Pentagon plans shift of blue-collar workers to new pay system

Officials at the Pentagon are in the early stages of retooling the department's new personnel system to cover blue-collar employees -- behind-the-scenes work that continues despite legal setbacks to the labor relations portion of the department's reforms.

The Defense Department started work this summer on a new set of rules it may publish to transfer 140,000 blue-collar employees currently in the Federal Wage System into the National Security Personnel System, an NSPS spokeswoman said. These employees, who are tradesmen, craftsmen and laborers such as pipe fitters and shipbuilders, will make up the second broad layer, called Spiral 2, of the NSPS.

The plans for the transition continue despite a federal court ruling in the spring that blocked the Pentagon's proposed labor relations system and stalled pay changes for employees covered by collective bargaining agreements. NSPS, which is expected to cover 700,000 civilian Defense employees eventually, is under review by an appellate court.

In June, NSPS Program Executive Officer Mary Lacey asked Darryl Perkinson, president of the Federal Managers Association, to meet with her about the blue-collar system. Perkinson said his group lobbied from the beginning to consult on the changes for blue-collar workers because front-line managers of such employees will bear the responsibility for intensified performance evaluations and performance-based raises.

"They have asked FMA to be a resource and to provide information and opinions on different policies," Perkinson said. He said the meeting was just the beginning of collaboration by his group, which is the only organization in the Government Managers Coalition to represent nonexecutive-level managers in the Defense Department.

So far, the Pentagon has moved 11,000 employees into Spiral 1.1 of NSPS, which features broad pay bands for flexible hiring and rigorous performance evaluations that determine annual pay raises. The Defense Department is now training 66,000 more employees who will shift into the new system by January, under Spiral 1.2.

"NSPS is moving ahead," said NSPS spokeswoman Joyce Frank. "77,000 employees, more employees than in many Cabinet-level departments, will be operating in a results-oriented, performance-based environment that provides each of them with tremendous opportunities to excel."

Frank also said the department anticipates a Spiral 1.3 in the spring of 2007, and there may be more parts of Spiral 1 after that. Defense has not yet determined which employees will be included in those phases.

For the time being, the court decision limits the Pentagon to placing nonbargaining unit employees in NSPS, of which there are about 360,000. Many of them work alongside bargaining unit employees, which could result in two compensation systems under one roof.

The Pentagon is waiting for the court to schedule oral arguments on its appeal. The Homeland Security Department, which is working to implement a similar personnel system, lost its appeal in the same court and has until Sept. 25 to ask the Supreme Court for review.

Thomas Richards, FMA's director of government affairs, said FMA's increased involvement is an important development in NSPS.

"It's not as though we haven't been a part of the discussion, but this really commits NSPS to bring us into the fold," Richards said. "I think that's important because the front-line managers who are responsible for the ultimate implementation of this are represented by our organization."

In November, Comptroller General David Walker testified before the Senate Homeland Security and Governmental Affairs Subcommittee on Oversight of Government Management that one of his top concerns about the new personnel system was lack of input by nonunion voices.

Frank said the FMA has "been very helpful. We value their input and we will continue to include them and all our stakeholders in the process."