National Security Personnel System, 2757-2770 [E9-899]

Agencies

• Office of Personnel Management
• DEPARTMENT OF DEFENSE

[Federal Register Volume 74, Number 11 (Friday, January 16, 2009)]
[Rules and Regulations]
[Pages 2757-2770]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-899]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 74, No. 11 / Friday, January 16, 2009 / Rules 
and Regulations

[[Page 2757]]



DEPARTMENT OF DEFENSE

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 9901

RIN 3206-AL75


National Security Personnel System

AGENCY: Department of Defense; Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Defense (DoD) and the Office of Personnel 
Management (OPM) are issuing the final regulations adding subpart E, 
Staffing and Employment, to the National Security Personnel System 
(NSPS) regulations published in the Federal Register on September 26, 
2008. NSPS is a human resources management system for DoD, authorized 
by the National Defense Authorization Act for Fiscal Year 2004, amended 
by the National Defense Authorization Act for Fiscal Year 2008 and the 
Duncan Hunter National Defense Authorization Act for Fiscal Year 2009. 
These final regulations govern staffing and employment under NSPS.

DATES: This rule is effective March 17, 2009.

FOR FURTHER INFORMATION CONTACT: For DoD, Bradley B. Bunn, (703) 696-
5604; for OPM, Charles D. Grimes III, (202) 606-8079.

SUPPLEMENTARY INFORMATION: On December 3, 2008, the Department of 
Defense (DoD or ``the Department'') and the Office of Personnel 
Management (OPM) published in the Federal Register at 73 FR 73606 a 
proposal to add staffing and employment provisions to the National 
Security Personnel System (NSPS or ``the System''), a human resources 
(HR) management system for DoD under 5 U.S.C. 9902, as enacted by 
section 1101 of the National Defense Authorization Act for Fiscal Year 
2004 (Pub. L. 108-136, November 24, 2003), and amended by section 1106 
of the National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 
110-181, January 28, 2008), and by section 1106 of the Duncan Hunter 
National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-
417, October 14, 2008).

I. Staffing and Employment--5 CFR 9901 Subpart E

    This subpart provides DoD with authority, pursuant to 5 U.S.C. 
9902(i), to waive or modify certain provisions of title 5 U.S.C. and 
CFR pertaining to methods for recruitment for, and appointments to, 
NSPS positions and the methods for the assignment, reassignment, 
detail, transfer, and promotion of employees into and within NSPS. This 
subpart revises the subpart E found in the NSPS regulations published 
November 1, 2005 at 70 FR 66116. The revisions reflect changes in NSPS 
authorized by amendments to 5 U.S.C. 9902 by the National Defense 
Authorization Act for Fiscal Year 2008 (Pub. L. 110-181) as further 
amended by the Duncan Hunter National Defense Authorization Act for 
Fiscal Year 2009 (Pub. L. 110-417); provide specificity to the 
regulations based on existing implementation; reflect changes in 
subparts A through D of the regulations published on September 26, 
2008; and make technical changes and improvements.
    In order to meet its critical mission requirements worldwide and 
respond to a dynamic national security environment, the Department 
needs flexibility to attract, recruit, assign and retain a high quality 
workforce. The current Federal hiring system does not have the 
flexibility needed by DOD to meet all of its mission requirements. 
Subpart E of the final regulations preserves merit principles and 
veterans' preference requirements, while streamlining hiring and 
placement processes and providing DoD with flexible hiring tools to 
respond effectively to continuing mission changes and priorities and 
evolving labor markets. The public comment period ended on January 2, 
2009. The following is a discussion of the comments received.

II. Response to Public Comments

A. Summary

    The proposed rule was published in the Federal Register on December 
3, 2008. In response to the proposed rule, the Department received 42 
submissions during the 30-day public comment period. General comments 
fell into one of the following categories: collective bargaining and 
labor relations; publication date; fairness and equity; and whether the 
subpart implements too many or too few changes to staffing and 
employment procedures. Comments specific to staffing and employment 
fell into one of the following categories: Coverage of regulations; 
appointing authorities; probationary periods; competitive examining 
procedures; and internal placement. The 42 submissions included a total 
of 94 comments; 60 of those comments pertain to this subpart and are 
addressed below. We do not address the remaining comments because they 
concern other NSPS subparts published in 73 FR 56344, or do not relate 
to staffing and employment.

B. General Comments

1. Collective Bargaining and Labor Relations
    Labor organizations contended that various matters should be 
subject to collective bargaining under 5 U.S.C. chapter 71. As noted in 
the publication of the final regulations for subparts A through D of 
this part, published on September 26, 2008, collective bargaining 
obligations are governed by Federal statute. DoD is committed to 
fulfilling its obligation to bargain in good faith consistent with 
governmentwide labor relations law under 5 U.S.C. chapter 71 and the 
requirements of 5 U.S.C. 9902, as well as section 1106(b) of Public Law 
110-181 and section 1106 of Public Law 110-417. However, the Department 
seeks uniformity and consistency in its NSPS employment practices 
through issuance of regulations.
2. Publication Date
    One commenter questioned the timing of our proposed regulations, 
stating that we should allow the new Administration to review NSPS 
before implementing this rule. A labor organization expressed concern 
that these regulations were published on

[[Page 2758]]

December 3rd, requiring anyone interested in commenting to use time 
during the holidays to do so. The proposed regulations, which add 
subpart E to subparts A through D of the final enabling regulations 
published on September 26, 2008, are authorized by both the National 
Defense Authorization Act (NDAA) for Fiscal Year 2008 and the Duncan 
Hunter National Defense Authorization Act for Fiscal Year 2009, which 
clarified the staffing and employment authorities originally granted 
under 5 U.S.C. 9902 by Public Law 108-136. When Congress enacted NDAA 
2008 in January 2008, OPM and DoD began developing these regulations, 
which was eleven months prior to their December 3, 2008 publication. 
However, Congress did not enact NDAA 2009 until October 14, 2008. The 
Department and OPM issued the proposed subpart E regulations less than 
two months after the NDAA 2009 became law. They were issued at that 
time to provide a complete regulatory structure for NSPS that reflects 
the most recent changes in law.
3. Fairness and Equity
    Many commenters expressed concerns about the fairness and equity of 
the staffing and employment features of NSPS. These concerns were 
characterized by terms such as ``favoritism'' and ``cronyism'' implying 
that the greater flexibility in decision-making under NSPS would result 
in hiring or placement decisions on a basis other than merit.
    A number of the fairness comments centered around the NSPS 
competitive examining flexibilities. For example, some commenters 
expressed concern regarding management's ability to limit the area of 
consideration, when sufficient qualified applicants are available, to 
applicants in the local commuting area and other targeted recruitment 
sources, stating that these restrictions limit advancement 
opportunities for qualified candidates and prevent applicants who are 
willing to relocate from being considered for NSPS positions. They 
feared that management would use this flexibility to narrow the field 
of applicants to their favorites in order to select their ``employee of 
choice.'' Two commenters pointed out that it will now be easier than 
ever for military leaders to hire and promote retiring military members 
who would otherwise face unemployment at the expense of faithful, 
loyal, honest, and deserving civilians. Another commenter stated that 
limiting the pool of qualified applicants does not make sense if the 
department intends to hire the most qualified candidate for the 
position. In response, we note that NSPS competitive examining 
procedures require acceptance of applications from all U.S. citizens, 
including current Federal employees. However, if there is a sufficient 
number of qualified applicants, initial consideration may be limited to 
candidates in the local commuting area and other targeted recruitment 
sources. In instances where the ease of filing an application or supply 
and demand forces generate a sufficient number of candidates, the 
ability to narrow the pool of applicants to be considered is necessary 
to streamline hiring processes. Streamlining hiring practices enables 
management to quickly fill positions and help ensure that the highest 
quality candidates are not lost to other employers due to length of 
time between the close of a job announcement and the job offer. This 
flexibility neither favors nor disfavors military members since all 
qualified applicants, whether civilian or military, in the local 
commuting area must be considered. Likewise, both civilian and military 
outside the local commuting area would equally be excluded from 
consideration. While organizations may limit the initial area of 
consideration, there is no requirement to do so. Apparent in many of 
the comments is the belief that the ability to narrow the area of 
consideration to the local commuting area would enable management to 
target ``favorite'' employees or friends or ``cronies.'' However, the 
regulations provide a safeguard against misuse of the smaller area of 
initial consideration. Specifically, the regulations require that, if 
sufficient qualified applications are not received from the local 
commuting area and other targeted recruitment sources, the area of 
consideration must be expanded to include all applicants for the 
vacancy. DoD will continue to comply with merit system principles and 
veterans' preference when filling NSPS positions through NSPS 
competitive examining procedures.
    A number of fairness-related comments revolved around the 
alternative promotion procedures, an NSPS internal placement 
flexibility. Commenters stated that these procedures will narrow 
promotion and career advancement opportunities for NSPS employees and 
that their use will result in a supervisor's favorite employee or crony 
being selected, ensuring that the Federal Government will turn into a 
``who you know club'' that does not consider diversity or 
qualifications in the selection process. One commenter observed that 
absent a formal vacancy announcement, management would not be able to 
ensure that all employees are made aware of the opportunity for 
consideration. In other words, nothing would prevent management from 
singling out one or two favorite employees for consideration. With 
respect to consideration of qualifications in the selection process, 
under the alternative promotion procedures, the regulations require 
that employees selected meet qualification standards and either fall 
into the category of highly qualified or have received the highest 
level of performance rating for NSPS. While the regulations do not 
require formal advertisement (e.g., posting a job on USAJOBS), Sec.  
9901.516(c)(8) does require that employees be notified prior to use of 
alternative promotion procedures. Some methods that may be used include 
newsletters, bulletin boards, e-mail, and other forms of employee 
notification. Also, using alternative promotion procedures may not 
require employees to apply for positions. For example, the exceptional 
performance promotion procedure requires that all employees in the area 
of consideration be considered when their Level 5 rating of record is 
based on performance in the same occupational series and similar 
function as the vacancy being filled. Assessment boards may entail 
soliciting job experience information from employees in an organization 
or may simply be held in conjunction with or after the conclusion of 
the performance appraisal period.
    Another commenter expressed the belief that the alternative 
promotion procedures are not competitive and/or do not comply with 
merit system principles. They are consistent with merit system 
principles and with the merit promotion requirements of 5 CFR part 335. 
In fact, procedures similar to the alternative promotion procedures are 
currently used by some DoD Components to fill non-NSPS positions. We 
have included each of these procedures in the regulations because not 
all of these flexibilities are currently authorized for use within each 
DoD Component. Including them under the NSPS Merit Promotion Program 
provides NSPS managers uniform and consistent access to these 
flexibilities. In addition to notifying all employees that these forms 
of competition may be used, each of these procedures requires analysis 
of the job to be filled to identify the knowledge, skills, abilities, 
and/or competencies necessary to successfully perform the duties of the 
position;

[[Page 2759]]

clearance of applicable programs for displaced or surplus employees, 
such as the DoD Priority Placement Program and the Reemployment 
Priority List; determination that selectees meet applicable OPM or DoD 
qualification standards for the positions being filled; and, selection 
of candidates determined to be best qualified for the positions. The 
identification, qualification, evaluation, and selection of candidates 
must be made without regard to political, religious, or labor 
organization affiliation or nonaffiliation, marital status, race, 
color, sex, national origin, nonqualifying physical handicap, or age, 
and must be based solely on job-related criteria. These alternative 
promotion procedures streamline the standard vacancy announcement 
process. Streamlining the process permits management to fill positions 
quickly by identifying and selecting highly qualified candidates in a 
timely manner.
    Some commenters raised concerns about the exceptional performance 
promotion procedure which permits management to promote an employee 
whose most recent rating of record is Level 5 to a vacant position in 
the same occupational series (or related interdisciplinary/
interoccupational series) and similar function as the position the 
employee held at the time he or she received the Level 5 rating. 
Commenters who objected to this procedure indicated they consider the 
NSPS pay pool process to be faulty. Commenters stated that the NSPS 
performance system is ``far too subjective'' and employees who perform 
at the Level 4 or Level 5 will never be considered for the exceptional 
performance promotion because ratings are forced down in a quota-like 
manner to Level 3. Another commenter suggested that using a severely 
flawed performance system's appraisals as a tool for selection 
undermines EEO and merit system principles.
    As described in 5 CFR part 9901, subparts C and D, the pay pool 
process employs a number of checks and balances to ensure that 
employees who perform similar categories of work are measured 
consistently and that multiple levels of review occur. In addition, 
should a written justification not support a recommended rating of 
record, the Pay Pool Panel must afford the rating official an 
opportunity to provide further justification for the recommendation 
prior to adjusting the rating. This mechanism reinforces equity across 
and within pay pools and is a necessary safeguard when rewarding 
performance from a shared pay pool. Because supervisors may interpret 
performance criteria differently, pay pools reconcile ratings to ensure 
the criteria are applied consistently throughout a pay pool in order to 
provide equity and fairness of ratings. Further, NSPS regulations 
strictly prohibit a forced distribution of ratings. NSPS performance 
criteria also make clearer distinctions in levels of performance, 
assess employee performance more rigorously, and set a higher bar for 
higher-level performance, ensuring that only the most highly performing 
employees achieve a Level 5 rating of record. Consequently, the NSPS 
performance management criteria often result in a different rating 
distribution than found under other performance management systems. It 
is precisely because of the rigor of the NSPS performance rating 
process and criteria that there is equity in NSPS performance ratings 
and distinctions in levels of performance. This rigor and these 
thoughtfully crafted performance criteria result in a small, 
distinguished group of high performers rated at the Level 5 NSPS rating 
level. As a result, a selectee from this pool of candidates has a 
record of proven performance, as demonstrated by award of the highest 
rating possible. Such an employee has demonstrated, through day-to-day 
performance that he or she possesses the applicable knowledge, skills, 
abilities and/or competencies to perform the duties of the vacant 
position in an exemplary manner.
    In addition to the reconciliation process that takes place within 
the pay pool, NSPS has implemented numerous rules to guard against 
arbitrary performance rating decisions, enabling employees to challenge 
or seek review of key decisions and setting up accountability 
mechanisms to ensure that employees are treated fairly.
    Use of the exceptional performance promotion procedure is not 
required; however, should management choose to utilize this procedure, 
the mechanisms and safeguards built into the NSPS performance appraisal 
and evaluation process ensure that only the highest performing 
employees receive a Level 5 rating.
    Another commenter suggested that promoting employees based on only 
``one good rating regardless of experience'' is not responsible and 
that promotions should award those with a ``proven track record of 
exceptional performance.'' While only those with an exceptional 
performance rating can be considered through this procedure, selections 
are made based on factors in addition to the rating, such as 
experience, education, training, knowledge, skills, abilities, 
competencies and other appropriate information consistent with merit 
system principles.
4. Sufficient/Insufficient Change
    Some commenters objected to waiving and/or modifying the various 
provisions of title 5, stating that current hiring flexibilities were 
sufficient. They also stated that the Department has not demonstrated 
why changes are needed in the staffing and employment areas or how 
these proposals would result in a less cumbersome or fairer hiring 
process. Another commenter suggested that our proposals do not provide 
enough hiring flexibilities. Yet another commenter applauded the 
streamlining of the direct hire authority approval process. The 
enabling legislation (5 U.S.C. 9902(i)) permits the Department to waive 
or modify specified sections of title 5 U.S.C. and CFR, essential to 
the development and implementation of a flexible system for hiring and 
assigning employees. NSPS staffing and employment flexibilities were 
designed and developed through a formal and rigorous process in 
coordination with OPM. The flexibilities strike a balance between 
enhancing the Department's ability to accomplish its many missions and 
preserving compliance with essential important civil service 
protections such as merit system principles and veterans' preference 
requirements. When a position is filled through the competitive 
examining process, we have provided the ability to limit the area of 
consideration to candidates in the local commuting area and other 
targeted recruitment sources in cases where sufficient qualified 
candidates are available. The regulations also provide the capability 
to convert non-permanent employees to permanent appointments in the 
competitive service provided certain requirements are met; provide 
flexibility for longer periods of temporary, term, and time-limited 
appointments; and provide alternative promotion procedures for internal 
placement actions. We are cognizant of the requirement to fully inform 
and train supervisors, managers, and human resources personnel 
regarding the various NSPS flexibilities so that they will be 
understood and used to the fullest advantage. We believe the identified 
flexibilities are sufficient at this time. However, if after a period 
of operation and evaluation of the benefits provided by the new 
flexibilities, we determine that other enhancements would be 
beneficial, we will explore additional regulatory authorities for 
hiring and assigning employees to meet critical national security 
missions.

[[Page 2760]]

C. Specific Comments

1. Coverage
    A commenter noted that the proposed rule indicates that the 
regulations will apply to all DoD employees determined by the Secretary 
to be covered under Sec.  9901.102(b). However, the commenter points 
out that the section speaks specifically to coverage determinations for 
subparts B through D of the NSPS regulations issued in 73 FR 56344 and 
recommends that Sec.  9901.503 be amended to specifically address 
subpart E. We agree with this recommendation and have modified the 
regulations to reflect this change.
2. Appointing Authorities
    Competitive and excepted appointing authorities. Section 9901.511 
authorizes the Secretary to continue using excepted and competitive 
appointing authorities under 5 U.S.C. chapter 33, Governmentwide 
regulations, Executive orders, and other statutes. Individuals hired 
under these authorities will be designated as career, career 
conditional, term, temporary, or time-limited employees, as 
appropriate.
    A commenter asked if the provision for Schedule A hiring of the 
disabled is still in place. Yes; under NSPS, activities may continue to 
use the Schedule A hiring authority to appoint persons with 
disabilities to NSPS positions.
    Several commenters requested clarification on the inclusion of 
career conditional appointments in NSPS. Previously, Public Law 108-136 
permitted NSPS to establish its own workforce shaping rules. These 
rules did not make distinctions in tenure between permanent employees 
for the purpose of employee retention. Consequently, there was no need 
for a career conditional tenure at that time. However, Public Law 110-
181 requires NSPS reductions in force (RIF) to comply with the 
Governmentwide regulations appearing at 5 CFR part 351. Under those 
regulations, the assignment of a specific tenure group is directly 
related to an employee's retention standing and it is necessary to have 
appointment types (career conditional and career) that align with the 
Governmentwide tenure group definitions to apply RIF procedures.
    A commenter disagreed with the definition of career employee. 
Specifically, the commenter stated that the rule appears to take an 
employee who is currently ``a career employee'' after completing a 1-
year probationary period and increase the requirement to 3 years. Under 
the current NSPS rules, an employee who receives a permanent 
appointment is immediately considered a career employee and does not 
serve any ``conditional'' period. The initial probationary period 
requirement is a separate requirement. Under this final rule, a 
``career employee'' is defined as ``an individual appointed without 
time limit to a competitive service position in NSPS who has served 3 
years of substantially continuous service as described in 5 CFR 
315.201(b).'' This definition requires that an employee's initial 
permanent appointment to an NSPS position in the competitive service be 
a conditional appointment and upon completion of the 3-year conditional 
period he or she be designated as career, unless the employee has 
previously completed a 3-year conditional service period in accordance 
with 5 CFR 315.201(b). Any NSPS employee on a career appointment in the 
competitive service who has not completed 3 years of substantially 
continuous service at the time these regulations become effective must 
be converted to a conditional appointment until the 3-year requirement 
is met. Time already served under an NSPS career appointment counts 
toward completion of the conditional period. No change was made to the 
regulations based on this comment.
    Another commenter asked if NSPS employees who are career employees 
will be grandfathered in and remain career employees. It depends. On 
the effective date of the final regulations, NSPS employees on career 
appointments in the competitive service who do not meet the Sec.  
9901.504 or 5 CFR part 315 definition of career employee will be 
converted to a career conditional appointment. Time already served as a 
career employee under NSPS, as well as creditable time under 5 CFR 
315.201, will count toward completion of the 3-year career conditional 
period. NSPS employees who meet the above-mentioned definitions will 
remain career employees.
    Several commenters stated that it is unclear whether or not both 
career and career conditional appointments in NSPS have the same 
stature as those types of appointments in non-NSPS positions throughout 
the Federal Government, i.e., whether a former NSPS appointee would 
have reinstatement eligibility under 5 CFR 315.401. Yes, both career 
and career conditional employees within NSPS have the same ``stature'' 
as non-NSPS career or career conditional employees and a former NSPS 
appointee would have reinstatement eligibility under 5 CFR 315.401. 
Another commenter questioned whether NSPS service is creditable toward 
career tenure in a non-NSPS position under 5 CFR 315.201(b)(1)(i) 
through (xix). Yes, service under career and career conditional 
appointments in NSPS competitive service positions is creditable in the 
same manner and to the same extent as service under the same type of 
appointments in non-NSPS positions. To minimize confusion regarding the 
creditability of NSPS service under career and career conditional 
appointments, additional guidance will be provided in implementing 
issuances.
    A labor organization representative suggested that OPM should 
review the regulations in light of a recent court decision concerning 
veterans' preference. We have not revised the regulations in response 
to this comment. After further review of the regulatory text, we 
conclude that these regulations fully comply with applicable veterans' 
preference requirements.
    Severe shortage/critical need hiring authority (direct hire 
authority). This section authorizes the Secretary to determine when a 
severe shortage or critical hiring need exists. A labor organization 
representative expressed concern that the Secretary, rather than OPM, 
has the authority to authorize direct hire authority for positions 
determined to have a severe shortage of qualified applicants or where 
there is a critical need. The representative stated that OPM should not 
abandon its role as a monitor of agency actions to ensure that merit 
principles are not violated and that no prohibited personnel practices 
take place, asserting that letting DoD develop its own appointing 
authorities runs the risk of creating opportunities for inequities, 
discrimination, and abuse and threatens the credibility of the system 
for employees. By design, and in keeping with the statutory objective 
of establishing a flexible system, these regulations give DoD 
considerable authority within the regulatory framework to design 
staffing and employment features. When the Secretary determines a 
severe shortage or critical hiring need exists, it is done using the 
same criteria that OPM uses under 5 CFR part 337. Also, OPM continues 
to have a role in overseeing the civil service system and in advising 
the President on civil service matters, including matters covered by 
these regulations. We believe the coordination and approval roles as 
defined in Sec.  9901.105 allow OPM sufficient opportunity to fulfill 
its responsibilities. Requiring OPM approval for every action would 
undermine the intent to

[[Page 2761]]

create a flexible system, especially when the action is in response to 
a time-sensitive national security matter or critical need, which DoD 
is in the best position to assess. As a result, we have not revised the 
language in this section in response to these comments.
    Non-permanent appointing authorities. This section authorizes the 
Secretary to make temporary and term appointments to NSPS positions in 
the competitive service and temporary and time-limited appointments to 
NSPS positions in the excepted service. It prescribes extended 
timeframes for such appointments and provides a mechanism for the 
noncompetitive conversion of certain nonpermanent employees to career 
conditional or career appointments in the competitive service, provided 
specific requirements are met. A labor organization representative 
objected to the extended timeframe for term appointments in the 
competitive service and asserted that some of the situations the 
regulations state as reasons for term appointments more appropriately 
justify a permanent appointment. The commenter stated that there is no 
good justification for extending the timeframe of term appointments for 
a longer period than Governmentwide regulations allow and that the 
primary justification for doing so seems to be to bring these employees 
on board through term appointment procedures and then convert them to 
competitive non-term appointments. We have not revised the regulations 
in response to these comments. Extended timeframes for term 
appointments provide a valuable tool to the Department for 
accomplishing its many mission requirements of a time-limited nature. 
Extended time limits for such appointments are essential in an 
organization driven by knowledge-based and other skills requirements 
that are difficult to attract and retain on a temporary basis. We also 
recognize that situations and/or work that are initially time-limited 
in nature may, in fact, evolve into permanent work. The ability to 
convert term employees to permanent appointments minimizes disruption 
while permitting the Department to retain a valued employee who has, in 
fact, gone through a competitive process and met additional 
requirements prior to conversion to a permanent position. For example, 
the first condition for conversion to a permanent appointment is that 
the employee be selected for the non-permanent appointment under NSPS 
competitive examining procedures from a vacancy announcement that 
includes information to all applicants about the possibility of 
noncompetitive conversion. Further, the employee must have completed at 
least 2 years of continuous service at Level 3 (Valued Performer) or 
better and be converted to a career conditional or career position in 
the same pay schedule and band for which initially hired.
3. Probationary Periods
    Section 9901.512 describes requirements for serving and 
successfully completing probationary periods upon appointment to an 
NSPS position in the competitive or excepted service or upon initial 
appointment to a supervisory position.
    A labor organization representative expressed concern that the 
regulations could be read as requiring no less than 1 year. Section 
9901.512(a)(3) clearly identifies the length of the probationary 
periods and does not intend the time period of 1 year to be interpreted 
as a minimum time period as feared by the commenter. Another commenter 
expressed concern that removing the ability of a supervisor to appeal 
being removed while on probation ``assures that all supervisors will 
learn to be yes-men.'' This assertion has no basis. The NDAA for 2008 
brought NSPS under certain Governmentwide rules, including the right of 
employees to appeal an adverse action such as removal from Federal 
employment. Additionally, Sec.  9901.512(b)(2)(i) retains the same 
protection afforded under General Schedule that an employee who does 
not satisfactorily complete a probationary period is entitled to be 
assigned to a position at a grade or pay band and pay no lower than 
that held before assignment to the supervisory position. This 
protection coupled with the ability to remove the employee from the 
supervisory position balances the organization's need to ensure the 
capability of supervisory personnel while providing safeguards to the 
employee who fails his or her supervisory position. No change has been 
made to the regulations based on these comments.
    A commenter questioned the provisions at Sec. Sec.  9901.512(a)(4) 
and 9901.512(b)(1)(iii), which require that time spent in a non-pay 
status in excess of one workday during the probationary period (both 
initial and supervisory) extend the probationary period by an equal 
amount of time. These provisions are intended to allow management the 
full period to observe an employee's on-the-job performance and enable 
a manager to remove the employee without undue restriction. However, we 
have reviewed this provision in light of the requirements of 5 U.S.C. 
chapter 75 (which provides appeal rights to competitive service 
employees and preference eligible excepted service employees after 1 
year and excepted service employees other than preference eligibles 
after 2 years) and have determined that this provision does not result 
in the intended goal. Therefore, we have revised the regulations to 
reflect an allowable absence in a non-pay status consistent with the 
provisions for non-NSPS employees covered under 5 CFR part 315, subpart 
H.
    A labor organization representative suggested that the regulations 
clarify under Sec.  9901.512(a)(4)(ii) that if an employee is 
successful on appeal in overturning a separation for performance or 
conduct, all time served in the initial probationary period must be 
restored and credited toward completion of the probationary period. 
Insofar as a separation is overturned, it ceases to exist. Therefore, 
the regulations provide sufficient clarity on this point. No change was 
made to the regulations based on this comment.
    A commenter requested clarification regarding the length of the 
probationary period for preference eligibles with appeal rights. The 
commenter also suggested adding information to the regulations to 
address the limited appeal rights of Veterans' Recruitment Appointment 
appointees terminated during the initial probationary period. We agree 
and have modified the regulations accordingly.
    A commenter questioned whether completion of a supervisory 
probationary period in a different Federal position would be creditable 
for an NSPS position. The regulations have been modified to state that 
the prior completion of the supervisory probationary period under these 
circumstances is creditable.
    A commenter noted that the regulations require a supervisory 
probationary period and questioned whether a probationary period is 
required for an employee appointed to a managerial position. No change 
was made to the regulations based on this comment. NSPS does not 
require a managerial probationary period, since not all managerial 
positions have responsibility over subordinate positions. Consequently, 
a managerial position that is not titled and coded as supervisory is 
not subject to a probationary period.
4. Competitive Examining Procedures
    Section 9901.515 provides DoD the authority to use competitive 
examining procedures to appoint applicants to career, career 
conditional, term, and

[[Page 2762]]

temporary appointments in the competitive service and provides that the 
Secretary will issue uniform policies, procedures, and guidance 
concerning competitive examining for NSPS positions. This section also 
discusses public notice requirements and the use of numerical rating 
and ranking procedures and alternative ranking and selection procedures 
(category rating). It retains OPM's authority to grant or deny a pass-
over request of a preference eligible with a compensable service-
connected disability of 30 percent or more as well as to make medical 
qualifications determinations pertaining to preference eligibles.
    Under NSPS, DoD must accept applications from all U.S. citizens, 
including current Federal employees, for positions announced using 
competitive examining procedures. If sufficient qualified applicants 
are available, applicants from the local commuting area and other 
targeted recruitment sources may be considered first. A commenter 
recommended that we define what ``sufficient'' qualified candidates 
means and that we include a requirement for the agency to publicly 
disclose the total number of applications considered versus the total 
number of applications received. We disagree that the term needs 
further definition. The term is relative. Sufficiency depends on the 
specifics of each recruitment action, including the number of 
vacancies, the labor market and the type and level of position to be 
filled. These various factors all contribute to ensuring that there are 
a multiple number of quality choices from which to select. In response 
to the comment that we include a requirement to publicly disclose the 
number of applications considered versus the total number received, we 
note that Governmentwide rules do not require a similar disclosure, and 
we see no useful purpose served by this request. However, this 
information is available in the case file generated for each selection 
and is subject to internal review and audit as well as review by OPM.
    A commenter noted that, under the numerical rating and ranking 
procedures (one of the methods for determining which applicants will be 
referred to the selecting official), the ``rule of 3'' should apply. We 
disagree. Under NSPS, DoD has waived chapter 33 of title 5 of the 
U.S.C., which among other things, mandates the rule of three. By 
waiving this statutory provision, DoD is able to broaden the pool of 
candidates from which to select and provide flexibility to acquire a 
workforce tailored to its needs. No change was made based on this 
comment.
5. Internal Placement
    Section 9901.516 prescribes procedures regarding the assignment, 
reassignment, reinstatement, detail, transfer, and promotion of 
individuals or employees into or within NSPS. This section addresses 
level of work determinations for determining when an action is 
competitive or noncompetitive; contains information related to 
detailing NSPS employees; and describes the NSPS Merit Promotion 
Program, including competitive actions and exceptions to competition, 
alternative promotion procedures, grievances, and maintaining records 
for each promotion to a competitive service position filled through 
internal competitive procedures.
    A labor organization representative observed that the definitions 
in Sec.  9901.103 of ``reassignment'' and ``reduction in band'' are 
brief and do not contain enough detail to enable managers to make level 
of work determinations or to determine whether an action will be 
competitive or noncompetitive. The definitions the representative 
refers to appear in the NSPS regulations published on September 26, 
2008. These definitions, while brief, are quite specific. A 
reassignment is described as a move to a different position or set of 
duties in the same or comparable pay band, and a reduction in band is 
described as a move from one pay band to a lower pay band while 
continuously employed. The definitions also describe when reassignment 
and reduction in band are appropriate for moves from positions outside 
of NSPS to a NSPS position. The definitions are further supplemented by 
definitions for comparable pay band or level of work and lower pay band 
or level of work. These additional definitions clarify that 
reassignment and reduction in band are based on level of work 
determinations inherent in the NSPS classification structure. The 
relationship of pay bands in the NSPS classification architecture and 
information on level of work determinations for moves from non NSPS 
positions to NSPS is described in the NSPS Classification and 
Qualification implementing issuances. Consequently, no change was made 
to the regulations based on this comment.
    A labor organization representative stated that the NSPS definition 
of ``promotion'' is more concrete than the definitions of ``reduction 
in band'' and ``reassignment.'' The representative observed that, with 
pay bands, promotions are less frequent than they are under the GS 
system, meaning that far more mobility will take place as movement 
within a band. The representative expressed concern that movements 
within a pay band, or ``reassignments,'' may involve an increase in 
base pay normally reserved for promotions under the GS system and that 
managers will be able to decide when to give a pay increase or whether 
to subject a movement to competition. They were particularly concerned 
that employees could be reassigned with pay increases and other 
employees would be given no notice or opportunity to compete.
    The definitions of reassignment and promotion differ among 
different personnel systems. NSPS is designed to be a modern, 
contemporary, flexible, and agile human resources management system 
intended to help DoD meet the national security challenges of the 21st 
century, while following core merit system principles and protections. 
The NSPS pay band recognizes a broader range of work than a General 
Schedule grade within a single pay band also known as one discrete 
level of work. Classification architectures utilizing a grade concept 
describe narrower ranges of work for a single discrete level of work. 
Consequently, where movements in a graded system would result in 
promotion pay, the same movement in a pay-banded system may constitute 
a reassignment. While pay progression in grade-based systems is 
primarily based on promotions, pay progression in the NSPS pay-banded 
system is primarily based on performance and secondarily on promotion 
movements. In appropriate situations, as documented and authorized by 
Component procedures, management may provide a discretionary base 
salary increase to provide an incentive to employees to broaden skill 
sets, take on more responsibilities, accept assignments that require 
relocation, etc. To preserve the competitive procedures for promotion, 
such increases are limited to an amount less than the minimum 
percentage increase permitted by promotion rules. Providing an increase 
in pay for a reassignment is not required and, where provided, may be 
predicated on specific case information (e.g., the employee's salary in 
range, what skills the employee brings to the position). At the same 
time, the pay band structure recognizes that employees may be promoted 
to a position in a higher pay band containing a higher level of work. 
Consistent with merit promotion rules, promotion to a position in a 
higher pay band, or at a higher level of work, in the

[[Page 2763]]

competitive service requires competition.
    With respect to the comment regarding managers deciding when 
reassignments will require competition or not, or when a notice of the 
vacancy will be given, we note that, as with the GS system, many NSPS 
positions to which employees are reassigned are advertised; however, 
some are not. As under the GS system, some reassignments are done 
competitively to increase the applicant base. Some reassignments are 
also done competitively if the position to which the employee will be 
reassigned ultimately leads to a position in a higher full performance 
pay band (i.e., a higher level of work under the NSPS classification 
architecture). Whether a position is advertised or not, employees who 
are reassigned must be qualified for the position, unless they are 
reassigned as a result of reduction in force procedures and 
qualification requirements are waived. No change was made to these 
regulations based on this comment.
    A labor organization representative expressed concern that details 
could ``go on forever'' without documentation and that ``a manager 
could pick a favorite employee for a desirable detail with no record of 
the action,'' making it ``difficult if not impossible to track movement 
of employees in order to ensure that there is no prohibited 
discrimination.'' In addition, the labor organization representative 
asked specifically about what documentation was required for a GS 
employee's detail to an NSPS position.
    Consistent with Governmentwide regulations, NSPS does not impose a 
specific timeframe that limits flexibility in accomplishing work. A 
detail, however, is limited in that it involves the temporary 
assignment of an employee to another position or set of duties to 
perform work on a time-limited basis with the expectation that the 
employee will return to the permanent position of record upon 
expiration of the detail. NSPS does require documentation of some 
details, in that details to higher pay bands beyond 180 days are 
subject to competition. Management must evaluate the situation and 
determine the appropriate assignment of employees. In some cases, it 
may be better to temporarily promote an employee or fill a position on 
a permanent basis.
    The OPM Guide to Processing Personnel Actions provides technical 
guidance regarding when documentation is required for a GS employee's 
detail. Documentation is not dependent on whether the employee is 
detailed to a different personnel system but on the duties assigned, 
the organization or agency to which assigned, length of the detail, and 
the grade of the position. Additional guidance regarding the conditions 
surrounding a detail requiring documentation is in chapter 14 of the 
Guide.
    A commenter asked for clarification of the exception to competition 
situation described at Sec.  9901.516(e)(7), which permits a 
noncompetitive promotion to a higher pay band previously held on a 
permanent or term basis in the competitive service. The commenter asked 
that we make clear that holding a position on a term basis means on a 
term appointment, not a temporary promotion or temporary appointment. 
The commenter also suggested we state when the term appointment was 
held and for how long, to ensure consistency. Alternatively, the 
commenter suggested the regulations provide discretionary authority to 
Components to specify the conditions under which a term appointment 
could be used as the basis for a noncompetitive permanent action. 
Finally, the commenter noted that, during base realignment and closure 
and transformation efforts, term appointments and temporary promotions 
for extended periods are common and expressed concern that this 
provision seems to give an advantage to term applicants over permanent 
employees who have held a position in a higher pay band on a temporary 
basis for several years. We agree that this provision may be confusing 
and have deleted the words ``or term'' from this paragraph.
    A labor organization representative expressed concern that the 
alternative promotion procedures bypassed competitive processes and 
merit principles creating ``secret processes'' to fill vacancies. 
Several commenters associated a formal vacancy announcement with 
competition, transparency and merit selection. The NSPS regulations on 
internal placement explicitly align with Governmentwide regulations by 
adopting the merit promotion requirements under 5 CFR 335.103(b). These 
merit promotion requirements provide the foundation for a systemic 
means of selection according to merit. They include analysis of the job 
to be filled to identify the knowledge, skills, abilities, and/or 
competencies necessary to successfully perform the duties of the 
position; clearance of applicable programs for displaced or surplus 
employees, such as the DoD Priority Placement Program and the 
Reemployment Priority List; determination that the selectees meet 
applicable OPM or DoD qualification standards for the positions being 
filled; and, selection of candidates determined to be best qualified 
for the positions. Additionally, the identification, qualification, 
evaluation, and selection of candidates must be made without regard to 
political, religious, or labor organization affiliation or 
nonaffiliation, marital status, race, color, sex, national origin, 
nonqualifying physical handicap, or age, and must be based solely on 
job-related criteria. Employees selected under alternative promotion 
procedures have been judged on the recognized merit factors of 
qualifications and performance. Although formal advertisement is not 
required for selections under these procedures, the regulations require 
that employees are notified in advance of the intent to use these 
procedures.
    A labor organization representative asked how absent employees or 
those not physically present might receive consideration for positions 
through these alternative means. The absence of an employee does not 
preclude consideration under these procedures precisely because these 
procedures do not necessarily require an application from the employee. 
For example, all employees eligible and within the area of 
consideration will automatically receive consideration through the 
exceptional performance promotion procedure. Each Component will 
determine specific processes for each procedure, and should a Component 
request applications for any of these alternative methods, they will 
also explain the provision and conditions for considering those who are 
absent. However, we have amended Sec.  9901.516(e)(8) to clarify that 
when alternative promotion procedures are used, appropriate 
consideration must be given to employees within the area of 
consideration who are absent for legitimate reasons, (e.g., on detail, 
on leave, at training courses, in the military service, etc.).
    A labor organization representative asked specific questions 
regarding the execution of these alternative promotion procedures, 
including whether employees would be informed when specific jobs became 
available, whether employees would be informed of their ratings, 
whether employees could challenge their ratings, how employees would be 
informed of enough information to file a grievance if desired, and 
whether the rating outcomes would be available for potential grievance 
or EEO procedures. The goal of the alternative promotion procedures is 
to provide an efficient procedure for filling positions

[[Page 2764]]

competitively. While we have provided the framework and requirements 
for each alternative promotion procedure, Components will establish 
specific guidelines for their use of each alternative promotion 
procedure to be consistent with their merit promotion plans. It is 
important to emphasize that employing alternative promotion procedures 
does not negate merit promotion requirements. For example, like all 
other competitive procedures, case files will be kept for each position 
filled through these alternative procedures and will be made available 
for grievance and EEO purposes. In addition, Components will continue 
to provide necessary information to employees.
    A labor organization representative asked for clarification 
regarding who determines if the by-name request is ranked within the 
highest quality group. The competitive process requires measuring the 
candidate against the job-related criteria. If the candidate meets the 
rating factors required for the highest level, the candidate may be 
selected for the position. The human resources office determines 
whether a candidate is ranked within the highest quality group.
    Another commenter stated that the alternative promotion procedures 
may be used as a means of circumventing veterans' preference, 
particularly the hiring of disabled veterans. The application of 
veterans' preference is a requirement when conducting competitive 
examining, not in internal placement. The NSPS alternative promotion 
procedures are only used to place employees internally within the 
Department. NSPS upholds veterans' preference in the competitive 
examining process. We have not revised the regulations in response to 
this comment.
    A labor organization representative questioned why the requirement 
to maintain internal placement files was based solely on the time frame 
of the grievance process and stated that this allowed ``premature 
destruction'' of records without considering the EEO process. The 
language regarding how long to maintain documents mirrors the language 
as it exists today for General Schedule employees in 5 CFR 
335.103(b)(5). Governmentwide experience to date has not indicated a 
need for extending the time period for retention of these records. NSPS 
does not change the procedures currently in place with respect to 
meeting EEO or veterans' preference requirements. We have not changed 
the regulations in regard to these comments.

III. Next Steps

    The National Defense Authorization Act for Fiscal Year 2008 
requires that this rule be considered a major rule for the purpose of 
section 801 of title 5, United States Code. Consequently, before it can 
take effect, the Department will submit to each House of the Congress 
and to the Comptroller General a report containing the rule, a general 
statement relating to the rule, and the proposed effective date of the 
rule. The rule may not be effective until the date occurring 60 days 
after the later of (1) Congressional receipt of the report, or (2) the 
date the rule is published in the Federal Register. This rule is 
subject to the procedures set forth in 5 U.S.C. 801-808.

E.O. 12866, Regulatory Review

    DoD and OPM have determined that this action is a significant 
regulatory action within the meaning of Executive Order 12866 because 
there is significant public interest in the National Security Personnel 
System. DoD and OPM have analyzed the expected costs and benefits of 
the revised HR system, and that analysis was presented in the 
supplementary information published with the rule on September 26, 2008 
(Volume 73 Number 188) on page 56389.
    The primary benefit to the public of NSPS resides in the HR 
flexibilities that will enable DoD to attract, build, and retain a 
high-performing workforce focused on effective and efficient mission 
accomplishment. Staffing and employment regulations that streamline 
hiring processes provide additional hiring flexibilities which will 
result in a more qualified and proficient workforce and will generate a 
greater return on investment in terms of productivity and 
effectiveness. Taken as a whole, the changes included in these 
regulations will improve upon the original NSPS regulations and result 
in a contemporary, merit-based HR system that focuses on performance, 
generates respect and trust, and supports the primary mission of DoD.
    This rule has been reviewed by the Office of Management and Budget 
in accordance with E.O. 12866.

Regulatory Flexibility Act

    DoD and OPM have determined that these regulations will not have a 
significant economic impact on a substantial number of small entities 
because they will apply only to Federal agencies and employees.

Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35)

    This final regulatory action will not impose any additional 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act.

E.O. 12988, Civil Justice Reform

    These regulations are consistent with the requirements of E.O. 
12988. The regulations clearly specify the effects on existing Federal 
law or regulation; provides clear legal standards; has no retroactive 
effects; specifies procedures for administrative and court actions; 
defines key terms; and is drafted clearly.

E.O. 13132, Federalism

    DoD and OPM have determined these regulations will not have 
Federalism implications because they will apply only to Federal 
agencies and employees. The regulations will not have financial or 
other effects on States, the relationship between the Federal 
Government and the States, or the distribution of power and 
responsibilities among the various levels of government.

Unfunded Mandates

    These regulations will not result in the expenditure by State, 
local, or tribal governments of more than $100 million annually. Thus, 
no written assessment of unfunded mandates is required.

List of Subjects in 5 CFR Part 9901

    Administrative practice and procedure, Employment, Government 
employees, Labor-management relations, Labor unions, Reporting and 
recordkeeping requirements, Wages.

Office of Personnel Management.
Michael W. Hager,
Acting Director, Office of Personnel Management.
    Department of Defense.
Gordon England,
Deputy Secretary of Defense.

0
Accordingly, under the authority of section 9902 of title 5, United 
States Code, the Department of Defense and the Office of Personnel 
Management are adding subpart E, part 9901, of title 5, Code of Federal 
Regulations, to read as follows:

PART 9901--DEPARTMENT OF DEFENSE NATIONAL SECURITY PERSONNEL SYSTEM 
(NSPS)

Subpart E--Staffing and Employment

General

Sec.
9901.501 Purpose.
9901.502 Scope of authority.

[[Page 2765]]

9901.503 Coverage.
9901.504 Definitions.

External Recruitment and Internal Placement

9901.511 Appointing authorities.
9901.512 Probationary periods.
9901.513 [Reserved]
9901.514 Non-citizen hiring.
9901.515 Competitive examining procedures.
9901.516 Internal placement.

    Authority: 5 U.S.C. 9902.

Subpart E--Staffing and Employment

General


Sec.  9901.501  Purpose.

    (a) This subpart sets forth policies and procedures for the 
recruitment for, and appointment to, positions; and assignment, 
reassignment, detail, transfer, or promotion of employees, consistent 
with 5 U.S.C. 9902(a) and (i).
    (b) The Secretary will comply with merit principles set forth in 5 
U.S.C. 2301 and with 5 U.S.C. 2302 (dealing with prohibited personnel 
practices).
    (c) The Secretary will adhere to veterans' preference principles 
set forth in 5 U.S.C. 2302(b)(11), consistent with 5 U.S.C. 9902(i).


Sec.  9901.502  Scope of authority.

    When a specified category of employees, applicants, and positions 
is covered by the system established under this subpart, the provisions 
of 5 U.S.C. 3301, 3302, 3304, 3317(a), 3318 and 3319 (except with 
respect to veterans' preference), 3321 (except 3321(a)(2)), 3324, 3325, 
3327, 3330, and 3341 are modified or waived and replaced with respect 
to that category except as otherwise specified in this subpart. In 
accordance with Sec.  9901.101, the Secretary may prescribe 
implementing issuances to carry out the provisions of this subpart.


Sec.  9901.503  Coverage.

    (a) At his or her sole and exclusive discretion, the Secretary may 
decide to apply this subpart to a specific category or categories of 
eligible civilian employees in organizations and functional units of 
the Department at any time in accordance with the provisions of 5 
U.S.C. 9902. However, no category of employee may be covered by this 
subpart unless that category is also covered by subpart D of this part.
    (b) The following employees and positions in DoD organizational and 
functional units are eligible for coverage under this subpart:
    (1) Employees and positions who would otherwise be covered by 5 
U.S.C. chapter 33 (excluding members of the Senior Executive Service); 
and
    (2) Such others designated by the Secretary as authorized under 5 
U.S.C. 9902.


Sec.  9901.504  Definitions.

    In this subpart--
    Career conditional employee means an individual appointed without 
time limit to a competitive service position in NSPS who does not meet 
the definition of a career employee.
    Career employee means an individual appointed without time limit to 
a competitive service position in NSPS who has served 3 years of 
substantially continuous service as described in 5 CFR 315.201(b).
    Competencies has the meaning given that term in Sec.  9901.103.
    Detail means the temporary assignment, other than temporary 
reassignment or temporary promotion, of an employee to another position 
or set of duties with the expectation that the employee will return to 
the permanent position of record upon expiration of the assignment. For 
pay and benefits purposes and for the purpose of part 351 of this 
title, an employee continues to encumber the position from which the 
employee was detailed.
    Initial probationary period means the initial period of service 
immediately following an employee's appointment to the competitive or 
excepted service, as specified in Sec.  9901.512, during which an 
authorized management official determines whether the employee fulfills 
the requirements of the position to which assigned.
    Local commuting area is the geographic area that usually 
constitutes one area for employment purposes. It includes any 
population center (or two or more neighboring ones) and the surrounding 
localities in which people live and can reasonably be expected to 
travel back and forth daily to their usual place of employment.
    Promotion has the meaning given that term in Sec.  9901.103.
    Reassignment has the meaning given that term in Sec.  9901.103. For 
the purpose of part 351 of this title, an official position does not 
include a position to which an employee is reassigned on a temporary or 
time-limited basis.
    Reduction in band has the meaning given that term in Sec.  
9901.103.
    Supervisory probationary period means the first year of service 
immediately following an employee's initial appointment or placement in 
a supervisory position, as provided in 5 U.S.C. 3321(a)(2), during 
which an authorized management official determines whether the employee 
fulfills the requirements of the position to which assigned.
    Temporary employee means an individual in the competitive or 
excepted service who is employed for a limited period of time not to 
exceed 1 year. The individual's appointment may be extended, up to a 
maximum established under Sec.  9901.511(d), to perform the work of a 
position that does not require an additional permanent employee.
    Term employee means an individual in the competitive service who is 
employed for a period of more than 1 year up to a maximum established 
under Sec.  9901.511(d).
    Time-limited employee means an individual in the excepted service 
who is employed for a period of more than 1 year up to a maximum 
established under Sec.  9901.511(d).

External Recruitment and Internal Placement


Sec.  9901.511  Appointing authorities.

    (a) Competitive and excepted appointing authorities. The Secretary 
may continue to use excepted and competitive appointing authorities 
under chapter 33 of title 5, U.S. Code, Governmentwide regulations, or 
Executive orders, as well as other statutes, and those individuals 
appointed under these authorities will be given career, career 
conditional, term or temporary appointments in the competitive service 
or permanent, time-limited, or temporary appointments in the excepted 
service, as appropriate. The competitive appointing authorities under 
this paragraph are subject to the procedures in part 330 of this title, 
except for 5 CFR 330.208 and 330.501.
    (b) Additional appointing authorities. (1) The Secretary and the 
Director may enter into written agreements providing for new excepted 
and competitive appointing authorities for positions covered by the 
National Security Personnel System, including noncompetitive 
appointments, and excepted appointments that may lead to a subsequent 
noncompetitive appointment to the competitive service.
    (2) DoD and OPM will jointly publish a notice, and request 
comments, in the Federal Register when establishing a new competitive 
appointing authority or a new excepted appointing authority that may 
lead to a subsequent noncompetitive appointment to a competitive 
service position.
    (3) The Secretary will prescribe appropriate implementing issuances 
to administer a new appointing authority est