Pentagon: Personnel overhaul should only include civilian workforce

Pentagon officials do not think the Defense Department should craft a personnel system that includes military, civilian and contractor personnel, despite support for such a plan from the General Accounting Office.

Last week, Pentagon officials sent a proposal for overhauling and modernizing the Defense civilian personnel system to Congress. GAO recommended in a March 2003 report and an April 18 letter to Rep. Solomon Ortiz, D-Texas, that the agency focus its energies on developing a departmentwide plan that encompasses both the military and civilian workforces, and takes into account the contractor workforce.

"DoD's three human capital strategic plans-two military and one civilian-were prepared separately and were not integrated to form a seamless and comprehensive strategy and did not address how DoD plans to link its human capital initiatives with its sourcing plans, such as efforts to outsource noncore responsibilities," Derek Stewart, GAO's director of defense capabilities and management, wrote in the April 18 letter. "Without an integrated strategy, DoD may not effectively and efficiently allocate its scarce resources for optimal readiness."

But Pentagon officials disagreed with that recommendation in the April 18 letter, declaring that the contractor workforce was "just another tool to accomplish the mission, not a separate workforce, with separate needs, to manage." The Defense Department did not submit their comments in time to be included in GAO's March report, so they were included in the letter from Stewart to Ortiz.

The "Defense Transformation for the 21st Century Act" is the result of 20 years of incremental personnel innovation at the department and will help the department deal with its recruitment and retention challenges, David Chu, undersecretary of Defense for personnel and readiness, said Tuesday.

"The current system is not agile enough," Chu said at a forum sponsored by the IBM Endowment for the Business of Government, a think tank that studies government operations. "The civil service system has the right values, but its processes are outdated."

Based on a best practices model developed from the various personnel and alternative pay system demonstration projects, the proposal for the National Security Personnel System includes plans to shift employees from the general schedule pay system to a pay--band system, as well as scrapping automatic annual pay increases for a pay-for-performance system. The proposal also includes streamlined hiring authority and special pay authorities to bring in specialists and retirees for a limited time.

"We need to have a compensation system that is responsive to the market and to performance," Chu explained. "We cannot succeed with today's system."

Chu said civilians were a key part of the department's total workforce, but that without significant changes to the civil service system, the department might be less inclined to rely on its civilian employees.

"Ultimately the reason for changing is national security," Chu said.

Chu and Ginger Groeber, Defense's deputy undersecretary for civilian personnel policy, said they hoped to get congressional approval for the proposal in time to implement it in fiscal 2004.

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