DOD Issues Proposed NSPS Regulations With Changes Made in Authorization Bill

updating DOD’s National Security Personnel
System to reflect changes in the fiscal year 2008 DOD
authorization bill signed into law by President Bush in
January (73 Fed. Reg. 29881, 5/22/08).

The changes, based on the measure enacted Jan. 29
(46 GERR 145, 2/5/08), include:
-Bringing NSPS under governmentwide rules for
labor-management relations, disciplinary actions, and
employee appeals of adverse actions. In addition, the
proposed regulations would bring DOD under governmentwide
rules for workforce shaping, including
reductions-in-force, furloughs, and transfers of employee
-Excluding Federal Wage System (blue-collar) employees
from NSPS as required by the authorization
-Extending and expanding the exclusion from
NSPS for certain DOD laboratories through Oct. 1,
-Requiring DOD to bargain collectively over procedures
and appropriate arrangements for bringing DOD
bargaining unit employees into NSPS prior to converting
these employees to the new system.
-Limiting the number of employees that can be converted
to NSPS in a calendar year to 100,000.
-Requiring advanced congressional notification before
OPM and DOD can jointly prescribe new NSPS
-Mandating that all employees with a performance rating above ‘‘unacceptable’’ or who do not have current performance ratings receive no less than 60 percent of the annual governmentwide General Schedule pay increase, with the balance allocated to pay pool funding for the purpose of rewarding employees for their performance. The regulations also specify that NSPS employees with performance ratings above ‘‘unacceptable’’ or who do not have current performance ratings are entitled to receive locality pay in the same manner as General Schedule employees.

In addition to making regulatory changes resulting
from the FY 2008 authorization bill, additional updates
that adjust and clarify other NSPS principles include:
-enabling NSPS coverage for employees appointed
for fewer than 90 days;
-provision of a conversion/movement out process
for employees moving to GS positions to ensure consistent
pay-setting practices for NSPS employees;
-allowing employees to request reconsideration of
an individual job objective rating, in addition to the ability to request reconsideration of the overall final rating of record; and
-grandfathering GS pay retention timeframes for
employees covered by GS grade or pay retention rules
at the time of their conversion to NSPS.

More Than 180,000 Employees Covered. Within the past two years, DOD noted in a May 22 statement, more than 181,500 civilian employees have transitioned to NSPS.

Brad Bunn, program executive officer for NSPS, told
BNA May 23 that DOD intends to convert another
20,000 nonbargaining unit employees to NSPS between
the fall of 2008 and spring 2009. After those employees are converted, Bunn said, most of the remaining white-collar workforce eligible for conversion to NSPS will be unionized employees.

The earliest that DOD would consider beginning the
conversion of bargaining unit employees would be the
fall of 2009, he said. Under the new authorization law, he noted, DOD will need to bargain with its unions before converting represented employees. Bunn added, however, that DOD does have some experience in dealing with unionized employees in NSPS because a total of about 170 previously unrepresented Navy, Army, and Air Force employees in the system have joined unions.

The ‘‘good news’’ for NSPS, according to Bunn, is
that despite the changes made by Congress, the core elements of the system have emerged essentially intact,
including the pay banding and classification structure,
compensation flexibilities, and pay-for-performance
system. Although the pool for performance pay increases
is smaller due to the new law, he added, employees
in NSPS with ‘‘unacceptable’’ ratings will continue
not receiving pay increases.

In addition, Bunn said, DOD in the proposed regulations
has taken advantage of its two years of experience
with NSPS to add provisions designed to make the system
more transparent and consistent. Based on its previous experience with NSPS regulations, he said, DOD currently expects to issue a final NSPS rule in early October.

Legal Battle Over NSPS. DOD unions have fought implementation of NSPS since a proposed rule describing the system was first unveiled by DOD and OPM in
February 2005 (43 GERR 151, 2/15/05). Although the
U.S. Court of Appeals for the District of Columbia Circuit
in a May 2007 opinion upheld the NSPS provisions
challenged in a lawsuit filed by the unions (45 GERR
601, 5/22/07), Congress provided most of the relief they
were seeking in the DOD authorization bill.
Unions representing DOD employees did not challenge
NSPS’s pay-for-performance provisions, although
union leaders indicated that a court challenge to the
provisions was possible if the department attempted to
convert bargaining unit employees to NSPS without
agreement from their unions.

John Gage, president of the American Federation of
Government Employees, which led the litigation effort,
in a May 23 statement criticized the most recent proposed
regulations as an attempt by DOD to do an ‘‘end
run’’ around congressional intent by sorting out key details of NSPS rather than leaving them to department
According to Gage, the FY 2008 authorization statute
‘‘mandated that those flexibilities left to the components
would be bargainable as appropriate under Chapter
71 [of Title 5 of the U.S. Code], the law which governs
collective bargaining in the federal sector.’’ He asserted
that the proposal ‘‘eliminates many of the areas
of component discretion in an effort to avoid future bargaining over these areas.’’
DOD and OPM’s description in the Federal Register
of the new proposed rule emphasized that NSPS is ‘‘an
event-driven system’’ and said that ‘‘no decisions have
been made at this time regarding when or whether additional
groups or organizations will be converted to NSPS.’’
Comments on the proposed NSPS regulations are
due no later than June 23. They can be submitted electronically through the Federal eRulemaking Portal at or via regular mail to DOD/
OPM/NSPS Public Comments, P.O. Box 14474, Washington,
D.C. 20044.

Text of the proposed rule is available at http://

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