By Lane V. Erickson /

Senate Approves Major Governmentwide Pay and Hiring Reforms in Defense Bill

Senators will have to fight to preserve workforce reforms such as an increase in allowable buyout amounts to $40K.

The Senate on Monday passed the annual defense authorization bill, which includes provisions to permanently increase the maximum buyout offers for federal employees across government and ease the hiring process for recent college graduates.

The hiring changes included in the Fiscal 2019 National Defense Authorization Act stem from a bill that a Senate panel cleared last year to enable the expedited hiring of applicants with college degrees. The provision would allow agency heads to circumvent normal hiring restrictions to bring on university students or those who have recently completed their studies. The agency leader could appoint a “qualified individual” to any competitive service, professional or administrative position at the GS-11 level or below.

Agencies would still be required to adhere to merit system principles and the appointments could not make up more than 15 percent of the number of similar jobs filled in the previous year. Current students appointed under the new authority would serve on a temporary basis, but their agency head could hire them to a permanent position upon their graduation. The Office of Personnel Management would be responsible for creating regulations for the new law and agencies would report annually on their use of the authority.

Another governmentwide provision in the Defense authorization measure would enable agencies to pay up to $40,000 to employees opting to participate in a Voluntary Separation Incentive Program offer. That would mark an increase from the current maximum of $25,000, which has been the limit since Congress created VSIP in 1993. The Defense Department has maintained a carve-out to offer buyout recipients of up to $40,000 for the last two years.

A Senate panel unanimously approved a similar provision as a standalone bill last year. The White House has pushed Congress to adopt the increase. Several agencies offered buyouts to a wide swath of employees in the first year of the Trump administration, but Congress has since placed significant restrictions on those downsizing efforts.

Going forward, the NDAA would index the maximum buyout to inflation.

Several personnel provisions in the NDAA would apply only to the Defense Department:

  • The Pentagon would no longer have to seek approval from OPM’s qualification review boards for its Senior Executive Service appointments. Instead, the Defense secretary would have unilateral authority to elevate employees to the top career civilian jobs. Defense would be capped at 50 such appointments per year, and the authority would sunset after two years.
  • The department would create a Strategic Defense Fellows Program aimed at grooming civilians by creating a “career track toward senior leadership in the department.” The fellowship would last for one year and be offered to up to 60 applicants. It would be aimed at recent graduates who would be paid at the GS-10 level. Those selected would receive special mentorship and be offered further career opportunities if they completed the fellowship successfully. The program would be named after Sen. John McCain, R-Ariz.
  • The bill would expedite security clearances for “mission-critical” positions. The department would have to rule on clearances for secret positions within 15 days and top secret positions within 45 days. It would undertake a study to examine potential additional reforms.
  • The measure includes several provisions to create new or extend existing direct hire authorities for science, technology, engineering and mathematics positions. The measure would continue direct hire authority for financial management experts.

Also significant in the Senate NDAA is what is not in it: the measure includes no language requiring the Pentagon to slash its back-end offices. The House version of the bill would result in 25 percent cuts to departmentwide activities such as logistics, human resources, services contracts and real property management, while eliminating Washington Headquarters Services entirely.

The House has already approved its version of the measure. It will now move to a conference committee to iron out the differences between the two bills. Most of the workforce provisions were not included in the House’s legislation.