Cost-of-Living Allowances (Nonforeign Areas); Partnership Pilot Project

SUMMARY: The Office of Personnel Management (OPM) is issuing

regulations to establish a pilot project in which OPM will form

partnerships with agencies and employees in administering the

nonforeign area cost-of-living allowance (COLA) program. Under the

project, COLA partnership committees will be established in Alaska,

Hawaii, Puerto Rico, Guam, and the U.S. Virgin Islands, and possibly in

the Washington, DC, area, to assist OPM in designing, conducting, and

reviewing the results of COLA surveys as well as in reviewing and

improving the COLA program. Involvement in the committees should help

OPM, affected agencies, and their employees better understand issues

relating to the compensation of Federal employees in these areas. The

regulations also make a technical amendment to clarify the term

``agency'' as it applies to the COLA program.

EFFECTIVE DATE: These regulations become effective on November 21,

1996.

FOR FURTHER INFORMATION CONTACT: Donald L. Paquin, (202) 606-2838.

SUPPLEMENTARY INFORMATION: Under section 5941 of title 5, United States

Code, and Executive Order 10000, as amended, certain Federal employees

in nonforeign areas outside the 48 contiguous States are eligible for

cost-of-living allowances when local living costs are substantially

higher than those in the Washington, DC, area. Nonforeign area COLA's

are paid in Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands, and

Guam and the Commonwealth of the Northern Mariana Islands.

OPM published proposed rules on August 12, 1996 (61 FR 41746), to

initiate a COLA Partnership Pilot Project that would provide for

greater agency and employee involvement in the COLA program through the

use of COLA partnership committees composed of representatives of OPM,

other agencies, and labor organizations in Alaska, Hawaii, Puerto Rico,

Guam, and the U.S. Virgin Islands. OPM proposed that committees advise

and assist OPM in planning COLA surveys, observe data collection during

the surveys advise and assist OPM in the review of survey data, advise

OPM on the COLA program and other compensation issues relating to the

allowance areas, and assist OPM in dissemination of information to

affected employees about the COLA surveys and the COLA program. In

addition, OPM proposed a technical amendment to define ``agency'' under

the definitions section of 5 CFR part 591, subpart B, and to remove a

corresponding reference in Sec. 591.203 to agencies covered by the

subpart.

Earlier this year, OPM briefed agency and employee representatives

in the Washington, DC, area and Anchorage, Honolulu, San Juan, Guam,

and the U.S. Virgin Islands on the proposed pilot project. During and

subsequent to these briefings, OPM received several comments on the

project, and we took these into consideration in drafting the proposed

regulations. In response to the publication of the proposed

regulations, we received additional comments. Most of the comments OPM

received endorsed the major elements of the proposed pilot project

while making suggestions for change or identifying issues that need

clarification. Four commenters objected to the pilot project overall.

In the discussion that follows, we address all comments received.

Agency and Employee Representation on Partnership Committees

Two commenters suggested that one of the members of the committee

represent the Federal Executives Association (FEA) or Federal Executive

Board (FEB) in each area that has an FEA or FEB. Two other commenters

made similar suggestions concerning the COLA Defense Committees, and a

third commenter believed OPM should include a representative from the

Federal Managers Association (FMA). Other commenters expressed concerns

that their agency or union would not be represented on the committees.

One commenter suggested that all Federal labor unions be allowed to

have a representative on the COLA partnership committees. These

comments echoed several that OPM heard earlier this year when it

briefed agency and employee representatives.

OPM tried to find a balance between effective representation and

effective committee operation. The pilot project regulations provide

for committees with five agency representatives, five employee

representatives, and one or more OPM representatives, plus additional

members as recommended by the committee and approved by OPM. These are

large committees, and we are concerned that if they become much larger

they will not function effectively. Therefore, OPM is not expanding the

size of the basic committee.

To accommodate the FEA/FEB suggestion without expanding the

committee, we modified the regulations so that FEA/FEBs will be offered

the agency rotational position in areas where there is an FEA or FEB.

In areas where there is no FEA or FEB or if the FEA or FEB declines,we

will use the process originally proposed--i.e., sampling with

probability proportional to the size of the agency.

Although OPM wants to prevent the committees from becoming so large

that they will be unwieldy, OPM notes that the regulations allow each

partnership committee to recommend additional members to OPM, including

persons representing the FMA, COLA Defense Committees, and other

organizations. OPM will try to accommodate such requests if it appears

practical to do so.

In addition, OPM will make the meetings open to the public and

establish systems of communication (e.g., via mail, telephone,

facsimile, computer bulletin boards, and/or Internet) so that agencies

and employee groups can attend these meetings, hear the discussions,

and make their views known. We will also use the same systems of

communication so that those not directly on the committee or in

attendance at the meetings can have access to the information provided

and the issues under discussion.

[[Page 59174]]

One commenter suggested that OPM choose all agency representatives

at random and rotate the committee positions among agencies on a 6-

month basis. The commenter noted that this could be cumbersome, since

new members would be joining the committee every 6 months. OPM agrees

that this procedure would be combersome and that it would not ensure

that the views and interests of the major Federal employers in each

area are represented on the committee. Therefore, OPM is not adopting

this approach.

Another commenter recommended that OPM not use OPM staff from

outside the allowance area. The commenter believed OPM's own

representatives within the allowance areas could serve on the committee

or as data collectors if their work and activities were reviewed

properly. Under 5 CFR part 2635, Federal employees must avoid engaging

in activities where there is the appearance of a conflict of interest.

Thus, we believe it is preferable to use OPM staff from outside the

allowance area for the pilot project.

Identifying Largest Federal Unions and Employers by Area

Two commenters stated that OPM did not have correct information

regarding the number of employees in bargaining units in each area. OPM

received similar comments earlier when it briefed agency and employee

representatives on the proposal. For these briefings, OPM used

materials that showed the number of employees by bargaining unit as

reported in the Central Personnel Data File (CPDF)--a census of

Government workers reported to OPM by Federal agencies. The CPDF is the

best source of Governmentwide information on the number of employees in

bargaining units; however, OPM will attempt to supplement CPDF data

with other information provided by agencies and/or unions if the counts

by agency/union are such that relatively small changes could make a

difference in the composition of a committee.

Another commenter believed OPM had classified the Puerto Rico

Federal Executives Association as an employee organization because, in

its briefing materials, OPM had listed ``FEA'' among the major labor

organizations in Puerto Rico. The ``FEA'' listed in the briefing

materials refers to the Federal Educators Association, a major labor

organization in Puerto Rico. OPM recognizes that Federal Executives

Associations are not labor organizations, although we also agree with

the commenter that Federal Executives Associations are concerned with

the interests of both the agencies and the employees.

A third commenter expressed concern that the civilian agencies

would be under-represented on the partnership committees because the

military departments (e.g., Army, Navy, and Air Force) would have three

of the five seats in most areas. Although it was suggested during our

earlier briefings that OPM consider the military departments as

separate agencies for the purpose of committee membership, the proposed

and final regulations use the term ``Executive agency,'' as defined in

5 U.S.C. 105. Under section 105, the Department of Defense (DOD) is

defined as an Executive agency and is considered to be a single agency.

Therefore, DOD will have no more than one agency representative on any

COLA partnership committee.

Release of Employee Representatives

Two commenters objected to and one commenter expressed serious

concerns about the way employee representatives were to be selected for

the committees. Under the proposed regulations, agencies would select

agency committee representatives, but employee organizations would

nominate representatives and OPM would select committee representatives

from among the nominations in consultation with the employing agencies.

The commenters noted that it is very important for employees to have as

their representatives persons of their own choosing. OPM agrees, but it

cannot require agencies to release specific employees for committee

duties if the employees' work at their jobs is critical to the mission

of the agency. One commenter suggested that OPM adopt language similar

to that used in section 532.229(b)(6) of title 5, Code of Federal

Regulations, which addresses the release of employee representatives

for work on Federal Wage System surveys. These regulations state in

part that ``[e]mployers shall cooperate and release appointed employees

for committee proceedings unless the employers can demonstrate that

exceptional circumstances directly related to the accomplishment of the

work units' missions require their presence on their regular jobs.''

OPM agrees that such a provision is appropriate and has included

parallel language in the final pilot project regulations.

Another commenter stated that OPM failed to recognize Federal union

representatives as full-time Federal employees while these employees

are in a leave without pay status from their Federal jobs. The

commenter said that by creating its own criteria, OPM was prohibiting

certain Federal union representatives from being on the COLA

partnership committees.

The regulatory requirement that all members of the COLA partnership

committees be Federal employees stems from the requirements of the

Federal Advisory Committee Act (FACA) (Public Law 92-463) and Executive

Order 12838. FACA applies to committees established by the Federal

Government that have as their membership one or more persons who are

not full-time Federal employees. Executive Order 12838 prohibits

agencies from establishing committees subject to FACA unless required

by law or ``compelled by considerations of national security, health or

safety, or similar national interests.'' Therefore, OPM cannot

establish COLA partnership committees if they would be subject to FACA.

Since FACA does not apply to committees composed solely of full-time

Federal employees, OPM's final regulations require that all COLA

partnership committee members be full-time Federal employees. A person

who is on leave without pay is not considered a full-time Government

employee during that period of time for the purpose of applying FACA

and will not be able to serve on a COLA partnership committee while in

a nonpay status.

U.S. Postal Service and Its Employee Representatives

In its comments, the U.S. Postal Service (USPS) stated that its

collective bargaining agreements did not allow it to pay USPS union

members for work performed on the partnership committees. USPS said,

however, that it could grant union representatives leave without pay

for committee work. As discussed above, COLA partnership committee

members must be full-time Federal employees in the pay of the Federal

Government during the time they are performing committee work.

Therefore, unless USPS agrees to pay its union representatives for

partnership committee work, the union representatives will not be

eligible to serve on the committees because (as explained above) they

would not be full-time Federal employees during such periods of work

for the purpose of applying FACA. Since it would not be equitable to

have USPS represented on the committee but not its employees, OPM has

modified its regulations to make USPS participation in the pilot

project conditional upon the involvement of both USPS and its unions.

[[Page 59175]]

Experience and Training

Several commenters noted the importance of having committee

representatives and data collection observers with technical experience

concerning COLA issues, and two commenters suggested that OPM select

committee members and observers based on the nominees' qualifications.

Although technical experience certainly could be an asset, we believe

committee members and observers with broad ranges of experience can

provide valuable insights and advice concerning COLA's, compensation,

and recruitment and retention issues. Also, as noted above, we believe

agencies and employees should be represented by persons of their own

choosing, rather than by others selected through some other means.

Therefore, we do not plan to adopt these suggestions.

Nevertheless, OPM agrees that training, experience, and support are

important for effective committee participation, and we will work with

the committees to provide the resources and information necessary. We

note, however, that while some aspects of the COLA methodology are

complex, the fundamental principles involved in survey design and

execution (e.g., item and outlet selection and data collection) are

based on common consumer behavior--experiences that we all have.

Therefore, we believe the committee members and observers will be able

to make valuable contributions toward improving the surveys while they

acquire more technical expertise and background in the COLA program.

One commenter stated that unless all participants in the COLA

partnership process had jointly received employee involvement training,

the partnership committees could become dysfunctional. The commenter

recommended that such training be provided in advance of the first

committee meetings. OPM believes many of the representatives who will

serve on the COLA partnership committees will have had employee

involvement training, and timing and budget considerations make it

difficult to provide such training in advance of the initial meetings.

If the lack of employee involvement training threatens to undermine the

pilot project, OPM will revisit this issue and determine how such

training might be provided.

Data Collection Observers

One commenter questioned whether the proposed role of the data

collection observer was an efficient use of manpower resources. The

commenter suggested expanding the role to include actual data

collection or dropping the role entirely. OPM believes the role of the

data collection observer is important because it will provide integrity

to the data collection effort. This integrity cannot be achieved if

either OPM or the COLA recipients were to collect the data alone.

Furthermore, we do not expect the observer to stand by silently and

offer no comments or suggestions during the surveys. We expect that

observers will provide valuable insights both during and after the data

collection process and that these insights will be very useful as the

COLA partnership committees work to improve surveys from one year to

the next.

COLA Committee in the DC Area

Two commenters suggested that OPM involve agency and employee

representatives from the Washington, DC, area in the pilot project. OPM

agrees that the integrity of the program could benefit from such

involvement in the DC area survey, and we have modified the regulations

to allow this. OPM will explore the issue further with agency and

employee representatives in the DC area and will establish a DC area

committee if it appears practical to do so.

Subcommittees

One commenter stated that subcommittees in the allowance areas in

Alaska should be required by regulation rather than simply permitted at

the discretion of OPM and the COLA partnership committees. We agree

that subcommittees will be valuable assets to the partnership

committees and to OPM in the conduct of the survey. Therefore, we

certainly will encourage the committees to establish a subcommittee in

each of the COLA survey areas. Although OPM could make these

subcommittees mandatory, we did not adopt this change because we do not

think it will be necessary. We also note that under the regulations OPM

can establish additional partnership committees if necessary.

During our briefings of agency and employee representatives, it was

suggested that OPM establish two types of COLA committees--a COLA

policy committee and a COLA survey subcommittee. OPM agrees that it may

well be valuable to have subcommittees that focus on specific issues,

processes, and/or geographic interests, and the regulations allow for

this at the recommendation of the COLA partnership committees as

approved by OPM. We anticipate that subcommittees will be established

for various purposes during the pilot project.

Review of Pilot Project

One commenter suggested that the pilot project be reviewed

periodically to determine whether it represents an efficient use of

resources, and another commenter asked how the effectiveness of the

pilot project would be measured. OPM agrees that the effectiveness of

the pilot project should be evaluated during and at the end of project.

Certainly, if it becomes clear that the pilot project is not effective,

OPM will discontinue it. However, based on the majority of the comments

we have received to date, we believe this is an unlikely prospect.

Expenses Related to Committee Activities

One commenter noted that the commentary that preceded the proposed

regulations suggested that agency committee representatives would have

their travel costs paid by the Government, but that employee

representatives would not. That is not what we intended. To clarify

this, we have revised the regulations to state clearly that employees

serving as committee or subcommittee members are considered to be on

official assignment to an interagency function. Therefore, such

employees, without regard to whether they are agency or employee

representatives, will be entitled to reimbursement for travel expenses

related to COLA partnership committee work. However, as we noted in the

commentary on the proposed rule, we expect such expenses to be minimal

because all non-OPM committee and subcommittee members will be

residents of the immediate area, and non-local travel will therefore be

unnecessary in most cases.

Another commenter believed OPM should provide the budgetary

resources necessary for COLA partnership and not rely on agency

support. In developing this pilot project, OPM tried to minimize its

budget impact. We also consulted with the major Federal employers in

the allowance areas and discussed the potential impact with them.

Although they recognized that the pilot project would be a new resource

requirement, most of the agencies found merit in the proposal and

agreed to support the project in terms of the staff time and related

expenses associated with the program.

Committee Charters

One commenter asked whether COLA partnership committees would be

chartered. Although charters are not required for these committees, OPM

believes that charters would be beneficial and plans to encourage

[[Page 59176]]

committees to develop charters. These charters could provide additional

detail on and clarify committee objectives and scope, membership

requirements, agency support, reports, OPM and other agency support,

etc.

Issues Relating to COLA Surveys

One commenter believed prices in Puerto Rico were higher in the

fall than in the January through March time frame during which OPM will

conduct the COLA surveys. The commenter recommended changing the timing

of the survey or using a factor to adjust for any price differences. On

May 11, 1995, OPM published in the Federal Register (60 FR 25150) for

comment a notice that said it planned to change the timing of the

surveys of Hawaii, Guam, Puerto Rico, and the U.S. Virgin Islands to

the first quarter of the calendar year. OPM received no comments

opposing that change. Nevertheless, timing of the COLA surveys is one

of the issues that COLA partnership committees could consider as they

advise OPM on the COLA program.

One commenter suggested that OPM take into consideration other

measures of relative living costs, such as those reported by certain

private sector companies, and another commenter suggested that OPM

consider varying COLA rates by income level. OPM believes these are

valuable suggestions and are certainly topics that the COLA partnership

committees could consider.

Opposition to Proposed Pilot Project

Four commenters objected to the proposed pilot project overall.

Their comments and our analyses and responses are noted below.

Procedure for selecting employee representatives: As noted earlier,

two commenters objected to the procedure for selecting employee

representatives for the committees. In response to these concerns, OPM

modified the regulations to ensure that employee organizations are

represented by persons of their own choosing, except when the affected

work unit's mission requires the employee's presence on his or her

regular job.

One commenter criticized the proposal because it involved agencies

in a technical process that could affect their budgets. The commenter

said that the agencies' right to select their representatives and

consult with OPM concerning the selection of employee representatives

gives the agencies the ability to improperly influence the survey

results. The COLA program was established to provide a compensation

tool that helps agencies recruit and retain a well-qualified work

force. Therefore, we believe agencies must be involved in any effort to

improve the administration of the COLA program. Furthermore, as

discussed earlier, OPM has modified its regulations to address issues

relating to the selection of employee representatives. We believe this

change will strengthen the composition of the committee and guarantee

the free exchange of ideas and issues from all perspectives.

Another commenter believed the process of selecting only the

largest unions in terms of the number of COLA recipients they represent

would promote conflict and competition among labor organizations. OPM's

experience working with labor organizations under the Federal Wage

System for over 20 years has shown that Federal labor organizations

work cooperatively in these situations. Therefore, we do not believe

the COLA partnership process will be jeopardized by union conflict and

competition.

Nature of the partnership committees: Two commenters believed the

committees should not be called ``partnerships'' because the committees

would be advisory in nature. One commenter was concerned that the

committees might be expected to ``rubber stamp'' OPM's unilateral

actions, and that if this were to happen, participating organizations

might be ``tainted.'' Another commenter believed committee members

would be ``turned off'' if they did not have the ability to influence

decisions that affect them.

No two partnerships look exactly alike, and OPM believes that

establishment of these committees will result in a more collaborative

relationship among affected agencies and employees with respect to this

complex and often contentious program. By statute and Executive order,

however, OPM has the final authority for conducting COLA surveys and

administering the COLA program. If a consensus cannot be reached on an

issue or if the views of one COLA committee differ from those of

another on the same issue, OPM must still conduct surveys and set COLA

rates. Nevertheless, this does not mean that we cannot use partnership

to improve the COLA program.

OPM plans to accommodate suggestions whenever practical and

consistent with the laws and regulations that govern the COLA program.

We certainly do not expect the committees to ``rubber stamp'' our

proposals. Instead, we plan to listen carefully to and seriously

consider all of the information and advice that will be provided. We

know there is much we can learn that will help us improve the surveys

and the way we administer the program, and we look forward to having

frank and open discussions with the other committee members. It is our

hope that we can reach a consensus on the vast majority of issues that

will face us. As several commenters said, the partnership process will

not work unless there is a sincere commitment from all parties,

including OPM, to share ideas, listen to others, learn from what is

said, and find areas of agreement. OPM is committed to this process.

Agency impact: Another commenter objected to the proposal on the

basis that it seemed to set up a new bureaucracy to deal with COLA

issues and that this was not an efficient use of resources in a time of

downsizing. The commenter appeared to suggest that OPM consider using a

different approach to compensation, such as the locality pay provisions

of the Federal Employees Pay Comparability Act of 1990 (Public law 101-

509). OPM recognizes that the pilot project will require staff time of

a limited number of agencies and employee representatives in each area

and that this comes at a time when many agencies have had staff-level

reductions. Therefore, in developing the pilot project, OPM strived to

limit the number and size of the committees while trying to ensure that

there is adequate representation and a sufficient number of people to

do the work. We do not believe we are creating a bureaucracy, but

rather furthering National Performance Review objectives concerning

management and employee partnership.

Memorandum of understanding and COLA partnership: Two commenters

objected to the proposal because of perceived conflicts between COLA

partnership work and the work to be performed under a memorandum of

understanding (MOU) between the Government and the plaintiffs in Alaniz

v. Office of Personnel Management and Karamatsu v. United States. The

commenter felt that the pilot project would undermine the MOU and

dilute the parties' resources to work on it. One commenter suggested

that the pilot project be postponed and reconsidered at the end of the

``Safe Harbor'' process envisioned by the MOU. The same commenter also

suggested that OPM delete or amend several of the functions of COLA

partnership committees, as described in Sec. 591.212(d) of the proposed

regulations. The other commenter believed the pilot project duplicated

and conflicted with the Safe Harbor process.

While we agree that both the MOU and the COLA partnership ;pilot

project are major undertakings, we do not

[[Page 59177]]

believe they will deplete the resources necessary to participate

effectively in both processes. Furthermore, we see the MOU and pilot

project as two distinctly different processes that, while having

similar overall goals, will not conflict with one another. The MOU is

designed to engage the parties in Alaniz and Karamatsu in a

collaborative process through which the parties will attempt to reach

agreement on issues that have long been contested in the COLA program

and to help OPM in connection with its report to Congress, which is

required by Public Law 102-141, as amended. The COLA pilot project is

designed to use partnerships of agency and employee representatives to

assist OPM in designing, conducting, and reviewing results of annual

COLA surveys; to improve the COLA program and OPM's administration of

the program; and to explore issues relating to the compensation of

Federal employees in the allowance areas. As with the MOU, the

information and experience that OPM will gain through the pilot project

will also be helpful in preparing our report to Congress. OPM believes

the MOU and COLA partnership will complement each other as they provide

information on different aspects of the COLA program. This information

will be very beneficial to Congress as it reviews and considers the

COLA program. Therefore, we believe it would be undesirable to postpone

the pilot project until the MOU process is complete or to modify the

functions of the COLA partnership committees.

Training, expertise, and resources: One of the commenters also

believed the partnership committees would have insufficient resources,

experience, and training to participate effectively. The commenter felt

that the COLA Defense Committees would be able to participate more

effectively and criticized OPM for not explicitly including

representatives from the COLA Defense Committees on the COLA

partnership committees.

As discussed above, the regulations allow for the COLA partnership

committees to expand their membership in consultation with OPM, and OPM

intends to be open to such requests. Therefore, if any COLA partnership

committee believes it would be appropriate to include representatives

from a COLA Defense Committee, OPM will try to support such a request,

provided that the size of the committee does not threaten its

effectiveness.

As also discussed above, OPM agrees that training, experience, and

support are important, and we plan to provide the resources and

information necessary for effective involvement. Although there may be

individuals in each area who have more experience with COLA issues, we

believe there is much to be gained from the involvement of a wide range

of views and interests, and we also believe effective experience

concerning COLA issues can be gained quickly through participation in

the COLA partnership pilot project.

Waiver of 30-Day Delay in Effective Date

Pursuant to section 553(d)(3) of title 5, United States Code, OPM

finds that good cause exists to make these regulations effective in

less than 30 days. The regulations are being made effective immediately

in order to provide sufficient time for the COLA partnership committees

to organize and prepare for the surveys to be conducted during the

first quarter of calendar year 1997.

Regulatory Flexibility Act

I certify that this regulation will not have a significant economic

impact on a substantial number of small entities because it will affect

only Federal agencies and employees.

List of Subjects in 5 CFR Part 591

Government employees, Travel and transportation expenses, Wages.

U.S. Office of Personnel Management

James B. King,

Director.

Accordingly, OPM amends 5 CFR part 591 as follows:

PART 591--ALLOWANCES AND DIFFERENTIALS

Subpart B--Cost-of-Living Allowance and Post Differential--

Nonforeign Areas

1. The authority citation for subpart B of part 591 continues to

read as follows:

Authority: 5 U.S.C. 5941; E.O. 10000, 3 CFR, 1943-1948 Comp., p.

792; E.O. 12510, 3 CFR, 1985 Comp., p. 338.

2. Section 591.201 is amended by adding a definition of ``agency''

in alphabetical order to read as follows:

Sec. 591.201 Definitions.

* * * * *

Agency means an Executive agency as defined in section 105 of title

5, United States Code, but does not include Government-controlled

corporations. For the purposes of Sec. 591.212, ``agency'' also

includes the United States Postal Service.

* * * * *

3. Section 591.203 is amended by revising the section heading and

the introductory text to paragraph (a) to read as follows:

Sec. 591.203 Employees covered.

(a) This subpart applies to civilian employees whose rates of basic

pay are fixed by statute and who are employed by an agency. The

following pay plans are covered by this subpart:

* * * * *

4. Section 591.212 is added to read as follows:

Sec. 591.212 COLA Partnership Pilot Project.

(a) Purpose and duration of COLA Partnership Pilot Project. The

COLA Partnership Pilot Project is designed to assess the efficacy of a

plan to increase agency and employee involvement in the allowance

program. The pilot project shall be in effect for a period not to

exceed 2 years from November 21, 1996.

(b) Purpose and establishment of committees. To assist OPM in

reviewing and improving the allowance program and to help OPM, affected

agencies, and their employees better understand issues relating to the

compensation of Federal employees in the allowance areas, OPM may

establish one or more COLA partnership committees in the allowance

areas and in the Washington, DC, area. Committees established under

this section function at the discretion of OPM and may be

disestablished at any time. A committee may represent agencies and

employees in more than one allowance area and will meet from time to

time as requested by OPM.

(c) Composition of committees. Each committee shall be composed of

one or more representatives of Federal agencies and labor

organizations. All committee members shall be current full-time Federal

employees performing official business of the Federal Government and

will serve at their agencies' and OPM's discretion. All non-OPM

committee members shall be from the area represented by the committee.

The representatives shall be selected as follows:

(1) Agency representatives. (i) OPM will identify the largest

agencies (in terms of allowance recipients) in the area represented by

the committee. For the Washington, DC, area committee, if established,

OPM will identify the largest agencies in terms of allowance recipients

in all of the allowance areas. OPM will invite up to four agencies each

to designate a representative to serve on the committee. In areas where

a Federal Executive Association (FEA) or Federal Executive Board (FEB)

is located, OPM will invite the FEA or FEB to nominate an FEA or FEB

member employed by an agency not otherwise represented on the

committee, and OPM will select the nominee in consultation with the

nominee's employing agency.

[[Page 59178]]

In areas where there is no FEA or FEB, or where an FEA or EB declines

to participate, OPM will invite one additional agency selected from

among the other agencies in each committee area to designate a

representative to serve on the committee on a 1-year rotational basis.

To select this agency, OPM will use sampling with probability

proportional to the size of the agency. If mutually agreeable among the

agencies, they may select representatives using other means and may

rotate committee positions among agencies on other than a 1-year

rotational basis.

(ii) OPM will appoint one or more of its employees to serve on each

COLA partnership committee.

(2) Employee representatives. OPM will identify the largest labor

organizations (in terms of allowance recipients) in the area

represented by the committee. For the Washington, DC, area committee,

if established, OPM will identify the largest labor organizations in

terms of allowance recipients in all of the allowance areas. OPM will

invite up to four labor organizations each to nominate a representative

to serve on the committee. OPM will further invite one additional labor

organization selected from among the other labor organizations in each

committee area to nominate a representative to serve on the committee

on a 1-year rotational basis. To select this labor organization, OPM

will use sampling with probability proportional to the size of the

labor organization. If mutually agreeable among the labor

organizations, they may nominate representatives using other means and

may rotate committee positions among labor organizations on other than

a 1-year rotational basis. OPM will select committee members from among

the nominees in consulation with the nominees' employing agencies.

(3) Postal Service. No committee shall have a representative from

the United States Postal Service (USPS) unless USPS labor organizations

have the opportunity to participate as provided by paragraph (g) of

this section. No committee shall have more than one employee

representative from USPS labor organizations.

(4) Other members. In consultation with the committee members, OPM

may invite other current full-time Federal employees to serve on the

committees. OPM will coordinate such invitations with the employing

agencies.

(d) Functions of committees. COLA partnership committees may--

(1) Advise and assist OPM in planning living-cost surveys;

(2) Provide or arrange for observers for data collection during

living-cost surveys;

(3) Advise and assist OPM in the review of survey data;

(4) Advise OPM on its administration of the COLA program, including

survey methodology and other issues relating to the compensation of

Federal employees in the allowance areas; and

(5) Assist OPM in the dissemination of information to affected

employees about the living-cost surveys and the COLA program.

(e) Data collection observers. In consultation with the committees,

OPM will determine the number of observers required to accompany OPM

officials during the collection of living-cost data. All observers

shall be from the local area and shall be full-time Federal employees

performing official business of the Federal Government. The committees

will nominate observers, and OPM will select from among these

nominations in consultation with the nominees' employing agencies.

(f) Subcommittees. In consultation with the committees, OPM may

establish one or more subcommittees to advise the committee on issues

relating to the allowance areas and survey areas within the geographic

area represented by the committee. If such subcommittees are

established, they shall be composed of up to two agency representatives

and two employee representatives from the local area, as well as one or

more OPM representatives. OPM may, in consultation with the committee

and subcommittee, invite additional Federal employees to serve on the

subcommittee. Subcommittee agency and employee representatives shall be

nominated and appointed in the same manner as committee members. All

subcommittee members shall be current full-time Federal employees

performing official business of the Federal Government.

(g) Agency release of employees for committee/subcommittee

activities. Employers shall cooperate and release nominated employees

for committee/subcommittee proceedings and activities unless the

employers can demonstrate that exceptional circumstances directly

related to the accomplishment of the work units' missions require their

presence on their regular jobs. Employees serving as committee or

subcommittee members are considered to be on official assignment to an

interagency function, rather than on leave.

[FR Doc. 96-29773 Filed 11-20-96; 8:45 am]

BILLING CODE 6325-01-M