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The Defense Department will spend several years shifting employees to its new personnel system, Navy Secretary Gordon England said Wednesday.

Under England's plan, some Defense employees will change to a six-month pilot personnel system in July of next year. The first group will be substantial in number and broadly representative of the department's workforce, England said.

After the pilot test is completed, Defense will evaluate it and make changes before launching a 12-month pilot, which also will be followed by an evaluation. A third group will be phased in starting in late 2006, bringing the total of Defense employees under the new system to 300,000 by then.

At that point, the department must seek approval from the Office of Personnel Management to expand the system to the remaining 400,000 of its civilian workforce

England offered no details about what the new system would look like, emphasizing that he was only laying out a process for devising and implementing it.

He said that Defense plans to consult widely with employee groups and OPM, and will post its changes in the Federal Register. The first proposal -- for a new labor relations system -- will go out in November, followed by a proposed rule for a new human resources system in January 2005.

England was named the point person for the Defense personnel reform effort earlier this year after employee unions and some members of Congress said the department was moving too quickly and not consulting with them on the design of the new system.

England's schedule marks a significant departure from previous plans. Last month, Defense officials told a congressional panel that they intended to roll out a new personnel system for Navy Department employees as early as October.

At a hearing following the February release of a Pentagon working paper for a new labor relations system, Sen. Carl Levin, D-Mich., said that Defense had "presented a singular approach right out of the box" that was "needlessly confrontational," and which indicated to Levin that Defense "views consultation as a formality."

The working paper indicated that Defense planned to eliminate all provisions of the old labor relations system at the agency, which is governed by Chapter 71 of Title 5 of the U.S. Code.

Under the proposal, Defense civilian employees could continue to join unions, but a fee-for-service arrangement also would be established, allowing employees to contract with a union to represent them in certain situations for a fee. Unions opposed that provision, arguing that it would lead some members to quit, believing they could secure union representation at less expense on an as-needed basis.

England dismissed the working paper on Wednesday, calling it just a "point of departure" for discussion. He said he was now overseeing six teams of employees from Defense, OPM and the Office of Management and Budget who will consider options for new labor relations, pay-for-performance, and disciplinary appeals systems. Defense has already begun to consult with the General Accounting Office, and will hold town meetings with employees and meetings with union officials.

George Nesterczuk, an OPM official assigned to work with Defense, said that the new process would follow the lead of the Homeland Security Department in consulting broadly with employees before moving forward. Last year, DHS won praise from Congress and the GAO for consulting with employees in designing its personnel system.