Study reveals the success of Pentagon personnel system is unclear

It's too early to tell whether the Pentagon's new personnel system has met the department's goals of motivating employees and creating more flexibility in hiring and pay decisions, according to a new report by the Congressional Budget Office.

The report, released on Wednesday, said implementation of the National Security Personnel System was not yet complete and not enough time had elapsed since the first employees were converted to the system to determine its effectiveness.

The department has added more than 181,500 nonbargaining unit employees to NSPS since 2006 and plans to add 20,000 more into the system by the end of 2008, bringing it close to converting all 205,000 nonbargaining unit employees. In September, the department announced it would not place its 270,000 bargaining unit employees under NSPS.

The report fell short of providing an evaluation of NSPS' use of broad paybands, but said the system could provide advantages or disadvantages to the department, depending on how paybanding was implemented. For example, while paybanding could provide a way to recognize dual career tracks and enhance job mobility, CBO said, it also could raise questions about fairness and increase the burden of oversight.

The report also noted that while there was insufficient data to determine whether NSPS had improved the department's hiring process, the changes made to the classification and compensation system should reduce the time it takes to hire employees and gradually reduce vacancy rates. CBO added that the Defense Department could monitor the effectiveness of its employment process by collecting data on the number of days that elapse from the time a manager recognizes the need to fill a position to when an offer is made to a job applicant.

Meanwhile, CBO said that while NSPS officials estimated in May that the overall cost for continuing the system from 2009 to 2011 would be $143 million, it was unclear whether the estimate included all the financial and opportunity costs associated with the system. CBO cited a July 2007 report from the Government Accountability Office that found Defense underestimated the cost of the personnel overhaul by not including indirect expenses such as the salaries of NSPS officials, rent, equipment and utilities associated with NSPS' design and implementation.

"Information that would allow a determination of whether that latest estimate addressed the problems with previous ones was not available to CBO," the latest report said.

Matt Biggs, legislative director for the International Federation of Professional and Technical Engineers, said on Monday that the report confirmed that NSPS was costing taxpayers much more than the $158 million Defense originally projected, and the department continued to ignore the salary costs of the employees in charge of creating the system.

"The report, as far as the cost issue is concerned, is just another piece of independent evidence to point to as a reason why President-elect Obama should recommend to Secretary [Robert] Gates that it is time to stop throwing good money after bad at this failed personnel system," Biggs said.