PROVISIONS RELATING TO THE NATIONAL SECURITY PERSONNEL SYSTEM.

SEC. 1113. PROVISIONS RELATING TO THE NATIONAL SECURITY PERSONNEL SYSTEM.(a) Definitions.—For purposes of this section—(1) the term “National Security Personnel System” or “NSPS” refers to a human resources management system established under authority of section 9902 of title 5, United States Code (as in effect before the date of the enactment of this Act); and(2) the term “statutory pay system” means a pay system under—(A) subchapter III of chapter 53 of title 5, United States Code (relating to General Schedule pay rates); or(B) such other provisions of law as would apply if section 9902 of title 5, United States Code, had never been enacted.(b) Repeal of Provisions Relating to NSPS.—(1) In general.—Section 9902 of title 5, United States Code, is amended—(A) by striking subsections (a), (b), (c), (d), (e), (i) and (j); and(B) by redesignating subsections (f) through (h) as subsections (e) through (g), respectively.(2) Expansion prohibited.—The National Security Personnel System may not be extended to any organizational or functional unit of the Department of Defense (or any component thereof) not included in such System as of March 1, 2009.(3) Current rules invalid.—Any regulations in effect as of the day before the date of the enactment of this Act which were issued pursuant to any provision of law repealed by paragraph (1)(A)—(A) may not be modified on or after the date of the enactment of this Act, except as necessary to implement this Act; and(B) shall cease to be effective as of January 1, 2012.(c) Termination of NSPS and Conversion of Employees and Positions.—(1) In general.—The Secretary of Defense shall take all actions which may be necessary to provide, beginning no later than 6 months after the date of enactment of this Act, for the orderly termination of the National Security Personnel System and conversion of all employees and positions from such System, by not later than January 1, 2012, to—(A) the statutory pay system and all other aspects of the personnel system that last applied to such employee or position (as the case may be) before the National Security Personnel System applied; or(B) if subparagraph (A) does not apply, the statutory pay system and all other aspects of the personnel system that would have applied if the National Security Personnel System had never been established.No employee shall suffer any loss of or decrease in pay because of the preceding sentence, and, for purposes of carrying out such preceding sentence, any determination of the system that 123 STAT. 2499 last applied (or that would have applied) with respect to an employee or position shall take into account any modifications to such system pursuant to the provisions of subsections (a) and (b) of section 9902 of title 5, United States Code, as amended by subsection (d).(2) Transition period appointments.—To the extent practicable, any individual who, during the NSPS transition period, is appointed to any position within the Department of Defense which is subject to the NSPS shall be subject to the statutory pay system and all other aspects of the personnel system to which such individual or position is to be converted in accordance with the requirements of paragraph (1).(3) Temporary continuation of nsps.—Notwithstanding any other provision of this section, the National Security Personnel System, as in effect on the day before the date of the enactment of this Act, shall continue to apply with respect to any employees and positions remaining subject to the NSPS, in accordance with paragraph (1), during the NSPS transition period.(4) Restoration of full annual pay adjustments under nsps pending its termination.—Notwithstanding subsection (b)(1)(A), section 9902(e)(7) of title 5, United States Code, to the extent that it remains in force under paragraph (3), shall be applied by substituting “100 percent” for “no less than 60 percent”.(5) NSPS transition period defined.—For purposes of this subsection, the term “NSPS transition period” means the period beginning on the date of the enactment of this Act and ending on January 1, 2012.(d) Authority Relating to Performance Management and Workforce Incentives, Hiring Flexibilities, and Training of Supervisors.—Section 9902 of title 5, United States Code, as amended by subsection (b)(1), is further amended by inserting before subsection (e) (as so redesignated by subsection (b)(1)(B)) the following:“(a) Performance Management and Workforce Incentives.—(1) The Secretary, in coordination with the Director, shall promulgate regulations providing for the following:“(A) A fair, credible, and transparent performance appraisal system for employees.“(B) A fair, credible, and transparent system for linking employee bonuses and other performance-based actions to performance appraisals of employees.“(C) A process for ensuring ongoing performance feedback and dialogue among supervisors, managers, and employees throughout the appraisal period and setting timetables for review.“(D) Development of ‘performance assistance plans’ that are designed to give employees formal training, on-the-job training, counseling, mentoring, and other assistance.“(2) In developing the regulations required by this subsection, the Secretary, in coordination with the Director, may waive the requirements of chapters 43 (other than sections 4302 and 4303(e)) and the regulations implementing such chapters, to the extent necessary to achieve the objectives of this subsection.123 STAT. 2500“(3)(A) The Secretary may establish a fund, to be known as the ‘Department of Defense Civilian Workforce Incentive Fund’ (in this paragraph referred to as the ‘Fund’).“(B) The Fund shall consist of the following:“(i) Amounts appropriated to the Fund.“(ii) Amounts available for compensation of employees that are transferred to the Fund.“(C) Amounts in the Fund shall be available for the following:“(i) Incentive payments for employees based on team or individual performance (which payments shall be in addition to basic pay).“(ii) Incentive payments to attract or retain employees with particular or superior qualifications or abilities.“(D) The authority provided in this paragraph is in addition to, and does not supersede or replace, any authority or source of funding otherwise available to the Secretary to pay bonuses or make incentive payments to civilian employees of the Department.“(4)(A) Any action taken by the Secretary under this subsection, or to implement this subsection, shall be subject to the requirements of subsection (c) and chapter 71.“(B) Any rules or regulations promulgated pursuant to this subsection shall be deemed an agency rule or regulation under section 7117(a)(2), and shall not be deemed a Government-wide rule or regulation under section 7117(a)(1).“(b) Flexibilities Relating to Appointments.—(1) The Secretary, in coordination with the Director, shall promulgate regulations to redesign the procedures which are applied by the Department of Defense in making appointments to positions within the competitive service in order to—“(A) better meet mission needs;“(B) respond to managers’ needs and the needs of applicants;“(C) produce high-quality applicants;“(D) support timely decisions;“(E) uphold appointments based on merit system principles; and“(F) promote competitive job offers.“(2) In redesigning the process by which such appointments shall be made, the Secretary, in coordination with the Director, may waive the requirements of chapter 33, and the regulations implementing such chapter, to the extent necessary to achieve the objectives of this section, while providing for the following:“(A) Fair, credible, and transparent methods of establishing qualification requirements for, recruitment for, and appointments to positions.“(B) Fair and open competition and equitable treatment in the consideration and selection of individuals to positions.“(C) Fair, credible, and transparent methods of assigning, reassigning, detailing, transferring, or promoting employees.“(3) In implementing this subsection, the Secretary shall comply with the provisions of section 2302(b)(11), regarding veterans’ preference requirements, in a manner consistent with that in which such provisions are applied under chapter 33.“(4)(A) Any action taken by the Secretary under this subsection, or to implement this subsection, shall be subject to the requirements of subsection (c) and chapter 71.123 STAT. 2501“(B) Any rules or regulations promulgated pursuant to this section shall be deemed an agency rule or regulation under section 7117(a)(2), and shall not be deemed a Government-wide rule or regulation under section 7117(a)(1).“(c) Criteria for Use of New Personnel Authorities.—In establishing any new performance management and workforce incentive system under subsection (a) or utilizing appointment flexibilities under subsection (b), the Secretary shall—“(1) adhere to merit principles set forth in section 2301;“(2) include a means for ensuring employee involvement (for bargaining unit employees, through their exclusive representatives) in the design and implementation of such system;“(3) provide for adequate training and retraining for supervisors, managers, and employees in the implementation and operation of such system;“(4) develop—“(A) a comprehensive management succession program to provide training to employees to develop managers for the agency; and“(B) a program to provide training to supervisors on actions, options, and strategies a supervisor may use in administering such system;“(5) include effective transparency and accountability measures and safeguards to ensure that the management of such system is fair, credible, and equitable, including appropriate independent reasonableness reviews, internal assessments, and employee surveys;“(6) utilize the annual strategic workforce plan, required by section 115b of title 10; and“(7) ensure that adequate agency resources are allocated for the design, implementation, and administration of such system.“(d) Development of Training Program for Supervisors.—(1) The Secretary shall develop—“(A) a program to provide training to supervisors on use of the new authorities provided in this section, including the actions, options, and strategies a supervisor may use in—“(i) developing and discussing relevant goals and objectives with the employee, communicating and discussing progress relative to performance goals and objectives, and conducting performance appraisals;“(ii) mentoring and motivating employees, and improving employee performance and productivity;“(iii) fostering a work environment characterized by fairness, respect, equal opportunity, and attention to the quality of the work of employees;“(iv) effectively managing employees with unacceptable performance;“(v) addressing reports of a hostile work environment, reprisal, or harassment of or by another supervisor or employee; and“(vi) otherwise carrying out the duties and responsibilities of a supervisor;“(B) a program to provide training to supervisors on the prohibited personnel practices under section 2302 (particularly with respect to such practices described under subsections (b)(1) and (b)(8) of such section), employee collective bargaining and 123 STAT. 2502 union participation rights, and the procedures and processes used to enforce employee rights; and“(C) a program under which experienced supervisors mentor new supervisors by—“(i) sharing knowledge and advice in areas such as communication, critical thinking, responsibility, flexibility, motivating employees, teamwork, leadership, and professional development; and“(ii) pointing out strengths and areas for development.“(2) Each supervisor shall be required to complete a program at least once every 3 years.”.(e) Reports.—The Secretary of Defense shall provide a report to the covered committees (as defined by subsection (g)(6))—(1) no later than 6 months after the date of enactment of this Act, on the initial steps being taken to reclassify positions from the NSPS and the initial conversion plan to begin converting employees from the NSPS, which information shall be supplemented by reports describing the progress of the conversion process which shall be submitted to the same committees on a semiannual basis;(2) no later than 12 months after date of enactment, a plan for the personnel management system as authorized by section 9902(a) of title 5, United States Code, as amended by this section, which plan shall not take effect until 90 days after the submission of the plan to Congress; and(3) no later than 12 months after date of enactment, a plan for the appointment procedures as authorized by section 9902(b) of title 5, United States Code, as amended by this section.(f) Clerical Amendments.—(1) The heading of section 9902 of title 5, United States Code, is amended to read as follows:“§ 9902. Department of Defense personnel authorities” .(2) The table of sections at the beginning of chapter 99 of such title is amended by striking the item relating to section 9902 and inserting the following: “9902. Department of Defense personnel authorities.”. (g) Other Personnel Flexibilities.—(1) In general.—If the Secretary of Defense determines that it would be in the best interest of the Department of Defense to implement personnel flexibilities in addition to those authorized under section 9902 of title 5, as amended by this section, the Secretary, in coordination with the Director of the Office of Personnel Management, may develop and submit to the covered committees, not later than 6 months after the date of the enactment of this Act, a proposal to implement—(A) additional personnel flexibilities and associated statutory waivers with respect to the application of the General Schedule (as defined in section 5332 of title 5, United States Code); or(B) additional personnel flexibilities and associated statutory waivers, which would require exemption from the application of the General Schedule (as so defined).(2) Rationale.—If the Secretary’s proposal is to implement authorities described in paragraph (1)(B), the Secretary shall 123 STAT. 2503 provide a detailed rationale as to why implementation of authorities described in paragraph (1)(A) are not adequate or appropriate to meet the interests of the Department.(3) Requirements.—The Secretary’s proposal (whether as described in paragraph (1)(A) or (1)(B))—(A) shall be developed in a manner consistent with the requirements of subsections (c) and (d) of section 9902 of title 5, United States Code, as amended by this section;(B) shall include a description of proposed regulations and implementing rules that the Secretary plans to adopt for the proposed system;(C) shall identify and provide a rationale for any statutory waiver that would be required to implement the proposed system;(D) shall describe the steps that the Department would take to avoid problems of the type described in the report of the Defense Business Board, dated August 2009, regarding the National Security Personnel System; and(E) may not provide for the waiver of any provision of law that cannot be waived under paragraph (3) of section 9902(b) of title 5, United States Code (as in effect on the day before the date of the enactment of this Act), and shall be subject to the requirements in paragraphs (4) and (5) of such section (as then in effect).(4) Congressional approval required.—If Congress approves the Secretary’s proposal in the National Defense Authorization Act for Fiscal Year 2011, the Secretary may implement the proposal (subject to any changes required by law) and begin the implementation of such proposal for personnel included in the National Security Personnel System, in lieu of the transition that would otherwise be required by subsection (b), subject to paragraph (5).(5) Restrictions.—Notwithstanding any approval under paragraph (4), the provisions of subsection (b)(2) and (c)(4) shall apply with respect to any proposal approved under such paragraph, unless and until modified or repealed in legislation enacted after the date of the enactment of this Act.(6) Definitions.—For purposes of this subsection, the term “covered committees” means—(A) the Committees on Armed Services of the Senate and the House of Representatives;(B) the Committee on Homeland Security and Governmental Affairs of the Senate; and(C) the Committee on Oversight and Government Reform of the House of Representatives.(h) Modification of Implementation Authorities and Limitations.—Section 1106 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 349) is amended—(1) by striking subsection (b);(2) by redesignating subsection (c) as subsection (b); and(3) in subsection (b) (as so redesignated by paragraph (2))—(A) by striking paragraph (1) and inserting the following:“(1) The Comptroller General shall conduct a review, in each of calendar years 2010, 2011, and 2012, of—123 STAT. 2504 “(A) employee satisfaction with any processes established pursuant to regulations promulgated by the Secretary of Defense pursuant to section 9902 of title 5, United States Code (as amended by section 1113 of the National Defense Authorization Act for Fiscal Year 2011; and“(B) the extent to which any processes so established are fair, credible, and transparent, as required by such section 9902 (as so amended).”; and(B) in paragraph (2), by striking “the National Security Personnel System” and inserting “any processes established pursuant to such regulations”.