House sounds death knell for Pentagon pay-for-performance system

The House on Thursday overwhelmingly passed the fiscal 2010 Defense authorization bill containing an amendment that guts the Pentagon's controversial pay-for-performance system.

The provision, passed last week by the House Armed Services Committee, requires the Pentagon to demonstrate whether its National Security Personnel System can be reformed or prepare to dismantle it within one year. It also prohibits new jobs from being classified under NSPS.

In a statement of administration policy, the White House called the amendment "premature," because the Defense Department and Office of Personnel Management already are reviewing the pay-for-performance system to determine its future. The panel will issue its recommendations to the Defense Business Board this summer, to be followed by a report to Defense in the fall.

In a statement introducing the amendment last week, Rep. Carol Shea-Porter, D-N.H., said it was intended to ensure Congress could address the results of the review expediently: "Without this language, we would not be able to act until fiscal 2011 and the serious problems would linger unresolved for yet another long year. Our dedicated federal workers deserve better than that."

The Pentagon in March stopped moving new job titles under the NSPS umbrella pending the results of the assessment. But the amendment goes a step further by blocking Defense from hiring people after June 16 for positions already classified as part of NSPS. This is of particular concern, the White House said, because it "will cause significant, undue disruption to organizations currently operating under NSPS."

The fiscal 2010 Defense authorization bill also prohibits new positions to be converted to the Defense Civilian Intelligence Personnel System and requires its elimination.

Separately, House lawmakers also approved a 3.4 percent pay raise for military members as part of the authorization bill. That figure is 0.5 percentage points higher than the 2.9 percent 2010 pay hike President Obama requested for the military in his February budget proposal.

The House also rolled H.R. 2990 into the authorization bill. H.R. 2990 includes a provision that would let workers in the Federal Employees Retirement System count unused sick leave toward their pensions. Additionally, it contains language making it easier to rehire federal retirees part time; modifying how the Civil Service Retirement System calculates annuity payments for employees who retire as part-time workers; moving federal employees in Alaska, Hawaii and U.S. territories from cost-of-living adjustments into the locality pay system; and permitting FERS workers to redeposit retirement funds, including interest, collected after leaving government upon returning for a second round of service.

The Senate hopes to wrap up its work on the Defense authorization bill before the August recess.