Lawmakers examine logistics of potential NSPS repeal

The Pentagon does not have a detailed plan for repealing its controversial pay-for-performance system if asked to do so by Congress, a Defense Department official said at a House hearing on Wednesday.

Brad Bunn, program executive officer for the National Security Personnel System, told the House Armed Services Readiness Subcommittee that officials are awaiting the results of a joint Defense-Office of Personnel Management review that will be instrumental in the program's fate. That examination, announced on March 16, will address the underlying assumptions and transparency of NSPS, as well as the effect of having Defense employees working under multiple compensation systems.

"All the options are on the table, from making changes to the existing system to the extreme option of reverting back to the General Schedule system," Bunn said. "I can't say we have done a lot of work to analyze the impact of [a potential repeal]. The fundamental principle we will follow will be to do no harm to people if they return to the General Schedule system."

Reps. Solomon Ortiz, D-Texas, chairman of the subcommittee, and Randy Forbes, R-Va., the ranking member, pressed Bunn and other witnesses on whether NSPS should be modified or abolished and asked them how employees should be treated in those scenarios.

"It's never going to start off perfect," Forbes said. "It's never going to be implemented [perfectly]. Do we continue to tweak the NSPS system, or at what point do we ditch it and say are we going to go back to the General Schedule system?"

Subcommittee members expressed concern over Pentagon surveys indicating decreasing satisfaction with NSPS. But Brenda Farrell, director of defense capabilities and management at the Government Accountability Office, said such dips are common with new personnel systems and that satisfaction often reaches a plateau after the first few years of implementation and then begins to rise again. She cautioned against a hasty decision to abandon or reform the program.

"Give DoD and OPM time," Farrell said. "NSPS as you know is very broad. It covers performance management, classification [and] compensation -- so many moving parts. Be sure you know what you want to fix before you move to fix it."

NSPS regulations do not provide specific guidelines for unraveling the program, Farrell said. A number of pay-for-performance demonstration projects at Defense Department labs contained rollback provisions that could provide models for a reversal of NSPS, she added.

Darryl Perkinson, national president of the Federal Managers Association, said the most important consideration would be to make sure employees did not lose pay or raises they had been awarded under NSPS.

But Perkinson and other witnesses said Ortiz and Forbes should broaden their inquiries and look at pay-for-performance systems governmentwide. They must consider whether it is appropriate for agencies to operate under multiple, customized personnel systems, Perkinson said.

"We need to come back with basic principles that we're looking at that all the agencies can adhere to, that can be the standard," he said. "That's the direction we need to go in so we don't have multiple pay-for-performance systems to operate under."

John Crum, director of the Office of Policy and Evaluation at the Merit Systems Protection Board, said the government could not wait for the Pentagon to perfect NSPS before moving forward with broader personnel reforms.

"If we wait for DoD to serve as a proving ground, we will wait some time and miss an opportunity to improve," Crum said. "We will be facing the same kind of retirement tsunami in a few years. We need to solve the same problems [of hiring, evaluation and compensation] for other agencies, not just DoD."

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