Exchanging the old for the new at the Pentagon

National Security Personnel System offers DOD greater flexibility

The new National Security Personnel System (NSPS), which affects every civilian employee at the Defense Department, has been moving steadily forward since last year. It targets an old personnel system that made it impossible for employees to be fired or denied a yearly raise.

President Bush signed the 2004 Defense Authorization bill into law late last year, and under that law, Defense Secretary Donald Rumsfeld has launched a new office — the Program Executive Office for NSPS (PEO-NSPS). Office staff will oversee the design, testing, implementation and policy issues involved with completely replacing a civil service system developed in the 1930s.

Congressional Democrats and federal employees' unions fought against the new system, but Congress and President Bush signed off on the authorization bill last year, which retired the entrenched policy. It is part of an even broader initiative by the Bush administration, which has implemented a similar system at the Homeland Security Department.

Mary Lacey, the Pentagon's first program executive for the new system, said the lines of communication among her office, Defense Department employees and the unions must remain open and clear for

the new system to be effective and increase productivity in what is largely seen as

an inefficient behemoth agency.

"We're talking about a total overhaul of all the tools we use to hire, deploy, train, develop and assign our people," Lacey said. "Right now, we operate under the old civil service system. This is a whole new DOD civil service system."

NSPS would give Rumsfeld more flexibility in hiring, classifying, paying, promoting and firing employees — bypassing employee management policies that have been in place for decades. The provision will make it easier to hire technical employees and scientists, often some of

the most difficult people to recruit and


"In order to secure critical expertise, the Defense secretary [is authorized] to hire highly qualified personnel with uniquely critical technical, scientific and management skills at appropriate pay for up to five years, with the possibility of a one-year extension," the new law states.

The remainder of this year will be a critical time for the fledgling program. Lacey said she hopes to have a definition of the program published in the Federal Register by 2005.

At that point, each of the stakeholders in the system will have the opportunity to comment on the shape it is taking and to work through policy problems that might delay its


Union members still have concerns that need to be addressed, according to Mark Gibson, a labor relations specialist at the American Federation of Government Employees.

"We didn't get the first taste of what DOD wanted to do with this until mid-February, when DOD took steps to dismantle labor relations and eliminate third-party processes," Gibson said. "The unions and federal employees were greatly outraged, and DOD took a step back and took another stab at it."

He said the unions are not yet convinced that officials from DOD, the Office of Personnel Management and the unions are on the same page.

"If things are broken, let's acknowledge that and fix them," Gibson said. "But you don't give the department essentially the ability

to create an undefined personnel

system on the pretext that it's going to make life in America great and wonderful because suddenly the DOD is going to be able to do whatever it wants with its civilian


Moving ahead

Nevertheless, work is moving forward. Lacey will report directly to Navy Secretary Gordon England, whom Rumsfeld asked to provide guidance and oversight as the program's senior executive.

"Lacey will lead the comprehensive policy and program management office that will complete the design, planning, assessment and implementation of NSPS," England said in a statement released late last month. "She will be working with our partners at OPM to lead broad collaboration within an open process — one that provides opportunities for employee, manager and union input and dialogue."

Following a strategic review of NSPS in March, DOD officials created PEO-NSPS to design and implement the new civilian personnel system. The organization will include subject-matter experts from all the services and other major DOD agencies. Teams will work on human resources, labor relations, training, appeals, pay for performance and other elements of the system.

Before taking on her current role, Lacey served as technical director of the Naval Surface Warfare Center. She began her civil service career during college and has been a full-time DOD civilian employee since 1978, so she knows the old system well.

"I think this will be an incredibly important and challenging assignment," Lacey said. "NSPS will truly impact everybody — military and civilian — serving in [DOD]. I'm committed to ensuring that the future of NSPS will include an open and two-way dialogue, will recognize and respect the value to the nation of our civil servants and will protect their rights."

George Nesterczuk, senior adviser to the director of OPM on DOD matters, said OPM officials are working closely with the department, and any policies or regulations that are proposed must be signed off by both agencies.

"We're partners with DOD — and ultimately equal partners," Nesterczuk said. "Whatever regulations are promulgated have to be signed off by both the Defense secretary" and OPM.

Lacey said DOD officials also are working closely with the 41 unions with members employed by the department to ensure that their concerns are addressed at the outset.

On June 7, DOD, OPM and the unions held the first of what will be several meetings this year. A second meeting is scheduled for this week.

"Basically, we want to keep an open process and allow the unions to express their concerns," Nesterczuk said. "They can tell us what they think is wrong with the system and what they think we didn't address. It creates an unfettered dialogue."

Alternative human resources programs are nothing new for OPM or DOD, which have more than 30,000 people involved in 10 demonstration projects to study changes in human resources management systems.

"They demonstrate the ability to change payroll and job classifications," Nesterczuk said. "They show us different ways to manage the workforce."

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