31 Dec 2003

SUBJECT: National Security Personnel System for Civilians


1. Purpose: To inform Senior Army Leaders about the imminent challenges and benefits of fielding and converting to a new civilian human resource system.

2. Facts: a. The FY 2004 National Defense Authorization Act, Public Law 108-136 authorizes the Department of Defense (DoD) to create a National Security Personnel System (NSPS) for its civilian employees. The legislation creates a framework of principles and processes, but not the rules. DoD, with participation by all components, will develop the specific features, regulations, and policies. It will build on system features of Demonstration Project Personnel Management Best Practices developed among DoD components during 2002-2003.

b. By law, the design of NSPS must follow these principles.

c. NSPS will bring the most far-reaching changes in the civilian personnel system in decades. It will change many aspects of key personnel functions for much of the workforce. These include staffing (hiring, assignment, promotion, removal, reduction in force); pay; job classification; discipline; adverse actions; employee appeals; and labor relations. NSPS legislation also mandates a pay for performance evaluation system.

d. NSPS cannot change the following civil service matters: merit system principles; prohibited personnel practices; appeals to the Equal Employment Opportunity Commission; antidiscrimination laws; leave and attendance; travel and subsistence expenses; pay for political executives and firefighters; training; personnel demonstration projects; incentive awards; insurance and annuities; access to criminal history record;


SUBJECT: National Security Personnel System for Civilians


Laboratory Demonstration projects; incentive awards; insurance and annuities; access to criminal history record; employees rights to petition Congress; and services to employees like safety and drug abuse programs.

e. NSPS, designed with component participation, will be prescribed jointly by DoD and the Office of Personnel Management, after a collaboration process at the national level with representatives of organizations (unions) that have exclusive recognition, and possibly with designated organizations representing substantial numbers of employees.

f. DoD has an ambitious timetable for NSPS. DoD expects to begin implementation very quickly and fully implement the system within two years. By law, NSPS at first may include up to 300,000 employees. NSPS can extend to more than that once the performance management system is determined to be fair, equitable, credible, transparent, and to link performance management to the agencys strategic plan and an employee’s pay to the his/her performance.

g. Senior Army Leaders and the Human Resources community face a large challenge to implement NSPS effectively. The Army is setting up a project office to manage implementation and coordinate transition work. Key activity areas follow:




Ms. Janice Lander/DSN 221-1349

COM (703) 325-1349