GovernmentExecutive.com

Defense Secretary Donald Rumsfeld has sent a proposal to Congress to overhaul the Defense Department's human resources management system and transfer authority over Defense civilian employees from the Office of Personnel Management to the Pentagon.

The "Defense Transformation for the 21st Century Act" calls for a personnel system that could more quickly and creatively respond to new demands placed on the department. Details of the wide-ranging plan include switching to a pay-banding system, implementing a separate pay structure for managers, and modifying job classifications, hiring authorities, pay administration, pay-for-performance evaluation systems and reduction-in-force procedures. Many of the personnel flexibilities in the proposal mirror those included in the legislation that created the Homeland Security Department.

"We are working to promote a culture in the Defense Department that rewards unconventional thinking, a climate where people have freedom and flexibility to take risks and try new things," David Chu, undersecretary of Defense for personnel and readiness, told members of the House Armed Services Committee in March. The Defense Department currently employs 1.8 million civilian and military workers.

The proposal recommends repealing authority for civilian personnel demonstration projects and implementing a "best practices," system of five career groups with corresponding pay bands. Employees would no longer receive step increases, within-grade pay increases or annual across-the-board raises under the plan. Another portion of the proposal would raise the annual total compensation limit for senior executives to that of the vice president, which is $198,600 for 2003.

The proposal also would shift approximately 300,000 military jobs to civilian positions.

The legislation would provide the flexibility the department needs to respond to events, such as the war on terrorism, by allowing civilian employees to "move money, shift people, and design and buy weapons quickly, and respond to sudden changes in our security environment," said Chu, who pointed to the personnel flexibilities given to Homeland Security Department officials as a model for change.

But union officials questioned the Defense Department's rush to emulate a plan that is still in the development stages at Homeland Security.

"We're still waiting to see what the Homeland Security Department is going to come up with, and it would be absurd to model another program after that until we see what the Homeland Security Department comes up with and whether or not that works," said Diane Witiak, spokeswoman for the American Federation of Government Employees. AFGE officials were still reviewing the proposal Tuesday afternoon.

"At a minimum, we think that hearings should be held to consider the proposal by Defense and there should be a hold on any type of reform at Defense until there is some evidence of success at the Homeland Security Department," Witiak said.

The Defense personnel proposal, like the Homeland Security law, does provide for input from union officials in crafting and implementing changes to the existing personnel system. But it also would allow the Defense secretary considerable leeway in crafting collective bargaining relationships at the department. That follows a bad precedent set at Homeland Security, said Robert Tobias, director of the Institute for Public Policy Implementation at The American University in Washington.

"Creating the structure for collective bargaining in the federal sector is the responsibility of Congress, not an agency," said Tobias, who is a former president of the National Treasury Employees Union. "Congress is responsible for the structure of collective bargaining and it has no reason to give the authority to a department."

Tobias said Defense officials have not made a compelling case for changing existing collective bargaining rules.

"The whole idea for the Homeland Security legislation was security. I certainly didn't agree with that rationale then, and how can it be true for the Defense Department now?" Tobias asked. "You can't solve the leadership problem that is reflected in the most recent survey of federal employees by taking away collective bargaining rights. When given a chance, federal employees have shown that working through their unions, they can help make an increase in productivity. Taking away those rights will not increase productivity."