[Federal Register: February 14, 2005 (Volume 70, Number 29)]
[Proposed Rules]
[Page 7551-7603]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14fe05-30]
[[Page 7551]]
-----------------------------------------------------------------------
Part II
Department of Defense
Office of Personnel Management
-----------------------------------------------------------------------
5 CFR Chapter XCIX and Part 9901
National Security Personnel System; Proposed Rule
[[Page 7552]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Chapter XCIX and Part 9901
RIN 3206-AK76/0790-AH82
National Security Personnel System
AGENCY: Department of Defense; Office of Personnel Management.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Defense (DoD) and the Office of Personnel
Management (OPM) are issuing proposed regulations to establish the
National Security Personnel System (NSPS), a human resources management
system for the DoD, as authorized by the National Defense Authorization
Act (Pub. L. 108-136, November 24, 2003). NSPS governs basic pay,
staffing, classification, performance management, labor relations,
adverse actions, and employee appeals. NSPS aligns DoD's human
resources management system with the Department's critical mission
requirements and protects the civil service rights of its employees.
DATES: Comments must be received on or before March 16, 2005.
ADDRESSES: You may submit comments, identified by docket number NSPS-
2005-001 and/or Regulatory Information Number (RIN) 3206-AK76 or 0790-
AH82. Please arrange and identify your comments on the regulatory text
by subpart and section number; if your comments relate to the
supplementary information, please refer to the heading and page number.
There are multiple methods for submitting comments. Please submit only
one set of comments via one of the methods described.
Preferred Method for Comments: The preferred method for submitting
comments is through the NSPS Web site at:
http://www.cpms.osd.mil/nsps.
Alternative Methods: If you are unable to submit comments via the
NSPS Web site, you may submit comments in one of the following ways.
Federal Rulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail to: Program Executive Office, National Security
Personnel System, Attn: Bradley B. Bunn, 1400 Key Boulevard, Suite B-
200, Arlington, VA 22209-5144.
E-mail to: nspscomments@cpms.osd.mil. Please put the
following in the subject line: ``Comments on Proposed NSPS
Regulations--RIN 3206-AK76/0790-AH82.''
Hand delivery/courier to: Program Executive Office,
National Security Personnel System, Attn: Bradley B. Bunn, 1400 Key
Boulevard, Suite B-200, Arlington, VA 22209-5144. Delivery must be made
between 8 a.m. and 5 p.m., Monday through Friday, except Federal
holidays.
Instructions: All submissions must include the agency name and
docket number or RIN for this rulemaking. Mailed or hand-delivered
comments must be in paper form. No mailed or hand-delivered comments in
electronic form (CDs, floppy disk, or other media) will be accepted.
The official Web site (http://www.cpms.osd.mil/nsps) will contain any
public comments received, without change, as DoD and OPM receive them,
unless the comment contains security-sensitive material, confidential
business information, or other information whose public disclosure is
restricted by statute. If such material is received, we will provide a
reference to that material in the version of the comment that is placed
in the docket. The system is an ``anonymous access'' system, which
means that DoD and OPM will not know your identity, e-mail address, or
other contact information unless you provide it in the body of your
comment. Unless a comment is submitted anonymously, the names of all
commenters will be public information.
Please ensure your comments are submitted within the specified open
comment period. Comments received after the close of the comment period
will be marked ``late,'' and DoD and OPM are not required to consider
them in formulating a final decision.
Before acting on this proposal, DoD and OPM will consider all
comments we receive on or before the closing date for comments.
Comments filed late will be considered only if it is possible to do so
without incurring expense or delay. Changes to this proposal may be
made in light of the comments we receive.
FOR FURTHER INFORMATION CONTACT: For DoD, Bradley B. Bunn, (703) 696-
4664; for OPM, Ronald P. Sanders, (202) 606-6500.
SUPPLEMENTARY INFORMATION: The Department of Defense (DoD or ``the
Department'') and the Office of Personnel Management (OPM) are
proposing to establish the National Security Personnel System (NSPS), a
human resources (HR) management system for DoD under 5 U.S.C. 9902, as
enacted by section 1101 of the National Defense Authorization Act (Pub.
L. 108-136, November 24, 2003). The following information is intended
to provide interested parties with relevant background material about
(1) the establishment of the National Security Personnel System, (2)
the process used to design the NSPS, (3) a description of the proposed
NSPS regulations, and (4) an analysis of the costs and benefits of
those proposed regulations.
The Case for Action
``* * * a future force that is defined less by size and more by
mobility and swiftness, one that is easier to deploy and sustain,
one that relies more heavily on stealth, precision weaponry, and
information technologies.''
With that statement on May 25, 2001, President Bush set a new
direction for defense strategy and defense management--one toward
transformation. On January 31, 2002, Secretary of Defense Donald
Rumsfeld echoed the sentiments expressed by President Bush, stating
that ``All the high-tech weapons in the world will not transform the
U.S. armed forces unless we also transform the way we think, the way we
train, the way we exercise, and the way we fight.''
Transformation is more than acquiring new equipment and embracing
new technology--it is the process of working and managing creatively to
achieve real results. To transform the way DoD achieves its mission, it
must transform the way it leads and manages the people who develop,
acquire, and maintain our Nation's defense capability. Those
responsible for defense transformation--including DoD civilian
employees--must anticipate the future and wherever possible help create
it. The Department must seek to develop new capabilities to meet
tomorrow's threats as well as those of today. NSPS is a key pillar in
the Department of Defense's transformation--a new way to manage its
civilian workforce. NSPS is essential to the Department's efforts to
create an environment in which the total force, uniformed personnel and
civilians, thinks and operates as one cohesive unit.
DoD civilians are unique in government: they are an integral part
of an organization that has a military function. DoD civilians must
complement and support the military around the world in every time
zone, every day. Just as new threats, new missions, new technology, and
new tactics are changing the work of the military, they are changing
the work of our 700,000 civilians. To support the interests of the
United States in today's national security environment--where
unpredictability is the norm and greater
[[Page 7553]]
agility the imperative--civilians must be an integrated, flexible, and
responsive part of the team.
At best, the current personnel system is based on 20th century
assumptions about the nature of public service and cannot adequately
address the 21st century national security environment. Although the
current Federal personnel management system is based on important core
principles, those principles are operationalized in an inflexible, one-
size-fits-all system of defining work, hiring staff, managing people,
assessing and rewarding performance, and advancing personnel. These
inherent weaknesses make support of DoD's mission complex, costly, and
ultimately, risky. Currently, pay and the movement of personnel are
pegged to outdated, narrowly defined work definitions, hiring processes
are cumbersome, high performers and low performers are paid alike, and
the labor system encourages a dispute-oriented, adversarial
relationship between management and labor. These systemic
inefficiencies detract from the potential effectiveness of the total
force. A more flexible, mission-driven system of human resources
management that retains those core principles will provide a more
cohesive total force. The Department's 20 years of experience with
transformational personnel demonstration projects, covering nearly
30,000 DoD employees, has shown that fundamental change in personnel
management has positive results on individual career growth and
opportunities, workforce responsiveness, and innovation; all these
things multiply mission effectiveness.
The immense challenges facing DoD today require a civilian
workforce transformation: civilians are being asked to assume new and
different responsibilities, take more risk, and be more innovative,
agile, and accountable than ever before. It is critical that DoD
supports the entire civilian workforce with modern systems;
particularly a human resources management system that supports and
protects their critical role in DoD's total force effectiveness. Public
Law 108-136 provides the Department of Defense with the authority to
meet this transformation challenge through development and deployment
of the NSPS.
More specifically, the law provides the Department and OPM--in
collaboration with employee representatives--authority to establish a
flexible and contemporary system of civilian human resources management
for DoD civilians. The attacks of September 11 made it clear that
flexibility is not a policy preference. It is nothing less than an
absolute requirement and it must become the foundation of DoD civilian
human resources management.
NSPS is designed to promote a performance culture in which the
performance and contributions of the DoD civilian workforce are more
fully recognized and rewarded. The system will offer the civilian
workforce a contemporary pay banding construct, which will include
performance-based pay. As the Department moves away from the General
Schedule system, it will become more competitive in setting salaries
and it will be able to adjust salaries based on various factors,
including labor market conditions, performance, and changes in duties.
The HR management system will be the foundation for a leaner, more
flexible support structure and will help attract skilled, talented, and
motivated people, while also retaining and improving the skills of the
existing workforce.
Despite the professionalism and dedication of DoD civilian
employees, the limitations imposed by the current personnel system
often prevent managers from using civilian employees effectively. The
Department sometimes uses military personnel or contractors when
civilian employees could have and should have been the right answer.
The current system limits opportunities for civilians at a time when
the role of DoD's civilian workforce is expanding to include more
significant participation in total force effectiveness. NSPS will
generate more opportunities for DoD civilians by easing the
administrative burden routinely required by the current system and
providing an incentive for managers to turn to them first when certain
vital tasks need doing. This will free uniformed men and women to focus
on matters unique to the military.
The law requires the Department to establish a contemporary and
flexible system of human resources management. DoD and OPM are crafting
NSPS through a collaborative process involving management, employees,
and employee representatives, and are inviting comments from a broader
community of other interested parties. DoD leadership will ensure that
supervisors and employees understand the new system and can function
effectively within it. The system will retain the core values of the
civil service and allow employees to be paid and rewarded based on
performance, innovation, and results. In addition, the system will
provide employees with greater opportunities for career growth and
mobility within the Department.
Relationship to the Department of Homeland Security
In developing the National Security Personnel System, the
Department of Defense has benefited greatly from the efforts of the
Department of Homeland Security (DHS). After more than 2 years of work,
DHS and OPM have recently issued final regulations establishing
Homeland Security's new human resources (HR) system, and the Secretary
and the Director were extensively informed by the DHS experience, in
terms of both process and results, in designing, developing, and
drafting these proposed regulations. In this regard, the DHS
regulations were analyzed by staff-level working groups, as well as
senior leadership, and where it made sense--that is, where it was
consistent with and supported DoD's national security mission,
operations, and statutory authorities--we adopted many of the concepts
and approaches, and even much of the specific language set forth in the
DHS regulations. For example, both regulations provide flexibilities in
pay, performance management, labor relations, adverse actions, and
appeals, while preserving the important core merit principles required
by law. Similarly, both regulations provide essential management
flexibilities to respond to mission and operational exigencies. At the
same time, where there are differences between DHS and DoD--in terms of
scope, mission, organizational culture, and human capital challenges,
as well as the statutes that authorize the respective HR systems--DoD
and OPM have broken new ground, and these proposed regulations are
intended to stand on their own in that regard. Accordingly, this
proposed regulation should not be viewed (or judged) in comparison to
DHS, but rather as an independent effort, informed by the DHS
experience, yet focused on DoD's mission and requirements.
Authority To Establish a New HR System
The authority for NSPS is 5 U.S.C. 9902(a) through (h) and (k)
through (m), which provide authority to establish a new human resources
management system, appeals system, and labor relations system for the
Department of Defense. NSPS allows the Department of Defense to
establish a more flexible civilian personnel management system that is
consistent with its overall human capital management strategy. NSPS
will make the Department a more competitive and progressive employer at
a time when the country's national security demands a highly responsive
[[Page 7554]]
civilian workforce. The NSPS is a transformation lever to enhance the
Department's ability to execute its national security mission.
Subsection (a) of section 9902 provides that the Secretary of
Defense may establish a human resources management system, known as the
``National Security Personnel System'' (NSPS), in regulations jointly
prescribed with the Director of OPM. The system established under
subsection (a) may differ from the traditional civil service system
established under title 5, U.S. Code, in certain respects. It is also
subject to certain requirements and limitations that are specified in
subsections (b) through (h) and (l) of section 9902. For example, NSPS
must be flexible, contemporary, and consistent with statutory merit
system principles and prohibitions against prohibited personnel
practices (in 5 U.S.C. 2301 and 2302, respectively). The system must
ensure that employees may organize and bargain collectively, subject to
the provisions of chapter 99 of title 5 and other statutory
requirements. The system must include a performance management system
that incorporates certain elements listed in the law. Also, in
establishing the system, only certain provisions of title 5 may be
waived or modified by DoD and OPM:
Chapter 31, 33, and 35 (dealing with staffing, employment,
and workforce shaping, as authorized by 5 U.S.C. 9902(k));
Chapter 43 (dealing with performance appraisal systems);
Chapter 51 (dealing with General Schedule job
classification);
Chapter 53 (dealing with pay for General Schedule
employees, pay and job grading for Federal Wage System employees, and
pay for certain other employees);
Subchapter V of chapter 55 (dealing with premium pay),
except section 5545b (dealing with firefighter pay);
Chapter 75 (dealing with adverse actions); and
Chapter 77 (dealing with appeal of adverse actions and
certain other actions).
In planning, developing, implementing, and adjusting NSPS
established under subsection (a), DoD and OPM must use procedures that
provide employee representatives with an opportunity to participate and
collaborate in the process. This collaboration requirement is set forth
in subsection (f) and is further described later in this Supplementary
Information. The law provides that the collaboration procedures in
subsection (f) are the ``exclusive procedures'' for the participation
of employee representatives, provided in lieu of any collective
bargaining requirements.
Subsection (h) of section 9902 provides authority to establish an
appeals process for DoD employees covered by NSPS. This process must
ensure that all affected DoD employees are afforded the protection of
due process. Subsection (h) authorizes new standards and procedures for
personnel actions based on either misconduct or performance that fails
to meet expectations. The procedures may include a revised process for
hearing appeals of adverse actions. Finally, subsection (h) provides
that an employee against whom an adverse action is taken may seek
review of the record of the case by the Merit Systems Protection Board.
The Board may dismiss cases that do not raise substantial questions of
fact or law. The Board may only order corrective action if it
determines that the DoD decision was--
Arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law;
Obtained without procedures required by law, rule or
regulation having been followed; or
Unsupported by substantial evidence.
Subsection (k) of section 9902 provides that, in establishing and
implementing the NSPS under subsection (a), DoD and OPM are not limited
by any provision of title 5 or implementing regulations relating to--
The methods of establishing qualification requirements
for, recruitment for, and appointments to positions;
The methods of assigning, reassigning, detailing,
transferring, or promoting employees; and
The methods of reducing overall agency staff and grade
levels, except that performance, veterans' preference, tenure of
employment, length of service, and such other factors as the Secretary
considers necessary and appropriate must be considered in decisions to
realign or reorganize the Department's workforce.
Thus, subsection (k) authorizes the modification of chapters 31,
33, and 35 of title 5, U.S. Code (dealing with staffing, employment,
and workforce shaping). However, in implementing subsection (k), DoD
must comply with veterans' preference requirements in 5 U.S.C.
2302(b)(11).
Subsection (m) provides a separate authority (independent of
subsection (a) and notwithstanding subsection (d)) for the Secretary of
Defense and the Director of OPM to establish a DoD labor relations
system Subsection (m) establishes collaboration requirements to give
employee representatives the opportunity to participate in developing,
implementing, and adjusting the labor relations system. Subsection (m)
provides authority to modify chapter 71. By law, the subsection (m)
authority may not be used to expand the scope of bargaining. Also, by
law, the DoD labor relations system supersedes all collective
bargaining agreements for covered DoD bargaining units, except as
otherwise determined by the Secretary. Finally, the law provides that
the DoD labor relations system established under subsection (m) will
expire 6 years after the date of enactment (i.e., November 24, 2009),
unless extended by statute. If subsection (m) expires, the provisions
of chapter 71 of title 5, U.S. Code, would again apply.
Subsections (i) and (j) in section 9902 establish separate
authorities that are not held jointly with OPM and are not addressed in
these proposed regulations.
Process
Leadership
In April 2004, senior DoD leadership approved the collaborative
process that the Department is using to design and implement NSPS. This
process was crafted over a period of about 3 weeks by a group of 25 to
30 senior experts representing various elements within DoD, OPM, and
the Office of Management and Budget. The senior leaders used the
Defense Acquisition Management model as a way to establish the
requirements for the design and implementation of NSPS. The senior
leaders recommended Guiding Principles and Key Performance Parameters
(KPPs), which defined the minimum requirements for NSPS. They also
recommended establishing a Senior Executive and Program Executive
Office (PEO), modeled after the Department's acquisition process.
Subsequently, the Honorable Gordon England, was appointed by the
Secretary of Defense as the NSPS Senior Executive, in addition to his
duties as Secretary of the Navy, to design, develop, establish,
implement, and adjust the NSPS on his behalf. As the NSPS Senior
Executive, Secretary England established the NSPS PEO as the central
DoD policy and program office to conduct the design, planning and
development, deployment, assessment, and full implementation of NSPS.
The PEO provides direction to and oversight of the Component program
managers who
[[Page 7555]]
are dual-hatted under their parent Component and the PEO.
At OPM, the Director designated the Senior Advisor on the
Department of Defense to lead agency activities in the joint
development of the NSPS. The Director received frequent and regular
briefings on the progress of NSPS and on the status of key policy
options across the spectrum of authorities granted in the NSPS statute.
Subsequently, in periodic reviews the Director exercised policy
options, thereby providing guidance to the OPM team. Policy and
regulatory development for NSPS are specifically vested in the Division
for Strategic Human Resources Policy, and OPM's work teams and
leadership cadres were drawn largely from this Division. In addition, a
Senior Level Review Group reviewed NSPS decision documents to ensure
consistency with the Director's priorities.
An integrated executive management team composed of senior DoD and
OPM leaders provides overall policy and strategic advice to the PEO and
serves as staff to the Senior Executive. The PEO meets with and
consults with this team, the Overarching Integrated Product Team
(OIPT), 8 to 10 times a month. The Senior Executive convenes meetings
with the PEO and OIPT at least twice a month to monitor and direct the
process.
Guiding Principles and Key Performance Parameters
In setting up the process for the design of the system, senior
leadership adopted a set of Guiding Principles as a compass to direct
efforts throughout all phases of NSPS development. They translate and
communicate the broad requirements and priorities outlined in the
legislation into concise, understandable requirements that underscore
the Department's purpose and intent in creating NSPS. The Guiding
Principles are:
Put mission first--support National Security goals and
strategic objectives;
Respect the individual--protect rights guaranteed by law;
Value talent, performance, leadership and commitment to
public service;
Be flexible, understandable, credible, responsive, and
executable;
Ensure accountability at all levels;
Balance HR interoperability with unique mission
requirements; and
Be competitive and cost effective.
In addition, senior leadership approved a set of Key Performance
Parameters (KPPs), which define the minimum requirements and/or
attributes of the system. Those KPPs are summarized below:
High Performing: Employees/supervisors are compensated/
retained based on performance/contribution to mission;
Agile and Responsive: Workforce can be easily sized,
shaped, and deployed to meet changing mission requirements;
Credible and Trusted: System assures openness, clarity,
accountability and merit principles;
Fiscally Sound: Aggregate increases in civilian payroll,
at the appropriations level, will conform to OMB fiscal guidance, and
managers will have flexibility to manage to budget;
Supporting Infrastructure: Information technology support
and training and change management plans are available and funded; and
Schedule: NSPS will be operational and demonstrate success
prior to November 2009.
Working Groups
In July 2004, the PEO established Working Groups to begin the NSPS
design process. Over 120 employees representing the Military
Departments (Army, Navy, Air Force), the other DoD Components, and OPM
began the process of identifying and developing options and
alternatives for consideration in the design of NSPS. The Working Group
members included representatives from the DoD human resources
community, DoD military and civilian line managers, representatives
from OPM, the legal community, and subject matter experts in equal
employment opportunity, information technology, and financial
management. In addition, other subject matter experts participated.
The Working Groups were functionally aligned to cover the following
human resources program areas: (1) Compensation (classification and pay
banding); (2) performance management; (3) hiring, assignment, pay
setting, and workforce shaping; (4) employee engagement; (5) adverse
action and appeals; and (6) labor relations. Each group was co-chaired
by an OPM and DoD subject matter expert. The Working Groups' review and
analysis included a compilation of pertinent laws, rules, regulations,
and other related documents that were forwarded to them for advance
preparation. Working Groups were also provided with available
information and input from NSPS focus groups and town hall sessions
held at strategic locations worldwide, union consultation meetings,
data review and analysis from alternative personnel systems and
laboratory and acquisition demonstration projects, the NSPS statute,
Guiding Principles, as well as a review of earlier studies and working
groups. In addition, subject matter experts briefed the Working Groups
on a variety of topics, such as pay-for-performance systems,
alternative personnel systems, pay pool management, and market
sensitive compensation systems.
Option Development Process
In developing options for the NSPS, the Working Groups benefited
from the Government's experience under demonstration project
authorities and alternative personnel systems, the DoD ``Best
Practices'' initiative (68 FR 16120, April 2, 2003), and the
compilation of research materials from the Department of Homeland
Security HR Systems Design process. The Working Groups also received
and considered input from employees and their representatives. The
resulting product was a set of options that covered a broad range of
variations on the six areas of focus. Each option was evaluated against
the Guiding Principles and Key Performance Parameters (KPPs).
To ensure that the options reflected the wide range of views and
concerns expressed by various entities, the NSPS Working Groups did not
attempt to reach consensus regarding the merits of the options.
Consequently, none of the options necessarily represented a consensus
view of the Working Groups. Some of the options integrate approaches to
developing new HR systems across two or more of the six subject matter
areas under consideration. This is especially true of the compensation
architecture and pay-for-performance options, which were intended to
illustrate how various classification, compensation, and performance
system elements might work in combination. The performance and
compensation/classification options also tended to cluster around
several distinct themes, such as ``function/occupation-focused,''
``performance-focused,'' and ``contribution/ mission-focused.'' The
initial draft options were reviewed by the PEO and Senior Advisory
Group (SAG) to capture feedback prior to finalizing them for submission
to the Overarching Integrated Product Team (OIPT) for review.
Outreach
A comprehensive outreach and communications strategy is essential
for designing and implementing a new HR system. Outreach facilitates
employee awareness and understanding of NSPS;
[[Page 7556]]
it's the primary strategy for sharing the NSPS vision. In April 2004,
the PEO developed and implemented a communications strategy. The
objectives of DoD's communications strategy are to (1) demonstrate the
rationale for and benefits of NSPS; (2) demonstrate openness and
transparency in the design and process of converting to NSPS; (3)
express DoD's commitment to ensuring NSPS is applied fairly and
equitably; and (4) address potential criticism of NSPS.
The PEO identified channels for disseminating relevant, timely, and
consistent information, including a wide variety of print and
electronic media, e-mail, town hall meetings, focus groups, speeches,
and briefings, and developed an action plan for communicating with each
stakeholder. The PEO also developed key messages to include in
stakeholder communications to reinforce the Guiding Principles of the
NSPS HR systems design process. A website was developed and launched to
serve as a primary, two-way communications tool for the workforce,
other stakeholders, and the general public. PEO updates the website
regularly with new information concerning the design, development, and
implementation of NSPS. Further, the website includes the capability
for visitors to submit questions and comments. To date, PEO has
responded to thousands of questions and comments.
Outreach to Employee Representatives
Beginning in the spring of 2004 and continuing over the course of
several months, the PEO sponsored a series of meetings with union
leadership to discuss design elements of NSPS. Officials from DoD and
OPM met throughout the summer and fall with union officials
representing many of the DoD civilians who are bargaining unit
employees. These sessions provided the opportunity to discuss the
design elements, options, and proposals under consideration for NSPS
and solicit union feedback.
To date, DoD and OPM have conducted 10 joint meetings with
officials of the 41 unions that represent DoD employees, including the
9 unions that currently have national consultation rights. These union
officials represent some 1,500 separate bargaining units covering about
445,000 employees. These meetings involved as many as 80 union leaders
from the national and local level at any one time, and addressed a
variety of topics, including: the reasons change is needed and the
Department's interests; the results of Department-wide focus group
sessions held with a broad cross-section of DoD employees; the proposed
NSPS implementation schedule; employee communications; and proposed
design options in the areas of labor relations and collective
bargaining, adverse actions and appeals, and pay and performance
management.
Outreach to Employees
In keeping with DoD's commitment to provide employees and managers
an opportunity to participate in the development of NSPS, the PEO
sponsored a number of Focus Group sessions and town hall meetings at
various sites across DoD. Focus Group sessions began in mid-July 2004,
and continued for approximately 3 weeks. A total of 106 focus groups
were held throughout DoD, including overseas locations. Separate focus
groups were held for employees, civilian and military supervisors, and
managers and practitioners from HR, legal and EEO communities.
Bargaining unit employees and union leaders were invited to
participate. Each focus group was conducted by a trained facilitator.
For the major system design elements, focus group participants were
asked what they thought worked well in the current HR systems and what
they thought should be changed. Over 10,000 comments, ideas and
suggestions received during the Focus Group sessions were summarized
and provided to NSPS Working Groups for use in developing options for
the labor relations, appeals, adverse actions, and human resources
design elements of NSPS.
In addition, town hall meetings were held in DoD facilities around
the world during the summer of 2004, providing an opportunity to
communicate with the workforce, provide the status of the design and
development of NSPS, and solicit thoughts and ideas. The NSPS Senior
Executive, Secretary Gordon England, conducted the first town hall
meeting at the Pentagon on July 7, 2004. The format for town hall
meetings included an introductory presentation by a senior leader
followed by a question and answer session where anyone in the audience
was free to ask a question or make a comment. Some of the town hall
meetings were broadcast live, as well as videotaped and rebroadcast on
military television channels and Web sites to facilitate the widest
possible dissemination.
The focus group sessions and town hall meetings, as well as the
Working Groups and union consultation sessions, underscore the
Department's commitment to ensuring an open, transparent design
process. The sessions assured that civilian employees, managers,
supervisors, union leadership, and other key stakeholders were involved
in the design and implementation of NSPS and had ample opportunity to
provide input.
Outreach to Other Stakeholders
In addition to reaching out to DoD employees and labor
organizations, DoD and OPM met with other groups who were thought to be
interested in the design of a new HR system for DoD. DoD and OPM
invited selected stakeholders to participate in briefings held at OPM
in August and September 2004.
The first stakeholder briefing was for public interest groups, such
as the National Association of Public Administrators (NAPA), Coalition
for Effective Change, and Partnership for Public Service. The second
stakeholder briefing was for veterans' service organizations. A third
stakeholder briefing was conducted with non-union employee advocacy
groups. Attendees at all three briefings received background
information about NSPS, an update on the PEO work plan, an overview of
the NSPS Guiding Principles, and updates on the activities of the team,
including town hall meetings and focus groups. Attendees were afforded
an opportunity to participate in a question-and-answer session
following these presentations.
Both before and after these three stakeholder briefings, DoD and
OPM responded to dozens of requests for special briefings. DoD and OPM
also met with the Government Accountability Office, Office of
Management and Budget, and Department of Homeland Security to keep them
up to date on the team's activities.
General Provisions--Subpart A
Subpart A of the proposed regulations provides the purpose and the
establishment of the general provisions governing coverage under the
new DoD HR system, and defines terms that are used throughout the new
part 9901. Part 9901 applies to employees in DoD organizational and
functional units identified under the regulations as eligible for
coverage and who are approved for coverage, as of a specified date, by
the Secretary of Defense. This enables DoD to phase in coverage of
particular groups of employees or Components of the Department. Subpart
A also allows DoD to prescribe internal Departmental issuances that
further define the design characteristics of the new HR system. (See
the ``Next Steps'' section at the end of this SUPPLEMENTARY
INFORMATION.) Finally,
[[Page 7557]]
subpart A clarifies the relationship of the regulations in part 9901 to
other provisions of law and regulations outside those that are being
waived with respect to DoD.
Purpose
The purpose of the proposed regulations is to establish a system
designed to meet the statutory requirements, the NSPS KPPs and Guiding
Principles.
Eligibility and Coverage
All DoD employees currently covered by the classification and pay
systems established under chapter 51 or 53 of title 5, U.S. Code, are
eligible for coverage under one or more of subparts B through I of this
part, except to the extent specifically prohibited by law (e.g.,
Executive Schedule officials, who, by law, remain covered by subchapter
II of chapter 53). DoD will transition to the NSPS human resources
system beginning with its General Schedule (GS) employees (and
equivalent). Other categories of employees, including those covered by
other systems outside of title 5, will be phased in as appropriate. SES
members and certain other similar types of DoD employees will be
eligible for coverage under the new DoD pay system. However, the
proposed regulations provide that any new pay system covering SES
members must be consistent with the performance-based features of the
new Governmentwide SES pay-for-performance system authorized by section
1125 of the National Defense Authorization Act (Pub. L. 108-136,
November 24, 2003). If DoD wishes to establish an SES pay system that
varies substantially from the new Governmentwide SES pay-for-
performance system, DoD and OPM will issue joint authorizing
regulations consistent with all of the requirements of the National
Security Personnel System, as set forth in 5 U.S.C. 9902. In addition,
DoD and OPM will involve SES members and other interested parties in
the design and implementation of any new pay system for SES members
employed by DoD.
Scope of Authority
Subject to the requirements and limitations in 5 U.S.C. 9902, the
provisions in the following chapters of title 5, U.S. Code, and any
related regulations, may be waived or modified:
The rules governing staffing, employment, and workforce
shaping (as permitted by 5 U.S.C. 9902(k)) established under chapters
31, 33, and 35;
The rules governing performance appraisal systems
established under chapter 43;
The General Schedule classification system established
under chapter 51;
The pay systems for General Schedule employees, pay and
job grading for Federal Wage System employees, and pay for certain
other employees, as set forth in chapter 53;
The premium pay system for employees, as set forth in
chapter 55, subsection V, except section 5545(b) relating to pay for
firefighters;
The labor relations system (as authorized by 5 U.S.C.
9902(m)) established under chapter 71;
The rules governing adverse actions and certain other
actions taken under chapter 75; and
The rules governing the appeal of adverse actions and
certain other actions under chapter 77.
Coordination Between DoD and OPM
In implementing the intent of Congress that the Secretary and the
Director jointly prescribe regulations for NSPS, DoD and OPM recognize
that both agencies have significant legitimate interests that must be
taken into account. DoD requires an agile and responsive civilian
personnel system to support its Total Force and execute its national
security mission. At the same time, OPM is responsible for providing
guidance and assistance to DoD in developing a new human resources
management system while simultaneously protecting Governmentwide
institutional interests regarding the civil service system.
Section 9901.105 of the proposed regulations provides that the
Secretary will advise and/or coordinate with OPM in advance, as
applicable, regarding the proposed promulgation of certain DoD
implementing issuances and certain other actions related to the ongoing
operation of the NSPS where such actions could have a significant
impact on other Federal agencies and the Federal civil service as a
whole. The Secretary and the Director fully expect their staffs to work
closely together on the matters specified in this section, before such
matters are submitted for official OPM coordination and DoD decision,
so as to maximize the opportunity for consensus and agreement before an
issue is so submitted.
When a matter requiring OPM coordination pursuant to the
coordination requirements established in these regulations, is to be
submitted to the Secretary for decision, the Director will be provided
an opportunity, as part of the Department's normal coordination
process, to review and comment on the recommendations and officially
concur or nonconcur with all or part of them. The Secretary will take
the Director's comments and concurrence/nonconcurrence into account,
advise the Director of his or her determination, and provide the
Director with reasonable advance notice of its effective date.
Thereafter, the Secretary and the Director may take such action(s) as
they deem appropriate, consistent with their respective statutory
authorities and responsibilities.
Continuing Collaboration
The NSPS law requires that the implementation of a new HR system
for DoD will be carried out with the participation of, and in
collaboration with, employee representatives. The law spells out the
specific process for involvement of employee representatives in the
establishment of the system, known generally as the ``30/30/30''
process. These proposed regulations will be subject to that statutory
process, which includes a comment period of 30 days, a minimum of 30
days for DoD and OPM to ``meet and confer'' with employee
representatives on their recommendations, and a final 30 days for
congressional notification prior to implementation.
The NSPS law also provides that the Secretary and the Director
develop a process to involve employee representatives in the further
planning, development, and/or adjustment of the system. To that end,
Sec. 9901.106 establishes a process by which employee representatives
will be provided an opportunity to review, comment, and participate in
discussions regarding proposals for further adjustments to the system,
including DoD implementing issuances. This process is called
``continuing collaboration'' and is a separate and distinct process
from the provisions found in subpart I, Labor-Management Relations.
While the proposed NSPS regulations establish the overall NSPS human
resources management system, there are several areas that will require
DoD to promulgate implementing directives, instructions, manuals, and
other issuances that provide the detailed procedures needed to
implement the system. For example, the proposed regulations provide for
an administrative process in which employees may seek reconsideration
of their performance ratings; this is to ensure transparency in the
performance management system. The specific procedures for that
reconsideration process are not spelled out in these
[[Page 7558]]
proposed regulations; rather, they will be established in internal DoD
issuances. In order to ensure that the views and concerns of employee
representatives are considered in the development of those procedures,
DoD will engage in the ``continuing collaboration'' process.
Under continuing collaboration, employee representatives (for those
employees affected by the proposed issuance) will be provided a draft
proposal and given a timeframe to review and submit written comments on
the proposal, and they will be afforded the opportunity to discuss
their views and concerns with DoD officials prior to finalization of
the issuance. At the Secretary's discretion, this collaboration may
also be initiated prior to the drafting of proposed issuances (e.g., at
the conceptual stage of the process). The proposed regulations
guarantee that any written comments submitted within the timeframes
will become part of the official record and be considered before final
decisions are made. While this process does not affect the right of the
Secretary to make the final determination as to the content of
implementing issuances, it offers the opportunity for employee
representatives to participate meaningfully in the process and
influence the further development and refinement of NSPS.
Relationship to Other Provisions of the Law
Paragraph (a)(2) of Sec. 9901.107 establishes a rule of
construction requiring all provisions of this part be interpreted in a
way that recognizes the critical national security mission of the
Department. Each provision must be construed to promote the swift,
flexible, and effective day-to-day accomplishment of that mission, as
defined by the Secretary. DoD's and OPM's interpretation of these
regulations must be accorded great deference.
Paragraph (b) of Sec. 9901.107 describes the relationship between
the proposed part 9901 and laws that are not waivable or modifiable
under the NSPS law. For the purpose of applying other provisions of law
or Governmentwide regulations that reference provisions under the
waivable or modifiable chapters (i.e., chapters 31, 33, 35, 43, 51, 53,
55 (subchapter V only), 71, 75, and 77 of title 5, U.S. Code), the
referenced provisions are not waived but are modified consistent with
the corresponding regulations in part 9901, except as otherwise
provided in that part or in DoD implementing issuances. For example,
physicians' comparability allowances under 5 U.S.C. 5948 are limited to
physicians in certain listed pay systems, including the General
Schedule. To ensure that DoD physicians continue to be eligible for
physicians' comparability allowances when they convert from the General
Schedule to the NSPS pay system, they will be deemed to be covered by
the General Schedule for the purpose of applying section 5948. In
addition, in applying the back pay law in 5 U.S.C. 5596 to DoD
employees covered by subpart H of these proposed regulations (dealing
with appeals), the reference in section 5596(b)(1)(A)(ii) to 5 U.S.C.
7701(g) (dealing with attorney fees) is considered to be a reference to
a modified section 7701(g) that is consistent with Sec. 9901.807(h).
Classification--Subpart B
Subpart B provides DoD with the authority to replace the current GS
and FWS classification and qualifications systems and other current
classification systems with a new method of evaluating and classifying
jobs by grouping them into occupational categories and levels of work
for pay and other related purposes. Under this new system, DoD (in
coordination with OPM) will have the authority to establish
qualifications for positions and to assign occupations and positions to
broad occupational career groups and pay bands (or levels).
DoD (in coordination with OPM) will establish broad occupational
career groups by grouping occupations and positions that are similar in
types of work, mission, developmental/career paths, and/or
competencies. The occupational career groups will serve as the basic
framework for the NSPS classification and pay system. Within career
groups, DoD may establish pay schedules that apply to subgroupings of
related occupations. Within each pay schedule, DoD (in coordination
with OPM) will establish broad salary ranges, commonly referred to as
pay bands. The pay bands within a pay schedule represent progressively
higher levels of work with correspondingly higher pay ranges.
DoD may elect to phase in the coverage of specific categories of
employees or occupations under the new classification and pay system
established under these proposed regulations. DoD may use OPM-approved
occupational series and titles to identify and assign positions to a
particular career group and pay schedule. Pay schedules typically will
include most or all of the following levels of work:
Entry/developmental work that involves a combination of
formal training and/or on-the-job experience designed to provide the
employee with the competencies needed to perform successfully at the
full performance level.
Work that involves nonsupervisory duties and
responsibilities at the full performance level of the occupation.
Nonsupervisory expert work that involves a high level of
specialized knowledge or technical expertise clearly beyond the
requirements for work at the full performance level upon which the
employing organization relies for the accomplishment of critical
mission goals and objectives.
Work that involves the supervision of employees at the
full performance or expert level.
Managerial work whose primary purpose is to direct key
DoD/Component scientific, medical, legal, administrative, or other
programs.
Career groups, pay schedules, and pay bands provide clearly defined
career paths for occupations. Table 1 illustrates the career group
structure concept.
[[Page 7559]]
[GRAPHIC] [TIFF OMITTED] TP14FE05.000
The new classification system for DoD will result in a streamlined
method of classifying positions that no longer relies on lengthy
classification standards and position descriptions. The new system does
not require artificial distinctions between closely related levels of
work, as currently required under the GS and Federal Wage System (FWS)
classification systems. This more fully supports the merit system
principle that ``equal pay should be provided for work of equal value,
with appropriate consideration of both national and local rates paid by
employers in the private sector, and appropriate incentives and
recognition * * * for excellence in performance.'' Employees will be
permitted to request reconsideration of the classification (career
group, pay schedule, occupational series, or pay band) of their
official positions of record at any time with DoD and/or OPM, as they
can today under the GS system. The system described here, together with
the new pay system described below, will provide DoD with greater
flexibility to adapt the Department's job and pay structure to meet
present and future mission requirements.
Pay and Pay Administration--Subpart C
This subpart contains proposed regulations establishing pay
structures and pay administration rules for covered DoD employees to
replace the pay structures and pay administration rules established
under 5 U.S.C. chapter 53 and 5 U.S.C. chapter 55, subchapter V. This
new system links pay to employees' performance ratings and is designed
to promote a high-performance culture within DoD.
National Security Compensation Comparability
In accordance with the NSPS law, to the maximum extent practicable,
for fiscal years 2004 through 2008, the aggregate amount allocated for
compensation of DoD civilian employees under NSPS will not be less than
if they had not been converted to the NSPS. This takes into account
potential step increases and rates of promotion had employees remained
in their previous pay schedule.
In addition, NSPS implementing issuances will provide a formula for
calculating the aggregate compensation amount, for fiscal years after
fiscal year 2008. The formula will ensure that, to the maximum extent
practicable, in the aggregate, employees are not disadvantaged in the
overall amount of pay available as a result of conversion to the NSPS,
while providing flexibility to accommodate changes in the function of
the organization, changes in the mix of employees performing those
functions, and other changed circumstances that might impact pay
levels.
Setting and Adjusting Rate Ranges
Setting Rate Ranges and Local Market Supplements: The proposed
regulations establish a pay system that governs the setting and
adjusting of covered employees' rates of pay. The system will have a
rate range, with a minimum and maximum rate, for each band in each
career group based on factors such as labor market rates, recruitment
and retention information, mission requirements, operational needs, and
overall budgetary constraints. The bands will have open pay ranges,
with no fixed step rates. DoD will also set local market supplements (a
supplement to basic pay in lieu of locality pay) for rate ranges based
on geographic and occupational factors. DoD will coordinate setting and
adjusting rate ranges and local market supplements with OPM.
Adjusting Rate Ranges and Local Market Supplements: DoD will
[[Page 7560]]
determine the rate range adjustments and local market supplements
considering mission requirements, labor market conditions, availability
of funds, pay adjustments received by employees in other Federal
agencies, allowances and differentials under 5 U.S.C. chapter 59, and
other relevant factors. Rate range adjustments and local market
supplements may differ by career group, pay schedule, or pay band. The
minimum and maximum of a range may be adjusted at different rates. DoD
may determine local market areas as well as the timing of these pay
adjustments.
The proposed regulations provide that employees may receive pay
adjustments as a result of a rate range adjustment. Generally,
employees will receive an adjustment equal to any increase to the
minimum rate of their band and will receive any applicable local market
supplement. In keeping with the desire of the Secretary and the
Director to achieve and sustain a culture of high performance, the
proposed regulations provide that these pay adjustments will not be
provided to employees with an unacceptable performance rating.
Performance-Based Pay
The NSPS pay system will be a performance-based pay system that
will result in a distribution of pay raises and bonuses based upon
individual performance, individual contribution, organizational
performance, team performance, or a combination of those elements. The
NSPS system will use pay pools to manage, control, and distribute
performance-based pay increases and bonuses. Under the proposed
regulations, the term ``pay pool'' means the organizational elements/
units or other categories of employees that are combined for the
purpose of determining performance payouts or the dollar value of the
funds set aside for performance payouts for employees covered by a pay
pool. The performance payout is a function of the amount of money in
the performance pay pool and the number of shares assigned to
individual employees.
Annual Performance-based Payouts: Employees will receive annual
performance-based payouts based on their rating of record and assigned
shares. Each rating level will have a share or range of shares
associated with it.
Rating Methodology: DoD implementing issuances will define the
specific methodologies and practices that will be used in the
Department. DoD expects to use a methodology that includes at least
three rating levels and identifies a range of performance shares that
can be assigned for rating levels. An example of a possible rating
methodology is provided by Table 2. This example illustrates a five-
level rating methodology with associated share ranges in which level
five signifies the highest level of performance. The rater will prepare
and recommend the rating, number of shares, and the distribution of the
payout between basic pay increase and bonus, as applicable, for each
employee. These recommendations will then be reviewed by the pay pool
panel to ensure equitable rating criteria and methodology have been
applied to all pay pool employees. The final determination of the
rating, number of shares, and payout distribution will be a function of
the pay pool panel process and will be approved by the pay pool
manager. The criteria used to determine the number of shares to assign
an employee may include assessment of the employee's contribution to
the mission, the employee's type and level of work, consideration of
specific achievements, or other job-related significant accomplishments
or contributions.
Table 2.--Sample Rating Methodology
------------------------------------------------------------------------
Rating level Share range
------------------------------------------------------------------------
5........................................ 6-8
4........................................ 3-6
3........................................ 1-2
2........................................ 0
1........................................ N/A
------------------------------------------------------------------------
Performance Pay Pools: Performance pay pools will be established by
combining organizational elements, functional groupings, or other
categories of employees. Distinctions may also be made using criteria
such as location or mission. Each pay pool will be managed by a pay
pool manager in concert with appropriate management officials. The pay
pool manager is the individual charged with the overall responsibility
for rating determinations and distribution of the payout funds in a
given pay pool. The funding of a performance pay pool consists of the
money allocated for performance-based payouts for a defined group of
employees. The amount of money available within a pay pool is normally
based on the money that would have been available for within-grade
increases, quality step increases, promotions between grades that have
been banded in the NSPS pay system, and applicable across-the-board pay
increases. Funds previously used for end-of-rating cycle performance
awards or incentive awards may also be used to fund the pay pool. Note
that the provisions of 5 U.S.C. chapter 45, ``Incentive Awards,''
remain in place and provide a valuable means to recognize employee
achievements throughout the rating cycle.
Performance Payout: The performance payout is composed of an
increase to basic pay, a bonus, or a combination of these. A bonus is a
one-time lump-sum payment that is not paid as basic pay. Subject to DoD
guidelines, pay pool managers will have the discretion to determine the
proportion of an employee's total performance payout paid as an
increase to basic pay or as a bonus. Increases to basic pay may not
cause the basic pay of an employee to exceed the maximum of his or her
pay band. In such situations, the amount of the payout that exceeds the
maximum of the pay band will be paid in the form of a bonus.
Example: If the maximum of a pay band is $30,000, and an employee
earning $28,750 is awarded a payout of $3,000, then the employee may
receive an increase in basic pay of not more than $1,250 ($28,750 +
$1,250 = $30,000) with the remainder (at least $1,750) paid as a bonus.
In addition, the proposed regulations allow DoD to establish
``control points'' or other mechanisms within a band, beyond which
basic pay increases may be granted only for meeting criteria
established by DoD. An example of such a control point is a requirement
for the employee to have achieved the highest performance rating.
Other Performance Payouts: Extraordinary pay increases (EPI),
organizational achievement recognition, or other special payments may
be paid to employees in accordance with implementing issuances. The
amount of such payments may not cause the employee's basic pay to
exceed the maximum rate of the employee's assigned pay band.
Extraordinary Pay Increase: An extraordinary pay increase
(EPI) is a basic pay increase to reward employees when the payout
formula does not adequately compensate them for their extraordinary
performance. It is to be used sparingly and only to reward
exceptionally high-performing employees whose performance and
contributions to the organization are of an exceedingly high value. The
performance must be expected to continue at an extraordinarily high
level in the future.
Organizational Achievement Recognition: This type of
recognition may take the form of additional compensation paid to
employees of a team, unit, branch, or organization
[[Page 7561]]
whose performance and contributions have successfully and directly
advanced organizational goal(s).
Developmental Positions: Employees in developmental positions may
receive pay adjustments as they acquire the competencies, skills, and
knowledge necessary to advance to the full performance level.
Pay Administration
The new DoD pay system provides the Department with an enhanced
ability to establish and adjust overall pay levels in keeping with
changes in national and local labor markets. It is designed to adjust
individual pay levels based on the acquisition and assessment of
competencies, skills, and knowledge and on the basis of performance or
contributions to mission. The new system is capable of adapting to
changing circumstances and mission requirements.
Initial Conversion: Upon implementation of the new system,
employees will be converted based on their official position of record.
Initial entry into NSPS will ensure that each employee is placed in the
appropriate pay band without loss of pay.
New Appointments/Reinstatements: When an employee is newly
appointed or reinstated to a position in NSPS, management may establish
pay at any rate up to the maximum of the pay band in accordance with
implementing issuances. The hiring official will determine starting pay
based on available labor market considerations; specific qualification
requirements; scarcity of qualified applicants; program needs;
education or experience of the candidate; and other criteria as
appropriate. When an employee moves to a pay band with a higher earning
potential, pay will be set in accordance with implementing issuances.
Temporary Promotion: Employees on temporary promotions will be
returned to their official position of record prior to conversion. GS
employees will be converted at their current rate of basic pay,
including any locality payment, adjusted on a one-time, pro-rata basis,
for the time spent towards their next within-grade increase.
Career-ladder Positions: Employees in career-ladder positions below
the full performance level will be placed in the appropriate career
group, pay schedule, and entry or developmental band.
Promotion: Promotion pay increases (from a lower band to a higher
band in the same cluster or to a higher band in a different cluster)
generally will be a fixed percent of the employee's rate of basic pay
or the amount necessary to reach the minimum rate of the higher band,
whichever is greater. This amount is roughly equivalent to the value of
a promotion to a higher grade within the GS system.
Reassignment: An employee who moves to a position in a comparable
pay band will have pay set depending on whether the move is voluntary
or involuntary as a result of unacceptable performance and/or conduct.
If the move is voluntary or involuntary and not due to unacceptable
performance and/or conduct, pay will generally be set at the existing
rate of pay; however, pay may be set at a higher rate within
limitations specified in DoD implementing issuances. If the move is
involuntary due to unacceptable performance and/or conduct, there may
be a reduction in basic pay of up to 10 percent as provided in these
proposed regulations and in DoD implementing issuances. Pay may not be
set lower than the minimum of the pay band level or exceed the maximum
of the pay band level.
Reduction in Band: When an employee moves to a lower pay band, pay
will be set depending on whether the move is voluntary or involuntary.
If the move is voluntary, pay may generally be set anywhere within the
pay band within limits specified in the implementing issuances. If the
move is involuntary due to an adverse action based on unacceptable
performance and/or conduct, there may be a reduction in basic pay
within the limits specified in these proposed regulations and in DoD
implementing issuances (not to exceed 10 percent, unless a larger
reduction is needed to place the employee at the maximum rate of the
lower band). For other involuntary moves, any reduction in pay will be
limited in accordance with DoD implementing issuances. Where pay
retention is applicable (e.g., following a reduction in force), the
employee's pay will be protected under conditions and parameters to be
identified in the implementing issuances.
Premium Pay
Section 9901.361 of the proposed regulations addresses DoD's
authority to waive and replace the premium pay provisions in 5 U.S.C.
chapter 55, subchapter V (except section 5545b), in whole or in part
for employees in a category approved by the Secretary. DoD (in
coordination with OPM) will establish any NSPS premium payments through
implementing issuances.
Performance Management--Subpart D
The current performance management system is burdensome because of
its actual and/or perceived inflexibility and strict adherence to
written elements and standards established at the beginning of a rating
cycle. Supervisors feel restricted in making any mid-course corrections
or modifications to a performance plan, resulting in a final assessment
that does not meet their needs. These static standards make it
difficult for managers to adjust performance requirements and
expectations in response to the Department's rapidly changing work
environment, hold individual employees accountable for those general
and/or assignment-specific work requirements and expectations, and make
meaningful distinctions in employee performance as they accomplish
those assignments. The proposed regulations are designed to address
these deficiencies.
DoD has decided to waive the provisions of chapter 43 of title 5,
U.S. Code, in order to design a performance management system that will
complement and support the Department's proposed performance-based pay
system described above. The proposed system will also ensure greater
employee and supervisor accountability with respect to individual
performance expectations, as well as organizational results.
The proposed system builds in the flexibility to modify, amend, and
change performance and behavioral expectations during the course of a
performance year, subject to employees being advised of, and involved
in to the maximum feasible extent, the adjusted expectations. For
example, supervisors have the option of establishing and communicating
performance expectations during the course of the appraisal period
through specific work assignments or other means. These other means may
include standard operating procedures, organizational directives,
manuals, and other generally established job requirements that apply to
employees in a particular occupation and/or unit.
Coverage
Generally, DoD employees who are currently covered by chapter 43 of
title 5, U.S. Code, are eligible for coverage under the new performance
management provisions in subpart D of the proposed regulations.
Employees who are currently excluded by chapter 43 of title 5, such as
administrative law judges and presidential appointees, will not be
eligible for coverage. Certain categories of employees are currently
excluded from chapter 43 by OPM administrative action, as authorized by
5 CFR 430.202(d). Such employees are eligible for coverage under the
new DoD
[[Page 7562]]
performance management provisions. DoD will decide which of those
categories of otherwise eligible employees are covered by the
Department's new performance management system or systems. The proposed
regulations also allow DoD to develop, implement, and administer
systems tailored to specific organizations and/or categories of
employees.
Performance and Behavior Accountability
Typically, poor behavior or misconduct has been addressed only
through the disciplinary process. Little attention has been paid to the
impact of behavior, good or bad, on performance outcomes of the
employee and the organization. DoD has determined that conduct and
behavior affecting performance outcomes (actions, attitude, manner of
completion, and/or conduct or professional demeanor) should be a
tracked and measured aspect of an employee's performance. The NSPS
regulations provide for consideration of employee behavior as a
performance factor, element, or objective, such as ``teamwork/
cooperation.''
When an employee's behavior enhances or impairs task/job
accomplishment, it should affect the employee's performance appraisal.
Behavior that significantly enhances the mission should also be noted.
This does not change a supervisor's responsibility to take prompt
corrective action in the event of actionable misconduct; it merely
recognizes the fact that behavior can and does affect an employee's
overall performance and should be recognized. For example, an employee
may receive corrective action at the time of misconduct. The nature of
that misconduct has an impact on the successful execution of duties and
should therefore impact the employee's performance assessment at the
conclusion of the performance rating period. The impact of misconduct
on the employee's performance rating will depend on its seriousness,
evidence of correction, and any other relevant factors.
Though behavior must be addressed in the performance management
system, it need not be a separate factor, element, or objective, if
sufficiently covered by a more general factor, element, or objective,
such as ``teamwork/cooperation.'' Whether constructed as a separate or
combined factor, element, or as an objective, the behavioral
expectations must be set by the supervisor at the beginning of an
appraisal period, and as with other performance expectations, modified
or reinforced throughout the appraisal cycle. These expectations
normally would include the general behavioral expectations for all
employees as stated in the Standards of Ethical Conduct for Employees
in the Executive Branch and the DoD Joint Ethics Regulations, as well
as any behavioral expectations specifically related to the local
organization.
By providing supervisors and managers realistic alternatives for
setting employee expectations, and assessing behavior and performance
against those expectations, DoD will be better able to hold its
employees accountable and recognize and reward those who excel. As part
of the performance management system, supervisors and employees should
stay aware of the status of performance and behavior and be better able
to anticipate and address difficulties. The performance management
system is intended to assist in employee performance and behavior
development, recognize and reward exemplary performance and behaviors,
and identify and remedy shortfalls. Employees share the responsibility
of identifying and communicating difficulties, whether due to problems
in understanding, communication, or accomplishment of expectations.
By the same token, supervisors and managers will be held
accountable for clearly and effectively communicating expectations and
providing timely feedback regarding behavior and performance.
Supervisors and managers must make meaningful behavior and performance
distinctions in support of DoD's new performance-based pay system, as
well as identifying and addressing unacceptable performance and
misconduct.
Further, supervisors and managers will have a broad range of
options for dealing with unacceptable performance. These include but
are not limited to remedial training, an improvement period, a
reassignment, an oral warning, a letter of counseling, a written
reprimand, or adverse action defined in subpart G of these proposed
regulations, including a reduction in rate of basic pay or pay band.
Resolution of employment difficulties must utilize appropriate
methodologies, using remedial and corrective actions, when appropriate,
prior to consideration of taking an adverse action. The range of
adverse actions will include the involuntary movement of an employee to
a lower pay band, giving supervisors and managers another means of
dealing with unacceptable performance.
These proposed regulations lay the foundation for a performance
management system that is fair, credible, and transparent, and that
holds employees, supervisors, and managers accountable for results.
However, a performance management system is only as effective as its
implementation and administration. To that end, DoD is committed to
providing its employees, supervisors, and managers with extensive
training on the new performance management system and its relationship
to other HR policies and programs.
Setting and Communicating Performance Expectations
Supervisors and managers must establish performance expectations
and communicate them to employees. Performance expectations must align
with and support the DoD mission and goals. Performance expectations
may take the form of goals or objectives that set general or specific
performance targets at the individual, team, and/or organizational
level, and may include observable or verifiable descriptions of manner,
quality, quantity, timeliness, and cost effectiveness. Performance
expectations will be communicated to the employee prior to holding the
employee accountable and promptly adjusted as changes occur.
Supervisors will involve employees in the planning process to the
maximum extent practicable. In so doing employees will better
understand the goals of the organization, what needs to be done, why it
needs to be done, and how well it should be done. Final determinations
in setting expectations, however, are within the authority of the
supervisor.
Monitoring Performance and Providing Feedback
One of the main objectives of the pay-for-performance system is to
replace the culture of pay-for-longevity with pay-for-results-driven
performance. Over time, there should be individual distinctions based
on performance, and high performers should receive more pay than
average or low performers. Performance-based pay requires improved
communication of expectations and performance feedback on the part of
supervisors, since employees must understand what they have to do in
order to receive higher ratings and increased pay. To achieve that
objective, the proposed regulations require ongoing feedback with at
least one interim performance review during each appraisal period.
[[Page 7563]]
Performance Rating Challenges
The NSPS performance management system, even with its greater
emphasis on communication and clarity of purpose, will result in
questions and challenges, at least in the beginning. To be effective
and allow for appropriate and reasonable rating adjustments, a process
needs to be established for challenge purposes. Such a process will
allow for the timely determination of rating adjustments, so that final
pay adjustment determinations can be made.
As provided in subpart C of the proposed regulations, performance
ratings of record will be used to make individual pay adjustments under
the new DoD pay system. In recognition of this impact on pay, the
regulations permit employees to request timely reconsideration of their
ratings of record. Because of the unique nature of such challenges, the
implementing issuances will prescribe a separate reconsideration
process that will afford every employee an opportunity to seek
appropriate redress.
Staffing and Employment--Subpart E
In order to meet its critical mission requirements in a dynamic
national security environment, the Department needs greater flexibility
to attract, recruit, shape, and retain a high quality workforce. While
preserving merit principles and veterans' preference requirements,
subpart E of the proposed regulations provides DoD with an expanded set
of flexible hiring tools to respond effectively to continuing mission
changes and priorities. DoD managers will have greater flexibility in
acquiring, advancing, and shaping a workforce tailored to the
Department's needs. The new flexibilities provide DoD managers with a
greater range of options to adapt their recruitment and hiring
strategies to meet changing mission and organizational needs, including
consideration of the nature and duration of work. The proposed
regulations also address the need to compete for the best talent
available by providing the Department with the ability to streamline
and accelerate the recruitment process.
Definitions
The proposed regulations simplify the categories of employment.
Under NSPS, employees will be defined as either career or time-limited.
Career employees serve without time limit in competitive or excepted
service positions. Time-limited employees serve either for a specified
duration (term) or for an unspecified, but limited duration
(temporary). The proposed regulations eliminate the category of
``career-conditional employment;'' under NSPS, those employees may be
hired directly into the career service.
The proposed regulations redefine the terms ``promotion'' and
``reassignment'' to fit the NSPS pay banding environment. In addition,
the regulations introduce a new term--``reduction in band''--that
replaces ``change to lower grade.'' Under pay banding, the GS grade
structure is collapsed into fewer, broader salary ranges. Employees
progress through those ranges based primarily on performance and job
duties. Under NSPS, employees can also receive increased pay as a
result of a reassignment within a pay band or promotion to a higher pay
band, as provided in subpart C of these proposed regulations.
Appointing Authorities
Governmentwide Appointing Authorities. Under the proposed
regulations, the Department will continue to use excepted and
competitive appointing authorities and entitlements under chapters 31
and 33 of title 5, U.S. Code, Governmentwide regulations, or Executive
orders, as well as other statutes. Individuals hired under those
authorities will be designated as career or time-limited employees, as
appropriate.
Additional NSPS Appointing Authorities. Under the proposed
regulations, the Secretary and the Director may establish new excepted
and competitive appointing authorities for positions covered by NSPS.
For any appointing authority that may result in entry into the
competitive service, including excepted appointments that may lead to a
subsequent noncompetitive appointment to the competitive service, DoD
and OPM will jointly publish advance notice in the Federal Register and
provide for a public comment period prior to establishing the
authority. However, where DoD determines that it has a critical mission
requirement, the Department and OPM may establish such an authority,
upon notice in the Federal Register but without a preceding comment
period. In addition, DoD and OPM may establish excepted appointing
authorities for positions that are not in the competitive service
without specific notice in the Federal Register. The proposed
regulations require DoD to publish annually a list of appointing
authorities created under this authority and remain in effect. DoD will
prescribe appropriate implementing issuances to administer a new
authority.
Direct Hire Authority. The proposed regulations authorize DoD to
exercise direct hire authority, subject to existing legal and
regulatory standards. DoD will prescribe implementing issuances to
administer this authority, provide public notice in accordance with 5
U.S.C. 3304(a)(3)(A), inform OPM of all determinations made with
respect to the exercise of this authority, and maintain appropriate
records and documentation.
Time-limited Appointing Authorities. DoD may continue to use
existing time-limited appointing authorities; however, the proposed
regulations provide the Secretary (in coordination with OPM) with the
authority to prescribe the duration of such appointments, advertising
requirements, examining procedures, and the appropriate uses of time-
limited employees. The Secretary may also establish procedures under
which a time-limited employee who competed for and is serving in a
competitive service position may be converted without further
competition to the career service, but under the conditions specified
in the proposed regulations.
Recruitment and Competitive Examining
In order to increase the efficiency of the recruiting and hiring
process without compromising merit principles, the proposed regulations
allow DoD to target its recruiting strategy. DoD will provide public
notice for all vacancies in the career service and accept applications
from all sources; however, applicants from the local commuting area and
other targeted sources may be considered first. If there are
insufficient qualified candidates in the local commuting area, DoD may
consider applicants from outside that area. The proposed regulations
also extend examining authority to DoD, to be exercised in accordance
with chapters 31 and 33 of title 5, U.S. Code. To exercise this
authority, DoD will develop and coordinate examining procedures which
will remain subject to OPM oversight. Examining procedures will adhere
to the merit system principles in 5 U.S.C. 2301 and veterans'
preference requirements set forth in 5 U.S.C. 3309 through 3320, as
applicable, and will be available in writing for applicants to review.
Probationary Periods
NSPS is a performance-based system; therefore, a critical first
step is the ability to assess employees' performance during their
initial entry into the Federal service and as they move to positions
requiring markedly new skill sets. Employees' performance during
[[Page 7564]]
this time period usually serves as a good indication of how well they
will perform throughout their career or as a supervisor. During this
period, supervisors should provide assistance to help new employees
improve their performance and, at the same time, determine whether or
not the employee is suited for the position.
Under the proposed regulations, the Department may prescribe
implementing issuances to establish probationary periods as deemed
appropriate for certain categories of employees newly appointed to
career service positions covered by NSPS. DoD will prescribe the
conditions for such periods, including duration and creditable service,
in implementing issuances. Employees who are separated during their
initial probationary period receive limited appeal rights under subpart
H of these proposed regulations; however, a preference eligible who has
completed 1 year of creditable service has full appeal rights as
provided by subparts G and H of these proposed regulations.
DoD may also prescribe in-service probationary periods for current
Federal career employees who move into certain categories of positions.
An employee who fails to complete the in-service probationary period
will be returned to a position and rate of pay comparable to the
position and rate of pay he or she held before the probationary period.
Workforce Shaping--Subpart F
Subpart F provides the Department with the authority to reduce,
realign, and reorganize the Department's workforce in a manner
consistent with a performance-based HR system. The proposed regulations
retain existing veterans' preference protections in reduction in force
(RIF). However, the proposed regulations do provide the Department with
additional flexibilities to minimize disruption resulting from any
reduction in force actions that take place.
For example, under current regulations, the minimum RIF competitive
area (i.e., the organizational and geographic boundaries in which
employees compete for retention) is an organization with separate
personnel administrative authority in a local commuting area. Under the
proposed regulations the Department may establish a minimum RIF
competitive area on the basis of one or more of the following factors:
geographical location(s), line(s) of business, product line(s),
organizational unit(s), and funding line(s). These factors provide the
Department with additional flexibility to limit the impact of a
reduction in force upon its employees (e.g., confining reduction in
force actions only to positions directly impacted by a decision to
realign the work of those positions to another facility). However, the
proposed regulations prohibit the use of competitive areas to target an
individual employee for RIF based on nonmerit factors.
The proposed regulations also simplify the RIF process. The first
step in determining employees' retention rights under that process is
to place employees in the appropriate tenure group (i.e., a group of
employees with a given appointment type). Current regulations provide
for three tenure groups, including a tenure group comprised of
employees serving on career-conditional appointments. The proposed
regulations eliminate that tenure group and place all employees in one
of two tenure groups: (1) career employees (including employees serving
an initial probationary period) and (2) employees on term and
comparable non-permanent appointments in a separate, lower tenure
group.
The regulations also provide for ``competitive groups'' as a way of
identifying those employees who will compete against one another for
retention in a RIF, based on their ranking on a retention list (similar
to a ``retention register'' under the present reduction in force
regulations). Consistent with current regulations, the Department will
continue to establish separate competitive groups for employees (1) in
the excepted and competitive service, (2) under different excepted
service appointment authorities, and (3) with different work schedules.
The proposed regulations provide the Department with the flexibility to
further define competitive groups on the basis of career group, pay
schedule, occupational series or specialty, pay band, and/or trainee
status. This new flexibility provides the Department with additional
options to minimize disruption if a reduction in force is necessary.
Finally, the proposed regulations give greater emphasis to
performance in RIF retention by placing performance ahead of length of
service. Under current regulations performance is the least important
factor. Under the proposed regulations, employees are placed on a
competitive group's retention list in the following order: (1) Tenure
group, (2) veterans' preference, (3) individual performance rating, and
(4) length of service. As provided by current law, within each tenure
group, the Department will list employees with a compensable service-
connected disability of 30 percent or more ahead of all other
preference eligibles, and will list all other preference eligibles
ahead of non-preference eligibles. Within a particular retention list,
a qualified higher-standing employee may displace a lower-standing
employee; when there are no lower-standing employees, the displaced
employee may be released from the retention list and separated by
reduction in force. Employees who are separated by reduction in force
will continue to be eligible for the existing programs that provide
hiring preferences and assistance for obtaining other employment.
Adverse Actions--Subpart G
The regulations propose several revisions and additions to the
current adverse actions system. These changes are directed at the
cumbersome and restrictive requirements for addressing and resolving
unacceptable performance and misconduct. The proposed changes
streamline the rules and procedures for taking adverse actions, to
better support the mission of the Department while ensuring that
employees receive due process and fair treatment guaranteed by the law
authorizing the establishment of NSPS.
The following sections identify the major changes proposed by this
subpart and briefly describe the purpose of each change.
1. Actions and Employees Covered
Adverse actions include removals, suspensions of any length,
furloughs of 30 days or less, reductions in pay, and reductions in pay
band (or comparable reduction). Additionally, all actions currently
excluded from coverage remain excluded. Subject to Sec.
9901.102(b)(2), all DoD employees are eligible for coverage under
subpart G, except where specifically excluded by law or regulation.
Members of the National Security Labor Relations Board established in
Sec. 9901.907 are also excluded from coverage.
Employees who are serving a probationary period, as established
under subpart E, are not covered by this subpart. However, employees
who are removed during a probationary period are covered by the
termination procedures found in 5 CFR 315.804 or 315.805. Preference
eligible employees who are removed after completing 1 year of a
probationary period are covered by the adverse action procedures of
this subpart.
2. Mandatory Removal Offenses
This subpart permits the Secretary to identify offenses that have a
direct and
[[Page 7565]]
substantial adverse impact on the Department's national security
mission. These offenses would carry a mandatory penalty of removal from
Federal service. This proposed change allows management to act swiftly
to address and resolve misconduct or unacceptable performance that
would be most harmful to the Department's critical mission. These
proposed mandatory removal offenses would be identified in advance and
made known to all employees. Employees alleged to have committed these
offenses will have the same MSPB appeal rights as provided other
employees against whom appealable adverse actions are taken. However,
only the Secretary may mitigate the penalty for committing a mandatory
removal offense (MRO). The proposed MRO procedures include a
requirement that a proposed notice of mandatory removal be issued only
after approval by the Secretary. DoD has not yet identified a proposed
list of such offenses. However, it is important to preserve the
Secretary's flexibility to carefully and narrowly determine the
offenses that will fall into this category and to make changes over
time. The absence of this flexibility has been problematic at the
Internal Revenue Service (IRS), where the IRS Restructuring Act
codified mandatory disciplinary offenses in law and limited the
agency's ability to make needed changes. The Department will identify
and publish mandatory removal offenses through implementing issuances
in advance of their application.
3. Adverse Action Procedures
This subpart retains an employee's right to representation and a
written decision but provides shorter advance notice periods and reply
periods than are currently required for appealable adverse actions.
Employees are entitled to a minimum of 15 days advance notice and a
minimum of 10 days to reply, which run concurrently. However, if there
is a reasonable cause to believe the employee has committed a crime for
which a sentence of imprisonment may be imposed, the Department will
provide a minimum 5 days advance notice and opportunity to reply, which
will run concurrently. These proposed changes facilitate timely
resolution of adverse actions while preserving employee rights.
4. Single Process and Standard for Action for Unacceptable Performance
and Misconduct
This subpart establishes a single system for taking adverse actions
based on misconduct and/or unacceptable performance. This proposed
change represents a return to a simplified approach that existed prior
to the 1978 passage of the Civil Service Reform Act and chapter 43 of
title 5, U.S. Code.
Congress enacted chapter 43 in part to create a simple, dedicated
process for agencies to use in taking adverse actions based on
unacceptable performance. Since that time, however, chapter 43 has not
worked as Congress intended. In particular, interpretations of chapter
43 have made it difficult for agencies to take actions against poor
performers and to have those actions upheld. As a result, agencies have
consistently preferred to use the procedures available under chapter 75
of title 5 rather than chapter 43 when taking actions for unacceptable
performance.
The proposed regulations eliminate the requirement for a formal,
set period for an employee to improve performance before management may
take an adverse action. Management selects employees for their
positions because the employees are well qualified. As set forth in
proposed subpart D, management must explain to employees what is
expected of them when it comes to performance. If an employee fails to
perform at an acceptable level, management may use a variety of
measures, including training, regular feedback, counseling and, at
management's discretion, an improvement period, to address and resolve
performance deficiencies. If an employee is still unable or unwilling
to perform as expected, it is reasonable for management to take an
action against the employee.
The proposed standard for taking an adverse action remains ``for
such cause as will promote efficiency of the service'' as currently in
title 5, U.S. Code.
Appeals--Subpart H
Subpart H of part 9901 covers employee appeals of certain adverse
actions taken under subpart G. Appealable actions include removals,
suspensions for more than 14 days, furloughs, reductions in pay, or
reductions in pay band (or comparable reduction). Suspensions of 14
days or less and other lesser disciplinary measures are not appealable
to MSPB, but may be grieved through a negotiated grievance procedure or
an administrative grievance procedure, whichever is applicable. Also,
actions taken under DoD placement programs are not appealable to MSPB.
Furthermore, employees who are removed during a probationary period are
provided the appeal rights found in 5 CFR 315.806. Preference eligible
employees who are removed after completing 1 year of a probationary
period are provided the appeal rights of this subpart.
Section 9902 of title 5, U.S. Code, requires that these appeal
regulations provide DoD employees fair treatment, and are afforded the
protections of due process. It provides employees the right to petition
the full Merit Systems Protection Board for review of the record of a
final Department decision. The law also provides that current legal
standards and precedents applied by MSPB under 5 U.S.C., chapter 77,
continue to apply, unless such standards and precedents are
inconsistent with legal standards established under this subpart. These
regulations state that in applying existing legal standards and
precedents, MSPB is bound by the legal standard set forth in Sec.
9901.107(a)(2), which provides that these regulations must be
interpreted in a way that recognizes the critical national security
mission of the Department, and each provision must be construed to
promote the swift, flexible, effective day-to-day accomplishment of
this mission as defined by the Secretary.
This subpart establishes procedures and timeframes for filing
appeals with MSPB and modifies rules that MSPB will use to process
appeals from DoD employees. These regulations are intended to ensure
appropriate deference to the adverse actions taken by DoD and to
streamline the way MSPB cases are handled while continuing to preserve
and safeguard employee due process protections. In addition, they
provide for an internal DoD review process of initial decisions issued
by MSPB administrative judges.
The Secretary and the Director will conduct an ongoing evaluation
of the DoD HR system to ensure that it is achieving its intended
purposes. As part of this evaluation, the Department and OPM will pay
particular attention to the adverse action and appeal procedures
established by these regulations. As noted (and discussed in more
detail below), those procedures continue to permit employees to appeal
most adverse actions to MSPB, despite the fact that DoD and OPM could
have established a separate appellate body for the initial review of
all such actions, particularly ``mandatory removal offenses.''
In proposing these appellate procedures, the Secretary and the
Director were especially mindful of 5 U.S.C. 9902(h)(1), which requires
that the Secretary consult with MSPB on changes to chapter 77 of title
5. This requirement was met through consultations between members and
[[Page 7566]]
staffs of MSPB, DoD, and OPM. During those consultations, DoD and OPM
officials described specific concerns with existing procedures and
discussed the range of appellate options and alternatives that were
under consideration. For their part, MSPB officials were particularly
constructive in responding to those concerns, offering numerous
suggestions to address them, including several modifications to their
own rules and regulations, and expressing the intention to issue
conforming regulations.
The appellate procedures below reflect many of those suggestions,
as well as the constructive dialogue that gave rise to them. Indeed,
the proposal to retain MSPB administrative judges was predicated on the
results of that dialogue. However, the cumulative effect of these
changes can be assessed only as they are actually implemented and
administered by MSPB. Such an assessment will be undertaken by DoD and
OPM after the Department has accumulated sufficient experience under
NSPS.
1. Appeals to MSPB
These regulations retain MSPB administrative judges as the initial
adjudicators of employee appeals of adverse actions. At the same time,
these regulations propose new substantive standards that MSPB will
apply to DoD cases to improve the appeals process and accommodate and
support the agency's critical national security mission. These
regulations also propose new case-handling procedures that MSPB will
apply to facilitate the efficient and expeditious resolution of
appeals.
We gave serious consideration to establishing a DoD internal
appeals board to replace MSPB administrative judges. However, we
concluded that the potential advantages of creating an internal DoD
appeals board--greater efficiency of decision-making and deference to
agency mission and operations, among them--could be achieved if MSPB
administrative judges were retained as the initial adjudicators for
adverse actions but with substantive and significant procedural
modifications. In accordance with 5 U.S.C., section 9902, employees
retain the right to petition the full Merit Systems Protection Board
for review of the record of a final Department decision.
2. Department Review of Initial MSPB Administrative Judge Decisions
This subpart authorizes the Department to review initial decisions
of MSPB administrative judges (AJ). The authority provides that DoD may
reconsider and affirm, remand, modify, or reverse an initial MSPB AJ
decision for which a request for review (RFR) has been filed by either
party concurrently with the full MSPB and the Department. DoD will
promulgate implementing issuances that establish procedures for the
submission of an RFR and review of an initial decision. The
Department's review authority includes:
Affirming an initial MSPB AJ decision where the Department
determines that such decision shall serve as precedent.
Remanding an initial MSPB AJ decision to the assigned AJ
for further adjudication where the Department believes that there has
been a material error of fact, or that there is new evidence material
to the case.
Modifying or reversing an initial MSPB AJ decision or an
MSPB AJ decision on remand where the Department determines that (1) the
decision has a direct and substantial adverse impact on the
Department's national security mission, (2) the decision is based on an
erroneous interpretation of law, this subpart, or Governmentwide rule
or regulation, (3) the decision is based on a material error of fact,
or (4) there is new evidence material to the case.
Either party who wishes to file a request for review (RFR) must
file the RFR with the Department (and concurrently with the full MSPB)
no later than 30 days after issuance of an initial MSPB AJ decision. If
the Department intends to review an initial MSPB AJ decision, the
Department must provide notice of its intent no later than 30 days
after receipt of a timely filed RFR.
Any initial MSPB AJ decision for which an RFR has been filed (or
any remand decision) that DoD affirms, modifies, or reverses will
become the final Department decision. In such cases, the final
Department decision is precedential unless otherwise determined by the
Department or reversed or modified by the full MSPB. An employee or OPM
may file a petition for review (PFR) to the full MSPB, and must file
such petition within 30 days after issuance of the final Department
decision.
Any initial MSPB AJ decision for which an RFR has been filed that
DoD does not affirm, remand, modify, or reverse shall become the final
Department decision. In such cases, the final Department decision is
not precedential. The RFR will be processed as a PFR by the full MSPB.
Any initial MSPB AJ decision for which no RFR has been filed shall
become the final Department decision. That decision is not precedential
and may not be appealed to the full MSPB.
In authorizing establishment of a human resources management system
under the National Security Personnel System Act (NSPS), Congress
specifically required that the full MSPB may order corrective action as
it considers appropriate only if MSPB determines that the final
Department decision was: (a) Arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law; (b) obtained
without procedures required by law, rule, or regulation having been
followed; or (c) unsupported by substantial evidence. These standards
are an adoption of the standards for judicial review of a final MSPB
decision currently provided under 5 U.S.C. 7703. Although these
standards are appropriate for judicial review, we believe they are too
high for an administrative review of adverse actions. That is, such
standards would significantly weaken the opportunity to correct an
erroneous MSPB AJ decision, whether the employee or the Department
petitions the correction. These regulations provide that the Department
may review an initial MSPB AJ decision, and correct such decision as
appropriate by applying a standard that provides for meaningful
corrective action and preserves statutory requirements of fairness and
due process.
The Department needs the authority to review initial MSPB AJ
decisions to ensure that MSPB interprets NSPS and these regulations in
a way that recognizes the critical mission of the Department; and to
ensure that MSPB gives proper deference to such interpretation.
Notwithstanding the Department's need for review authority, that
authority should not be unlimited. Therefore, as previously described,
these regulations limit the Department's review to those initial MSPB
AJ decisions for which either party has timely filed a request for
review, and the authority to issue a final Department decision that
modifies or reverses an initial MSPB AJ decision is limited by specific
criteria set forth in these regulations.
3. Appeals of Mandatory Removal Offenses
An employee will be able to appeal a removal action to MSPB based
on an MRO in substantially the same manner he or she will be able to
appeal an adverse action, including removal, based on a non-MRO.
[[Page 7567]]
4. MSPB Appellate Procedure Improvements
MSPB will have the authority to review and adjudicate actions
covered by this subpart as prescribed in 5 U.S.C. 9902. These
regulations propose to modify certain case processing rules, legal
standards, and precedents. Current title 5 provisions and MSPB
regulations will govern the initial review and adjudication of adverse
action appeals, unless inconsistent with the modifications identified
in this section. The modifications being made to current MSPB
requirements will further the mission of DoD without impairing fair
treatment and due process protections. Key procedural modifications
include the following:
When some or all material facts are not in genuine
dispute, the AJ may limit the scope of the hearing, or issue a decision
without a hearing.
The appeal filing deadline, including the deadline for
class appeals, is decreased from 30 days to 20 days.
The administrative judge's initial decision must be made
no later than 90 days after the date on which the appeal is filed.
If the full MSPB reviews a final Department decision,
either through an employee's petition for review or OPM intervention,
the full MSPB must render its final decision no later than 90 days
after the close of record. If OPM seeks reconsideration of a final MSPB
decision or order, MSPB must render its decision no later than 60 days
after receipt of the opposition to OPM's petition in support of such
reconsideration.
Currently, the parties to an appeal may submit unilateral
requests for additional time to pursue discovery or settlement. The
ability of the parties to unilaterally submit a request for case
suspension is eliminated.
The parties may seek discovery regarding any matter that
is relevant to any of their claims or defenses. However, by motion to
MSPB, either party can seek to limit any discovery being sought because
it is privileged; not relevant; unreasonably cumulative or duplicative;
or can be secured from some other source that is more convenient, less
burdensome, or less expensive. Discovery can also be limited through
such a motion if the burden or expense of providing a response
outweighs its benefit. Prior to filing such a motion with MSPB, the
parties must confer and attempt to resolve any pending objections. When
engaging in discovery, either party can submit only one set of
interrogatories, requests for production, and requests for admissions.
The number of interrogatories or requests for production or admissions
may not exceed 25 per pleading, including subparts, and neither party
may conduct/compel more than 2 depositions. However, either party may
file a motion requesting additional discovery. Such a motion will be
granted only if MSPB determines that necessity and good cause has been
shown to justify additional discovery.
An administrative judge may not grant interim relief or
grant a stay of an action taken against an employee. Only the full MSPB
may order interim relief or stay an adverse action following the final
Department decision regarding the adverse action.
Any response to a petition for review or a cross petition
for review must be filed within 30 days after the date of service of
the petition or cross petition.
All of these modifications will expedite and streamline the appeals
process so that both employees and the Department will be able to
resolve appeals more quickly and efficiently than is possible today.
These regulations also retain due process protections--notice, an
opportunity to respond, and a third-party review, either in person or
on the record--for removal actions. These regulations provide the same
procedural protections for all actions covered in subpart G. These
regulations retain the statutory requirement that the appealability of
a removal be unaffected by the individual's status under any retirement
system.
Section 7701 of title 5, U.S. Code, currently authorizes the
Director of OPM to intervene in an MSPB proceeding or to petition MSPB
for review of a decision if the Director believes that an erroneous
decision will have a substantial impact on a civil service law, rule,
or regulation under OPM's jurisdiction. Given OPM's responsibility for
Governmentwide personnel management, these regulations authorize OPM to
intervene in such situations regardless of whether the law, rule or
regulation is one that falls under OPM jurisdiction. These regulations
provide that the Director may exercise this intervention authority
after consultation with the Secretary.
5. Standard of Proof
Currently, actions taken under chapter 75 are sustained if
supported by a preponderance of the evidence, and performance actions
taken under chapter 43 are sustained if supported by substantial
evidence, a lower standard of proof than preponderance. In all cases
arising under this subpart, dealing either with performance or conduct,
the Department's decision will be sustained if it is supported by a
preponderance of the evidence. Changing the standard of proof to the
single, higher standard regardless of the nature of the action
simplifies the appeal process, and assures consistency without
compromising fairness.
6. Affirmative Defenses
Consistent with current law, the Department's action will not be
sustained if MSPB determines that (1) a harmful procedural error
occurred; (2) the decision was based on any prohibited personnel
practice; or (3) the decision was not otherwise in accordance with law.
These regulations require the Department to prove by a
preponderance of the evidence that an action taken against an employee
promotes the efficiency of the service, but these regulations do not
permit MSPB to reverse the action based on the way in which the charge
is labeled or the misconduct is characterized. This will eliminate
excessively technical pleading requirements in adverse action
proceedings imposed by MSPB and the U.S. Court of Appeals for the
Federal Circuit in King v. Nazelrod, 43 F.3d 663, and similar cases. As
long as the employee is on notice of the facts sufficient to respond to
the factual allegations of a charge, the Department will have complied
with the notice and due process requirements of these regulations.
Moreover, MSPB may not reverse the Department's action based on the
way a performance expectation is expressed, as long as the expectation
would be clear to a reasonable person.
7. Penalty Review
In cases involving a mandatory removal offense, the penalty
selected by the Department may not be reduced or otherwise modified by
MSPB. Only the Secretary may mitigate the penalty under these
regulations.
In all other cases arising under this subpart, MSPB (as well as
arbitrators) may mitigate penalties, but only under very limited
circumstances. Because the Department bears full accountability for
national security, it is in the best position to determine the most
appropriate adverse action for unacceptable performance or misconduct.
The Department's judgment in regard to penalty should be given
deference. These regulations preclude mitigation of the penalty
selected by DoD except where, after granting deference to the
Department, a determination is made that the penalty
[[Page 7568]]
is so disproportionate to the basis for the action as to be wholly
without justification.
This authority is significantly more limited than MSPB's current
mitigation authority under the standard first enunciated in Douglas v.
Veterans Administration (5 M.S.P.R. 280 (1981)). Under that decision,
MSPB stated that it would evaluate agency penalties to determine not
only whether they were too harsh or otherwise arbitrary but also
whether they were unreasonable under all the circumstances. In
practice, this has meant that MSPB has exercised considerable latitude
in modifying agency penalties.
With this new, substantially more limited standard for MSPB
mitigation of penalties selected by DoD, the intent is to explicitly
restrict the authority of MSPB to modify those penalties to situations
where there is simply no justification for the penalty. MSPB may not
modify the penalty imposed by the Department unless such penalty is so
disproportionate to the basis for the action as to be wholly without
justification. In cases of multiple charges, MSPB or an arbitrator may
mitigate a penalty where not all of the charges are sustained. The
third party's judgment is based on the justification for the penalty as
it relates to the sustained charge(s). These regulations are intended
to ensure that when a penalty is mitigated, the maximum justifiable
penalty must be applied.
Nothing in these regulations would limit the Secretary's sole and
exclusive authority to mitigate any penalty imposed on, or rescind any
action taken against a DoD employee pursuant to subpart G.
8. Attorney Fees
OPM and DoD have modified the current standard for recovering
attorney fees. Under the current standard, the Department may be
required to pay attorney fees based on facts that were not known to
management when the action was taken. This is an unreasonable standard
that can deter the Department from taking action in appropriate cases
and has a chilling effect on the Department's ability to carry out its
mission. Accordingly, the proposed regulations provide that a
prevailing appellant may recover attorney fees if the Department's
action was clearly without merit based upon facts known to management
when the action was taken. The proposed regulations also continue to
require attorney fees if a prohibited personnel practice was committed
by the Department.
9. Alternative Dispute Resolution
These regulations encourage the use of alternative dispute
resolution (ADR) procedures and provide that ADR will be subject to
collective bargaining to the extent permitted by subpart I, Labor-
Management Relations. However, because ADR and settlement efforts are
most successful when voluntary, these regulations prohibit MSPB from
requiring ADR or settlement in connection with any action taken under
this subpart. Once either party decides that settlement is not
desirable, the matter will proceed to adjudication. Eliminating
settlement efforts that are contrary to the expressed wishes of one or
both of the parties will speed up the adjudication process and
strengthen management decisionmaking authority.
Where the parties agree to engage in settlement discussions, the
case will be assigned to an official specifically designated for that
sole purpose, rather than the official responsible for adjudication.
This is necessary to avoid actual or perceived conflicts of interest on
the part of MSPB adjudicating officials.
10. Discrimination Allegations
The proposed regulations do not alter the substance of existing law
regarding actions involving discrimination. They preserve the rights of
employees to obtain review of their discrimination claims by EEOC in
``mixed cases,'' i.e., cases that are appealable to MSPB involving
allegations of discrimination, and they also preserve judicial review
in such cases.
11. Judicial Review
Decisions of MSPB are subject to review by the U.S. Court of
Appeals for the Federal Circuit based on the same standard currently
provided for in 5 U.S.C. 7703. As provided by 5 U.S.C. 9902(h)(6), the
Secretary, after notifying the Director, may obtain judicial review of
any final order or decision of the full MSPB under the same terms and
conditions as provided an employee. Before seeking judicial review, the
Secretary may seek reconsideration of a final MSPB decision.
12. Savings Provision
These regulations clarify that this subpart does not apply to
adverse actions proposed prior to the date of an affected employee's
coverage under this subpart.
Labor-Management Relations--Subpart I
Congress recognized DoD's need for enhanced flexibilities to ensure
mission accomplishment when it passed the National Defense
Authorization Act providing for the creation of the National Security
Personnel System (NSPS). Such a system must be ``flexible'' and
``contemporary,'' enabling a swift response to ever-changing national
security threats. The labor-management relations regulations in this
part are designed to meet these compelling concerns.
1. Purpose
DoD's ability to carry out its mission swiftly and authoritatively
is of paramount importance to national security. The DoD civilian
workforce plays a critical role in the successful accomplishment of
that mission. In authorizing the creation of the NSPS, Congress
recognized that maintaining the status quo with respect to labor-
management relations would not provide DoD with a workforce that is
sufficiently agile and flexible to execute the current and future
national security mission. Thus, it authorized the Secretary of Defense
and the Director of the Office of Personnel Management to establish a
labor-management relations system that addresses the unique role that
the Department's civilian workforce has in supporting the Department's
national security mission. See 5 U.S.C. 9902(m).
These regulations modify the provisions of 5 U.S.C. 7101 through
7135, unless noted otherwise in this subpart, and define the purpose of
the labor-management relations system. They implement the requirements
of 5 U.S.C. 9902 by ensuring the right of employees to organize,
bargain collectively, and participate through labor organizations of
their own choosing in decisions which affect them, subject to the
provisions of chapter 99 and any exclusion from coverage or limitation
on negotiability established pursuant to law, rule, DoD issuance and
any other legal authority, including the authority granted to DoD and
OPM to promulgate these regulations.
2. Definitions
These regulations keep intact a number of definitions provided for
in chapter 71 of title 5, but those definitions have been edited where
applicable to reflect references to the proposed regulations. For
example, as a general matter, the term ``agency,'' which is used
throughout the definition section of chapter 71, has been replaced by
the term ``Department'' and refers to the Department of Defense. The
regulations adopt the following terms and their associated definitions
from that chapter and apply them to DoD:
[[Page 7569]]
``Authority,'' ``dues,'' ``person,'' and ``professional employee.'' To
better fit the Department's labor-management relations system, the
regulations make substantive modifications to the following terms:
Collective bargaining is modified to specifically identify
the Department instead of the term agency in chapter 71 and to remove
the term ``consult'' because consultation, under the proposed
regulations, as well as under chapter 71, does not require that the
parties reach an agreement;
Conditions of employment is modified to exclude
determinations regarding pay and pay adjustments, in addition to
classification determinations;
Confidential employee is modified to include those
employees providing confidential support to an individual who
formulates or effectuates management policies, not just those employees
providing support to an individual who formulates or effectuates labor-
management relations policies;
Grievance is modified to limit grievances solely to those
issues defined as conditions of employment. Grievances regarding the
application of laws, rules, regulations, and DoD issuances are limited
to those issued for the purpose of affecting the working conditions of
employees--not those that may do so indirectly or incidentally. To this
extent, DoD and OPM adopt the D.C. Circuit's interpretation in U.S.
Dep't of Treasury, U.S. Customs Service v. FLRA, 43 F.3d 682 (1994), of
what constitutes a ``grievance;''
Management official is modified to include individuals who
have the authority to recommend actions, if the exercise of the
authority is not merely routine or clerical in nature; and
Supervisor is modified to include employees who supervise
military members of the armed services.
The following terms have been added because of their significance
to the NSPS system:
Board refers to the newly established National Security
Labor Relations Board (NSLRB);
Component was added to clarify that the Secretary
determines which organizations within DoD are considered components for
purposes of this subpart;
Consult was added as a distinct and separate method for
considering the interests, opinions, and recommendations of a
recognized labor organization. Consultation can be accomplished in
face-to-face meetings or through other means such as teleconferencing
or written communications;
DoD issuance or issuances identifies the types of
documents that are considered issuances; and
Grade is defined to clarify its usage under various job
grading and position classification systems.
3. Coverage
Employees, who would otherwise be covered by chapter 71, except as
modified by this subpart, are covered under the NSPS labor-management
relations system.
4. Impact on Existing Agreements
In order to ensure consistent application of DoD issuances, as well
as this part and its implementing issuances, provisions of collective
bargaining agreements that conflict with this part and/or such
issuances are unenforceable as of the effective date of this part or
such issuances. If the union believes that management has
inappropriately found contract provisions unenforceable, it may appeal
such decisions to the National Security Labor Relations Board. While as
a general matter, contract provisions that conflict with the provisions
of these regulations and their implementing issuances are
unenforceable, the Secretary may allow for the continuance of all or
part of such provisions. Where contract provisions conflict with these
regulations or their implementing issuances, the parties, upon request
by the exclusive representative, will have 60 days to bring the
remaining negotiable terms directly affected by the regulations into
conformance.
5. Employee Rights
This section of the regulations parallels the provisions contained
in 5 U.S.C. 7102. Covered employees, as defined in the regulations,
will have the right to form, join, or assist any labor organization, or
to refrain from such activity. Each employee will be protected in the
exercise of any rights under the regulations through procedures
established in this subpart.
6. National Security Labor Relations Board
The Department will create a National Security Labor Relations
Board (NSLRB) composed of at least three members appointed to fixed
terms. The Secretary will appoint the members, with one member
appointed from a list developed in consultation with the Director of
OPM. Members will be independent, distinguished citizens known for
their integrity, impartiality and expertise in labor relations and/or
the DoD mission, and/or relevant national security matters. The NSLRB
must interpret the regulations in subpart I and related decisions and
policies in a way that recognizes the critical mission of the
Department and the need for flexibility.
The NSLRB's decisions are subject to limited review by the
Authority, and subsequent judicial review under the rules established
in 5 U.S.C. 7123. Excluded from NSLRB review are arbitration exceptions
involving adverse actions appealable under subpart H of this part or 5
U.S.C. chapters 43 and 75. While the Department may issue interim rules
for the NSLRB, the NSLRB will ultimately prescribe its own rules and
publish them in the Federal Register.
In evaluating the merits of a separate National Security Labor
Relations Board that would largely replace FLRA, with its
Governmentwide responsibilities, DoD and OPM put a high premium on the
opportunity to establish an NSLRB whose members would have a deep
understanding of and appreciation for the unique challenges the
Department faces in carrying out its national security mission. To
ensure independence and impartiality, the DoD NSLRB members will be
appointed to fixed terms and be subject to the same criteria for
removing members of the Authority and MSPB, i.e., inefficiency, neglect
of duty, or malfeasance.
DoD and OPM considered splitting jurisdiction for adjudicating
certain labor disputes between FLRA and the NSLRB. The proposed
regulations give the NSLRB jurisdiction for all such disputes, except
those involving questions of representation, to ensure consistent
application of the NSPS labor relations system as well as to minimize
various forums for addressing matters stemming from a single incident.
Thus, the NSLRB will issue decisions on unfair labor practices, to
include scope of bargaining, duty to bargain in good faith, and
information requests; certain arbitration exceptions; negotiation
impasses; and questions regarding national consultation rights.
However, DoD and OPM specifically solicit comments on other
alternatives, such as requiring (or entering into a service level
agreement with) FLRA or some other organization to provide
investigative and other services, subject to these regulations.
Both the NSLRB and FLRA must interpret the regulations in subpart I
in a way that promotes the swift, flexible and effective, day-to-day
accomplishment of the Department's mission as defined by the Secretary.
The NSLRB is authorized to issue advisory opinions on important issues
of law that are binding on the parties. These opinions will help both
labor and management understand how key
[[Page 7570]]
provisions of the regulations will be interpreted without the time and
expense of years of litigation.
Matters that come before the NSLRB may be reviewed de novo, which
means that the NSLRB will have the discretion to reevaluate the
evidence presented by the record and reach its own independent
conclusions with respect to the matters at issue. Under chapter 71,
FLRA reviews issues of law de novo. The Board will have the same
authority, but it may also employ a de novo review to factual findings
and contract interpretation. Given the inherently executive branch
nature of decisions relating to national security and the Department's
unique responsibilities in this area, the Board is authorized to
conduct a thorough review of all matters, including factual
determinations by its adjudicators or arbitrators, to safeguard the
Department's national security mission.
7. Management Rights
To carry out its national security mission, the Department must
have the authority to take actions quickly when circumstances demand;
it must be able to develop and rapidly deploy resources to confront
threats in an ever-changing national security environment; and it must
be able to act without unnecessary delay.
Actions such as these involve the exercise of management's reserved
rights and lie at the very core of how DoD carries out its mission.
Under chapter 71 of title 5, the obligation to notify the union well
ahead of any changes in the workplace and complete all negotiations
before making any changes can seriously impede the Department's ability
to meet mission demands. To ensure that the Department has the
flexibility it needs, the Department and OPM propose to revise the
management rights provisions of chapter 71. Expanding the list of
nonnegotiable subjects in section 7106 to include what are now
permissive subjects of bargaining--the numbers, types, and grades of
employees and the technology, methods, and means of performing work--is
proposed. The proposed regulations prohibit bargaining over the
exercise of these rights and over other rights enumerated in chapter
71, including the right to determine mission, budget, organization, and
internal security practices, and the right to hire, assign and direct
employees, and contract out.
In addition, the proposed regulations prohibit bargaining over the
procedures management will follow in the exercise of certain of its
rights--to determine the mission, budget, organization, number of
employees, and internal security practices of the Department; to hire,
assign, and direct employees in the Department; to assign work, make
determinations with respect to contracting out, and to determine the
personnel by which Departmental operations may be conducted; to
determine the numbers, types, pay schedules, pay bands and grades of
employees or positions assigned to any organizational subdivision, work
project or tour of duty, and the technology, methods, and means of
performing work; to assign employees to meet any operational demand;
and to take whatever other actions may be necessary to carry out the
Department's mission. The Department can take action in any of these
areas without advance notice to the union.
The Department will bargain over procedures and appropriate
arrangements management will follow in the exercise of certain other
rights--to lay off and retain employees, or to suspend; remove; reduce
in pay, pay band, or grade; or take other disciplinary action against
such employees or, with respect to filling positions, to make
selections for appointments from properly ranked and certified
candidates for promotion or from any other appropriate source--as
provided for in these regulations. This bargaining may be prospective,
that is, after management has exercised such right. Where management is
not required to negotiate over procedures stemming from the exercise of
its rights, the proposed regulations provide a mechanism for obtaining
an exclusive representative's views and recommendations regarding such
procedures.
8. Exclusive Recognition of Labor Organizations
Election procedures for determining exclusive representatives have
not changed from the requirements of chapter 71.
9. Determination of Appropriate Units for Labor Organization
Representation
In determining appropriate bargaining units, FLRA will continue to
apply the same factors set forth under chapter 71. However, in applying
these criteria, the proposed regulations require FLRA to apply them
consistent with the Department's mission, organizational structure, and
the requirements of Sec. 9901.107(a). Using this standard will help
align the Department's bargaining units as closely as possible with the
agency's mission and organizational structure.
Besides requiring consideration of the Department's mission and
organizational structure in determining appropriate units, the proposed
regulations exclude additional categories of employees from coverage.
Supervisors of military members of the armed services are excluded from
coverage because they engage in supervisory functions and their
inclusion in bargaining units creates a conflict of interest. The tasks
associated with supervision do not change based on the type of person
supervised. Employees engaged in all types of personnel work are also
excluded from the unit. This is a change from the current law, which
allows employees engaged in personnel work of a purely clerical
capacity to be included in a bargaining unit. The regionalization of
DoD's personnel functions has made the clerical nature of personnel
work a false distinction for bargaining unit membership. Those
individuals are now, and will continue to be, frequently called upon to
provide advice and guidance to management officials on personnel
functions. Additionally, these individuals have direct access to all
confidential personnel records and discussions. By including these
individuals in bargaining units, a conflict of interest exists such
that management officials risk compromising confidential management
information when seeking or accepting guidance from personnelists
within the personnel office. Further, inclusion of clerical
personnelists in the bargaining unit prohibits the personnel officer
from using his or her full staff in areas that are vital to the
efficient accomplishment of the mission. The removal of these positions
will eliminate unnecessary administrative disputes. Finally, this
section removes attorney positions from bargaining unit coverage.
Supervisors and managers must be assured that communications with
attorneys are confidential and unbiased. These communications often go
to the heart of the managerial function and thus inclusion of attorneys
in the bargaining unit creates at a minimum the perception of a
conflict of interest.
10. National Consultation
The Department and Components will conduct national consultation
over substantive changes in conditions of employment generated by the
Department or the Component with those unions holding national
consultation rights. National consultation is not required where
national level bargaining has occurred or where the continuing
collaboration procedures of 9901.105 apply. Nothing
[[Page 7571]]
in this section precludes management from seeking the views of other
labor organizations not holding national consultation rights, nor does
the conduct of national consultation eliminate any local labor
relations obligations.
11. Representation Rights and Duties
As in chapter 71, these proposed regulations provide that
recognized unions are the exclusive representatives of the employees in
the unit and act for and negotiate on their behalf, consistent with law
and regulation.
Under current law, a union has the right to send a representative
to a formal discussion (``formal meetings'') called by management to
discuss general working conditions with employees. Determining what is
and is not a formal discussion, as FLRA and courts have interpreted
that term, requires managers to balance numerous factors concerning the
relative formality of the meeting and the precise subject matter
discussed. Because of the complicated and confusing criteria, front-
line managers and supervisors are often reluctant to hold discussions
with employees concerning everyday workplace issues, which can affect
work unit effectiveness and efficiency and inhibit communication and
problem solving.
The proposed language redefines formal discussions as discussions
or announcements of new or substantially changed personnel policies,
practices, or working conditions. It specifically excludes discussions
on operational matters where discussions do not involve the
establishment of new policies or practices.
An exclusive representative is entitled to attend discussions
regarding grievances filed under its negotiated grievance procedure.
Moreover, these proposed regulations resolve any uncertainty resulting
from litigation about whether unions have an institutional right to be
present during EEO proceedings, to include mediation efforts, after a
formal EEO complaint has been filed or other matters appealed by
employees. Under these proposed regulations, unions do not have such a
right unless the complainant raises the matter in the negotiated
grievance procedures.
Where an employee elects to use a procedure outside the negotiated
grievance procedure (such as EEO), the employee has the choice of
personal representatives (including, at the employee's option, a union
official acting as personal representative). However, the union has no
institutional right to represent the employee or attend meetings
related to the resolution of the employee's issues. Where a resolution
impacts the bargaining unit as a whole, the union will be fully advised
and afforded the opportunity to exercise applicable rights. This change
strikes an appropriate balance between the union's institutional rights
and employee privacy and, with regard to complaint processes other than
negotiated grievance procedures.
The proposed regulations also preserve what has come to be known as
the ``Weingarten'' right, which permits union representation at the
employee's request when management examines an employee during an
investigation and the employee reasonably believes that discipline will
follow. However, the proposed regulations exclude investigations
conducted by the Offices of the Inspectors General and other
independent Department or Component investigatory organizations, such
as U.S. Army Criminal Investigation Command and the Air Force Office of
Special Investigations; ``Weingarten'' representation rights do not
apply in such investigations. These exclusions were identified to
ensure that independent bodies can conduct truly independent
investigations. Further, this change ensures that investigations
involving criminal matters are not affected by unnecessary delay, harm
to the integrity of the investigation, or issues of confidentiality.
Under these regulations, the Department will hold employee
representatives to the same conduct requirements as any other DoD
employees. The proposed regulations clarify that the Department may
address the misconduct of any employee, including employees acting as
union representatives, as long as the agency does not treat employees
more severely because they are engaging in union activity. The
Department will no longer be bound by FLRA's ``flagrant misconduct''
standard or any other test developed through case decisions which may
immunize union representatives engaged in otherwise actionable
misconduct. However, the proposed regulation is not intended to target
the content of ideas.
This section also retains the requirement that the parties are to
negotiate in good faith and approach negotiations with a sincere
resolve to reach a collective bargaining agreement. Such agreements
will be subject to agency head review as currently provided in chapter
71.
Under chapter 71, a union has the right to information maintained
by the agency if the information is necessary and relevant to the
union's representational responsibilities. This right is maintained
with some modifications in these regulations. Under these regulations,
disclosure of information is not required if adequate alternative means
exist for obtaining the requested information, or if proper discussion,
understanding, or negotiation of a particular subject within the scope
of collective bargaining is possible without recourse to the
information. This change also relieves management of the unnecessary
administrative burden of producing information that can readily be
obtained some other way and recognizes technological advances in
information access and sharing. The proposed regulations further
provide that information may not be disclosed if an authorized official
determines that disclosure would compromise the Department's mission,
security, or employee safety.
The regulations specify that sensitive information such as personal
addresses, personal telephone numbers, personal e-mail addresses, or
any other information not related to an employee's work, may not be
disclosed. While this is not a change in existing statutory
interpretation, it is necessary to specify these limitations in the
proposed regulations, given the extremely sensitive nature of the
Department's mission and the serious consequences if such information
were deliberately or inadvertently disclosed to an inappropriate
source.
In recognition of the foregoing duties of the union, the
regulations preserve the official time provisions in chapter 71. In so
doing, we have clarified that, consistent with current law, official
time is not permitted for representational duties outside the exclusive
representative's bargaining unit. However, we have provided an
exception for multi-unit bargaining and bargaining above the level of
exclusive recognition, subject to mutual agreement of the parties.
Current chapter 71 authorizations and requirements concerning
allotments also are retained in this section.
12. Unfair Labor Practices
Management's unfair labor practices (ULPs) remain almost identical
to those contained in chapter 71. One major difference is the
elimination of 7116(a)(7), which provided that it is a ULP to enforce a
rule or regulation, which is in conflict with a collective bargaining
agreement if the agreement was in effect prior to the issuance of the
rule or regulation. Such action is no longer a ULP because the proposed
regulations provide that law, Governmentwide rules and regulations,
[[Page 7572]]
Presidential issuances, and DoD issuances will supersede current
collective bargaining agreements where the terms conflict. This
includes Department issuances in existence prior to the effective date
of these regulations. There is no significant change to the union ULPs
contained in chapter 71.
13. Duty To Bargain and Consult
In order to ensure a consistent approach to managing the Department
within a multi-union, multi-bargaining unit environment, the proposed
regulations specify that there is no duty to bargain over DoD issuances
(which includes Component issuances). In addition, management has no
obligation to bargain over changes to conditions of employment unless
the change is foreseeable, substantial, and significant in terms of
both impact and duration on the bargaining unit, or on those employees
in that part of the bargaining unit affected by the change. Typically,
where a change in conditions of employment is of duration shorter than
the bargaining process associated with that change, or where it affects
a minimal number of employees, there is no bargaining obligation
associated with that change. This regulatory change will focus
bargaining on those matters that are of significant concern and impact
and relieve the parties of potentially lengthy negotiations over
matters that are limited in scope and effect.
If parties bargain over an initial term agreement or its successor
and do not reach agreement within 90 days, the parties may agree to
continue bargaining after the 90-day period or either party may refer
the matter to the NSLRB for impasse resolution. Mid-term bargaining
over proposed changes in conditions of employment must be completed
within 30 days or management will be able to implement the change after
notifying the union. Either party may refer the matter to the NSLRB for
impasse resolution after the 30-day period. The obligation to bargain,
however, does not prevent management from exercising its management
rights identified in Sec. 9901.910.
14. Multi-Unit Bargaining
A number of installations and organizations within the Department
of Defense have multiple bargaining units. When a change is needed
affecting the entire installation, management must engage in as many
negotiations as there are units. This is unnecessarily time consuming
and frequently results in numerous variations to a single policy. In
order to expedite negotiations and ensure consistent application of the
policy, management may require multi-unit bargaining over particular
issues. Such negotiations will be binding on all parties requested to
participate in the negotiations and supersede any conflicting
provisions in current negotiated agreements or past practices. Such
agreements will not be subject to ratification as such efforts
contradict the basis for such negotiations: Timely, uniform application
of policies. These negotiations are subject to the impasse resolution
procedures of the NSLRB. Additional instructions and requirements
associated with multi-unit bargaining will be issued in Department
implementing issuances. Unions may request to negotiate multi-unit
agreements; however, the Department has sole and exclusive authority to
grant the labor organizations' requests.
15. Collective Bargaining Above the Level of Recognition
This section describes procedures associated with negotiations
above the level of exclusive recognition. The decision to negotiate at
this level rests with the Secretary and is not subject to review or
statutory third-party dispute resolution procedures. Such negotiations
are subject to impasse resolution by the NSLRB and any agreement
reached will be binding on all subordinate bargaining units and
Components of the Department. Such agreements supersede conflicting
provisions of existing collective bargaining agreements. Any agreement
reached will not be subject to ratification as this unnecessarily
delays implementation. Representatives participating in these
negotiations are expected to come to the table with authority to bind
their respective parties. These agreements, however, are subject to
agency head review to ensure compliance with applicable law, rule, and
regulation. Unions may request to negotiate at a level above
recognition; however, the Department has sole and exclusive discretion
to grant the labor organizations' requests.
Negotiations above the level of recognition will not apply to the
National Guard Bureau and the Army and Air Force National Guard. Where
these organizations are impacted by an agreement negotiated above the
level of recognition, they may negotiate at the level of recognition,
as provided in this subchapter.
16. Grievance Procedures
As a result of the decision of the Federal Circuit Court of Appeals
in Mudge v. U.S., 308 F.3d 1220 (Fed. Cir. 2002), DoD and OPM propose
to modify 5 U.S.C. 7121(a)(1) by removing the term ``administrative''
from the second sentence of that subsection. In so doing, the proposed
regulations make it clear that the negotiated grievance procedure is
the only authorized procedure for resolving issues under its exclusive
coverage. This modification is consistent with the Federal Circuit's
decision in Carter v. Gibbs, 909 F.2d 1452 (Fed. Cir. 1990),
interpreting 5 U.S.C. 7121(a)(1) prior to its amendment in 1994. Under
the regulations, matters excluded from the grievance procedure under 5
U.S.C. 7121(c) will remain excluded from coverage. The regulations
codify the well-established interpretation that classification
determinations are excluded from coverage. In addition, given the
changes to the HR system, the proposed regulations exclude three
additional matters from the negotiated grievance procedure--pay,
ratings of record issued under subpart D of these regulations, and
mandatory removal actions.
The Department recognizes that employees covered by subpart D
should have a way to challenge ratings of record to ensure such ratings
are accurate reflections of employees' performance and the performance
management system is credible and transparent. Therefore, in subpart D
of these proposed regulations, the Department and OPM have provided for
the development of a formal process whereby employees covered by
subpart D may seek reconsideration of their ratings of record issued
under this system. Similarly, subpart H provides a procedure for
seeking redress of removals based on mandatory removal offenses for
employees covered by that subpart.
The proposed regulations continue to provide for arbitration of
adverse actions that are otherwise appealable to MSPB. However, where a
party covered by subpart H seeks review of an arbitrator's award
involving an appealable matter, the arbitrator's award will be treated
in the same manner as an initial decision by an MSPB AJ under
procedures provided in that subpart; this allows an arbitrator's
decision to be appealed to the full MSPB for review, rather than to the
Federal Circuit directly.
17. Exceptions to Arbitration Awards
Exceptions to arbitrators' awards, except those involving
appealable actions under subpart G, are filed with the NSLRB. As noted,
exceptions involving appealable actions are filed either with the
Federal Circuit or MSPB, as applicable, according to coverage under
subpart H. In addition to bases contained in 5 U.S.C. 7122, exceptions
may also be filed based on the
[[Page 7573]]
arbitrator's failure to properly consider the Department's national
security mission or to comply with applicable NSPS regulations and DoD
issuances. In reviewing exceptions, the NSLRB may determine its own
jurisdiction without regard to whether any party has raised a
jurisdictional issue.
18. Savings Provisions
Where a grievance or other administrative proceeding was already
pending on the date of coverage of this subpart, the grievance or
proceeding will continue to be processed in accordance with the rules
under which it was initially filed. However, any remedy issued must be
in compliance with the applicable provisions of this part.
Next Steps
The National Defense Authorization Act for Fiscal Year 2004
provides that the development and implementation of a new HR system for
DoD will be carried out with the participation of, and in collaboration
with, employee representatives. The Secretary and the Director must
provide employee representatives with a written description of the
proposed new or modified HR system. The description contained in this
Federal Register notice satisfies this requirement. The Act further
provides that employee representatives must be given 30 calendar days
to review and make recommendations regarding the proposal. Any
recommendations must be given full and fair consideration. If the
Secretary and Director do not accept one or more recommendations, they
must notify Congress of the disagreement and then meet and confer with
employee representatives for at least 30 calendar days in an effort to
reach agreement. The Federal Mediation and Conciliation Service may
provide assistance at the Secretary's option, or if requested by a
majority of employee representatives who have made recommendations.
If there is no objection to or recommendation on a proposal, it may
be implemented immediately. Similarly, when the Secretary and the
Director accept any recommendation from employee representatives, the
revised proposal may be implemented immediately. If the Secretary and
the Director do not fully accept a recommendation, the Secretary may
implement the proposal (including any modifications made in response to
the recommendations) at any time after 30 calendar days have elapsed
since the initiation of congressional notification, consultation, and
mediation procedures. To proceed with implementation in this
circumstance, the Secretary must determine (in his/her sole and
unreviewable discretion) that further consultation and mediation are
unlikely to produce agreement. The Secretary must notify Congress
promptly of the implementation of any such contested proposal.
The Secretary and the Director must develop a method under which
each employee representative may participate in any further planning or
development in connection with implementation of a proposal. Also, the
Secretary and the Director must give each employee or representative
adequate access to information to make that participation productive.
DoD plans to make the new labor relations provisions effective 30
days after the issuance of final regulations, and notification to
Congress as required by the law. At this time, DoD intends to implement
the new HR system in phases, or spirals. The tentative schedule for
implementing the spirals is outlined as follows:
In the first spiral, up to 300,000 General Schedule (GS
and GM), Acquisition Demonstration Project, and certain alternative
personnel system employees will be brought into the system through
incremental deployments.
After the assessment cycle and certification of the
performance management system are completed, the second spiral will be
deployed.
Spiral two will consist of Federal Wage System employees,
overseas employees, and all other eligible employees.
E.O. 12866, Regulatory Review
DoD and OPM have determined that this action is a significant
regulatory action within the meaning of Executive Order 12866 because
there is a significant public interest in revisions of the Federal
employment system. DoD and OPM have analyzed the expected costs and
benefits of the proposed HR system to be adopted for DoD, and that
analysis is presented below.
Among the NSPS design requirements is to build a system that is
competitive, cost effective, and fiscally sound, while also being
flexible, credible, and trusted. NSPS will bring many flexibilities and
modern HR practices, including a movement towards market sensitive pay,
pay increases based on performance rather than the passage of time, and
the flexibility to offer competitive salaries. This requires striking a
balance among the values of pay flexibility, valuing high performance,
fiscal constraint, and credibility. While these flexibilities will
improve DoD's ability to attract and retain a high-performing
workforce, it is expected that actual payroll costs under this system
will be constrained by the amount budgeted for overall DoD payroll
expenditures, as is the case with the present GS pay system. DoD
anticipates that accessions, separations, and promotions will net out
and, as with the present system, not add to the overall cost of
administering the system.
The implementation of NSPS will, however, result in some initial
implementation costs, which can be expressed in two basic categories:
(1) Program implementation costs and (2) NSLRB startup costs. The
program implementation category refers to the costs associated with
designing and implementing the system. This includes establishing and
funding the operations of the Program Executive Office, executing the
system design process, developing and delivering new training
specifically for NSPS, conducting outreach to employees and other
parties, engaging in collaboration activities with employee
representatives, and modifying automated human resources information
systems, including personnel and payroll transaction processing
systems. In the areas of training and HR automated systems, the costs
associated with implementing NSPS will not be extensive, since DoD has
significant training and IT infrastructures in place for current
operations. DoD will not have to build new systems or delivery
mechanisms, but rather will modify existing systems and approaches to
accommodate changes brought about by NSPS. The other cost category
refers to the cost to establish the proposed National Security Labor
Relations Board. This includes typical organizational stand-up costs,
as well as staffing the NSLRB with members and a professional staff. It
is expected that the NSLRB will develop streamlined processes and
procedures and leverage existing infrastructures and technology to
minimize startup and sustainment costs.
As has been the practice with implementing other alternative
personnel systems, DoD expects to incur an initial payroll cost related
to the conversion of employees to the pay banding system. This is often
referred to as a within-grade increase (WGI) ``buyout,'' in which an
employee's basic pay, upon conversion, is adjusted by the amount of the
WGI earned to date. While this increase is paid earlier than scheduled,
it represents a cost that would have been incurred under the current
system at some point. However, under the NSPS proposed regulations,
[[Page 7574]]
WGIs no longer exist; once under NSPS, such pay increases will be based
on performance. Accordingly, the total cost of the accelerated WGI
``buyout'' should not be treated as a ``new'' cost attributed to
implementation of NSPS, since it is a cost that DoD would bear under
the current HR system in the absence of NSPS authority and implementing
regulations. The portion of the WGI buyout cost attributable to NSPS
implementation is the marginal difference between paying out the earned
portion of a WGI upon conversion and the cost of paying the same WGI
according to the current schedule. In the absence of NSPS, WGIs would
be spread out over time instead of being paid ``up front.'' The
marginal cost of the accelerated payment of earned WGIs is difficult to
estimate, but is not a significant factor in the benefit cost analysis
for regulatory review purposes.
DoD estimates the overall costs associated with implementing the
new DoD HR system--including the development and implementation of a
new human resources management system and the creation of the NSLRB--
will be approximately $158M through FY 2008. Less than $100 million
will be spent in any 12-month period.
The primary benefit to the public of this new system resides in the
HR flexibilities that will enable DoD to attract, build, and retain a
high-performing workforce focused on effective and efficient mission
accomplishment. A performance-based pay system that rewards excellent
performance will result in a more qualified and proficient workforce
and will generate a greater return on investment in terms of
productivity and effectiveness. It is also expected that new
flexibilities and improved processes in labor management relations,
adverse actions, and appeals will result in more efficient and faster
resolution of workplace and labor disputes, timelier and less costly
bargaining processes, and quicker implementation of workplace changes
needed to carry out the national security mission of the Department,
while preserving basic employee rights. Taken as a whole, the changes
included in these proposed regulations will result in a contemporary,
merit-based HR system that focuses on performance, generates respect
and trust, and supports the primary mission of DoD.
Regulatory Flexibility Act
DoD and OPM have determined that these regulations would not have a
significant economic impact on a substantial number of small entities
because they would apply only to Federal agencies and employees.
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35)
This proposed regulatory action will not impose any additional
reporting or recordkeeping requirements under the Paperwork Reduction
Act.
E.O. 12988, Civil Justice Reform
This proposed regulation is consistent with the requirements of
E.O. 12988. The regulation clearly specifies the effects on existing
Federal law or regulation; provides clear legal standards; has no
retroactive effects; specifies procedures for administrative and court
actions; defines key terms; and is drafted clearly.
E.O. 13132, Federalism
DoD and OPM have determined these proposed regulations would not
have federalism implications because they would apply only to Federal
agencies and employees. The proposed regulations would not have
financial or other effects on States, the relationship between the
Federal Government and the States, or the distribution of power and
responsibilities among the various levels of government.
Unfunded Mandates
These proposed regulations would not result in the expenditure by
State, local, or tribal governments of more than $100 million annually.
Thus, no written assessment of unfunded mandates is required.
List of Subjects in 5 CFR Part 9901
Administrative practice and procedure, Government employees, Labor
management relations, Labor unions, Reporting and recordkeeping
requirements, Wages.
Department of Defense.
Donald Rumsfeld,
Secretary.
Office of Personnel Management.
Kay Coles James,
Director.
Accordingly, under the authority of section 9902 of title 5, United
States Code, the Department of Defense and the Office of Personnel
Management are proposing to amend title 5, Code of Federal Regulations,
by establishing chapter XCIX consisting of part 9901 as follows:
CHAPTER XCIX--DEPARTMENT OF DEFENSE NATIONAL SECURITY PERSONNEL SYSTEM
(DEPARTMENT OF DEFENSE--OFFICE OF PERSONNEL MANAGEMENT)
PART 9901--DEPARTMENT OF DEFENSE NATIONAL SECURITY PERSONNEL SYSTEM
Subpart A--General Provisions
Sec.
9901.101 Purpose.
9901.102 Eligibility and coverage.
9901.103 Definitions.
9901.104 Scope of authority.
9901.105 Coordination with OPM.
9901.106 Continuing collaboration.
9901.107 Relationship to other provisions.
9901.108 Program evaluation.
Subpart B--Classification
General
9901.201 Purpose.
9901.202 Coverage.
9901.203 Waivers.
9901.204 Definitions.
Classification Structure
9901.211 Career groups.
9901.212 Pay schedules and pay bands.
Classification Process
9901.221 Classification requirements.
9901.222 Reconsideration of classification decisions.
Transitional Provisions
9901.231 Conversion of positions and employees to the NSPS
classification system.
Subpart C--Pay and Pay Administration
General
9901.301 Purpose.
9901.302 Coverage.
9901.303 Waivers.
9901.304 Definitions.
Overview of Pay System
9901.311 Major features.
9901.312 Maximum rates.
9901.313 National security compensation comparability.
Setting and Adjusting Rate Ranges
9901.321 Structure.
9901.322 Setting and adjusting rate ranges.
9901.323 Eligibility for pay increase associated with a rate range
adjustment.
Local Market Supplements
9901.331 General.
9901.332 Local market supplements.
9901.333 Setting and adjusting local market supplements.
9901.334 Eligibility for pay increase associated with a supplement
adjustment.
Performance-Based Pay
9901.341 General.
9901.342 Performance payouts.
9901.343 Pay reduction based on unacceptable performance and/or
conduct.
[[Page 7575]]
9901.344 Other performance payments.
9901.345 Treatment of developmental positions.
Pay Administration
9901.351 Setting an employee's starting pay.
9901.352 Setting pay upon reassignment.
9901.353 Setting pay upon promotion.
9901.354 Setting pay upon reduction in band.
9901.355 Pay retention.
9901.356 Miscellaneous.
Premium Pay
9901.361 General.
Conversion Provisions
9901.371 General.
9901.372 Creating initial pay ranges.
9901.373 Conversion of employees to the NSPS pay system.
Subpart D--Performance Management
9901.401 Purpose.
9901.402 Coverage.
9901.403 Waivers.
9901.404 Definitions.
9901.405 Performance management system requirements.
9901.406 Setting and communicating performance expectations.
9901.407 Monitoring performance and providing feedback.
9901.408 Developing performance and addressing poor performance.
9901.409 Rating and rewarding performance.
Subpart E--Staffing and Employment
General
9901.501 Purpose.
9901.502 Scope of authority.
9901.503 Coverage.
9901.504 Definitions.
External Recruitment and Internal Placement
9901.511 Appointing authorities.
9901.512 Probationary periods.
9901.513 Qualification standards.
9901.514 Non-citizen hiring.
9901.515 Competitive examining procedures.
9901.516 Internal placement.
Subpart F--Workforce Shaping
9901.601 Purpose and applicability.
9901.602 Scope of authority.
9901.603 Definitions.
9901.604 Coverage.
9901.605 Competitive area.
9901.606 Competitive group.
9901.607 Retention standing.
9901.608 Displacement, release, and position offers.
9901.609 Reduction in force notices.
9901.610 Voluntary separation.
9901.611 Reduction in force appeals.
Subpart G--Adverse Actions
General
9901.701 Purpose.
9901.702 Waivers.
9901.703 Definitions.
9901.704 Coverage.
Requirements for Removal, Suspension, Furlough of 30 Days or Less,
Reduction in Pay, or Reduction in Band (or Comparable Reduction)
9901.711 Standard for action.
9901.712 Mandatory removal offenses.
9901.713 Procedures.
9901.714 Proposal notice.
9901.715 Opportunity to reply.
9901.716 Decision notice.
9901.717 Departmental record.
Savings Provision
9901.721 Savings provision.
Subpart H--Appeals
9901.801 Purpose.
9901.802 Applicable legal standards and precedents.
9901.803 Waivers.
9901.804 Definitions.
9901.805 Coverage.
9901.806 Alternative dispute resolution.
9901.807 Appellate procedures.
9901.808 Appeals of mandatory removal actions.
9901.809 Actions involving discrimination.
9901.810 Savings provision.
Subpart I--Labor-Management Relations
9901.901 Purpose.
9901.902 Scope of authority.
9901.903 Definitions.
9901.904 Coverage.
9901.905 Impact on existing agreements.
9901.906 Employee rights.
9901.907 National Security Labor Relations Board.
9901.908 Powers and duties of the Board.
9901.909 Powers and duties of the Federal Labor Relations Authority.
9901.910 Management rights.
9901.911 Exclusive recognition of labor organizations.
9901.912 Determination of appropriate units for labor organization
representation.
9901.913 National consultation.
9901.914 Representation rights and duties.
9901.915 Allotments to representatives.
9901.916 Unfair labor practices.
9901.917 Duty to bargain and consult.
9901.918 Multi-unit bargaining.
9901.919 Collective bargaining above the level of recognition.
9901.920 Negotiation impasses.
9901.921 Standards of conduct for labor organizations.
9901.922 Grievance procedures.
9901.923 Exceptions to arbitration awards.
9901.924 Official time.
9901.925 Compilation and publication of data.
9901.926 Regulations of the Board.
9901.927 Continuation of existing laws, recognitions, agreements,
and procedures.
9901.928 Savings provisions.
Authority: 5 U.S.C. 9902.
Subpart A--General Provisions
Sec. 9901.101 Purpose.
(a) This part contains regulations governing the establishment of a
new human resources management system within the Department of Defense
(DoD), as authorized by 5 U.S.C. 9902. These regulations waive or
modify various statutory provisions that would otherwise be applicable
to affected DoD employees. These regulations are prescribed jointly by
the Secretary of Defense and the Director of the Office of Personnel
Management (OPM).
(b) The system established under this part is designed to meet a
number of essential requirements for the implementation of a new human
resources management system for DoD. The guiding principles for
establishing these requirements are to put mission first; respect the
individual; protect rights guaranteed by law, including the statutory
merit system principles; value talent, performance, leadership, and
commitment to public service; be flexible, understandable, credible,
responsive, and executable; ensure accountability at all levels;
balance human resources system interoperability with unique mission
requirements; and be competitive and cost effective. The key
operational characteristics and requirements of NSPS, which these
regulations are designed to facilitate, are as follows: High Performing
Workforce and Management--employees and supervisors are compensated and
retained based on their performance and contribution to mission; Agile
and Responsive Workforce and Management--workforce can be easily sized,
shaped, and deployed to meet changing mission requirements; Credible
and Trusted--system assures openness, clarity, accountability, and
adherence to the public employment principles of merit and fitness;
Fiscally Sound--aggregate increases in civilian payroll, at the
appropriations level, will conform to OMB fiscal guidance; Supporting
Infrastructure--information technology support, and training and change
management plans are available and funded; and Schedule--NSPS will be
operational and demonstrate success prior to November 2009.
Sec. 9901.102 Eligibility and coverage.
(a) Pursuant to the provisions of 5 U.S.C. 9902, all civilian
employees of DoD are eligible for coverage under one or more of
subparts B through I of this part, except to the extent specifically
prohibited by law.
(b) At his or her sole and exclusive discretion, the Secretary may,
subject to Sec. 9901.105(b)--
(1) Establish the effective date for applying subpart I of this
part to all eligible employees in accordance with 5 U.S.C. 9902(m); and
[[Page 7576]]
(2) With respect to subparts B through H of this part, apply these
subparts to a specific category or categories of eligible civilian
employees in organizations and functional units of the Department at
any time in accordance with the provisions of 5 U.S.C. 9902. However,
no category of employees may be covered by subparts B, C, E, F, G, or H
of this part unless that category is also covered by subpart D of this
part.
(c) Until the Secretary makes a determination under paragraph (b)
of this section to apply the provisions of one or more subparts of this
part to a particular category or categories of eligible employees in
organizations and functional units, those employees, will continue to
be covered by the applicable Federal laws and regulations that would
apply to them in the absence of this part. All personnel actions
affecting DoD employees will be based on the Federal laws and
regulations applicable to them on the effective date of the action.
(d) Any new NSPS classification, pay, or performance management
system covering Senior Executive Service (SES) members will be
consistent with the policies and procedures established by the
Governmentwide SES pay-for-performance framework authorized by 5 U.S.C.
chapter 53, subchapter VIII, and applicable implementing regulations
issued by OPM. If the Secretary determines that SES members employed by
DoD should be covered by classification, pay, or performance management
provisions that differ substantially from the Governmentwide SES pay-
for-performance framework, the Secretary and the Director will issue
joint regulations consistent with all of the requirements of 5 U.S.C.
9902.
(e) At his or her sole and exclusive discretion, the Secretary may
rescind the application under paragraph (b) of this section of one or
more subparts of this part to a particular category of employees and
prescribe implementing issuances for converting that category of
employees to coverage under applicable title 5 or other applicable
provisions. DoD will notify affected employees and labor organizations
in advance of a decision to rescind the application of one or more
subparts of this part to them.
(f)(1) Notwithstanding any other provision of this part, but
subject to the following conditions, the Secretary may, at his or her
sole and exclusive discretion, apply one or more subparts of this part
as of a specific effective date to a category of employees in
organizations and functional units not currently eligible for coverage
because of coverage under a system established by a provision of law
outside the waivable or modifiable chapters of title 5, U.S. Code, if
the provision of law outside those waivable or modifiable title 5
chapters provides discretionary authority to cover employees under a
given waivable or modifiable title 5 chapter or to cover them under a
separate system established by the Department.
(2) In applying paragraph (f)(1) of this section with respect to
coverage under subparts B and C of this part, the affected employees
will be converted directly to the DoD NSPS pay system from their
current pay system. The Secretary may establish conversion rules for
these employees similar to the conversion rules established under Sec.
9901.373.
Sec. 9901.103 Definitions.
In this part:
Band means pay band.
Basic pay means an employee's rate of pay before any deductions and
exclusive of additional pay of any kind, except as expressly provided
by law or regulation. For the specific purposes prescribed in Sec.
9901.332(c), basic pay includes any local market supplement.
Career group means a grouping of one or more associated or related
occupations. A career group may include one or more pay schedules.
Competencies means the measurable or observable knowledge, skills,
abilities, behaviors, and other characteristics that an individual
needs to perform a particular job or job function successfully.
Contribution means a work product, service, output, or result
provided or produced by an employee or group of employees that supports
the Departmental or organizational mission, goals, or objectives.
Day means a calendar day.
Department or DoD means the Department of Defense.
Director means the Director of the Office of Personnel Management.
Employee means an employee within the meaning of that term in 5
U.S.C. 2105.
Furlough means the placement of an employee in a temporary status
without duties and pay because of lack of work or funds or other non-
disciplinary reasons.
General Schedule or GS means the General Schedule classification
and pay system established under chapter 51 and subchapter III of
chapter 53 of title 5, U.S. Code.
Implementing issuances means documents issued at the Departmental
level by the Secretary to carry out any policy or procedure established
in accordance with this part. These issuances may apply Department-wide
or to any part of DoD as determined by the Secretary at his or her sole
and exclusive discretion.
Mandatory removal offense (MRO) means an offense that the Secretary
determines in his or her sole, exclusive, and unreviewable discretion
has a direct and substantial adverse impact on the Department's
national security mission.
National Security Personnel System (NSPS) means the human resources
management system authorized by 5 U.S.C. 9902(a). It may also refer to
the labor relations system authorized by 5 U.S.C. 9902(m).
Occupational series means a group or family of positions performing
similar types of work. Occupational series are assigned a number for
workforce information purposes (for example: 0110, Economist Series;
1410, Librarian Series).
OPM means the Office of Personnel Management.
Pay band or band means a work level and associated pay range within
a pay schedule.
Pay schedule means a set of related pay bands for a specified
category of employees within a career group.
Performance means accomplishment of work assignments or
responsibilities and contribution to achieving organizational goals,
including an employee's behavior and professional demeanor (actions,
attitude, and manner of performance), as demonstrated by his or her
approach to completing work assignments.
Promotion means the movement of an employee from one pay band to a
higher pay band under DoD implementing issuances. This includes
movement of an employee currently covered by a non-NSPS Federal
personnel system to a position determined to be at a higher level of
work in NSPS.
Rating of record means a performance appraisal prepared--
(1) At the end of an appraisal period covering an employee's
performance of assigned duties against performance expectations over
the applicable period; or
(2) As needed to reflect a substantial and sustained change in the
employee's performance since the last rating of record as provided in
DoD implementing issuances.
Reassignment means the movement of an employee from his or her
position of record to a different position or set of duties in the same
or a comparable pay band under DoD implementing issuances on a
permanent or temporary/time-limited basis. This includes the movement
of an employee between
[[Page 7577]]
positions at a comparable level of work in NSPS and a non-NSPS Federal
personnel system.
Reduction in band means the voluntary or involuntary movement of an
employee from one pay band to a lower pay band under DoD implementing
issuances. This includes movement of an employee currently covered by a
non-NSPS Federal personnel system to a position determined to be at a
lower level of work in NSPS.
Secretary means the Secretary of Defense.
SES means the Senior Executive Service established under 5 U.S.C.
chapter 31, subchapter II.
SL/ST refers to an employee serving in a senior-level position paid
under 5 U.S.C. 5376. The term ``SL'' identifies a senior-level employee
covered by 5 U.S.C. 3324 and 5108. The term ``ST'' identifies an
employee who is appointed under the special authority in 5 U.S.C. 3325
to a scientific or professional position established under 5 U.S.C.
3104.
Unacceptable performance means the failure to meet one or more
performance expectations.
Sec. 9901.104 Scope of authority.
The authority for this part is 5 U.S.C. 9902. The provisions in the
following chapters of title 5, U.S. Code, and any related regulations,
may be waived or modified in exercising the authority in 5 U.S.C. 9902:
(a) Chapters 31, 33, and 35, dealing with staffing, employment, and
workforce shaping (as authorized by 5 U.S.C. 9902(k));
(b) Chapter 43, dealing with performance appraisal systems;
(c) Chapter 51, dealing with General Schedule job classification;
(d) Chapter 53, dealing with pay for General Schedule employees,
pay and job grading for Federal Wage System employees, and pay for
certain other employees;
(e) Chapter 55, subchapter V, dealing with premium pay, except
section 5545b;
(f) Chapter 71, dealing with labor relations (as authorized by 5
U.S.C. 9902(m));
(g) Chapter 75, dealing with adverse actions and certain other
actions; and
(h) Chapter 77, dealing with the appeal of adverse actions and
certain other actions.
Sec. 9901.105 Coordination with OPM.
(a) As specified in paragraphs (b) through (e) of this section, the
Secretary will advise and/or coordinate with OPM in advance, as
applicable, regarding the proposed promulgation of certain DoD
implementing issuances and certain other actions related to the ongoing
operation of the NSPS where such actions could have a significant
impact on other Federal agencies and the Federal civil service as a
whole. Such pre-decisional coordination is intended as an internal DoD/
OPM matter to recognize the Secretary's special authority to direct the
operations of the Department of Defense pursuant to title 10, U.S.
Code, as well as the Director's institutional responsibility to oversee
the Federal civil service system pursuant to 5 U.S.C. chapter 11.
(b) DoD will advise OPM in advance regarding the extension of
specific subparts of this part to specific categories of DoD employees
under Sec. 9901.102(b).
(c) Subpart B of this part authorizes DoD to establish and
administer a position classification system and classify positions
covered by the NSPS; in so doing, DoD will coordinate with OPM prior
to--
(1) Establishing or substantially revising career groups,
occupational pay schedules, and pay bands under Sec. Sec. 9901.211 and
9901.212(a);
(2) Establishing alternative or additional qualification standards
for a particular occupational series, career group, occupational pay
schedule, and/or pay band under Sec. 9901.212(d) or 9901.513 that
significantly differ from Governmentwide standards;
(3) Establishing alternative or additional occupational series for
a particular career group or occupation under Sec. 9901.221(b)(1) that
differ from Governmentwide series and/or standards;
(4) Establishing alternative or additional classification standards
for a particular career group or occupation under Sec. 9901.221(b)(1)
that differ from Governmentwide classification standards; and
(5) Establishing the process by which DoD employees may request
reconsideration of DoD classification decisions by the Department under
Sec. 9901.222, to ensure compatibility between DoD and OPM procedures.
(d) Subpart C of this part authorizes DoD to establish and
administer a compensation system for employees of the Department
covered by the NSPS; in so doing, DoD will coordinate with OPM prior
to--
(1) Establishing maximum rates of basic pay and aggregate pay under
Sec. 9901.312 that exceed those established under 5 U.S.C. chapter 53;
(2) Establishing and adjusting pay ranges for occupational pay
schedules and pay bands under Sec. Sec. 9901.321(a), 9901.322(a) and
(b), and 9901.372;
(3) Establishing and adjusting local market supplements under
Sec. Sec. 9901.332(a) and 9901.333;
(4) Establishing alternative or additional local market areas under
Sec. 9901.332(b) that differ from those established for General
Schedule employees under 5 CFR 531.603;
(5) Establishing policies regarding starting rates of pay for newly
appointed or transferred employees under Sec. Sec. 9901.351 through
9901.354 and pay retention under Sec. 9901.355;
(6) Establishing policies regarding premium pay under Sec.
9901.361 that differ from those that exist in Governmentwide
regulations; and
(7) Establishing policies regarding the student loan repayment
program under Sec. 9901.303(c) that differ from Governmentwide
policies with respect to repayment amounts, service commitments, and
reimbursement.
(e) Subpart E of this part authorizes DoD to establish and
administer authorities for the examination and appointment of employees
to certain organizational elements of the Department covered by the
NSPS; in so doing, DoD will coordinate with OPM prior to establishing
alternative or additional examining procedures under Sec. 9901.515
that differ from those applicable to the examination of applicants for
appointment to the competitive and excepted service under 5 U.S.C.
chapters 31 and 33, except as otherwise provided by subpart E of this
part.
(f) When a matter requiring OPM coordination is submitted to the
Secretary for decision, the Director will be provided an opportunity,
as part of the Department's normal coordination process, to review and
comment on the recommendations and officially concur or nonconcur with
all or part of them. The Secretary will take the Director's comments
and concurrence/nonconcurrence into account, advise the Director of his
or her determination, and provide the Director with reasonable advance
notice of its effective date. Thereafter, the Secretary and the
Director may take such action(s) as they deem appropriate, consistent
with their respective statutory authorities and responsibilities.
(g) The Secretary and the Director fully expect their staffs to
work closely together on the matters specified in this section, before
such matters are submitted for official OPM coordination and DoD
decision, so as to maximize the opportunity for consensus and agreement
before an issue is so submitted.
[[Page 7578]]
Sec. 9901.106 Continuing collaboration.
(a) Continuing collaboration with employee representatives. (1) In
accordance with 5 U.S.C. 9902, this section provides employee
representatives with an opportunity to participate in the development
of Department-level implementing issuances that carry out the
provisions of this part. This process is not subject to the
requirements established by subpart I of this part, including but not
limited to Sec. Sec. 9901.910 (regarding the exercise of management
rights), 9901.916(a)(5) (regarding enforcement of the duty to consult
or negotiate), 9901.917 (regarding the duty to bargain and consult),
and 9901.920 (regarding impasse procedures).
(2)(i) For the purpose of this section, the term ``employee
representatives'' includes representatives of labor organizations with
exclusive recognition rights for units of DoD employees, as determined
pursuant to subpart I of this part.
(ii) The Secretary, at his or her sole and exclusive discretion,
may determine the number of employee representatives to be engaged in
the continuing collaboration process.
(iii) Each national labor organization with multiple collective
bargaining units accorded exclusive recognition will determine how its
units will be represented within the limitations imposed by the
Secretary under paragraph (a)(2)(ii) of this section.
(3)(i) Within timeframes specified by the Secretary, employee
representatives will be provided with an opportunity to submit written
comments to, and to discuss their views with, DoD officials on any
proposed final draft implementing issuances.
(ii) To the extent that the Secretary determines necessary,
employee representatives will be provided with an opportunity to
discuss their views with DoD officials and/or to submit written
comments, at initial identification of implementation issues and
conceptual design and/or at review of draft recommendations or
alternatives.
(4) Employee representatives will be provided with access to
information to make their participation in the continuing collaboration
process productive.
(5) Any written comments submitted by employee representatives
regarding proposed final draft implementing issuances will become part
of the record and will be considered before a final decision is made.
(6) Nothing in the continuing collaboration process will affect the
right of the Secretary to determine the content of implementing
issuances and to make them effective at any time.
(b) Continuing collaboration with other interested organizations.
The Secretary may also establish procedures for continuing
collaboration with appropriate organizations that represent the
interests of a substantial number of nonbargaining unit employees.
Sec. 9901.107 Relationship to other provisions.
(a)(1) The provisions of title 5, U.S. Code, are waived, modified,
or replaced to the extent authorized by 5 U.S.C. 9902 to conform to the
provisions of this part.
(2) This part must be interpreted in a way that recognizes the
critical national security mission of the Department. Each provision of
this part must be construed to promote the swift, flexible, effective
day-to-day accomplishment of this mission, as defined by the Secretary.
The interpretation of the regulations in this part by DoD and OPM must
be accorded great deference.
(b) For the purpose of applying other provisions of law or
Governmentwide regulations that reference provisions under chapters 31,
33, 35, 43, 51, 53, 55 (subchapter V only), 71, 75, and 77 of title 5,
U.S. Code, the referenced provisions are not waived but are modified
consistent with the corresponding regulations in this part, except as
otherwise provided in this part (including paragraph (c) of this
section) or in DoD implementing issuances. Applications of this rule
include, but are not limited to, the following:
(1) If another provision of law or Governmentwide regulations
requires coverage under one of the chapters modified or waived under
this part (i.e., chapters 31, 33, 35, 43, 51, 53, 55 (subchapter V
only), 71, 75, and 77 of title 5, U.S. Code), DoD employees are deemed
to be covered by the applicable chapter notwithstanding coverage under
a system established under this part. Selected examples of provisions
that continue to apply to any DoD employees (notwithstanding coverage
under subparts B through I of this part) include, but are not limited
to, the following:
(i) Foreign language awards for law enforcement officers under 5
U.S.C. 4521 through 4523;
(ii) Pay for firefighters under 5 U.S.C. 5545b;
(iii) Recruitment, relocation, and retention payments under 5
U.S.C. 5753 through 5754; and
(iv) Physicians' comparability allowances under 5 U.S.C. 5948.
(2) In applying the back pay law in 5 U.S.C. 5596 to DoD employees
covered by subpart H of this part (dealing with appeals), the reference
in section 5596(b)(1)(A)(ii) to 5 U.S.C. 7701(g) (dealing with attorney
fees) is considered to be a reference to a modified section 7701(g)
that is consistent with Sec. 9901.807(h).
(3) In applying the back pay law in 5 U.S.C. 5596 to DoD employees
covered by subpart I of this part (dealing with labor relations), the
reference in section 5596(b)(5) to section 7116 (dealing with unfair
labor practices) is considered to be a reference to a modified section
7116 that is consistent with Sec. 9901.916.
(c) Law enforcement officer special rates and geographic
adjustments under sections 403 and 404 of the Federal Employees Pay
Comparability Act of 1990 (section 529 of Pub. L. 101-509) do not apply
to employees who are covered by an NSPS classification and pay system
established under subparts B and C of this part.
(d) Nothing in this part waives, modifies or otherwise affects the
employment discrimination laws that the Equal Employment Opportunity
Commission (EEOC) enforces under 42 U.S.C. 2000e et seq., 29 U.S.C. 621
et seq., 29 U.S.C. 791 et seq., and 29 U.S.C. 206(d). Employees and
applicants for employment in DoD will continue to be covered by EEOC's
Federal sector regulations found at 29 CFR part 1614.
Sec. 9901.108 Program evaluation.
(a) DoD will establish procedures for evaluating the regulations in
this part and their implementation. DoD will provide designated
employee representatives with an opportunity to be briefed and a
specified timeframe to provide comments on the design and results of
program evaluations.
(b) Involvement in the evaluation process does not waive the rights
of any party under applicable law or regulations.
Subpart B--Classification
General
Sec. 9901.201 Purpose.
(a) This subpart contains regulations establishing a classification
structure and rules for covered DoD employees and positions to replace
the classification structure and rules in 5 U.S.C. chapter 51 and the
job grading system in 5 U.S.C. chapter 53, subchapter IV, in accordance
with the merit principle that equal pay should be provided for work of
equal value, with appropriate consideration of both national and local
rates paid by employers in the private sector, and
[[Page 7579]]
appropriate incentives and recognition should be provided for
excellence in performance.
(b) Any classification system prescribed under this subpart will be
established in conjunction with the pay system described in subpart C
of this part.
Sec. 9901.202 Coverage.
(a) This subpart applies to eligible DoD employees and positions
listed in paragraph (b) of this section, subject to a determination by
the Secretary under Sec. 9901.102(b)(2).
(b) The following employees of, or positions in, DoD organizational
and functional units are eligible for coverage under this subpart:
(1) Employees and positions that would otherwise be covered by the
General Schedule classification system established under 5 U.S.C.
chapter 51;
(2) Employees and positions that would otherwise be covered by a
prevailing rate system established under 5 U.S.C. chapter 53,
subchapter IV;
(3) Employees in senior-level (SL) and scientific or professional
(ST) positions who would otherwise be covered by 5 U.S.C. 5376;
(4) Members of the Senior Executive Service (SES) who would
otherwise be covered by 5 U.S.C. chapter 53, subchapter VIII, subject
to Sec. 9901.102(d); and
(5) Such others designated by the Secretary as DoD may be
authorized to include under 5 U.S.C. 9902.
Sec. 9901.203 Waivers.
(a) When a specified category of employees is covered by a
classification system established under this subpart, the provisions of
5 U.S.C. chapter 51 and 5 U.S.C. 5346 are waived with respect to that
category of employees, except as provided in paragraph (b) of this
section, Sec. Sec. 9901.107, and 9901.222(d) (with respect to OPM's
authority under 5 U.S.C. 5112(b) and 5346(c) to act on requests for
review of classification decisions).
(b) Section 5108 of title 5, U.S. Code, dealing with the
classification of positions above GS-15, is not waived for the purpose
of defining and allocating senior executive service positions under 5
U.S.C. 3132 and 3133 or applying provisions of law outside the waivable
and modifiable chapters of title 5, U.S. Code--e.g., 5 U.S.C. 4507 and
4507a (regarding Presidential rank awards) and 5 U.S.C. 6303(f)
(regarding annual leave accrual for members of the SES and employees in
SL/ST positions).
Sec. 9901.204 Definitions.
In this subpart:
Band means pay band.
Basic pay has the meaning given that term in Sec. 9901.103.
Career group has the meaning given that term in Sec. 9901.103.
Classification, also referred to as job evaluation, means the
process of analyzing and assigning a job or position to an occupational
series, career group, pay schedule, and pay band for pay and other
related purposes.
Competencies has the meaning given that term in Sec. 9901.103.
Occupational series has the meaning given that term in Sec.
9901.103.
Pay band or band has the meaning given that term in Sec. 9901.103.
Pay schedule has the meaning given that term in Sec. 9901.103.
Position or job means the duties, responsibilities, and related
competency requirements that are assigned to an employee whom the
Secretary approves for coverage under Sec. 9901.202(a).
Classification Structure
Sec. 9901.211 Career groups.
For the purpose of classifying positions, DoD may establish career
groups based on factors such as mission or function; nature of work;
qualifications or competencies; career or pay progression patterns;
relevant labor-market features; and other characteristics of those
occupations or positions. DoD will document in implementing issuances
the criteria and rationale for grouping occupations or positions into
career groups.
Sec. 9901.212 Pay schedules and pay bands.
(a) For purposes of identifying relative levels of work and
corresponding pay ranges, DoD may establish one or more pay schedules
within each career group.
(b) Each pay schedule may include two or more pay bands.
(c) DoD will document in implementing issuances the definitions for
each pay band which specify the type and range of difficulty and
responsibility; qualifications or competencies; or other
characteristics of the work encompassed by the pay band.
(d) DoD will designate qualification standards and requirements for
each career group, occupational series, pay schedule, and/or pay band,
as provided in Sec. 9901.514.
Classification Process
Sec. 9901.221 Classification requirements.
(a) DoD will develop a methodology for describing and documenting
the duties, qualifications, and other requirements of categories of
jobs, and DoD will make such descriptions and documentation available
to affected employees.
(b) DoD will--
(1) Assign occupational series to jobs consistent with occupational
series definitions established by OPM under 5 U.S.C. 5105 and 5346, or
by DoD; and
(2) Apply the criteria and definitions required by Sec. Sec.
9901.211 and 9901.212 to assign jobs to an appropriate career group,
pay schedule, and pay band.
(c) DoD will establish procedures for classifying jobs and may make
such inquiries of the duties, responsibilities, and qualification
requirements of jobs as it considers necessary for the purpose of this
section.
(d) Classification decisions become effective on the date an
authorized official approves the classification. Except as provided for
in Sec. 9901.222(b), such decisions will be applied prospectively and
do not convey any retroactive entitlements.
Sec. 9901.222 Reconsideration of classification decisions.
(a) An individual employee may request that DoD or OPM reconsider
the classification (i.e., pay system, career group, occupational
series, pay schedule, or pay band) of his or her official position of
record at any time.
(b) DoD will establish implementing issuances for reviewing
requests for reconsideration. Such issuances will include a provision
stating that a retroactive effective date may be required only if the
employee is wrongfully reduced in band.
(c) An employee may request OPM to review a DoD determination made
under paragraph (a) of this section. If an employee does not request an
OPM reconsideration decision, DoD's classification determination is
final and not subject to further review or appeal.
(d) OPM's final determination on a request made under this section
is not subject to further review or appeal.
(e) Any determination made under this section will be based on
criteria issued by DoD or, where DoD has adopted an OPM classification
standard, criteria issued by OPM.
Transitional Provisions
Sec. 9901.231 Conversion of positions and employees to the NSPS
classification system.
(a) This section describes the transitional provisions that apply
when DoD positions and employees are converted to a classification
system established under this subpart. Affected positions and employees
may convert from the GS system, a prevailing rate system, the SL/ST
system, the SES system, or such other DoD systems as may be designated
by the Secretary, as provided in Sec. 9901.202. For the purpose
[[Page 7580]]
of this section, the terms ``convert,'' ``converted,'' ``converting,''
and ``conversion'' refer to positions and employees that become covered
by the NSPS classification system as a result of a coverage
determination made under Sec. 9901.102(b)(2) and exclude employees who
are reassigned or transferred from a noncovered position to a position
already covered by the DoD system.
(b) DoD will issue implementing issuances prescribing policies and
procedures for converting DoD employees to a pay band upon initial
implementation of the NSPS classification system. Such procedures will
include provisions for converting an employee who is retaining a grade
under 5 U.S.C. chapter 53, subchapter VI, immediately prior to
conversion. As provided in Sec. 9901.373, DoD will convert employees
to the system without a reduction in their rate of pay (including basic
pay and any applicable locality payment under 5 U.S.C. 5304, special
rate under 5 U.S.C. 5305, or local market supplement under Sec.
9901.332).
Subpart C--Pay and Pay Administration
General
Sec. 9901.301 Purpose.
(a) This subpart contains regulations establishing pay structures
and pay administration rules for covered DoD employees to replace the
pay structures and pay administration rules established under 5 U.S.C.
chapter 53 and 5 U.S.C. chapter 55, subchapter V, as authorized by 5
U.S.C. 9902. Various features that link pay to employees' performance
ratings are designed to promote a high-performance culture within DoD.
(b) Any pay system prescribed under this subpart will be
established in conjunction with the classification system described in
subpart B of this part.
(c) Any pay system prescribed under this subpart will be
established in conjunction with the performance management system
described in subpart D of this part.
Sec. 9901.302 Coverage.
(a) This subpart applies to eligible DoD employees and positions in
the categories listed in paragraph (b) of this section, subject to a
determination by the Secretary under Sec. 9901.102(b)(2).
(b) The following employees of, or positions in, DoD organizational
and functional units are eligible for coverage under this subpart:
(1) Employees and positions who would otherwise be covered by the
General Schedule pay system established under 5 U.S.C. chapter 53,
subchapter III;
(2) Employees and positions who would otherwise be covered by a
prevailing rate system established under 5 U.S.C. chapter 53,
subchapter IV;
(3) Employees in senior-level (SL) and scientific or professional
(ST) positions who would otherwise be covered by 5 U.S.C. 5376;
(4) Members of the Senior Executive Service (SES) who would
otherwise be covered by 5 U.S.C. chapter 53, subchapter VIII, subject
to Sec. 9901.102(d); and
(5) Such others designated by the Secretary as DoD may be
authorized to include under 5 U.S.C. 9902.
(c) This section does not apply in determining coverage under Sec.
9901.361 (dealing with premium pay).
Sec. 9901.303 Waivers.
(a) When a specified category of employees is covered under this
subpart--
(1) The provisions of 5 U.S.C. chapter 53 are waived with respect
to that category of employees, except as provided in Sec. 9901.107 and
paragraphs (b) through (c) of this section; and
(2) The provisions of 5 U.S.C. chapter 55, subchapter V (except
section 5545b), are waived with respect to that category of employees
to the extent provided by the Secretary when approving coverage under
Sec. 9901.361.
(b) The following provisions of 5 U.S.C. chapter 53 are not waived:
(1) Sections 5311 through 5318, dealing with Executive Schedule
positions;
(2) Section 5371, insofar as it authorizes OPM to apply the
provisions of 38 U.S.C. chapter 74 to DoD employees in health care
positions covered by section 5371 in lieu of any NSPS pay system
established under this subpart or the following provisions of title 5,
U.S. Code: chapters 51, 53, and 61, and subchapter V of chapter 55. The
reference to ``chapter 51'' in section 5371 is deemed to include a
classification system established under subpart B of this part; and
(3) Section 5377, dealing with the critical pay authority.
(c) Section 5379 is modified. DoD may establish and administer a
student loan repayment program for DoD employees, except that DoD may
not make loan payments for any noncareer appointee in the SES (as
defined in 5 U.S.C. 3132(a)(7)) or for any employee occupying a
position that is excepted from the competitive service because of its
confidential, policy-determining, policy-making, or policy-advocating
character. Notwithstanding Sec. 9901.302(a), any DoD employee
otherwise covered by section 5379 is eligible for coverage under the
provisions established under this paragraph, subject to a determination
by the Secretary under Sec. 9901.102(b)(2).
Sec. 9901.304 Definitions.
In this part:
Band means pay band.
Band rate range means the range of rates of basic pay (excluding
any local market supplements) applicable to employees in a particular
pay band, as described in Sec. 9901.321. Each band rate range is
defined by a minimum and maximum rate.
Basic pay has the meaning given that term in Sec. 9901.103.
Bonus means an element of the performance payout that consists of a
one-time lump-sum payment made to employees. It is not part of basic
pay.
Career group has the meaning given that term in Sec. 9901.103.
Competencies has the meaning given that term in Sec. 9901.103.
Contribution has the meaning given that term in Sec. 9901.103.
Contribution assessment means the determination made by the pay
pool manager as to the impact, extent, and scope of contribution that
the employee's performance made to the accomplishment of the
organization's mission and goals.
CONUS or Continental United States means the States of the United
States, excluding Alaska and Hawaii, but including the District of
Columbia.
Extraordinary pay increase or EPI means a discretionary basic pay
increase to reward an employee at the highest performance level who has
been assigned the maximum number of shares available under the rating
and contribution scheme when the payout formula does not adequately
compensate them for the employee's extraordinary performance and
contribution, as described in Sec. 9901.344(b).
Local market supplement means a geographic- and occupation-based
supplement to basic pay, as described in Sec. 9901.332.
Modal rating means the rating of record that occurs most frequently
in a particular pay pool level.
Pay band or band has the meaning given that term in Sec. 9901.103.
Pay pool means the organizational elements/units or other
categories of employees that are combined for the purpose of
determining performance payouts. Each employee is in only one pay pool
at a time. Pay pool also means the dollar value of the funds set aside
[[Page 7581]]
for performance payouts for employees covered by a pay pool.
Pay schedule has the meaning given that term in Sec. 9901.103.
Performance has the meaning given that term in Sec. 9901.103.
Performance payout means the total monetary value of performance
pay increase and bonus resulting from the performance appraisal process
and contribution assessment.
Performance share means a unit of performance payout awarded to an
employee based on performance. Performance shares may be awarded in
multiples commensurate with the employee's performance and contribution
rating level.
Performance share value means a calculated value for each
performance share based on pay pool funds available and the
distribution of performance shares across employees within a pay pool,
expressed as a percentage or fixed dollar amount.
Promotion has the meaning given that term in Sec. 9901.103.
Rating of record has the meaning given that term in Sec. 9901.103.
Reassignment has the meaning given that term in Sec. 9901.103.
Reduction in band has the meaning given that term in Sec.
9901.103.
Unacceptable performance has the meaning given that term in Sec.
9901.103.
Overview of Pay System
Sec. 9901.311 Major features.
Through the issuance of implementing issuances, DoD will establish
a pay system that governs the setting and adjusting of covered
employees' rates of pay and the setting of covered employees' rates of
premium pay. The NSPS pay system will include the following features:
(a) A structure of rate ranges linked to various pay bands for each
career group, in alignment with the classification structure described
in subpart B of this part;
(b) Policies regarding the setting and adjusting of band rate
ranges based on mission requirements, labor market conditions, and
other factors, as described in Sec. Sec. 9901.321 and 9901.322;
(c) Policies regarding the setting and adjusting of local market
supplements to basic pay based on local labor market conditions and
other factors, as described in Sec. Sec. 9901.331 through 9901.333;
(d) Policies regarding employees' eligibility for pay increases
based on adjustments in rate ranges and supplements, as described in
Sec. Sec. 9901.323 and 9901.334;
(e) Policies regarding performance-based pay, as described in
Sec. Sec. 9901.341 through 9901.345;
(f) Policies on basic pay administration, including movement
between career groups; positions, pay schedules, and pay bands, as
described in Sec. Sec. 9901.351 through 9901.356;
(g) Linkages to employees' performance ratings of record, as
described in subpart D of this part; and
(h) Policies regarding the setting of and limitations on premium
payments, as described in Sec. 9901.361.
Sec. 9901.312 Maximum rates.
The Secretary will establish limitations on maximum rates of basic
pay and aggregate pay for covered employees.
Sec. 9901.313 National security compensation comparability.
(a) To the maximum extent practicable, for fiscal years 2004
through 2008, the overall amount allocated for compensation of the DoD
civilian employees who are included in the NSPS may not be less than
the amount that would have been allocated for compensation of such
employees for such fiscal years if they had not been converted to the
NSPS, based on at a minimum--
(1) The number and mix of employees in such organizational or
functional units prior to conversion of such employees to the NSPS; and
(2) Adjustments for normal step increases and rates of promotion
that would have been expected, had such employees remained in their
previous pay schedule.
(b) To the maximum extent practicable, DoD implementing issuances
for the NSPS will provide a formula for calculating the overall amount
to be allocated for fiscal years beyond fiscal year 2008 for
compensation of the civilian employees included in the NSPS. The
formula will ensure that in the aggregate employees are not
disadvantaged in terms of the overall amount of pay available as a
result of conversion to the NSPS, while providing flexibility to
accommodate changes in the function of the organization and other
changed circumstances that might impact pay levels.
(c) For the purpose of this section, ``compensation'' for civilian
employees means basic pay and any geographic-based payments that are
basic pay for retirement purposes (e.g., NSPS local market
supplements).
Setting and Adjusting Rate Ranges
Sec. 9901.321 Structure.
(a) DoD may establish ranges of basic pay for pay bands, with
minimum and maximum rates set and adjusted as provided in Sec.
9901.322.
(b) For each pay band within a career group, DoD will establish a
common rate range that applies in all locations.
Sec. 9901.322 Setting and adjusting rate ranges.
(a) Within its sole and exclusive discretion, DoD may, subject to
Sec. 9901.105(d)(2), set and adjust the rate ranges established under
Sec. 9901.321. In determining the rate ranges, DoD may consider
mission requirements, labor market conditions, availability of funds,
pay adjustments received by employees of other Federal agencies, and
any other relevant factors.
(b) DoD may determine the effective date of newly set or adjusted
band rate ranges.
(c) DoD may establish different rate ranges and provide different
rate range adjustments for different pay bands.
(d) DoD may adjust the minimum and maximum rates of a pay band by
different percentages.
Sec. 9901.323 Eligibility for pay increase associated with a rate
range adjustment.
(a) Except for employees receiving a retained rate under Sec.
9901.355, employees with a current rating of record above
``unacceptable'' will receive a percentage increase in basic pay equal
to the percentage by which the minimum of their rate range is
increased.
(b) Employees with a current rating of record of ``unacceptable''
will not receive a pay increase under this section.
(c) For employees who do not have a current rating of record, DoD
will determine the amount of any pay increase associated with a rate
range adjustment in accordance with implementing issuances.
Local Market Supplements
Sec. 9901.331 General.
The basic pay ranges established under Sec. Sec. 9901.321 through
9901.323 may be supplemented in appropriate circumstances by local
market supplements, as described in Sec. Sec. 9901.332, 9901.333, and
9901.334. These supplements are expressed as a percentage of basic pay
and are set and adjusted as described in Sec. 9901.333. As authorized
by Sec. 9901.355, DoD implementing issuances will determine the extent
to which Sec. Sec. 9901.332 through 9901.334 apply to employees
receiving a retained rate.
[[Page 7582]]
Sec. 9901.332 Local market supplements.
(a) For each band rate range, DoD may establish local market
supplements that apply in specified local market areas. Local market
supplements apply to employees whose official duty station is located
in the given area. DoD may provide different local market supplements
for different career groups or for different occupations and/or pay
bands within the same career group in the same local market area.
(b) For the purpose of establishing and modifying local market
areas, 5 U.S.C. 5304 is not waived. A DoD decision to use the local
market area boundaries based on locality pay rates established under 5
U.S.C. 5304 does not require separate DoD regulations. DoD may, in
accordance with 5 U.S.C. 553, issue regulations that establish and
adjust different local market areas within CONUS or establish and
adjust new local market areas outside CONUS. As provided by 5 U.S.C.
5304(f)(2)(B), judicial review of any DoD regulation regarding the
establishment or adjustment of local market areas is limited to whether
or not the regulation was promulgated in accordance with 5 U.S.C. 553.
(c) Local market supplements are considered basic pay for only the
following purposes:
(1) Retirement under 5 U.S.C. chapter 83 or 84;
(2) Life insurance under 5 U.S.C. chapter 87;
(3) Premium pay under 5 U.S.C. chapter 55, subchapter V, or similar
payments under other legal authority, including this subpart;
(4) Severance pay under 5 U.S.C. 5595;
(5) Cost-of-living allowances and post differentials under 5 U.S.C.
5941;
(6) Overseas allowances and differentials under 5 U.S.C. chapter
59, subchapter III, to the extent authorized by the Department of
State;
(7) Other payments and adjustments authorized under this subpart as
specified by DoD implementing issuances;
(8) Other payments and adjustments under other statutory or
regulatory authority that are basic pay for the purpose of locality-
based comparability payments under 5 U.S.C. 5304;
(9) Determining the rate of basic pay upon conversion to the NSPS
pay system as provided in Sec. 9901.373(b); and
(10) Any provisions for which DoD local market supplements are
treated as basic pay by law.
Sec. 9901.333 Setting and adjusting local market supplements.
(a) Within its sole and exclusive discretion, DoD may, subject to
Sec. 9901.105(d)(3), set and adjust local market supplements. In
determining the amounts of the supplements, DoD will consider mission
requirements, labor market conditions, availability of funds, pay
adjustments received by employees of other Federal agencies, allowances
and differentials under 5 U.S.C. chapter 59, and any other relevant
factors.
(b) DoD may determine the effective date of newly set or adjusted
local market supplements. Established supplements will be reviewed for
possible adjustment at least annually in conjunction with rate range
adjustments under Sec. 9901.322.
Sec. 9901.334 Eligibility for pay increase associated with a
supplement adjustment.
(a) When a local market supplement is adjusted under Sec.
9901.333, employees to whom the supplement applies with a current
rating of record above ``unacceptable'' will receive any pay increase
resulting from that adjustment.
(b) Employees with a current rating of record of ``unacceptable''
will not receive a pay increase under this section.
(c) For employees who do not have a current rating of record, DoD
will determine the amount of any pay increase under this section in
accordance with implementing issuances.
Performance-Based Pay
Sec. 9901.341 General.
Sections 9901.342 through 9901.345 describe the performance-based
pay that is part of the pay system established under this subpart.
These provisions are designed to provide DoD with the flexibility to
allocate available funds to employees based on individual, team, or
organizational performance as a means of fostering a high-performance
culture that supports mission accomplishment.
Sec. 9901.342 Performance payouts.
(a) Overview. (1) The NSPS pay system will be a pay-for-performance
system and, when implemented, will result in a distribution of
available performance pay funds based upon individual performance,
individual contribution, organizational performance, or a combination
of those elements. The NSPS pay system will use a pay pool concept to
manage, control, and distribute performance-based pay increases and
bonuses. The performance payout is a function of the amount of money in
the performance pay pool and the number of shares assigned to
individual employees.
(2) The rating of record used as the basis for a performance pay
increase is the one assigned for the most recently completed appraisal
period, except that if an appropriate rating official determines that
an employee's current performance is inconsistent with that rating,
that rating official may prepare a more current rating of record,
consistent with Sec. 9901.409(b). Unless otherwise provided in
implementing issuances, if an employee is not eligible to have a rating
of record for the current rating cycle for reasons other than those
identified in paragraphs (f) and (g), such employee will not be
eligible for a pay increase or bonus payment under this part.
(b) Performance pay pools. (1) DoD will issue implementing
issuances for the establishment and management of pay pools for
performance payouts.
(2) DoD may determine a percentage of pay to be included in pay
pools and paid out in accordance with accompanying DoD implementing
issuances as--
(i) A performance-based pay increase;
(ii) A performance-based bonus; or
(iii) A combination of a performance-based pay increase and a
performance-based bonus.
(c) Performance shares. (1) DoD will issue implementing issuances
regarding the assignment of a number or range of shares for each rating
of record level, subject to paragraph (c)(2) of this section.
Performance shares will be used to determine performance pay increases
and/or bonuses.
(2) Employees with unacceptable ratings of record will be assigned
zero shares.
(d) Performance payout. (1) DoD will establish a methodology that
authorized officials will use to determine the value of a performance
share. A performance share may be expressed as a percentage of an
employee's rate of basic pay (exclusive of local market supplements
under Sec. 9901.332) or as a fixed dollar amount, or both.
(2) To determine an individual employee's performance payout, DoD
will multiply the share value determined under paragraph (d)(1) of this
section by the number of performance shares assigned to the employee.
(3) DoD may provide for the establishment of control points within
a band that limit increases in the rate of basic pay. DoD may require
that certain criteria be met for increases above a control point.
(4) A performance payout may be an increase in basic pay, a bonus,
or a
[[Page 7583]]
combination of the two. However, an increase in basic pay may not cause
the employee's rate of basic pay to exceed the maximum rate or
applicable control point of the employee's band rate range.
Implementing issuances will provide guidance for determining the payout
amount and the appropriate distribution between basic pay and bonus.
(5) DoD will determine the effective date(s) of increases in basic
pay made under this section.
(6) Notwithstanding any other provision of this section, DoD will
issue implementing issuances to address the circumstances under which
an employee receiving a retained rate under Sec. 9901.355 may receive
a lump-sum performance payout.
(e) Proration of performance payouts. DoD will issue implementing
issuances regarding the proration of performance payouts for employees
who, during the period between performance payouts, are--
(1) Hired, transferred, reassigned, or promoted;
(2) In a leave-without-pay status (except as provided in paragraphs
(f) and (g) of this section); or
(3) In other circumstances where proration is considered
appropriate.
(f) Adjustments for employees returning after performing honorable
service in the uniformed services. DoD will issue implementing
issuances regarding how it sets the rate of basic pay prospectively for
an employee who leaves a DoD position to perform service in the
uniformed services (in accordance with 38 U.S.C. 4303 and 5 CFR
353.102) and returns through the exercise of a reemployment right
provided by law, Executive order, or regulation under which accrual of
service for seniority-related benefits is protected (e.g., 38 U.S.C.
4316). DoD will credit the employee with increases under Sec. 9901.323
and increases to basic pay under this section based on the employee's
last DoD rating of record or the average percentage basic pay increases
granted to employees in the same pay pool, pay schedule, and pay band
who received the modal rating, whichever is most advantageous to the
employee. For employees who have no such rating of record, DoD will use
the modal rating received by other employees in the same pay pool, pay
schedule, and pay band during the most recent rating cycle.
(g) Adjustments for employees returning to duty after being in
workers' compensation status. DoD will issue implementing issuances
regarding how it sets the rate of basic pay prospectively for an
employee who returns to duty after a period of receiving injury
compensation under 5 U.S.C. chapter 81, subchapter I (in a leave-
without-pay status or as a separated employee). For the intervening
period, DoD will credit the employee with increases under Sec.
9901.323 and increases to basic pay under this section based on the
employee's last DoD rating of record or the average percentage basic
pay increases granted to employees in the same pay pool, pay schedule,
and pay band who received the modal rating, whichever is most
advantageous to the employee. For employees who have no such rating of
record, DoD will use the modal rating received by other employees
covered by the same pay pool, pay schedule, and pay band during the
most recent rating cycle.
Sec. 9901.343 Pay reduction based on unacceptable performance and/or
conduct.
An employee's rate of basic pay may be reduced based on a
determination of unacceptable performance and/or conduct. Such
reduction may not exceed 10 percent unless the employee has been
changed to a lower pay band and a greater reduction is needed to set
the employee's pay at the maximum rate of the pay band. (See also
Sec. Sec. 9901.352 and 9901.354.)
Sec. 9901.344 Other performance payments.
(a) In accordance with implementing issuances authorized officials
may make other payments to--
(1) Recognize organizational or team achievement;
(2) Reward extraordinary individual performance through an
extraordinary pay increase (EPI), as described in paragraph (b) of this
section; and
(3) Provide for other special circumstances.
(b) An EPI is paid in addition to performance payouts under Sec.
9901.342 and will usually be made effective at the time of those
payouts. The future performance and contribution level exhibited by the
employee will be expected to continue at an extraordinarily high level.
Sec. 9901.345 Treatment of developmental positions.
DoD may issue implementing issuances regarding pay increases for
developmental positions. These issuances may require employees to meet
certain standardized assessment or certification points as part of a
formal training/developmental program.
Pay Administration
Sec. 9901.351 Setting an employee's starting pay.
Subject to DoD implementing issuances, DoD may set the starting
rate of pay for individuals who are newly appointed or reappointed to
the Federal service anywhere within the assigned pay band.
Sec. 9901.352 Setting pay upon reassignment.
(a) Subject to paragraph (b) of this section, DoD may set pay
anywhere within the assigned pay band when an employee is reassigned,
either voluntarily or involuntarily, to a position in a comparable pay
band.
(b) Subject to the adverse action procedures set forth in subpart G
of this part and implementing issuances, DoD may reduce an employee's
rate of basic pay within a pay band for unacceptable performance and/or
conduct. A reduction in pay under this section may not be more than 10
percent or cause an employee's rate of basic pay to fall below the
minimum rate of the employee's pay band. Such a reduction may be made
effective at any time.
Sec. 9901.353 Setting pay upon promotion.
Subject to DoD implementing issuances, DoD may set pay anywhere
within the assigned pay band when an employee is promoted to a position
in a higher pay band.
Sec. 9901.354 Setting pay upon reduction in band.
(a) Subject to paragraph (b) of this section, DoD may set pay
anywhere within the assigned pay band when an employee is reduced in
band, either voluntarily or involuntarily. As applicable, pay retention
provisions established under Sec. 9901.355 will apply.
(b) Subject to the adverse action procedures set forth in subpart G
of this part, DoD may assign an employee involuntarily to a position in
a lower pay band for unacceptable performance and/or conduct, and may
simultaneously reduce the employee's rate of basic pay. A reduction in
basic pay under this section may not cause an employee's rate of basic
pay to fall below the minimum rate of the employee's new pay band, or
be more than 10 percent unless a larger reduction is needed to place
the employee at the maximum rate of the lower band.
(c) If an employee is reduced in band involuntarily, but not
through adverse action procedures (e.g., termination of a temporary
promotion or failure to successfully complete a supervisory
probationary period), DoD will limit any reduction in pay in accordance
with implementing issuances.
Sec. 9901.355 Pay retention.
(a) Subject to the requirements of this section, DoD will issue
implementing
[[Page 7584]]
issuances regarding pay retention. Pay retention prevents a reduction
in basic pay that would otherwise occur by preserving the former rate
of basic pay within the employee's new pay band or by establishing a
retained rate that exceeds the maximum rate of the new pay band.
(b) Pay retention will be based on the employee's rate of basic pay
in effect immediately before the action that would otherwise reduce the
employee's rate. A retained rate will be compared to the range of rates
of basic pay applicable to the employee's position.
Sec. 9901.356 Miscellaneous.
(a) Except in the case of an employee who does not receive a pay
increase under Sec. Sec. 9901.323 because of an unacceptable rating of
record, an employee's rate of basic pay may not be less than the
minimum rate of the employee's pay band.
(b) Except as provided in Sec. 9901.355, an employee's rate of
basic pay may not exceed the maximum rate of the employee's band rate
range.
(c) DoD will follow the rules for establishing pay periods and
computing rates of pay in 5 U.S.C. 5504 and 5505, as applicable. For
employees covered by 5 U.S.C. 5504, annual rates of pay will be
converted to hourly rates of pay in computing payments received by
covered employees.
(d) DoD may promulgate implementing issuances that provide for a
special increase prior to an employee's movement in recognition of the
fact that the employee will not be eligible for a promotion increase
under the GS system, if a DoD employee moves from the pay system
established under this subpart to a GS position having a higher level
of duties and responsibilities.
(e) Subject to DoD implementing issuances, DoD may set the rate of
basic pay of an employee upon the expiration of a temporary
reassignment or promotion, and any resulting reduction in basic pay is
not considered an adverse action under subpart G of this part.
Premium Pay
Sec. 9901.361 General.
(a) This section applies to eligible DoD employees and positions
which would otherwise be covered by 5 U.S.C. chapter 55, subchapter V,
subject to a determination by the Secretary under Sec. 9901.102(b)(2).
In making such a determination, the Secretary may waive the provisions
of 5 U.S.C. chapter 55, subchapter V (except section 5545b), in whole
or in part with respect to any category of employees approved for
coverage.
(b) DoD will issue implementing issuances regarding additional
payments which include, but are not limited to:
(1) Overtime pay (excluding overtime pay under the Fair Labor
Standards Act);
(2) Compensatory time off;
(3) Sunday, holiday, and night pay;
(4) Annual premium pay for standby duty and administratively
uncontrollable overtime;
(5) Criminal investigator availability pay; and
(6) Hazardous duty differentials.
(c) DoD will determine the conditions of eligibility for the
amounts of and limitations on payments made under the authority of this
section.
Conversion Provisions
Sec. 9901.371 General.
(a) This section and Sec. Sec. 9901.372 and 9901.373 describe the
provisions that apply when DoD employees are converted to the NSPS pay
system established under this subpart. An affected employee may convert
from the GS system, a prevailing rate system, the SL/ST system, or the
SES system (or such other systems designated by the Secretary as DoD
may be authorized to include under 5 U.S.C. 9902), as provided in Sec.
9901.302. For the purpose of this section and Sec. Sec. 9901.372 and
9901.373, the terms ``convert,'' ``converted,'' ``converting,'' and
``conversion'' refer to employees who become covered by the pay system
without a change in position (as a result of a coverage determination
made under Sec. 9901.102(b)(2)) and exclude employees who are
reassigned or transferred from a noncovered position to a position
already covered by the NSPS pay system.
(b) DoD will issue implementing issuances prescribing the policies
and procedures necessary to implement these transitional provisions.
Sec. 9901.372 Creating initial pay ranges.
DoD will set the initial band rate ranges for the NSPS pay system
established under this subpart. The initial ranges may link to the
ranges that apply to converted employees in their previously applicable
pay system (taking into account any applicable locality payment under 5
U.S.C. 5304, special rate under 5 U.S.C. 5305, or local market
supplement under Sec. 9901.332).
Sec. 9901.373 Conversion of employees to the NSPS pay system.
(a) When the NSPS pay system is established under this subpart and
applied to a category of employees, DoD will convert employees to the
system without a reduction in their rate of pay (including basic pay
and any applicable locality payment under 5 U.S.C. 5304, special rate
under 5 U.S.C. 5305, or local market supplement under Sec. 9901.332).
(b) When an employee receiving a special rate under 5 U.S.C. 5305
before conversion is converted to an equal rate of pay under the NSPS
pay system that consists of a basic rate and a local market supplement,
the conversion will not be considered as resulting in a reduction in
basic pay for the purpose of applying subpart G of this part.
(c) If another personnel action (e.g., promotion, geographic
movement) takes effect on the same day as the effective date of an
employee's conversion to the new pay system, DoD will process the other
action under the rules pertaining to the employee's former system
before processing the conversion action.
(d) An employee on a temporary promotion at the time of conversion
will be returned to his or her official position of record prior to
processing the conversion. If the employee is temporarily promoted
immediately after the conversion, pay will be set under the rules for
promotion increases under the NSPS pay system.
(e) The Secretary has discretion to make one-time pay adjustments
for GS and prevailing rate employees when they are converted to the
NSPS pay system. DoD will issue implementing issuances governing any
such pay adjustment, including rules governing employee eligibility,
pay computations, and the timing of any such pay adjustment.
Subpart D--Performance Management
Sec. 9901.401 Purpose.
(a) This subpart provides for the establishment in DoD of a
performance management system as authorized by 5 U.S.C. 9902.
(b) The performance management system established under this
subpart is designed to promote and sustain a high-performance culture
by incorporating the following elements:
(1) Adherence to merit principles set forth in 5 U.S.C. 2301;
(2) A fair, credible, and transparent employee performance
appraisal system;
(3) A link between the performance management system and DoD's
strategic plan;
(4) A means for ensuring employee involvement in the design and
implementation of the system;
(5) Adequate training and retraining for supervisors, managers, and
[[Page 7585]]
employees in the implementation and operation of the performance
management system;
(6) A process for ensuring ongoing performance feedback and
dialogue among supervisors, managers, and employees throughout the
appraisal period, and setting timetables for review;
(7) Effective safeguards to ensure that the management of the
system is fair and equitable and based on employee performance;
(8) A means for ensuring that adequate agency resources are
allocated for the design, implementation, and administration of the
performance management system; and
(9) A pay-for-performance evaluation system to better link
individual pay to performance, and provide an equitable method for
appraising and compensating employees.
Sec. 9901.402 Coverage.
(a) This subpart applies to eligible DoD employees and positions in
the categories listed in paragraph (b) of this section, subject to a
determination by the Secretary under Sec. 9901.102(b)(2), except as
provided in paragraph (c) of this section.
(b) The following employees and positions in DoD organizational and
functional units are eligible for coverage under this subpart:
(1) Employees and positions who would otherwise be covered by 5
U.S.C. chapter 43;
(2) Employees and positions who were excluded from chapter 43 by
OPM under 5 CFR 430.202(d) prior to the date of coverage of this
subpart; and
(3) Such others designated by the Secretary as DoD may be
authorized to include under 5 U.S.C. 9902.
(c) This subpart does not apply to employees who have not been, and
are not expected to be, employed in an NSPS position for longer than a
minimum period (as defined in Sec. 9901.404) during a single 12-month
period.
Sec. 9901.403 Waivers.
When a specified category or group of employees is covered by the
performance management system(s) established under this subpart, the
provisions of 5 U.S.C. chapter 43 are waived with respect to that
category of employees.
Sec. 9901.404 Definitions.
In this subpart--
Appraisal means the review and evaluation of an employee's
performance.
Appraisal period means the period of time established under a
performance management system for reviewing employee performance.
Competencies has the meaning given that term in Sec. 9901.103.
Contribution has the meaning given that term in Sec. 9901.103.
Minimum period means the period of time established by DoD during
which an employee will perform under applicable performance
expectations before receiving a rating of record.
Pay-for-performance evaluation system means the performance
management system established under this subpart to link individual pay
to performance and provide an equitable method for appraising and
compensating employees.
Performance has the meaning given that term in Sec. 9901.103.
Performance expectations means that which an employee is required
to do, as described in Sec. 9901.406, and may include observable or
verifiable descriptions of manner, quality, quantity, timeliness, and
cost effectiveness.
Performance management means applying the integrated processes of
setting and communicating performance expectations, monitoring
performance and providing feedback, developing performance and
addressing poor performance, and rating and rewarding performance in
support of the organization's goals and objectives.
Performance management system means the policies and requirements
established under this subpart, as supplemented by DoD implementing
issuances, for setting and communicating employee performance
expectations, monitoring performance and providing feedback, developing
performance and addressing poor performance, and rating and rewarding
performance. It incorporates the elements set forth in Sec.
9901.401(b).
Rating of record has the meaning given that term in Sec. 9901.103.
Unacceptable performance has the meaning given that term in Sec.
9901.103.
Sec. 9901.405 Performance management system requirements.
(a) DoD will issue implementing issuances that establish a
performance management system for DoD employees, subject to the
requirements set forth in this subpart.
(b) The NSPS performance management system will--
(1) Specify the employees covered by the system(s);
(2) Provide for the periodic appraisal of the performance of each
employee, generally once a year, based on performance expectations;
(3) Specify the minimum period during which an employee will
perform before being eligible to receive a rating of record;
(4) Hold supervisors and managers accountable for effectively
managing the performance of employees under their supervision as set
forth in paragraph (c) of this section;
(5) Specify procedures for setting and communicating performance
expectations, monitoring performance and providing feedback, and
developing, rating, and rewarding performance; and
(6) Specify the criteria and procedures to address the performance
of employees who are detailed or transferred and for employees in other
special circumstances.
(c) In fulfilling the requirements of paragraph (b) of this
section, supervisors and managers are responsible for--
(1) Clearly communicating performance expectations and holding
employees responsible for accomplishing them;
(2) Making meaningful distinctions among employees based on
performance and contribution;
(3) Fostering and rewarding excellent performance;
(4) Addressing poor performance; and
(5) Assuring that employees are assigned a rating of record when
required by DoD implementing issuances.
Sec. 9901.406 Setting and communicating performance expectations.
(a) Performance expectations will support and align with the DoD
mission and its strategic goals, organizational program and policy
objectives, annual performance plans, and other measures of
performance.
(b) Supervisors and managers will communicate performance
expectations, including those that may affect an employee's retention
in the job. Performance expectations will be communicated to the
employee prior to holding the employee accountable for them. However,
notwithstanding this requirement, employees are always accountable for
demonstrating professionalism and standards of appropriate conduct and
behavior, such as civility and respect for others.
(c) Performance expectations for supervisors and managers will
include assessment and measurement of how well supervisors and managers
plan, monitor, develop, correct, and assess subordinate employees'
performance.
(d) Performance expectations may take the form of--
(1) Goals or objectives that set general or specific performance
targets at the individual, team, and/or organizational level;
[[Page 7586]]
(2) Organizational, occupational, or other work requirements, such
as standard operating procedures, operating instructions, manuals,
internal rules and directives, and/or other instructions that are
generally applicable and available to the employee;
(3) A particular work assignment, including expectations regarding
the quality, quantity, accuracy, timeliness, and/or other expected
characteristics of the completed assignment;
(4) Competencies an employee is expected to demonstrate on the job,
and/or the contributions an employee is expected to make; or
(5) Any other means, provided that the expectation would be clear
to a reasonable person.
(e) Supervisors will involve employees, insofar as practicable, in
the development of their performance expectations. However, final
decisions regarding performance expectations are within the sole and
exclusive discretion of management.
Sec. 9901.407 Monitoring performance and providing feedback.
In applying the requirements of the performance management system
and its implementing issuances and policies, supervisors will--
(a) Monitor the performance of their employees and their
contribution to the organization; and
(b) Provide ongoing (i.e., regular and timely) feedback to
employees on their actual performance with respect to their performance
expectations, including one or more interim performance reviews during
each appraisal period.
Sec. 9901.408 Developing performance and addressing poor performance.
(a) DoD implementing issuances will prescribe procedures that
supervisors will use to develop employee performance and to address
poor performance.
(b) If during the appraisal period a supervisor determines that an
employee's performance is unacceptable, the supervisor will--
(1) Consider the range of options available to address the
performance deficiency, which include, but are not limited to, remedial
training, an improvement period, a reassignment, an oral warning, a
letter of counseling, a written reprimand, or adverse action defined in
subpart G of this part, including a reduction in rate of basic pay or
pay band; and
(2) Take appropriate action to address the deficiency, taking into
account the circumstances, including the nature and gravity of the
unacceptable performance and its consequences.
(c) As specified in subpart H of this part, employees may appeal
adverse actions (e.g., suspensions of more than 14 days, reductions in
pay and pay band, and removal) based on unacceptable performance.
Sec. 9901.409 Rating and rewarding performance.
(a) The NSPS performance management system will establish a multi-
level rating system as described in the DoD implementing issuances.
(b) An appropriate rating official will prepare and issue a rating
of record after the completion of the appraisal period. An additional
rating of record may be issued to reflect a substantial and sustained
change in the employee's performance since the last rating of record. A
rating of record will be used as a basis for--
(1) A pay determination under any applicable pay rules;
(2) Determining reduction-in-force retention standing; and
(3) Such other action that DoD considers appropriate, as specified
in DoD implementing issuances.
(c) A rating of record will assess an employee's performance with
respect to his or her performance expectations and/or relative
contributions and is considered final when issued to the employee with
all appropriate reviews and signatures.
(d) An appropriate rating official will communicate the rating of
record and number of shares to the employee prior to payout.
(e) A rating of record issued under this subpart is an official
rating of record for the purpose of any provision of title 5, Code of
Federal Regulations, for which an official rating of record is
required. DoD will transfer ratings of record between subordinate
organizations and to other Federal departments or agencies in
accordance with DoD implementing issuances.
(f) DoD may not lower the rating of record of an employee on an
approved absence from work, including the absence of a disabled veteran
to seek medical treatment, as provided in Executive Order 5396.
(g) A rating of record may be challenged by an employee only
through a reconsideration procedure as provided in DoD implementing
issuances. This procedure will be the sole and exclusive method for all
employees to challenge a rating of record. A payout determination will
not be subject to reconsideration procedures.
(h) A supervisor or other rating official may prepare an additional
performance appraisal for the purposes specified in the applicable
performance management system (e.g., transfers and details) at any time
after the completion of the minimum period. Such an appraisal is not a
rating of record.
(i) DoD implementing issuances will establish policies and
procedures for crediting performance in a reduction in force in
accordance with subpart F of this part.
Subpart E--Staffing and Employment
General
Sec. 9901.501 Purpose.
(a) This subpart sets forth policies and procedures for the
establishment of qualification requirements; recruitment for, and
appointment to, positions; and assignment, reassignment, detail,
transfer, or promotion of employees, consistent with 5 U.S.C. 9902(a)
and (k).
(b) DoD will comply with merit principles set forth in 5 U.S.C.
2301 and with 5 U.S.C. 2302 (dealing with prohibited personnel
practices).
(c) DoD will adhere to veterans' preference principles set forth in
5 U.S.C. 2302(b)(11), consistent with 5 U.S.C. 9902(a) and (k).
Sec. 9901.502 Scope of authority.
When a specified category of employees, applicants, and positions
is covered by the system established under this subpart, the provisions
of 5 U.S.C. 3301, 3302, 3304, 3317(a), 3318 and 3319 (except with
respect to veterans' preference), 3321, 3324, 3325, 3327, 3330, 3341,
and 5112(a) are modified and replaced with respect to that category,
except as otherwise specified in this subpart. In accordance with Sec.
9901.105, DoD will prescribe implementing issuances to carry out the
provisions of this subpart.
Sec. 9901.503 Coverage.
(a) This subpart applies to eligible DoD employees and positions in
the categories listed in paragraph (b) of this section, subject to a
determination by the Secretary under Sec. 9901.102(b).
(b) The following employees and positions in DoD organizational and
functional units are eligible for coverage under this subpart:
(1) Employees and positions who would otherwise be covered by 5
U.S.C. chapters 31 and 33 (excluding members of the Senior Executive
Service); and
(2) Such others designated by the Secretary as DoD may be
authorized to include under 5 U.S.C. 9902.
Sec. 9901.504 Definitions.
In this subpart--
Career employee means an individual appointed without time limit to
a
[[Page 7587]]
competitive or excepted service position in the Federal career service.
Promotion has the meaning given that term in Sec. 9901.103.
Reassignment has the meaning given that term in Sec. 9901.103.
Reduction in band has the meaning given that term in Sec.
9901.103.
Temporary employee means an individual not on a career appointment
who is employed for a limited but unspecified period of time, up to a
maximum established by implementing issuances, to perform the work of a
position that does not require an additional permanent employee.
Term employee means an individual not on a career appointment who
is employed for a specified period of time up to a maximum established
by implementing issuances, to perform the work of a temporary or
permanent position.
Time-limited employee means an individual appointed to a position
for a period of limited duration, either specified or unspecified
(e.g., term or temporary) in either the competitive or excepted
service.
External Recruitment and Internal Placement
Sec. 9901.511 Appointing authorities.
(a) Competitive and excepted appointing authorities. DoD may
continue to use excepted and competitive appointing authorities and
entitlements under chapters 31 and 33 of title 5, U.S. Code,
Governmentwide regulations, or Executive orders, as well as other
statutes, and those individuals will be given career or time-limited
appointments, as appropriate.
(b) Additional appointing authorities. (1) The Secretary and the
Director may enter into written agreements providing for new excepted
and competitive appointing authorities for positions covered by the
National Security Personnel System, including noncompetitive
appointments, and excepted appointments that may lead to a subsequent
noncompetitive appointment to the competitive service.
(2)(i) DoD and OPM will jointly publish a notice in the Federal
Register when establishing a new competitive appointing authority or a
new excepted appointing authority that may lead to a subsequent
noncompetitive appointment to a competitive position in the career
service. DoD and OPM will issue a notice with a public comment period
before establishing such authority, except as provided in paragraph
(b)(2)(ii) of this section.
(ii) If DoD determines that a critical mission requirement exists,
DoD and OPM may establish a new appointing authority as described in
paragraph (b)(2)(i) of this section effective upon publication of a
Federal Register notice without a preceding comment period. However,
the notice will invite public comments, and DoD and OPM will issue
another notice if the authority is revised based on those comments.
(3) DoD will prescribe appropriate implementing issuances to
administer a new appointing authority established under paragraph (b)
of this section.
(4) At least annually, DoD will publish in the Federal Register a
consolidated list of all appointing authorities established under this
section and currently in effect.
(c) Severe shortage/critical need hiring authority. (1) DoD may
determine that there is a severe shortage of candidates or a critical
hiring need, as defined in 5 U.S.C. 3304(a)(3) and 5 CFR part 337,
subpart B, for particular occupations, pay bands, career groups, and/or
geographic locations, and establish a specific authority to make
appointments without regard to Sec. 9901.515. Public notice will be
provided in accordance with 5 U.S.C. 3304(a)(3)(A).
(2) For each specific authority, DoD will document the basis for
the severe shortage or critical hiring need, consistent with 5 CFR
337.204(b) or 337.205(b), as applicable.
(3) DoD will terminate or modify a specific authority to make
appointments under paragraph (a) of this section when it determines
that the severe shortage or critical need upon which the authority was
based no longer exists.
(4) DoD will prescribe appropriate implementing issuances to
administer this authority and will notify OPM of determinations made
under this section.
(d) Time-limited appointing authorities. (1) The Secretary may
prescribe the procedures for appointing employees, the duration of such
appointments, and the appropriate uses of time-limited employees.
(2) The Secretary will prescribe implementing issuances
establishing the procedures under which a time-limited employee (e.g.,
an individual employed on a temporary or term basis) serving in a
competitive service position may be converted without further
competition to the career service if--
(i) The vacancy announcement met the requirements of Sec.
9901.515(a) and included the possibility of noncompetitive conversion
to a competitive position in the career service at a later date;
(ii) The individual was appointed using the competitive examining
procedures set forth in Sec. 9901.515(b) and (c); and
(iii) The employee completed at least 2 years of continuous service
at the fully successful level of performance or better.
Sec. 9901.512 Probationary periods.
The Secretary may establish probationary periods as deemed
appropriate for employees appointed to positions in the competitive and
excepted service covered by the National Security Personnel System. DoD
will prescribe the conditions for such periods, including creditable
service, in implementing issuances. A preference eligible who has
completed 1 year of a probationary period is covered by subparts G and
H of this part. An employee who fails to complete an in-service
probationary period established under Sec. 9901.516 will be returned
to a position and rate of pay comparable to the position and rate of
pay he or she held before the probationary period.
Sec. 9901.513 Qualification standards.
DoD may continue to use qualification standards established or
approved by OPM. DoD also may establish qualification standards for
positions covered by the National Security Personnel System.
Sec. 9901.514 Non-citizen hiring.
DoD may establish procedures for appointing non-citizens to
positions within NSPS under the following conditions:
(a) In the absence of a qualified U.S. citizen, DoD may appoint a
qualified non-citizen in the excepted service; and
(b) Immigration and security requirements will apply to these
appointments.
Sec. 9901.515 Competitive examining procedures.
(a) In recruiting applicants for competitive appointments to
competitive service positions in NSPS, DoD will provide public notice
for all vacancies in the career service in accordance with 5 CFR part
330 and--
(1) Will accept applications for the vacant position from all
sources;
(2) Will, at a minimum, consider applicants from the local
commuting area;
(3) May concurrently consider applicants from other targeted
recruitment areas, as specified in the vacancy announcement, in
addition to those applicants from the minimum area of consideration;
and
(4) May consider applicants from outside that minimum area(s) of
consideration as necessary to provide sufficient qualified candidates.
[[Page 7588]]
(b) DoD may establish procedures for the examination of applicants
for entry into competitive and excepted service positions in the
National Security Personnel System. Such procedures will adhere to the
merit system principles in 5 U.S.C. 2301 and veterans' preference
requirements as set forth in 5 U.S.C. 3309 through 3320, as applicable,
and will be available in writing for applicant review. These procedures
will also include provisions for employees entitled to priority
consideration as defined in 5 U.S.C. 1302(c) or 8151.
(c) In establishing examining procedures for appointing employees
in the competitive service under paragraph (b) of this section, DoD may
use traditional numerical rating and ranking or alternative ranking and
selection procedures (category rating) in accordance with 5 U.S.C.
3319(b) and (c).
(d) DoD will apply the requirements of paragraphs (a), (b), and (c)
of this section to the recruitment of applicants for time-limited
positions in the competitive service in order to qualify an appointee
for noncompetitive conversion to a competitive position in the career
service, in accordance with Sec. 9901.511.
Sec. 9901.516 Internal placement.
DoD may prescribe implementing issuances regarding the assignment,
reassignment, reinstatement, detail, transfer, and promotion of
individuals or employees into or within NSPS. These issuances may also
establish in-service probationary periods and prescribe the conditions
under which employees will complete such periods. Such issuances will
be made available to applicants and employees. Internal placement
actions may be made on a permanent or temporary basis using competitive
and noncompetitive procedures. Those exceptions to competitive
procedures set forth in 5 CFR part 335 apply to NSPS.
Subpart F--Workforce Shaping
Sec. 9901.601 Purpose and applicability.
This subpart contains the regulations implementing the provisions
of 5 U.S.C. 9902(k) concerning the Department's system for realigning,
reorganizing, and reshaping its workforce. This subpart applies to
categories of positions and employees affected by such actions
resulting from the planned elimination, addition, or redistribution of
functions, duties, or skills within or among organizational units,
including realigning, reshaping, delayering, and similar
organizational-based restructuring actions. This subpart does not apply
to actions involving the conduct and/or performance of individual
employees, which are covered by subpart G of this part.
Sec. 9901.602 Scope of authority.
When a specified category of employees is covered by the system
established under this subpart, the provisions of 5 U.S.C. 3501 and
3502 (except with respect to veterans' preference), and 3503 are
modified and replaced with respect to that category, except as
otherwise specified in this subpart. In accordance with Sec. 9901.105,
DoD will prescribe implementing issuances to carry out the provisions
of this subpart.
Sec. 9901.603 Definitions.
In this subpart:
Competing employee means a career employee (including an employee
serving an initial probationary period), an employee serving on a term
appointment, and other employees as identified in DoD implementing
issuances.
Competitive area means the boundaries within which employees
compete for retention under this subpart, based on factors described in
Sec. 9901.605(a).
Competitive group means employees within a competitive area who are
on a common retention list for the purpose of exercising displacement
rights.
Displacement right means the right of an employee who is displaced
from his or her present position because of position abolishment, or
because of displacement resulting from the abolishment of a higher-
standing employee on the retention list, to displace a lower-standing
employee on the list on the basis of the retention factors.
Notice means a written communication from the Department to an
individual employee stating that the employee will be displaced from
his or her position as a result of a reduction in force action under
this subpart.
Rating of record has the meaning given that term in Sec. 9901.103.
Retention factors means performance, veterans' preference, tenure
of employment, length of service, and such other factors as the
Secretary considers necessary and appropriate to rank employees within
a particular retention list.
Retention list means a list of all competing employees occupying
positions in the competitive area, who are grouped in the same
competitive group on the basis of retention factors. While all
positions in the competitive group are listed, only competing employees
have retention standing.
Tenure group means a group of employees with a given appointment
type. In a reduction in force, employees are first placed in a tenure
group and then ranked within that group according to retention factors.
Undue interruption means a degree of interruption that would
prevent the completion of required work by an employee within 90 days
after the employee has been placed in a different position.
Sec. 9901.604 Coverage.
(a) Employees covered. The following employees and positions in DoD
organizational and functional units are eligible for coverage under
this subpart:
(1) Employees and positions who would otherwise be covered by 5
U.S.C. chapter 35 (excluding members of the Senior Executive Service
and employees who are excluded from coverage by other statutory
authority); and
(2) Such others designated by the Secretary as DoD may be
authorized to include under 5 U.S.C. 9902.
(b) Actions covered. (1) Reduction in force. The Department will
apply this subpart when releasing a competing employee from a retention
list by separation, reduction in band, or assignment involving
displacement, and the release results from an action described in Sec.
9901.601.
(2) Transfer of function. The Department will apply 5 CFR part 351,
subpart C, when a function transfers from one competitive area to a
different competitive area, except as otherwise provided in this
subpart.
(3) Furlough. The Department will apply the provisions in 5 CFR
351.604 when furloughing a competing employee for more than 30
consecutive days, except as otherwise provided in this subpart.
(c) Actions excluded. This subpart does not apply to--
(1) The termination of a temporary promotion or temporary
reassignment and the subsequent return of an employee to the position
held before the temporary promotion or temporary reassignment (or to a
position with comparable pay band, pay, status, and tenure);
(2) A reduction in band based on the reclassification of an
employee's position due to the application of new classification
standards or the correction of a classification error;
(3) Placement of an employee serving on a seasonal basis in a
nonpay, nonduty status in accordance with conditions established at
time of appointment;
[[Page 7589]]
(4) A change in an employee's work schedule from other-than-full-
time to full-time;
(5) A change in an employee's mixed tour work schedule in
accordance with conditions established at time of appointment;
(6) A change in the scheduled tour of duty of an other-than-full-
time schedule;
(7) A reduction in band based on the reclassification of an
employee's position due to erosion of duties, except that this
exclusion does not apply to such reclassification actions that will
take effect after an agency has formally announced a reduction in force
in the employee's competitive area and when the reduction in force will
take effect within 180 days; or
(8) Any other personnel action not covered by paragraph (b) of this
section.
Sec. 9901.605 Competitive area.
(a) Basis for competitive area. The Department may establish a
competitive area on the basis of one or more of the following
considerations:
(1) Geographical location(s);
(2) Line(s) of business;
(3) Product line(s);
(4) Organizational unit(s); and
(5) Funding line(s).
(b) Employees included in competitive area. A competitive area will
include all competing employees holding official positions of record in
the defined competitive area.
(c) Review of competitive area determinations. The Department will
make all competitive area definitions available for review.
(d) Change of competitive area. Competitive areas will be
established for a minimum of 90 days before the effective date of a
reduction in force. In implementing issuances, DoD will establish
approval procedure requirements for any competitive area identified
less than 90 days before the effective date of a reduction in force.
(e) Limitations. The Department will establish a competitive area
only on the basis of legitimate organizational reasons, and competitive
areas will not be used for the purpose of for targeting an individual
employee for reduction in forces on the basis of nonmerit factors.
Sec. 9901.606 Competitive group.
(a) The Department will establish separate competitive groups for
employees--
(1) In the excepted and competitive service;
(2) Under different excepted service appointment authorities; and
(3) With different work schedules (e.g., full-time, part-time,
seasonal, intermittent).
(b) The Department may further define competitive groups on the
basis of one or more of the following considerations:
(1) Career group;
(2) Pay schedule;
(3) Occupational series or specialty;
(4) Pay band; or
(5) Trainee status.
(c) An employee is placed into a competitive group based on the
employee's official position of record. The Department may supplement
an employee's official position description by using other applicable
records that document the employee's actual duties and
responsibilities.
(d) The competitive group includes the official positions of
employees on a detail or other nonpermanent assignment to a different
position from the competitive group.
Sec. 9901.607 Retention standing.
(a) Retention list. Within each competitive group, the Department
will establish a retention list of competing employees in descending
order based on the following:
(1) Tenure, with career employees (including employees serving an
initial probationary period) listed first, followed by other employees
on term appointments and other employees as identified in DoD
implementing issuances.
(2) Veterans' preference, in accordance with the preference
requirements in 5 CFR 351.504(c) and (d), including the preference
restrictions found in 5 U.S.C. 3501(a);
(3) The rating of record, in accordance with DoD implementing
issuances; and
(4) Creditable civilian and/or uniformed service in accordance with
5 CFR 351.503 and 5 U.S.C. 3502(a)(A) and (B). The Department may
establish tie-breaking procedures when two or more employees have the
same retention standing.
(b) Active armed forces member not on list. The retention list does
not include the name of an employee who, on the effective date of the
reduction in force, is on active duty in the armed forces with a
restoration right under 5 CFR part 353.
(c) Access to retention list. Both an employee who received a
specific reduction in force notice, and the employee's representative,
have access to the applicable retention list in accordance with 5 CFR
351.505.
Sec. 9901.608 Displacement, release, and position offers.
(a) Displacement to other positions on the retention list. (1) An
employee who is displaced because of position abolishment, or because
of displacement resulting from the abolishment of the position of a
higher-standing employee on the retention list, may displace a lower-
standing employee on the list if--
(i) The higher-standing employee is qualified for the position,
consistent with 5 CFR 351.702; and
(ii) No undue interruption would result from the displacement.
(2) A displacing employee retains his or her status and tenure.
(b) Release from the retention list. (1) The Department selects
employees for release from the list on the basis of the ascending order
of retention standing set forth in Sec. 9901.607(a).
(2) The Department may not release a competing employee from a
retention list that contains a position held by a temporary employee
(e.g., a competitive service temporary position).
(3) The Department may temporarily postpone the release of an
employee from the retention list when appropriate under 5 CFR 351.506,
351.606, 351.607, and 351.608.
(c) Placement in vacant positions. At the Department's option, the
Department may offer an employee released from a retention list a
vacant position within the competitive area in lieu of reduction in
force, based on relative retention standing as specified in Sec.
9901.607(a).
(d) Actions for employees with no offer. If a released employee
does not receive an offer of another position under paragraph (c) of
this section to a position on a different retention list, the
Department may--
(1) Separate the employee by reduction in force; or
(2) Furlough the employee under applicable procedures, including
the provisions in 5 CFR 351.604.
Sec. 9901.609 Reduction in force notices.
The Department will provide a specific written notice to each
employee reached for an action in reduction in force competition at
least 60 days before the reduction in force becomes effective. DoD will
prescribe the content of the notice in implementing issuances.
Sec. 9901.610 Voluntary separation.
(a) The Secretary of Defense may--
(1) Separate from the service any employee who volunteers to be
separated even though the employee is not otherwise subject to
separation due to a reduction in force; and
(2) For each employee voluntarily separated under paragraph (a)(1)
of this section, retain an employee in a similar position who would
otherwise be separated due to a reduction in force.
(b) The separation of an employee under paragraph (a) of this
section will
[[Page 7590]]
be treated as an involuntary separation due to a reduction in force.
Sec. 9901.611 Reduction in force appeals.
(a) An employee who believes the Department did not properly apply
the provisions of this subpart may appeal the reduction in force action
to the Merit Systems Protection Board as provided for in 5 CFR 351.901
if the employee was released from the retention list and was--
(1) Separated by reduction in force;
(2) Reduced in band by reduction in force; or
(3) Furloughed by reduction in force for more than 30 consecutive
days.
(b) Paragraph (a) of this section does not apply to actions taken
under internal DoD placement programs, including the DoD Priority
Placement Program.
Subpart G--Adverse Actions
General
Sec. 9901.701 Purpose.
This subpart contains regulations prescribing the requirements for
employees who are removed, suspended, furloughed for 30 days or less,
reduced in pay, or reduced in pay band (or comparable reduction). DoD
may prescribe implementing issuances to carry out the provisions of
this subpart.
Sec. 9901.702 Waivers.
With respect to any category of employees covered by this subpart,
subchapters I and II of 5 U.S.C. chapter 75, in addition to those
provisions of 5 U.S.C. chapter 43 specified in subpart D of this part,
are waived and replaced by this subpart.
Sec. 9901.703 Definitions.
In this subpart:
Adverse action means a removal, suspension, furlough for 30 days or
less, reduction in pay, or reduction in pay band (or comparable
reduction).
Furlough has the meaning given that term in Sec. 9901.103.
Indefinite suspension means the placement of an employee in a
temporary status without duties and pay pending investigation, inquiry,
or further Department action. An indefinite suspension continues for an
indeterminate period of time and ends with the occurrence of pending
conditions set forth in notice of actions which may include the
completion of any subsequent administrative action.
Mandatory removal offense (MRO) has the meaning given that term in
Sec. 9901.103.
Pay means the rate of basic pay fixed by law or administrative
action for the position held by an employee before any deductions and
exclusive of additional pay of any kind. For the purpose of this
subpart, pay does not include locality-based comparability payments
under 5 U.S.C. 5304, local market supplements under subpart C of this
part, or other similar payments.
Probationary period means that period established pursuant to Sec.
9901.512.
Removal means the involuntary separation of an employee from the
Federal service.
Suspension means the temporary placement of an employee, for
disciplinary reasons, in a nonduty/ nonpay status.
Sec. 9901.704 Coverage.
(a) Actions covered. This subpart covers removals, suspensions,
furloughs of 30 days or less, reductions in pay, or reductions in band
(or comparable reductions).
(b) Actions excluded. This subpart does not cover--
(1) An action taken against an employee during a probationary
period (excluding an in-service or supervisory probationary period);
(2) A reduction in pay or pay band of a supervisor or manager who
has not completed a supervisory probationary period, if the supervisory
or manager is returned to the pay or pay band held immediately before
becoming a supervisor or manager.
(3) A reduction in pay or pay band of an employee who does not
satisfactorily complete an in-service probationary period under Sec.
9901.512.
(4) An action that terminates a temporary or term promotion and
returns the employee to the position from which temporarily promoted,
or to a different position in a comparable pay band, if the Department
informed the employee that the promotion was to be of limited duration;
(5) A reduction-in-force action under subpart F of this part;
(6) An action imposed by the Merit Systems Protection Board under 5
U.S.C. 1215;
(7) A voluntary action by an employee;
(8) An action taken or directed by OPM based on suitability under 5
CFR part 731;
(9)(i) Termination of appointment on the expiration date specified
as a basic condition of employment at the time the appointment was
made;
(ii) Termination of appointment before the expiration date
specified as a basic condition of employment at the time the
appointment was made, except when the termination is taken against--
(A) A preference eligible employee who has completed 1 year under a
time-limited appointment; or
(B) An employee who has completed a probationary period under a
term appointment;
(10) Cancellation of a promotion to a position not classified prior
to the promotion;
(11) Placement of an employee serving on an intermittent or
seasonal basis in a temporary non-duty, non-pay status in accordance
with conditions established at the time of appointment;
(12) Reduction of an employee's rate of basic pay from a rate that
is contrary to law or regulation;
(13) An action taken under a provision of statute, other than one
codified in title 5, U.S. Code, which excludes the action from 5 U.S.C.
chapter 75 or this subpart;
(14) A classification determination, including a classification
determination under subpart B of this part;
(15) Suspension or removal under 5 U.S.C. 7532;
(16) An action to terminate grade retention upon conversion to the
NSPS pay system established under subpart C of this part; and
(c) Employees covered. Subject to a determination by the Secretary
under Sec. 9901.102(b)(2), this subpart applies to DoD employees,
except as excluded by paragraph (d) of this section.
(d) Employees excluded. This subpart does not apply to--
(1) An employee who is serving a probationary period, except when
the employee is a preference eligible who has completed 1 year of that
probationary period;
(2) A member of the Senior Executive Service;
(3) An employee who is terminated in accordance with terms
specified as conditions of employment at the time the appointment was
made;
(4) An employee whose appointment is made by and with the advice
and consent of the Senate;
(5) An employee whose position has been determined to be of a
confidential, policy-determining, policy-making, or policy-advocating
character by--
(i) The President, for a position that the President has excepted
from the competitive service;
(ii) OPM, for a position that OPM has excepted from the competitive
service; or
(iii) The President or the Secretary for a position excepted from
the competitive service by statute;
(6) An employee whose appointment is made by the President;
(7) A reemployed annuitant who is receiving an annuity from the
Civil
[[Page 7591]]
Service Retirement and Disability Fund or the Foreign Service
Retirement and Disability Fund;
(8) An employee who is an alien or non-citizen occupying a position
outside the United States, as described in 5 U.S.C. 5102(c)(11);
(9) A member of the National Security Labor Relations Board;
(10) A non-appropriated fund employee;
(11) A National Guard technician who is employed under 32 U.S.C.
709; and
(12) An employee against whom an adverse personnel action is taken
or imposed under any statute or regulation other than this subpart.
Requirements for Removal, Suspension, Furlough of 30 Days or Less,
Reduction in Pay, or Reduction in Band (or Comparable Reduction)
Sec. 9901.711 Standard for action.
The Department may take an adverse action under this subpart only
for such cause as will promote the efficiency of the service.
Sec. 9901.712 Mandatory removal offenses.
(a) The Secretary has the sole, exclusive, and unreviewable
discretion to identify offenses that have a direct and substantial
adverse impact on the Department's national security mission. Such
offenses will be identified in advance as part of departmental
regulations, and made known to all employees upon identification.
(b) The procedures in Sec. Sec. 9901.713 through 9901.716 apply to
actions taken under this section. However, a proposed notice required
by Sec. 9901.714 may be issued to the employee in question only after
the Secretary's review and approval.
(c) The Secretary has the sole, exclusive, and unreviewable
discretion to mitigate the removal penalty on his or her own initiative
or at the request of the employee in question.
(d) Nothing in this section limits the discretion of the Department
to remove employees for offenses other than those identified by the
Secretary as an MRO.
Sec. 9901.713 Procedures.
An employee against whom an adverse action is proposed is entitled
to the following:
(a) A proposal notice under Sec. 9901.714;
(b) An opportunity to reply under Sec. 9901.715; and
(c) A decision notice under Sec. 9901.716.
Sec. 9901.714 Proposal notice.
(a) Notice period. The Department will provide at least 15 days
advance written notice of a proposed adverse action. However, if there
is reasonable cause to believe the employee has committed a crime for
which a sentence of imprisonment may be imposed, the Department will
provide at least 5 days advance written notice.
(b) Contents of notice. (1) The proposal notice will inform the
employee of the factual basis for the proposed action in sufficient
detail to permit the employee to reply to the notice, and inform the
employee of his or her right to review the Department's evidence
supporting the proposed action. The Department may not use evidence
that cannot be disclosed to the employee, his or her representative, or
designated physician pursuant to 5 CFR 297.204.
(2) When some but not all employees in a given category and/or
organizational unit are being furloughed, the proposal notice will
state the basis for selecting a particular employee for furlough, as
well as the reasons for the furlough. The notice is not necessary for
furlough without pay due to unforeseeable circumstances, such as sudden
breakdowns in equipment, acts of God, or sudden emergencies requiring
immediate curtailment of activities.
(c) Duty status during notice period. An employee will remain in a
duty status in his or her regular position during the notice period.
However, when the Department determines that the employee's continued
presence in the workplace during the notice period may pose a threat to
the employee or others, result in loss of or damage to Government
property, adversely impact the Department's mission, or otherwise
jeopardize legitimate Government interests, the Department may elect
one or a combination of the following alternatives:
(1) Assign the employee to duties where the Department determines
the employee is no longer a threat to the employee or others, the
Department's mission, or Government property or interests;
(2) Allow the employee to take leave, or place him or her in an
appropriate leave status (annual leave, sick leave, or leave without
pay) or absence without leave if the employee has absented himself or
herself from the worksite without approved leave; or
(3) Place the employee in a paid, non-duty status for such time as
is necessary to effect the action.
Sec. 9901.715 Opportunity to reply.
(a) The Department will provide employees at least 10 days, which
will run concurrently with the notice period, to reply orally and/or in
writing to a notice of proposed adverse action. However, if there is
reasonable cause to believe the employee has committed a crime for
which a sentence of imprisonment may be imposed, the Department will
provide the employee at least 5 days, which will run concurrently with
the notice period, to reply orally and/or in writing.
(b) The opportunity to reply orally does not include the right to a
formal hearing with examination of witnesses.
(c) During the opportunity to reply period, the Department will
provide the employee a reasonable amount of official time to review the
Department's supporting evidence, and to furnish affidavits and other
documentary evidence, if the employee is otherwise in an active duty
status.
(d) The Department will designate an official to receive the
employee's written and/or oral response. The official will have
authority to make or recommend a final decision on the proposed adverse
action.
(e) The employee may be represented by an attorney or other
representative of the employee's choice and at the employee's expense,
subject to paragraph (f) of this section. The employee will provide the
Department with a written designation of his or her representative.
(f) The Department may disallow as an employee's representative--
(1) An individual whose activities as representative would cause a
conflict between the interest or position of the representative and
that of the Department,
(2) An employee of the Department whose release from his or her
official position would give rise to unreasonable costs or whose work
assignments preclude his or her release; or
(3) An individual whose activities as representative could
compromise security.
(g)(1) An employee who wishes the Department to consider any
medical condition that may be relevant to the proposed adverse action
will provide medical documentation, as that term is defined at 5 CFR
339.104, during the opportunity to reply, whenever possible.
(2) When considering an employee's medical documentation, the
Department may require or offer a medical examination pursuant to 5 CFR
part 339, subpart C.
(3) When considering an employee's medical condition, the
Department is not required to withdraw or delay a proposed adverse
action. However, the Department will--
[[Page 7592]]
(i) Allow the employee to provide medical documentation during the
opportunity to reply;
(ii) Comply with 29 CFR 1614.203 and relevant Equal Employment
Opportunity Commission rules; and
(iii) Comply with 5 CFR 831.1205 or 844.202, as applicable, when
issuing a decision to remove.
Sec. 9901.716 Decision notice.
(a) In arriving at its decision on a proposed adverse action, the
Department may not consider any reasons for the action other than those
specified in the proposal notice.
(b) The Department will consider any response from the employee and
the employee's representative, if the response is provided to the
official designated under Sec. 9901.715(d) during the opportunity to
reply period, and any medical documentation furnished under Sec.
9901.715(g).
(c) The decision notice will specify in writing the reasons for the
decision and advise the employee of any appeal or grievance rights
under subparts H or I of this part.
(d) The Department will, to the extent practicable, deliver the
notice to the employee on or before the effective date of the action.
If unable to deliver the notice to the employee in person, the
Department may mail the notice to the employee's last known address of
record.
Sec. 9901.717 Departmental record.
(a) Document retention. The Department will keep a record of all
relevant documentation concerning the action for a period of time
pursuant to the General Records Schedule and the Guide to Personnel
Recordkeeping. The record will include the following:
(1) A copy of the proposal notice;
(2) The employee's written response, if any, to the proposal;
(3) A summary of the employee's oral response, if any;
(4) A copy of the decision notice; and
(5) Any supporting material that is directly relevant and on which
the action was substantially based.
(b) Access to the record. The Department will make the record
available for review by the employee and furnish a copy of the record
upon the employee's request or the request of the Merit Systems
Protection Board (MSPB).
Savings Provision
Sec. 9901.721 Savings provision.
This subpart does not apply to adverse actions proposed prior to
the date of an affected employee's coverage under this subpart.
Subpart H--Appeals
Sec. 9901.801 Purpose.
This subpart implements the provisions of 5 U.S.C. 9902(h), which
establishes the system for Department employees to appeal certain
adverse actions covered under subpart G of this part.
Sec. 9901.802 Applicable legal standards and precedents.
In accordance with 5 U.S.C. 9902(h)(3), in applying existing legal
standards and precedents, MSPB is bound by the legal standard set forth
in Sec. 9901.107(a)(2).
Sec. 9901.803 Waivers.
When a specified category of employees is covered by an appeals
system established under this subpart, the provisions of 5 U.S.C. 7701
are waived with respect to that category of employees to the extent
they are inconsistent with the provisions of this subpart. The
provisions of 5 U.S.C. 7702 are modified as provided in Sec. 9901.809.
The appellate procedures specified herein supersede those of MSPB to
the extent MSPB regulations are inconsistent with this subpart. MSPB
will follow the provisions in this subpart until it issues conforming
regulations, which may not conflict with this part.
Sec. 9901.804 Definitions.
In this subpart:
Administrative judge or AJ means the official, including an
administrative law judge, authorized by MSPB to hold a hearing in a
matter covered by this subpart and subpart G of this part, or to decide
such a matter without a hearing.
Class appeal means an appeal brought by a representative(s) of a
group of similarly situated employees consistent with the provisions of
Federal Rule of Civil Procedure 23.
Harmful error means error by the Department in the application of
its procedures that is likely to have caused it to reach a conclusion
different from the one it would have reached in the absence or cure of
the error. The burden is on the appellant to show that the error was
harmful, i.e., that it caused substantial harm or prejudice to his or
her rights.
Mandatory removal offense (MRO) has the meaning given that term in
Sec. 9901.103.
MSPB means the Merit Systems Protection Board.
Petition for review (PFR) means a request for full MSPB review of a
final Department decision.
Preponderance of the evidence means the degree of relevant evidence
that a reasonable person, considering the record as a whole, would
accept as sufficient to find that a contested fact is more likely to be
true than untrue.
Request for review (RFR) means a preliminary request for review of
an initial decision of an MSPB administrative judge before that
decision has become a final Department decision.
Sec. 9901.805 Coverage.
(a) Subject to a determination by the Secretary under Sec.
9901.102(b)(2), this subpart applies to employees in DoD organizational
and functional units that are included under NSPS who appeal removals;
suspensions for more than 14 days, including indefinite suspensions;
furloughs of 30 days or less; reductions in pay; or reductions in pay
band (or comparable reductions), which constitute appealable adverse
actions for the purpose of this subpart, provided such employees are
covered by Sec. 9901.704.
(b) This subpart does not apply to a reduction in force action
taken under subpart F of this part, nor does it apply to actions taken
under internal DoD placement programs, including the DoD Priority
Placement Program.
(c) Appeals of suspensions of 14 days or less and other lesser
disciplinary measures are not covered under this subpart but may be
grieved through a negotiated grievance procedure or an administrative
grievance procedure, whichever is applicable.
(d) The appeal rights in 5 CFR 315.806 apply to the termination of
an employee in the competitive service while serving a probationary
period.
(e) Actions taken under 5 U.S.C. 7532 are not appealable to MSPB.
Sec. 9901.806 Alternative dispute resolution.
The Department recognizes the value of using alternative dispute
resolution methods such as mediation, an ombudsman, or interest-based
problem-solving to address employee-employer disputes arising in the
workplace, including those which may involve disciplinary or adverse
actions. Such methods can result in more efficient and more effective
outcomes than traditional, adversarial methods of dispute resolution.
The use of alternative dispute resolution is encouraged. Such methods
will be subject to collective bargaining to the extent permitted by
subpart I of this part.
Sec. 9901.807 Appellate procedures.
(a) A covered Department employee may appeal to MSPB an adverse
action listed in Sec. 9901.805(a). Such an
[[Page 7593]]
employee has a right to be represented by an attorney or other
representative of his or her own choosing. However, separate procedures
apply when the action is taken under the special national security
provisions established by 5 U.S.C. 7532.
(b)(1) This section modifies MSPB's appellate procedures with
respect to appeals under this subpart, as applicable.
(2) MSPB will refer appeals to an AJ for adjudication. The AJ must
make a decision at the close of the review and provide a copy of the
decision to each party to the appeal and to OPM.
(c) Pursuant to 5 U.S.C. 9902(h)(4), employees will not be granted
interim relief, nor will an action taken against an employee be stayed,
unless specifically ordered by the full MSPB following final decision
by the Department.
(1) If the interim relief ordered by the full MSPB provides that
the employee will return or be present at the place of employment
pending the outcome of any petition for review, and the Department
determines, in its sole, exclusive, and unreviewable discretion, that
the employee's return to the workplace is impracticable or the presence
of the employee is unduly disruptive to the work environment, the
employee may be placed in an alternative position, or may be placed on
excused absence pending final disposition of the employee's appeal.
(2) Nothing in paragraph (c) of this section may be construed to
require that any award of back pay or attorney fees be paid before an
award becomes final.
(d)(1) An adverse action taken against an employee will be
sustained by the MSPB AJ if it is supported by a preponderance of the
evidence, unless the employee shows by a preponderance of the
evidence--
(i) That there was harmful error in the application of Department
procedures in arriving at the decision;
(ii) That the decision was based on any prohibited personnel
practice described in 5 U.S.C. 2302(b); or
(iii) That the decision was not in accordance with law.
(2) Neither the MSPB AJ, nor the full MSPB, may reverse the
Department action based on the way in which the charge is labeled or
the conduct characterized, provided the employee is on notice of the
facts sufficient to respond to the factual allegations of the charge.
(3) Neither the MSPB AJ nor the full MSPB may reverse the
Department's action based on the way a performance expectation is
expressed, provided that the expectation would be clear to a reasonable
person.
(e) The Director of OPM may, as a matter of right at any time in
the proceeding, intervene or otherwise participate in any proceeding
under this section in any case in which the Director believes that an
erroneous decision will have a substantial impact on a civil service
law, rule, regulation, or policy directive.
(f) Except as provided in 5 U.S.C. 7702, as modified by Sec.
9901.809, any decision under paragraph (b) of this section is final
unless a party to the appeal or the Director of OPM petitions the full
MSPB for review within 30 days. The Director, after consultation with
the Secretary, may petition the full MSPB for review if the Director
believes the decision is erroneous and will have a substantial impact
on a civil service law, rule, regulation, or policy directive. MSPB,
for good cause shown, may extend the filing period.
(g) If the AJ is of the opinion that an appeal could be processed
more expeditiously without adversely affecting any party, the AJ may--
(1) Consolidate appeals filed by two or more appellants; or
(2) Join two or more appeals filed by the same appellant and hear
and decide them concurrently.
(h)(1) Except as provided in paragraph (h)(2) of this section or as
otherwise provided by law, the AJ may require payment by the Department
of reasonable attorney fees incurred by an employee if the employee is
the prevailing party and the AJ determines that payment by the
Department is warranted in the interest of justice. For the purpose of
this subpart, such fees are warranted in the interest of justice only
when the Department engaged in a prohibited personnel practice or the
Department's action was clearly without merit based upon facts known to
management when the action was taken.
(2) If the employee is the prevailing party and the decision is
based on a finding of discrimination prohibited under 5 U.S.C.
2302(b)(1), the payment of reasonable attorney fees must be in
accordance with the standards prescribed in Sec. 706(k) of the Civil
Rights Act of 1964 (42 U.S.C. 2000e-5(k)).
(i)(1) An MSPB AJ may not require any party to engage in settlement
discussions in connection with any action appealed under this section.
If either party decides that settlement discussions are not
appropriate, the matter will proceed to adjudication.
(2) Where the parties agree to engage in formal settlement
discussions, these discussions will be conducted by an official other
than the AJ assigned to adjudicate the case. Nothing prohibits the
parties from engaging in settlement discussions on their own.
(j) If an employee has been removed under subpart G of this part,
neither the employee's status under any retirement system established
by Federal statute nor any election made by the employee under any such
system will affect the employee's appeal rights.
(k)(1) All appeals, including class appeals, will be filed no later
than 20 days after the effective date of the action being appealed, or
no later than 20 days after the date of service of the Department's
decision, whichever is later.
(2) Either party may file a motion to disqualify a party's
representative at any time during the proceedings.
(3) The parties may seek discovery regarding any matter that is
relevant to any of their claims or defenses. However, by motion, either
party may seek to limit such discovery because the burden or expense of
providing the material outweighs its benefit, or because the material
sought is privileged, not relevant, unreasonably cumulative or
duplicative, or can be secured from some other source that is more
convenient, less burdensome, or less expensive.
(i) Prior to filing a motion to limit discovery, the parties must
confer and attempt to resolve any pending objection(s).
(ii) Neither party may submit more than one set of interrogatories,
one set of requests for production, and one set of requests for
admissions. The number of interrogatories or requests for production or
admissions may not exceed 25 per pleading, including subparts; in
addition, neither party may conduct/compel more than 2 depositions.
(iii) Either party may file a motion requesting additional
discovery. Such motion may be granted only if the party has shown
necessity and good cause to warrant such additional discovery.
(4) Requests for case suspensions must be submitted jointly.
(5) If the AJ determines upon his or her own initiative or upon
request by either party that some or all facts are not in genuine
dispute, he or she may, after giving notice to the parties and
providing them an opportunity to respond in writing within 15 calendar
days, issue an order limiting the scope of the hearing or issue a
decision without holding a hearing.
(6) The Department's determination regarding the penalty imposed
will be given great deference. An arbitrator, AJ, or the full MSPB may
not modify the penalty imposed by the Department
[[Page 7594]]
unless such penalty is so disproportionate to the basis for the action
as to be wholly without justification. In cases of multiple charges,
the third party's determination in this regard is based on the
justification for the penalty as it relates to the sustained charge(s).
When a penalty is mitigated, the maximum justifiable penalty must be
applied. The maximum justifiable penalty is the severest penalty that
is not so disproportionate to the basis for the action as to be wholly
without justification. If the adverse action is based on an MRO, the
penalty may only be mitigated as prescribed in Sec. 9901.808.
(7) An initial decision must be made by an AJ no later than 90 days
after the date on which the appeal is filed.
(8)(i) The initial AJ decision will become the Department's final
decision 30 days after its issuance, unless either party files an RFR
with MSPB and the Department concurrently (with service on the other
party, as specified by DoD implementing issuances) within that 30-day
period in accordance with 5 U.S.C. 9902(h), MSPB's regulations, and
this subpart.
(ii) Thirty days after the timely filing of an RFR of an initial AJ
decision, that initial AJ decision will become the Department's final
decision, and that decision is nonprecedential. MSPB will docket and
process a party's RFR as a petition for full MSPB review in accordance
with 5 U.S.C. 9902(h), MSPB's regulations, and this subpart, unless the
Department serves notice on the parties and MSPB within that 30-day
period that it will act on the RFR and review the initial AJ decision.
Any decision issued by the Department after reviewing an initial AJ
decision is precedential unless--
(A) The Department determines that the DoD decision is not
precedential; or
(B) The final DoD decision is reversed or modified by the full
MSPB.
(iii) Upon notice that it will reconsider the initial AJ decision,
the Department will provide the other party to the case 15 days to
respond to the RFR. After receipt of a timely response to the RFR, the
Department may--
(A) Where it believes that there has been a material error of fact,
or that there is new and material evidence available that, despite due
diligence, was not available when the record closed, remand the matter
to the assigned AJ for further adjudication or issue a final DoD
decision modifying or reversing that initial decision or decision after
remand. An AJ decision after remand must be made no later than 30 days
after the date of receipt of the remand;
(B) Where the Department determines that the initial AJ decision
has a direct and substantial adverse impact on the Department's
national security mission, or is based on an erroneous interpretation
of law, Governmentwide rule or regulation, or this part, issue a final
DoD decision modifying or reversing that initial decision; or
(C) Where the Department determines that the initial AJ decision
should serve as precedent, issue a final DoD decision affirming that
initial decision for such purposes.
(9) Upon receipt of a final DoD decision issued under paragraph
(k)(8)(iii) of this section, an employee or OPM may file a PFR with the
full MSPB within 30 days in accordance with 5 U.S.C. 9902(h), MSPB's
regulations, and this subpart.
(10) Upon receipt of a petition for full MSPB review or an RFR that
becomes a PFR as a result of the expiration of the Department's
reconsideration period in accordance with paragraph (k)(8)(iii) of this
section, the other party to the case and/or OPM, as applicable, will
have 30 days to file a response to the petition. The full MSPB will act
on a PFR within 90 days after receipt of a timely response, or the
expiration of the response period, as applicable, in accordance with 5
U.S.C. 9902(h), MSPB's regulations, and this subpart.
(11) The Director of OPM, after consultation with the Secretary,
may seek reconsideration by MSPB of a final MSPB decision in accordance
with 5 U.S.C. 7703(d), which is modified for this purpose. If the
Director seeks such reconsideration, the full MSPB must render its
decision no later than 60 days after receipt of a response to OPM's
petition in support of such reconsideration. The full MSPB must state
the reasons for its decision.
(l) Failure of MSPB to meet the deadlines imposed by paragraphs
(k)(7), (10), and (11) of this section in a case will not prejudice any
party to the case and will not form the basis for any legal action by
any party. If the AJ or full MSPB fails to meet the above time limits,
the full MSPB will inform the Secretary in writing of the cause of the
delay and will recommend future actions to remedy the problem.
(m) The Secretary or an employee adversely affected by a final
order or decision of MSPB may seek judicial review under 5 U.S.C.
9902(h)(6). Before seeking judicial review, the Secretary may seek
reconsideration by MSPB of a final MSPB decision.
Sec. 9901.808 Appeals of mandatory removal actions.
(a) Procedures for appeals of adverse actions to MSPB based on MROs
will be the same as for other offenses except as otherwise provided by
this section.
(b) If one or more MROs are sustained, neither the MSPB AJ nor the
full MSPB may mitigate the penalty.
(c) Only the Secretary may mitigate the penalty.
(d) If the MSPB AJ or the full MSPB sustains an employee's appeal
based on a finding that the employee did not commit an MRO, the
Department is not precluded from subsequently proposing an adverse
action (other than an MRO) based in whole or in part on the same or
similar evidence.
Sec. 9901.809 Actions involving discrimination.
(a) In considering any appeal of an action filed under 5 U.S.C.
7702, the Board will apply the provisions of 5 U.S.C. 9902 and this
part.
(b) In any appeal of an action filed under 5 U.S.C. 7702 that
results in a decision of the Department, if no petition for review of
the Department's decision is filed with the full Board, the Department
will refer only the discrimination issue to the full Board for
adjudication.
(c) All references in 5 U.S.C. 7702 to 5 U.S.C. 7701 are modified
to read 5 CFR part 9901, subpart H.
Sec. 9901.810 Savings provision.
This subpart does not apply to adverse actions proposed prior to
the date of an affected employee's coverage under this subpart.
Subpart I--Labor-Management Relations
Sec. 9901.901 Purpose.
This subpart contains the regulations which implement the
provisions of 5 U.S.C. 9902(m) relating to the Department's labor-
management relations system. This labor management relations system
addresses the unique role that the Department's civilian workforce
plays in supporting the Department's national security mission. These
regulations recognize the rights of DoD employees to organize and
bargain collectively, subject to any exclusion from coverage or
limitation on the scope of bargaining pursuant to law, including this
subpart and DoD issuances, applicable Presidential issuances (e.g.
Executive orders), and any other legal authority.
Sec. 9901.902 Scope of authority.
When a specified category of employees is covered by the labor-
[[Page 7595]]
management relations system established under this subpart, the
provisions of 5 U.S.C. 7101 through 7135 are modified and replaced by
the provisions in this subpart with respect to that category, except as
otherwise specified in this subpart. DoD may prescribe implementing
issuances to carry out the provisions of this subpart.
Sec. 9901.903 Definitions.
In this subpart:
Authority means the Federal Labor Relations Authority described in
5 U.S.C. 7104(a).
Board means the National Security Labor Relations Board established
by this subpart.
Collective bargaining means the performance of the mutual
obligation of a management representative of the Department and an
exclusive representative of employees in an appropriate unit in the
Department to meet at reasonable times and to bargain in a good faith
effort to reach agreement with respect to the conditions of employment
affecting such employees and to execute, if requested by either party,
a written document incorporating any collective bargaining agreement
reached, but the obligation referred to in this paragraph does not
compel either party to agree to a proposal or to make a concession.
Collective bargaining agreement means an agreement entered into as
a result of collective bargaining pursuant to the provisions of this
subpart.
Component means an organizational unit so prescribed and designated
by the Secretary in his or her sole and exclusive discretion, such as,
for example, the Office of the Secretary of Defense; the Military
Departments, or the Defense Logistics Agency.
Conditions of employment means personnel policies, practices, and
matters affecting working conditions--whether established by rule,
regulation, or otherwise--except that such term does not include
policies, practices, and matters relating to--
(1) Political activities prohibited under 5 U.S.C. chapter 73,
subchapter III;
(2) The classification of any position, including any
classification determinations under subpart B of this part;
(3) The pay of any employee or for any position, including any
determinations regarding pay or adjustments thereto under subpart C of
this part; or
(4) Any matters specifically provided for by Federal statute.
Confidential employee means an employee who acts in a confidential
capacity with respect to an individual who formulates or effectuates
management policies.
Consult means to consider the interests, opinions, and
recommendations of a recognized labor organization in rendering
decisions. This can be accomplished in face-to-face meetings or through
other means, e.g., teleconferencing, e-mail, and written
communications.
DoD issuance or issuances means a document issued at the DoD or DoD
Component level to carry out a policy or procedure of the Department
including those issuances implementing this part.
Dues means dues, fees, and assessments.
Exclusive representative means any labor organization which is
recognized as the exclusive representative of employees in an
appropriate unit consistent with the Department's organizational
structure, pursuant to 5 U.S.C. 7111 or as otherwise provided by Sec.
9901.911.
FMCS means Federal Mediation and Conciliation Service.
Grade means a level of work under a position classification or job
grading system.
Grievance means any complaint--
(1) By any employee concerning any matter relating to the
conditions of employment of the employee;
(2) By any labor organization concerning any matter relating to the
conditions of employment of any employee; or
(3) By any employee, labor organization, or the Department
concerning--
(i) The effect or interpretation, or a claim of breach, of a
collective bargaining agreement; or
(ii) Any claimed violation, misinterpretation, or misapplication of
any law, rule, regulation, or DoD issuance issued for the purpose of
affecting conditions of employment.
Labor organization means an organization composed in whole or in
part of employees, in which employees participate and pay dues, and
which has as a purpose the dealing with the Department concerning
grievances and conditions of employment, but does not include--
(1) An organization which, by its constitution, bylaws, tacit
agreement among its members, or otherwise, denies membership because of
race, color, creed, national origin, sex, age, preferential or
nonpreferential civil service status, political affiliation, marital
status, or handicapping condition;
(2) An organization which advocates the overthrow of the
constitutional form of government of the United States;
(3) An organization sponsored by the Department; or
(4) An organization which participates in the conduct of a strike
against the Government or any agency thereof or imposes a duty or
obligation to conduct, assist, or participate in such a strike.
Management official means an individual employed by the Department
in a position the duties and responsibilities of which require or
authorize the individual to formulate, determine, or influence the
policies of the Department or who has the authority to recommend such
action, if the exercise of the authority is not merely routine or
clerical in nature, but requires the consistent exercise of independent
judgment.
Person has the meaning given that term in 5 U.S.C. 7103(a)(1).
Professional employee has the meaning given that term in 5 U.S.C.
7103(a)(15).
Supervisor means an individual employed by the Department having
authority in the interest of the Department to hire, direct, assign,
promote, reward, transfer, furlough, layoff, recall, suspend,
discipline, or remove employees; to adjust their grievances; or to
effectively recommend such action, if the exercise of the authority is
not merely routine or clerical in nature but requires the consistent
exercise of independent judgment. It also means an individual employed
by the Department who exercises supervisory authority over military
members of the armed services, such as directing or assigning work or
evaluating or recommending evaluations.
Sec. 9901.904 Coverage.
(a) Employees covered. This subpart applies to eligible DoD
employees, subject to a determination by the Secretary under Sec.
9901.102(b)(1), except as provided in paragraph (b) of this section.
DoD employees who would otherwise be eligible for bargaining unit
membership under 5 U.S.C. chapter 71, as modified by Sec. 9901.912,
are eligible for bargaining unit membership under this subpart. In
addition, this subpart applies to an employee whose employment in the
Department has ceased because of any unfair labor practice under Sec.
9901.916 of this subpart and who has not obtained any other regular and
substantially equivalent employment.
(b) Employees excluded. This subpart does not apply to--
[[Page 7596]]
(1) An alien or noncitizen of the United States who occupies a
position outside the United States;
(2) A military member of the armed services;
(3) A supervisor or a management official;
(4) Any person who participates in a strike in violation of 5
U.S.C. 7311; or
(5) Any employee excluded pursuant to Sec. 9901.912 or any other
legal authority.
Sec. 9901.905 Impact on existing agreements.
(a) Any provision of a collective bargaining agreement that is
inconsistent with this part and/or DoD implementing issuances is
unenforceable on the effective date of the applicable subpart(s) or
such issuances. The exclusive representative may appeal the
Department's determination that a provision is unenforceable to the
National Security Labor Relations Board in accordance with the
procedures and time limits pursuant to Sec. 9901.908. However, the
Secretary, in his or her sole and exclusive discretion, may continue
all or part of a particular provision(s) with respect to a specific
category or categories of employees and may cancel such continuation at
any time; such determinations are not precedential.
(b) Upon request by an exclusive representative, the parties will
have 60 days after the effective date of coverage under the applicable
subpart and/or implementing issuance to bring into conformance those
remaining negotiable terms directly affected by the terms rendered
unenforceable by the applicable subpart and/or implementing issuance.
If the parties fail to reach agreement by that date, they may utilize
the negotiation impasse provisions of Sec. 9901.920 to resolve the
matter.
Sec. 9901.906 Employee rights.
Each employee has the right to form, join, or assist any labor
organization, or to refrain from any such activity, freely and without
fear of penalty or reprisal, and each employee will be protected in the
exercise of such right. Except as otherwise provided under this
subpart, such right includes the right--
(a) To act for a labor organization in the capacity of a
representative and the right, in that capacity, to present the views of
the labor organization to heads of agencies and other officials of the
executive branch of the Government, the Congress, or other appropriate
authorities; and
(b) To engage in collective bargaining with respect to conditions
of employment through representatives chosen by employees under this
subpart.
Sec. 9901.907 National Security Labor Relations Board.
(a)(1) The National Security Labor Relations Board is composed of
at least three members who are appointed by the Secretary for terms of
3 years, except that the appointments of the initial Board members will
be for terms of 1, 2, and 3 years, respectively. The Secretary may
extend the term of any member beyond 3 years when necessary to provide
for an orderly transition and/or appoint the member for up to two
additional 1-year terms. The Secretary, in his or her sole and
exclusive discretion, may appoint additional members to the Board; in
so doing, he or she will make such appointments to ensure that the
Board consists of an odd number of members.
(2) Members of the Board will be independent, distinguished
citizens of the United States who are well known for their integrity,
impartiality, and expertise in labor relations, and/or the DoD mission
and/or other related national security matters, and will be able to
acquire and maintain an appropriate security clearance. Members may be
removed by the Secretary only for inefficiency, neglect of duty, or
malfeasance in office.
(3) An individual chosen to fill a vacancy on the Board will be
appointed for the unexpired term of the member who is replaced and, at
the Secretary's option, an additional term or terms.
(b) The Secretary will appoint two members, with one appointed as
Chair of the Board. The third member of the Board will be appointed by
the Secretary from a list of three to five nominees developed in
consultation with the Director of OPM. The Secretary may appoint
additional members as long as the total membership of the Board is an
odd number.
(c) A Board vacancy will be filled according to the procedure used
to appoint the member whose position was vacated.
(d)(1) The Board will establish procedures for the fair, impartial,
and expeditious assignment and disposition of cases. To the extent
practicable, the Board will use a single, integrated process to address
all matters associated with a negotiations dispute, including unfair
labor practices, negotiability disputes, and bargaining impasses. The
Board may, pursuant to its regulations, use a combination of mediation,
factfinding, and any other appropriate dispute resolution methods to
resolve all such disputes at the earliest practicable time and with a
minimum administrative burden.
(2) A vote of the majority of the Board (or a three-person panel of
the Board) will be final. A vacancy on the Board does not impair the
right of the remaining members to exercise all of the powers of the
Board. The vote of the Chair will be dispositive in the event of a tie.
(e) Decisions of the Board are final and binding.
(f)(1) Subject to Sec. 9901.909(c), in order to obtain judicial
review of a Board decision, except those involving appealable actions
taken under subpart G of this part or 5 U.S.C. chapters 43 or 75, a
party will request a review of the record of a Board decision by the
Authority by filing such a request in writing within 15 days after the
issuance of the decision. A copy of the request will be served on all
parties. Within 15 days after service of the request, any response will
be filed. The Authority will establish, in conjunction with the Board,
standards for the sufficiency of the record and other procedures,
including notice to the parties. The Authority will accept the findings
of fact and interpretations of this part made by the Board and sustain
the Board's decision unless the requesting party shows that the Board's
decision was--
(i) Arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law;
(ii) Caused by harmful error in the application of the Board's
procedures in arriving at such decision; or
(iii) Unsupported by substantial evidence.
(2) The Authority will complete its review of the record and issue
a final decision within 30 days after receiving the party's response to
such request for review. If the Authority does not issue a final
decision within the mandatory time limit established by paragraph (f)
of this section, the Authority will be considered to have denied the
request for review of the Board's decision, which will constitute a
final decision of the Authority and is subject to judicial review in
accordance with 5 U.S.C. 7123.
Sec. 9901.908 Powers and duties of the Board.
(a) The Board may to the extent provided in this subpart and in
accordance with regulations prescribed by the Board--
(1) Conduct hearings and resolve complaints of unfair labor
practices, including complaints concerning strikes, work stoppages,
slowdowns, and picketing, or condoning such
[[Page 7597]]
activity by failing to take action to prevent or stop such activity;
(2) Resolve issues relating to the scope of bargaining and the duty
to bargain in good faith under Sec. 9901.917;
(3) Resolve disputes concerning requests for information under
Sec. 9901.914(b)(5) and (c);
(4) Resolve exceptions to arbitration awards. In doing so, the
Board will conduct any review of an arbitral award in accordance with
the same standards set forth in 5 U.S.C. 7122(a) as modified in Sec.
9901.923;
(5) Resolve negotiation impasses in accordance with Sec. 9901.920;
(6) Conduct de novo review involving all matters within the Board's
jurisdiction;
(7) Have discretion to evaluate the evidence presented in the
record and reach its own independent conclusions with respect to the
matters at issue, but in no case may the Board issue status quo ante
remedies, where such remedies are not intended to cure egregious
violations of this subpart or where such an award would impose an
economic hardship or interfere with the efficiency or effectiveness of
the Department's mission or impact national security; and
(8) Resolve disputes regarding the granting of national
consultation rights.
(b) Upon the request of a DoD Component or a labor organization
concerned, the Board may issue binding Department-wide opinions for
matters within its jurisdiction, which may be appealed as if they were
decisions of the Board in accordance with Sec. 9901.907(f).
(c) The Board's decisions will be written and published.
Sec. 9901.909 Powers and duties of the Federal Labor Relations
Authority.
(a) To the extent provided in this subpart (pursuant to the
authority in 5 U.S.C. 9902), the Federal Labor Relations Authority, in
accordance with conforming regulations prescribed by the Authority,
may--
(1) Determine the appropriateness of bargaining units pursuant to
the provisions of Sec. 9901.912; and
(2) Supervise or conduct elections to determine whether a labor
organization has been selected as an exclusive representative by a
majority of the employees in an appropriate unit and otherwise
administer 5 U.S.C. 7111 (relating to the according of exclusive
recognition to labor organizations), which is not waived for the
purpose of this subpart.
(b) In any matter filed with the Authority, if the responding party
believes that the Authority lacks jurisdiction, that party will timely
raise the issue with the Authority and simultaneously file a copy of
its response with the Board in accordance with regulations established
by the Authority. The Authority will promptly transfer the case to the
Board, which will determine whether the matter is within the Board's
jurisdiction. If the Board determines that the matter is not within its
jurisdiction, the Board will return the matter to the Authority for a
decision on the merits of the case. The Board's determination with
regard to its jurisdiction in a particular matter is final and not
subject to review by the Authority. The Authority will promptly decide
those cases that the Board has determined are within the jurisdiction
of the Authority.
(c) Judicial review of any Authority decision is as prescribed in 5
U.S.C. 7123(a), which is not modified.
Sec. 9901.910 Management rights.
(a) Subject to paragraphs (b), (c), and (d) of this section,
nothing in this subpart may affect the authority of any management
official or supervisor of the Department--
(1) To determine the mission, budget, organization, number of
employees, and internal security practices of the Department;
(2) To hire, assign, and direct employees in the Department; to
assign work, make determinations with respect to contracting out, and
to determine the personnel by which Departmental operations may be
conducted; to determine the numbers, types, pay schedules, pay bands
and/or grades of employees or positions assigned to any organizational
subdivision, work project or tour of duty, and the technology, methods,
and means of performing work; to assign employees to meet any
operational demand; and to take whatever other actions may be necessary
to carry out the Department's mission; and
(3) To lay off and retain employees, or to suspend; remove; reduce
in pay, pay band, or grade; or take other disciplinary action against
such employees or, with respect to filling positions, to make
selections for appointments from properly ranked and certified
candidates for promotion or from any other appropriate source.
(b) Management is prohibited from bargaining over the exercise of
any authority under paragraph (a) of this section or the procedures
that it will observe in exercising the authorities set forth in
paragraphs (a)(1) and (2) of this section.
(c) Notwithstanding paragraph (b) of this section and at the
request of an exclusive representative, management will consult as
required under Sec. 9901.917 over the procedures it will observe in
exercising the authorities set forth in paragraphs (a)(1) and (2) of
this section. Consultation does not require that the parties reach
agreement on any covered matter. The parties may, upon mutual
agreement, provide for FMCS or another third party to assist in this
process. Neither the Board nor the Authority may intervene in this
process.
(d) If an obligation exists under Sec. 9901.917 to bargain or
consult regarding any authority under paragraph (a) of this section,
management will provide notice to the exclusive representative
concurrently with the exercise of that authority. However, at its sole,
exclusive, and unreviewable discretion, management may provide notice
to an exclusive representative of its intention to exercise an
authority under paragraph (a) of this section as far in advance as
practicable. Further, nothing in paragraph (d) of this section
establishes an independent right to bargain or consult.
(e) When an obligation exists under Sec. 9901.913, management will
provide the exclusive representative an opportunity to present its
views and recommendations regarding the exercise of an authority under
paragraph (a) of this section, and the parties will bargain at the
level of recognition (unless otherwise delegated below that level, at
their mutual agreement) over otherwise negotiable--
(1) Appropriate arrangements for employees adversely affected by
the exercise of any authority under paragraph (a)(3) of this section
and procedures which management officials and supervisors will observe
in exercising any authority under paragraph (a)(3) of this section; and
(2)(i) Appropriate arrangements for employees adversely affected by
the exercise of any authority under paragraphs (a)(1) and (2) of this
section, provided that the effects of such exercise is foreseeable,
substantial, and significant in terms of both impact and duration on
the bargaining unit, or on those employees in that part of the
bargaining unit affected by the change. Appropriate arrangements within
the duty to bargain include proposals on matters such as personal
hardships and safety measures.
(ii) Appropriate arrangements within the duty to bargain do not
include proposals on matters such as--
(A) The routine assignment to specific duties, shifts, or work on a
regular or overtime basis; and
(B) Pay or credit for work not actually performed.
(f) Where a proposal falls within the coverage of both paragraph
(a)(1) and
[[Page 7598]]
(a)(3) of this section or paragraph (a)(2) and (a)(3) of this section,
the matter will be determined to be covered by paragraph (a)(1) or
(a)(2) of this section for the purpose of collective bargaining.
(g) Nothing in this section will delay or prevent the Department
from exercising its authority. Any agreements reached with respect to
paragraph (e)(2) of this section will not be precedential or binding on
subsequent acts, or retroactively applied, except at the Department's
sole, exclusive, and unreviewable discretion.
(h) Nothing in the process established under this section or in
Sec. 9901.917, will delay the exercise of a management right under
Sec. 9901.910(a)(1), (2) or (3).
(i) Management retains the sole, exclusive, and unreviewable
discretion to determine the procedures that it will observe in
exercising the authorities set forth in Sec. 9901.910(a)(1) and (2)
and to deviate from such procedures, as necessary.
Sec. 9901.911 Exclusive recognition of labor organizations.
The Department will accord exclusive recognition to a labor
organization if the organization has been selected as the
representative, in a secret ballot election, by a majority of the
employees, in an appropriate unit as determined by the Authority, who
cast valid ballots in the election.
Sec. 9901.912 Determination of appropriate units for labor
organization representation.
(a) The Authority will determine the appropriateness of any unit.
The Authority will determine in each case whether, in order to ensure
employees the fullest freedom in exercising the rights guaranteed under
this subpart, the appropriate unit should be established on a
Department, plant, installation, functional, or other basis and will
determine any unit to be an appropriate unit only if the determination
will ensure a clear and identifiable community of interest among the
employees in the unit and will promote effective dealings with, and
efficiency of the operations of the Department, consistent with the
Department's mission and organizational structure and Sec.
9901.107(a).
(b) A unit may not be determined to be appropriate under this
section solely on the basis of the extent to which employees in the
proposed unit have organized, nor may a unit be determined to be
appropriate if it includes--
(1) Except as provided under 5 U.S.C. 7135(a)(2), which is not
waived for the purpose of this subpart, any management official or
supervisor;
(2) A confidential employee;
(3) An employee engaged in personnel work;
(4) An employee in an attorney position;
(5) An employee engaged in administering the provisions of this
subpart;
(6) Both professional employees and other employees, unless a
majority of the professional employees vote for inclusion in the unit;
(7) Any employee engaged in intelligence, counterintelligence,
investigative, or security work which directly affects national
security; or
(8) Any employee primarily engaged in investigation or audit
functions relating to the work of individuals employed by the
Department whose duties directly affect the internal security of the
Department, but only if the functions are undertaken to ensure that the
duties are discharged honestly and with integrity.
(c) Any employee who is engaged in administering any provision of
law or this subpart relating to labor-management relations may not be
represented by a labor organization--
(1) Which represents other individuals to whom such provision or
subpart applies; or
(2) Which is affiliated directly or indirectly with an organization
which represents other individuals to whom such provision or subpart
applies.
(d) Two or more units in the Department for which a labor
organization is the exclusive representative may, upon petition by the
Department or labor organization, be consolidated with or without an
election into a single larger unit if the Authority considers the
larger unit to be appropriate. The Authority will certify the labor
organization as the exclusive representative of the new larger unit.
Sec. 9901.913 National consultation.
(a) If, in connection with the Department or Component, no labor
organization has been accorded exclusive recognition on a Department or
Component basis, a labor organization that is the exclusive
representative of a substantial number of the employees of the
Department or Component, as determined in accordance with criteria
prescribed by the Board, will be granted national consultation rights
by the Department or Component. National consultation rights will
terminate when the labor organization no longer meets the criteria
prescribed by the Board. Any issue relating to any labor organization's
eligibility for or continuation of, national consultation rights will
be subject to determination by the Board.
(b)(1) Any labor organization having national consultation rights
in connection with any Department or Component under subsection (a) of
this section will--
(i) Be informed of any substantive change in conditions of
employment proposed by the Department or Component; and
(ii) Be permitted reasonable time to present its views and
recommendations regarding the changes.
(2) If any views or recommendations are presented under paragraph
(b)(1) of this subsection to the Department or Component by any labor
organization--
(i) The Department or Component will consider the views or
recommendations before taking final action on any matter with respect
to which the views or recommendations are presented; and
(ii) The Department or Component will provide the labor
organization a written statement of the reasons for taking the final
action.
(c) Section 9901.913(b) does not apply where the proposed change is
bargained at the national level or where continuing collaboration
procedures under Sec. 9901.106 apply.
(d) Nothing in this section precludes the Department or the
Component from seeking views and recommendations from labor
organizations having exclusive representation within the Department or
Component which do not have national consultation rights.
(e) Nothing in this section will be construed to limit the right of
the agency or exclusive representative to engage in collective
bargaining.
Sec. 9901.914 Representation rights and duties.
(a)(1) A labor organization which has been accorded exclusive
recognition is the exclusive representative of the employees in the
unit it represents and is entitled to act for, and negotiate collective
bargaining agreements covering, all employees in the unit. An exclusive
representative is responsible for representing the interests of all
employees in the unit it represents without discrimination and without
regard to labor organization membership.
(2) An exclusive representative of an appropriate unit will be
given the opportunity to be represented at--
(i) Any formal discussion between a Department management
official(s) and bargaining unit employees, the purpose of which is to
discuss and/or announce new or substantially changed personnel
policies, practices, or working conditions. This right does not apply
to meetings between a management official(s) and bargaining unit
[[Page 7599]]
employees for the purpose of discussing operational matters where any
discussion of personnel policies, practices or working conditions--
(A) Constitutes a reiteration or application of existing personnel
policies, practices, or working conditions;
(B) Is incidental or otherwise peripheral to the announced purpose
of the meeting; or
(C) Does not result in an announcement of a change to, or a promise
to change, an existing personnel policy(s), practice(s), or working
condition(s);
(ii) Any discussion between one or more Department representatives
and one or more bargaining unit employees concerning any grievance
filed under the negotiated grievance procedure; or
(iii) Any examination of a bargaining unit employee by a
representative of the Department in connection with an investigation if
the employee reasonably believes that the examination may result in
disciplinary action against the employee and the employee requests such
representation. Such right will not apply to investigations conducted
by the Offices of the Inspectors General and other independent
Department or Component organizations whose mission includes the
conduct of criminal investigations, such as the Defense Criminal
Investigative Service, the U.S. Army Criminal Investigation Command,
the Naval Criminal Investigative Service, and the Air Force Office of
Special Investigations.
(3) The Department will annually inform its employees of their
rights under paragraph (a)(2)(iii) of this section.
(4) Employee representatives employed by the Department are subject
to the same expectations regarding conduct as any other employee,
whether they are serving in their representative capacity or not.
(5) Except in the case of grievance procedures negotiated under
this subpart, the rights of an exclusive representative under this
section may not be construed to preclude an employee from--
(i) Being represented by an attorney or other representative of the
employee's own choosing, other than the exclusive representative, in
any grievance or appeal action; or
(ii) Exercising grievance or appellate rights established by law,
rule, or regulation.
(b) The duty of the Department or appropriate Component(s) of the
Department and an exclusive representative to negotiate in good faith
under paragraph (a) of this section includes the obligation--
(1) To approach the negotiations with a sincere resolve to reach a
collective bargaining agreement;
(2) To be represented at the negotiations by duly authorized
representatives prepared to discuss and negotiate on any condition of
employment;
(3) To meet at reasonable times and convenient places as frequently
as may be necessary, and to avoid unnecessary delays;
(4) If agreement is reached, to execute on the request of any party
to the negotiation, a written document embodying the agreed terms, and
to take such steps as are necessary to implement such agreement; and
(5) In the case of the Department or appropriate Component(s) of
the Department, to furnish information to an exclusive representative,
or its authorized representative, when--
(i) Such information exists, is normally maintained in the regular
course of business, and is reasonably available;
(ii) The exclusive representative has requested such information
and demonstrated a particularized need for the information in order to
perform its representational functions in grievance or appeal
proceedings, or in negotiations; and
(iii) Disclosure is not prohibited by law.
(c) Disclosure of information in paragraph (b)(5) of this section
does not include the following:
(1) Disclosure prohibited by law or regulations, including, but not
limited to, the regulations in this part, Governmentwide rules and
regulations, Departmental implementing issuances and other policies and
regulations, and Executive orders;
(2) Disclosure of information if adequate alternative means exist
for obtaining the requested information, or if proper discussion,
understanding, or negotiation of a particular subject within the scope
of collective bargaining is possible without recourse to the
information;
(3) Internal Departmental guidance, counsel, advice, or training
for managers and supervisors relating to collective bargaining;
(4) Any disclosures where an authorized official has determined
that disclosure would compromise the Department's mission, security, or
employee safety; and
(5) Personal addresses, personal telephone numbers, personal email
addresses, or any other information not related to an employee's work.
(d)(1) An agreement between the Department or appropriate
Component(s) of the Department and the exclusive representative is
subject to approval by the Secretary.
(2) The Secretary will approve the agreement within 30 days after
the date the agreement is executed if the agreement is in accordance
with the provisions of these regulations and any other applicable law,
rule, regulation or similar Department or Component issuance.
(3) If the Secretary does not approve or disapprove the agreement
within the 30-day period specified in paragraph (d)(2) of this section,
the agreement will take effect and is binding on the Department or
Component(s), as appropriate, and the exclusive representative, but
only to the extent it is consistent with Federal law, Presidential
issuance (e.g., Executive order), Governmentwide regulations, DoD
issuances (including implementing issuances and Component issuances),
or the regulations in this part.
(4) A local agreement subject to a national or other controlling
agreement at a higher level may be approved under the procedures of the
controlling agreement or, if none, under Departmental regulations.
Bargaining will be at the level of recognition except where delegated.
(5) Provisions in existing collective bargaining agreements are
unenforceable if an authorized official determines that they are
contrary to Federal law, Presidential issuance (e.g. Executive order),
Governmentwide regulations, DoD issuances (including implementing
issuances and Component issuances), or the regulations in this part.
Sec. 9901.915 Allotments to representatives.
(a) If the Department has received from an employee in an
appropriate unit a properly executed written or electronic assignment
which authorizes the Department to deduct from the pay of the employee
amounts for the payment of regular and periodic dues and other
financial assessments of the exclusive representative of the unit, the
Department will honor the assignment and make an appropriate allotment
pursuant to the assignment. Any such allotment will be made at no cost
to the exclusive representative or the employee. Except as provided
under paragraph (b) of this section, any such assignment may not be
revoked for a period of 1 year.
(b) An allotment under paragraph (a) of this section for the
deduction of dues with respect to any employee terminates when--
[[Page 7600]]
(1) The agreement between the Department or Department Component
and the exclusive representative involved ceases to be applicable to
the employee; or
(2) The employee is suspended or expelled from membership by the
exclusive representative.
(c)(1) Subject to paragraph (c)(2) of this section, if a petition
has been filed with the Authority by a labor organization alleging that
10 percent of the employees in an appropriate unit in the Department
have membership in the labor organization, the Authority will
investigate the petition to determine its validity. Upon certification
by the Authority of the validity of the petition, the Department has a
duty to negotiate with the labor organization solely concerning the
deduction of dues of the labor organization from the pay of the members
of the labor organization who are employees in the unit and who make a
voluntary allotment for such purpose.
(2)(i) The provisions of paragraph (c)(1) of this section do not
apply in the case of any appropriate unit for which there is an
exclusive representative.
(ii) Any agreement under paragraph (c)(1) of this section between a
labor organization and the Department or Department Component with
respect to an appropriate unit becomes null and void upon the
certification of an exclusive representative of the unit.
Sec. 9901.916 Unfair labor practices.
(a) For the purpose of this subpart, it is an unfair labor practice
for the Department--
(1) To interfere with, restrain, or coerce any employee in the
exercise by the employee of any right under this subpart;
(2) To encourage or discourage membership in any labor organization
by discrimination in connection with hiring, tenure, promotion, or
other conditions of employment;
(3) To sponsor, control, or otherwise assist any labor
organization, other than to furnish, upon request, customary and
routine services and facilities on an impartial basis to other labor
organizations having equivalent status;
(4) To discipline or otherwise discriminate against an employee
because the employee has filed a complaint or petition, or has given
any information or testimony under this subpart;
(5) To refuse, as determined by the Board, to negotiate in good
faith or to consult with a labor organization, as required by this
subpart;
(6) To fail or refuse, as determined by the Board, to cooperate in
impasse procedures and impasse decisions, as required by this subpart;
or
(7) To fail or refuse otherwise to comply with any provision of
this subpart.
(b) For the purpose of this subpart, it is an unfair labor practice
for a labor organization--
(1) To interfere with, restrain, or coerce any employee in the
exercise by the employee of any right under this subpart;
(2) To cause or attempt to cause the Department to discriminate
against any employee in the exercise by the employee of any right under
this subpart;
(3) To coerce, discipline, fine, or attempt to coerce a member of
the labor organization as punishment, reprisal, or for the purpose of
hindering or impeding the member's work performance or productivity as
an employee or the discharge of the member's duties as an employee;
(4) To discriminate against an employee with regard to the terms
and conditions of membership in the labor organization on the basis of
race, color, creed, national origin, sex, age, preferential or
nonpreferential civil service status, political affiliation, marital
status, or handicapping condition;
(5) To refuse, as determined by the Board, to negotiate in good
faith or to consult with the Department as required by this subpart;
(6) To fail or refuse, as determined by the Board, to cooperate in
impasse procedures and impasse decisions as required by this subpart;
(7)(i) To call, or participate in, a strike, work stoppage, or
slowdown, or picketing of the Department in a labor-management dispute
if such picketing interferes with an agency's operations; or
(ii) To condone any activity described in paragraph (b)(7)(i) of
this section by failing to take action to prevent or stop such
activity; or
(8) To otherwise fail or refuse to comply with any provision of
this subpart.
(c) Notwithstanding paragraph (b)(7) of this section, informational
picketing which does not interfere with the Department's operations
will not be considered an unfair labor practice.
(d) For the purpose of this subpart, it is an unfair labor practice
for an exclusive representative to deny membership to any employee in
the appropriate unit represented by the labor organization, except for
failure to meet reasonable occupational standards uniformly required
for admission or to tender dues uniformly required as a condition of
acquiring and retaining membership. This does not preclude any labor
organization from enforcing discipline in accordance with procedures
under its constitution or bylaws to the extent consistent with the
provisions of this subpart.
(e) The Board will not consider any unfair labor practice charge
filed more than 90 days after the alleged unfair labor practice
occurred, unless the Board determines, pursuant to its regulations,
that there is good cause for the late filing.
(f) Unfair labor practice issues which can properly be raised under
an appeals procedure may not be raised as unfair labor practices
prohibited under this section. Except where an employee has an option
of using the negotiated grievance procedure or an appeals procedure in
connection with an adverse action, issues which can be raised under a
grievance procedure may, in the discretion of the aggrieved party, be
raised under the grievance procedure or as an unfair labor practice
under this section, but not under both procedures.
(g) The expression of any personal view, argument, opinion, or the
making of any statement which publicizes the fact of a representational
election and encourages employees to exercise their right to vote in
such an election, corrects the record with respect to any false or
misleading statement made by any person, or informs employees of the
Government's policy relating to labor-management relations and
representation, will not, if the expression contains no threat of
reprisal or force or promise of benefit or was not made under coercive
conditions--
(1) Constitute an unfair labor practice under any provision of this
subpart; or
(2) Constitute grounds for the setting aside of any election
conducted under any provision of this subpart.
Sec. 9901.917 Duty to bargain and consult.
(a) The Department or appropriate Component(s) of the Department
and any exclusive representative in any appropriate unit in the
Department, through appropriate representatives, will meet and
negotiate in good faith as provided by this subpart for the purpose of
arriving at a collective bargaining agreement. In addition, the
Department or appropriate Component(s) of the Department and the
exclusive representative may determine appropriate techniques,
consistent with the operational rules of the Board, to assist in any
negotiation.
(b) If bargaining over an initial collective bargaining agreement
or any successor agreement is not completed within 90 days after such
bargaining
[[Page 7601]]
begins, the parties may mutually agree to continue bargaining, or
either party may refer the matter to the Board for resolution in
accordance with procedures established by the Board. At any time prior
to going to the Board, either party may refer the matter to FMCS for
assistance.
(c) If the parties bargain during the term of an existing
collective bargaining agreement, or in the absence of a collective
bargaining agreement, over a proposed change affecting bargaining unit
employees' conditions of employment, and no agreement is reached within
30 days after such bargaining begins, either party may refer the matter
to the Board for resolution in accordance with procedures established
by the Board. Either party may refer the matter to FMCS for assistance
at any time.
(d)(1) Management may not bargain over any matters that are
inconsistent with law or the regulations in this part, Governmentwide
rules and regulations, Departmental implementing issuances and other
Department or Component policies, regulations or similar issuances, or
Executive orders.
(2) Except as otherwise provided in Sec. 9901.910(c), management
has no obligation to bargain or consult over a change to a condition of
employment unless the change is otherwise negotiable pursuant to these
regulations and is foreseeable, substantial, and significant in terms
of both impact and duration on the bargaining unit, or on those
employees in that part of the bargaining unit affected by the change.
(3) Nothing in paragraphs (b) or (c) of this section prevents
management from exercising the rights enumerated in Sec. 9901.910.
(e) If a management official involved in collective bargaining with
an exclusive representative alleges that the duty to bargain in good
faith does not extend to any matter, the exclusive representative may
appeal the allegation to the Board in accordance with procedures
established by the Board.
Sec. 9901.918 Multi-unit bargaining.
(a) Negotiations can occur at geographical or organizational levels
within DoD or a Component with the local exclusive representatives
impacted by the proposed change.
(b) Any such negotiations will--
(1) Be binding on all parties afforded the opportunity to bargain
with representatives of DoD or the Component;
(2) Supersede all conflicting provisions of applicable collective
bargaining agreements of the labor organization(s) affected by the
negotiations;
(3) Not be subject to ratification; and
(4) Be subject to impasse resolution by the Board under procedures
prescribed by the Board. In resolving impasses, the Board will ensure
that agreement provisions are consistent with regard to all similarly
situated employees. The determination as to which organizations are
covered under multi-unit bargaining is not subject to review by the
Board.
(c) Any party may request the services of FMCS to assist with these
negotiations.
(d) Labor organizations may request multi-unit bargaining, as
appropriate. The Secretary has sole and exclusive authority to grant
the labor organizations' request.
(e) The Department will prescribe implementing issuances on the
procedures and constraints associated with multi-unit bargaining.
Sec. 9901.919 Collective bargaining above the level of recognition.
(a) Negotiations can occur at the DoD or Component level with labor
organization(s) at an organizational level above the level of exclusive
recognition. The decision to negotiate at a level above the level of
recognition as well as the unions involved, is within the sole and
exclusive discretion of the Secretary to determine and will not be
subject to review.
(b) Any such agreement reached in these negotiations will--
(1) Be binding on all subordinate bargaining units of the labor
organization(s) afforded the opportunity to bargain at the level of
recognition and their exclusive representatives, and DoD and its
Components, without regard to levels of recognition;
(2) Supersede all conflicting provisions of other collective
bargaining agreements of the labor organization(s), including
collective bargaining agreements negotiated with an exclusive
representative at the level of recognition, except as otherwise
determined by the Secretary;
(3) Not be subject to further negotiations with the labor
organizations for any purpose, including bargaining at the level of
recognition, except as the Secretary may decide, in his or her sole and
exclusive discretion;
(4) Be subject to review by the Board only to the extent provided
by this subpart;
(5) Not be subject to ratification;
(6) Be subject to impasse resolution by the Board under procedures
prescribed by the Board. In resolving impasses, the Board will ensure
that agreement provisions are consistent with regard to all similarly
situated employees. The determination as to which organizations are
covered under national level bargaining is not subject to review by the
Board;
(7) The National Guard Bureau and the Army and Air Force National
Guard are excluded from coverage under this section. Where National
Guard employees are impacted, negotiations at the level of recognition
are authorized; and
(8) Labor organizations may request bargaining above the level of
recognition, as appropriate. The Secretary has sole and exclusive
authority to grant the labor organizations' request.
Sec. 9901.920 Negotiation impasses.
(a) If the Department and exclusive representative are unable to
reach an agreement under Sec. Sec. 9901.914, 9901.917, 9901.918, or
9901.919, either party may submit the disputed issues to the Board for
resolution.
(b) The Board may take whatever action is necessary and not
inconsistent with this subpart to resolve the impasse, to include use
of settlement efforts.
(c) Pursuant to Sec. Sec. 9901.907 and 9901.926, the Board's
regulations will provide for a single, integrated process to address
all matters associated with a negotiations dispute, including unfair
labor practices, negotiability disputes, and bargaining impasses.
(d) Notice of any final action of the Board under this section will
be promptly served upon the parties. The action will be binding on such
parties during the term of the agreement, unless the parties agree
otherwise. Nothing in this section precludes judicial review of any
portion of a decision addressing a negotiability dispute or unfair
labor practice charge.
Sec. 9901.921 Standards of conduct for labor organizations.
Standards of conduct for labor organizations are those prescribed
under 5 U.S.C. 7120, which is not modified.
Sec. 9901.922 Grievance procedures.
(a)(1) Except as provided in paragraph (a)(2) of this section, any
collective bargaining agreement will provide procedures for the
settlement of grievances, including questions of arbitrability. Except
as provided in paragraphs (d) and (f) of this section, the procedures
will be the exclusive procedures for grievances which fall within its
coverage.
(2) Any collective bargaining agreement may exclude any matter from
the application of the grievance procedures which are provided for in
the agreement.
[[Page 7602]]
(b)(1) Any negotiated grievance procedure referred to in paragraph
(a) of this section will be fair and simple, provide for expeditious
processing, and include procedures that--
(i) Assure an exclusive representative the right, in its own behalf
or on behalf of any employee in the unit represented by the exclusive
representative, to present and process grievances;
(ii) Assure such an employee the right to present a grievance on
the employee's own behalf, and assure the exclusive representative the
right to be present during the grievance proceeding; and
(iii) Provide that any grievance not satisfactorily settled under
the negotiated grievance procedure is subject to binding arbitration,
which may be invoked by either the exclusive representative or the
Department.
(2) The provisions of a negotiated grievance procedure providing
for binding arbitration in accordance with paragraph (b)(1)(iii) of
this section will, to the extent that an alleged prohibited personnel
practice is involved, allow the arbitrator to order a stay of any
personnel action in a manner similar to the manner described in 5
U.S.C. 1221(c) with respect to the Merit Systems Protection Board and
order the Department to take any disciplinary action identified under 5
U.S.C. 1215(a)(3) that is otherwise within the authority of the
Department to take.
(3) Any employee who is the subject of any disciplinary action
ordered under paragraph (b)(2) of this section may appeal such action
to the same extent and in the same manner as if the Department had
taken the disciplinary action absent arbitration.
(c) The preceding paragraphs of this section do not apply with
respect to any matter concerning--
(1) Any claimed violation of 5 U.S.C. chapter 73, subchapter III
(relating to prohibited political activities);
(2) Retirement, life insurance, or health insurance;
(3) Any examination, certification, or appointment;
(4) A rating of record issued under subpart D of this part;
(5) A removal taken under mandatory removal authority as defined in
Sec. 9901.717;
(6) Any subject not within the definition of grievance in Sec.
9901.903 (e.g., the classification or pay of any position), except for
an adverse action under applicable authority, including subpart G of
this part, which is not otherwise excluded by paragraph (c) of this
section; or
(7) A suspension or removal taken under 5 U.S.C. 7532.
(d) To the extent not already excluded by existing collective
bargaining agreements, the exclusions contained in paragraph (c) of
this section apply upon the effective date of this subpart, as
determined under Sec. 9901.102(b)(1).
(e)(1) An aggrieved employee affected by a prohibited personnel
practice under 5 U.S.C. 2302(b)(1) which also falls under the coverage
of the negotiated grievance procedure may raise the matter under the
applicable statutory procedures, or the negotiated procedure, but not
both.
(2) An employee is deemed to have exercised his or her option under
paragraph (e)(1) of this section to raise the matter under the
applicable statutory procedures, or the negotiated procedure, at such
time as the employee timely initiates an action under the applicable
statutory or regulatory procedure or timely files a grievance in
writing in accordance with the provisions of the parties' negotiated
grievance procedure, whichever event occurs first.
(f)(1) For appealable matters, except for mandatory removal
offenses under Sec. 9901.717, an aggrieved employee may raise the
matter under an applicable appellate procedure or under the negotiated
grievance procedure, but not both. An employee will be deemed to have
exercised his or her option under this section when the employee timely
files an appeal under the applicable appellate procedures or a
grievance in accordance with the provisions of the parties' negotiated
grievance procedure, whichever occurs first.
(2) An arbitrator hearing a matter appealable under subpart H of
this part is bound by the applicable provisions of this part.
(g)(1) This paragraph applies with respect to a prohibited
personnel practice other than a prohibited personnel practice to which
paragraph (e) of this section applies.
(2) An aggrieved employee affected by a prohibited personnel
practice described in paragraph (g)(1) of this section may elect not
more than one of the procedures described in paragraph (g)(3) of this
section with respect thereto. A determination as to whether a
particular procedure for seeking a remedy has been elected will be made
as set forth under paragraph (g)(4) of this section.
(3) The procedures for seeking remedies described in this paragraph
are as follows:
(i) An appeal under subpart H of this part;
(ii) A negotiated grievance under this section; and
(iii) Corrective action under 5 U.S.C. chapter 12, subchapters II
and III.
(4) For the purpose of this paragraph, an employee is considered to
have elected one of the following, whichever election occurs first:
(i) The procedure described in paragraph (g)(3)(i) of this section
if such employee has timely filed a notice of appeal under the
applicable appellate procedures;
(ii) The procedure described in paragraph (g)(3)(ii) of this
section if such employee has timely filed a grievance in writing in
accordance with the provisions of the parties' negotiated procedure; or
(iii) The procedure described in paragraph (g)(3)(iii) of this
section if such employee has sought corrective action from the Office
of Special Counsel by making an allegation under 5 U.S.C. 1214(a)(1).
(h) An arbitrator hearing a matter under this subpart is bound by
all applicable laws, rules, regulations, and DoD issuances, including
applicable provisions of this part.
Sec. 9901.923 Exceptions to arbitration awards.
(a) Either party to arbitration under this subpart may file with
the Board an exception to any arbitrator's award, except an award
issued in connection with an appealable matter under Sec. 9901.922(f)
or matters similar to those covered under 5 U.S.C. 4303 and 7512
arising under other personnel systems, which will be adjudicated under
procedures described in Sec. 9901.807(k)(8) through (10). Such
procedures are adopted in this subpart for these purposes.
(b) In addition to the bases contained in 5 U.S.C. 7122, exceptions
may also be filed by the parties based on the arbitrator's failure to
properly consider the Department's national security mission or to
comply with applicable NSPS regulations and DoD issuances. The Board
may take such action concerning the award as is consistent with this
subpart.
(c) If no exception to an arbitrator's award is filed under
paragraph (a) of this section during the 30-day period beginning on the
date of such award, the award is final and binding. Either party will
take the actions required by an arbitrator's final award. The award may
include the payment of back pay (as provided under 5 U.S.C. 5596 and 5
CFR part 550, subpart H).
(d) Nothing in this section prevents the Board from determining its
own jurisdiction without regard to whether any party has raised a
jurisdictional issue.
[[Page 7603]]
Sec. 9901.924 Official time.
(a) Any employee representing an exclusive representative in the
negotiation of a collective bargaining agreement under this subpart
will be authorized official time for such purposes, including
attendance at impasse proceedings, during the time the employee
otherwise would be in a duty status. The number of employees for whom
official time is authorized under this section may not exceed the
number of individuals designated as representing the Department for
such purposes.
(b) Any activities performed by any employee relating to the
internal business of the labor organization, including but not limited
to the solicitation of membership, elections of labor organization
officials, and collection of dues, will be performed during the time
the employee is in a nonduty status.
(c) Except as provided in paragraph (a) of this section, the
Authority or the Board, as appropriate, will determine whether an
employee participating for, or on behalf of, a labor organization in
any phase of proceedings before the Authority or the Board will be
authorized official time for such purpose during the time the employee
would otherwise be in a duty status.
(d) Except as provided in the preceding paragraphs of this section,
any employee representing an exclusive representative or, in connection
with any other matter covered by this subpart, any employee in an
appropriate unit represented by an exclusive representative, will be
granted official time in any amount the agency and the exclusive
representative involved agree to be reasonable, necessary, and in the
public interest.
(e) Official time for representational activities will not extend
to the representation of employees outside the representative's
bargaining unit, except for multi-unit bargaining and/or bargaining
above the level of recognition, in accordance with Sec. Sec. 9901.918
and 9901.919 and mutual agreement of the agency and the exclusive
representatives involved.
Sec. 9901.925 Compilation and publication of data.
(a) The Board will maintain a file of its proceedings.
(b) All files maintained under paragraph (a) of this section will
be open to inspection and reproduction in accordance with 5 U.S.C. 552
and 552a. The Board will establish rules in consultation with the
Department for maintaining and making available for inspection
sensitive information.
Sec. 9901.926 Regulations of the Board.
The Department may issue initial interim rules for the operation of
the Board and will consult with labor organizations granted national
consultation rights on the rules. The Board will prescribe and publish
rules for its operation in the Federal Register.
Sec. 9901.927 Continuation of existing laws, recognitions,
agreements, and procedures.
(a) Except as otherwise provided by Sec. Sec. 9901.905 or
9901.912, nothing contained in this subpart precludes the renewal or
continuation of an exclusive recognition, certification of an exclusive
representative, or an agreement that is otherwise consistent with law,
the regulations in this part and DoD or Component issuances between the
Department or a Component thereof and an exclusive representative of
its employees, which is entered into before the effective date of this
subpart, as determined under Sec. 9901.102(b)(1).
(b) Policies, regulations, and procedures established under and
decisions issued under Executive Orders 11491, 11616, 11636, 11787, and
11838 or any other Executive order, in effect on the effective date of
this subpart (as determined under Sec. 9901.102(b)(1)), will remain in
full force and effect until revised or revoked by the President, or
unless superseded by specific provisions of this subpart or by
implementing issuances or decisions issued pursuant to this subpart.
Sec. 9901.928 Savings provisions.
This subpart does not apply to grievances or other administrative
proceedings already pending on the date of coverage of this subpart, as
determined under Sec. 9901.102(b)(1). Any remedy that applies after
the date of coverage under any provision of this part and that is in
conflict with applicable provisions of this part is not enforceable.
[FR Doc. 05-2582 Filed 2-11-05; 8:45 am]
BILLING CODE 6325-39-P