Feds to scrap defense pay rule

WASHINGTON — After spending several years to implement a pay-for-performance system for civilian employees at the Defense Department, the federal government is about to dismantle it.

More than 200,000 Defense Department employees, including some at Fort Drum, fell under the National Security Personnel System, which gave management more ability to hire, fire and move workers but which met stiff resistance from labor unions and, ultimately, Congress.

The first hint of change came last week, when the Pentagon announced the creation of a new office called the National Security Personnel System Transition Office and put John H. James Jr. in charge of it.

Mr. James's main responsibility will be to manage the transition of workers back to the pre-NSPS system, the department said in a press release.

But the department does not appear to be going back exactly to conditions before the NSPS took effect. The department said Mr. James would oversee creation of a "performance management system, hiring flexibilities, and a DoD Workforce Incentive Fund," which Congress authorized in defense legislation last year that killed the NSPS.

The National Security Personnel System was designed during Donald H. Rumsfeld's tenure as defense secretary under President George W. Bush, with approval from the Republican-led Congress at the time. But unions quickly complained that it threatened collective bargaining, a position bolstered by some federal court decisions.

By the time Democrats took control of Congress in 2006, they were ready to scale it back or repeal it. The system was never fully implemented.

"It's hard to tell what's going to take its place," said Matthew Biggs, a spokesman for the Federal Workforce Alliance, a group of unions formed a few years ago to fight the NSPS and similar measures in other departments.

The Pentagon should proceed with a new performance management system, but only if officials work with labor leaders and stay within the existing general schedule pay system, Mr. Biggs said.

The GS system consists of 15 grade levels, with 10 pay steps within each grade.

The system allows for changes to the performance management system, Mr. Biggs said.