Employment in the Senior Executive Service

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 317

RIN 3206-AI75

Employment in the Senior Executive Service

AGENCY: Office of Personnel Management.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Office of Personnel Management (OPM) is proposing to amend

its regulations governing career and limited appointments to the Senior

Executive Service (SES) and Qualifications Review Board (QRB)

certification. The proposed regulations emphasize the importance of

executive leadership qualifications in agency SES selection criteria;

strengthen merit principles; increase SES staffing flexibilities to

help agencies recruit the brightest and most diverse executive cadre

possible; and provide for delegating QRB administration to agencies via

individual delegation agreements. In addition, there will be procedural

modifications to streamline the SES application process, reduce

paperwork requirements, and improve the QRB certification process.

DATES: Comments on the proposed regulations must be received on or

before September 28, 1999.

ADDRESS: Send or deliver written comments to Ms. Joyce Edwards,

Director, Office of Executive Resources Management, Room 6484, 1900 E

Street NW., Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Marcia K. Staten at 202-606-1832, FAX

202-606-2126, or email to [email protected].

SUPPLEMENTARY INFORMATION: The success of the Senior Executive Service

(SES) rests in the ability of agencies to employ highly competent,

motivated, and diverse professionals dedicated to public service with

the requisite leadership expertise to meet the challenges facing the

Government and the Nation into the next century.

In April 1998, OPM widely circulated a ``Draft Framework for

Improving the Senior Executive Service'' to focus attention on the

importance of executive leadership and to stimulate discussion about

the SES. OPM wanted stakeholders to think about whether the way the

senior executive cadre is selected, developed, and managed today will

produce the kind of executives equipped to meet the leadership

challenges of the 21st century. The Framework was an outline of ideas

in four broad areas: SES structure, staffing flexibility, performance

management and accountability, and development and continuing learning.

From April through November, OPM held briefings and discussions

with nearly 40 different groups of stakeholders, including senior

executives and candidates, the human resources community, public

administration organizations, and professional associations. OPM also

received over 50 written comments from departments and agencies,

individual executives and other interested persons, and various

organizations. Although stakeholder views varied widely, there was

consensus on many ideas, including increasing agency flexibility for

SES staffing. Specifically, there was general support for improving the

SES selection process to ensure that leadership and executive

qualifications are the major selection criteria, reducing the paperwork

burden on applicants and agencies, considering options for delegating

QRB administration, and increasing agency authority to make limited

term appointments.

OPM formed a work group of agency human resources professionals,

who administer executive resources programs, to help identify solutions

to the staffing issues raised by the Framework initiative. OPM also

sought the views of senior executives who have served as members of

QRBs. Some solutions will require changes to OPM regulations, while

others may be accomplished administratively through procedural or

process changes. These regulatory proposals are the result of the

comments and suggestions from the senior executives and the work group.

The proposed regulations require agency selection criteria to address

executive leadership expertise, provide for delegating QRB

administration on an agency-by-agency basis via written delegation

agreements, clarify current restrictions on converting noncareer

appointees in their current or successor positions, increase agency

focus on performance during the probationary period, and expand the

pool of limited appointment authorities currently delegated to

agencies.

In addition to the improvements achieved through regulatory change,

OPM will make modifications to internal procedures and other

requirements to streamline the SES application process, reduce

paperwork requirements, and improve the QRB certification process.

These modifications will include alternative methods for documenting

executive qualifications for presentation to QRBs, improved guidance

and instructions to QRBs to ensure that members fully understand their

role and responsibilities, and more specific and detailed feedback to

agencies on QRB disapprovals.

These flexibilities were designed to facilitate agency efforts to

hire a diverse and talented cadre of senior executives.

Emphasis on Executive Leadership

The law at 5 U.S.C. 3393 requires agency Executive Resources Boards

to conduct the merit staffing process for career entry into the SES,

including reviewing the executive qualifications of each career SES

candidate. During the discussions of the Framework on improving the

SES, it was confirmed that, in many agencies, the selection criteria

focus primarily on candidates' professional or technical

qualifications, and therefore consideration of executive qualifications

is not getting the full attention intended by the legislation. The key

characteristics of an SES position are the executive leadership

responsibilities, and therefore selection criteria should focus

primarily on these qualifications. In order to strengthen that focus

and encourage agencies to fully integrate consideration of executive

leadership qualifications into their selection processes, the proposed

regulations incorporate the statutory requirements. Agency latitude to

design the merit staffing process, including how to consider executive

qualifications in the merit staffing process, is unchanged.

In addition to the regulatory change, OPM is modifying procedural

[[Page 41335]]

requirements for documenting executive qualifications for presentation

to QRBs to provide alternative methods and options for agency use.

These changes are intended to give agencies additional flexibility,

reduce the paperwork burden on applicants, and improve the QRB

certification process.

Delegating QRB Administration

The law at 5 U.S.C. 3393 requires OPM to establish QRBs to certify

the executive qualifications of candidates for initial career

appointment to the SES. In enacting this provision, Congress indicated

that this would provide an independent peer review, which would ensure

that appointments to the SES are based primarily on executive

qualifications, rather than on technical or professional

qualifications. While OPM's broad statutory authority at 5 U.S.C. 1104

includes the authority to delegate QRB administration to agencies, OPM

has traditionally held that OPM-convened QRBs assured that the focus of

the certification is on the executive qualifications and safeguarded

Congressional intent. However, as we have moved in recent years toward

increasing agencies' flexibility to manage their executive resources,

OPM has agreed to consider delegating QRB administration to agencies,

on an agency-by-agency basis via individual delegation agreements;

provided that the focus on leadership and executive expertise is

maintained and merit system principles are preserved. The proposed

regulation authorizes delegated agreements, under specific conditions.

The agreements will be designed to ensure an independent peer review,

set the scope of the delegation, address agency QRB operations,

prescribe reporting requirements, and provide for OPM oversight.

In addition to this regulatory change, OPM is modifying procedures

and paperwork associated with QRB administration to address concerns

that the process focuses on paper over substance and to provide more

specific and detailed feedback to agencies on QRB disapprovals.

Noncareer Conversion Restriction

The current regulation at 5 CFR 317.502(e) precludes QRB

certification of a noncareer SES employee for career appointment in the

employee's current position or a successor to that position, because

there is no bona-fide vacancy for which to hold competition. This

regulation was intended to preserve the merit principle of fair and

open competition in merit selections. Since the regulation was

promulgated, however, questions have arisen about the definition of

``noncareer SES employee.'' The proposed regulation strengthens and

clarifies the intent of the current regulation by expanding coverage to

noncareer-type employees, including noncareer SES appointees and

Schedule C appointees, or the equivalent.

SES Probationary Period

Performance Assessment

The SES statute (Pub. L. 95-454) establishes a 1-year probationary

period for new career SES appointees. It requires that an individual's

initial appointment as a career SES appointee could not become final

until that individual completes one year of service as a career

appointee (5 U.S.C. 3393(d)). OPM has long held that the probationary

period is an extension of the examining process to be used to determine

an individual's ability to actually perform as an executive. The law

also includes provisions to facilitate removal of appointees during

probation for unacceptable performance or conduct (5 U.S.C. 3592).

During the Framework discussions, stakeholders expressed concern

about the lack of attention that agencies have given to SES probation

and explored options for making more effective use of the probationary

period as the vehicle for assessing whether or not the new appointees

are performing as executives. The proposed regulation requires agencies

to assess the performance of career appointees before the end of the

probationary period and make an official determination that the

appointee is performing at the level of excellence expected of a senior

executive.

Training and Development.

By law (5 U.S.C. 3393(c)(2)), OPM prescribes criteria for

establishing executive qualifications for career appointment, but these

criteria must provide for consideration of demonstrated executive

experience, successful participation in an OPM-approved candidate

development program, and possession of special or unique qualities that

indicate a likelihood of executive success. In support of candidates

with special or unique qualities, OPM requires a detailed development

plan for obtaining the full complement of executive qualifications.

Stakeholders indicated that stronger oversight is needed in cases where

the QRB certifies candidates on the basis of special and unique

qualifications to verify that the executive development activities

promised by the agency are accomplished. The proposed regulation

requires agencies to address the executive development activities

outlined in the development plans during the appointee's probationary

period.

Pool of Limited Appointment Authorities

Under 5 CFR 317.601, agencies currently have been provided a pool

of limited appointment authorities equal to 2 percent of their total

SES space allocation that they may use without prior OPM approval. Use

of these pool authorities is restricted to appointments of individuals

with career or career-type appointments outside the SES. Agencies have

found this flexibility very helpful. Many have made full use of the

delegated pool of authorities and have expressed a need for increased

authorities. The proposed regulation increases the delegated pool of

limited authorities from 2 percent to 3 percent.

In exercising these authorities, agencies must continue to comply

with all other statutory and regulatory provisions affecting limited

appointments, e.g., that an appointment be made only to a general

position; that the appointee must meet the qualifications required for

the position; and that the appointment is to a non-continuing, project-

type position. OPM will continue to monitor use of this appointment to

ensure compliance with the statutory 5 percent limit on SES limited

appointments Governmentwide and that appointments are being made in

accordance with statutory and regulatory provisions.

Regulatory Flexibility Act

I certify that these regulations will not have a significant

economic impact on a substantial number of small entities because the

regulations pertain only to Federal employees and agencies.

List of Subjects in 5 CFR Part 317

Government employees.

Office of Personnel Management.

Janice R. Lachance,

Director.

Accordingly, OPM proposes to amend 5 CFR part 317 as follows:

PART 317--EMPLOYMENT IN THE SENIOR EXECUTIVE SERVICE

1. The authority citation for part 317 continues to read as

follows:

Authority: 5 U.S.C. 3392, 3393, 3393a, 3395, 3397, 3593 and

3596.

[[Page 41336]]

Subpart E--Career Appointments

2. Amend Sec. 317.501 by revising the first sentence of paragraph

(c)(2) and paragraph (c)(6), to read as follows:

Sec. 317.501 Recruitment and selection for initial SES career

appointment.

* * * * *

(c) * * *

(2) Provide that the ERB consider the executive and technical

qualifications of each candidate, other than those found ineligible

because they do not meet the requirements of the vacancy announcement.

* * *

* * * * *

(6) Provide that the appointing authority select from among the

candidates identified as best qualified by the ERB and certify the

candidate's executive and technical qualifications.

* * * * *

3. Section 317.502 is revised to read as follows:

Sec. 317.502 Qualifications Review Board certification.

(a) This section covers Qualifications Review Boards convened by:

(1) The Office of Personnel Management (OPM); or

(2) An agency, under a written delegation agreement with OPM.

(b) General Provisions:

(1) A Qualifications Review Board (QRB) must certify the executive/

managerial qualifications of a candidate before initial career

appointment may be made to an SES position. More than one-half of the

members of a QRB must be SES career appointees.

(2) Requests for certification of a candidate by a QRB must contain

such information as prescribed by OPM, including evidence that merit

staffing procedures were followed and that the appointing authority

certified the candidate's executive and technical qualifications for

the position.

(3) Qualifications Review Board certification of executive

qualifications must be based on demonstrated executive experience;

successful completion of an OPM-approved candidate development program;

or possession of special or unique qualities that indicate a likelihood

of executive success. Any existing time limit on a previously approved

certification is removed.

(4) OPM may determine the disposition of requests for QRB

certification if the QRB has not yet acted when:

(i) The agency head leaves office or announces an intention to

leave office;

(ii) The President has nominated a new agency head; or

(iii) There is a Presidential transition.

(5) An action to convert a ``noncareer-type'' employee to a career

SES appointment in the employee's current position or a successor to

that position will not be forwarded to a QRB. A ``noncareer-type''

employee includes a noncareer SES appointee, a Schedule C appointee, or

equivalent.

(6) A new QRB certification is required for an individual to be

reappointed as an SES career appointee following separation of the

individual from an SES career appointment if:

(i) The individaul was removed during the SES probationary period

for performance or disciplinary reasons; or

(ii) The individual completed an SES probationary period, or did

not have to serve one, and was removed for a reason that made the

individual ineligible for reinstatement to the SES under subpart G of

this part.

(c) Agencies may request the authority to convene Qualifications

Review Boards. OPM may delegate such authority via written delegation

agreement on an individual agency-by-agency basis. The delegation

agreement will:

(1) Delegate the authority to the head of the agency;

(2) Provide for QRB operations that result in certification of

candidates on the basis of executive qualifications and in the

preservation of merit principles.

(3) Address the composition of the Boards to ensure an independent

peer review.

(4) Prescribe documentation, reporting, and record retention

requirements.

(5) Provide for OPM oversight.

4. Amend Sec. 317.503 by revising paragraph (a); redesignating

paragraphs (b) through (f) as paragraphs (c) through (g), respectively;

adding a new paragraph (b); and revising the last sentence in newly

redesignated paragraph (f) to read as follows:

Sec. 317.503 Probationary period.

(a) An individual's initial appointment as an SES career appointee

becomes final only after the individual has served a 1-year

probationary period as a career appointee; there has been an assessment

of the appointee's performance during the probationary period; and the

appointing authority has certified that the appointee performed at the

level of excellence expected of a senior executive during the

probationary period.

(b) When a career appointee's executive qualifications have been

certified by a Qualifications Review Board on the basis of special or

unique qualities, as described in Sec. 317.502(b)(3), the probationary

assessment must address any executive development activities the agency

identified in support of the request for QRB certification.

* * * * *

(f) * * * The individual, however, need not be recertified by a QRB

unless the individual was removed for performance or disciplinary

reasons.

* * * * *

5. In subpart F, the heading for the subpart is revised to read as

follows:

Subpart F--Noncareer and Limited Appointments

6. Amend Sec. 317.601, paragraph (c)(1), by revising the first

sentence to read as follows:

Sec. 317.601 Authorization.

* * * * *

(c) * * *

(1) Agencies are provided a pool of limited appointment authorities

equal to 3 percent of their Senior Executive Service (SES) position

allocation, or one authority, whichever is greater. * * *

[FR Doc. 99-19487 Filed 7-29-99; 8:45 am]

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