Nasa: Balancing a Multisector Workforce to Achieve a Healthy Organization

A Report by a Panel of the

NATIONAL ACADEMY OF PUBLIC ADMINISTRATION

For the National Aeronautics and Space Administration and the Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies

February 2007

NASA: BALANCING A MULTISECTOR WORKFORCE TO ACHIEVE A HEALTHY ORGANIZATION

Panel

Sallyanne Harper,* Chair Benita A. Cooper Harold B. Finger* Harriett G. Jenkins* Bernard D. Rostker* John G. Stewart*

* Academy Fellow

Officers of the Academy

Valerie A. Lemmie, Chair of the Board G. Edward DeSeve, Vice Chair Howard M. Messner, President Franklin S. Reeder, Secretary Howard M. Messner, Treasurer

Project Staff

J. William Gadsby, Vice President for Academy Studies Alethea Long-Green, Program Area Director Laurie J. May, Project Director Joseph P. Mitchell, III, Senior Research Analyst Sherrie Russ, Senior Project Advisor Julia Mensah, Research Associate Martha S. Ditmeyer, Senior Administrative Specialist

The views expressed in this report are those of the Panel. They do not necessarily reflect the views of the Academy as an institution.

National Academy of Public Administration 1100 New York Avenue, N.W. Suite 1090 East Washington, D.C. 20005 www.napawash.org

Printed in the United States of America ISBN 1-57744-141-9

Academy Project Number: 2035

FOREWORD

As the first and only organization in the world to land a man on the Moon, NASA has one of the most complex and exciting missions in the federal government. By managing the Shuttle Program and International Space Station, sending robotic missions to every planet in our solar system, and conducting cutting edge research in aeronautics, space science, and earth science, NASA expands our knowledge of the universe and applies these insights in ways that improve our daily lives. With the Vision for Space Exploration, the President and Congress have asked NASA to expand our presence in the solar system. Among other things, this will involve establishing a permanent human outpost on the Moon as a base for ultimately going to Mars and beyond.

To assist NASA in this significant expansion of its mission, Congress and the agency asked the Academy to conduct an independent review of workforce issues associated with a transformation of this magnitude. This included developing a framework and metrics to help the agency assess and maintain organizational health as well as policies, procedures, and criteria for improving use of its workforce. Over the course of this study, an Academy Panel also considered management tools and flexibilities that NASA needs to safely accomplish its mission. Although optimistic about the future, the Panel concludes that NASA must continue to find ways to balance its multisector workforce and restructure its existing civil service component to meet its ambitious exploration agenda and timeline.

As someone who began his federal career at NASA, this report has special meaning to me. I am pleased the Academy had the opportunity to undertake this study. I want to thank the Academy Fellows and other experts on the Panel for their outstanding guidance and insights. I also thank NASA executives, staff, and other stakeholders throughout the country for their time and cooperation. Finally, I extend my appreciation to the study team for its hard work and diligence in helping to produce such an important report.

Howard M. Messner President

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TABLE OF CONTENTS

FOREWORD...... iii

ACRONYMS...... xi

PANEL MESSAGE ...... xv

CHAPTER I: INTRODUCTION ...... 1

NASA’s Mission...... 1 The Vision for Space Exploration...... 2

NASA Organizational Structure ...... 3 NASA’s Multisector Workforce...... 5 NASA’s Civil Service Workforce by Occupation...... 7

NASA Budgetary Challenges ...... 7 Financial Management Issues...... 8

NASA Workforce Challenges...... 9 Human Capital Landscape ...... 9 Workforce Challenges ...... 10 Uncovered Capacity...... 10 Skill Mismatches...... 12

NASA Legacy Challenges ...... 14 Hiring Freezes...... 14 Demographic and Staffing Impacts ...... 15

NASA Stakeholders...... 19

Report Methodology ...... 19

Road Map to the Report...... 19

CHAPTER II: PLANNING AND DECISION-MAKING ...... 21

NASA’S Evolving Mission...... 22 Constellation Program ...... 23

Organizational Support for Strategic Goals...... 24 Office of Program Analysis and Evaluation ...... 24

Office of Human Capital Management...... 26

NASA Workforce Planning Processes...... 27

Implementing NASA’S Strategic Plans and Goals...... 29 Shuttle Transition Planning...... 30

Useful Methodologies as NASA Transitions to the Vision for Space Exploration...... 34 Scenario Planning ...... 34 RAND Model for Projecting Core Workforce...... 35 Collaboration with other countries or multinational entities ...... 37

Conclusions...... 38

Recommendations...... 38

CHAPTER III: TEN HEALTHY CENTERS...... 41

The Ten Healthy Center Concept ...... 42

Best Places to Work: An Indicator of Center Health ...... 43

Insights from Field Visits...... 46 Assessing the Ten Healthy Centers Initiative ...... 54 Potential to Adjust the Structure to Achieve the Vision...... 55

Conclusions...... 56

Recommendations...... 57

CHAPTER IV: ACQUISITION: A KEY SUPPORT CAPABILITY ...... 67

Contracting Overview...... 68 NASA Functions Contracted Out ...... 70 Four Categories of NASA Contractors...... 71 Union Views on NASA’s Use of Contractors ...... 72

NASA’S Acquisition Organization and Planning...... 72 Integration Efforts to Date ...... 72

NASA Acquisition Challenges ...... 75 NASA Inspector General’s Assessment of Agency Contracting...... 76 Rules and Regulations in a Multisector Workforce Setting...... 77 Field Visit Insights into Contractor Usage...... 78

OMB Advisory Panel Insights on Use of Contractors...... 79 Acquisition Workforce Challenges...... 81 COTRs: A Critical Link in an R&D Agency...... 82

NASA Responses to Acquisition Challenges ...... 83 Effective Practices within the NASA Acquisition Community...... 83

Assessing NASA’S Readiness for Flexible and Scalable Contracting...... 86 Tools for Assessing Contacting Readiness...... 86

Conclusions...... 87

Recommendations...... 88

CHAPTER V. HUMAN CAPITAL AS A FULL PARTICIPANT ...... 97

Federal Human Capital Issues and Perspectives...... 98 Strategic Human Capital Model...... 98 Leadership and Succession Planning Challenges ...... 101

NASA’s Human Capital Organizational Structure...... 102

NASA Workforce Objectives and Human Capital Initiatives ...... 104 Additional Human Capital Flexibilities...... 105 NASA Workforce Strategy ...... 107

Need for Multisector Workforce Planning and Strategy Development...... 111 Shuttle Transition Planning...... 112 Competency Management System...... 115 Human Capital Information Environment ...... 119 Additional Emphasis on Career Development and Performance Management...... 119

Conclusions...... 120

Recommendations...... 121

CHAPTER VI: BALANCING THE WORKFORCE ...... 125

Making the Decision: Civil Servant or Contractor ...... 126 The Link Between Human Capital and Acquisition...... 126 The Decision as Part of the Acquisition Continuum ...... 127 The Civil Service and its Inherently Governmental Functions...... 127 Strategically Examining the Mix ...... 129

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Civil Servant-Contractor Decision Guide...... 130

Conclusions...... 137

Recommendations...... 138

Civil Service Options: Permanent/Term...... 139 Strategic Use of Term Hires ...... 139 Defining Term Employment...... 140 Ending Term Employment...... 140 How Federal Agencies Use Term Employment ...... 141 NASA’s Approach to Term Hires...... 143 Preference for Hiring Permanently ...... 144 Historical Usage of Non-Permanent Appointees...... 144 Field Visit Insights into Center Variability...... 146 Occupational Trends in Term Employment...... 147 Patterns and Practices in Term Recruitment and Hiring...... 148 Conversion from Term to Permanent Employment...... 149 Labor’s View of Term Employment...... 150

Permanent-Term Decision Guide ...... 151

Conclusions...... 160

Recommendations...... 161

CHAPTER VII: MANAGING THE 21ST CENTURY WORKFORCE ...... 163

The Need for a Workforce Transformation ...... 164

Work Measurement for Data-Driven Planning...... 166 GPRA and the Program Assessment Review Tool...... 166 Work Measurement at NASA...... 167

Need to Increase Interagency and Intergovernmental Partnerships...... 169 Strategic Partnerships with Other Federal Agencies ...... 169 Strategic Outplacement of Unfunded NASA Functions...... 170

Need to Use Existing Statutory Authorizations for Recruitment and Workforce Management ...... 172

Innovative Recruitment Programs ...... 172

Detailed Personnel ...... 173

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Experts and Consultants...... 175 Guest Researcher Programs ...... 176

Additional Statutory and Regulatory Flexibilities Would Improve NASA’S Ability to Manage its Workforce ...... 176 RIF Policies and Procedures ...... 177 Buyout Reform...... 180 Reemployed Annuitants...... 181 Career Life Cycle Modifications ...... 181

Conclusions...... 183

Recommendations...... 184

APPENDICES

Appendix A: Panel and Staff Listing ...... 189 Appendix B: Individuals and Organizations Interviewed or Contacted ...... 193 Appendix C: Federal Lessons Learned...... 201 Appendix D: Decision Guide Methodology and Utilization ...... 221

FIGURES AND TABLES

Figure 1-1. NASA Organizational Structure ...... 4 Figure 1-2. NASA Workforce Functional Breakdown (as of FY 2006) ...... 7 Figure 1-3. Number of Outside Hires, 1993-2006 ...... 15 Figure 1-4. Average Age of Permanent Full-Time Employees ...... 16 Figure 2-1. Office of Program Analysis and Evaluation: Organizational Structure and Responsibilities ...... 25 Figure 2-2. Historic Shuttle Launches ...... 31 Figure 2-3. Headquarters Shuttle Transition Working Group ...... 32 Figure 6-1. Total NASA Permanent Hires, Temporary Hires, and Conversions to Permanent Status for Fiscal Years 1993-2006 ...... 145 Figure 6-2. Total NASA Permanent Hires, Conversions to Permanent, and Term Appointments, Fiscal Years 2004-FY 2006...... 146

Table 1-1. NASA Workforce Breakdown by Center, FY 2005 ...... 6 Table 1-2. A Comparison of NASA Occupational Age Distribution for Three Critical Junctures, FY 1994 vs. FY 2007 (Age Group 20-29) ……………………………………………………...17 Table 3-1. Rankings on Leadership and Strategic Issues, Best Places to Work in the Federal Government ...... 44 Table 3-2. Rankings on Human Capital Issues, Best Places to Work in the Federal Government ...... 45

Table 3-3. Overview of NASA Field Centers ...... 47 Table 3-4. Healthy Center Framework and Metrics ...... 60 Table 4-1. The Government Accountability Office’s Evaluation Framework ...... 86 Table 4-2. Contracting Readiness Checklist ...... 91 Table 5-1. Human Capital Management: Perspectives and Roles ...... 99 Table 5-2. Human Capital Decisions: Data-Driven and Tailored? ...... 100 Table 5-3. Use of Authorities in the NASA Flexibility Act of 2004 ...... 107 Table 6-1. Categories and Definition (Civil Service/Contractor) ...... 131 Table 6-2. NASA Civil Servant-Contractor Decision Making Guide ...... 132 Table 6-3. Term Appointments and New Hires by Agency for Fiscal Year 2005 ...... 142 Table 6-4. Categories and Definitions (Permanent/Term Hiring) ...... 152 Table 6-5. NASA Permanent-Term Hiring Decision Making Guide ...... 154 Table 7-1. NASA’s Use of Detail Assignments ...... 174 Table 7-2. Use of Existing Flexibilities to Meet Strategic Needs ...... 184 Table 7-3. Additional Statutory and Regulatory Flexibilities ...... 185

ACRONYMS

Academy National Academy of Public Administration AFGE American Federation of Government Employees ARC Ames Research Center ASAP Aerospace Safety Advisory Panel ASM Acquisition Strategy Meeting ASP Acquisition Strategic Planning BRAC Base Realignment and Closure CAIB Columbia Accident Investigation Board CalTech California Institute of Technology CaLV Cargo Launch Vehicle CBO Congressional Budget Office CCA Clinger-Cohen Act CEV Crew Exploration Vehicle CLV Crew Launch Vehicle CMS Competency Management System CO Contracting Officer COTR Contracting Officer Technical Representative CR Continuing Resolution CSRS Civil Service Retirement System DHS Department of Homeland Security DoD Department of Defense DOJ Department of Justice DOL Department of Labor DFRC Dryden Flight Research Center EEO Equal Employment Opportunity EPA Environmental Protection Agency ESMD Exploration Systems Mission Directorate FAIR Federal Activities Inventory Reform Act FAR Federal Acquisition Regulation FCA Full Cost Accounting FERS Federal Employees Retirement System FTE Full Time Equivalent FY Fiscal Year G & A General and Administrative GAO Government Accountability Office GRC Glenn Research Center GS General Schedule GSFC Goddard Space Flight Center HC Human Capital HCIE Human Capital Information Environment HR Human Resources HUD Department of Housing and Urban Development IG Inspector General

IEMP Integrated Enterprise Management Program IIE Institute of Industrial Engineers IPA Intergovernmental Personnel Act IPT Integrated Product Team IFPTE International Federation of Professional and Technical Engineers ISS International Space Station JPL Jet Propulsion Laboratory JSC Johnson Space Center KSC Kennedy Space Center LaRC Langley Research Center LEO Low Earth Orbit MEO Most Efficient Organization MESA Marshall Engineers and Scientists Association MSFC Marshall Space Flight Center MSIP Mission Support Implementation Plan MSPB Merit Systems Protection Board NACA National Advisory Committee for Aeronautics NAS National Academy of Science NAPA National Academy of Public Administration NASA National Aeronautics and Space Administration NEX NASA Excepted (Authority) NIST National Institute of Standards and Technology NOMET NASA Organizational Model Evaluation Team NPD NASA Policy Directive NPR NASA Procedural Requirements NSF National Science Foundation NSPS National Security Personnel System NSSC NASA Shared Services Center OCC Office of the Comptroller of the Currency OFPP Office of Federal Procurement Policy OHCM Office of Human Capital Management OMB Office of Management and Budget OPM Office of Personnel Management PA&E Office of Program Analysis and Evaluation PART Program Assessment Rating Tool PMA President’s Management Agenda PR Purchase Requests PSM Procurement Strategy Meeting PPBE Planning, Programming, Budgeting, and Execution PWC PricewaterhouseCoopers R & D Research and Development RIF Reduction-in-Force S & E Scientists and Engineers SEC Securities and Exchange Commission SES Senior Executive Service SBIR Small Business Innovation Research

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SIRMA Shuttle Integrated Risk Management Application SRMP Shuttle Risk Management Process SSC Stennis Space Center SSP Space Shuttle Program STEM Science, Technology, Engineering, and Mathematics UARC University Affiliated Research Center UKMOD United Kingdom Ministry of Defense USPTO United States Patent and Trademark Office WIMS Workforce Integrated Management System

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PANEL MESSAGE

The National Aeronautics and Space Administration (NASA) is experiencing a fundamental mission shift. Initially established in 1958 as a response to the Sputnik challenge, the agency’s mission has long included space exploration, aeronautics research, and other scientific pursuits. Under the newly established Vision for Space Exploration (Vision), NASA has an ambitious agenda to expand its role in exploration not only to establish a permanent lunar outpost on the Moon, but also to go to Mars and beyond. The Vision, along with the agency’s planned phase- out of the Shuttle Program and reductions in various aeronautics and scientific programs, will require significant workforce and programmatic changes. Because NASA’s organizational structure and workforce grew up around its previous mission, the agency is experiencing an inevitable tension between the need to make significant changes to adjust to the new direction while also protecting its current workforce. NASA is constrained by its budget, Title 5’s civil service rules and requirements, and a Congressional ban on reduction-in-force. In order to respond to changing mission objectives, program redirection, and budget imperatives, NASA recognized that it must develop a flexible, scalable workforce. The Administrator has emphasized the need for a strong, technically competent civil service to provide oversight and smart buyer capability. The Panel believes it is critical for the agency to develop processes that ensure it has the right people, with the right skills, at the right time, in the right place.

In March 2006, the Senate Appropriations Subcommittee and NASA asked the Academy to provide the agency with its recommendations as to how NASA might approach these challenges. In particular, they asked the Panel to focus on the challenges of transitioning from the Shuttle Program to the Vision and acquiring the right balance within its multisector workforce of approximately 18,000 civil servants and 40,000 contractors. Over the course of this project, the Panel and study team have conducted over a hundred interviews at headquarters and eight of the ten centers, as well as with important stakeholders, including union representatives and contractor organizations. These interviews have helped the Panel identify emerging practices and develop tools for improving NASA decision-making, as well as workforce and acquisition planning

The Panel believes that, if NASA is to achieve a flexible, scalable workforce, it must establish, align, and achieve a high-level of integration in its acquisition and workforce planning processes. The component supporting offices—the Office of Human Capital Management and the Office of Procurement—need to work creatively to surmount the planning challenges presented by a multisector workforce in a rapidly evolving environment. NASA must go beyond the traditional, functional, stove-piped approach by bringing agency leaders and experts together early in the planning cycle to make decisions about the human capital assets and resources needed to accomplish the mission, with a specific focus on the allocation of civil servant and contractor resources. Other federal agencies face similar challenges as they, too, are forced to adapt to the 21st century challenges confronting them. They will benefit from NASA’s leadership and experience. Because the federal workforce is far more than the sum of its civil servants, comprehensive workforce planning must consider all the elements and resources the government leverages to accomplish its tasks. These resources include intergovernmental and interagency partnerships, as well as private and non-profit organizations, and universities.

A major driver behind NASA’s current workforce planning and management is the agency’s desire to have ten healthy centers—each with a critical role in the new exploration program and a fully funded civil service workforce. The research centers will have the most difficulty transitioning to the agency’s new development focus. The Panel understands the constraints facing NASA. In an environment of constrained resources, however, the potential danger of the ten healthy centers approach is that actions intended to help the struggling centers could harm the other centers. Therefore, supporting all ten field installations could come at the expense of NASA as an agency.

The fundamental theme of this report is that NASA─ if it is to ensure its institutional health─ needs to be a knowledge-based, data-driven organization. The Panel believes that NASA should rigorously collect and analyze work and workforce data, share the evaluation of that information in a transparent manner, and make decisions based on these analyses. NASA has historically used this approach for its major mission programs. Now it must apply the same rigor and objective approach to strategic planning for its internal support capabilities, management, and workforce and acquisition decision processes. This approach would help the agency to be proactive in the identification of trends and timely development of appropriate responses. In addition to providing a solid base for its own decision-making, this would generate useful information for stakeholders and may help NASA garner support for budgetary resources and statutory authorizations needed to implement the Vision.

As part of this study, NASA asked the Academy to provide policies, procedures, tools, and effective practices to help it make the following key management decisions:

• How should NASA decide whether to obtain the services/deliverables of a contractor, or hire a civil service employee?

• If NASA decides to hire a civil servant, what kind of appointment should be used (tenured permanent or multi-year term)?

• What is a healthy center? How should NASA measure it?

The Panel developed tools to assist NASA in each of these areas. The report includes a proposed Decision Guide to help the agency focus on the most important work criteria for deciding whether to use civil servants or contractors. If the decision is to hire a civil servant, the Panel proposes work-based criteria for assessing the appropriate type of appointment. Use of these tools will provide the agency with a consistent, quantifiable approach, based on rigorous analysis, and should facilitate management discussions across NASA. These tools should help NASA set acquisition and workforce priorities in a transparent and strategic manner. The Panel believes term employment is an important element in the agency’s human capital change arsenal.

In examining the agency’s overall workforce strategy, the Panel found NASA’s approach to healthy centers to be people-focused, with a primary emphasis on fully funding civil servants. To evaluate center health, the Panel developed a more comprehensive framework that includes twelve critical factors and performance metrics. This framework will help establish a more

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extensive and rational means to balance changing mission requirements, within budget constraints, with the desire to protect the permanent workforce. The Panel recommends that NASA use this framework to conduct an annual evaluation of center health, identify effective practices worth transferring, and, if necessary, pursue other organizational options over the long- term for centers that continue to struggle. While it is valuable to assess the health of individual centers, the Panel believes the ultimate test of this cornerstone of NASA’s Workforce Strategy is whether the pursuit of ten healthy centers will yield a healthy NASA.

The Panel also believes that the agency must use all available flexibilities, including those provided in the 2004 NASA Flexibilities Act. Given its legacy workforce, skill mismatches, and long-term limited ability to hire, the agency is faced with a challenge to accomplish its changing mission with its current workforce. With a stable mission, such balancing would not present insurmountable obstacles. When agencies have significantly evolving missions, however, the government’s rigid, rule-bound civil service system does not facilitate or encourage flexibility in the civil service workforce. Although the nature of an agency’s work requirements changes over time, permanent civil servants with tenure are not forced to adapt. While NASA’s employees are among the most highly educated in the federal workforce and extremely dedicated to the agency’s mission, the Vision’s work requirements have, nonetheless, resulted in working-level skill mismatches that appear to be significant, but have not been quantified. In examining this issue, the Panel found it significant that centers, regardless of their circumstances, expressed concerns about agency skill mismatches.

In looking for ways to help the agency overcome these challenges, the Panel identified new authorities that NASA and Congress should consider. NASA’s Workforce Strategy acknowledges a significant over-supply of existing competencies and significant demand for new competencies. Given the constraints of the current civil service system and voluntary nature of employee decisions regarding their career lifecycle, the agency finds this to be its biggest workforce challenge. The problem is most prevalent among NASA’s scientists and engineers, who comprise 60 percent of the agency’s workforce. In addition to making maximum use of existing authorities for recruitment and retention, as well as intergovernmental and interagency partnerships, the Panel believes that NASA needs a package of new flexibilities. Among these are modified RIF rules, blanket buyout authority with a higher dollar value incentive, and limited statutory authority for emergency retirement reform.

If NASA successfully adopts a more knowledge-based management decision model, the Panel believes that the agency will be in an improved position to work with Congress to obtain the flexibilities required to implement the Vision. Together, Congress and NASA have the opportunity to break new ground by demonstrating the government’s agility in responding to change. Today’s broader, multisector workforce requires the high-level integration of acquisition and human capital planning, which is long overdue for the federal sector. NASA will then be at the forefront of 21st century governance—pointing the way for other federal agencies facing similar challenges.

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CHAPTER I INTRODUCTION

In January 2004, President George W. Bush announced the Vision for Space Exploration (the Vision), which calls for robotic and crewed space missions to the Moon by 2020 and, in ensuing years, to Mars and other destinations.1 This Vision, endorsed by Congress in the National Aeronautics and Space Administration (NASA) Authorization Act of 2005, represents a new era for the nation and for NASA—an era laden with new discoveries and opportunities. Its implementation also represents unprecedented workforce challenges. The success of the Vision will hinge on the agency’s ability to manage its biggest asset: its people. NASA has said that it will need to establish a flexible, scalable workforce, and develop innovative strategic and workforce planning tools to realign its current workforce.

Congress and NASA asked the Academy to answer three main questions, with primary attention to the agency’s transition to the new Vision:2

• What is a healthy center, and how should NASA measure it?

• How should NASA decide whether to obtain services from a contractor or a civil servant?

• If NASA decides to hire a civil servant, what kind of appointment should it use (permanent or term)?

The Panel has examined effective practices in other federal agencies, as well as other legal authorizations and management tools that could help NASA safely accomplish its mission. This study builds on the Panel’s 2005 report.3

NASA’S MISSION

NASA’s mission is “to pioneer the future in space exploration, scientific discovery, and aeronautics research.”4 Congress established the agency in 1958 through the National Aeronautics and Space Act, partly as a response to the Soviet Union’s launch of the world’s first satellite (Sputnik), on October 1957, which many believed posed a threat to American security and technological leadership. The Act required NASA to “provide for research into problems of flight within and outside Earth’s atmosphere and to ensure that the United States conducts activities in space devoted to peaceful purposes for the benefit of mankind.”5 The nucleus of the new agency was the National Advisory Committee for Aeronautics (NACA), created by

1 “President Bush Announces New Vision for Space Exploration Program,” [http://www.whitehouse.gov/news/releases/2004/01/20040114-3.html] 2 The Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies was the Congressional requester of this study. 3 NASA: Human Capital Flexibilities for the 21st Century Workforce. 4 NASA website, [http://www.nasa.gov/about/highlights/what_does_nasa_do.html] 5 2006 NASA Strategic Plan, p. 3.

Congress in 1915 as the government’s research agency for aeronautics. Its facilities and activities were folded into NASA. Even though human and robotic space exploration became NASA’s major focus, aeronautics has remained a significant component of the agency’s work, particularly at the NACA laboratories—Ames, Glenn, and Langley Research Centers—that became three of NASA’s ten centers.

NASA began working on options for human space flight, achieved through the Apollo Program (1961 – 1975) and the Space Shuttle Program (1972 – present).6 NASA continues to conduct cutting-edge aeronautics research on aerodynamics, wind shear, and other important topics using wind tunnels, flight testing, and computer simulations. Furthermore, the agency has launched a number of scientific probes, such as the Pioneer and Voyager spacecraft that have explored the Moon, the planets, and other areas of the solar system. Robotic missions will continue to play a vital role in NASA’s programs and in the Vision. These will include exploration of planetary bodies in the solar system, advanced telescope searches for earth-like planets around other stars, and the study of origins, structure, evolution and destiny of the universe. The Hubble Space Telescope and other space science spacecraft have enabled scientists to make a number of significant astronomical discoveries about the universe.

The Vision for Space Exploration

The primary mission of the Vision is “to advance United States scientific, security and economic interests through a robust space exploration program”7 intended to return humans to the Moon, Mars, and beyond. The Vision will usher in a new era of space exploration, expanding the breadth of science and technology beyond the Moon and Low Earth Orbit (LEO).8 Through 2020, the key elements of the Vision are to:

• Safely return the Space Shuttle to flight

• Complete the International Space Station by 2010

• Retire the Space Shuttle in 2010

• Begin robotic missions to the Moon by 2008 and return people there by 2020

• Continue robotic exploration of Mars and the solar system

• Develop a Crew Exploration Vehicle (CEV)—Orion—and other technologies required to send people beyond LEO.

The Vision marks a fundamental change in NASA’s mission and approach to space exploration. It also shifts the balance of NASA’s programmatic portfolio from operations and research toward

6 NASA announced in 2004 that the Space Shuttle will be retired in 2010 and replaced by the Orion, a new vehicle intended to take humans to the Moon and beyond. 7 “A Renewed Spirit of Discovery,” [http://www.whitehouse.gov/space/renewed_spirit.html] 8 Low Earth Orbit is defined as an orbit within the locus extending from the Earth’s surface up to an altitude of 2,000 km. [Source: www.wikipedia.org ]

design, development, test, and evaluation. Although the agency has ten centers, only four (Johnson Space Center, Kennedy Space Center, Marshall Space Flight Center, and Stennis Space Center) have historically focused on human space flight operations. Three centers (Ames Research Center, Glenn Research Center, and Langley Research Center) have done research in the areas of aeronautics and science. Dryden Flight Research Center has focused on researching, developing, verifying, and transferring aeronautics and space-related technologies. The Jet Propulsion Laboratory (JPL) has conducted end-to-end interplanetary robotic missions, while Goddard Space Flight Center has conducted robotic earth observation missions. With the introduction of the Vision, and the associated budget reductions to research and aeronautics, all NASA centers will have a role in the Constellation Program and CEV development.

The NASA Authorization Act of 2005 required the agency to “develop a human capital strategy to ensure that NASA has a workforce of the appropriate size and with the appropriate skills to carry out the programs of NASA.” When developing the strategy, Congress required NASA to “utilize current personnel, to the maximum extent feasible, in implementing the Vision for Space Exploration and NASA’s other programs.” The Act prohibits the agency from implementing a Reduction-in-Force (RIF) or other involuntary separations, except for cause, before March 16, 2007.9 (See Chapter V for a more detailed discussion of the NASA Workforce Strategy.)

NASA ORGANIZATIONAL STRUCTURE

NASA is comprised of NASA headquarters in Washington, D.C. and ten centers located around the country, as shown in Figure 1-1. JPL, a Federally Funded Research and Development Center (FFRDC)10 operated under a five-year renewable contract with California Institute of Technology (Caltech), is one of the centers and the only FFRDC.

In 2004, NASA streamlined its organizational structure to implement the Vision. The agency collapsed its seven strategic enterprises into four mission directorates responsible for managing mission programs, providing programmatic guidance, and allocating resources to the ten centers. Volume 2 provides details on the functions of NASA’s mission directorates.

Figure 1-1 illustrates NASA’s organizational structure.

9 NASA Authorization Act of 2005, S.1281-8. 10 Federally Funded Research and Development Centers are independent, non-profit entities sponsored and funded by the U. S. government to meet specific long-term technical needs that cannot be met by any other single organization. They bring together the expertise and outlook of government, industry, and academia to solve complex technical problems.

Figure 1-1 NASA Organizational Structure

Through the “Ten Healthy Centers” initiative, Administrator Griffin is encouraging NASA to increase its internal collaboration and partnering to ensure that each center has an active role in exploration programs. The initiative is founded on the premise that for NASA to accomplish its mission, all ten centers have to be fully engaged and productive. This requires that each center has (1) a clear mission, (2) a role in the Constellation Program, and (3) adequate funding and workload to support its workforce. On December 13, 2005, NASA’s Strategic Management Council proposed a set of seven attributes to define healthy centers. (Chapter III provides detailed information on the agency’s definition of healthy center attributes as well as the Panel’s proposed framework and metrics to evaluate center health.)

NASA’s Multisector Workforce

NASA has a multisector workforce of approximately 60,000. Its headquarters and ten centers have long relied upon a mix of civil service, contractor, and other types of loaned workforce members. The term multisector workforce refers to the current agency reality in which a mix of different types of personnel implement federal programs. The term “recognizes that federal, state, and local civil servants (full-time, part-time, temporary or permanent), uniformed personnel, and contractor personnel often work on different elements of program implementation, sometimes in the same workplace, but under substantially different governing laws; different systems for compensation, appointment, discipline, and termination; and different ethical standards.”11 In addition, NASA further leverages its capabilities by awarding grants. For example, in FY 2005, the agency awarded 642 grants, many of them to universities with significant infrastructures/facilities applied to the NASA mission. These teams of professors, researchers, and graduate students are important contributors to NASA’s mission.

To put NASA’s workforce planning challenges in context, Paul Light’s book The True Size of Government noted “the federal government simply does not have a workforce planning system to shift jobs deliberately.”12 While the government has improved its efforts since Light’s book appeared in 1999, few federal agencies have done true multisector workforce planning. D.C. Delegate Eleanor Holmes Norton argued in 1994 that the government did not have the capacity to identify jobs by level or occupation that should “stay or go.” Commenting on Norton’s assessment, Light said, “[t]he reality is that the federal government would rather do anything, including selling its institutional memory, than target specific employees for downsizing.”

Organizations seeking to determine an appropriate mix of workers to achieve higher performance may well require a new model, including:

• New analytic capacity

• A change in how the government views its work force

• Fuller definition of who constitutes an employee

• New data on who works for the federal government and under which employment arrangements

According to Light, a new bridge is needed between those who hire labor through civil service appointments, those who purchase labor through contracts and grants, and those who create labor through mandates.

Table 1-1 depicts the FY 2005 workforce breakdown, at each of NASA’s organizational components, based on the Federal Activities Inventory Reform Act (FAIR Act) estimates. It

11 National Academy of Public Administration. Managing Federal Missions with a Multisector Workforce: Leadership for the 21st Century. November 2005, p. 1. 12 Light, Paul, The True Size of Government, Brookings Institute Press, 1999, Washington, D.C., p.156.

depicts total civil servants (inherently governmental and commercial) contractors, and “other” categories.

Table 1-1 NASA Workforce Breakdown by Center FY 200513

Center Civil Servant Workforce Contractor Other14 Total Inherently Commercial15 Total Governmental Ames 630 745 1,375 1,521 153 3,049 Dryden 277 291 568 520 56 1,144 Glenn 890 985 1,875 1,748 123 3,746 Goddard 1,676 1,740 3,416 5,229 221 8,866 Johnson 2,685 549 3,234 12,282 106 15,622 Kennedy 1,730 395 2,125 10,708 60 12,893 Langley 1,163 946 2,109 1,557 99 3,765 Marshall 2,033 624 2,657 3,554 96 6,307 Stennis 271 40 311 1258 34 1,603 Headquarters 1,193 265 1,458 741 110 2,309 Office of the Inspector General 131 82 213 11 0 224 Total 12,679 6,662 19,341 39,129 1,058 59,528

JPL is not included in Table 1-1. As an FFRDC, most of its almost 5,000 workers are employees of Caltech.

The NASA Workforce Strategy projects that the agency’s total civil servant workforce will decline by 10 percent between FY 2005 through FY 2011, when the Space Shuttle Program (SSP) ends.16 During this period, the workforce at the research centers is projected to decline the most. However, the size of these centers relative to NASA’s overall workforce will change only from 28 to about 25 percent.17

Likewise, the agency anticipates contraction and expansion of its contractor workforce, as it uses contractor capability to meet surge demands, complete remaining Shuttle missions, and meet new requirements associated with the Vision. With changing program responsibilities, some

13 FAIR Inventory, FY 2005. 14 This category includes Intergovernmental Personnel Act assignees, grantees, and other on-site federal employees. 15 While the FAIR Act provides for the designation of some civil service positions as commercial, the designation does not mean that the agency should necessarily contract out this work. For example, some potentially commercial positions require critical competencies, which the agency needs to develop and retain within its civil service workforce for smart-buyer capability. 16 A year-by-year analysis of these projected Full Time Equivalent (FTE) trends is provided in Volume 2 of this report in Appendix A-7. 17 In FY 05, Ames was approximately 7.5 percent of NASA’s total workforce; Glenn was 9.75; Langley was 11.45 percent. In FY 11, Ames is projected to be approximately 6.3 percent, Glenn to be 8.45 percent, and Langley 10.34 percent.

field centers have recently reduced their contractor capability. This kind of ebb and flow in the contractor workforce is not a new pattern—for example, in the 1960’s, NASA’s contractor workforce ballooned from 3,500 in 1962 to 79,000 just two years later in 196418.

NASA’s Civil Service Workforce by Occupation

Sixty percent of NASA’s civil service workforce is comprised of scientists and engineers (S & E). Figure 1-2 shows the breakdown of NASA’s civil service workforce by occupation:

Figure 1-2 NASA Workforce Functional Breakdown (as of FY 2006)19

GS Technician: 1,152 Wage Grade: 30 (0.2%) ( 7%)

Clerical: 829 (5%)

Professional Administrative: 4,693 (28%) S&E: 10,046 (60%)

S&E Professional Administrative Clerical GS Technician Wage Grade

NASA BUDGETARY CHALLENGES

NASA’s budget in FY 2006 was $16.623 billion dollars, which represented approximately 0.7 percent of the federal budget. Within the next five years (by 2011), NASA faces budgetary challenges to implement the Vision while phasing out the SSP and continuing to support its scientific and aeronautics research programs.

18“IFPTE Report on the Effectiveness of NASA’s Workforce & Contractor Policies,” September 6, 2003, p. 2. 19 “Exploring the NASA Workforce,” [http://naade02.msfc.nasa.gov/workforce/]

While NASA Administrator Griffin has stated that the agency will implement the Vision on a go- as-you-can-afford basis, he has committed the agency to retiring the Shuttle and completing the assembly of the International Space Station (ISS) by 2010 and developing the next generation launch vehicles by 2012 and no later than 2014. As a result, the nation and NASA must make difficult decisions to determine how to ensure that exploration programs have the requisite funding to meet this timeframe given NASA’s other programmatic commitments. In addition, the Government Accountability Office (GAO) urged Congress in July 2006 to “consider restricting annual appropriations and limiting NASA's obligations for the CEV project to only the amount of funding necessary to support activities needed to successfully complete the project's preliminary design review.”20

In February 2006, the President submitted his FY 2007 budget request, which included $16.8 billion for NASA (a 3.2 percent increase over FY 2006 regular appropriation). However, in December 2006, the incoming chairmen of the House and Senate appropriations committees announced the extension for the rest of the fiscal year of a Continuing Resolution (CR) that had been funding much of the federal government since October 1, 2006. Consistent with this announcement, the House Appropriations Committee, on January 30, 2007, approved a joint funding resolution for the remainder of the 2007 fiscal year that does not contain any additional funding for NASA, representing a reduction of $545 million from the President’s FY 2007 request. As of the beginning of February 2007, the full House and Senate had yet to determine the current year’s appropriation for NASA and other federal agencies, with Senate deliberations beginning soon after the funding resolution is passed in the House. In response, NASA Administrator Griffin stated that “the FY 2007 appropriation, if enacted as the House has resolved, will jeopardize [NASA’s] ability to transition safely and efficiently from the Shuttle to the Orion Crew Exploration Vehicle and Ares I Crew Launch Vehicle. It will have serious effects on many people, projects, and programs this year, and for the longer term.”21 The President’s FY 2008 budget request includes $17.309 billion (a 3.1 percent increase over the FY 2007 budget request).

Financial Management Issues

NASA is Red (unsatisfactory) in the financial performance portion of the President’s Management Agenda Scorecard, primarily due to difficulties in providing financial information required by independent auditors on a timely basis, and lack of standardized, integrated systems. With the exception of FY 2002, it has not had a clean financial audit or opinion since FY 2000..

Like other federal agencies, NASA began budgeting and recording agency costs using Full Cost Accounting (FCA) in response to the Chief Financial Officers Act. NASA implemented FCA in FY 2004. Historically, Congress had provided NASA with the funds for its full civil service

20 The report, which was critical of NASA’s CEV acquisition strategy, noted that NASA had not developed clearly defined requirements, a preliminary design, mature technology, or firm cost estimates. In response to the GAO report, NASA modified its acquisition strategy somewhat, but did not allay GAO’s concerns. NASA awarded the contract for CEV to Lockheed Martin in August 2006. (See GAO’s NASA: Long-Term Commitment to and Investment in Space Exploration Requires More Knowledge GAO-06-817R, July 2006 for more details.) 21 Highlights of NASA’s 2008 Budget Request, Michael D. Griffin, February 5, 2007.p.2

workforce, which was then funded from a central account separate from its projects. Under FCA, an agency must tie all its direct and indirect costs (including civil service personnel costs) to major activities, called cost objects. In NASA’s case, the cost objects are its programs and projects. Prior to FCA, project managers were not responsible for incorporating the costs of civil service personnel and certain other institutional costs into their project budgets. Now project managers must allocate these payroll and other costs to their projects and incorporate them into proposals.

Although the Chief Financial Officers Act requires NASA to use FCA, agencies can implement it in a variety of ways. NASA initially implemented FCA based on a rather strict adherence to private sector principles. For example, the centers with excess workforce capacity had to increase their General and Administrative (G&A) rates to fund the additional indirect labor, which made it more difficult for them to compete for work. In addition, NASA’s facilities were forced to operate at full cost, which disproportionately affected the smaller field centers and rendered the facilities too expensive for outside users.

As a response to these difficulties, NASA plans to implement Full Cost Simplification for FY 2008. Under this financial system, the agency will establish a corporate G&A rate and an institutional investment rate for projects. It will also establish a new Center Management and Operations Account, which will be funded by a standard rate assessed by headquarters at the agency project level. Headquarters will determine what a center needs to operate and will take this amount off the top of the budget, with each center accounting for its share.

NASA WORKFORCE CHALLENGES

Human Capital Landscape

Over the past five years, human capital management has been a critical component of NASA’s strategic planning efforts. Some national and industry trends, however, have raised concerns for NASA as it strives to continue to recruit and retain world class talent. Concerns, exacerbated by a limited ability to hire and an aging workforce, include increased competition for technical skills in today’s market, perception among some engineering students that the aerospace industry is no longer a career of choice, and declining interest in government employment among college graduates. This led the agency to request human capital flexibilities to more effectively manage its workforce and plan for future needs. The implementation of the Vision and the required alignment of NASA’s workforce to this mission change have further impacted the agency’s human capital landscape. On February 24, 2004, President George W. Bush signed the NASA Flexibility Act of 2004 (P.L. 108-201). The law included numerous human capital flexibilities designed to help NASA overcome the challenges noted above.

Workforce Challenges

NASA faces daunting mission and workforce challenges. It must simultaneously acquire the right mix of skills to develop the next generation exploration vehicle and its accompanying launch and support system; retain a robust science portfolio; refocus its aeronautics program; ensure at least 16 safe SSP flights; and complete the ISS. Effective implementation of each of these goals will require NASA to implement a strategy that enables it to acquire and retain competencies and work critical to these objectives.

The agency faces a challenge in adjusting to this new direction because of the following:

• The skills of the workforce are not completely aligned with the type of work required for the Constellation Program. Even though the agency has the expertise to design, develop, and test the new crewed vehicles, not all the personnel required to work on the vehicle and associated launch systems have previous experience on this kind of system.

• Since the CEV will not be as labor intensive as the SSP—2,000 civil service FTE, plus contractor support—the agency must find a way to retain the critical Shuttle workforce until the phase-out of SSP and then redeploy them to other programs if necessary.

• NASA has very limited time to transition its workforce: the two-year window between the retirement of the Space Shuttle (2010) and the first launch of the Orion vehicle (2012) presents a tight schedule to retrain and redeploy personnel.

Uncovered Capacity

After the President announced the Vision in 2004, the NASA Administrator and other senior leaders initially planned to contract out a substantial portion of this work, increase headquarters Exploration Systems Mission Directorate (ESMD) staff by 300 FTE, and establish a separate ESMD procurement office.22 This approach resulted in a total of 2,673 civil service FTE without funded work—referred to by NASA as “uncovered capacity,” defined as the quantity of available employee work time in excess of program/project requirements and funding commitments. If an engineer is only funded by a project for two-thirds of the time, he or she would be a third “uncovered.” Administrative support staff and other indirectly funded personnel can also be uncovered. For example, a procurement office could have an excess of employees (or employees’ time) beyond which the center’s programs and projects were willing to pay.

According to NASA, most of the uncovered capacity was due to:

• Cancellation of the Space Launch Initiative

22 Since the late 1990’s headquarters downsizing, Goddard had been responsible for the headquarters procurement function.

• Redirection of funding for exploration research and technology development to the CEV

• Reduction of funding for biological and physical research for the CEV

• Reduction in funding for the aeronautics program

• Restructuring the science program and subsequent redirection of funds to higher priority missions in science

NASA’s leadership benchmarked private industry rates of uncovered capacity at 5 percent—the approximate rate at the time the agency’s Workforce Strategy was released in June 2006. The agency was, however, concerned that uncovered employees were concentrated at three centers (Ames, Glenn, and Langley), each with an uncovered workforce of between 15 and 30 percent. The NASA Workforce Strategy described numerous initial efforts to reduce the number of uncovered civil servants:

• Retain sufficient work in-house to protect and strengthen core capabilities

• Sponsor internal job fairs to facilitate transferring employees to other centers

• Implement hiring controls and establish ceilings on center FTE levels to provide more opportunities to place employees

• Encourage voluntary attrition through buyouts and early-outs

When the Workforce Strategy was published in April 2006, the agency estimated that it would have 1,000 uncovered FTEs throughout most of 2006–2011.23 In a statement to the Subcommittee on Space and Aeronautics in June 2006, the NASA Assistant Administrator for the Office of Human Capital Management (OHCM) testified that the above-mentioned methods had reduced uncovered capacity by two-thirds.

In interviews with NASA officials during the fall of 2006, the study team was told that NASA had established a plan through the budget process to provide funding for virtually all civil servants in FY 2007 and FY 2008.24 The Panel understands, however, that not all of the agency’s scientific, engineering, and technical personnel will be working directly on a project; nor will all administrative staff necessarily have their salaries tied directly to projects. Some excess capacity (or parts of the employees’ time) will apparently be embedded in projects, and some employee time will still be charged to institutional budgets and transitional accounts. NASA headquarters has not established a transparent, readily accessible mechanism to track employees who formerly would have been considered “uncovered.” For example, the agency has not established a set of accounting codes that would readily identify when an employee is working on (1) unfunded

23 NASA Workforce Strategy, p. 14. 24 In interviews with NASA officials in the fall of 2006, the study team learned that as many as 300 FTE were still officially “uncovered” and that the workforce implications of the CR were not clear.

activities that cannot be tied directly back to a project, (2) areas outside of his/her core competencies, or (3) a non-priority effort.

In reality, NASA’s actual uncovered capacity for FY 2007 and FY 2008 could be higher than projected, and the impact of the Congressional budget action for FY 2007 is unclear. When Congress takes up the President’s FY 2008 budget request, it is likely that programmatic changes and earmarks will have additional impacts on the agency’s plans to fund the workforce. For example, the NASA Assistant Administrator for Legislative Affairs stated that an earlier House- proposed reduction of one-third of the President’s request for Exploration Technology Development in FY 2007 would result in increasing the uncovered workforce by approximately 165 FTE, with particular impact on Ames, Glenn, Langley, and Marshall.25 Any earmarks that must be paid for from the agency’s budget request also uncover additional FTE.

NASA does not necessarily expect the President’s budget over the next few years (FY 2009 – 2011) to provide funding to cover the salaries of the agency’s entire civil servant workforce. Only when full Vision program requirements are known can the agency assess the impact of these programmatic decisions on center work assignments and workforce uncovered capacity.

Skill Mismatches

The Panel has found NASA to be a mission-driven agency with a people-based approach to the planning, management, and utilization of its workforce. When the agency’s portfolio of programs is stable, the mission-driven and people-based approaches can be complementary strategies. Conflicts occur when employees are no longer aligned with the new direction. With a goal of boosting employee morale and maximizing use of the existing workforce, the agency’s approach has been to put maximum focus on internal avenues for realigning employee work assignments with changing missions and direction. Ultimately, this can result in an ineffective and inefficient use of labor within the agency.

A “skill mismatch” exists when an employee’s core competencies either lag behind or exceed the demands of their work assignments. Skill mismatches can occur under a number of circumstances, discussed below.

Insufficient Experience Base Because NASA’s last major development project for a new space vehicle was in the 1970s, when the Shuttle was designed and built, work assignments may not always mesh with an employee’s past work experiences. In 2006, the National Academy of Sciences (NAS) issued an interim report on Issues Affecting the Future of the U.S. Space, Science and Engineering Workforce. The report responded to NASA’s request for an assessment of its long-range science and engineering workforce needs to accomplish the Vision and potential obstacles. The report questioned “whether the experience base in the current workforce is adequate to meet current and expected future needs in selected areas of expertise” and cited, as most critical, the skills “acquired via real-work experience.”26

25 See Brian Chase memo, [http://www.spaceref.com/news/viewsr.html?pid=22585] 26 National Academy of Sciences, Issues Affecting the Future of the US Space, Science and Engineering Workforce, Interim Report, 2006 p. 29.

Difficulty Transferring to Development Scientific, engineering, and technical personnel at the space flight centers have been working in an operational environment, while those at the research centers have been working in a research environment. The Vision is transitioning NASA to a development environment characterized by design, testing, and evaluation of next generation launch vehicles. The scientific and engineering skills required to develop new vehicles, systems, and technologies are different from those required to sustain and maintain the Shuttle and ISS. Therefore, some personnel throughout the centers may have difficulty adjusting to this new environment, with personnel in the research centers likely to have the most difficulty.27

Work Outside Occupational Classification or Pay Grade Level An employee’s skills may exceed the demands of their work assignment. For example, faced with loss of funding for a large project, a supervisory project manager may be reassigned as a team leader, staff scientist, or engineer to a project that is smaller or not as complex. Unless management pursues reclassification of the employee’s position and downgrades that employee, the employee will still be paid at his/her previous pay rate. Agencies dealing with such staffing dilemmas sometimes temporarily detail employees to unclassified positions, thus avoiding the need to confront the occupational/level mismatch.

In allocating the Constellation work packages earlier this year, the centers competed for various core assignments based on their stated capabilities. Once the packages were awarded, some center officials began expressing concern that workforce skill imbalances may hinder their ability to effectively perform these assignments. Headquarters officials have expressed some frustration when this issue is raised, noting that the packages were allocated based on the centers’ stated capabilities.

Skill mismatches resulted from the work package bidding process because it was a big-picture exercise—based on the center’s general capabilities, past work, and past performance—and driven by a strong, underlying budgetary incentive to allocate the work to maximize the number of civil servants funded. Specific skill mismatches become apparent when programs and projects begin arriving at a center with the requisite detailed task requirements, and project managers begin identifying particular individuals for these assignments.

Even centers with considerable expertise in areas related to their work assignments may find mismatches at the working level. And unlike private industry bid processes, the Constellation work was assigned under existing civil service constraints. While private industry can easily hire new talent to fill any skill gaps that emerge after a firm wins a bid, the centers to which management has recently allocated exploration work have very little ability or agency-granted FTE authority to hire new civil servants. Likewise, NASA tends to rely on its employees to volunteer for geographic relocation. Other than some reassignments at the Senior Executive

27 Compared to the research centers’ traditional business line, for example, the new design work is characterized by larger projects with more defined deliverables to be produced in a shorter time frame, subject to significant external scrutiny.

Service (SES) level, NASA has not used its authority to direct geographic reassignment of NASA staff to compensate for skill mismatches. Therefore, centers are forced to perform the work largely with their existing civil service staff, supplemented by contractor personnel.

NASA LEGACY CHALLENGES

In addition to the challenges of uncovered capacity and skill mismatches, NASA faces legacy challenges. Like all organizations, NASA is to a great extent an amalgam of its past. To be a robust organization, management must be able to adapt its expertise and change its strategies— including workforce strategies—to overcome these legacies and meet future obligations in the most cost-effective, efficient, safe, and responsible manner.

NASA’s inheritance is rich with scientific and technical expertise as well as significant accomplishments. The Panel has, however, identified some of the perhaps unintended consequences of previous management patterns and practices used to control workforce size and cost. While these practices are not unique to NASA, their impact has perhaps been more pronounced in this organization because of its unique and changing mission.

Hiring Freezes

Like most federal agencies, NASA has used hiring freezes during periods of retrenchment to reduce on-board civil service strength and restrict the hiring of replacements for some or all departing employees. These freezes vary in their formality, rigidity, duration, and scope. Some are initiated by the President; others are initiated by agency or local component management. A freeze on hiring offers an opportunity to cut staff by not replacing these departing employees. This strategy keeps the agency from incurring the costs and hardships of a RIF. The Congressional Budget Office (CBO) notes, however, that freezes are “slow and difficult to target.” RAND Corporation studies of the U.S. Navy and the United Kingdom Ministry of Defense, both of which faced workforce transitions of the magnitude and complexity of NASA, note that such freezes or other curtailments of hiring may have unintended consequences for the core competencies of an organization and impinge on the organization’s ability to meet future mission demands.28 Nonetheless, the government has relied on hiring freezes as the primary means of reducing staff over the years. (See Volume 2, Appendix A-6 for examples of NASA freezes imposed over the last several years.)

Figure 1-3 below depicts the impact of NASA freezes and other curtailments of hiring on the influx of new employees.

28 See RAND Corporation studies by John F. Schank and John Birkler.

Figure 1-3 Number of Outside Hires, 1993-2006

800

700 754

600 694

500

400 495 445 418 406 300 Number of Outside Hires Outside of Number 337

200 265 224 240

100 135 142 89 41 0

3 4 6 7 9 0 3 6 9 9 0 99 995 99 99 002 00 005 00 1 19 1 1 19 1998 1 20 2001 2 2 2004 2 2

YEAR

Demographic and Staffing Impacts

As NAS observed in its 2006 interim report, NASA’s freezes in the 1990s led it to fill only specific positions and not hire younger people who could be grown into higher positions. “As a result, the agency’s mean age has continued to rise over time, and the agency lacks younger employees with necessary skills.”29

Figure 1-4 and Table 1-2 depict average age of permanent full-time employees by occupation, as well as occupational and generational changes from FY 1994 to FY 2007 in three critical segments of the agency workforce:

• Employees in their twenties, including recent graduates (whom NASA calls fresh-outs) and co-op conversions, who have historically been the agency’s primary source of new talent

• Employees in their thirties, many of whom have that critical five to 15 years of experience that readies them to assume decision-making authority and leadership roles

• Employees age 70 and beyond, who, until 1979, would have been subject to mandatory retirement

29 National Academy of Sciences, Issues Affecting the Future of the US Space, Science and Engineering Workforce, Interim Report, 2006, pp.2-3.

Figure 1-4 Average Age of Permanent Full-Time Employees

52 S & E Profession/Administrative Clerical 50

Age GS Technician Wage Grade 48 All Occupations

4 8 0 2 5 6 9 96 9 0 0 03 0 0 7* 9 9 9 0 0 0 1 1 1 1999 2 2 0 Y 2 FY FY FY FY f FY20 f FY20 FY f FY20 FY of of FY1995of of of F o o of of o of rt rt rt rt art art art art t ta t t t tart S Sta S Start of FY1997S Sta Start Start of FY2001S Sta Start of FY2004S Start S

Table 1-2 A Comparison of NASA Occupational Age Distribution for Three Critical Junctures, FY 1994 vs. FY 200730 Age Group 20-29

FY 1994 FY 2007 Percentage Point Occupational Category Total Total Change from Occupational Employees %* Occupational Employees % 1994 to 2007 Population Population Science and Engineering 13,317 1,894 14.2% 10,007 442 4.4% -9.8 Professional and 4,712 387 8.2% 4,677 207 4.4% -3.8 Administrative Clerical 2,597 537 18.2% 835 41 4.9%-13.3 GS Technical 2,420 204 8.4% 1,154 6 .52% -7.88 Wage Grade 649 56 8.6% 31 0 0% -8.6 All Employees 23,695 3,078 13% 16,704 690 4.1% -8.9 * Percent of Occupational Category Age Group 30-39 FY 1994 FY 2007 Percentage Point Occupational Category Total Total Change from Occupational Employees %* Occupational Employees % 1994 to 2007 Population Population Science and Engineering 13,317 4,146 31.3% 10,007 1,376 13.8% -17.5 Professional and 4,712 1,122 23.8% 4,677 690 14.8% -9 Administrative Clerical 2,597 577 22.2% 835 708 84.8% +62.6 GS Technical 2,420 558 24.3% 1,154 105 9.1% -15.2 Wage Grade 649 222 34.2% 31 1 3.2% -31 All Employees 23,695 6,625 28% 16,704 2,303 13.8% -14.2 * Percent of Occupational Category

30 Figures reflect data from the start of FY 1994 and, for FY 2007, for data collected on September 16, 2006.

Age Group 70+ FY 1994 FY 2007 Percentage Point Occupational Category Total Total Change from Occupational Employees %* Occupational Employees % 1994 to 2007 Population Population Science and Engineering 13,317 68 .51% 10,007 117 1.17% +.66 Professional and 4,712 34 .72% 4,677 20 .42% -.3 Administrative Clerical 2,597 11 .42% 835 5 .6% +.18 GS Technical 2,420 22 .9% 1,154 6 .52% -.38 Wage Grade 649 3 .46% 31 0 0% -.46 All Employees 23,695 138 .58% 16,704 148 .89% +.31 * Percent of Occupational Category

(See Volume 2, Appendix A-8 for similar analysis of employment in the following age groups: 40 to 49, 50 to 59, and 60 to 69.)

NASA STAKEHOLDERS

NASA’s stakeholders include Congress, public employee unions, NAS, universities, and industry/contractor associations. The influence of these diverse stakeholders has a significant impact on the agency’s mission and direction. Elected officials, for example, establish and support NASA’s strategic mission objectives and provide budgetary resources. In addition, NAS conducts studies that help establish the direction for NASA’s scientific and technological research.

The stakeholders can also impose limitations on the agency by restricting its flexibility in planning and quickly responding to organizational, mission, and programmatic changes. Most importantly, while endorsing the Vision and providing direction on next steps in the NASA Authorization Act of 2005, Congress—at the behest of the labor unions—prohibited the agency from conducting a RIF until March 2007. The Act called for NASA to “develop a human capital strategy to ensure that NASA has a workforce of the appropriate size and with the appropriate skills to carry out the programs of NASA,” but constrained the agency’s options in reshaping and realigning its workforce with the Vision.

REPORT METHODOLOGY

As part of this task, the study team and Panel members did extensive workforce analysis and research, including literature reviews, and visited eight of NASA’s ten centers. The study team also met with a wide array of NASA headquarters and center officials, union representatives, managers of contractor organizations, thought leaders in relevant areas, industry representatives, and officials of the Office of Management and Budget (OMB), the Office of Personnel Management (OPM), GAO, and other federal organizations whose workforce experience might inform NASA’s efforts. (See Appendix B for a complete list of individuals interviewed/contacted for this study.) As part of the healthy center portion of this study, the Panel also collected and analyzed some preliminary data relevant to the critical internal capabilities of acquisition and human capital in the hope that this initial effort might ultimately inform the agency’s selection and use of effective healthy center metrics.

ROAD MAP TO THE REPORT

The next six chapters focus on specific elements required for NASA to balance its multisector workforce and implement the Vision:

• Chapter II: Planning and Decision-Making describes the rapidly evolving and complex environment in which NASA must operate. The chapter identifies the implications of NASA’s Strategic Plan for its work and suggests additional planning and workforce methodologies.

• Chapter III: Ten Healthy Centers examines this major driver in the agency’s strategic and workforce planning. Applying lessons learned from field center visits, the chapter contains a framework to assess the health of NASA’s centers.

• Chapter IV: Acquisition: a Key Support Capability puts NASA acquisition challenges in the context of those facing the federal government as a whole, discusses acquisition processes at NASA, the need for further high-level integration with other workforce planning, and suggests additional methods by which the agency might assess its readiness for flexible and scalable contracting. This chapter, in conjunction with Chapter V, discusses the importance of acquisition and human capital as enabling capabilities that need to be integrated for the agency to make optimal decisions regarding its entire workforce (civil servant and contractor).

• Chapter V: Human Capital as a Full Participant discusses NASA’s human capital organization structure and the challenges it faces within the context of those facing the federal government. It describes NASA workforce objectives and human capital initiatives, its need for multisector workforce planning and strategy development, and the need to integrate the human capital function with the acquisition processes to ensure effective workforce planning.

• Chapter VI: Balancing the Workforce examines processes NASA uses to balance its multisector workforce and provides knowledge-based tools and accompanying processes to enhance these efforts, including Decision Guides to help managers make appropriate workforce choices.

• Chapter VII: Managing the 21st Century Workforce identifies additional management strategies as well as statutory and regulatory authorities that NASA and Congress should consider to help the agency become the more robust and adaptable organization it needs to be to implement the Vision.

Appendices: The report includes four appendices:

Appendix A provides information on the project Panel and Academy staff. Appendix B lists individuals interviewed or contacted during the project. Appendix C focuses on lessons learned from other federal agencies. Appendix D details the Decision Guide methodology, including weighting and scoring.

Supplemental materials to this report are contained in a separate volume (hereafter referred to as Volume 2). This includes additional supporting analyses and background material on a variety of areas, including NASA's organizational structure and workforce composition, as well as lessons learned from visits to eight of the ten field centers.

CHAPTER II PLANNING AND DECISION-MAKING

As NASA works to implement the Vision, phase-out the Shuttle, and maintain its core aeronautics and scientific capabilities, the agency’s strategic and workforce planning mechanisms will be essential to:

• Evaluate agency capability and progress toward desired objectives

• Guide the implementation of laws and policies, as well as identify any needed changes

• Assure appropriate budget resources

• Sustain core competencies

• Maximize flexibility and adaptability

• Balance the multisector workforce

The Panel believes that NASA will be challenged to implement the Vision within projected budget constraints with its current civil service workforce. Consistent with NASA’s need to be a knowledge-based organization, NASA should establish innovative planning mechanisms to hedge against changes in future direction and focus on longer term needs, especially regarding its multisector workforce. These planning mechanisms can also help in developing effective strategies to sustain core capabilities in aeronautics and science.

Given the significant workforce implications of the Vision and its associated programmatic changes, this chapter focuses on NASA’s strategic objectives and key planning processes. The agency’s plans are discussed within the context of its three human capital goals of establishing an agency-wide workforce planning process to support flexibility, scalability, and center health; optimizing mission performance to strengthen technical excellence and leadership capabilities; and providing near real-time information to managers and staff. Specifically, the chapter covers:

• NASA’s evolving mission

• Organizational support for strategic goals

• Workforce planning processes

• Implementation of NASA’s strategic plans and goals, including Shuttle transition planning

• Useful strategic and workforce planning methodologies

The Panel’s conclusions and recommendations focus on NASA’s need to:

• Develop a risk-based planning strategy to deal with plausible alternative futures

• Broaden its strategic planning processes beyond the FY 2007 – 2009 time horizon

• Incorporate innovative planning methodologies into its strategic decision-making.

NASA’S EVOLVING MISSION

After it was created in 1958, NASA established Project Mercury to determine whether humans could survive in space. Project Gemini built on Mercury's successes and used spacecraft built for two astronauts. With Project Apollo, NASA's human space flight efforts extended to the Moon, when the Apollo 11 mission landed on the Moon and put human beings on the lunar surface for the first time. With the phase-out of Apollo in the mid-1970s, NASA established the Shuttle Program,31 which first launched in 1981. The Shuttle is NASA’s vehicle for sending into space the people and supplies necessary to complete the International Space Station (ISS), a 16- nation project to build the world’s largest orbiting laboratory. Two major disasters have befallen the Shuttle Program: Challenger was destroyed on launch in 1986,32 and Columbia was destroyed on re-entry in 2003.

After the Columbia tragedy, NASA responded by reinforcing its emphasis on safety, implementing the recommendations made by the Columbia Accident Investigation Board (CAIB), and grounding Shuttle flights until July 2005, when it launched Space Shuttle Discovery. However, the problem that resulted in the destruction of Columbia—debris separating from the external tank during ascent—unexpectedly recurred during the launch of Discovery. As a result, NASA decided on July 27, 2005 to postpone future Shuttle flights pending additional modifications to the flight hardware. On July 4, 2006, NASA resumed Shuttle flight and has since launched three successful flights.

In NASA’s 2006 Strategic Plan, the Administrator acknowledged the importance of strategic planning processes: “To ensure the success of the space program through generations to come, we must have simple, but compelling, long-term goals and a coherent, thoughtful plan to achieve them.”33 As noted in Chapter I, NASA has six strategic goals, which are discussed below.

• Shuttle retirement by 2010

• Completion of the International Space Station34

31 Four space shuttles were initially constructed for the Space Shuttle Program: Columbia, Challenger, Discovery, and Atlantis. 32 Endeavour was constructed as a replacement for Challenger. 33 2006 NASA Strategic Plan, p.1. 34 NASA is committed to ensuring that the research conducted onboard the ISS matches exploration requirements.

• Balanced programmatic portfolio of exploration, science, and aeronautics35

• Developing the Crew Exploration Vehicle (CEV).

• Partnerships with the commercial space sector

• Establishing a lunar return program

The 2006 NASA Strategic Plan also places emphasis on the workforce planning and human capital management process, identifying it as one of nine cross-cutting management principles.

Constellation Program

Under the Vision, the Shuttle Program will be phased-out in 2010. NASA’s plan to return humans to the Moon, unveiled in September 2005, is similar to the agency’s approach to Apollo. Two modules (crew and service) will orbit the Moon while astronauts go to the Moon’s surface in a lunar lander. Administrator Griffin has referred to the plan as “Apollo on steroids,” however, because of its many advantages over the earlier program:

• The new lander is larger

• It can put twice as many people on the Moon

• It can leave them there for months, not days

• It can land people anywhere on the lunar surface, not just the equatorial region

• The orbiting spacecraft does not have to have a crewmember aboard

In addition, the new spacecraft will use lighter composite structures instead of metal; it will use more efficient propellants; and it will benefit from computer science advances over the past 45 years.

NASA has established the Constellation Program to implement the Vision. Constellation will develop the large and small systems that will allow humans to travel and explore the solar system. It will include Earth-to-orbit, in-space and surface transportation systems, surface and space-based infrastructures, power generation, communications systems, maintenance and science instrumentation, and robotic investigators and assistants. At present, Constellation is working on two major development projects:

35 NASA is committed to developing a balanced overall program of science, exploration, and aeronautics consistent with the redirection of the human spaceflight program to focus on exploration. The exploration program is not limited to human exploration. It also includes robotic exploration of planetary bodies in the solar system and telescope searches for planets similar to Earth, as well as the study of the origins, structure, evolution, and design of the universe.

• The Crew Exploration Vehicle (CEV), which will succeed the Shuttle as NASA’s primary vehicle for human space exploration, has been named “Orion.” This capsule will carry future astronauts into space. Although it has a similar design to the Apollo-era command module, Orion is larger and more versatile, allowing it to carry twice as many occupants (a total of six) as Apollo. On August 31, 2006, Lockheed Martin Corporation was awarded the contract to build Orion, whose first flight to the International Space Station with astronauts on board is planned for no later than 2014. Its first flight to the Moon is planned for no later than 2020.

• The Launch Vehicles, which will provide the propulsion to return humans to the Moon and later take them to Mars and other destinations, have been named “Ares I” and “Ares V.” Ares I is the Crew Launch Vehicle (CLV) that will launch the Orion spacecraft into orbit. Ares V is a heavy lift Cargo Launch Vehicle (CaLV) that will carry cargo and other components into orbit to go to the Moon and later to Mars.

NASA will have Orion and the Ares vehicles available for operations no later than 2014, but is working to have them as early as 2012. In addition, it has said the Constellation will evolve over time based on exploration goals and budgetary priorities, as well as analyses of cost, benefits, and risks.

ORGANIZATIONAL SUPPORT FOR STRATEGIC GOALS

The Panel identified two institutional support offices with critical roles in strategic planning, workforce planning, and organizational analysis: (1) the Office of Program Analysis and Evaluation; (2) the Office of Human Capital Management. (See Chapter 4 for a detailed discussion of the role of the Office of Procurement, its current acquisition strategy process, and its relationship to NASA’s strategic goals.)

Office of Program Analysis and Evaluation

In April 2005, NASA established the Office of Program Analysis and Evaluation (PA&E) to provide objective, transparent, and multidisciplinary analysis of its programs. Headed by an Associate Administrator, PA&E is responsible for leading strategic planning and budget integration. It provides independent advice to NASA’s senior management on all aspects of the agency’s programs.

Figure 2-1 Office of Program Analysis and Evaluation: Organizational Structure and Responsibilities

PA&E is a member of all three Management Councils (Strategic, Program and Operations). Although it supports the councils by drafting the agendas and conducting analyses, it does not chair any council and has no operational responsibility. PA&E undertakes both short and long- term studies. Of particular relevance to the Panel’s study of workforce issues are formal “Organizational Readiness Assessments.” PA&E recently completed an assessment of two research centers (Glenn and Ames) and the Chief Financial Officer’s funds distribution process. Further, it is currently conducting a readiness assessment of the Office of Human Capital Management to determine how the agency’s requirements for this office must change as NASA transitions to development work. Finally, the Readiness Division is examining 230 tools and processes across the agency to determine whether the agency can integrate, standardize, and streamline some to improve efficiency.

PA&E’s first readiness assessment was of Glenn in 2006. PA&E widely disseminated results of this study within NASA and to the general public, but has decided to designate subsequent study results as pre-decisional documents, thus limiting access to NASA officials. PA&E’s focus is on collaborative self-assessments, which encourage organizational openness, and does not want to be perceived as an audit function. This approach is similar to the Department of Defense’s.

In addition to the readiness reviews, PA&E is conducting a benchmarking study of high performing public agencies and private industries to determine the industry standard across a number of critical areas, such as management, human capital, and business processes. The

private industries are all geographically dispersed, technology-driven companies that have faced a significant transition. PA&E may distribute the results of this study more widely than those of the readiness reviews.

Office of Human Capital Management

In April 2006, the agency’s human resource directors met at the Kennedy Space Center to explore how they could best support NASA’s strategic goals. They identified three human capital goals:

1. Integrate and institutionalize agency-wide workforce planning processes with program and business planning to assure a flexible, mission-aligned workforce at ten healthy centers.

2. Optimize mission performance through strategies designed to strengthen technical excellence and leadership capabilities.

3. Deliver up-to-date information to managers and staff through a seamless system integrated with agency business processes to support workforce decision making.

NASA’s Workforce Integrated Product Team worked in partnership with the mission directorates and other stakeholders to issue a draft white paper in May 2006 that established the following objectives:

• Developing goals that support the accomplishment of the agency’s strategic plan

• Establishing the policies, processes, and structure that support the timely development and maintenance of a workforce aligned with the current and planned work of the agency

• Developing the infrastructure necessary to make agency principles a reality

• Providing tools to assess the appropriate mix of contractor and civil servant employees and of permanent and term civil servants

• Providing leadership in the area of workforce environment and culture, as well as performance management

• Establishing objective measures of progress

(For a fuller discussion of NASA’s Office of Human Capital Management, see Chapter V.)

NASA WORKFORCE PLANNING PROCESSES

Until recently, each NASA center had its own tools and processes for workforce strategy and planning, which made it difficult to track uncovered capacity, skill mismatches, and other human capital issues and take appropriate corrective actions. According to agency officials, prior workforce planning activities were “center-based, short-term, decentralized and only loosely connected at the ends.”36 In addition, “coordination and integration of workforce planning typically occurred on a relatively ad hoc basis in response to what was perceived as an anomalous workforce issue of an urgent nature.”37

In the Workforce Strategy presented to Congress in April 2006, NASA described a new, more centralized approach to workforce planning consisting of:

• Participation from all management levels

• Coordination and integration of planning among all management levels

• Integration of workforce planning and assessment with NASA’s strategic, business, and resource planning activities.

NASA officials have identified the agency’s financial management system as a central challenge in successfully designing and implementing a total workforce planning system. The agency requires a system that produces consistent, reliable financial processes and resulting data. In the past year, NASA has tried to integrate several systems into a comprehensive agency tool for workforce planning. This has been challenging because each center has historically had its own financial management, labor distribution, and human capital tracking systems (other than the centralized payroll and personnel actions processing systems). These independent systems used different codes, different terminology, and different work breakdown structures. No central system has existed to translate the data from center-specific systems into a comprehensive set of agency-wide data.

Since the Workforce Strategy was released, the Office of Human Capital Management (OHCM) has been taking steps to further strengthen the agency’s workforce planning process to meet its new mission objectives. Currently, the workforce planning process is primarily budget/FTE driven, with more strategic activities occurring in an ad hoc manner. Providing funding for all civil servants has been the fundamental planning goal. Over the past year, for example, NASA found that it could resolve much of the uncovered capacity by altering the distribution of work and funds given to centers and people.

Like most federal agencies, NASA tends to think more in terms of the budget cycle than in layered timeframes (short, intermediate, and long-term). In interviews in October 2006, however, NASA’s OHCM acknowledged that the agency must focus on planning beyond the one to two-year horizon and expand its horizon to five years. To increase the alignment of the workforce to the mission and programmatic goals, OHCM also acknowledged in October 2006

36 NASA Workforce Strategy, p. 7. 37 Ibid.

that it must involve senior management at headquarters and the centers in strategic workforce planning activities.

Building upon the framework described in the Workforce Strategy, OHCM’s objectives are to strengthen NASA’s planning capabilities, at both the headquarters and the center levels, by:

• Adding strategic components to the agency business and workforce planning process to address changing circumstances and mission uncertainties

• Establishing a workforce planning governance structure with clear roles and responsibilities

• Ensuring that the new capabilities include such key elements as improved agency guidance to centers; clear workforce policies; measures of workforce capability; center reports on workforce capability and risk of misalignments; and assessments that highlight risks to be addressed at the agency level.

The central components of this new planning process will be:

• Agency Guidance Development to improve the information given to centers about future work. OHCM is seeking to incorporate the improved agency guidance on work distribution into the Planning, Programming, Budgeting, and Execution (PPBE) process during the December to February timeframe of each fiscal year.

• Center Assessments of Workforce Capability to improve the information from the centers about their workforce. OHCM is seeking to incorporate the center workforce capability and risk results, along with center roadmaps to reduce risk and improve capability, into PPBE during the March to June timeframe of each fiscal year.

• Agency Analysis and Problem Solving to manage workforce risks by incorporating center information and problem-solving. Based on this information, OHCM plans to initiate new or modified policies during June to September of each fiscal year.

OHCM believes that the center workforce capability assessments will be a major step forward. The centers will conduct workforce assessments based on multiple dimensions, against variations in work, to identify what agency help is needed to manage risks. NASA would then be able to assess links between hire-or-buy choices, work assignment decisions, and workforce capability; surface differences between agency and center assumptions about work distribution; surface risks requiring agency attention beyond uncovered capacity; and question the common assumption that what the agency has is what it needs.

As the Panel noted in its Task 2 White Paper, one of the central challenges facing NASA’s workforce planning process is its exclusion of the contractor workforce. The Panel recommended in the White Paper that NASA should incorporate the multisector nature of its workforce into its implementation plan by:

• Addressing its total workforce needs, including the work for which it will hire staff as well as the work it will buy.

• Analyzing the workforce and identify competencies that are in excess or deficit for both the civil service and contractors.38

While recognizing the key differences in NASA’s relationship between employees and contractors, the Panel noted that nothing precludes the agency from assessing the impact of changing circumstances on the type of work it buys, or the knowledge and skills needed for both the civil servant and the contractor workforce. While broadening its strategic workforce planning process to include contractors, the Panel contended that NASA could maintain the necessary distinctions.

NASA headquarters human capital officials have said some centers are already working to deal more effectively with the multisector nature of their workforce: some have been able to identify the type of work that can be contracted out and have used this analysis to divide the work. Headquarters officials have identified training as an important aspect of workforce planning. If NASA is not hiring, and does not train its staff, it will have to contract out more of its work in the future.

IMPLEMENTING NASA’S STRATEGIC PLANS AND GOALS

NASA has committed itself to an aggressive exploration program that has significant implications for its workforce. NASA must pursue its objectives within an environment characterized by significant challenges:

• Tight budget environment. The President’s FY 2007 budget includes cuts to the science and aeronautics programs in order to pay for the Vision, and congressional action thus far has supported this approach. According to GAO, NASA plans to spend nearly $230 billion over the next two decades to implement the program. Under a “go as you can afford to pay” approach, NASA will defer, de-scope, or discontinue lower-priority efforts to stay within the budget profile. NASA expects that it will not have sufficient funding to implement its Exploration Architecture in some fiscal years (some yearly shortfalls exceed $1 billion), while having excess funding in the earliest years.39 NASA preliminarily projects an overall deficit through 2025 of over $18 billion. Given the long-term fiscal challenges facing the federal government, GAO has recommended that NASA should establish a program that reduces the risk that significant additional

38 Because NASA is not responsible for managing contractor personnel on a daily basis, the competency analysis for this group should be done on an aggregate basis, focusing on cost effectiveness, timeliness of deliverables, and return on investment. 39 GAO-06-817R, NASA: Long-Term Commitment to and Investment in Space Exploration Program Requires More Knowledge, (July 2006), p. 5. In addition, GAO said that NASA “preliminarily projects multibillion-dollar shortfalls for ESMD in all fiscal years from 2014 to 2020, with an overall deficit through 2025 of over $18 billion”(pp. 2 – 3).

funding, beyond moderate increases for inflation, will be required to execute the program.

• Developing specifications and requirements. On September 1, 2006, NASA chose Lockheed Martin as the prime contractor for the CEV/Orion project.40 In October 2006, NASA awarded a sole-source contract (value of up to $35 million) for the first stage of the CLV to ATK-Thiokol, the manufacturer of the Shuttle’s Reusable Solid Rocket Motor. The specifications and requirements for the CEV and CLV are continually evolving. GAO believes that NASA’s current acquisition for the Orion vehicle places the project at risk of significant cost overruns, schedule delays, and performance shortfalls because it commits the government to a long-term product development effort before establishing a sound business case.

• Static civil service workforce. For the near and intermediate-term, NASA must meet these new program needs with its current civil service workforce, plus contractor support. As noted in Chapter I, NASA has distributed Constellation work responsibilities across the ten field centers. During field visits, NASA officials told the Panel and study team that workforce realignment efforts, particularly at the research centers, had resulted in mismatches between work requirements and the expertise, experience, and skills of considerable numbers of current civil servants.

Shuttle Transition Planning

In its Strategic Plan, NASA acknowledges the significance of retiring the Shuttle: the agency will “conduct a series of complex International Space Station assembly and Hubble servicing missions using the Shuttle while simultaneously exploring and developing future transportation alternatives, including a new Shuttle-derived replacement transportation system.”41 NASA has adopted a fairly aggressive proposed launch schedule that requires a total of 19 Shuttle flights between 2006 and 2010.

40 GAO-06-817R, pp. 2-3. In July 2005, NASA awarded CEV concept development contractors to both Lockheed Martin and Northrop Grumman. In September 2006, it awarded Lockheed the contract for design, development, production, and sustainment in September 2006, which could extend through 2019. According to GAO, NASA “has started in-house preliminary design work on the CLV upper stage structures and avionics and plans to begin awarding competitive contracts for production of these items in May 2007.” 41 2006 NASA Strategic Plan, p. 6.

Figure 2-2 Historic Shuttle Launches

Figure 2-2 shows that the proposed Shuttle flight schedule is consistent with the schedules adopted in previous years. For example, in the early to mid-1990s, NASA consistently launched 7 or 8 Shuttles a year over a five-year period. Of the years that NASA has flown the Shuttle,42 the smallest number of flights it has had in a given year is 1; the largest number of flights is 9. Historically, when the Shuttle flew between 1981 and 2005, NASA averaged 4.5 flights a year. Still, the planned launch schedule must be met with a smaller Shuttle fleet,43 at a time when many Shuttle assets are being transitioned to Constellation Systems.

In interviews with the study team, NASA officials acknowledged they are facing a significant challenge during this transition. The scope of the Shuttle is huge:

• Shuttle activities occupy 640 facilities.

• Over 900,000 line items are associated with its equipment.

• Over 15,000 civil servants and prime contractors work on the program.

42 After the Challenger explosion upon liftoff, NASA launched no Shuttles the rest of 1986 or in 1987. After the Columbia tragedy upon reentry, NASA launched no Shuttles the rest of 2003 or in 2004. The years 1987 and 2004 are excluded from the historic average calculated above. 43 Columbia was not replaced after it was destroyed in 2003.

• Equipment value totals over $12 billion.

• Facilities value total $5.7 billion.

Finally, Shuttle assets are widely dispersed across the government, prime contractors, subcontractors, and vendors.

To prepare for the multi-year Shuttle transition, NASA has created a transition infrastructure, including a headquarters transition working group, designed to develop an integrated response to these issues at the directorate, center, program, and project levels. In NASA’s history, it has not faced a transition of this magnitude or duration. The closest parallel is the end of the Apollo mission, which ended more abruptly. Figure 2-3 depicts the Headquarters Transition Working Group.

Figure 2-3 Headquarters Shuttle Transition Working Group

The transition team examines each resource to determine if the Shuttle still needs it. If it is not, the team offers the resource to other ongoing programs, which would then fund the resource. If not needed by other ongoing programs, the team offers the resource to the Constellation program for future needs. If a resource that neither the Shuttle nor the exploration program currently needs may be required in the future, the agency may provide funding to retain it.

The transition structure’s efforts are underway. For example, it is working to decide how soon, and under what conditions, one of the two launch pads at Kennedy would be transferred to Constellation. The proposal is to transition Launch Pad B in FY 2007. Although there is some risk to only being able to fly the Shuttle from Launch Pad A because it complicates potential rescue missions, Constellation needs a launch pad to do a demonstration of a launch vehicle as early as FY 09 and needs time to prepare. Recently, NASA decided not to use any of the Shuttle main engines in any of the Constellation projects. Because it has enough main engines for the Shuttle to fly safely until 2010, these assembly lines will close. Consequently, NASA will terminate some suppliers.

As one of the centers most heavily impacted by the Shuttle phase-out, Johnson Space Center has established a “Johnson 2025” process, facilitated by their Office of Advanced Planning. The center recently held a senior staff retreat to help management focus on these issues and develop follow-on actions related to 2025 strategic planning. Some of the broader questions being considered are:

• What long-term changes to the center’s organizational structure and governance structure will be needed?

• How should these be transitioned through 2025?

• Who are the center’s future partners?

• Does the center have the necessary skills to deal with its international partners, both now and in the future?

Other questions to be addressed include:

• What skills will be needed in 2025?

• What type of center will Johnson be? For example, will it be a development center, an operational center, or an integration center? How much of its business line will be directly involved with the human development of the vehicles?

USEFUL METHODOLOGIES AS NASA TRANSITIONS TO THE VISION FOR SPACE EXPLORATION

As NASA works to implement the Vision, as well as to respond to changing circumstances and maintain core competencies in aeronautics and science, the Panel has identified two useful methodologies to incorporate into its strategic planning and workforce planning processes. The first is scenario planning, which would help NASA develop and alter strategies based on critical changes in the environment. The second is a model, such as RAND’s, to project the “core workforce”44 to be maintained in certain critical areas, even though demand is declining in the short-term, in order to avoid the significant costs of rebuilding these competencies from zero.

Scenario Planning

In 2005, GAO released a report on the Space Shuttle that urged the program to “begin identifying its future workforce needs based upon various future scenarios the program could face.”45 GAO identified scenario planning as a valuable tool for answering key “what if” questions given the rapidly evolving environment NASA faces. What if the Vision is not as large as currently envisioned? What if appropriations are not sufficient to meet current plans? What if the agency is unable to implement some of its planned reductions to aeronautics and science programs?

In an earlier report on human capital across the federal government, GAO observed that “scenario planning is an approach that agencies have used to manage risk of planning for future human capital needs in a changing environment.”46 After the 9/11 terrorist attacks, for example, the Coast Guard reexamined five long-term scenarios developed in 1999 to describe different environments that might exist in 2020. The Coast Guard recognized that the terrorist attacks fundamentally changed its operating environment. Accordingly, it established two new scenarios to guide short-term planning and created new long-term scenarios to guide planning beyond 2005.

The relevant research and literature on scenario planning has been growing. Martin Borjesson, a university lecturer at Sweden’s Göteborg University and a consultant on scenario planning, describes the methodology as a way of “learning about the future by understanding the nature and impact of the most uncertain and important driving forces affecting our future.” It is a group process that encourages the exchange of knowledge and a deeper mutual understanding of the critical issues facing an organization. The goal of scenario planning is to “craft a number of diverging stories by extrapolating uncertain and heavily influencing driving forces” in order to increase “the knowledge of the business environment and widen both the receiver's and participant's perception of possible future events.”47

44 NASA has conducted four previous core competency assessments, but to date has not used an approach such as RAND’s to identify the optimal core workforce for competencies whose demand is projected to decline over the long term. 45 GAO-05-230, Space Shuttle: Actions Needed to Better Position NASA to Sustain Its Workforce through Retirement (March 2005, p. i). 46 Ibid, p. i. 47 For more information, see Borjesson’s website (http://www.well.com/~mb/scenario/).

Pierre Wack, a leading thinker on scenario planning,48 distinguishes this approach from traditional forecasting or market research in that “scenarios present alternative images instead of extrapolating current trends from the present. Scenarios also embrace qualitative perspectives and the potential for sharp discontinuities that econometric models exclude.” When conducting scenario planning, decision-makers should “question their broadest assumptions about the way the world works, so they can foresee decisions that might be missed or denied.” “Decisions that have been pre-tested against a range of what fate may offer,” he concludes, “are more likely to stand the test of time, produce robust and resilient strategies, and create distinct competitive advantage. Ultimately, the result of scenario planning is not a more accurate picture of tomorrow, but clearer thinking and an ongoing strategic conversation about the future.”49

As mentioned above, the study team learned in October 2006 that OHCM is working to incorporate scenario planning into the workforce planning process across the five-year budget cycle. It will coordinate with each of the four mission directorates to develop the two or three most likely scenarios with the most impact on work. The scenarios will consider such issues as plausible budget changes, schedule delays, and work content shifts. OHCM hopes to be able to integrate these scenarios across the mission directorates. This would provide centers with the opportunity to plan their workforce and budget against these various ranges. OHCM believes that using scenario planning for the relatively near-term (five-year budget cycle) is more practical and of more immediate value than focusing on a longer period, such as 20 years.

In addition, the study team learned from Langley Research Center officials that they recently worked with the Futures Strategy Group to complete a scenario-based planning exercise. With the Futures Strategy Group, Langley officials used five scenarios, each deemed equally likely to happen, to describe future worlds within which the center might find itself. After developing a set of realistic strategies for their respective scenarios, all the participants met as a group and selected those that would be viable for all of the worlds. The exercise was intended to do the following:

• Develop robust strategic objectives and strategies for the future.

• Train center officials to examine the center strategically and think strategically about key issues.

• Identify a cadre of officials who could test center objectives.

RAND Model for Projecting Core Workforce

RAND’s workforce studies for the Department of Defense and the United Kingdom’s Ministry of Defense (UKMOD) offer insights for NASA’s workforce planning, especially as it attempts to reshape the aeronautics program and phase out the Shuttle. RAND’s studies show the challenges

48 In the early 1970s, Pierre Wack was a planner in the London offices of Royal Dutch/Shell, in a newly formed department called Group Planning. He built upon the work of American futurist, Herman Kahn, by looking for events that might affect oil prices (http://www.juergendaum.com/news/09_08_2001.htm). 49 For an article that discusses Wack and other aspects of scenario planning in organizations, see Art Kleiner’s “Scenario Practice” [http://stage.itp.nyu.edu/scenario/overview.html]

agencies face if they allow specific areas of expertise and employee skill sets to atrophy and disappear. Reconstituting these skills can be difficult, time-consuming, and expensive. RAND offers insights into how to sustain a core workforce with current skills over the long-term, despite declining demand over the short-term.

Because NASA is not the first Research and Development (R&D) organization to face such a transition, it may gain useful insights by considering the experiences of others. Ambitious R&D programs are seldom continuous because demand for core assets varies over time. RAND found that the United Kingdom had essentially lost the ability to design nuclear submarines by contracting out inherently governmental functions.50

Any large organization planning a workforce transition must address complex issues:

• How to size and sustain core competencies

• How to plan over the long-term to sustain competencies and match demand with supply

• How to plan over the short-term to save the expenses of relearning

The issue of identifying and sustaining core competencies is especially crucial in today’s complex environment, which requires highly skilled professionals. According to RAND, it takes approximately five years for a tradesperson to become fully qualified and 10 to 15 years for an engineer. Although the knowledge obtained through a technical school or a university is important, equally important is on-the-job experience working within a given R&D program. If a competency will likely be needed in the future, RAND analysts believe an organization should maintain a core cadre—even if there is a reduction in demand over the short-term. Otherwise, schedule delays and cost increases will occur when demand increases again. In short, retaining the core is the least-cost solution.

• RAND has determined that managing workforce transitions requires:

• Careful analysis of the demand for labor over time, down to the skill level.

• Identification and characterization of core capabilities

• Long-term planning for the maintenance of those capabilities to ensure that today’s problem by making tomorrow’s worse.

A “critical mass” (which RAND refers to as the “core”) is important. Through RAND’s models, an organization is able to track the costs of different strategies—including the cost of letting

50 In many ways, Navy shipbuilding in the US and UK is comparable to some NASA missions. Like spacecrafts and satellites, aircraft carriers and submarines are expensive: aircraft carriers cost about $7 billion; submarines cost about $2 billion. They are also very time-consuming to design and build (between 10 and 15 years). These vessels, like NASA’s spacecrafts, must be designed and operated carefully due to safety concerns: nuclear submarines, for example, have problems with radiation and heat transfer. RAND noted that the Columbia Accident Investigation Board identified the Navy as a model for safety.

employees go, hiring or rehiring them, and training them. In determining how long the core should be sustained, RAND emphasizes the need to plan over the long-term—which is decades for R&D programs. Organizations need to consider how many university and technical school graduates are likely to be produced during this time. If the core group is too small, the organization may be unable to train a new cadre quickly enough to meet its schedule. The lower the supply of graduates, the more people it will need to retain within the organization during dips in demand. Because of the core group’s familiarity with the external environment and internal operations, they can act as mentors for new hires and for individuals pulled in from other programs within the organization. According to RAND, the core group should include both civil servants and contractors.

Without such a core, organizations run several risks:

• Unnecessary expenditures for relearning

• Program demands for labor exceeding the supply

• Loss of core capabilities

After determining how many people are needed in the core group, the organization must determine how to keep them gainfully employed. In addition to beginning a project earlier than originally planned or stretching programs over a longer time horizon, organizations can sustain a core group of design and development experts by:

• Continuous design improvement (spiral development)

• Continuous conceptual designs

• Employment on related projects (for example, they could be detailed to another federal agency, or be sent to another level of government or non-profit on an Intergovernmental Personnel Act assignment

Collaboration with other countries or multinational entities

Over the shorter term, an organization can save substantial sums through careful scheduling. How long to sustain the core depends on the length of the demand gap. The core is generally smaller when the gap is longer; it is generally larger when the gap is shorter. It is important to get an adequate balance because it is equally inefficient to over-sustain the core (that is, go beyond what a least-cost solution would require).

RAND’s model does not simply focus on civil servants. It considers contractors to be part of the core.

CONCLUSIONS

• At the most basic level, the Panel believes NASA is facing a significant number of macro-level and micro-level challenges:

o Macro-level challenges exist in the agency’s overall environment, both because of ambitious decisions for the Vision and stakeholder pressures. These challenges include long-term budget shortfalls for the exploration work; a current civil service workforce not ideally aligned with the new mission; ambitious plans to phase out the Shuttle no later than 2010; and ambitious plans to design, build, and launch the next generation launch vehicles no later than 2014.

o Micro-level challenges exist at the program level. These challenges include the effect of budget shortfalls on the Constellation program; significantly declining appropriations for aeronautics research; declining appropriations for some science programs; and continually evolving exploration specifications and requirements.

• In order to develop an effective long-term response to these challenges, NASA should build upon existing innovative planning efforts at the headquarters, program, and center levels:

o Although NASA has not used scenario planning as an agency-wide tool for workforce or programmatic planning, this methodology has been used by specific programs and centers. In addition, OHCM is working with the mission directorates to integrate scenarios for center workforce variability into the FY 2008 budget process. At headquarters, the Aeronautics Directorate has worked with the Futures Strategy Group to do scenario planning for the aeronautics field; both Langley and Marshall have contracted with this group for center-level scenario planning exercises.

o At the program level, NASA has made a solid start at developing a long-term governance structure for the Shuttle transition. Through this process, it will determine when to transition assets (workforce, equipment, facilities, and others) to the Constellation program.

o At the center level, individual centers have begun to expand their planning processes to determine how the worlds in which they operate may change and what the center will need to do to respond. The Johnson and Langley initiatives discussed above are a step in the right direction in this area.

RECOMMENDATIONS

Given NASA’s budget constraints, the Vision is very daunting and poses significant challenges to the agency, its workforce, and its programs. Therefore, the Panel recommends that NASA:

• Adopt a risk-based planning strategy, based on solid and transparent supporting analyses, that allows the agency to foresee and deal with potential changes in future program needs, budget shortfalls, and schedule revisions.

This risk-based approach is especially needed in areas currently being reduced over the short and intermediate-term. Without such an approach, NASA may experience unnecessary expenditures for retraining; program demands for work exceeding the available supply of civil servants and contractors with the requisite skills and experience; and a general loss of core capabilities.

• Broaden its strategic planning processes, especially for the multisector workforce, beyond the current near-term focus on FY 2007 through 2009.

Because the Vision is a long-term fundamental program shift, it is vitally important that NASA immediately begin to analyze the workforce skill mix—both demand and supply—for the next ten years. Given NASA’s multisector workforce, such a skill mix analysis should include both civil servants and contractors.

• Incorporate scenario planning into agency-wide planning processes and use the results to inform decision-making, especially regarding workforce plans and strategies.

To be most useful, the scenario planning process should be sufficiently focused to:

o Identify the driving forces underlying each likely scenario o Incorporate the scenarios into strategic actions o Identify key events that would indicate a particular scenario is unfolding o Create mechanisms to monitor the environment, particularly the key events identified above o Make adjustments to agency strategies based on environmental monitoring o Identify and coordinate overall agency competencies, schedules, and facilities across programs by scenario

• Use a methodology, such as the RAND model discussed earlier, to quantify the “core” workforce required to maintain its critical aeronautics and scientific competencies.

This core workforce should include both civil service and contractor components. Because it is unclear what the actual demand for some aeronautics and science programs will be over the next five to ten years, NASA officials at headquarters and the centers should make it a priority to protect and sustain an appropriate core workforce.

• Apply this same methodology to the Shuttle transition process to quantify the workforce required to maintain core competencies through the end of the program.

The Panel believes that the model would be especially useful where a given expertise is not immediately required for the next generation launch vehicles, but is likely to be needed over the

longer term. Although the Shuttle transition team concept aligns the organization to meet its transition challenges and provides a structure appropriate to a robust organization, the effort could benefit from the application of a rigorous RAND-type model, with its increased emphasis on long-term scheduling projections, quantification of core competencies and proficiencies, and analysis of overlapping mission needs.

CHAPTER III TEN HEALTHY CENTERS

NASA asked the Panel to identify the key components of a healthy center and propose related metrics, particularly regarding each center’s use of a flexible, multisector workforce of civil servants and contractors. Throughout this study, the Panel has found NASA’s desire to have ten healthy centers—each with a critical role in the exploration program, with fully funded civil servants—to be a major driver behind its current workforce planning strategy. The Ten Healthy Centers approach is, in part, a response to the constraints of Title 5 and congressional mandates to make maximum use of existing civil servants. It is also consistent with the agency’s long- standing organizational culture, which is characterized by a “can-do” orientation to new missions and programs, as well as the sense that the “NASA Family” has a duty to protect its permanent civil servants.

The Ten Healthy Center approach raises two questions. First, what is a healthy center, and how should NASA measure it? Second, how should NASA evaluate the Ten Healthy Centers initiative itself? The Panel has addressed the first question by developing a comprehensive framework to assess center health, with twelve critical success factors and key success elements and metrics. (See Table 3-4 at the end of this chapter.) The framework is consistent with the knowledge-based approach promoted throughout this report.

Over the longer term, the Panel believes that NASA will also need to develop mechanisms to evaluate the Ten Healthy Centers approach itself. With constrained resources and Title 5 limitations, the Panel is concerned that supporting all ten field installations may come at the expense of NASA as an institution. Although it is valuable to assess individual center health, the Panel believes the Ten Healthy Centers approach will prove to be successful only if it yields a healthy NASA.

This chapter:

• Summarizes relevant background information on the Ten Healthy Center concept

• Identifies lessons learned from headquarters interviews and field visits

• Presents a comprehensive framework for assessing the health of NASA’s centers

The Panel’s conclusions and recommendations focus on NASA’s need to:

• Expand its healthy centers criteria and approach

• Conduct an annual evaluation of center health

• Take corrective action over time based on the results of these evaluations

• Pursue longer-term organizational changes, if necessary, should annual evaluations indicate that the existing configuration of ten centers is not contributing to a healthy NASA

THE TEN HEALTHY CENTER CONCEPT

NASA’s Workforce Strategy places strong emphasis on the development of ten healthy centers that are “fully engaged and productive.” To accomplish this, the agency is committed to ensuring that each center has a clear mission, a role in turning the Vision into reality, and sufficient funding and workload to sustain its workforce.51 NASA expects this approach will fully utilize its resources and “vastly increases the agency’s ability to manage the normal ebb and flow of programs and projects in a comprehensive, reasoned, and cost-effective manner.”52

In order to make this a reality, the Workforce Strategy committed NASA to:

• Protect core capabilities by having civil servants instead of contractors perform work where appropriate

• Recapture intellectual capital

• Avoid furloughs and reductions-in-force

• Transfer work to centers with uncovered capacity

• Expand relevant reimbursable work

The Workforce Strategy identified seven key attributes of a “strong and healthy” Center:

• Core, clear, stable, and enduring roles and responsibilities

• Clear program/project management leadership roles

• Major in-house durable space flight responsibility

• Skilled and flexible “blended workforce” with sufficient depth and breadth

• Technically competent and values-centered leadership

• Capable and effectively utilized infrastructure

• Strong stakeholder support

51 NASA Workforce Strategy, p. 6 52 Ibid.

The Panel’s earlier review of the Workforce Strategy, issued in July 2006, acknowledged that NASA had defined the healthy center concept and identified seven key attributes, but expressed concern that it did not make a business case for ten centers being critical to accomplishing the agency’s mission. Neither the agency-wide Strategic Plan nor the Workforce Strategy address the business reasons for sustaining ten healthy centers; nor did either address ways to strategically right-size the centers with an optimized organizational structure that can adapt to changing work, labor markets, or program budgets. The Panel also noted that the Workforce Strategy did not include evaluative tools or metrics to assess how the various centers are performing relative to the seven attributes. The Panel understands that OHCM recognizes this as a limitation of the existing framework and is in the process of expanding its healthy center approach to include measures of workforce capability. These would assess such areas as skill availability and access; internal sustainability; scalability; staffing efficiency; budget coverage; workforce proficiency; leadership strength; contractor oversight and smart buyer strength; investment research; business development strength; and geographic stability.

The Office of Program Analysis and Evaluation (PA&E), established as a headquarters office by Administrator Griffin in 2005, is responsible for conducting Organizational Readiness Reviews of centers and programs. In 2006, it also led the agency-wide review of uncovered capacity at NASA’s centers. Although worthwhile, their current emphasis appears primarily driven by budget concerns or focused on a center’s ability to undertake major exploration programs. To conduct comprehensive assessments of center health, PA&E would need to broaden its scope to include the agency’s other programs and collect and analyze consistent data across the centers. By conducting a comprehensive assessment of the centers, NASA would have the quantifiable data to support the establishment of underlying conditions required for long-term center health and eventually determine the appropriate mission, structure, and size of each center.

BEST PLACES TO WORK: AN INDICATOR OF CENTER HEALTH

Employee surveys provide needed insights because employee attitudes are a barometer of an organization’s ability to attract and retain critical workers. One indicator of center health, therefore, is the Best Places to Work in the Federal Government survey, whose results were first released in 2003 by the Partnership for Public Service and the American University Institute for the Study of Public Policy Implementation. Results from the second survey were released in 2005, with updated rankings to provide benchmarks of the progress made for departments and sub-agencies (organizations below the department level).53 At the departmental level, NASA ranked 6th out of 28 agencies in 2005. Although this is still an extremely high ranking, it is a drop from the previous year, when it was ranked #1—the top place to work in the federal government.

53 The information was collected by OPM in its most recent Federal Human Capital Survey in December 2004. The survey, distributed to a stratified random sample of over 275,000 executive branch employees, is the largest survey of federal employees ever undertaken. It had a response rate of 54 percent (approximately 150,000 employees). The Partnership transformed this raw survey data into specific measures of workplace satisfaction. [http://www.usnews.com/usnews/biztech/best-places-to-work/about/methodology.htm]

This survey is a useful indicator of center health because it examines the “subcomponents” (headquarters and field unit installations) of major federal departments and agencies. Although all of the civil service-run centers54 have a rank above the mean, which is a positive indicator, they vary widely in their relative standing. Johnson and Kennedy rank in the top ten of all federal subcomponents. Several centers rank in the top fifty: Goddard, Marshall, Stennis, and Glenn. NASA headquarters, as an organizational entity, has a rank below the mean.

Table 3-1 shows how the centers rank among all federal subcomponents on four critical leadership and strategic issues: (1) employee skills and mission match; (2) strategic management; (3) teamwork; (4) effective leadership. The number in parentheses below this overall federal ranking (labeled factor rank) is the relative ranking of each NASA subcomponent (headquarters and the ten centers).

Table 3-1 Rankings on Leadership and Strategic Issues Best Places to Work in the Federal Government

Employee Skills & Strategic Effective Center Teamwork Mission Match Management Leadership (aggregate rank)55 (factor rank) (factor rank) (factor rank) (factor rank) Ames 83 178 38 54 (106) (7) (8) (6 tie) (8) Dryden 187 206 99 100 (121) (9) (10) (9) (10) Glenn 79 176 22 29 (47) (6) (7) (5) (6) Goddard 30 42 11 5 (11) (3) (3) (4) (4) Headquarters56 188 60 120 86 (10) (5) (10) (9) Johnson 9 7 1 2 (5) (1) (1) (1) (1) Kennedy 22 10 5 3 (7) (2) (2) (3) (2) Langley 141 19 47 28 (76) (8) (9) (8) (5) Marshall 40 47 4 4 (19) (4) (4) (2) (3) Stennis 75 80 38 37 (33) (5) (6) (6 tie) (7)

This table shows a wide discrepancy among the ten field centers in their relative ranking among all federal subcomponents in the survey on these critical areas. However, there is remarkable

54 As an FFRDC managed by the Caltech, JPL was not included in the Best Places to Work survey. 55 Total rank in the Best Places to Work in the Federal Government. 56 Headquarters is unranked because it fell below the mean.

consistency in how each center ranks across the same areas when looking at their relative position within NASA. Johnson, for example, was the top NASA center in all four areas; the remaining nine centers each had a similar rank across each of the factors.

Table 3-2 shows how the centers rank in the same survey on five human capital issues: (1) performance-based rewards/advancement; (2) training and development; (3) diversity; (4) pay/benefits; (5) family friendly culture and benefits; (6) work/life balance.

Table 3-2 Rankings on Human Capital Issues Best Places to Work in the Federal Government

Performance- Training Pay/ Family Work/ Based & Diversity Benefits Friendly Life Rewards/ Center Development (rank on (rank Culture & Balance Advancement (rank on factor) on Benefits (rank (rank on (rank on factor) factor) on factor) factor) factor) Ames 13 42 40 173 35 204 (5) (8) (9) (10) (5) (10) Dryden 93 41 56 141 169 178 (10) (7) (10) (9) (10) (9) Glenn 33 12 6 83 16 172 (8) (4 tie) (3) (8) (3) (8) Goddard 5 12 4 42 14 59 (3) (4 tie) (2) (7) (2) (5) Headquarters 27 79 21 18 65 116 (7) (10) (7) (5) (7) (6) Johnson 6 5 9 10 76 32 (4) (3) (5) (3) (9) (4) Kennedy 2 1 1 11 70 3 (1) (1) (1) (4) (8) (1) Langley 16 59 24 8 24 167 (6) (9) (8) (2) (4) (7) Marshall 4 4 7 4 13 10 (2) (2) (4) (1) (1) (2) Stennis 61 22 14 22 54 21 (9) (6) (6) (6) (6) (3)

Unlike the leadership issues addressed in the previous table, Table 3-2 shows that there is a wide discrepancy among the ten field centers in their relative rank among all federal subcomponents in the survey on these human capital issues, as well as discrepancies in how each ranks across the areas, when looking at their relative position within NASA. In other words, there are differences across the centers on these issues and also within them. Kennedy was the top-ranked center on four of the areas, while Marshall was the top-ranked center on the other two.

INSIGHTS FROM FIELD VISITS

Over the course of this project, the Panel and study team have visited eight of NASA’s ten field centers (listed below in the order in which they were visited): 57

• Goddard Space Flight Center • Ames Research Center • Johnson Space Center • Glenn Research Center • Marshall Space Flight Center • Langley Research Center • Kennedy Space Center • Jet Propulsion Laboratory

Each NASA center has its own cultures and purposes, often as a result of their different origins. Table 3-3 provides an overview that identifies the origin of each center, its major historical programs, and its new exploration responsibilities. The purpose of this table is to compare each center’s exploration responsibilities with their traditional programs, as well as to compare and contrast roles across the centers. The table does not imply that the exploration programs will replace a center’s historic programs.

57 To fit within the allotted travel budget, the Academy consulted with NASA headquarters about field visits; it was jointly agreed that the team would not visit Dryden or Stennis because they are both very small centers.

Table 3-3 Overview of NASA Field Centers

CENTER (location) ORIGINS HISTORIC PROGRAMS NEW EXPLORATION ROLE Ames Research Center 2nd NACA laboratory • Aeronautics • Thermal Protection Systems (heat shield and Est. 1939 • Astrobiology aeroshell) (Moffett Field, CA) • Integrated Next Generation • Information Technology Computing Systems • Lunar Crater Observation and Sensing Satellite • Intelligent/adaptive systems • Nanotechnology • Entry, descent, and landing systems (with JPL and Langley) • Air Traffic Management Systems Dryden Flight NACA Laboratory • Aeronautics, Space and • Abort Flight Test Integration and Operations Research Center Est. 1946 Related Technologies (research, develop, verify, and (Edwards, CA) transfer). • Space Shuttle Backup Landing Site • Test and Validate Design Concepts/Systems for Orbiters Glenn Research Center NACA Laboratory • Aeronautics Research and • Service Module Est. 1942 Development • Upper Stage of the Crew Launch Vehicle (Cleveland, OH) • Aircraft Engine Research • Aerospace • Propulsion Research • Aeropropulsion • Microgravity • ISS Power • Turbomachinery

CENTER (location) ORIGINS HISTORIC PROGRAMS NEW EXPLORATION ROLE Goddard Space Flight 1st NASA Space • Earth Science Center (robotic • CEV Communication, Tracking, and Support Center Flight Center earth observation missions) Mechanisms Est. May 1959 • Hubble Space Telescope • Lunar Reconnaissance Orbiter Mission (Greenbelt, MD) • Explorer Program • Discovery Program • Earth Observing System

Jet Propulsion Est. by Caltech in • Robotic space and earth • Systems Engineering for Operations Laboratory 1936 to do rocket science missions Development and Preparation (lead of a multi- propulsion • Mars Rovers center effort) (LaCanada, CA) experiments on the • Galileo Jupiter mission • Constellation Program Office Systems site • Robotic missions to every Engineering and Integration Software and planet in the solar system Avionics Team (co-lead with Goddard) • Rocket development oversight • Nuclear systems Johnson Space Center Opened as “Manned • Lead for human spaceflight • Managing the Constellation Program Space Center” and exploration • Integrate CEV, Crew Launch, and Cargo Launch (Houston, TX) Est. September 1963 • Space Shuttle (astronaut Vehicles for all mission operations training and mission control) • Crew Module • International Space Station • CEV Flight Operations Support • Mission Planning and Crew Training • Mission Control Operations

Kennedy Space Center Est. as the NASA • Shuttle Launch Services and • Ground Operations Project (manages ground space vehicle launch Processing operations for launch/landing sites; includes (Cape Canaveral, FL) facility in July 1962 • Shuttle Payload Ground ground processing, launch, and recovery systems) Processing • Expendable Launch Vehicle Services and Processing

CENTER (location) ORIGINS HISTORIC PROGRAMS NEW EXPLORATION ROLE Langley Research 1st NACA laboratory • Aeronautics (Research, • Launch Abort System Integration Center Est. 1917 (oldest Engineering, Testing) • Command Module Landing System Advanced NASA center) • High Speed Research Development Project (Hampton, VA) • Advanced Supersonics • CEV testing (support) • Aviation and Space Research • Man-In-Space program (1958 – 1963) • Earth Science Research Marshall Space Flight Est. in July 1960; • Space Shuttle propulsion • Constellation Launch Vehicle projects (managing Center Director was chief • International Space Station all Crew Launch and Cargo Launch Vehicle architect of the program integration related activities). (Huntsville, AL) Saturn V launch • Chandra X-Ray Observatory • Crew Launch Vehicle’s First Stage (design) vehicle (superbooster • Gravity Probe B programs • Launch Vehicle Testing that propelled • Discovery and New Frontiers Americans to the exploration programs Moon) Stennis Space Center Federal Decision to • Rocket Test Complex • Rocket Propulsion Testing (program Build Facility to Test • Flight Certification of Engines management/integration) (Hancock County, MS) Launch Vehicles to Boost Shuttle into Low- • Upper Stage Engine and Propulsion Test Article (October 1961) Earth Orbit (development/testing) Named for Senator • Propellant Test and Delivery Systems Stennis in 1988

The field visits between June and November 2006 provided the team with important insights into the management, operations, and culture of the eight centers. Among other things, the centers have significantly different business lines. Goddard, Ames, Glenn, and Langley have a history of small projects. Because the major program management decisions are made at the space flight centers, Ames officials said they were analogous to a small “subcontractor” to the “prime contractors.” Langley officials also used the subcontractor analogy to describe their center’s role. Goddard has historically had 40 or more missions at any one time, most of which have been small. Unlike the research centers, however, Goddard’s portfolio has been balanced with large sustaining programs, such as the Hubble and James Webb telescopes. It has historically maintained two major missions in-house.

Total aeronautics funding has been declining for the past decade, while the science budget is declining in real dollars. In addition, an increasing amount of the available science funding is going to the James Webb Telescope and the Mars Science Lab. Ames, Glenn, Goddard, JPL, and Langley experienced significant cuts to many other science programs. This has produced widespread uncertainty regarding future work and funding. The allocation of Constellation work assignments in the summer of 2006 has allayed some of these concerns for FYs 2007 and 2008, but exploration funding and work beyond FY2009 remains uncertain.

In general, the three research centers (Ames, Glenn, and Langley) each faced similar challenges. Each of the research centers expressed concerns about their aging workforce and the lack of a significant number of mid-career officials.

Ames identified its three major challenges as:

• Stabilizing the workforce in alignment with the Vision

• Receiving program management responsibility and developing project management skills

• Renovating aging facilities

Langley officials described their major challenges as:

• Need to develop project management skills

• Short-term skill mix (Senior managers acknowledged this as a short-term issue; center workforce planners, however, made recommendations on work assignments based on the premise that engineers are engineers who can do research and development regardless of their specialty..

• Need to develop a longer-term workforce and leadership pipeline

• Center Management & Operations budget cutbacks expected in the out-years will have a disproportionate impact on Langley because it has the oldest infrastructure

• New and emerging skills that must be brought into their center.

Glenn Research Center expressed similar concerns. Glenn officials were particularly concerned about their ability to successfully match the skills required for future development projects to its relatively static civil servant engineering population. To deal with skill mismatches, Glenn has been working to re-deploy and retrain some personnel. It has established the Space Mission Excellence Program to do retraining. The center hopes to train approximately 50 engineers in systems engineering—a skill in short supply across NASA and the aerospace industry as a whole. Other strategies for dealing with the workforce include attempting to expand reimbursable work and providing additional discipline training for program and project managers, especially in the space flight area.

Glenn has been restructuring its organization to accommodate its evolution from a heavily aeronautics orientation to a much stronger focus on exploration systems, space flight development, and space operations. For example, it had established a new Space Flight Systems Directorate in response to an Organizational Readiness Assessment by the Office of Program Analysis and Evaluation.

As major space operations centers responsible for human space flight activities, Johnson and Marshall are in a very different position. They have each long had a very clear, hands-on mission:

• Johnson has been given a major role in the Vision, both for now and in the future, which has motivated and energized its workforce. It has responsibility for the overall management of the Constellation program, which includes overseeing the development of the next generation launch vehicles, systems engineering and integration, and safety and reliability. It will integrate the CEV and CLV for all mission operations. It is the lead center for the crew module. As with Shuttle program and Apollo, JSC will plan missions, train crews, and run mission control.

• Marshall has had 25 years of experience managing Shuttle elements (external tank, main engines, reusable solid rocket boosters, and reusable solid rocket motors). It has significant responsibilities for the ISS and has strong science programs. Marshall will develop new heavy lift capability for the Ares Crew Launch vehicles and do substantial engineering evaluation/studies for the Lunar Precursor Robotic Program and the Lunar Lander Project.

Given the demands of supporting three major programs, the total level of work requested by the programs and mission directorates for JSC exceeds their FTE ceiling; Marshall officials said that the total volume of work requests will likely exceed their ceiling over time. JSC supports the agency’s plan for ten healthy centers. The center understands that this will require its workforce to remain flat through Shuttle completion; it is working with headquarters to transfer excess work to other centers. Marshall has also been actively seeking to partner with other centers— primarily with Glenn Research Center on propulsion development work.

Kennedy Space Center’s circumstances are in between these two scenarios because its major program (the Space Shuttle) will be phased out in 2010 after the ISS is completed. It has long

had a very clear mission of launching and processing spacecrafts. Like Johnson and Marshall, its current program demands exceed its FTE restriction. Executives in the technical directorates, especially the Engineering Directorate, are concerned about the inability to hire to fill critical needs. After 2010, however, the center could be facing very different workforce dynamics. Senior Kennedy officials have identified 2010 – 2020 as a challenging period because the Shuttle will have been phased-out and ISS construction completed.58 Given the Administrator’s and OMB’s strong belief that the next generation vehicles cannot be as labor intensive as the Shuttle, the jobs of many people within Kennedy’s workforce (especially contractors) will be vulnerable after 2010. With the phase-out of the Shuttle, projected work for the contractor currently responsible for check-out assembly and payload processing for the ISS is expected to decline steadily from FY 2007 to FY2011. Similarly, the near-term Shuttle workforce at KSC is expected to decline from over 4,450 Work Year Equivalents (WYE) in FY 2007 to less than 2,950 WYE in FY 2010.

Kennedy believes that most civil servants will be able to be covered through non-traditional KSC work: CEV/Orion Final Assembly; Commercial Orbital Transportation Service; and other exploration activities. Kennedy has been given responsibility for ground operations under Constellation. The center is tasking many current Shuttle personnel with Constellation work in order to further develop their skills and ease the transition. As the prime contractor to design, develop, and build the CEV (Orion), Lockheed will use the Kennedy facility to complete the final assembly of the vehicle.

NASA’s FFRDC, the Jet Propulsion Laboratory (JPL), said that it had traditionally had one flagship mission as the centerpiece of its research and development activities, and this provided a very strong anchor for the workforce’s attention. Over the past ten years, however, the focus has shifted away from one major program to a much larger number of smaller missions. As a result, JPL has needed many more project managers, flight systems managers, and systems engineers. In addition, JPL’s future missions will increasingly be the result of competitions against other centers (primarily Goddard). Although six of the ten JPL missions from 2000 to 2005 were assigned and four competed, the distribution of the next 10 scheduled launches has been dramatically different: two have been assigned and eight competed against other centers. The Mars Science Lab is JPL’s biggest project over the next five years. Of the 15 launch opportunities over the first half of the next decade, three are assigned; 10 will be competed; and it is yet-to-determined whether the other two will be competed or assigned. JPL believes it will win a sufficient number of missions—so long as the decisions are based on merit. But the increased competition does make workforce planning more difficult. Like Goddard and Ames, JPL is concerned that it will not be doing enough work for the Constellation program, raising concerns about its long-term role in exploration.

As an FFRDC, JPL has more flexibility in planning and realigning its workforce, as well as differentiating performance recognition and rewards.59 NASA’s decisions to rebalance the mix

58 It is not clear what role, if any, NASA will have in the International Space Station (ISS) after 2016, when NASA funding for the effort is scheduled to end. The Russians have indicated they may continue their efforts on the ISS if NASA does leave the program after 2015 with all modules and systems in place. 59 JPL went to a pay-banding system in 1997.

of space science missions meant that the business base no longer supported the number of employees working at the center in FY 2005. Due to these expected budget reductions for FY 2006, JPL had to lay off a significant number of employees.

Although senior management at the centers supports work package transfers to support the Ten Healthy Center concept, some technical personnel have expressed concerns about how this concept would work in practice. JSC’s Engineering Directorate, for example, specifically identified successfully transferring work to other centers with no negative impact on technical, cost, and schedule performance as a major challenge. They are concerned that skills may not be readily available at the other centers and that training of other center personnel will be required. If skills are available at the other centers, they believe the Certification of Flight Readiness and the schedule will be the major program risks. In addition, they identify cost and technical quality as potential risks. The Mission Operations Directorate concurred with these observations. They said space flight operations are geographically constrained because planning, training, and operations are physically located in Houston. This directorate had particular concerns because the next phase of the space station assembly will be more complex than any undertaken previously. Within the center, JSC’s directorates have expressed some concerns that the transfer of work to other centers may result in skill mismatches within its own workforce. Kennedy Space Center technical personnel had similar concerns that the work of processing and launching shuttles is geographically constrained. In addition, JPL officials emphasized that the Healthy Centers approach would only work if it resulted in the right people doing the right job.

Appendix B-1 in Volume 2 provides a more detailed narrative summary of key issues facing each center and insights gained as a result of the team’s visit. Appendix B-2 in Volume 2 presents a table that provides a more detailed summary of lessons learned at each center in six major areas:

• Uncovered Capacity

• Full Cost Accounting

• Competency Management System

• Permanent and Term Appointments

• Contractor Utilization

• Overall Center Health

Assessing the Ten Healthy Centers Initiative

NASA’s Workforce Strategy contended that the Ten Healthy Centers approach will yield significant benefits for the agency as a whole by:

• Engaging the whole agency in space flight success.

• Requiring no major disruptions of workforce.

• Rejuvenating space flight capability at the research centers.

• Utilizing the important synergies between aeronautics and exploration.

NASA further explained:

This approach also places renewed emphasis on building sufficient intellectual capacity for all Centers to do hands-on work in-house. Where necessary to facilitate the work transition, qualified employees may be temporarily reassigned to supplement shortfalls in program/project leadership at the gaining Centers. Rather than emphasizing relocation of employees from ‘hurting Centers’ to strong Centers, an expensive process that siphons off talent and creates further imbalances in Center strengths, NASA will emphasize using the talent at each Center as a foundation for a stronger whole.

Although there is no doubt value can be gained from leveraging existing resources and capabilities within the ten centers, it is important that the agency not use the Ten Healthy Center concept as a justification for avoiding needed workforce restructuring.60 As the agency implemented the healthy center concept during mid-2006, the uncovered capacity spotlighted by Full Cost Accounting appeared to be the primary driver. In interviews with the study team, agency officials conveyed the impression that the most fundamental measure of center health was the extent to which civil servants have a charge code to bill 100 percent of the time.

Clearly, having every civil servant with a place to charge 100 percent of their time does not translate into center health. A more holistic assessment, based on broader data, will provide a more comprehensive and analytical approach consistent with long term workforce planning guides. At the most fundamental level, NASA will have ten healthy centers only if the work assigned to them results in the right people, with the right skills and supporting physical and institutional infrastructure, doing the right job. As NASA phases out the Shuttle and transitions to the Vision programs, this more comprehensive approach should support agency planning and decision-making, as well as increase transparency.

60 Congress has mandated that NASA utilize the existing workforce to the maximum extent feasible. The NASA Authorization Act also prohibits NASA from undertaking any Reductions-in-Force until March 2007.

Potential to Adjust the Structure to Achieve the Vision

As an organization changes major portions of its mission, it is common to examine not only the workforce, but also the structure of the organization. NASA is aware of this. In 2004, for example, it established a NASA Organizational Model Evaluation Team (NOMET) to study the advantages and disadvantages of six potential models.

(1) Federally Funded Research and Development Centers

(2) University Affiliated Research Centers (UARC)

(3) Institutes

(4) Government Corporations

(5) State Agencies

(6) Public-Private Partnerships and Joint Ventures

NASA officials said that, after NOMET’s report was presented internally, the agency established an Institutional Realignment and Transformation Team in early 2005 to consider specific alternatives. Prior to the NOMET review, in June 2004, the President’s Commission on Implementation of United States Space Exploration Policy recommended that the NASA centers transition to FFRDCs. According to the Commission:

As currently organized, NASA’s Centers are not optimally configured to carry out the nation’s space exploration vision. They have Apollo-era infrastructure that needs substantial modernization. They lack institutional incentives that continuously align performance with the vision’s need. Personnel practices have too often ossified, placing insufficient priority on innovation, professional growth, and managerial mobility. In some instances, they support duplicative capabilities that unnecessarily raise NASA’s cost to the taxpayers. The Centers, as with the rest of NASA, must also contend with the reality that a large portion of the workforce is now or will soon be eligible for retirement. In short, the Centers must be renewed, empowered, focused, and more effectively leveraged in support of future space exploration and scientific discovery.61

When Dr. Griffin became Administrator in April 2005, he announced a different direction for the agency centered upon the development of ten healthy centers, with the overall organizational model of nine civil service-run centers and one FFRDC remaining unchanged.

Similarly, DoD faced major issues as the nation transferred from a defense posture that supported the Cold War to one that recognized that two “superpowers” would coexist peacefully. Not the least of its considerations were the changing size and location of military assets. Recognizing the inherent difficulty of closing military bases that are integral parts of local

61 President’s Commission on Implementation of United States Space Exploration Policy 2004, pp. 23 – 24.

economies, Congress established the Base Realignment and Closure Commission (BRAC), which recommended closures that Congress and the President either had to accept or reject. Decisions were not easy, but the process helped the DoD to reorganize its installation infrastructure to more efficiently and effectively support its forces, increase operational readiness, and facilitate new ways of doing business.

When a base is closed, all missions of the installation cease or are relocated. All personnel positions (military, civilian and contractor) are eliminated or relocated, except for personnel required for caretaking, conducting any ongoing environmental cleanup, and disposing of the base.

For the 2005 BRAC round, the process was as follows:

• Selection criteria established

• Report to Congress submitted with a force structure plan, based on an assessment of probable threats to national security over 20 years; a comprehensive inventory of military installations worldwide; a description of infrastructure needed to support the force structure; discussion of categories of excess capacity; and an economic analysis of the effect of realignments and closures

• Secretary of Defense certification of the need for BRAC and the annual net savings resulting by 2011

• Secretary of Defense forwarded recommendations for realignments and closures to the BRAC Commission

• The BRAC Commission forwarded its report on the recommendations to the President

• The President had 15 days to accept or reject the recommendations in their entirety

• Congress had 45 legislative days to reject the recommendations in their entirety before they became binding on DoD

CONCLUSIONS

The Panel concludes that:

• NASA’s seven criteria for Ten Healthy Centers, as established in the Workforce Strategy submitted to Congress in April 2006, are a good start at establishing a mechanism to assess center health. They are much too narrow, however, to be a meaningful assessment of the health of NASA’s ten centers over the long-term.

Although the Panel believes that these criteria should be included in a healthy center framework, they cannot stand alone as valid indicators of center health because their underlying focus is too heavily weighted toward sufficient work allocation to sustain the existing civil service workforce. The Panel acknowledges that OHCM has begun to develop added metrics and believes, if implemented, their efforts would begin the process of transitioning NASA to a broader, more comprehensive approach to the Ten Healthy Centers initiative.

• NASA has not established a comprehensive evaluation process to assess and monitor the long-term health of each center.

In FY 2006, NASA headquarters and centers understandably focused primarily on reducing the near-term uncovered capacity at four centers (Ames, Glenn, Goddard, and Langley) through a combination of Constellation assessments and work package transfers from the other centers. In field visits, several centers presented self-assessments, based on the seven criteria, through FY 2011. The Panel believes that the ability to accurately self-assess progress against established milestones is a core capability of a healthy organization, especially if the criteria are comprehensive. As discussed above, OHCM is also working to establish some more comprehensive indicators for centers to use in assessing their health and reporting to headquarters. Since NASA has stated that it has achieved its goal of reducing near-term uncovered capacity, now is an appropriate time to begin assessing center health in a more comprehensive manner.

• The current and long-term health of the three NASA research centers (Ames, Glenn, and Langley) is questionable and should be a core concern of NASA headquarters.

Because Ames, Glenn, and Langley have historically focused on aeronautics and scientific/technological research, they have naturally geared their workforce’s substantive expertise to these areas, and they have developed performance appraisal and reward structures appropriate to the research environment. In the new budget and programmatic environment, the Panel believes that the research centers will face more challenges than the others in transitioning to the design, development, test, and evaluation work that is the core of the Vision through 2014. The research centers will need to bring in personnel with new skills, retool their existing workforce, and may need to design new incentive and reward structures appropriate for the development work as opposed to research.

RECOMMENDATIONS

The Panel, therefore, recommends that NASA adopt a comprehensive approach to Ten Healthy Centers and that:

• NASA should utilize the Panel’s proposed Ten Healthy Centers Framework or a similar model.

The proposed comprehensive framework is based on academic research, government sources of information such as Best Places to Work, and expert judgment based on real-world experience in public organizations. It includes twelve critical factors:

o Mission of the center

o Program performance

o Infrastructure

o Organizational structure

o Communication flows into the center

o Leadership and decision-making

o Acquisition management

o Civil service workforce

o Contractor workforce

o Safety

o Stakeholder and environmental issues

o Evaluation

For each of these factors, the Framework includes success elements that elaborate upon the core aspects underlying the factor, as well as suggested metrics. Many of these metrics are quantitative; others lend themselves more to qualitative assessments by knowledgeable evaluators inside or outside of NASA.

• PA&E, supported as appropriate by OHCM, should use this framework to conduct an annual evaluation of center health. In addition, each center should perform an ongoing self-assessment based on this framework.

NASA should utilize the results of these evaluations to make appropriate revisions to the size, workload, and configuration of each center in absolute terms and as a relative proportion of the overall NASA civil service workforce. By “configuration,” the Panel means the proportion of the workforce dedicated to various programs, as well as the balance between civil servants (perm-term-other) and contractors (on-site, near-site, and off-site).

• The NASA Administrator and other senior agency leaders should take corrective actions based on the annual evaluations of center health.

If annual evaluations show that significant skill mix imbalances exist and overall center health needs improvement, the Panel believes headquarters should acknowledge these results, internally and externally. Headquarters should also educate elected officials and other stakeholders about the health of the centers, as well as advocate for additional regulatory and statutory flexibilities when these could improve center health over the long-term. (See Chapter VII for a fuller discussion of possible additional flexibilities.)

• If, over time, it becomes clear that the current organizational configuration of ten centers does not contribute to a healthy NASA and does not allow NASA to meet its changing mission within its available budget, Congress and NASA should consider other organizational models, especially for the research centers.

• Alternatively, if it becomes clear that the current organizational configuration of ten centers does not contribute to a healthy NASA and does not allow NASA to meet its changing mission within its available budget, the Panel believes that the Administrator should work with Congress to gain statutory authorization for a BRAC-type commission to determine whether one or more centers should be closed.

If such a commission determines that a center(s) should be closed, it should be responsible for identifying those to be closed, as well as establishing processes to transition critical facilities and relocate needed personnel. From a political standpoint, the Panel understands that it may be more difficult to establish a similar process for NASA because there are fewer total “installations” (that is, centers). However, if the Vision requires an alternative organizational configuration, it will be necessary for the nation to overcome these political barriers.

Table 3-4 Healthy Center Framework and Metrics (Success Elements Identified by NASA’s Workforce Strategy in Italics)

CRITICAL FACTORS SUCCESS ELEMENTS SELECT METRICS/SOURCES OF METRICS Mission of the Center Roles: Clear, stable, and enduring roles and • Current organization and functions manuals responsibilities • PA&E evaluations of capabilities and role • FTE and funding levels for major center programs Responsibilities: Major in-house, durable spacecraft • Best Places to Work in the Federal Government survey on responsibility (along with aeronautics and science employee skills/mission match programs at the research centers and, as appropriate, the other centers)

Programs: The center’s program responsibilities are consistent with its core capabilities Program Performance Program Alignment: Center programs are aligned • Project milestones met appropriately with the agency-wide and center-specific • Schedule delays Strategic Plan • Cost overruns • Staffing plans to address comprehensive needs based on Project Management and Deliverables: Projects meet work requirements cost, schedule, and technical performance expectations • Quality of deliverables based on feedback surveys and safety record Technology Development and Transfer: Center • # of New Technology Reports management and technical personnel actively work to • # of Space Act Agreements “spin-out” technology developed through NASA • # of Patents programs and projects; technical personnel make use of • # of Licenses technology “spun-in”

CRITICAL FACTORS SUCCESS ELEMENTS SELECT METRICS/SOURCES OF METRICS Infrastructure Infrastructure Assessment: Capable and effectively • Facility Condition Index62 utilized infrastructure • Type of facilities (#) • Facility types by current replacement value Facilities Investment and Management: Effective • Deferred maintenance for active facilities management and appropriate use of existing facilities • Average facility age • Unutilized properties/inactive facilities Information Systems Investment and Management: • Under-utilized properties/inactive facilities Effective management and use of information systems • Integrated data systems

• Accuracy and sufficiency of data • Clean financial opinion

Organizational Alignment: Tight alignment of organizational structure • PA&E organizational assessments (consider whether the Structure to center mission center has duplicative/overlapping organizations) • Internal center assessments/ management studies on Integration: Cross-office functionality and structure collaboration • Directorates with a disproportionate rate of uncovered capacity or skills mismatch Agility and Adaptability: Agile and adaptable • Up-to-date and clear delegations of authority organizational structure

Responsibility: Clear lines of authority and responsibility

Communication Flows External Environment: Timely flow of information • Review of NASA public documents, union comments, and into Center from external stakeholders to senior staff and other communications with employees relevant personnel • Best Places to Work in the Federal Government, overall sub-component rating Internal Environment: Information about the internal environment (HQ and field); information flows to field/operating employees, who understand impact of their daily decisions on the broader organization/mission

62 Data for the first five sample infrastructure metrics are already collected and analyzed for active facilities by the NASA Real Property Program.

CRITICAL FACTORS SUCCESS ELEMENTS SELECT METRICS/SOURCES OF METRICS Leadership and Leadership Effectiveness: Technically strong and • Best Places to Work in the Federal Government surveys on Decision-Making value-centered leadership at all levels (senior, middle, effective leadership and strategic management and project-level) • Process for selecting leaders • PA&E evaluations Project roles: Clear program/project management • GAO and IG reviews roles • Milestone analysis for those met and not met • Best Places to Work in the Federal Government survey on Decision-making and authority: Culture of the teamwork decision-making process; readily understood who is • Accountability mechanisms (avoidance of a “dual systems” responsible for making decisions/taking actions; how culture, in which center officials adopt local practices in quickly decisions are turned into action potential conflict with agency or center policies)

Teamwork: Center utilizes teams (including administrative teams for special projects) appropriately; monitors/oversees performance and deliverables

Action orientation: Effective implementation of agency decisions; response to significant/unexpected changes Acquisition Acquisition Utilization: Appropriate use of available • Internal controls for key acquisition activities Management63 acquisition tools; contractual provisions are appropriate • #/value of procurement obligations to the contracting vehicle • Dispersion of #/$ value of contracts for key goods or services Contract Management: Projects funded by center • #/% of suppliers selected again through competition acquisitions have clear specifications and are within (compare price, schedule, and performance) budget and on schedule • Acquisitions staff per procurement dollar obligations and complexity of acquisitions Contract Selection: Contractors for goods and services • Attrition rate of acquisition staff are selected/re-selected competitively based on cost, • % of total vacancies and retirement eligibility among schedule, and performance considerations acquisition staff

• $ value of cost overruns

63 Acquisition is an important element in the healthy center framework because the bulk of NASA’s budget is used to acquire goods and services from the private sector. As such, the contracting readiness of each NASA center is an important indicator of center health.

CRITICAL FACTORS SUCCESS ELEMENTS SELECT METRICS/SOURCES OF METRICS • Months of schedule delays • Ratio of COTRs to contract obligations; attrition rate of COTRs • COTR training • Time-on-task (pre-award, evaluation, and post-award) • Surveys of customers on satisfaction, procurement’s support of agency goals, and quality • Missed milestones Civil Service Workforce Workforce Capability: Skilled and flexible “blended • Median age of workforce workforce”64 with sufficient depth; employee skills and • Number of employees in critical occupational categories center mission appropriately matched; smart buyer and (such as science and engineering) by decade of birth oversight capabilities • Uncovered FTE • Total hires Workforce Planning: Assess current workforce, future • Fresh-out hires needs, and identify gaps; consider civil servants and • Civil service-contractor ratio contractors • Supervisor-to-staff ratio

• Grade structure, including SES per capita Human Capital Flexibilities: Appropriate balance • Center-by-center use of flexibilities (NEX, six-year terms, between permanent and term employees; effective recruitment/retention bonuses, student loan payments) utilization of all authorized flexibilities • Timeliness of awards Recruitment and Retention: • Percent of civil service payroll dedicated to awards Talent acquisition and retention; talent management and • System for soliciting nominations for awards retention • % of people participating in training over past year • Turnover Performance Culture: Rewards, recognition, and • Absenteeism motivators; performance management and • Overall productivity differentiation • Employee perceptions/assessments of management, e.g. 360 degree feedback, Best Places to Work survey Employee and labor relations: Effective labor and • Distribution of performance ratings manage collaboration to achieve center mission • Distribution of monetary awards objectives • Distribution of honorary awards

64 The Academy refers to the mix of civil servants and contractors as the multisector workforce.

CRITICAL FACTORS SUCCESS ELEMENTS SELECT METRICS/SOURCES OF METRICS • # of grievances Training and Development: Sufficient training and • Disciplinary actions development programs to achieve mission requirements • # of unfair labor practices and improve individual/organizational performance • # of EEO complaints • Best Places to Work in the Federal Government, diversity Healthy Workplace: Employee surveys indicate a element positive workplace in such areas as fair treatment, ability to impact decisions/actions, opportunities for advancement, and workload.

Diversity: Workforce diversity recognized, appreciated, and leveraged Contractor Workforce Contractor Competencies: the core capabilities of • #/$ value of task order modifications resulting in contractor contractor organizations are understood by the civil work coming in to civil service servants assigning/overseeing the work; contractors are • % of civil servant lead engineers responsible for given responsibilities consistent with their capabilities fundamental decision-making • # of contractors supervising civil servants Division of Responsibilities: civil servants perform • Joint civil service-contractor councils responsible for inherently governmental functions; civil servant coordinating and problem-solving engineers/scientists clearly responsible and accountable 65 • Contractor personnel meet required certification/licensing for technical products at the system level requirements • Training/awareness of regulations on civil servant- Contract Oversight and Supervision: Contractor contractor roles utilization and management are consistent with • Results of Inspector General reviews regulatory requirements established at the government- • COTR evaluations of contract performance, quality, cost, wide, agency, and center levels effectiveness, timeliness, and value to the government

Working Relationship: Civil servants and contractors distinguish their roles while also working together to meet program and project requirements

65 This is consistent with Administrator Griffin’s vision for the agency: “I do not believe it is wise to contract out these vital functions. Making NASA engineers clearly responsible and accountable for our technical products at the system level will drive our team toward excellence.”

CRITICAL FACTORS SUCCESS ELEMENTS SELECT METRICS/SOURCES OF METRICS Safety Human Safety: Comprehensive protections for human • Safety policies and procedures established/adhered to life and safety throughout all NASA missions, • Loss of life and “near misses” on NASA missions and in programs, projects, and facilities center facilities • Injuries on NASA missions and in center facilities Equipment Safety: Equipment utilized at NASA • Workmen’s Comp Claims facilities meets standards of acceptable design and • Workplace accident reports utilization • Loss of equipment, loss to mission

• Environmental degradation Environmental Safety: Industrial hygiene, radiological • Results of safety/hazard reports health, and food sanitation are protected throughout the • NASA response to specific safety recommendations in center ASAP and other applicable reports Stakeholder and External Stakeholders: Strong support in Congress • PA&E assessment of support and flexibility Environmental Issues and the larger community • Best Places to Work Survey • Response to external reports (GAO, IG, ASAP, NAPA, and Internal Stakeholders: Effective cross-center and others) headquarters collaboration Evaluation Self-Assessment: Center performs ongoing self- • Results of framework evaluation assessments based on this framework; develops and • Use of framework evaluation implements targeted actions in response to findings

HQ Annual Assessment: HQ performs annual evaluation of each center based on this framework; takes appropriate actions in response to findings

CHAPTER IV ACQUISITION: A KEY SUPPORT CAPABILITY

Contracts are NASA’s largest lever in work redirection, particularly for non-core competencies and products. They provide surge capacity, long-term capacity, and the ability to shift people and competencies as the mission dictates. NASA has asked the Academy to provide guidance as the agency seeks to balance its use of civil service employees with contractor services/deliverables. With continued reliance on this segment of its multisector workforce for flexibility and scalability, the agency’s acquisition planning processes must be integrated with overall strategic and workforce planning, and internal acquisition expertise must be sufficiently available, effective, and efficient.

For these reasons, the Panel has examined NASA’s acquisition function, which, along with human capital, it views as primary institutional support capabilities. These two capabilities66 are critical to NASA’s ability to achieve a flexible, scalable workforce. In high performing organizations—and particularly those facing dramatic change, increased workload, technological advancements, or workforce concerns—both must function at their highest possible levels if the organization is to adapt.

NASA is not unique in its reliance on contractors to accomplish its mission. Like other federal agencies, NASA has found the management of this segment of its workforce often presents complicated issues, particularly where contractors and civil servants physically intersect. At a 2006 federal acquisition67 forum, participants characterized “ensuring that the federal workforce has the capacity and capability to manage contractor operations effectively” as a major 21st century challenge.68 The Panel agrees. GAO has said, “Human capital permeates virtually every effort within an agency, including acquiring goods and services and executing and monitoring contracts. Successful acquisition efforts depend on agency leadership and management valuing and investing in the acquisition workforce.”69

This chapter will:

• Provide an overview of contracting at NASA

• Explore contracting issues at NASA and their impact on contract management

66 Although financial management systems are also critical to mission support, the Panel has focused on acquisition and human capital because they are directly tied to the primary focus of this study (civil servant and contractor workforce issues). The Panel does address the issue of sound financial management systems in its proposed healthy center framework and associated metrics. 67 While acquisition in the military context tends to focus primarily on the acquisition of hardware, for purposes of this report, the term acquisition is used in the traditional, broader civilian context and includes contracting for goods and services. 68 GAO-07-45SP, Highlights of a GAO Forum: Federal Acquisition Challenges and Opportunities in the 21st Century (October 2006). 69 GAO-05-218G, A Framework for Assessing the Acquisition Function at Federal Agencies (September 2005), p. 31.

• Summarize NASA’s responses to its acquisition challenges

• Explore additional methods for NASA to assess its readiness for flexible and scalable contracting

The Panel’s conclusions and recommendations focus on NASA’s need to:

• Enhance its recently-established acquisition planning process • Use a rigorous, consistent approach to ensure an appropriate allocation of work between civil servants and contractors • Limit vulnerability to personal service relationships • Collect and analyze information relating to the total acquisition workforce, including the technical representatives • Include the full range of managers in contract management evaluation and the resolution of identified problems • Apply effective contract management practices

CONTRACTING OVERVIEW

The Space Act of 1958 established NASA’s policy of contracting for most goods and services. Large-scale, decentralized procurement expanded rapidly. Between 1962 and 1968, more than 90 percent of NASA’s annual expenditures were for payments to outside contractors. With construction of research facilities and installations almost completed, from 1969 to 1978, there was a slight decline in the percentage of NASA’s expenditures dedicated to procurement. During this same period, the average value of a procurement action increased considerably, while the number of procurement actions steadily declined.70

Participants in the NASA procurement program consist of business firms, educational institutions, private research organizations, and government agencies. Along with the Department of Energy, NASA has become what some have called a de facto contract management agency, expending upwards of 80 percent of its budget on contractors. In FY 2004, NASA’s procurements totaled $13,472.4 million, via 109,476 procurement actions.71 The impact of NASA’s contracts reaches to all areas of the United States and beyond. Since the 1969-1978 period, every state and the District of Columbia has at times participated in NASA’s procurement program.

The acquisition challenges NASA faces are similar to those of other federal agencies and include:

70 SP-4012 NASA Historical Data Book: Volume IV, NASA Resources 1969-1978, p. 2. 71 NASA Annual Procurement Report, Fiscal Year 2004, p. 2.

• The sufficiency of the federal acquisition workforce, the ability to obtain the best value for goods and services, and the ability to implement acquisition reform. The majority of acquisition workers are retirement eligible.72

• An inconsistent definition of the federal acquisition workforce, which often excludes and, by implication may undervalue, Contracting Officer Technical Representatives (COTRs). COTRs are an agency’s technical link to ensure that contractors deliver quality products meeting agency specifications, schedules, and costs. Typically they are professionals in non-contracting disciplines. A May 2006 Merit Systems Protection Board (MSPB) report, which included NASA as one of ten surveyed agencies,73 concluded, “even the best managed contract is not successful if its deliverables fail to meet the technical requirements.” 74

Over the past two decades, the requirements associated with hiring and managing the federal workforce have become increasingly burdensome via the use of privatization as a public tool through A-76,75 the Federal Activities Inventory Reform (FAIR) Act of 1998,76 and competitive sourcing. In August 2006, an OMB Federal Acquisition Advisory Panel provisionally adopted a series of findings and recommendations to address under-capacity in the acquisition workforce. The panel’s Acquisition Workforce Working Group found: “Without a workforce that is qualitatively and quantitatively adequate and adapted to its mission, the government reforms of the last decade cannot achieve their potential, and successful federal procurement cannot be achieved.” It also noted that it would be “penny wise and pound foolish” for the government to acquiesce to inadequacies in its acquisition workforce, which would ultimately seriously undermine “the pursuit of good value for the expenditure of public resources.”

Some of the workgroup panelists attributed failure “to effectively manage contracts to hiring gaps that leave acquisition staffs barely able to keep up with the burden of awarding contracts, let alone overseeing them once signed.” The group generally agreed that procurement reforms in the 1990s dramatically changed the nature of government acquisition, “simplifying small procurements while greatly increasing the complexity of some larger ones and emphasizing time- intensive strategies,” such as best value contracting. The panel particularly noted that training during this same period also lagged behind the pace of change and that many agencies have acute shortages of procurement personnel with five to 15 years of experience.

72 Schooner, Steven L., “Keeping Up with Procurement,” GovExec.com, July 5, 2006, p. 2. 73 The ten agencies surveyed accounted for 90 percent of the government’s contracting dollars during that fiscal year. NASA’s 160 respondents comprised 11 percent of MSPB’s survey participants. MSPB officials noted that most federal agencies do not centrally track their COTR population. 74 December 2005 letter from Neil A.G. McPhie to the President, President of the Senate, and Speaker of the House of Representatives. 75 A-76 refers to OMB’s Circular which states that “certain functions are inherently governmental in nature, being so intimately related to the public interest as to mandate performance by federal employees.” 76 The FAIR Act established a formal, statutory process for federal agencies to identify functions that are not inherently governmental; resolve disputes over the identified functions; and inform Congress and the public about functions that could be performed by private entities.

As NASA now considers altering its mix of contractors and civil servants in order to achieve a more flexible and scalable workforce, these challenges are likely to be magnified and more critical.

NASA Functions Contracted Out

Over the years, NASA contracted-out functions have included:

• Basic services, such as landscaping, janitorial services, library services, and supply depot maintenance

• Technical functions, such as machine shop, wood shop, instrumentation calibration, and fabrication

• Operational functions, including support for wind tunnels, ground networks, deep space networks, and ground systems

• Scientific/engineering functions, such design, development, testing, and verification of spacecraft and payloads

Because of its unique mission and more limited private sector competition, NASA owns many of its own commercial/industrial operations. It has contracted out, in whole or in part, the operation of these NASA-owned facilities, as well as the manufacture of launch vehicles and related parts. NASA's rationale in outsourcing is not to cut costs, but to improve quality by "looking toward the best of the commercial world." In addition, it is sharing risk and using its limited staff to focus on core competencies: space exploration and flight.

In January 2006, Administrator Griffin told the National Society of Professional Engineers that NASA’s critical functions would no longer be assigned to contractors: “Making NASA engineers clearly responsible and accountable for our technical products at the system level will drive our team toward excellence.”

Senior NASA officials have identified the following activities as vital to keep in house:

• Strategic guidance • Oversight • Fundamental decision-making • Sustaining program momentum • Retention of institutional memory • Decisions about cost trade-offs • Architectural understanding

Although NASA has contracts with literally hundreds of organizations, an era of consolidations and mergers has led it to rely on a limited number of competitors for its largest contracts. (See Volume 2, Appendix C-2 for more detail on some of the primary contractors.)

Four Categories of NASA Contractors

Senior agency acquisition officials identified four main kinds of NASA contractors:

• Federally Funded Research and Development Center (FFRDC)-Jet Propulsion Lab (JPL) contractors. To some extent, the FFRDC is a hybrid between a traditional civil service organization and a contractor. Although most JPL personnel are employed by Caltech, NASA considers JPL to be one of its ten centers. For example, JPL officials are involved in NASA senior management discussions, negotiation, and budget formulation. The agency must be aware of JPL employees’ skill sets and required training. NASA management classes may include JPL permanent, onsite contractors. NASA describes these individuals as “the people who build for us.”

• On-site contractors, long-term. These contractors may run heat-chill plants, serve as technicians, firefighters, and IT resources. When contracts are recompeted and the incumbent loses, 80 to 90 percent of the losing company employees frequently join the new contract winner, and it is business as usual. These individuals are likely to be with the agency for the long term, and NASA managers say many of these contractors feel deeply involved in the NASA mission. Some long-term, on-site contractors augment agency core competencies when FTE and salary budgets preclude additional civil service hires. The agency uses other long-term contractors to leverage scarce resources and focus on building core expertise. Information technology is not a core competency for NASA, and many centers, including Ames and Marshall, use long-term contractors. Marshall long-term planners anticipate that, with the end of the Shuttle in 2010, the number of long-term, on-site contractors will diminish. Because NASA does not legally have an employer-employee relationship with these individuals and because many of these contracts are performance-based, the agency does not have definitive contractor population numbers.

• On-site contractors, short–term. These on-site contractors are with NASA only for the duration of a project. The contractor is responsible for having the right people and is ultimately accountable for the work accomplished. Because there is no employer- employee relationship, NASA is not concerned with the career paths of these short-term contractors. In 2006, six NASA centers provided the Academy with center estimates of on-site contractors (long and short-term combined). Totaling these six estimates demonstrates that NASA has at least 68 percent (27,377) of its contractors working on- site.

• Factory contractors. These off-site contractors, who number in the hundreds of thousands, produce specific deliverables. Their work location is irrelevant, with many located far from the NASA center, and the agency has no employer-employee relationship with them. NASA makes no attempt to gauge these workers’ competencies beyond FAIR Act estimates or certification of legal requirements. NASA procurement officials have commented that many factory contractors have spent their entire careers working on NASA contracts, as their employers continue to win competitions.

Union Views on NASA’s Use of Contractors

Public employees and unions, including those at NASA, have employed various methods to oppose privatization or related diminution of the civil service workforce. For example, the International Federation of Professional and Technical Engineers (IFPTE) testified at a June 13, 2006 House Subcommittee hearing on NASA’s Workforce Strategy that, “NASA benefits greatly from the synergy generated by its combined federal and private sector workforce,” but IFPTE believes that NASA has “already achieved the minimum healthy balance” and opposes any further decrease in the civil service component.

NASA’S ACQUISITION ORGANIZATION AND PLANNING

NASA’s procurement activities are led by the Assistant Administrator for Procurement, who reports to the Associate Administrator for Institutions and Management at headquarters. Each NASA installation has an Office of Procurement that provides leadership on all installation procurement activities. NASA acquisition employees are at all levels of the organization. The NASA federal manager’s role is to directly oversee the front line procurement workforce, which includes the contracting officer (CO) and COTR. For each designated contract, the CO serves as the government representative and provides leadership on agency adherence to all federal procurement rules and regulations. The CO also conducts market research and needs assessments to ensure that the agency’s decision to procure is well informed. The role of the COTR is delegated by the CO. The COTR uses technical expertise to provide guidance and ensure that the contractor delivers a quality end product and/or service to the agency in a timely manner. The COTR has the critical role of ensuring that the contractor understands agency work expectations and provides realistic cost and schedule estimates.

Integration Efforts to Date

NASA has undertaken efforts to involve acquisition officials in integrated planning and decision- making for the multisector workforce: Shuttle transition and senior management acquisition strategy. The first is program-focused, while the second has a broader leadership focus. Some experts believe that, with the blurring of the traditional dividing line between the private and public sectors and decreasing focus on who is doing the public’s work,77 attempts to improve and integrate processes and increase transparency in agency acquisition decisions are particularly important.

Shuttle Transition

As discussed in Chapter II, NASA has established a Shuttle transition team to position itself to spot trends, plan for change, and collaborate on decision-making to maximize resource utilization. It first convened in March 2006. A key focus of this group is to help the agency make the right decisions, with the right people at the table, and with documented decision-

77 Guttman, Dan, Contracting, An American Way of Governance: Post 911 Constitutional Choices, July 2004, p.4 and p. 6.

making of all resource considerations—including dollars, facilities, human capital (civil service and contractor), and intellectual capital.

The Space Shuttle Program (SSP) has also taken steps to map civil service and contractor workforce retention plans. In a June 12, 2006 memo from the SSP Manager, the agency established requirements to address concerns about the program’s “ability to retain critical skills required to safely and successfully fly out the program.”78 Recognizing that the majority of Shuttle workers are contractors, the memo asks project managers and their prime contractors to work as partners to reflect the needs of various projects and names the COTR as the focal point for all coordination, including that among the various contractors.

Contractor Human Capital Plans, presented in August 2006 at the Quarterly Program Manager’s Review, included:

• The current project environment, including key milestones, follow-on scenarios for contract employees, and potential links to Constellation

• Contractor workforce numbers for each FY through 2010, by project and function

• Retention strategies, with differentiation for mission critical skill positions versus essential skill positions79

• Description and justification of monetary and non-monetary retention tools

• Strategies to address unexpected workforce losses

• Metrics/measures by project and competency

Space Shuttle Program managers submitted Civil Service Human Capital Plans on September 15, 2006, to allow coordination with center budgets, as well as workforce, and competency plans Center human capital representatives coordinated and concurred in these plans. OHCM officials stated that these plans are at a relatively high level in terms of specificity of detail and are as yet not fully integrated with their corollary contractor plans. The workgroup has begun to look at the development of possible metrics.

Senior Management Acquisition Strategy and Planning

From a broader perspective, NASA has developed what it terms more upstream thinking about the acquisition process. Previously, acquisition strategy meetings were held after the agency decision had already been made to contract out. Managers acknowledged that the hire-or-buy

78NASA Memorandum from N. Wayne Hale, Jr., “Space Shuttle Program (SSP) Human Capital Retention Plans,” June 12, 2006. 79 A critical skill position is one that is necessary to safely and successfully achieve SSP requirements that can only be filled by individuals possessing specialized knowledge and/or skill, specific to SSP, and may not be readily available in the labor market or would be difficult to replace. Essential skill positions are defined as fulfilling a function that is necessary but not so specialized that a specific individual must perform the requirement.

process80 had been somewhat amorphous and inconsistent across the agency. Acquisition strategy meeting attendees typically included representatives from procurement, program offices, logistics, budget, legal, Chief Engineer’s Office, and small business.

The Assistant Administrator for Procurement issued, on August 15, 2006, NASA Procurement Notice 04-16, Acquisition Planning Changes: Procurement Strategy Meeting and Master Buy Plan Summaries. With this new planning format, one to two years before the procurement strategy meeting while the hire-or- buy decision is still in the conceptual stage, the agency will hold high-level meetings to decide which mission directorates will do the work and/or be accountable for its performance. The goal is to have “conscious, timely decisions with a small number of the right people” and to institutionalize the process well beyond the issue of uncovered capacity. In an effort to avoid planning via serial or parallel meetings, there will be a new singular strategy meeting to allow earlier planning to occur simultaneously in one room.

Acquisition planning will be comprised of up to three rounds, as follows:

• Round One: Acquisition Strategic Planning (ASP) to determine who gets the work. The August 2006 NASA Procurement Notice does not describe this first round. According to senior NASA officials, meeting attendees for this first round include the Administrator, Deputy Administrator, Associate Administrator, Chief Engineer, and Assistant Administrator for Procurement. The Deputy Administrator, to whom OHCM reports,81 represents human capital interests, with the understanding that the leadership could expand attendance to include human capital officials. NASA officials told the study team that this round, used to approve programs and significant projects for execution, will address the question of which mission directorate gets the work and at which location. Is there unfunded capacity that can be applied to this work? Where does NASA need capacity? What capabilities does NASA need to develop? Are the physical assets required to perform the work available? Are there existing NASA facilities that can be utilized? Are new types of facilities needed, and are they commercially available?

• Round Two: Specific Issues at the Acquisition Strategy Meeting (ASM) This round, more detailed and more program and project oriented than the ASP, includes a larger group of program, center, and facilities officials who convene to discuss more specific issues. Human capital management would likely be included here. The agency hopes that eventually this group would utilize generic criteria and develop sets of questions to apply to pertinent topics. Ideally, the questions would be flexible. In some instances, this second round may not be needed. Round two would be used where a significant amount of staff work is necessary.

80 As noted in the 2006 NAS interim report (p.14), the agency has historically used the terminology make or buy to denote the degree to which NASA conducts R&D work internally versus having it done by a contractor. The Panel has elected to use the term hire-or-buy since much of the work that NASA does is not strictly R&D or related to manufacture or production. The focus of the decisions now before the Panel is whether or not to hire a civil servant or utilize a contracting vehicle to secure product or services. 81 OHCM reports to the Associate Administrator for Institutions and Management and reports through the Associate Administrator to the Deputy Administrator

• Round Three: Renamed Procurement Strategy Meeting (PSM) This third meeting is the equivalent of the former Acquisition Strategy Meeting. At this point, NASA has decided to use contractor services. It has been and will continue to be a more tactical examination of contractor overlap and subcontracting issues and include more people than Round One. Depending on what services or products are being purchased, human capital staff may attend. This meeting is contract-specific and is developed by the project manager, supported by the contracting officer, and is the primary subject of the new procurement notice. This round has the most impact on NASA line employees throughout the organization and is the most transparent element of the planning process.

NASA ACQUISITION CHALLENGES

During the course of this study, the team visited eight field centers and conducted hundreds of interviews, including confidential interviews with program managers, contracting organizations, and NASA acquisition officials. While the purpose of this study was not to conduct an audit or a compliance review, the Panel identified some challenges relating to the implementation of acquisition rules and regulations that are consistent with the observations of GAO, the NASA IG, and experts in federal procurement.

NASA has been on GAO’s high risk list for contract management since 1990 due to vulnerabilities to waste, fraud, abuse, and mismanagement. GAO found, in a 2004 study, that NASA:

• Lacked effective systems and processes to oversee contractor activities

• Did not emphasize controlling costs

• Had deficient financial systems that prevented the agency from effectively managing and overseeing its procurement dollars 82

In a 2005 status report on its high-risk areas, GAO reported that NASA’s inability to overcome these challenges had “put a number of its major scientific and space programs at risk.” The report stated, “NASA lacked the disciplined cost-estimation processes and financial and performance management systems needed to establish priorities, quantify risks, and manage program costs.” As of June 2006, core financial83 and contract management remain on OMB’s high risk list.84

The primary focus of GAO’s criticism was more on systems deficiencies than on acquisition staffing. Such deficiencies in financial information, however, have the potential to directly affect

82 Testimony of Gregory D. Katz, GAO: “NASA Leadership and Systems Needed Effect Financial Management Improvements,” March 20, 2002, p. 4. 83 Agency officials involved in workforce planning stated that the agency’s financial management deficiencies had also negatively impacted workforce planning advancement at NASA. 84 See GAO-06-647, High Risk IT Projects (June 2006), Table 22, p. 59.

project managers who are then limited in their ability to do accurate cost projections or to look beyond expenditures to underlying value. Some NASA managers believe that these systems deficiencies put a burden on agency employees, including procurement professionals, who must overcome the additional challenges of less than optimal systems support. NASA expects to complete implementation of its Integrated Financial Management Program (IFMP) in FY 2008.

As noted in Chapter I, in July 2006, GAO questioned the acquisition strategy underlying the CEV project and focused on the need for the agency to have a more knowledge-based acquisition strategy. It concluded that “high levels of knowledge should be demonstrated before managers make significant program commitments. In essence, knowledge supplants risk over time.”85 GAO noted that NASA has had difficulty completing numerous projects, including several efforts to develop a new reusable space vehicle to replace the Shuttle. It estimated that unsuccessful development efforts are estimated to have cost $4.8 billion since the 1980s. It further contended that NASA’s acquisition strategy “places the [CEV] project at risk of significant cost overruns, schedule delays, and performance shortfalls” because it had not developed a sound business case before committing the government to a long-term development effort.

NASA Inspector General’s Assessment of Agency Contracting

In December 2005, the NASA Inspector General (IG) issued a report that identified a list of “trouble areas” relating to the contracting process for delivery of services and hardware. The list included:

• Lack of a reliable financial management system to track contract spending

• Inadequate control over government property held by contractors

• Single-bidder contracts with undefined and changing contract requirements

• Lack of transparency regarding subcontractor work

• Questionable contract management practices under NASA’s Small Business Innovation Research (SBIR) program

• Procurement process abuses by employees and contractors

• Significant cost overruns in some agency programs

To address these weaknesses, the IG recommended an improved internal control framework, as well as establishing institutional procurement officials accountable for acquisition integrity. The IG report noted that the agency’s weak internal control environment likely emboldens those who seek to defraud the government. The IG, agreeing with GAO, concluded that the agency is

85 See GAO-06-817R, NASA: Long-Term Commitment to and Investment in Space Exploration Program Requires More Knowledge (July 2006), p.3.

continuing to struggle to effectively oversee its contractors and noted cost overruns on the International Space Station, effort to return the space Shuttle to flight, and the James Webb Telescope Program.86

Rules and Regulations in a Multisector Workforce Setting

Like all federal organizations, NASA must comply with rules governing civil service-contractor relationships. According to the Federal Acquisition Regulation (FAR), agencies shall not award personal services contracts unless specifically authorized by statute. As specified in Subpart 37- 104(b), a personal services contract is “characterized by the employer-employee relationship it creates between the government and the contractor’s personnel.” The key question in determining whether or not a contract is for personal services is: “Will the government exercise relatively continuous supervision and control over the contractor personnel performing the contract?” Each contract arrangement must be judged in the light of its own facts and circumstances. The following elements might suggest that personal services are occurring:

• Performance on site

• Principal tools and equipment furnished by the government

• Services applied directly to the integral effort of the agency or an organizational subpart to further its assigned function or mission

• Comparable services, meeting comparable needs, performed in the same or similar agencies using civil service personnel

• The need for the type of service provided can reasonably be expected to last beyond one year

• The inherent nature of the service, or the manner in which it is provided, reasonably requires, directly or indirectly, government direction or supervision of contractor employees to: (1) adequately protect the government’s interest; (2) retain control of the function involved; or (3) retain full personal responsibility for the function supported in a duly authorized federal officer or employee.87

Federal managers typically avoid potential problems by:

• Physically separating civil servants from on-site contractors

• Using identification badges to differentiate contractors from civil servants

• Documenting the federal organizational structure clearly

86Letter (in response to House Conference Report 108-792) from Robert W. Cobb to The Honorable Thad Cochran, December 20, 2005. 87 NASA IG Report, G-99-017, Use of Support Service Contractors at the Glenn Research Center, January 29, 2001, p. 7.

• Specifying the delegation of duties and responsibilities in organizational documents

A January 2001 IG report, which focused primarily on Glenn, noted the challenge of balancing the agency’s historical reliance on contractors with regulations barring the use of contractors to perform personal services or inherently governmental work. The report noted that NASA centers have had problems in the area of personal service contracting dating back more than 30 years.88 While somewhat dated and limited in scope, the findings in this report are relevant guideposts as the Panel assists the agency in assessing the health of agency contract management practices. The report noted:

• Little differentiation between, for example, secretarial work performed by contractors and civil servants

• A common practice of rehiring ex-civil servants as contractors, subcontractors, or consultants—many supporting the same organization in which they were previously employed

• No differentiation between civil service and contractor email addresses

• About 44 percent of the total Glenn workforce was on-site contractors

• On-site contractors performing on-going and follow-on tasks for many years

• Comparable services being performed by contractors and civil servants, often side-by- side

• Provision of on-site contractors with tools and equipment needed to support NASA organizations

In August 2001, NASA issued a NASA Policy Directive (NPD) 3310.1a, titled “Distinguishing Between Contractor and Civil Service Functions.” The directive, which expired on August 22, 2006,89 addresses many of the points raised by the IG report.

Field Visit Insights into Contractor Usage

During its site visits and interviews with managers and contractors at the eight centers, the study team noted a number of situations that were similar to observations in the 2001 IG report. Taken as a group, they point to a possible reappearance of inconsistency between procedural

88 Ibid. p. 12, footnote 26. 89 The agency has not issued a replacement, but has asked the Academy Panel to suggest new policies, procedures, and criteria relative to the use of contractors versus civil servants.

requirements and daily management practices.90 For example, at various NASA centers the study team was told:

• NASA decisions concerning whether to hire or buy are driven almost exclusively by the availability of FTE salary dollars; the burden of local, uncovered employees; and the presence or absence of a hiring freeze. Allocations of FTE are made within a center, and critical functional needs for additional civil servants, such as for test managers, are likely to go unmet and be filled by contractors despite the Administrator’s pronouncement that critical decision-making positions should be brought in house. NASA managers frequently characterized their on-site, long-term contractors as augmentation to the civil service work force.

• NASA managers frequently used the term “in-house” to refer to either a contractor or a civil servant and do not readily differentiate between their roles. In explaining what a desirable place NASA is to work, several managers lauded the fact that, when working on a team, it is almost impossible to determine who is a contractor and who is a civil servant.

On a more limited basis, at some centers, the study team was told about the following contract management practices:

• Strong presence of contractors at management decision-making meetings, with critical decisions being made by contractors

• Personal service restrictions ignored by managers, who specifically ask contractors, operating under performance-based contracts, “How much money do I need to put into your contract to extend Joe for another year?”

• Inappropriate management use of position and evaluative authority to suggest that a contractor hire a specific party, known to the federal manager as a strong performer, but otherwise unknown to the contractor.

• Addition of task order clauses, by some centers/project managers, to require center management pre-approval for contractor hires.

• Reliance on contractors for integral support functions, such as general administrative support, and co-location of these individual contractors with civil service personnel to whom they essentially report.

OMB Advisory Panel Insights on Use of Contractors

The OMB Acquisition Advisory Panel, recognizing that federal agencies are increasingly using contractors as service providers, convened an Appropriate Role Working Group to deal with

90 Some assert that these differences are part of the headquarters-center tension. When headquarters tries to exert authority over the centers, through the establishment of NASA-wide policies/procedures, the centers resist and create their own informal, local practices.

these difficult issues. It adopted provisional findings and recommendations in August 2006, among them:

• Agencies are using contractors, in part, because of limitations on the number of authorized positions, unavailability of certain expertise among federal employees, a desire for operational flexibility, and the need for surge capacity.

• The existence of the multisector workforce, where contractors are co-located and work side-by-side with federal managers and staff, has blurred the lines between governmental and commercial functions and between personal and non-personal services.

• Agencies need to retain core functional capabilities that allow them to properly perform their missions and provide adequate oversight of agency functions performed by contractors.

• The term “inherently governmental” is inconsistently applied across government agencies.

• Contractors are increasingly performing functions previously done by civil servants.

• There is a need to ensure that the increase in contractor involvement in agency activities does not undermine the integrity of the government’s decision-making.

• As the extent of service contracting has grown, some have created cumbersome and difficult processes to avoid personal services contracts, but these steps may cause inefficient contract management; others have simply ignored the ban in an effort to improve contract management effectiveness.

Among the OMB working group panel’s recommendations were:

• Update the principles to determine which functions must be done by civil servants and under what circumstances agencies may procure personal services.

• Provide adequate staffing for functions determined to be civil service.

• Ask Congress to remove the current prohibitions on personal services.

• Allow the government to direct a contractor’s performance of a substance or task, but retain the prohibitions against government involvement in supervisory activities.

• Review existing rules and regulations, and, to the extent necessary, creation of new, uniform, government-wide policy.

• Consider including contractors in mandatory annual ethics training.91

As noted in this discussion of the Acquisition Advisory Board findings and recommendations, many organizations using contractors face inevitable concerns about their appropriate use, particularly in the long-term, on-site augmentation of the core civil service competencies. At NASA, as in many other governmental settings, contractors and civil servants must also work closely together with significant communication and interdependence. This situation poses challenges that are not readily resolved through physical separation or relaying instructions through the contractor’s chain of command.

Acquisition Workforce Challenges

While there is general agency concern about the sufficiency of program and project managers as well as COTRs, NASA’s Assistant Administrator for Procurement believes that staffing this function is not a long-term problem. NASA officials acknowledged, however, that agency management views allocation of FTEs to this function as adding to overhead. Likewise, it is sometimes difficult to recruit candidates for these acquisition jobs because the function, characterized as back office, is not seen as central to NASA’s mission. Recent recruiting of mid- level professionals from the Department of Defense and filling procurement positions at Stennis, post-Katrina, are examples of recruitment successes.

NASA procurement officials identified several other influences on staffing needs:

• Increased use of automation over the last ten years has enabled the offices to compensate for a smaller procurement workforce.

• As some centers’ contract portfolios expand from support contracts to include more of the complex and time critical project-specific contracts, the procurement work load has increased.

• With the implementation of integrated financial management tools, procurement professionals now have increased financial management responsibilities and workload.

As of November 2006, there was a 4.7 percent vacancy rate (39 vacancies out of a total number of 827 positions) in the center procurement offices.92 Of the current 788 civil service employees staffing the center procurement functions, almost 16 percent were eligible for retirement in FY 2006 and over 28 percent will be eligible in FY 2011. (See Volume 2, Appendices C-4 and C-5 for a copy of an acquisition survey tool, developed by the Academy, reviewed by the headquarters Office of Procurement, and piloted by Goddard, as well as a summary of the results, which show procurement center workforce trends.) Such data may provide a point of departure for agency discussion of possible healthy center metrics relating to acquisition. (See Chapter III for the Panel’s Healthy Centers Framework.)

91 Many contractors interviewed said they had such training and believed they were very knowledgeable about these issues. 92 National Academy of Public Administration survey of center procurement offices, November 2006.

COTRs: A Critical Link in an R&D Agency

OMB’s Acquisition Advisory Panel noted in its August 2006 report that, to meet demands, scarce procurement resources government-wide “have been skewed toward contract formation and away from contract management.” Others within NASA have noted that those in the technical community do not see the COTR function as professionally desirable or rewarding and would rather be using their technical training for technical work rather than contractor oversight. As one NASA manager put it, “My technical personnel tell me that the day you make my job contract monitoring is the day I go work for the contractor.” NASA may also face a scarcity of COTRs, with more than 26 percent of NASA COTRs responding to the MSPB study eligible to retire now and 57 percent of respondents eligible to retire within ten years.93

In October 2004, the IG’s office issued a report on the management of the procurement workforce, particularly at Ames, Goddard, Headquarters, and Johnson.94 The report, which noted a number of positives, also noted that some COTRs lacked the required training to carry out delegated duties and responsibilities.95 The report recommended that the Office of Procurement track and enforce throughout NASA the completion of basic and refresher COTR training. Agency management took corrective action, including the pledge to review COTR training when performing center procurement surveys.

Testifying on NASA management challenges in 2002, the Comptroller General noted “how debilitating contract management and oversight weaknesses can be to important space programs” and that “NASA did not effectively control costs as well as technical and scheduling risks, provide adequate oversight review, or effectively coordinate with partners.” He went on to note that GAO had found that “NASA lacked effective systems and processes for overseeing contractor activities and did not emphasize controlling costs.”96 These are all duties related to the COTR function.

The above findings are particularly significant given the extent of NASA’s budget spent on procurement, the agency’s dynamic procurement environment, and the significance of COTR duties on mission outcomes. COTRs have varying occupational classifications, are organizationally dispersed, and typically have other significant assignments in addition to their COTR duties.97 NASA has done little agency-wide monitoring of group demographics or of

93 MSPB surveyed COTRs from 10 agencies (accounting for 90 percent of the government’s contracting dollars). MSPB worked with agencies to obtain 14,163 COTR names/addresses; used a random sample of 5,285 possible; and distributed surveys to 4,895; 1,707 replied (36 percent). MSPB noted difficulty in identifying COTRs as many agencies do not centrally track them (MSPB report, Appendix A, p. 57). 94 NASA Office of the Inspector General, “Final Memorandum on Management of NASA Procurement Workforce, Assignment Number A-03-024-00, Report Number IG-05-002,” October 20, 1004. 95 Of the 1539 designated NASA COTRs at the four subject centers, 18 lacked required basic training, 571 needed refresher training, and 6 active duty COTRs, lacking the basic training, were nevertheless responsible for monitoring contracts valued at roughly $86 million. 96 GAO-02-735, Testimony of David Walker, NASA Management Challenges: Human Capital and Other critical Areas Need to be Addressed, (July 18, 2002), p. 22. 97 52 percent of NASA COTR respondents to the MSPB study indicated that they spent 25 percent or less of their time on contract-related activities.

COTR performance of duties for systematic inclusion in organizational performance appraisals of their COTRs.98

(See Volume 2, Appendix C-3 for a summary of data collected in the MSPB study.)

NASA RESPONSES TO ACQUISITION CHALLENGES

NASA’s Office of Procurement evaluates center functional performance. NASA’s senior procurement executive, the Assistant Administrator for Procurement, developed a Self- Assessment Guide and accompanying survey program to help ensure that the procurement function is operating well. These surveys focus on the following areas at individual centers:

• Organization and management • Contract, acquisition planning, solicitation, and award • Contract/subcontract management, termination and closeout • Grants and cooperative agreements; and simplified acquisition procedures

The surveys are not designed to explicitly assess how effectively or consistently NASA components manage contractors, nor do they typically compare performance between or among centers. They are used in support of annual center procurement audits and semi-annual center compliance reviews. Weaknesses identified in the surveys are tracked to closure, with one-on- one presentations to the Assistant Administrator on the status of corrective actions initiated. Twenty-nine survey reports, dating back to 1998 and covering each of the ten centers, are available on line.

Semi-annual compliance reviews focus on areas of procurement function vulnerability, with the specific scope of the review at the discretion of the center. Emphasis is placed on:

• Weaknesses identified in the last Procurement Management Survey • Weaknesses identified in the last semi-annual self-assessment • Validating the correction of previously identified weaknesses.

Effective Practices within the NASA Acquisition Community

NASA has also responded to its acquisition challenges by adopting several key practices:

NASA’s Contracting Intern Program

Since 1998, NASA has had a Contracting Intern Program. OMB’s Acquisition Advisory Panel included in its August 2006 report a recommendation that the Office of Federal Procurement Policy (OFPP) establish a similar program government-wide. The impetus for NASA’s program was a significant staffing gap, created by hiring freezes in the 1990s, which resulted in a 20

98 See Appendix C-5 for a summary of center procurement office provided data, which shows center estimates of COTR strength as below NASA IG estimated levels for the four centers it studied.

percent reduction in staffing agency-wide. These freezes coincided with a large number of acquisition staff retirements. The two-year program, managed by the Office of Procurement, allows the participants, who typically enter service at a GS-5 level, to rotate to the various centers. In addition to helping the agency recruit acquisition staff for each of its offices, the intern program has an additional express purpose of breaking a historical cycle of single-center employment. The interns bring to their work added exposure to the various centers and their differing missions. In Panel site visits for this study, each of the center acquisition offices cited this program as an excellent recruitment source and a wise investment.

Management/Contractor Partnerships

As NASA and contracting organization officials have noted, in order for NASA to succeed, its contractors must succeed. Some centers have formed management/contractor partnerships that allow for open two-way communication and feedback that promote necessary synergy.

• The Joint Leadership Team (JLT) at Johnson was formed to address leadership and culture issues across the civil service and contractor communities. In part, it was designed to respond to issues raised by the Columbia Accident Investigation Board (CAIB) and JSC work group discussions during Safety and Mission Success Week in November 2003. The JLT consists of senior NASA officials and the senior management from contracting and major subcontracting organizations supporting JSC. The team works as a collaborative group focused on improving the leadership capabilities, processes, and civil servant/contractor relationships. Among issues addressed are scheduling and workload concerns that affect contractors. Johnson has institutionalized the JLT.

• Langley has a Contractor Steering Council. It provides a forum for discussion between contractors and NASA on acquisition issues. The council came about after a major RIF, when the aeronautics budget had undergone several cuts.

• In 2003, Marshall’s Industry Assistance Office and several Marshall prime contractors worked together to create the Marshall Prime Contactor Supplier Council. It has 67 active members representing 23 businesses and its purpose is to create a productive environment for networking among Marshall prime contractors, strengthen diversity within Marshall’s subcontracting programs, and develop a forum for exchange of issues, concerns, and information, including procurement policy changes, effective practices, and lessons learned. The group meets several times a year, with a prime contractor company serving as host. In 2005, the group published a small business marketing guide.99

99George C. Marshall Space Flight Center, Small Business Marketing Guide to the National Aeronautics and Space Administration, p.1., December 2005.

Procurement Metrics

Consistent with the idea that robust organizations collect and analyze data to spot trends before ill effects take hold,100 the following center procurement offices shared with the study team their approaches to the use of metrics.101 (See Chapter VI for a discussion of metrics used in work measurement.)

Langley’s procurement office makes management decisions based on trends observed through a quarterly metrics review and report card. Each quarter, management evaluates the data and rates the various elements as red, yellow, or green, similar to the President’s Management Agenda scorecard. The procurement office attributes such accomplishments as reduced processing times and small business goal achievement, to use of this system. The metrics cover a broad range of areas, such as:

• People—employee development, internal and Defense Acquisition Workforce Improvement Act training, timely performance reviews, employee feedback, and intern development.

• Customer satisfaction—Acquisition Strategy Meetings/major procurements timeline, lead time (receipt to award), grant lead time, contract/for profit cooperative agreement lead time, and work follow-up.

• Support of agency goals/programs—socioeconomic programs.

• Quality—self-assessments, support service contractor assessments, and past performance evaluations, as documented on NASA Form 1680.

(See Volume 2, Appendix C-6 for more detail on the Langley Procurement Metrics Report Card process.)

Kennedy’s Procurement Office has also developed metrics to help it manage its workload, although on a more limited scale than Langley. The KSC effort developed a monthly metric system for purchase requests and tracks how long it takes from receipt to award.

100 See Light, Paul C., The Four Pillars of High Performance: How Robust Organizations Achieve Extraordinary Results, 2005. 101 The Office of Procurement’s 2005 Functional Leadership Plan identifies three types of metrics it employs: (1) customer feedback, (2) self-evaluations, and (3) the contracting certification program data. Headquarters also utilizes a Contract Management Module that provides, through the IFMP, a procurement workload management capability (metrics and status data) to procurement personnel, managers, customers, and interested stakeholders.

ASSESSING NASA’S READINESS FOR FLEXIBLE AND SCALABLE CONTRACTING

As the agency moves forward, key questions that NASA must answer are:

• Are the agency’s capabilities sufficient to deal with its acquisition challenges and with the mission shifts necessitated by Shuttle/CLV transition?

• Does the agency’s acquisition expertise sufficiently inform its contracting and workforce decisions?

• Can NASA adapt to optimally manage the changing landscape and composition of its new, more flexible and scalable civil service and contractor workforce?

Tools for Assessing Contacting Readiness

GAO provides a framework against which federal agencies can assess their acquisition program. This evaluation framework focuses on enabling a high-level, qualitative assessment of strengths and weaknesses and on identifying areas requiring more focused follow-up. The framework consists of four interrelated cornerstones essential to an efficient, effective and accountable acquisition process.

Table 4-1 The Government Accountability Office’s Evaluation Framework

CATEGORY COMPONENTS Organizational Alignment and • Aligning acquisition with agency missions and Leadership needs • Commitment from leadership Policies and Processes • Planning strategically • Effectively managing the acquisition process • Promoting successful outcomes of major projects Human Capital • Valuing and investing in the acquisition workforce • Strategic human capital planning • Acquiring, developing, and retaining talent • Creating results-oriented organizational cultures Knowledge and Information • Identifying data and technology that support Management acquisition management decisions • Safeguarding the integrity of operations and data

GAO identified critical success factors for evaluating agency acquisition functions. The guide presents key questions that management should ask to identify the presence or absence of critical

success factors, indicators of practices and activities that facilitate good acquisition outcomes, and indicators of practices and activities that hinder good acquisition outcomes.102

While NASA’s Office of Procurement conducts function-based surveys to look at specific acquisition actions and compliance with laws and regulations, the GAO tool takes a higher-level approach and emphasizes the integration of acquisition planning with human capital planning. In addition, to supplement the GAO framework, the Academy Panel and study team prepared a contract readiness checklist, provided in Table 4-2, at the end of this chapter. The checklist is designed for use by officials across NASA as they evaluate their contracting capabilities and identify areas where improvements are needed. The checklist is based on the Panel and study team’s expertise, as well as a variety of background research, including work by Sergio Fernandez, Hal Rainey, and Carol Lowman (“Privatization and Its Implications for Human Resources Management” in the 3rd edition of Public Personnel Management) and the August 2006 report of the Office of Management and Budget (OMB) Acquisition Advisory Panel.

Each of these tools has the potential to offer NASA evaluators valuable insights and metrics that will inform agency assessments about organizational health and readiness. Likewise, data collected in the Academy study team survey of center procurement offices (See Volume 2, Appendix C-5) can serve as a useful point of departure for the agency as it assesses how to include and measure acquisition center health as part of the healthy center framework.

CONCLUSIONS

Even though NASA’s new three-round acquisition planning process provides increased consistency and coherency in agency-level acquisition planning, the Panel believes that:

• Senior agency leaders need to establish and communicate a formal and more fully integrated acquisition/human capital planning process.

• This integrated process must ensure that decisions are made early and with a rigorous approach to the appropriate allocation of work between civil servants and contractors.

• With the restart of the Contracting Intern Program, NASA has reinvigorated its long-term recruitment/staff development initiatives for acquisition staff.

• The MSPB study of COTRs has implications for NASA’s acquisition workforce in that it provides insights into the COTR role, training needs, and accountability.

• The contractor civil service council concept, adopted at some centers, is a positive development.

102 For the complete guide, see GAO-05-218G, September 2005.

• Consistent with the agency’s plan for a healthy center framework and metrics, some NASA center procurement offices have demonstrated the effective use of metrics in decision-making.

• Office of Procurement evaluations, while a good start, do not appear to probe deeply enough to determine how consistently or effectively NASA components manage contractors.

• Likewise, these evaluations do not easily lend themselves to cross-agency comparisons on contractor utilization and management.

RECOMMENDATIONS

The Panel recognizes the agency for its efforts to revise its acquisition planning process. To further enhance these efforts, the Panel recommends that NASA:

• Formalize Round One of the agency Acquisition Strategic Planning, and make public the criteria applied in this leadership decision round.

The Panel believes that an informal process cannot easily inform follow-on analysis and is more likely to get lost in implementation. For example, it is not clear from current agency documentation how cost, safety, facility availability, existing expertise, and scheduling are taken into account in the new acquisition planning process.103 The formalization and public disclosure of this process will impose a sense of rigor that will help the agency as it makes and inevitably defends difficult decisions. Because the current Procurement Notice provides little detail on this earliest and perhaps most critical round of strategic decision-making, the integration of human capital and acquisition planning is not crystallized, nor are the criteria senior managers will apply as they decide which NASA facilities will lead the various mission elements and which work elements would best be contracted out.

• Use this formal, high-level process to integrate human capital and acquisition planning.

• Include human capital strategists in Round One, the earliest and highest level strategy meetings.

If the purpose of the Acquisition Strategy Planning meeting is, at least in part, to help the agency look more broadly at its options to accomplish its work, the name of the group itself belies its purpose, making the civil service and other multisector options appear as afterthoughts to the primary contracting focus. If NASA has a high performing human capital function, discussed in Chapter V, the best and brightest human capital professionals available should be partnering with

103 Section 1807.104 of the August 2006 NPR does include contract requirements for safety, occupational health, environmental, information technology, export control, and security concerns. Section 1815.304-70 identifies three typical evaluation factors: Mission Suitability, Cost/Price, and Past Performance. It is unclear, however, if these factors or input are considered in the ASP round or only in later rounds.

agency leaders in developing these critical agency strategies. Failure to fully empower and engage such human capital experts will likely hamper NASA’s ability to fully and effectively achieve its mission. With an extremely complex mission and daunting schedule, NASA has a compelling business case for applying all of its resources to meet these challenges.

With regard to the use and management of contracts, the Panel recommends that NASA:

• Establish consistent hire-or-buy criteria across the agency by applying a decision- guide process, as proposed in Chapter VI.

• Limit vulnerability to personal service relationships by training managers, as well as COTRs, in the legal requirements.

• Locate contractors in separate units rather than with civil servants whenever possible.

• Hold all employees accountable, via performance evaluation and award mechanisms, for compliance.

• Consider applying the Langley procurement metric concept across NASA and use it to jump-start the healthy center concept (See Chapter III).

• Evaluate data collected through the preliminary Academy survey of center procurement offices to further inform healthy center metrics.

• Consider applying the Joint Leadership Team model at all NASA facilities where contractors are near or on site.

To meet its mission demands and successfully transition from the Shuttle program to its broadened goals, NASA leadership must leverage all of its resources to the fullest extent possible and maximize its partnerships contractors, who make up more than two-thirds of NASA’s multisector workforce. At some centers, contractors greatly outnumber civil servants. NASA components using contractors must─in a fashion consistent with prescribed regulations─reach out at a management level and bridge the divide between federal civil servants and contractors. Establishing such venues for the early and open two-way collaborative exchange of concerns and discussion of solutions to common challenges is an effective practice that will contribute to improved contract management and contract performance.

With regard to acquisition workforce issues, the Panel endorses the agency’s continuing commitment to its Contracting Intern Program and recommends that:

• NASA collect and evaluate information about its COTR workforce, including demographic information, assigned roles and responsibilities, performance metrics, and organizational accountability.

The Panel believes that NASA must have more comprehensive information regarding who its COTRs are, what training they have had, what training they need, what parts of their contracting work they are doing effectively and timely, and what responsibilities are perhaps not getting adequate attention. With more complete information, the agency will be better able to evaluate contract data deficiencies, cost overruns, and schedule delays and be better positioned to improve overall contract management. The agency should also hold COTRs across the agency accountable for their full range of contracting work by including and appropriately weighting these duties in their performance appraisals and resultant awards.

With regard to evaluation of the acquisition function, the Panel recommends that:

• The Office of Procurement broaden its survey beyond the procurement function to more closely examine how NASA program managers deal with real-world contract management scenarios.

• Center directors share the results of procurement evaluations with the full range of managers and encourage program managers to participate in resolving identified problems.

• NASA use GAO’s Framework for Assessing the Acquisition Function at Federal Agencies and the Academy-provided Contracting Readiness Checklist to examine agency and component-level contracting agility and robustness.

Table 4-2 Contracting Readiness Checklist

ORGANIZATIONAL FRAMEWORK NASA SELF-ASSESSMENT Level of Agreement: 5- Strongly Agree; CATEGORY STATEMENT 4-Agree; 3-Neutral; 2-Disagree; 1-Strongly Disagree I. EVALUATION OF OVERALL My organization clearly specifies the product or EFFECTIVENESS IN USING service it desires when using a contractor. CONTRACTING My organization uses competition effectively in order to realize gains in efficiency. My organization has established well-designed contract administration and monitoring systems to ensure accountability. My organization designs effective contracting processes. My organization continuously improves management practices. My organization uses a clear framework when deciding which functions to contract out. My organization makes fair and accurate comparisons of public and private service delivery options.

ORGANIZATIONAL ISSUES IN CONTRACTING NASA-ASSESSMENT USED Level of Effectiveness: 5-Highly CATEGORY METHODS (Yes or No) Effective; 4-Effective; 3-Neutral; 2-Ineffective;1-Highly Ineffective II. PROBLEM Consistently applying the term “inherently PREVENTION governmental” Retaining core functional capabilities to provide adequate oversight of agency functions performed by contractors Physically separating civil servants from on-site contractors Using identification badges to differentiate on-site contractors from civil servants Clearly documenting the federal organizational structure Clearly defining lines between governmental and commercial Ensuring that contractors have ethics training Clearly defining lines between personal and non-personal services Specifying the delegation of duties and responsibilities in formal organizational documents

KNOWLEDGE, SKILLS, AND ABILITIES NEEDED BY MANAGERS UTILIZING CONTRACTS NASA SELF-ASSESSMENT Level of Agreement: 5-Strongly Agree; 4- CATEGORY SKILLS Agree; 3-Neutral; 2-Disagree; 1-Strongly Disagree III. SKILLS AND Managers in my organization have strong abilities to KNOWLEDGE TO craft, understand, and/or evaluate contract language MEET CONTRACT that reflects requirements. MANAGEMENT Managers in my organization have knowledge of the DEMANDS technical aspects of service or function to be contracted. Managers in my organization have familiarity with procurement practices and contract law. Managers in my organization effectively plan any transition to external service delivery. Managers in my organization anticipate problems or contingencies in all aspects of contract management. Managers in my organization ensure that our contractual documents address contingencies.

NASA SELF-ASSESSMENT Level of Proficiency: 5-Very Proficient; 4- CATEGORY SKILLS Proficient; 3-Neutral; 2-Minimally Proficient; 1-Not Proficient IV. SKILLS USED IN Persuasion INTER- Negotiation ORGANIZATIONAL Coordination RELATIONSHIPS Problem Solving Building Trust

NASA SELF-ASSESSMENT Level of Proficiency: 5-Very Proficient; 4- CATEGORY SKILLS Proficient; 3-Neutral; 2-Minimally Proficient; 1-Not Proficient V. PHASE 1: PRE-AWARD Ability to utilize substantive knowledge relative to the program or function to be contracted out Ability to apply analytical skills Ability to apply communication skills Ability to use writing skills necessary to draft clear contractual requirements and statements of work Ability to assess the market, including the extent of competition between potential providers Ability to facilitate effective communication and cooperation of procurement staff and operating or program level users of the service NASA SELF-ASSESSMENT Level of Proficiency: 5-Very Proficient; 4- CATEGORY SKILLS Proficient; 3-Neutral; 2-Minimally Proficient; 1-Not Proficient VI. PHASE 2: EVALUATION Skills to compare bids or proposals Ability to utilize knowledge of the program or function being contracted out Financial skills, including cost-benefit analysis and marginal analysis Ability to apply micro-economic principles, including transaction cost economics VII. PHASE 3: POST- Quality assurance AWARD Project management Inspection Statistical sampling Accounting Auditing Record keeping Conflict resolution Applications of contract law

EDUCATIONAL AND TRAINING REQUIREMENTS PERCENTAGE CATEGORY SKILLS PERCENTAGE (BY CENTER) (AGGREGATE) VIII. FEDERAL Have a college degree or 24 HQ JPL REQUIREMENTS FOR hours of college credit in Ames Dryden PROCUREMENT/ business topics Johnson Glenn ACQUISITION Kennedy Langley PERSONNEL Marshall Stennis Goddard Meet certification HQ JPL requirements Ames Dryden Johnson Glenn Kennedy Langley Marshall Stennis Goddard Complete 80 hours of HQ JPL continuing education every Ames Dryden two years Johnson Glenn Kennedy Langley Marshall Stennis Goddard

CHAPTER V HUMAN CAPITAL AS A FULL PARTICIPANT

NASA’s human capital function, along with the acquisition function discussed in Chapter IV, is a primary institutional support core capability. As NASA moves forward, the Panel believes that the Office of Human Capital Management (OHCM) must be a full participant in all agency processes that have significant workforce implications, including high-level acquisition planning. In addition to continuing to provide and improve such tools as the Human Capital Information Environment (HCIE) and the Competency Management System (CMS), OHCM should perform a proactive strategic, consultative function for the agency. This includes working with PA&E, as appropriate, to identify workforce needs and skill mismatches over the short, intermediate, and long term; analyzing the agency's existing flexibilities and promoting their appropriate use; and working with line officials to identify other needed flexibilities. Through this role, OHCM will be an essential element of a knowledge-based organization that helps NASA put the right people, in the right job, at the right time, in the right place.

This chapter discusses:

• Federal human capital issues and perspectives

• NASA’s human capital organizational structure

• NASA workforce objectives and human capital initiatives

• Need for multisector workforce planning and strategy development

The Panel’s conclusions and recommendations focus on the need for NASA to:

• Ensure its human capital officials are full participants in all agency processes with significant impact on the multisector workforce • Develop a more complete Implementation Plan for the Workforce Strategy submitted to Congress in June 2006 • Quantify existing and anticipated civil service skill mix imbalances anticipated over the next five to ten years • Develop strategies for recruitment and retention of needed competencies, including Office of Human Capital Management competencies • Strengthen the CMS by integrating it with existing budget tools • Analyze the use of human capital flexibilities and promote effective practices

FEDERAL HUMAN CAPITAL ISSUES AND PERSPECTIVES

In January 2001, GAO designated strategic human capital management as a high-risk area across the federal government.104 Acknowledging that the “major problem is not federal employees,” it said “the problem is the lack of a consistent strategic approach to marshalling, managing, and maintaining the human capital needed to maximize government performance and ensure its accountability.”105 According to GAO, the federal government faces four significant human capital (HC) challenges:

• Leadership, continuity, and succession planning

• Strategic human capital planning and organizational alignment

• Acquiring and developing staffs whose size, skills, and deployment meet agency needs

• Creating results-oriented organizational cultures

Two principles are central to the whole idea of human capital:

• An agency’s employees are assets whose value can be enhanced through investment. Like other investments, it is important to maximize value while managing risk.

• Human capital approaches should be designed, implemented, and assessed by how effectively they assist the agency in achieving results and pursuing its mission.

In a January 2005 update to its earlier report, GAO said that “legislation is likely to be necessary, as a supplement to action by the executive branch, in order to effectively address this high-risk area.”106

Strategic Human Capital Model

In March 2002, GAO developed a model for Strategic Human Capital Management that identified four human capital cornerstones and eight critical success factors:107

• Leadership Cornerstone: (1) commitment to human capital management; (2) role of the human capital function.

• Strategic Human Capital Planning Cornerstone: (3) integration and alignment; (4) data-driven human capital decisions

• Acquiring, Developing, and Retaining Talent Cornerstone: (5) targeted investments in people; (6) human capital approaches tailored to meet organizational needs

104 GAO-01-263, High Risk Updates (January 2001). 105 GAO-02-373SP, A Model of Strategic Human Capital Management (March 2002), p. 4. 106 GAO-05-207, High Risk Series: An Update (January 2005). 107 GAO-02-373SP.

• Results-Oriented Organizational Cultures Cornerstone: (7) empowerment and inclusiveness; (8) unit and individual performance linked to organizational goals

For each of these critical success factors, GAO identified three levels describing an agency’s perspective on these issues, as well as the related role of the human capital office:

Table 5-1 Human Capital Management: Perspectives and Roles

Agency Perspective on Office of Human Capital’s Role109 Human Capital Issues108 Level 1 Tactical approach Compliance-based approach • Managing human capital strategically to • Support function separate from core achieve results unrecognized as an strategic and business planning important value • Process-oriented office to ensure • Existing human capital approaches not compliance with merit system rules assessed against current or emerging and regulations agency needs • Staff expectations limited to answering personnel-type questions on case-by-case basis Level 2 Transitional approach Transitional approach • Employees viewed as a critical asset to • Transitioning “from rules to tools” to manage strategically facilitate compliance with merit • Designing and implementing new human system and national goals capital policies and programs to support • Helping agency meet program and the mission merit system needs • Staff expected to be customer- oriented and to develop expertise for new role Level 3 Strategic approach Full participant • Implemented human capital approaches • Partner with agency leaders and line that improve agency performance managers to develop strategic and • Human capital considerations fully program plans integrated into strategic planning and • Agency leaders recognize key role of daily operations human capital professionals • Agency seeking to improve people • Provides effective human capital management strategies • Provides technical and consultative services to customers

108 Table 5-1’s bolded description of the agency’s perspective is the Panel’s, not GAO’s. The characteristics were identified by GAO’s 2002 report (GAO-02-373SP), A Model of Strategic Human Capital Management . 109 Table 5-1’s bolded description of the Office of Human Capital’s role in this Table is the Panel’s, not GAO’s. The characteristics were identified by GAO’s 2002 report, A Model of Strategic Human Capital Management, referenced above.

Table 5-1 shows the relationship between an agency’s perspective on human capital issues and the role of the office with that functional responsibility. If an agency has a narrow, tactical approach to human capital, its human capital office cannot be expected to move beyond a compliance-based approach. On the other hand, if the human capital office does not have the expertise to be a strategic partner in the agency’s pursuit of broader goals, it will not be an effective, full participant, and it will be more difficult for the agency to take a strategic approach to human capital issues. Indeed, GAO acknowledges that progressing to Level 3 requires considerable time, effort, and resources on behalf of agency leaders to successfully manage the required organizational change.110

Two other factors in GAO’s model that directly relate to this study are the extent to which (1) human capital decisions are data-driven and (2) human capital approaches are tailored to meet organizational goals. Table 5-2 illustrates how organizations utilizing these two approaches manifest distinctions at the various levels.

Table 5-2 Human Capital Decisions: Data-Driven and Tailored?

Data-Driven Human Capital Tailored Human Capital Approaches Decisions Level 1 • Decision-makers lack critical • Meaningful improvements in human information on skills mix, deployment, capital management not considered and demographic trends feasible by managers • Performance measures and goals not • Range of available tools and flexibilities identified for human capital function not being explored • Self-imposed constraints on workforce management Level 2 • Agency working to ensure information • Transitioning to flexible and innovative systems generate meaningful and approaches reliable workforce data • Managers identified existing tools and • Data includes workforce shape, flexibilities competencies, skills mix, and • Managers using flexibilities to meet demographic trends current and expected needs • Agency profiles workforce to generate • Agency looking to others for effective usable information for human capital practices decisions • Pursuing opportunities for new and more • Identify performance measures results-oriented approaches Level 3 • Complete, valid, and reliable data used • Agency tailoring approach to meet to support human capital decisions specific mission needs • Current data used to identify • Using all appropriate existing flexibilities opportunities and improve results • Enhancing its attractiveness as employer • Performance measures distilled to vital • Developing business case to support few selected additional legislative flexibilities

110 GAO-02-373SP, p. 9.

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Leadership and Succession Planning Challenges

As a way to strengthen leadership across the federal government, OPM released new guidelines on September 12, 2006 to help federal agencies concentrate on developing stronger managers. OPM's guidance advised agencies to institute mentorship programs for inexperienced managers, train all new managers within six months after they take their positions, offer rotations, and provide employee feedback. In addition, they urged agencies to:

• Have multiple sources conduct periodic assessments of managerial competence for managers and prospective managers.

• Focus on the ability to manage a multisector workforce composed of federal employees, contractors, grantees, and military service members, as well as both part and full-time employees.

• Use technology for training.

• Develop methods to identify possible new managers through nomination or self- nomination.

• Clarify the links between smaller organizational goals and government-wide goals.

Although these guidelines are not mandated federal requirements, the Workforce Flexibility Act passed in 2004 does require agencies to develop programs to train leaders. Experts believe that government managers require increasingly complex and enhanced skills as agencies begin moving away from the General Schedule pay system to more differentiated performance-based systems in which employees are paid, hired, and fired based, in part, on rigorous performance assessments by their managers.

In releasing the guidelines to Chief Human Capital Officers across the federal government, the OPM Director said, the "time is right to recommit the federal government to developing effective leaders.” Federal agencies require “top-level commitment as demonstrated by dedicating adequate resources, by ensuring active involvement of higher-level officials in the development of their managerial subordinates, and by serving as positive role models, mentors, and teachers for leadership.” The Deputy Associate Director for Learning and Executive Resources Policy at OPM said that the guidelines were “prompted by a number of concerns we’re having in government over the quality of leadership. Leadership is especially important these days for a number of reasons. We need good supervision in order to oversee pay for performance in certain agencies.” A lack of confidence in managers' abilities has been one of the most common complaints from employees moving off of the General Schedule. OPM’s last completed federal human capital survey, in 2004, showed that more than half of employees said they did not have a high regard for the leadership capability of their managers.

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The Comptroller General has identified leadership as one of the United States’ four major deficits.111 A recent report by PricewaterhouseCoopers’ (PWC) Federal Practice and the Economist Intelligence Unit contended that the federal government’s leadership succession planning activities will yield “too few leaders, much too slowly.” In PWC’s words, “if there is a crisis in human capital, succession planning for leadership roles is ground zero.” In the 1980s, the federal government began to transition to the Federal Employees Retirement System (FERS), a more portable retirement system that removed some employee financial disincentives to executive turnover. In the 1990s, the federal government’s downsizing and hiring freezes decreased the overall federal workforce by approximately 500,000. As a result of these trends, as many as 70 percent of the Senior Executive Service (SES) is eligible to retire, with fewer people behind them to backfill these critical positions.

PWC noted that succession planning “is not only about the numbers,” but also about the “quality and state of readiness of those who will take over leadership.” It recommended against a “piecemeal approach to succession planning.” Instead, agencies need to develop a sustainable, long-term process to identify, develop, and retain the talent for future leadership positions.

The record is mixed across government, however. PWC’s research shows that while many agencies have made progress in planning, considerable work remains to be done in implementing programs that will provide the agencies with the depth of leadership talent they need to fill vacating positions and equip them to train these leaders to meet the rapidly evolving demands of the 21st century.

NASA’S HUMAN CAPITAL ORGANIZATIONAL STRUCTURE

At NASA headquarters, the responsibility for human capital strategy lies with OHCM, which reports to the Associate Administrator for Institutions and Management. OHCM, headed by the agency’s Chief Human Capital Officer, is responsible for fulfilling the strategic role by:

• Translating NASA's business strategy into world-class workforce capabilities

• Maximizing NASA employees' contributions toward the organization's success

• Collaborating with NASA leadership in making cultural and organizational changes

• Using a corporate perspective to meet federal and agency human capital objectives and requirements

Headquarters also has its own Human Resources Management Division, headed by a separate, SES-level director, who reports to the Associate Administrator for Institutions and Management.

111 In a speech before the Annual Conference of the Sons of the American Revolution, A Call for Modern Day Patriots, Comptroller General Walker stated: “Today, America has at least four serious deficits. The first is our budget deficit. The second is our savings deficit. The third is our balance-of-payments deficit. And the last, and possibly most serious one, is our nation’s leadership deficit. The truth is our nation’s leadership gap is a serious and non-partisan challenge that requires a bipartisan and cross-sectoral solution.”

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Like the center human capital offices, it provides functional human resource services. The division has an Operations Branch and a Management Programs Branch. This second branch has two teams to:

• Provide management advisory services

• Manage the headquarters total on-board count

• Manage the headquarters implementation of various NASA e-gov initiatives, such as the Competency Management System (CMS) and the Workforce Integrated Management System (WIMS)

• Provide special data reports and metrics

• Ensure all human resources actions are entered into an electronic data system whereby these actions are tracked and monitored

Similarly, each NASA center has its own human capital/human resources division that reports to the center director. Within this structure, OHCM develops policies that the center HR offices are expected to implement under the direction of their center director. The center HR offices currently provide both consultative and operational services, but this mix of responsibilities may change as the NASA Shared Services Center (NSSC),112 officially opened for business on March 1, 2006, becomes fully operational. NSSC will perform many transactional and administrative activities for human resources and three other functional areas historically performed at each center: procurement, financial management, and IT. By consolidating these services, NASA intends to improve operational efficiency and overall customer service and focus more on its core competencies.113 Between 2006 and 2008, some human resources operational activities will be moving to NSSC: personnel program support, personnel action processing, and personnel recordkeeping.114 (See Volume 2, Appendix A-2 for specifics on the functions the agency will transition to NSSC and the proposed schedule.)

NASA has projected annual savings of up to $6.6 million from NSSC, with more than 200 civil service FTE across the four redirected functional areas. In the human capital area, almost a third (27 percent) of the center HR FTEs are supposed to transition to NSSC. This will be a significant change for NASA. Although NSSC may result in more consistency across the agency, it will reduce the control historically exercised at each center. The agency has not shared with the Panel how it will redeploy any FTE regained through establishing NSSC, or to what extent it will

112 The NSSC is a public/private partnership between NASA and Computer Sciences Corporation Service Providers. As an organization, it consists of a core group of contractors, with some civil service staff overseeing the operation of the contract and performing other inherently governmental functions. 113 Both the public and the private sectors have used the shared services concept to achieve economies of scale by serving multiple organizations without losing customer focus. Through shared services, economies are achieved through standardization, automation, and consolidation; customer service improvements are achieved by implementing service level agreements (SLAs), usage based charge-backs, and active management of customer relationships. 114 Activities in three other functional areas will also be transferred: procurement, financial management, and information technology.

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refocus remaining center human capital staff on consultative functions, such as those described in GAO’s Level 3 office. NASA staff said that NSSC consultative human capital services will consist of experts providing answers to questions about rules and regulations and will not deal with broader strategic issues.

NASA WORKFORCE OBJECTIVES AND HUMAN CAPITAL INITIATIVES

In June 2005, Administrator Griffin emphasized the need to enhance the in-house expertise and smart- buyer capability of NASA’s civil service. As NASA transitions to the Vision, “the core capability, the core intellectual property … must reside within NASA as an organization, and particularly within the NASA Field Centers.” He acknowledged that the skill mix of the centers will have to change over the next five years as the agency transitions to development work.

In its 2006 interim report, the National Academy of Sciences115 noted that NASA: (1) needs a workforce strategy to ensure it is able to “target, attract, train, and retain the skilled personnel necessary” for the next five to 15 years; (2) should adopt innovative methods of attracting and retaining its required personnel; (3) should expand and enhance agency-wide training and mentorship programs, including opportunities for developing hands-on experience, for its most vital skill sets.

NASA has identified attaining a “flexible, scalable workforce” as a fundamental human capital objective. According to the Workforce Strategy, the agency requires a more flexible workforce with sufficient “bench strength” to respond effectively to mission, programmatic, and budget changes as well as demographic and labor market fluctuations. By evolving to a more balanced blend of permanent and non-permanent civil servants, NASA believes it will be able to more quickly address staffing needs or skill imbalances. The rules and processes governing permanent civil service employment make it more difficult to realign the workforce.116 In addition to term appointments, the Workforce Strategy expressed support for using “temporary appointments of retirees … [as] a means to retain capabilities in the skill base when they are needed for finite periods.”117 For additional information on NASA’s use of term appointments, see Chapter VI, Balancing the Workforce.

On the “Strategic Management of Human Capital” in the President’s Management Agenda, NASA has long been at Green.118 The latest Executive Branch Management Scorecard (released June 30, 2006) showed that NASA had a Green “current status” and a Green for “progress in implementing the President’s Management Agenda” for human capital. Recently, OHCM at headquarters has led several major agency initiatives, each of which is discussed below.

115 National Research Council of the National Academies of Sciences, Issues Affecting the Future of the U.S. Space Science and Engineering Workforce: Interim Report, 2006, p. 4. 116 NASA Workforce Strategy, p. 7. 117 NASA Workforce Strategy, p. 35. 118 Agencies are rated as Green (success), Yellow (mixed results), or Red (unsatisfactory).

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Additional Human Capital Flexibilities

OHCM led the agency’s effort to obtain additional human capital flexibilities. On February 24, 2004, President George W. Bush signed the NASA Flexibility Act of 2004119 (P.L. 108-201), which authorized the following:

• Term appointments. The act authorizes hiring term employees for up to six-years and converting them to permanent positions without a second round of competition if they were competitively selected for the initial term appointment. Prior to the act, NASA could hire term appointees for a maximum of four years.

• Recruitment, re-designation, and relocation bonuses. Title 5 already provides for recruitment and relocation bonuses, but the NASA Flexibility Act adds re-designation bonuses to the mix. The agency must use these to meet critical needs, defined in the agency workforce plan. NASA may pay this type of bonus to a current federal employee to accept a position with NASA. The act also increases the limit on the bonus amounts, which cannot exceed 100 percent of an employee’s annual salary over the length of the agreement, and provides more flexible pay options. The bonus requires a service agreement that can extend up to four years.

• Retention bonuses. The act raises the limit on the size of a retention bonus—from 25 percent of an employee’s annual salary (excluding locality pay) to 50 percent (including locality pay)—if the position meets a critical need.

• Pay authority for critical positions. The act authorizes the NASA Administrator to set a salary, not to exceed the Vice President’s, when he finds it necessary to recruit or retain an exceptionally highly qualified individual for a position that requires an extremely high level of expertise in a scientific, technical, professional or administrative field deemed mission critical. This authority is limited to 10 employees at one time.

• Distinguished scholar appointment authority. The act provides a new direct hiring authority for GS-7 through GS-12 scientific and professional positions for candidates with grade point averages of 3.5 or higher. Candidates must also meet relevant OPM education-based qualification standards and have a qualifying degree from an accredited university within two years of the effective date of the appointment.

• Extension of IPA assignment period. The IPA statute limits an initial assignment to two years and allows extensions of up to two additional years. The act permits NASA to extend assignments for four additional years, for a total of six years.

• Travel and transportation expenses of certain new appointees. The act allows NASA to pay the same travel, transportation, and relocation expenses for new appointees that it can currently offer to federal employees transferring from one permanent duty location to

119 On October 20, 2004, the President signed into law the Federal Workforce Flexibility Act of 2004, Public Law 108-411, which granted a range of similar, if not equal, flexibilities to the rest of the Executive Branch.

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another. NASA can pay these additional expenses only when it is in the interest of the federal government.

• Annual leave enhancements. The act allows NASA to treat certain non-federal experience as federal service when determining a newly appointed employee’s annual leave accrual rate. In addition, senior level employees—current and new hires—accrue annual leave at the rate of eight hours every two weeks, regardless of government service.120

• Limited appointment to SES positions. The law permits NASA to make limited term appointments to ‘career reserved’ SES positions in order to fill a bona fide temporary need. It also authorizes the agency to pay SES bonuses to these individuals.

• Qualifications pay. The law permits NASA to provide a pay incentive to encourage an employee to accept a new set of duties or new position, based on his or her exceptionally high qualifications and/or a special agency need.

• Increased maximum rate of pay for NASA-excepted (NEX) employees. The act raises the maximum allowable rate of pay for the 425 NASA excepted scientific, engineering, or administrative positions to Level III of the Executive Schedule.

While these flexibilities are important, they are much more modest than those given to the DoD and the Department of Homeland Security (DHS). NASA is subject to such Title 5 requirements as staffing, position classification, compensation, and performance management. For example, it is not authorized to implement pay-banding or performance-based compensation strategies.

In addition to the NASA Flexibility Act, NASA paid 77 recruitment, relocation, re-designation, and retention bonuses under other Title 5 authorities in FY 2005 (total value of $1,051,053). In FY 2004, NASA made limited use of its new flexibilities because it was unable to implement them until July 2004. Table 5-3 shows, however, that NASA made limited use of the flexibilities except for term hires. OHCM is in the process of gathering data on flexibility use in FY 2006.

120 Due to the Federal Workforce Flexibility Act of 2004, all federal agencies now have this flexibility for new hires.

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Table 5-3 Use of Authorities in the NASA Flexibility Act of 2004121

FY 2004 FY 2005 Flexibility TOTAL Total ($ Value)122 Total ($ Value) Bonuses for recruitment, re- 2 47 49 designation, and relocation ($23,000) ($540,356) ($563,356) Bonuses for retention 1 4 5 ($15,577) ($66,419) ($81,996) Term Conversions to 0 5 5 Permanent Employment Critical Pay Authority 0 0 0 Travel, Transportation, and N/A Relocation Costs for New $34,078 average123 $22,368 average124

Employees Qualifications Pay 2 11 13 Annual Leave Enhancements 18 103 121 Limited Appointment to SES 0 3 3 Positions Made Under the Act Science and Technology 0 0 0 Scholarship Program Distinguished Scholar Appointment Authority (made 0 1 1 to address a critical need)

NASA Workforce Strategy

In response to Congress’s mandate in the NASA Authorization Act of 2005, the agency developed and issued the National Aeronautics and Space Administration Workforce Strategy in April 2006. The strategy identified six major events occurring at NASA that have significant impacts on the agency’s workforce and its human capital management.125

• Implementation of the Vision. The Vision requires NASA to establish new programs to enhance understanding of the planets, to ask new questions, and answer old question regarding space exploration.

121 This table summarizes NASA’s FY 2004 and FY 2005 reports to Congress on flexibility usage. 122 The dollar value is presented where applicable. 123 The largest amount paid to an employee in FY 2004 was $151,200. 124 The largest amount paid to an employee in FY 2005 was $124,282. The amount of $124,282 includes the sum of $63,243 representing payments made by NASA on behalf of the employee (not directly to the employee) to a contractor for home sales assistance. 125 See NASA Workforce Strategy, p .4.

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• Space Shuttle Retirement. Between 2005 and 2010, NASA will execute a series of complex ISS assembly and servicing missions using the Space Shuttle, while simultaneously developing a new Shuttle-derived replacement transportation system. NASA must find and implement effective ways to transition the Shuttle workforce while retaining the skills necessary to complete the program.

• Refocus of the Aeronautics Research Program. Due to budget constraints, NASA is refocusing its aeronautics program to emphasize more advanced research, but with limited research application. The program will focus on long-term, cutting-edge, fundamental research in traditional aeronautics disciplines.

• Retirement Eligible Workforce Growing. Over the next five years, over 25 percent of the NASA workforce will become retirement eligible. While this does not necessarily mean a mass exodus of talent from the agency, it creates a degree of uncertainty about the continuity of the long-term skill base. The agency must identify ways to replace the skills it may lose, plan to use retention tools where needed, and share the knowledge and institutional memory of the Shuttle generation workforce with the future workforce who will implement the Vision.

• Research and Development of CEV and CLV. The research, design, and development of a new crew vehicle and launch system will occur after a break of more than 25 years since the development of the Space Shuttle. This initiative requires NASA to redeploy research resources to support the implementation of CEV and CLV, and create requirements for a different workforce skill mix. NASA’s Workforce Strategy acknowledged that it must reshape its workforce as soon as possible for the agency to meet the schedule the President and Congress established.

• Change to Full-Cost Management. The transition to full cost management eliminated the account that funded salaries for the entire civil service workforce independent of the programs’ need for their skills. As a result, funding for most of the civil service workforce now comes directly or indirectly from the budgets of the programs in which they reside. As civil service needs expand and contract, the programmatic life cycle creates challenges for the centers in covering the cost of their workforce.

According to the Workforce Strategy, NASA’s three primary workforce planning objectives are:

1. Ten Healthy Centers. NASA believes that the accomplishment of the agency’s mission requires “ten fully engaged and productive centers, each with a clear mission, role in making the Vision a reality, and sufficient funding and workload to sustain its workforce.”

2. Maximized Use of Current Human Capital Capabilities. NASA describes its workforce as one of its “greatest strengths.” As a result, the agency is committed to fully utilize the existing skills of its workforce to achieve the goals of the Vision.

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3. Evolution to a More Flexible and Scalable Civil Service Workforce. The agency believes that in order to realize its future goals, it requires a flexible and scalable workforce that can be easily managed “to respond effectively to mission, programmatic, and budget changes as well as demographic and labor market fluctuations.”

OHCM, in collaboration with center directors and human capital directors, has developed an implementation plan for the Workforce Strategy, released in June 2006. The agency identifies the plan’s fundamental goal as ensuring “a high performing and flexible, mission-aligned workforce,” which will be achieved by:

• Integrating agency-wide workforce planning processes with program and business planning

• Optimizing mission performance through strategies designed to strengthen technical excellence and leadership capabilities

• Delivering real time information to mangers and staff through a seamless system integrated with agency business processes

The implementation plan commits NASA to a wide range of such actions as:

• Identifying and quantifying, by September 2008, an appropriate workforce size and determining if any misalignments in the skill mix could pose significant risks to mission success and institutional health

• Identifying gaps in mission-critical competencies

• Aligning the workforce with the agency’s future mission

• Developing enhanced workforce planning tools

• Reinforcing the link between employee and organizational performance

OHCM offered centers the opportunity to lead components of the implementation plan. For example, Langley Research Center leads the career-pathing component of the plan, which lays out for each occupational area the optimal developmental experiences and training. Glenn Research Center leads the NASA FIRST program, which provides training to grade levels 9, 10, and 11.

In addition to the specific tasks in the implementation plan, agency human capital officials have indicated that the agency will pursue the following:

• Managing the agency’s current workforce, including any uncovered capacity126

126 OHCM, PA&E, and the CFO will act as an oversight board to ensure the uncovered capacity issue remains a focus of the agency.

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• Integrating all human resource systems through a customized module to the agency’s software system, as well as collaborating with the Chief Financial Officer and the Office of Procurement to integrate the systems with the business plan

• Providing workforce planning and training for NASA’s total workforce, including contractors

According to NASA officials, plans are underway to develop a summary document to accompany the implementation plan. The NASA Deputy Administrator is developing an overarching Mission Support Implementation Plan (MISP), which also examines the agency’s human capital issues. Once the MISP is complete, it will be integrated with the fuller workforce implementation plan.

OHCM developed this strategy, submitting it to Congress in April 2006. The Workforce Strategy:

• Highlighted critical issues facing the agency

• Identified key principles underlying the strategy’s development

• Described the planning process that will be used to support the Workforce Strategy on an ongoing basis

• Described mission and budget changes driving changes in NASA’s civil service workforce

• Identified the specific competency gaps and surpluses anticipated within the civil service workforce between 2006 and 2011 as a result of anticipated mission and budget changes

• Identified strategies NASA is taking to respond to its workforce challenges

The plan does not include a narrative that links actions to NASA’s strategic goals. Nor does it consider the agency’s broader contractor workforce or JPL, which the agency considers one of its ten centers, even though it is an FFRDC. The need for inclusion of the multisector workforce is discussed below.

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NEED FOR MULTISECTOR WORKFORCE PLANNING AND STRATEGY DEVELOPMENT

NASA’s Strategic Plan states that it will develop and implement NASA-wide human capital management initiatives to ensure that the workforce has the right mix of skills and the right balance between civil service, contractor, and other components to achieve the agency’s Vision. Yet, as the Academy Panel noted in its July 2006 Task 2 White Paper, “NASA’s Workforce Strategy is limited to the civil service workforce. It does not address the contractor personnel that comprise two-thirds of the agency’s total workforce.” Although the Strategy is consistent with historical approaches to civil service workforce planning, it was a narrow interpretation of the Congressional mandate for a human capital strategy “to ensure a workforce of the appropriate size and with the appropriate skills.”127

NASA reported it would address these broader issues in a forthcoming implementation plan. NASA also said that it would address the Panel’s concerns, identified in the Task 2 White Paper review, in a narrative-style implementation plan that would include cost analyses of the proposed strategies. Instead of developing a full implementation plan, however, NASA developed a list of tasks and outcome measures across three strategic sub-goals.

In 2001, an IG report concluded that NASA had not adequately incorporated human capital into its strategic and performance plans. It said that NASA was unable to determine the appropriate number of staff or competencies needed to carry out its mission effectively. Although progress has been made over the past five years, the Academy Panel and study team’s interviews at headquarters and visits to centers indicate that NASA’s human capital function is still not fully integrated with broader agency processes. PA&E, rather than OHCM, led two recent NASA internal exercises to assess workforce options and work package transfers.

In its Task 2 White Paper, the Panel recommended that the agency address the total workforce, including the work for which it will hire staff as well as for the work it will buy and identify the competencies that are in excess or deficit for both the civil service and contractors. The Panel acknowledged the key differences in NASA’s relationship between employees and contractors and noted that, because NASA is not responsible for managing contractor personnel on a daily basis, the competency analysis for this group should be done on an aggregate basis, focusing on cost effectiveness, timeliness of deliverables, and return on investment. These differences should not preclude the agency from assessing the impact of changing circumstances on the type of work it buys, or the knowledge and skills needed for the civil service workforce. NASA can maintain necessary distinctions, while broadening its strategic workforce planning to include, as appropriate, on-site and near-site contractors and employees of the Jet Propulsion Laboratory. (See Chapter VI for the Panel’s proposed guidance on the balance of civil service and contractor workforces. The Panel developed specific tools in response to NASA’s request.)

As mentioned earlier, NASA was the first agency to “Get to Green” in the category of human capital in OMB’s assessment of progress toward the President’s Management Agenda. OPM also considers NASA to be one of the leading agencies in the federal government for workforce

127 Section 101(f) of Public Law 109-155, the NASA Authorization Act of 2005.

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planning.128 Critics of NASA believe, however, that the agency must move beyond its primary civil service focus to a multisector focus if it is going to accomplish its daunting mission. These critics also acknowledge that NASA is not alone in focusing its workforce planning almost exclusively on its civil service sector.

Like most federal agencies, NASA’s workforce decision processes have historically focused on the budget cycle as the main driver of its decisions rather than on layered timeframes (short, intermediate, and long-term) associated with projected mission needs. The level of appropriated funds and resultant budget process, with a usual two-year window, limit how many civil servants the agency can afford to hire and retain. That calculation gets translated into an agency FTE plan, with allocations to the various agency components. While not currently the case, OMB had previously assigned agencies FTE ceilings, and some appropriations, although not NASA’s, specified agency and often sub-agency on-board limits. Currently, OMB imposes only a dollar ceiling on NASA, with that amount further constricted in some program areas by congressionally mandated earmarks.129 The agency does, however, use an FTE ceiling as an internal budget management tool. For the past three years, the FTE ceiling has not posed a limitation to the agency’s overall growth. As noted in Chapter I, however, over the next five years, the agency is slated for a substantial FTE reduction of more than 9 percent. If work requirements exceed the FTE ceiling at headquarters and/or centers, NASA—like other federal agencies—can be expected to turn primarily to contractors for additional capacity. (See Chapter VII for alternative methods employed by other agencies to leverage their workforce.)

NASA Procedural Directive (NPD) 3010.1 establishes and documents the agency’s strategic workforce management policy, while NASA Procedural Requirements (NPR) 3010.1 establishes the strategic workforce management process. The agency adopted both NPD and NPR 3010 in 2003, with the expectation that they would remain in effect until 2008. NASA is now, however, in the process of revising them to reflect the new mission and concomitant responsibilities within the current governance structure. (See Volume 2 for additional information on the process established by this NPD.)

Shuttle Transition Planning

Although the Shuttle will officially retire in 2010, NASA will transition many of its people, as well as certain programmatic and physical capabilities, to the Exploration program. The agency will not need all of the existing workforce, equipment, and facilities. NASA has found that some aspects of the program transition in their entirety to the CEV/CLV, while others, such as the Shuttle’s orbiter program, will not be needed at all. Some of the ground processing currently conducted at Kennedy will be needed in the future, but there will be a several year time-lag before ground operations will be needed to support the next generation launch vehicles. In

128 See OPM’s FY 2005 Third Quarter Strategic Management of Human Capital Update and Statement of Marta Brito Perez, Associate Director for Human Capital Leadership and Merit System Accountability, U. S. Office of Personnel Management, Before the Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia Committee on Homeland Security and Governmental Affairs, United States Senate, on “Employing Federal Workforce Flexibilities: A Progress Report,” April 21, 2005. 129 For Fiscal Year 2008, Congress has decided to eliminate earmarks from the appropriations process.

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addition, NASA will be making a concerted effort to reduce the total amount of labor required to process, maintain, and launch the new vehicles.

The current dedicated Shuttle workforce consists of the following:

• 1,860 civil servants spread over four primary centers: 843 at Johnson; 521 at Kennedy; 487 at Marshall; and 9 at Stennis

• 14,013 contractor personnel spread over four primary centers: 4,762 at Johnson; 4,673 at Kennedy; 4,377 at Marshall; and 201 at Stennis. The Shuttle has four prime contractors.

The Shuttle Human Capital Team supports the Headquarters Transition Working Group’s work. The goal is to conduct an orderly phase-out of the program and a smooth transition of the Shuttle workforce. Although the team officially resides at Johnson, it includes human capital representatives from headquarters and the four space operations centers.

In May 2005, GAO testified on NASA’s efforts to address workforce issues related to the Space Shuttle’s retirement.130 Based on a review conducted in March 2005, GAO concluded that NASA “has made limited progress toward developing a long-term strategy” for sustaining the skilled workforce needed to support Space Shuttle operations, even though it recognizes the importance of doing so. GAO emphasized the importance of the Shuttle workforce and the fact that it is concentrated at three centers:

Retiring the space shuttle and, in the larger context, implementing the Vision, will require that the Space Shuttle Program rely on its most important asset—its workforce. The space shuttle workforce consists of about 2,000 civil service and 15,600 contractor personnel, including a large number of engineers and scientists. While each of the NASA centers supports the Space Shuttle Program to some degree, the vast majority of this workforce is located at three of NASA’s Space Operations Centers: Johnson Space Center, Kennedy Space Center, and Marshall Space Flight Center.

NASA has identified three challenges to sustaining the Shuttle workforce until retirement:

• Retaining the current workforce. Because many in the current workforce will want to participate in or will be needed to support future phases of implementing the Vision, it may be difficult to retain them in the Space Shuttle Program. In addition, it may be difficult to provide certain employees with a transition path from the Space Shuttle Program to future programs following retirement.

• Impact on the prime contractor for Space Shuttle operations. Because United Space Alliance (USA) was established specifically to perform ground and flight operations for the Space Shuttle Program, its future following the Space Shuttle’s retirement is uncertain. Contractor officials stated that a lack of long-term job security would cause

130 GAO-05-718T, Space Shuttle: Status of NASA’s Efforts to Address Workforce Issues Related to the Space Shuttle’s Retirement, (May 18, 2005).

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difficulties in recruiting and retaining employees to continue supporting the Space Shuttle as it nears retirement. In addition, steps that the contractor may have to take to retain its workforce, such as paying retention bonuses, are likely to require funding above normal levels.

• Government-wide budgetary constraints. Throughout the process of retiring the Space Shuttle, NASA, like other federal agencies, will have to contend with urgent challenges facing the federal budget that will put pressure on discretionary spending—such as investments in space programs—and require NASA to do more with fewer resources.

In the summer of 2006, the Shuttle Human Capital Team conducted a survey of the civil service workforce that indicates a high level of intent to remain with the program through completion. Primary findings of the survey were:

• Civil servants intend to stay with the program. In response to the statement, I am likely to stay with Space Shuttle Program through program retirement, there was a strong commitment to remain. Overall, 65.7 percent of the respondents agreed or strongly agreed. Agreement ranges from 59.1 percent at Johnson to 72.1 percent at Marshall.

• Shuttle work is the largest incentive for remaining. In response to a question about which factors would be the most important for influencing a decision to remain with the program, the following were the results in rank order: (1) having meaningful work in the Shuttle program; (2) commitment to the Shuttle program and/or NASA; (3) ability to make a difference in the Shuttle program; (4) assurances by NASA of interesting future work; (5) center having a fair retention and transition plan for employees that support the Shuttle program; (6) personal commitment to supervisor and/or team; (7) monetary incentives; (8) recognition for contributions to the Shuttle program; (9) communication from the Shuttle program.

• Few actively seeking other jobs. In response to a statement about how they would describe their current search for jobs outside the Shuttle program, only 11 percent said they were actively looking; 70 percent said they were not looking now.

NASA officials have expressed greater concern about the Shuttle program’s ability to retain its contractors. In September 2006, NASA awarded the prime contract for the CEV to Lockheed Martin. The Shuttle program has identified retaining critical contractor skills as a top program risk for safe and successful mission execution.

The Space Shuttle Program (SSP) has also taken steps to map civil service and contractor workforce retention plans. In a June 12, 2006 memo from the SSP Manager, the agency established requirements to address concerns about the program’s “ability to retain critical skills required to safely and successfully fly out the program.” Recognizing that the majority of Shuttle workers are contractors, the memo asks project managers and their prime contractors to work as partners to reflect the needs of various projects and names the COTR as the focal point for all coordination, including that among the various contractors.

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Competency Management System

Since 2003, NASA has used a Competency Management System (CMS) to document the workforce competencies required by NASA positions and possessed by NASA employees. Originally developed at KSC, CMS has multiple components:

• Workforce competency dictionary

• Dataset of competencies identified by employees and validated by supervisors or subject- matter experts

• Dataset of competencies required for each position, including a primary competency, identified by the supervisor

• Dataset of primary competency requirements identified against budgeted projects for the fiscal years in the budget horizon

• Web-based application and database

The workforce competency dictionary identifies the total collection of competencies and categorizes the breadth of the agency’s corporate knowledge. The level of proficiency is intended to assess a demonstrated level of capability and to categorize the depth of knowledge within any given competency or sub-competency. As NASA has defined it, a competency is not a role or function, but a base level of knowledge relevant to the agency’s mission that defines for a position what knowledge is needed and how it is applied. For example, CMS would not include “Space Shuttle main engines” as a competency. It would include information at a more detailed level—for example, “fluid and thermal systems with experience in Space Shuttle main engines” or “human resource management with experience in benefits administration.”

Competencies can be applied across organizational and position boundaries. A job position identifies what knowledge is required and how that knowledge will be applied. Because the competencies are associated with employees, job positions, and workforce requirements, NASA expects to be able to perform a detailed analysis of gaps between workforce demand and forecasted supply, thus ensuring a comprehensive understanding of current and future workforce capabilities. It will be able to determine future organization demand, future project demand, and future workforce capability. Various NASA components have also used CMS to search for expertise throughout the agency131 to staff vacancies or new functions.

In a July 21, 2006, letter to officials in charge of headquarters offices and center directors, the Deputy Administrator mandated the population of CMS across the agency:

131 National Aeronautics and Safety Administration, “NASA Competency Management System: Overview” (July 1, 2004).

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• All agency civil service employees shall document their individual expertise (for both their current position and career history) by identifying in the CMS a relevant set of personal competencies and corresponding proficiency levels by September 30, 2006.

• All supervisors shall validate the employee self-assessments by October 31, 2006.

• The Workforce Integrated Management System (WIMS) is the designated agency workforce planning tool. It will be used to collect future workforce requirements by identifying the competencies need for each program and project as part of the agency budget planning process. Center workforce, financial, and/or strategic planners are responsible for ensuring that an accurate competency assessment is fed into WIMS by September 11, 2006, to support the FY 2008 budget development process.

Although CMS is a cornerstone of NASA’s workforce planning process, it gets mixed reviews from headquarters and center officials. Field visits show that some centers are more supportive of CMS than others. Goddard and Johnson, for example, believe that CMS adds very little value. They expressed concerns in the following areas:

• CMS competencies are not the planning units center managers use to make human capital decisions. CMS should track more to positions, their role in the organization, and the multiple disciplines at the center.

• CMS does not help with professional development because it does not identify the “soft skills” necessary for completing training needs assessments.

• It is difficult to use the competency portfolios to identify workforce gaps. CMS competencies disaggregate individual positions into two to five competencies that cannot be cross-walked to answer questions about how many employees need to be hired or trained.

• CMS accurately characterizes workforce supply, but the identified gaps are not very meaningful because demand projections are determined by the budget process rather than the strategic plan. Therefore, the resulting analysis indicates that all of the current employees’ competencies will always be needed.

• CMS is based upon annual planning data, not real-time data. NASA needs to move to a real-time workforce planning process (especially important as a way to assess uncovered capacity in response to agency initiatives).

• CMS is trying to answer too many questions with the same dataset: mission/goal alignment, civil service-contractor partnerships, education programs, workforce modeling, training and development, succession planning, program/project management, and strategic hiring/retention plans.

• CMS harms the credibility of OHCM because senior mission directorate and program managers at Goddard and Johnson do not support it.

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Other centers, however, were much more positive about CMS. Both Ames and Marshall indicated that the system had been useful to them. Ames specifically noted that it used CMS in combination with WIMS to answer a manager’s question about whether the center had the right skill mix among its available FTE to bid for some work in the summer of 2006. The center human capital office was able to answer this question by populating relevant competency data in CMS and comparing it with data on the uncovered workforce in the WIMS system. Ames officials emphasized that human capital professionals need to be able to deliver real-time workforce information to managers. They are establishing a partnership between program managers and human capital officials for this purpose. Marshall uses CMS extensively and integrates it with WIMS. Glenn and Langley senior management officials did not identify CMS as a problem, but some Glenn employees were concerned that CMS was inherently limited because it did not consider the contractors’ competencies. In theory, they believed that this could lead NASA headquarters to overstate the competencies of contractors, while understating the competencies of its own civil servants.

In its response to the NASA Workforce Strategy, the International Federation of Professional and Technical Engineers (IFPTE) expressed concerns that CMS (1) does not accurately identify the true capabilities because it only identified one primary position competency and (2) has not been validated. In response, the agency increased the number of competencies an employee could indicate in the tool, while continuing to use only one of them—designated the ‘primary competency’—for workforce planning purposes. NASA officials indicate that the union was satisfied with these changes, and CMS was not identified as a significant problem in interviews with union representatives in the field.

These observations are consistent with the Academy’s 2005 Human Capital Flexibilities study, which noted that center officials had varying views of CMS. At the time, managers and employees of Kennedy Space Center (where CMS originated) were the most favorable, reporting that CMS already had yielded valuable information to help in a program termination at that location. Using CMS, all but three of the approximately 50 employees affected by that termination were placed in one of their top three choices within 30 days of cancellation. Other centers said CMS was good for broader workforce planning, but needed to provide more detail to assist line managers. They also expressed concerned that the predefined competencies were too broad in a variety of areas, such as project management and system engineering.

In the Panel’s Review of the National Aeronautics and Space Administration’s Workforce Strategy, a White Paper the Academy released in July 2006, the Panel urged NASA to make CMS data a more useful management tool, with a methodology for translating competency surpluses and deficits into FTE needs. The Panel believed that development of such a CMS tool would aid managers in their personnel decision processes. As NASA headquarters works to continue to fine-tune CMS, some effective practices may be worth considering. JPL has developed a Capabilities Inventory that includes all the center’s employees, including contractor employees who are on-site for a short period.132 Originated in the Engineering and Science Directorate (ESD), this system has been in use for approximately two years and was expanded to the entire center in early 2006. This Inventory includes:

132 As an FFRDC, JPL is not required to use the Competency Management System.

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• Four major knowledge domains (Engineering and Science; Business; Mission Success; and Leadership and Management)

• 52 total capability categories across the four knowledge domains

• 282 specific capabilities (people can have more than one capability: current, past, and developmental). Employees have to include this information in the Inventory. Out of concern for potential negative employee reaction and linkage to the 2005 layoff, managers do not validate specific capabilities. The assumption is that employees are competent in the capabilities they are using in their current job.

The Inventory produces a wide variety of workforce planning reports, including a “Capability Report” that shows which employees have the capability necessary to move another area. The Job Assignment Data Entry forecasts work allocation for individual employees each quarter for the next five fiscal years. The Inventory’s “TBD” code identifies committed work to which employees have not been assigned, and this data is aggregated to conduct gap analyses and make work assignments.

JPL officials report that the Inventory has been very helpful with succession planning in the Engineering and Science Directorate and should be helpful for the whole center’s efforts in this area. They attributed the Capabilities Inventory’s success to the fact that it was built around how people are actually hired and how they are assigned to work; this has allowed it to become a real tool for managers and employees.

Although CMS only covers civil service employees, other federal organizations have developed systems to capture aggregate contractor competencies. In June 2006, for example, the Department of National Intelligence (DNI) began to develop a comprehensive competency-based inventory for its civil servants and its “embedded” (on-site) contractors who are doing “core work.”133 Based on information provided by civil servant and contractor personnel,134 DNI will create a new Intelligence Community Capabilities Catalogue that inventories human capital resources by civil servant name and by on-site contractor where possible.135 The capabilities catalog will include proficiency levels for three components: target competency, trade craft, and topics/countries of specialization. It will cover the 16 Intelligence Community agencies and some 100,000 civilian and military personnel in addition to the embedded contractors.

133 The inventory excludes commercial services and commodities. 134 For the contractor portion of this inventory, information must be provided in these areas: (1) type of funds; (2) program; (3) company name and contract number (using Federal Procurement Data System industry codes as a guide to ensure inventory covers core work); (4) type of contractor service; (5) contract vehicle type; (6) function; (7) statement of work in three to five words; (8) average hourly labor rate for the contract; (9) FTEs associated with work being performed; (10) reason for the contract (using a drop down menu of 8 options); (11) general comments. 135 Because of IT security and privacy issues, some contractors will not be listed by name, but only by their contracting organization, which could then access their skills.

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Human Capital Information Environment

WIMS is the agency’s tool for collecting and managing the agency’s workforce and competency planning data. It is a central repository for information at the headquarters and the center levels, used in Agency workforce planning decisions and analysis.136 Center workforce, financial, and/or strategic planners are to ensure that an accurate competency assessment is fed into WIMS by September of each year to support the next fiscal year’s budget development process. Some centers are integrating WIMS with CMS for labor cost projects

NASA is currently designing a Human Capital Information Environment (HCIE), to be completed in 2008 or 2009, assuming available funds. HCIE is a vehicle to integrate the electronic delivery of human capital information, tools, and services to support the President’s Management Agenda, the Vision, NASA’s workforce transformation, and NSSC. HCIE is important because NASA has a wide variety of electronic systems and tools, many of which do not communicate with one another. OHCM, for example, has 75 separate systems. In the past, funding for human capital was paired with funding for the Integrated Enterprise Management Program (IEMP), which reduced the total funding for initiatives such as HCIE. NASA is providing $3,000,000 exclusively to support the HCIE. An official in the Johnson Space Center’s human capital office is the overall lead to coordinate HCIE implementation, and OHCM in headquarters has a designated official for implementation.

Additional Emphasis on Career Development and Performance Management

In the PWC report discussed earlier, NASA and GAO were identified as two agencies that have recently “taken action to upgrade their succession planning practices and unblock the leadership pipeline.” It also noted that DoD, the Department of Health and Human Services, and the Internal Revenue Service have “launched major projects to improve their succession planning practices.” In testifying on NASA’s succession planning challenges, Comptroller General Walker noted that the loss of employees to retirement can cause problems, at least in the short term, but is also a significant opportunity. On the one hand, the agency is losing expertise. On the other hand, it provides NASA with “the opportunity to change culture, skill mix, deployment locations, and other agency attributes.”137

NASA officials have told the Academy Panel that the agency is beginning to implement a variety of training/retraining programs, especially for staff below GS-15, focused on developing and honing skills required for the future vision, such as exploration expertise. Historically, NASA’s leadership programs have meant that individuals moved up one organization rather than across, or learned skills that would be valuable in one organization, but not across the organization– termed stove-piping. For example, officials at an operational launch and processing center, such as KSC, would not get developmental technology experience. This is consistent with the view of former NASA Administrator Sean O’Keefe, who said, in a recent interview with the Academy study team, that NASA’s greatest strength was its systems, programs, and systems integration, but its greatest weakness was its “stove-piped organization.”

136 NASA Workforce Strategy 137GAO-02-945T, NASA Management Challenges: Human Capital and Other Critical Areas Need to Be Addressed (July 2002).

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One of the central tenets of the new strategy is to emphasize career development and encourage employees to secure the added skills or education to enable them to move up a career path. This so-called “career-pathing” is seen as a way to grow future leadership, particularly by providing career development opportunities much earlier. OHCM officials acknowledged that, in the past, the agency did not begin career-pathing early enough. OHCM officials said that another consequence of late career-pathing was that the agency often placed the wrong people in its training programs. Since the agency did not typically give career-path training until an individual reached GS-14, organizations often perceived these highest performers as too valuable to release them for training. Consequently, some people in the leadership programs were not necessarily the most appropriate candidates.

In addition, NASA leadership has charged its managers at both headquarters and the centers with managing performance more carefully and ensuring that employees in their organizations receive appropriate career counseling and guidance. This coincides with an initiative to change the performance appraisal system from what is referred to as a “pass-fail” basis to a revised system that may eventually support pay-banding. In May 2005, NASA went to a three-level performance appraisal system:

• Distinguished • Meets or Exceeds • Unacceptable

During field visits, many center officials said that NASA will be transitioning to a five-level performance appraisal rating structure. As of early December 2006, however, the study team understands that NASA headquarters has not released definitive guidance on the new performance appraisal system or when it will be implemented. OHCM’s implementation plan commits to developing and implementing an agency-wide performance pay system to strengthen the link between employee and organizational performance. NASA will convene a panel of experts in January 2007 to discuss issues related to pay-banding and pay-for-performance, which are intended to help federal agencies more closely link organizational and individual performance goals, as well as help them compete for top talent. NASA will be conducting research, including effective practices in other federal agencies, to decide whether to seek statutory authorization for pay-banding and pay-for-performance mechanisms.

CONCLUSIONS

• A high-performing and strategic human capital office is especially critical to an agency, such as NASA, that is experiencing significant changes within its mission programs/projects and the resulting need to realign its workforce.

Human capital professionals in a Level 3 office work with agency leaders and line managers to ensure that workforce strategies meet specific needs. They provide leadership in the agency’s use of available innovative strategies, analyze unmet needs, and advocate for additional flexibilities that would advance the agency’s mission.

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• NASA workforce planning processes and strategies must go beyond the narrow civil service-based approach to appropriately incorporate the multisector workforce.

• OHCM has not developed a full implementation plan for the Workforce Strategy.

• The competency-based approach generates important information for NASA to incorporate into workforce planning and decision-making as it undertakes significant mission, program, and project changes. As NASA phases out the Space Shuttle and fully transitions to the programs that will implement the Vision, the agency’s competency needs will obviously evolve over time.

CMS is a useful mechanism to identify NASA’s needs for additional and reduced competencies. The challenge for the agency, as it strives to become a knowledge-based organization, is to translate data from CMS into concrete recruitment, retention, and training information. As presently constituted, CMS is not always as helpful to centers at the personnel hiring level because it does not track directly to positions.

• NASA’s current plans to quantify—by the end of FY 2008—“workforce size/composition misalignments” representing significant risk to mission success or institutional health” may not be sufficiently timely.

• With the exception of a significantly expanded use of term appointment authority, NASA has made limited use of the flexibilities in the Flexibility Act.

RECOMMENDATIONS

In view of the above conclusions, the Panel recommends that:

• OHCM at headquarters, along with the human capital offices at the centers, be full participants in all agency processes that have significant impact on NASA’s total workforce (civil servants and contractors).

As a Level 3 office, OHCM professionals should work with agency leaders and line managers to ensure that they consider the workforce implications of strategic and program plans. As detailed in Chapter IV, human capital experts must be at the table when senior management crafts its critical multisector workforce plans. Specifically, if NASA is to integrate its civil service and contractor workforce planning by going beyond the historically-bifurcated federal model, the Panel recommends that NASA human capital:

o Partner with PA&E on any organizational readiness review that includes a significant workforce component or that has significant implications for workforce issues.

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o Provide the agency senior level leadership with the systems and analytical expertise to support Round 1 meetings in the new agency acquisition process.

o Play a leadership role in partnership with the Office of Procurement in Round 2 decision-making.

o Provide validated decision-making tools as well as guidance to agency managers, who will be accountable for implementing a new and integrated acquisition/workforce strategy. (See Chapter VI, Decision Guide for suggested method.)

• In conducting its readiness review of OHCM, PA&E should use the GAO framework to determine the level at which the office is currently functioning.

• OHCM, in conjunction with the Office of Procurement, develop a more complete implementation plan for the Workforce Strategy that addresses NASA’s total workforce needs, including needs for contractor-provided goods and services (especially by on-site contractors), and identifies principles and practices to use in responding to workforce challenges over the next five to ten years.

With regard to the agency’s overall workforce strategy, including its competency and skill management, the Panel recommends that:

• OHCM quantify existing and anticipated civil service skill mix imbalances over the next five to ten years, as it committed to do in its Workforce Strategy Implementation Plan. Working with agency planners, OHCM needs to project, across all NASA programs, what competencies will be required, at what proficiency, and at what levels.

• OHCM develop a strategy (short-term, intermediate, and long-term) to ensure that the agency recruits and retains needed competencies, plans how the agency will use its existing flexibilities to mitigate imbalances, and analyze how additional regulatory and statutory flexibilities could be utilized.

If OHCM determines that additional flexibilities would be helpful, it should work with NASA leadership to draft legislation, providing these flexibilities, for congressional consideration.

• OHCM acknowledge that CMS is most appropriate for macro-level analyses and reporting on the existing competency portfolio and determine how it will need to change.

• OHCM strengthen CMS in the following ways:

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o Develop a methodology for translating competency surpluses and deficits into specific FTE needs by occupation, program, center, and workforce sector, as well as likely duration of need. o Gather competency data, on an aggregate basis, for the agency’s contractor organizations. o Continue to work with the centers to respond to their concerns about CMS, as appropriate, and ensure that the system is as useful to each center as possible so the system can live up to its full potential.

• Integrate CMS data with existing agency budget tools.

• Given the aggressive schedule that NASA has adopted for the phase-out of the Shuttle and the full implementation of the Vision, the Panel believes that NASA should monitor skill mismatches on an ongoing basis, with existing and projected mismatches quantified as early as possible.

• OHCM develop and implement a communication plan to engage and educate NASA stakeholders—including its labor unions, career employees, and contracting organizations─ regarding its workforce strategy and need to be flexible and scalable to achieve NASA’s changing mission.

With regard to agency use of flexibilities and innovative recruitment and retention strategies, the Panel recommends that:

• OHCM analyze the use of existing human capital flexibilities, including: barriers to appropriate use; ways to overcome barriers; and trends in flexibility use across centers warranting senior management attention or redirection.

• OHCM promote center effective practices worth sharing with the rest of NASA, publicize their availability throughout the agency, and provide requisite training to headquarters and center managers.

• OHCM design a focused recruitment and development program for human capital professionals similar to the Office of Procurement’s program (discussed in Chapter IV). The human capital program should draw on the key elements that have made the contracting intern program so successful. These include:

o Resources supporting the program, even in difficult times o Focus on a specific occupational category critical to workforce flexibility and scalability o Competency areas where NASA faces a dual challenge of high attrition and stiff competition for talent o Requirement for rotational experience across the agency, thereby breaking the one-center perspective of many NASA career officials o Strong training program geared to hands-on experience and preparation of NASA staff for required certifications and high performance

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NASA may also find this to be useful for other competencies projected to be needed by the agency over the next decade. This recommendation is consistent with the findings and recommendations of the National Academy of Sciences 2006 Interim Report.

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CHAPTER VI BALANCING THE WORKFORCE

Determining who should perform the public’s business is one of the major challenges facing government. Among key concerns are the role of contractors, identifying what government functions may be contracted out, and the formal and informal means by which agency leaders make these decisions.138 The requirements of the Vision, including new technologies, multiply NASA’s challenges. NASA must have at its disposal a flexible and scalable multisector workforce, capable of responding to changing mission objectives, program redirection, and budget imperatives. The two primary work-producing resources available to NASA are government contracts and its own civil servants. How skillfully NASA balances these workforce elements will be critical to mission success.

This chapter─divided into two sections─will look at the processes NASA uses to balance its multisector workforce and suggest policies, procedures, criteria, and tools for the various decision elements.

Section one of this chapter focuses on the choice between civil servant and contractor, and:

• Details current links between human capital and acquisition

• Explores limitations on the agency’s decision to utilize a civil servant or a contractor

• Discusses what work should be brought in or retained in-house in order to ensure NASA program leadership, accountability for mission outcome, and smart-buyer capability

• Proposes a Civil Servant-Contractor Decision Guide for use across NASA

The Panel’s conclusions and recommendations for this section focus on NASA’s need to:

• Fundamentally change the approach to managing work

• Establish a consistent, formal, and transparent process for deciding when to hire a civil servant or buy the services of a contractor

• Evaluate data collected in the new decision process to inform healthy center metrics

Section two of this chapter focuses on the agency’s next decision point: its choice between permanent (“perms”) and term employees (“terms”), if it chooses to hire a civil servant. This section of the chapter:

138 See GAO-07-45SP, Highlights of a GAO Forum: Federal Acquisition Challenges and Opportunities in the 21st Century (October 2006).

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• Examines term employment options for NASA, including provisions of the appointing authority, NASA’s historical use, and center variations

• Provides comparative information on how other agencies have used term employment

• Proposes a Permanent-Term Decision Guide for use across NASA

The Panel’s conclusions and recommendations for this section focus on NASA’s need to:

• Establish a formal process and guidance on the use of term employment • Use a decision guide and apply agreed-upon criteria to the proposed work to choose the most appropriate kind of civil service appointment • Base conversion from term to permanent on these work-based criteria

MAKING THE DECISION: CIVIL SERVANT OR CONTRACTOR

The Link between Human Capital and Acquisition

How are NASA acquisition and human capital planning integrated? Agency policy and directives on strategic workforce management place the responsibility for cross-agency workforce integration with the Chief Human Capital Officer. The contractor workforce and partnering arrangements are to be integrated into the broader workforce strategy, but related policy documents focus more on the civil service than contractor workforce. Procedural requirements make oblique references to contractors, sometimes characterizing them as part of the “other workforce” or part of “an alternative approach” to civil service positions. Direct references are most prominent in discussions about achieving workforce component balance and in the acknowledgement of the presence of two types of contractors (“support contractors and other contractors”), as part of the total workforce mix.139

NASA’s Office of Procurement is responsible for the competitive sourcing process and may get involved in personnel-related functions, such as FAIR Act issues directly related to competitive sourcing. Procurement handles contractor workforce issues via its own cadre of private sector labor relations staff; OHCM has no involvement in issues such as contractor labor strikes at NASA facilities. The Office of Procurement relies on the Defense Contracting Audit Agency for information on contractor compensation studies and labor markets.

In October 2006, OHCM shared with the study team a new approach to strategic workforce planning, including establishing a senior-level governance body to coordinate agency activities and oversee progress. While the primary focus of the group is civil service workforce capability assessment and analysis, the group intends to integrate workforce planning and other strategic activities, such as acquisition. (For further details on this proposed approach, slated for integration with the annual budget cycle, see Chapter II, and Volume 2 for a summary diagram of the proposed process.)

139 NASA Procedural Requirements, NPR 3010.1, Chapter 4.1.

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The Decision as Part of the Acquisition Continuum

At a 2006 forum on federal acquisition reform, participants expressed the belief that “before contractors can be held accountable for delivering results, federal managers must be accountable and transparent in the acquisition process.”140 This accountability includes individual acquisitions. The decision to buy contracted services or hire a civil servant is part of the acquisition continuum.

NASA contractors are more than 65 percent of its workforce, twice the size of its civil servant population. NASA requested that the Academy Panel offer criteria and policies that will help the agency make more strategic and consistent decisions with regard to this critical mix. The following sections will explore statutory and regulatory limitations and the context for NASA decision-making.

The Civil Service and its Inherently Governmental Functions

The civil service is defined as “all appointive positions in the executive, judicial, and legislative branches of the Government of the United States, except positions in the uniformed services” (United States Code Title 5 §2101). NASA has approximately 18,000 civil servants, or one third of the agency’s total workforce. The majority of these civil servants (63 percent) perform what are termed “inherently governmental” functions.

In 1955, the federal government first promulgated the official policy of relying on commercial sources to supply the products and services the federal government needs. This policy, eventually reissued as OMB Circular A-76, states that “certain functions are inherently governmental in nature, being so intimately related to the public interest as to mandate performance by federal employees.” These functions require “either the exercise of discretion in applying governmental authority or the use of value judgments in making decisions for the government.” Most typically, they involve either the act of governing141 or monetary transactions and entitlements.142 While mandating that inherently governmental functions be performed by public employees, A-76 also mandates that the federal government contract with private entities for its commercial products and services whenever doing so would be more economical.

In 1992, OMB issued a policy letter to assist the executive branch in avoiding unacceptable transfers of official responsibility (these “inherently governmental functions”) to government contractors. Government officials are to take action based on informed, independent judgment, and they are the ones ultimately accountable to the President for these actions. While extreme examples of what is appropriate for a contractor and what is not are relatively easy to discern, the

140 GAO-07-45SP, Federal Acquisition Forum (October 2006), p. 10. 141 These include criminal investigations, prosecutions and other judicial functions; management of Government programs requiring value judgments, as in direction of the national defense; management and direction of the Armed Services; activities performed exclusively by military personnel who are subject to deployment in a combat, combat support or combat service support role; conduct of foreign relations; selection of program priorities; direction of Federal employees; regulation of the use of space, oceans, navigable rivers and other natural resources; direction of intelligence and counter-intelligence operations; and regulation of industry and commerce, including food and drugs. 142 These include tax collection and revenue disbursements; control of the Treasury accounts and money supply; and the administration of public trusts.

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policy letter continues, “The difficulty is in determining which of these services that fall between these extremes may be acquired by contract.”143

The FAIR Act of 1998 established a formal statutory process for federal agencies to identify functions that are not inherently governmental; resolve disputes over the identified functions; and inform Congress and the public about functions that could be performed by private entities. Federal agencies submit to OMB annual inventories of commercial activities federal employees perform. The FAIR Act is only a reporting mechanism and does not mandate that agencies contract out these activities.

According to legislation, such as the Government Performance and Results Act (GPRA) and the Clinger-Cohen Act, inherently governmental functions include:

• Strategic planning: defining strategic goals, vision, desired outcomes, initiatives

• Defining performance assessment metrics, goals, targets, schedules, collection and reporting processes

• Budgeting for strategic initiatives

• Establishing or approving standards, policies, procedures, and guidelines

• Evaluating vendors for specific mission tasks; benchmarking

• Serving as an honest broker of vendor products and services, government, and consumer advice • Defining security and data access policies

• Mediating disputes between private parties

• Defining common operating environments for interoperability144

FAIR Act estimates categorize federal employees into those performing inherently governmental work and those performing potentially commercial work. In FY 2005, 66 percent of NASA’s civil servants performed inherently governmental work. This work included research, development and testing, procurement, finance and accounting, management, and general support. FAIR Act estimates categorize the remaining 34 percent of NASA’s employees as potentially commercial. The majority (76 percent) of these employees perform work related to research, development and testing. The remaining 24 percent (of those categorized as potentially commercial) work in 18 other functional areas, including finance and accounting and personnel management.145

143 OMB Policy Letter 92-1, September 23, 1992, Section 4. 144 http://www.balancedscorecard.org/bkgd/igf.html 145 While potentially commercial, the agency notes that not all such work is suitable for contracting out and may require the core competencies of a civil servant.

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A NASA Policy Directive, entitled Distinguishing between Contractor and Civil Service Functions, provides guidelines to manage the contractor and civil service workforce. The practical application, as OMB noted, can often pose challenges. NASA’s directive notes that, in situations in which contractors closely support the performance of inherently governmental functions, special control measures are warranted, including:

• Performance-based statements of work

• Audit plans for periodic review of contracts

• Physical separation of contractor and governmental personnel146

Strategically Examining the Mix

With a portion of work in NASA’s core competency areas previously contracted out, Administrator Griffin, concerned about the sufficiency of core expertise and government leadership and accountability, has made a commitment to bring some of this work back in house. He noted:

As a central organizing principle of our work, and despite the fact that 80 percent of our total funding goes to industry and will continue to do so, I firmly believe that it must be NASA and its engineering staff, and not our contractors, who will assume the primary responsibility for making this program work. We are undertaking a multi-generational program of sustained exploration, and we must ask where our intellectual capital should reside. Should it be outside the government in the hands of a prime contractor whose interests may change over the years? Or should it remain in house, where we can sustain the program’s momentum, and retain an institutional memory of the system and cost trades that are made, and a strong understanding about why the architecture is the way it is? I do not believe that it is wise to contract out these vital functions. Making NASA engineers clearly responsible and accountable for our technical products at the system level will drive our team toward excellence.147

The reality is that as NASA makes decisions to bring critical work back in house, maintain flexibility, and have the right combination of workers available when needed, it has to operate within the confines of its budget and balance extramural and intramural dollars. Center officials, often at the first and second supervisory levels, tend to make these decisions in increments. A few interviewees told the Academy study team some centers were moving work in house on a small-scale basis by either letting contracts lapse or revising the task orders associated with a contract to provide work to civil servants. Goddard estimates that it eliminated 200 contractor positions in FY 06 through such efforts. NASA officials agreed that this would cover more civil service staff with project funding in the short term, but these individuals would likely be doing

146 NASA Policy Directive 3310.1A, “Distinguishing Between Contractor and Civil Service Functions,” August 22, 2001. 147 Speech of Administrator Griffin, before the National Society of Professional Engineers Professional Development Conference, January 16, 2006.

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work that is not inherently governmental. As a result, they may be unavailable for fundamental research and decision-making at a later date. Center officials also noted that some employees have filed complaints/grievances regarding below-grade level or occupationally inappropriate work assignments.

NASA’s senior management recognizes the need to balance its multisector workforce with agency long-term goals and has begun to implement a three-stage decision-making process that will involve the top five agency leaders one to two years earlier than in past agency practice. Ultimately, acquisition/workforce decisions will be made and then implemented at the center, program, and project director level.

CIVIL SERVANT-CONTRACTOR DECISION GUIDE

As part of this study, NASA asked the Academy to propose a set of methodologies and tools to assist managers in determining whether to hire a civil servant or procure the services of a contractor. In response, the Panel has developed a Civil Servant-Contractor Decision Guide to help NASA in making these determinations. The Guide is designed as a flexible tool. The Panel expects that NASA, during implementation, would engage managers at all levels in tailoring the tool to their circumstances, as well as adding any other relevant categories or factors.

Among the benefits such a guide can offer are:

• Consistent understanding of the criteria for deciding whether to hire a civil servant or to buy contractor services

• Transparent decision-making and implementation

• Quantifiable results to facilitate decision-making, with the opportunity for NASA to weight categories according to agency assessments of relative importance.

• Facilitation of meaningful discussions about such as issues as the most appropriate ways to balance the workforce, and/or how to address any circumstances restricting the agency’s options

As shown in Table 6-1, the Guide includes eight major categories of critical importance in deciding whether to hire a civil servant or use a contractor.

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Table 6-1 Categories and Definition (Civil Servant/Contractor)

CATEGORY DEFINITION Function A group of related activities and/or projects for which an organizational unit is responsible—the principal purpose a program is intended to serve.148 Resources Tangible inputs required to deliver the products and services of an organization, such as: • Multisector Workforce • Time • Money • Facilities • Raw materials • Tools/Equipment Workload Work an employee is expected to do within a specified time149 Labor Market The market in which workers compete for jobs and employers compete for workers150 Accountability Monitoring, measuring, and evaluating the results of policies, programs and processes151 Risk The combination of the: • Probability a program/project will experience cost overruns, schedule slippage, safety mishap, compromise of security, or failure to achieve needed technological breakthroughs • Consequences, impact, or severity of these events152 Quality/Service A planned and systematic pattern of action to provide confidence that the Level item/product/service conforms to established programmatic/technical and/or research requirements Employment/ Legal and regulatory implications of hiring a civil servant or using a contractor Flexibility

Table 6-2 presents the Civil Servant-Contractor Decision Guide. Within each of the eight categories are a series of statements. Respondents rate their level of agreement with each statement based on a Likert scale of:

5 = Strongly agree 4 = Agree 3 = Neither agree nor disagree 2 = Disagree 1 = Strongly disagree

(See Appendix D for a full discussion of the methodology for this Decision Guide, including weighting and scoring options.)

148 www.ojp.usdoj.gov/BJA/evaluation/glossary/glossary_f.htm 149 www.wordnet.princeton.edu/perl/webwn 150 www.wordnet.princeton.edu/perl/webwn 151 www.fiu.edu/~pie/sec8appglossary.htm 152 NASA-NPG: 7120.5B

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Table 6-2 NASA Civil Servant-Contractor Decision Making Guide NASA CIVIL SERVANT-CONTRACTOR DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY CIVIL SERVANT RATING CONTRACTOR RATING WEIGHT (OUT OF I. FUNCTION 100%): The work in question is a critical public function. The work in question is not a critical public function.

The work in question is a core competency or function The work is a peripheral competency or function, or for which NASA does not already have a sufficient base a core capacity for which NASA needs temporary within its civil servant workforce. augmentation. The function involves fundamental decision-making. The function involves lower level, more project-

oriented or tactical actions. It is very difficult to clearly define work requirements It is relatively easy to specify the product or service

and project deliverables. to be delivered. There is a need to build internal capacity for this There is a need to access specialized skills or output, function. patents, process, or specific intellectual capital for this function. The function is inherently governmental and must be The function is commercial.

performed by the state. Protecting the public interest is paramount. Protecting the public interest is not as crucial. The organization requires civil servant smart-buyer and There is sufficient in-house expertise to manage contract manager. contracts appropriately (smart buyer and smart overseer). MEAN WEIGHTED MEAN

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NASA CIVIL SERVANT-CONTRACTOR DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY CIVIL SERVANT RATING CONTRACTOR RATING WEIGHT (OUT OF II. RESOURCES 100%): Increased internal competition is desired; for example, to There is evidence to prove that a contract will be stimulate creativity and innovation. more cost effective.

The work is a core NASA function and is likely to be There is considerable uncertainty of future funding

supported through the future. to support the work. Funds available for this work are relatively stable or Public funds available for this work are decreasing. increasing.

Financial incentives are either inappropriate or Financial incentives may maximize the achievement inapplicable to the work to be performed. of an established goal.

MEAN WEIGHTED MEAN

(A) (B) (C) (D) (E) CATEGORY CIVIL SERVANT RATING CONTRACTOR RATING WEIGHT (OUT OF III. WORKLOAD 100%): The workload is projected to be stable over time. There is extraordinary volume of work; the agency

needs “extra hands.” The basis for the work is not as clearly established and The work tends to be in an established area and requires more fundamental development of procedures requires more routine or repetitive tasks. and work tasks.

Surge capability and the ability to contract the

workforce quickly are required. MEAN WEIGHTED MEAN

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NASA CIVIL SERVANT-CONTRACTOR DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY CIVIL SERVANT RATING CONTRACTOR RATING WEIGHT (OUT OF IV. LABOR MARKET 100%): The required skill(s)/expertise are not available The requisite skill(s)/expertise are available

commercially. commercially in sufficient quantity/quality. MEAN WEIGHTED MEAN

(A) (B) (C) (D) (E) CATEGORY CIVIL SERVANT RATING CONTRACTOR RATING WEIGHT (OUT OF V. ACCOUNTABILITY 100%): The organization must assume full responsibility for Accountability is project-focused. performing the work.

The work involves core concerns integral to the The work involves operational concerns peripheral to performance of NASA's mission; for example, safety- core concerns.

related decision making functions.

There is a possibility of a real or perceived conflict of There is no real or perceived conflict of interest. interest.

The government will eventually bear responsibility if the Although the government will ultimately bear contract fails because the work is of extraordinarily high responsibility if a contractor fails, sufficient value or the product is fundamental and critical. mechanisms can be established to hold a contractor accountable.

MEAN WEIGHTED MEAN

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NASA CIVIL SERVANT-CONTRACTOR DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY CIVIL SERVANT RATING CONTRACTOR RATING WEIGHT (OUT OF VI. RISK 100%): There is a high probability that the intended work will There is a lower probability that the intended work experience an undesired effect, such as cost overruns, will experience an undesired effect such as cost schedule slippage, safety mishap, compromise of overruns, schedule slippage, safety mishap, security, or failure to achieve a technological compromise of security, or failure to achieve a breakthrough. The consequences, if such an event were technological breakthrough. The consequences of to occur, are too critical to contract out. such an event are not so critical that they require direct government responsibility.

The intended work requires the highest form of safety The intended work is not as risky or is under the

assurance. umbrella of NASA safety management. Strong oversight from public servants is required. Strong daily management by public servants is not

crucial. MEAN WEIGHTED MEAN

(A) (B) (C) (D) (E) CATEGORY CIVIL SERVANT RATING CONTRACTOR RATING VII. QUALITY AND WEIGHT (OUT OF SERVICE LEVEL 100%): Direct federal control is needed to ensure that expected Direct federal control is not as necessary to achieve

outcomes are achieved. required outcomes. Analyses show that the best value will be achieved Analyses show that the best value will be achieved through performance of this function/activity by a civil through performance of this function/activity by a servant. contractor. MEAN WEIGHTED MEAN

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NASA CIVIL SERVANT-CONTRACTOR DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY CIVIL SERVANT RATING CONTRACTOR RATING VIII. EMPLOYMENT WEIGHT (OUT OF FLEXIBILITY 100%): The circumscribed options for management, e.g. More workforce options are need to accomplish the restrictive work practices/compensation, will not detract mission. from mission accomplishment.

Title 5 constraints on recruitment, retention, and Increased management flexibility is needed and/or termination are not important variables in the ability to hiring civil servants is difficult. hire or retain qualified staff.

It is necessary to overcome salary constraints, or public service staffing or regulatory restrictions.

Civil service protections that restrict management options Changeable conditions of employment are required.

do not detract from mission accomplishment. Existing personnel ceilings are not an obstacle to hiring Existing personnel ceilings are an obstacle to hiring

additional civil servants. additional civil servants. MEAN WEIGHTED MEAN

TOTAL MEAN TOTAL WEIGHTED MEAN

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CONCLUSIONS

The Panel believes that:

• The Vision has necessitated a fundamental change in the approach required to manage the work of NASA.

With a limited budget, redirected priorities, and the ever-looming potential for new scientific discoveries, NASA’s most senior managers—accountable for the agency’s performance—must have the early opportunity to shape decisions. Without this senior-level involvement and clearly communicated and applied criteria, the agency will lack the integrated processes and analytic rigor for a strategic approach.

• NASA does not currently have a consistent, formal, and transparent process for deciding when it is most appropriate to hire a civil servant or buy the services of a contractor.

Chapters IV and V present the agency’s separate acquisition and workforce planning processes. The Panel believes that the absence of a fully integrated process and of consistent agency criteria impedes NASA’s ability to manage its multisector workforce and to evaluate its contract management performance. This inconsistency hampers the agency’s ability to reshape its workforce in a manner supportive of the agency strategic plan. Lack of transparency also hinders the agency’s credibility. While recent changes to the agency acquisition process have elevated and clarified roles, the integration of planning for the civil service and contractor workforce remains without clear, work-based criteria. The agency’s request for a methodology and accompanying tool complements its new tiered acquisition strategy process. The tool and methodology will help integrate the civil service versus contractor discussion⎯something many other federal agencies will need to do as they too rely more heavily on multisector workforce elements. Such a tool, used as a common practice, will better inform decisions and instigate healthy discussions among managers, some of whom may not have previously focused on or been educated about the legal and regulatory basis of their decisions.

• The contractor workforce must be taken into account along with the civil service workforce.

To segregate planning for these two entities is to ignore the realities of today’s multisector workforce and limit agency effectiveness in mission accomplishment. An organization that is flexible and scalable must look at all of its resources and go through regular reassessments and scenario planning.

• There are currently few links between acquisition planning and civil service workforce planning.

The October 2006 OHCM-proposed new approach to strengthen NASA’s workforce planning is a positive development. The governance structure will include leaders from Institutions and Management, to which OHCM and Procurement both report. It is premature, however, to assess the degree to which this group will integrate workforce planning for the contract and civil service workforce. Early metrics indicate a heavy emphasis on civil service indicators. The focus appears to be the integration of workforce planning and work planning and does not explicitly include acquisition planning.

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• The process to move work in house has been decentralized, with decisions often made with a focus on protecting the permanent workforce.

These decisions are part of the acquisition continuum. As discussed in Chapter III, these historically delegated decisions have tended to be people driven.

RECOMMENDATIONS

To assist the agency in making consistent, well informed, and transparent decisions concerning the appropriate utilization and supervision of its multisector workforce, the Panel recommends that NASA:

• Require all levels of management to become familiar with and use a Civil Servant- Contractor Decision-Making Guide, such as the model proposed by the Panel.

NASA should apply agreed-upon criteria to all related decisions, with particular attention to the appropriate, on-site augmentation of the civil service workforce and differentiation between core and non- core competencies. Such a guide must be a flexible tool. With experience in defining critical success factors, NASA must engage its managers in tailoring this tool, including the weighting of categories at either the agency or center level. Should there be insufficient funding or FTE within a program to implement the optimal decision, decision guide results should spur senior management discussions about ways to remediate inconsistencies or concerns and can be used as a vehicle to establish criteria-based priority lists for needs that cannot be immediately met.

With regard to use of such a decision guide, the Panel provides the following guidance;

• Re-emphasize the need for management attention to the most vulnerable area, the utilization and supervision of long-term, on-site contractors who augment the civil service core competencies.

Because this group is closest in physical proximity to civil servants and has a degree of similarity in work assignments, they also present the highest level of organizational vulnerability. The Panel noted in Chapter IV that some site visit interviews pointed to a possible reappearance of some problems with personal services contracting. Managers must continually evaluate what is driving their decisions to assign work and whether that work is strategic, decision-making, core competency work that should be assigned to a more directly accountable civil servant. If lack of FTE is the only reason the work goes to a contractor, this should be a warning sign that the work should be reevaluated, with tasks that are more appropriately performed by a civil servant being assigned to one. If this is not possible over the short term, management should make it a priority to develop a plan for doing so in the longer term.

• Tie overall decision-making to long-term work and competency projections. When making these decisions the agency should consider the ultimate question: if the function is entirely contracted out, can the agency afford to lose this in-house capability?

• Maintain appropriate balance of roles between contractors and civil servants.

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The Panel recognizes the complexity inherent in establishing boundaries given the size of the workforce and the nature of NASA’s mission and team orientation. It will be a difficult balancing act, but one which the Panel believes may help the agency clarify its core expertise roles and bring back into the agency the critical decisions and leadership for NASA missions.

• Limit supervisory and managerial positions with authority over federal employees to civil servants

In the implementation of this new approach to workforce decision-making, the Panel further recommends that NASA management:

• Delegate to the Associate Administrator for Institutions and Management the responsibility to coordinate agency guidance in support of the guide.

• Evaluate data collected in this new decision-making process to inform healthy center metrics, with an eye toward evaluating how each center has encouraged the appropriate use of resources for the overall benefit of NASA.

CIVIL SERVICE OPTIONS: PERMANENT/TERM

Strategic Use of Term Hires

If NASA decides to hire a civil servant for a position or group of positions, it next must determine the type of appointments that will best meet mission needs. As part of this effort, the agency must evaluate the current and anticipated environment to determine:

• The required civil service competencies and proficiency levels

• The required time period for the competencies and proficiency levels

• The appropriate number and mix of long and short-term staff required at each location

• Cross-program demands and schedule overlaps potentially affecting competencies available to meet mission demands

• The number of core permanent civil servants required to sustain each competency, as well as meet new/unanticipated program requirements

• Succession plan needs for future leaders, with data to support strategic adjustments based on projections of occupational availability, attrition, and retirements, as well as competition for the labor pool

The agency has relied on permanent, full-time civil servants as its core. However, NASA is committed to “moving to a more flexible and scalable workforce as a means of responding to the evolving nature of workforce requirements.” It believes the strategic or targeted use of term employment authorities is

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among the most significant tools in managing its dynamic workforce environment. Term employment is consistent with agency analyses showing that 80 to 90 percent of its projects run from five to seven years.

Defining Term Employment

Under term employment, the employing agency hires the individual for work that is not permanent, but will last for more than one year but not exceed six years.153 OPM regulations, specifically 5CFR 316.301, provide guidance. According to OPM, reasons for making a term appointment may include project work, extraordinary workload, scheduled abolishment of a position, reorganization, uncertainty of future funding, and/or contracting out of the function.154 NASA term employees are eligible for most federal benefits.155

Federal agencies fill most term vacancies through open competitive examination procedures but can hire non-competitively under limited circumstances. Examples of those who may be eligible for non- competitive term employment are:

• Reinstatement eligibles (former career federal employees)

• Veterans (with more than 180 days active duty) eligible for Veterans Readjustment Appointment (VRA)

• 30 percent disabled veterans

Ending Term Employment

A term appointment ends automatically when the term expires. The first year of service is considered a trial, and the agency may terminate a term employee at any time during the trial period regardless of method of appointment.156

Term employees have basic RIF rights. An agency may conduct a RIF that involves releasing only tenure group III term employees from a retention register after first separating non-competing temporary employees. Such a limited RIF would be less disruptive than one involving the permanent workforce. In such a scenario, no group I (career) or group II (career-conditional) employees are released. According to OPM, this type of situation occasionally takes place when a project is completed, and the agency no

153 Generally, federal agencies must restrict term employment to no longer than four years. Under the NASA Flexibility Act of 2004, Public Law 108-201, NASA is authorized to extend the period of term employment to six years. 154 http://www.usajobs.opm.gov/E136.asp; OPM regulations give agencies the authority to fill permanent positions with term appointees. Agencies might use this authority to place permanent employees affected by downsizing. For example, such use might occur during a competitive sourcing study. 155 These benefits include: annual (vacation) and sick leave, health and life insurance, within-grade increases, Federal Employees Retirement System (FERS) participation, Thrift Savings Plan (TSP) coverage, and other benefits. Terms are also eligible for career ladder promotions, possible reassignment to or merit promotion consideration for other term positions, non- competitive conversion to a “like” term position in the same geographic location, conversion to permanent employment without a second round of competition if initially selected competitively, and consideration for any NASA permanent position for which they apply under internal merit promotion procedures. Many of these term employment benefits, beyond those listed on the OPM web site, are liberalized for NASA term employees by virtue of the NASA Flexibility Act of 2004 and are not benefits accorded to other government term employees. 156 5CFR316.304

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longer has a need for its temporary and term employees. Such limited RIFs have occurred at Navy shipyards.

To demonstrate that the RIF action was bona fide, the agency, if challenged, has the burden to show that its decision to abolish the term positions prior to their expiration date(s) was:

• Tied to an organizational decision, e.g. lack of work, shortage of funds

• Not a decision to abolish the positions solely because the positions were staffed by term appointments

• Not for the purpose of converting the term position to a permanent position and reassigning an excess permanent employee to the position157

Term employees are not:

• Covered by RIF regulations when separation is based on expiration of appointment

• Entitled to mandatory assignment rights (e.g. “bumping” or “retreating”) afforded in a RIF to tenure group I and II employees158

• Eligible for the agency’s Reemployment Priority List (5C.F.R. 330.203 (a)(1)

• Eligible for the Career Transition Assistance Plan

• Eligible for priority consideration for positions in other federal agencies under the Interagency Career Transition Assistance Plan (ICTAP) (5C.F.R. 330.703 (b)(1)

(See Chapter VII for a discussion of NASA’s overall RIF policy and procedures and possible changes.)

How Federal Agencies Use Term Employment

According to OPM’s data, in FY 2005, the federal government made 24,594 term appointments consisting of new appointments, extensions, and conversions to term appointments from other appointment types. Table 6-3 shows the agencies that account for about 93 percent of the term appointments made in FY 2005. Department of Defense (DoD) components account for about 42 percent. The Department of Treasury made the highest number of civilian appointments—2,982. NASA ranked 10th in the listing, making 760 appointments. These appointments accounted for 81 percent of NASA’s new hires and agency transfers, contrasted with a government wide average of about 10 percent.

157 See Merit Systems Protection Board (MSPB) decision, Perlman v. Department of the Army, 23 M.S.P.B. 125, September 11, 1984. 158 At its option, an agency may, under 5C.F.R. 351.705(a) (2), provide bumping rights to term employees. There is no authority for an agency to provide term employees with retreat rights. See OPM Downsizing Update, DUCOV025, dated March 1, 2000.

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Table 6-3 Term Appointments and New Hires by Agency for Fiscal Year 2005

Percent of All new new hires New term Conversions Extensions of term Total * term hires and and agency Department/Agency appointment to term appointments appointments agency transfers that s appointment transfers were term appointments Department of the 3,354 1,714 1,293 6,361 40,089 16% Army Department of 2,116 634 232 2,982 12,607 24% Treasury Department of Interior 591 1,698 592 2,881 16,328 18% Department of 274 2,112 97 2,483 23,875 10% Homeland Security Department of 494 1,132 388 2,014 23,506 9% Agriculture Department of the 742 513 457 1,712 14,679 12% Navy Other Department of 881 157 317 1,355 16,040 8% Defense Department of 404 635 232 1,271 26,811 5% Veterans Affairs Department of the Air 538 263 204 1,005 22,033 5% Force NASA 313 255 192 760 941 81% Subtotal 9,707 9,113 4,004 22,824 156,820 15% Other agencies 527 1,000a 243 1,770 90,421 2% All agencies 10,234 10,113 4,247 24,594 247,241 10% Source: OPM *Total does not include term appointments for SES. OPM said there were 28 limited term appointments for SES and 52 conversions to SES limited appointments in FY 2005.

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See Appendix C for lessons learned about term employment from other agencies, including:

• A summary of demonstration projects related to term employment

• Use of term employment by agencies with broad authority to implement alternative personnel systems

• Information about a Defense Advanced Research Projects Agency (DARPA) experimental hiring authority for the non-competitive, term appointment of eminent scientists and engineers without regard to the provisions of Title 5.

NASA’s Approach to Term Hires

NASA’s 2003 Workforce Strategy speaks to a “balance between permanent and non-permanent employment,” but does not otherwise provide guidance. NPR 3010.1, which expires in September 2008, states that centers shall not refill vacancies without first considering several criteria. When center management deems that a civil service position is required, one of the criteria they are to consider is “whether a permanent or non-permanent appointment type best meets the mission and workforce balance requirements.” The six-chapter NPR deals with broad topics, such as long-term workforce planning, project workforce transition, continual workforce renewal, total workforce balance, delegation of responsibilities, and measurements, but does not provide agency criteria for the use of term employment. These 2003 documents, which remain in force, predate NASA’s expanded authorities, including the six-year term appointment authority.

The NASA Flexibility Act of 2004 (discussed more fully in Chapter V) authorizes NASA to convert term employees to permanent positions without a second round of competition if they are competitively selected for the initial term appointment. It also lengthens the maximum duration for term appointments from four years (the duration provided for most federal agencies that adhere to Title 5 requirements) to six years.

On April 28, 2004, NASA issued interim implementing policies and procedures for all the Act’s flexibilities. With respect to term appointments, the policies:

• Reiterate OPM’s criteria for when to use term appointments

• Advise that all term appointment vacancy announcements state that selected individuals will be eligible to convert to permanent appointment

• Describe the requirements for converting a term employee to include o two years of continuous service under a term appointment and o performance at a fully successful level or better

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• Establish minimum reporting requirements for each center—the total number of term appointments converted to permanent, and of those the number that were made to address a critical need

Consistent with NASA’s 2003 NPR, the agency committed, in an April 2006 letter to a union president, to develop further “guidance identifying appropriate parameters for the use of term appointments and to using terms appointments where and when they are in the best interests of the agency.”159 (The Academy decision-making guides, discussed later in this chapter, would provide such guidance.) Previous budget guidance that said centers should strive to have ten percent of their workforce under term appointment is no longer in effect. The agency believes the best approach to establishing perm/term criteria is consistency with the agency’s culture, which values the differences among the centers and recognizes the need for varying approaches to their different missions.

Preference for Hiring Permanently

Ninety percent of the civil servants at NASA are permanent full-time staff under Title 5.160 Among reasons cited for this organizational preference are hiring officials who:

• See “continuing need” positions and assume compliance requires a permanent hire

• Believe quality applicants will not accept non-permanent appointments

• Anticipate turnover from non-permanent employees, whom they believe will remain only until they find a permanent job

• Fear disproportionate impact if hiring constraints are imposed─primarily because allowing a term appointment to expire would reduce the organization’s FTE level

During the downsizing of the mid 1990s, the agency constrained hiring, but allowed centers to fill critical vacancies. During this period, the agency averaged 160 full-time permanent and 27 term hires per year. Even during FY 1996, the year with the lowest intake, the agency hired 110 permanent full-time employees and 30 term hires. Between 1998 and 2004, NASA hired 2,500 permanent full-time employees and made an additional 250 term appointments.

Historical Usage of Non-Permanent Appointees

At the start of FY 2007, term employees comprised approximately 1.7 percent of the agency’s multisector workforce and 5 percent of its civil servant population, the latter up from less than 3 percent as of February 2005. The range for other-than-permanent-full-time employees over the last 45 years has been from three to five percent of the total civil service workforce. At some centers, term employment levels are considerably higher than the national average.

159 Letter of April 2006 from Toni Dawsey, Agency Human Resources Director, to Mr. Wesley A. Darbro, President MESA/IFPTE, p. 4 160 SEITT report, p. 108.

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Managers have historically used non-permanent appointments only when they have not been authorized to fill positions permanently. From the start of FY1994 though the start of FY 2005, the number of term employees varied from less than 50 to over 500. Officials attribute a recent increase in 2004 to the Return to Flight Mission and the fact that the Johnson Space Center increased its on-board term employees by 171 (from 13 to 184) in a 13-month period. In FY 2005 there was another substantial increase, due, in part, to a greater use of the Federal Career Intern Program (FCIP) for entry-level hiring and also to concerns about program and budget uncertainties. Two-thirds of the way through FY2006, the agency had hired only 141 term employees, compared to 269 in Fiscal Year 2005 and 320 in Fiscal Year 2004. As has been the case for the last three years, Johnson Space Center led the hiring of term employees, with 62 new terms. Figure 6.1 depicts hiring patterns for the three predominant occupational categories of scientists and engineers, professional /administrative, and clerical.

Figure 6-1 Total NASA Permanent Hires, Temporary Hires, and Conversions to Permanent Status for Fiscal Years 1993-2006

800

700 Permanent Conversions 600 Terms 500

400 Hires 300

200

100

3 2 94 98 99 03 04 000 001 199 19 1995 1996 1997 19 19 2 2 200 20 20 2005 2006 Fiscal Years

Note: Data in Figures 6.1 and 6.2 are for the three predominant occupational categories in which term appointments are made at NASA. Conversion data from NASA did not differentiate between types of non- permanent employment prior to permanent status. However, NASA officials said that the vast majority of conversions are from term employment. Source: NASA

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Field Visit Insights into Center Variability

Figure 6-2 shows wide variability in the usage of term employment from one NASA facility to the next.

Figure 6-2 Total NASA Permanent Hires, Conversions to Permanent, and Term Appointments Fiscal Years 2004-FY 2006

Source: NASA

For example, Glenn term employment has equaled from one to three percent of its total civil service population. Johnson, which has had more opportunity to hire, hired 394 term employees from FY 2004 through FY 2006. While Johnson’s original goal was to have between eight and nine percent of its workforce as term, it currently has a workforce that is 13 percent term employee. In spite of this wide variation in hiring rates, center management from research and space flight centers alike has told the Academy study team that they believe NASA should use term appointments as the predominant agency hiring vehicle.

There is also variability in the ways in which components use terms. In some labor markets, NASA officials do not find term employment a viable option. At Ames, for example, its proximity to a number of universities and Silicon Valley make it exceedingly difficult to hire scientists given the competition from these organizations. At Goddard, the metro area competition for acquisition professionals and related high levels of attrition in this segment of the workforce make term recruitment impractical. At Marshall, the competition with Redstone

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Arsenal for employees with security clearances and the impending BRAC-related increase in the arsenal’s size make attracting term employees to Marshall more difficult.

When centers find term employment a viable option, variability in use remains. For example:

• Glenn Research Center uses its terms to:

o Fill ongoing work needs where there is uncertainty of future funding, to convert co- ops, and when an ongoing need for an employee’s services is not permanent o Save FTE for mission-critical functions such as scientists and engineers

• Goddard Space Flight Center for:

o Temporary, short-term assignments, such as to backfill positions that will ultimately go to the NASA Shared Services Center in Mississippi

• Marshall Space Fight Center:

o Short duration programmatic requirements o Clerical positions

• Kennedy Space Flight Center:

o All external hires are terms o Conversions to permanent by exception only o Successful performers in positions where there is continuing need may receive an extension of their term employment of up to four years

Occupational Trends in Term Employment

NASA has historically used the majority of its term hires for scientific and engineering positions. From FY 1993 through FY 2003:

• Scientists and engineers comprised about 41 percent of NASA’s term hires

• Professional and administrative employees comprised a little over 28 percent

• Clerical employees comprised 30 percent

• GS technicians comprised less than two percent

• Wage grade employees were hired as terms in only three instances, equaling less than one percent of total term hires

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Since NASA received its new flexibilities in 2004, the most significant change in historical hiring patterns occurred in two occupation groups. From FY 2004 through FY 2006:

• Scientists and engineers comprised a larger percent of term hires—increasing to about 69 percent.

• Clerical employees comprised a much lower percent of term hires—declining to about two percent of term hires.

During site visits, NASA managers provided these insights into these occupational trends in term employment:

• The agency uses term appointments for engineers, whose work is seen as operational, project-oriented, and, to some extent, interchangeable.

• The agency believes this operational work gives term employees, as well as fresh-outs, the chance to acquire valuable hands-on experience that is transferable to the work processes of more mature programs, such as SSP, ISS, and Constellation.

• The agency uses term appointments for other disciplines dependent on the local labor market. For example, Goddard competes with other DC-based federal agencies for acquisition talent and has not had success in recruiting term acquisition professionals. NASA facilities outside of DC have greater success in recruiting terms for such positions. Some centers have established informal policies to hire terms exclusively for specified occupations, e.g. Glenn and Marshall fill all secretarial positions with terms.

• At most research centers, the agency is less likely to use term employment for science positions. This is based in part on labor market competition, particularly competition with universities, and, in part, on a desire to maintain those engaged in long- term research critical to the organization in its institutional core. Scientists at research centers are viewed as an institutional investment.

See Volume 2, Appendix A-9 for more detailed information on term hires by occupation.

Patterns and Practices in Term Recruitment and Hiring

During field visit interviews and meetings with NASA headquarters officials, managers shared their rationale for organizational differences in the use of term employment, summarized below.

NASA managers are motivated to use term appointments primarily out of uncertainty about future FTE allocations.161

161 OMB officials have said they are not really focused on agency FTE ceilings, but rather on budget ceilings. Agency officials do, however, assign FTE ceilings to internal organizations as a way of managing the workforce and salary dollars.

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• The majority of NASA term appointments are for one or two years, and possibly four at the healthiest centers; infrequently for the six-year period authorized in 2004.162 Managers use this shorter appointment period to minimize organizational risk and to:

o Essentially extend the probationary period o Avoid inclusion of the shorter-duration terms in a RIF and rely instead on expiration of appointment o Protect their permanent civil service workforce from additional competition, should a RIF occur. o Hire fresh-outs, who are easier to recruit for limited duration appointments than seasoned professionals

• NASA managers said that recruiting term employees has not typically presented a problem either in terms of candidate quality or quantity and has not required incentives beyond relocation pay and/or quality step increases. While NASA’s offer rejection rate has been low, one unknown is the number and kind of candidates who never apply to NASA’s announcement of term openings.

• Recruiters acknowledge that they encourage new term employees to believe that subsequent term appointments are likely and that term employment frequently leads to NASA permanent employment.

Conversion from Term to Permanent Employment

Consistent with federal trends, NASA converts the vast majority of term appointees to permanent positions. Most are eventually converted to permanent status by their employing center, although usually in a different position than their initial appointment. From 1995 through 2005, NASA hired 504 scientists and engineers as term appointees. Only 30 (less than 6 percent) left the organization because their term expired; the rest were converted. From FY 2000-2006, the agency converted 842 employees to permanent-full-time employment; the majority of these conversions were from term employment.

At the Johnson Space Center, 95 percent of new hires are term appointees, and virtually all of them are converted to permanent positions after two years of satisfactory performance. In FY 2006, Johnson converted 100 term hires to permanent status. JSC anticipates making 200 term- to-permanent conversions in FY 2007-2008.

A January 2002 OPM report that reviewed NASA’s human capital management program noted that, in NASA vacancy announcements, there was language regarding the possibility of non- competitively converting term appointments─an option not then authorized for NASA. During the OPM review, NASA officials cited a number of reasons for making non-permanent

162 JSC is a notable exception, now using the six year term appointment to staff up for its expanding role in Constellation.

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appointments, including the desire to “infuse the workforce with new ideas, to mirror academic tenure, to leverage technology transfer,” or to comply with the agency policy.163

Labor’s View of Term Employment

Nine bargaining units at seven different NASA facilities include term employees. NASA union officials have, however, testified before Congress to express their opposition to what they characterize as an overwhelming reliance on term positions and a threat to the quality of the technical staff. Dr. Lee Stone, Legislative Representative of the NASA Council of International Federation of Professional and Technical Engineers (IFPTE) Locals, in his June 2006 testimony before the House Subcommittee on Space and Aeronautics, stated: “The decision to offer term or permanent status should be based on a careful technical analysis of the job requirements and of the long-term need for the relevant skills, but no such analysis is happening. Employees are hired in as terms simply to undermine the civil service tenure process; many are slated for long- term employment, but are simply not hired as ‘perms.’”

In March 2006, IFPTE issued a response to the NASA Workforce Strategy in which it expressed additional concerns about the agency’s use of term and permanent appointments. It contained the following observations:

• The caliber of scientists and engineers that NASA hopes to attract will choose other options, such as tenured positions in research institutions or positions in industry, if NASA “becomes a mere soft-money temporary employment agency that pays civil- service wages.”

• NASA should have “hard rules” defining when hiring of term employees is appropriate or permissible.

• In the union’s opinion, NASA’s decisions regarding term employment are not strategic, but “based on a philosophy against long-term commitment.” The union believes that hiring terms makes agency budgetary planning easier, but comes “at the expense of productivity and technical excellence.”

• Term employees will not have the same long-term mission dedication as career employees, will take their intellectual capital with them when they leave, and are not the wisest investment of scarce NASA training resources.

Permanent employees may be more flexible than term appointees. “Terms are hired to do a specific job and they cannot always, by law, be moved to something else that is more pressing. That is not the case for permanent employees.” According to the union, management has more options to align permanent employees’ work assignments with the agency’s programmatic needs. For these reasons the union is concerned about terms playing a critical role when NASA’s key interests are at stake.

163 U.S. Office of Personnel Management, Office of Merit Systems Oversight and Effectiveness, Report of an Oversight Review: National Aeronautics and Space Administration, January 10, 2002. pp. 26-27.

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PERMANENT-TERM DECISION GUIDE

Given variations in term employment and a desire for a more strategic overlay, NASA asked the Academy to provide, among other products, a decision-making tool to guide agency managers in a more systematic and transparent process to assess specific staffing needs. This request comes with the recognition that tactical and personal factors can easily influence hiring decisions at the center, program, and project level.

In the Academy’s 2005 report on the use of human capital flexibilities, the Panel noted that NASA needs to appreciate the flexibility of non-permanent appointments, use them to the full extent possible, and examine the nature of the projects to which non-permanent employees are assigned. The Panel added that if the majority of term appointees were converted to permanent status, then the goal of developing a flexible and scalable workforce, focused on the critical core competencies and key decision-making roles, would not be realized. As the Comptroller General testified in 2002, on the subject of NASA management challenges, “Agencies must ensure that strategic human capital plans are results-oriented and data driven…and must effectively use these data to develop strategies that continually ensure they have the right mix of employees to meet their future needs.”

The Panel’s Permanent-Term Decision Guide is a response to NASA’s recognition that it should make these decisions in an objective manner in order for its workforce strategy and reshaping to be successful. This Guide is fundamentally focused on what the Panel believes should always be the primary focus of any hiring decision: the nature of the work.

The benefits of this guide are similar to those outlined above in the civil servant-contractor section—in particular, consistent understanding of the relevant criteria, transparent decision- making and quantifiable results. Like the Civil Servant-Contractor Decision Guide, the Permanent-Term tool is designed to be a flexible resource for NASA managers. During implementation, the Panel expects that NASA would engage managers at all levels in tailoring the tool to their circumstances, as well as adding any other relevant categories or factors.

As shown in Table 6-4, the Guide includes nine major categories that are critically important in deciding whether to hire a permanent or term civil servant to do certain work.

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Table 6-4 Categories and Definitions (Permanent/Term Hiring)

CATEGORY DEFINITION Flexibility Legal and regulatory implications of hiring a permanent civil servant, or term civil servant. Function A group of related activities and/or projects for which an organizational unit is responsible—the principal purpose a program is intended to serve.164 Recruitment Source Any place where one might recruit candidates with skills and competencies for employment in federal government; for example, colleges and universities, state and local government, non-profits, private industry, other federal agencies, the military, etc. Resources Tangible inputs required to deliver the products and services of an organization, such as: • Multisector Workforce • Time • Money • Facilities • Raw materials • Tools/Equipment Workload Work an employee is expected to do within a specified time165. Labor Market The market in which workers compete for jobs and employers compete for workers166 Organization A unit within an entity, socially structured for planned, coordinated, and purposeful action to achieve certain objectives; a boundary separates it from the environment. Training/Investment • Training: programs that provide instructional activities for individuals for professional development • Investment: the accumulation of some sort of asset in hopes of getting a future return167 Employee Benefits Financial reimbursement and other services provided by the employer or associated insurers under the terms of a contract. Examples include benefits under a life or health insurance policy, benefits as prescribed by a workers compensation law, annual and sick leave benefits, retirement benefits, the opportunity to participate in such programs as an agency’s leave bank, and so on.

Table 6-4 presents the Permanent-Term Decision Guide. Within each of the nine categories are a series of statements to which respondents express their level of agreement based on a five-level Likert scale.168

The methodology is based on federal regulations on term and permanent appointee use, as established by OPM, specifically in 5CFR 316.301, and Panel and other Academy insights into sound management decision-making. The framework also reflects effective-practices research

164 www.ojp.usdoj.gov/BJA/evaluation/glossary/glossary_f.htm 165 www.wordnet.princeton.edu/perl/webwn 166 www.wordnet.princeton.edu/perl/webwn 167www.en.wikipedia.org/wiki/Investment 168 The Likert scale utilized in this Guide is the same utilized for the Civil Servant-Contractor Decision Guide (5 = Strongly Agree … 1 = Strongly Disagree.)

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conducted at federal agencies that, like NASA, have utilized modified term appointment authority.

(See Appendix D for a full discussion of this Decision Guide, including weighting and scoring options.)

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Table 6-5 NASA Permanent-Term Hiring Decision Making Guide NASA PERMANENT-TERM HIRING DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY PERMANENT RATING TERM RATING I. FLEXIBILITY WEIGHT (OUT OF 100%): The work requires stability afforded through employee The position requires limited duration employee

protections, including merit system protections. rights/benefits. Management flexibility is not an overriding Management flexibility is an important

consideration in filling this position. consideration for filling this position. MEAN WEIGHTED MEAN

(A) (B) (C) (D) (E) CATEGORY PERMANENT RATING TERM RATING II. FUNCTION WEIGHT (OUT OF 100%): There is a need to create a long-term institutional It is not critical to create long-term institutional investment. investment. The functions to be performed are shorter term, project oriented, and/or operational. The function to be performed is a core competency for The function to be performed is peripheral to which NASA does not already have a sufficient base NASA's core mission, or is a core capacity for within its civil servant workforce. which NASA needs temporary augmentation. The function requires fundamental decision-making, The work is routine or repetitive in nature and does such as strategic decision-making for the agency. not involve fundamental decision-making that has long-term implications for the agency. The function in question involves ongoing research, The function involves more routine application of

necessary for institutional knowledge. principles/not likely to be needed in future mission. There is a need to build internal capacity (e.g. technical The work is inherently governmental and requires capacity). specialized, unavailable skills not necessarily needed for long-term. MEAN WEIGHTED MEAN

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NASA PERMANENT-TERM HIRING DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY PERMANENT RATING TERM RATING III. RECRUITMENT WEIGHT (OUT OF 100%): SOURCE Optimal candidate is a permanent federal employee with Optimal and most cost-effective candidate is an tenure. entry-level hire, typically more willing to accept term employment. Duration of work does not have a foreseeable end point Nature of work requires experienced personnel for AND the nature of work requires experienced personnel, limited, defined period, e.g. military retiree or primarily current federal employees, who are unlikely to reemployed civil servant annuitant (with waiver of

accept limited duration appointments. dual compensation) may be willing to accept limited duration appointment.

MEAN WEIGHTED MEAN

(A) (B) (C) (D) (E) CATEGORY PERMANENT RATING TERM RATING IV. RESOURCES WEIGHT (OUT OF 100%): The position is a long term priority, within NASA's There is considerable uncertainty about future funding for civil service workforce. funding: for example, lower FTE ceiling in out years; stable, but low level of funding. Projects are fairly stable for the required skill area. There are project fluctuations in the required skill

area. MEAN WEIGHTED MEAN

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NASA PERMANENT-TERM HIRING DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY PERMANENT RATING TERM RATING V. WORKLOAD WEIGHT (OUT OF 100%): The current and projected workload is stable. There are fluctuations in workload volume. For example, surge capability is needed (perhaps paired with contractor capability) to augment civil service workforce and avoid schedule disruption.

There are adequate staffing levels. Staffing levels need temporary augmentation or are

inherently unstable. The work involves significant long-term institutional The work involves specific short-term expertise of

responsibility. limited duration. MEAN WEIGHTED MEAN

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NASA PERMANENT-TERM HIRING DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY PERMANENT RATING TERM RATING VI. LABOR MARKET WEIGHT (OUT OF 100%): There is a need to recruit and retain highly skilled and The position is not highly competitive, and it is high caliber professionals. The position is highly easy to recruit in the required skill area. competitive and best candidates will go elsewhere if a non-permanent position is offered.

The position is intended for a researcher/scientist with The position does not necessarily require a senior

tenure track options. researcher/scientist. The position is a “target of opportunity” hire such as of a noted academic or “high visibility” expert who may be only willing to accept a permanent tenured position.

The position is hard to fill (for example, security clearance or advanced special degree required or intense competition with private sector).

The geographic location necessitates a permanent hire The geographic location in not as crucial. because of intense competition.

There is difficulty attracting candidates to this location. There is little difficulty in attracting candidates to

this location. MEAN WEIGHTED MEAN

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NASA PERMANENT-TERM HIRING DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY PERMANENT RATING TERM RATING VII. ORGANIZATION WEIGHT (OUT OF 100%): The long-term organizational structure is stable. The organization is in a state of transition, with

reorganization pending or possible. Work is expected to remain in-house and is suitable for Work is slated to be contracted out; term

contracting out. employment may be effective transition. The agency has a long-term commitment to retain this The agency is reevaluating the assignment of this position with its array of responsibilities in-house. work, e.g. bringing some work from contractors to civil servants and may assign pieces of this work in the future to permanent full-time staff; term employment may be effective transition.

The position or organization is not under consideration to The position or organization is going to be

be abolished. abolished. MEAN WEIGHTED MEAN

(A) (B) (C) (D) (E) CATEGORY PERMANENT RATING TERM RATING VIII. TRAINING / WEIGHT (OUT OF 100%): INVESTMENT The position is integral to the accomplishment of the Training costs are limited and proportional to agency's core mission. Long-term investment and project duration and specific to job performance. personnel development are warranted because the project is necessary for long-term institutional management.

This position is part of a cadre of experts/mentors in NASA's core competencies. It will help to ensure sufficient expertise to train and mentor the next generation.

MEAN WEIGHTED MEAN

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NASA PERMANENT-TERM HIRING DECISION MAKING GUIDE (A) (B) (C) (D) (E) CATEGORY PERMANENT RATING TERM RATING IX. EMPLOYEE WEIGHT (OUT OF 100%): BENEFITS The provision of funding for a full range of benefits, Limited duration benefits are more appropriate to including post-retirement health insurance and other the agency's mission needs and recruiting climate. benefits, is required to recruit for the position.

MEAN WEIGHTED MEAN

TOTAL MEAN TOTAL WEIGHTED

MEAN

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CONCLUSIONS

The Panel concludes that:

• NASA does not have a formal process to determine whether to hire a permanent or term civil servant. Each center has discretion to make its own decisions about which type of civil servant to hire.

• While NASA’s senior managers agree that term employment is a vitally important mechanism, the agency is not using its term employment statutory authorization to the maximum extent authorized.

NASA has used term employment as a vehicle to extend the typical one-year probationary period. This is an unintended, and in some cases, beneficial consequence, providing the agency with increased performance data on its eventual permanent hires and an increased likelihood of agency satisfaction with its hires. The agency’s decisions to convert term employees to permanent are not, however, driven by analysis of the work to be performed or of its core competency and proficiency requirements.

• Perceptions surrounding term employment and the expected career path of those so recruited may be colored by past organizational practices. If the agency alters its historical pattern by using term employees only for limited durations, and not routinely converting the preponderance of terms, the result will be a significantly changed career path.

• Under the NASA Flexibility Act, NASA was required to report whether conversions from term to permanent employment were for critical needs. The Act, however, did not require a rigorous analysis or criteria for making such a determination.

The Panel believes:

• NASA unions are resistant to the agency increasing the proportion of term employees relative to permanent civil servants.

• There are some center-by-center labor market differences that warrant consideration in establishing agency criteria.

As NASA factors in local labor market conditions and occupational trends, the nature and duration of the work must, however, remain primary. To remain strategic and avoid overloading on permanent hires, NASA must rely on data-driven, long-term projections of competency needs (including number and proficiency). NASA should also use incentives and other flexibilities to enhance term employment offers in tight labor markets.

• Clearer agency criteria and consistent application will facilitate more strategic use of the term authority and benefit the agency as it reshapes its workforce to be more flexible and scalable.

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• Term employment may be preferable to permanent employment options given the great deal of budget and programmatic uncertainty.

• Given the need to rapidly adapt competencies, term employees are, in many cases a more viable option than permanent hires for the agency’s core mission and its inherently governmental work.

• When a position warrants recruitment of a permanent civil servant, the existence of this pool of term employees will facilitate NASA’s efforts to recruit the next, albeit smaller, generation of permanent employees from among successful terms.

RECOMMENDATIONS

While the Panel recognizes that moving to a pattern of term employment as the predominant NASA hiring authority would be a sea change for the agency and a departure from the practice of other federal agencies, the Panel recommends that NASA:

• Establish a formal process and accompanying guidance on the use of term employment, along with a NASA-wide communication/education plan.

• Use a Decision Guide, such as the Panel-proposed model, and apply agreed-upon criteria to the work of the proposed position/function in choosing the most appropriate kind of appointment.

Such a guide will help NASA act strategically and not tactically in filling its term and permanent positions. The Panel believes that the consistent, NASA-wide application of such a guide, along with a companion for civil servant/contractor decisions, will increase organizational transparency and stimulate a healthy dialogue within NASA about the work to be done, the most appropriate means by which to accomplish it, and relative priorities for scarce resources. Center-specific circumstances and practical limitations warranting deviation on a case-by-case basis would require additional levels of review and approval. As noted in the civil servant vs. contractor Decision Guide, the Panel recommends that positions filled, by virtue of necessity, in a less-than- optimal fashion be placed on a center/program priority list, for future alternative recruitment.

The Panel also recommends that NASA use the guide to determine whether to convert from term to perm. Conversion should be based explicitly on:

• the work to be performed

• whether or not it is a NASA core competency not adequately represented in the workforce

• the required proficiency level

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The decision should not be based solely on an individual’s performance during a previous term appointment. Using the Decision Guide criteria for conversions from term to perm would further support and document the critical need requirement spelled out in the NASA Flexibility Act authorizing language.

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CHAPTER VII MANAGING THE 21ST CENTURY WORKFORCE

To meet the challenge of the Vision, NASA will need to make appropriate use of all existing legal authorizations to maximize flexibilities within its workforce and programs. The Panel’s work with NASA began in 2004 on the subject of human capital flexibilities. The Panel’s 2005 report, NASA: Human Capital Flexibilities for the 21st Century Workforce, examined the agency’s implementation of its Flexibility Act. Most importantly, it recommended that NASA pursue statutory and regulatory authorizations for other significant reforms. This chapter builds upon the analysis and recommendations contained in the Panel’s 2005 report.169

In this study, the Panel found additional evidence of NASA’s need for new management strategies and new authorizations to realign its organization and workforce, enhance its knowledge base, and increase its analytical rigor. Over the past two years, NASA has begun to define its exploration program requirements; the Shuttle has returned to flight; the agency is implementing its Shuttle transition program; and the workforce implications of NASA’s new direction are becoming clearer. The Vision is leading to a fundamental shift in the agency’s mission, which will continue to alter the balance of prior programs within its portfolio and require significant workforce realignment.

This chapter covers:

• Need for a significant workforce transformation

• Using work measurement to facilitate data-driven planning

• Increasing interagency and intergovernmental partnerships

• Current statutory authorizations for innovative workforce recruitment and management practices

• Need for additional statutory and regulatory flexibilities

The Panel’s conclusions and recommendations focus on NASA’s need to:

• Make aggressive use of existing human capital flexibilities for innovative recruitment programs, workforce partnerships with other federal agencies, and the strategic outplacement of functions

• Pursue additional statutory and regulatory authorizations to obtain other flexibilities needed to strategically manage the workforce

169 Specifically, see the fourth chapter (“Planning for New Flexibilities”) of the 2005 report for additional analyses and supporting information.

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• Pilot the use of work measurement for specific operational support areas susceptible to quantitative analysis, such as procurement

THE NEED FOR A WORKFORCE TRANSFORMATION

The Deputy Administrator’s memo mandating population and validation of CMS acknowledged that, during the past several years, significant changes in several programs created a major imbalance between the work the agency plans to do and the existing workforce. While the agency’s mission and allocation of resources have been changing substantially, the civil service workforce has not. Most employees who have been “uncovered” in the past are concentrated in various legacy programs and related occupations, such as engineering and science support (technicians); workforce operations and support; program/project management; computer science and information technology; space sciences; business operations; various systems engineering competencies; electrical and electronics systems; fundamental human factors research; and certain management competencies. Many of these programs and disciplines are no longer supported at their previous levels from either a budget or a programmatic standpoint.

The April 2006 NASA Workforce Strategy recognized this reality. It noted that “the design and development of a new crewed vehicle and launch system come after a break of over 25 years since the last such activity,” which “catalyzes requirements for a different workforce skill mix. Reshaping the workforce must be done as soon as possible if the agency is to meet the schedule established by the President and the Congress.170

Despite the urgent need to address this issue, both this Panel and a recent National Academy of Science Committee have noted that NASA is focused narrowly on the immediate near-term problem. The NAS Interim Report, Issues Affecting the Future of the U.S. Space Science and Engineering Workforce, observed that “the agency’s priority to date has been to focus on short- term issues such as addressing the problem of uncovered capacity.” It also noted that “the committee received little or no information about the extent to which NASA has conducted analyses or was planning for mid or long-term workforce skill mix demand or supply” [their emphasis] beyond some modeling of basic demographics related to age and retirement. In a presentation to the NAS Committee, the Dean of the College of Engineering at the Georgia Institute of Technology identified several important tasks for NASA.

• Get definitive data on near-term and long-term workforce skill needs

• Address current mismatch between NASA workforce skills and projected needs

• Retrain the current workforce and use targeted recruitment

• Initiate staff reductions

170 NASA Workforce Strategy, p. 5.

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• Look beyond 2011 to assess which skills will be obtained through evolutionary change and which (if any) will require revolutionary efforts

• Attract experienced, mid-career science and engineering employees from the private sector in the right skill sets (systems engineering and project management, in particular)

• Revisit in-house and contractor roles given industry’s greater flexibility in hiring and changing its workforce makeup

• Consider more or different efforts to affect the workforce supply side

As indicated in Chapter V, the NAS committee had the following initial findings:

• NASA’s work has focused on an initial assessment of current workforce demographics and estimates of future needs, but has yet to translate this analysis into a strategic action plan.

• Regarding workforce reshaping, the key is not just having enough employees in the right skill boxes, but also having people with adequate experience

• When addressing skill areas where NASA faces near term and/or longer-term shortages, it needs to pay particular attention to finding ways to promote exchanges of personnel between NASA and the non-government sector

In order to address these longer-term challenges, the NAS Committee recommended that NASA “develop a workforce strategy for ensuring that it is able to target, attract, train, and retain the skilled personnel necessary to implement the space exploration vision and conduct its other missions in the next 5 to 15 years,” as well as to “obtain the necessary flexibility in hiring and reduction-in-force procedures.”

In 2002, Comptroller General Walker testified before Congress on proposed human capital flexibilities for NASA. He said that NASA, like all federal agencies, should:

• Realistically assess human capital wants and needs, as well as the affordability of various strategies, before making major changes.

• Recognize that additional flexibilities, by themselves, will not solve workforce problems.

• Use innovative approaches to attract, retain, and motivate a high quality workforce: revitalize recruiting, conduct employee feedback surveys, inventory skills and knowledge of existing employees, establish professional development programs, modernize performance appraisal system, redesign training programs, implement employee-friendly benefits.

• Utilize existing flexibilities by hiring commercial recruiting firms, customizing merit promotion plans and performance systems, and using pay incentives.

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• Adopt effective succession planning processes, especially for science and engineering workers.

• Develop results-oriented and data-driven strategic human capital plans.

WORK MEASUREMENT FOR DATA-DRIVEN PLANNING

Consistent with the National Academy of Sciences report and the agency’s understanding that it must reshape and redeploy its workforce to meet mission requirements, NASA may want to employ additional strategies to enhance its knowledge-based workforce management. Many federal entities utilize task-based resource estimation processes (sometimes called work measurement or work standard systems) to produce meaningful information to help project, balance, and staff work. These tools are particularly useful as organizations face inevitable periods of downsizing, rightsizing, outsourcing, or privatizing. Agencies use such integrated, automated systems, which define the work to be done and estimate and allocate resources needed to accomplish the work, as everyday tools to help management set priorities and to bolster resource requests. While recognizing that not all tools are applicable agency-wide, NASA could pilot efforts in operational support units with work susceptible to quantification, such as procurement. This may be especially useful for offices experiencing such challenges as workload increases and staffing/resource shortages in evaluating and prioritizing their efforts. Work measurement may also help NASA determine the optimal size of its future workforce by function.

GPRA and the Program Assessment Review Tool

Work measurement is consistent with the goals of the Government Performance and Results Act (GPRA) of 1993, implemented government-wide in 1997. It seeks to improve Executive Branch agency accountability for efficiency and effectiveness. It requires agencies to:

• Develop strategic plans

• Measure and report on their performance

• Integrate performance planning and reporting with budgeting

• Match resources with performance goals

• Place an emphasis on the development of unit cost figures

As a follow-on to GPRA, OMB developed the Program Assessment Rating Tool (PART) to assess and improve federal program performance and results. Each spring, agencies complete their PART analysis to help identify program strengths and weaknesses to inform funding and management decisions aimed at making the program more effective. PART looks at all factors that affect and reflect program performance, including program purpose and design, performance

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measurement, evaluation, strategic planning; program management, and program results. PART builds on GPRA by encouraging agencies to integrate operational decisions with strategic and performance plans and to focus on measures which are outcome-oriented. The establishment of work measures or standards is therefore consistent with PART171 and GPRA goals and processes.

The use of the task and estimated resource information can serve as a basis for developing activity-based cost information within organizations. By looking at the costs for each work area, an agency can set a norm cost figure, and then examine variances from the norm and the underlying reasons for them. As noted in Chapter IV, one center procurement office utilizes metrics to spur organizational effectiveness. This concept has potential as well for broader application as NASA continues to deal with uncovered capacity across the organization and with major mission shifts requiring difficult management choices. Work measurement can also facilitate the linkage between strategic objectives, intermediate outcomes, program outputs, and center outputs.

Work Measurement at NASA

While some isolated offices, particularly those focused on procurement, use metrics to project workload and enhance organizational effectiveness, NASA does not currently have a traditional work measurement system. During study team interviews, some officials expressed skepticism as to the applicability or practicality of work measurement at NASA. The oft-repeated sentiment is that the majority of NASA’s work is of a creative, research or problem-solving orientation that does not easily or meaningfully lend itself to quantification in terms of a standard amount of time per task.

The agency has, however, recently made significant investment in integrating and upgrading its automated systems. These initiatives lay a strong foundational base for an eventual workforce measurement system that would be effective for many of NASA’s needs. Up until 2005, when the agency adopted a uniform system, known as the Human Capital Information Environment (HCIE), the agency had 75 human resource systems that were not connected to one another. The new and still evolving HCIE:

• Features fully-automated and integrated real time delivery

• Enables talent management

• Equips employees and managers with the right information at the right time

• Integrates federal, agency, and center data, consistent with eGOV

• Is adaptive, flexible, and cost efficient

171 OMB has, to date, done six PART evaluations of these NASA programs: Office of Education; Aeronautics Technology; Earth-Sun System Research; Astronomy and Astrophysics Research; Space Shuttle; Space and Flight Support. With the FY 2007 budget, OMB has proposed PART evaluations for Constellation System, Solar System Exploration Theme, and Integrated Enterprise Management. Results of this last proposed PART are likely to shed additional light on NASA workforce planning readiness.

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• Supports dynamic organizations, programs, and communities of practice172

In February 2006, the agency took the additional step of standardizing its labor distribution system, which tracks civil service hours of work, benefits, and leave to specific work assignments. Prior to this time, the various centers each had their own labor systems, their own sets of charge codes numbering into the thousands, and could not typically relate the data to individual employees.

The new labor distribution reports provide important information, such as:

• How work on a project is distributed across organizational boundaries, such as in multiple centers

• Which employees are on holding codes, meaning that their time is attributable in whole, or more likely, in part to uncovered capacity

• Which employees might be available for reassignment, additional assignment of work, or retraining

The agency is now in the process of integrating these two relatively new data systems, which have the potential to serve as the basis for a de facto work measurement system, including traditional information about civil servants (organizational placement, geographic locations, pay plan, type and duration of appointment, and at least a dozen other data elements) and labor distribution reports, which include project codes and dollars charged, per employee, to specific efforts.

This new linkage has the potential to become a meaningful work measurement tool, with smaller investments than would be required by creating a new system. (The agency estimates that this linkage will cost $300 million.) The linkage also presents the opportunity for the agency to add data elements, such as educational credentials, years to retirement eligibility, or whether or not an employee is in the Civil Service Retirement System (CSRS) or the newer and more portable Federal Employees Retirement System (FERS). The system also has the potential to sort information by other elements, perhaps already in the personnel system, but not frequently accessed or analyzed for purposes of workforce planning.

Further complementing this enhanced automated network is CMS. Consistent with the previous agency theme of ONE NASA, the agency mandated the population of the system. The new CMS will have not only primary position competency, but also employee competencies, with management validation of proficiency at the higher levels. Once populated and integrated into HCIE, CMS has the potential to be a powerful talent management tool.

In addition, NASA plans to marry its financial management, acquisition, and business systems (including facilities and security) with it new HCIE by 2009, if not earlier. Plans for the future

172 NASA Office of Human Capital Management Briefing, Transforming NASA HR Information Systems Into an Integrated Human Capital Information Environment, June 2005, pp .8-9.

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include actual and prospective contractor data. The agency had initially slated completion for 2010 and has moved up the date by a year and possibly more. Concerns remain, however, that the costs might escalate and that the funds to cover full implementation could be diverted.

Appendix C summarizes some private sector work measurement experiences as well as those of some other federal agencies, from which NASA might benefit. While the study team did not find examples of scientific organizations using widespread work measurement, the lessons learned from the following federal agencies may nonetheless translate to the administrative and operational elements of the agency:

• Housing and Urban Development (HUD), which found its task-based resource estimation process particularly helpful in gaining awareness of work requirements and mismatches between resources and work.

• The U.S. Patent and Trademark Office (USPTO), which experienced increased accuracy in projecting human capital needs associated with workload, enhanced ability to shift staff to meet fluctuating needs, and increased ability to sustain probationary period discharges and other performance-based actions.

• The Administrative Office of the U.S. Courts, faced with increasing non-discretionary expenditures, uses a methodology for workforce determination that is objective and provides a basis to support resource and staffing decisions.

NEED TO INCREASE INTERAGENCY AND INTERGOVERNMENTAL PARTNERSHIPS

Strategic Partnerships with Other Federal Agencies

Near the beginning of this study, the Academy offered to broker a partnership between NASA and USPTO.173 The study team viewed this as an innovative way to help alleviate NASA’s uncovered capacity problem. Specifically, PTO senior management was interested in a block of NASA’s scientific and technical personnel becoming patent examiners, on a temporary or preferably permanent basis, to reduce patent processing backlogs. It was also interested in accessing NASA expertise to train its patent examiners in state-of-the art aeronautics, nanotechnology, and other scientific disciplines for which the agency typically receives patent applications. PTO was open to reimbursing NASA, relocating NASA employees, and considering the use of NASA employees at their home centers.

NASA’s OHCM referred this offer to human capital officials only at Ames Research Center. Despite having a significant uncovered capacity problem, the Ames Human Capital Office elected to post the information as an opportunity which individual center employees could explore. There was no official or strategic agency encouragement to participate. At the study team’s site visit in July 2006, Ames human capital officials stated that they did not believe it was

173 An earlier Panel had completed a review in August 2005 entitled, U.S. Patent and Trademark Office: Transforming to Meet the Challenge of the 21st Century.

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their responsibility to strongly encourage personnel or to move them in blocks to another agency. The center viewed this as a small opportunity, to be pursued at an individual employee’s discretion.

NASA headquarters human capital officials indicated that they did not believe PTO’s offer would amount to more than a couple of dozen reassignments and so did not pursue discussions. Likewise, NASA has not yet vigorously pursued other outplacement options in the belief that future NASA work assignments will require the skills of current NASA employees, and it would therefore be imprudent to put significant effort into outplacement. In interviews, some NASA officials expressed reluctance to directly communicate with employees, both individually and collectively, about the need to manage their careers and take advantage of all available opportunities—both inside and outside of NASA. Some NASA officials even said they were concerned that being too forthright with individual employees about their options would be construed as harassment.

While not within NASA’s domain, a partnership between federal agencies experiencing skill imbalances might be replicated on a larger scale across the government and make the government more flexible, scalable, and adaptive. An OPM or OMB-brokered clearinghouse could partner federal agencies with skill deficiencies, whether temporary or long-term, with agencies with excess capacity, undergoing low attrition, or mission changes. In today’s environment, with such rapidly changing technology, the government’s role as financial and human capital steward may require such an adaptive mechanism to facilitate the government’s effective use and development of its human capital resources.

Among other possible federal partners for technical skills are:

• The Environmental Protection Agency, with whom NASA shares an interest in climate change and wind tunnels

• The National Institutes of Health, with whom NASA shares an interest in space implications for medical technology improvements and the lessons to be learned about microgravity’s impact on health

• The Department of Energy, with whom NASA shares an interest in basic research as well in various elaborate batteries used in space missions

• The Department of Defense, which has similar need for project and program managers within varied engineering disciplines

Strategic Outplacement of Unfunded NASA Functions

In the Workforce Strategy, NASA pledged to expand relevant reimbursable work:

NASA has several facilities, especially in aeronautics, whose costs are covered in part or entirely by reimbursable work for other governmental agencies or industry. In addition, some NASA personnel are receiving funding from external sources

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through Space Act Agreements, competitive proposals to other agencies, and services rendered to other agencies. There is a belief that unneeded barriers exist and could be reduced and that such a reduction will enable an expansion of reimbursable work. There is also agreement that reimbursable work will not solve the uncovered capacity problem, but is one tool among many that can contribute to its solution.

Interviews with officials at both headquarters and the centers supported this commitment. NASA has long used Space Act Agreements for reimbursable work. NASA could build upon this effort to out-place important NASA functions that the agency is unable to continue funding to state governments, universities, nonprofits, or some combination of these entities. This approach would primarily apply to the research centers, but it may be useful for the other centers in certain cases. The research centers have universities nearby. Ames Research Center is located in the San Francisco area, which has such top universities as Stanford and the University of California at Berkeley. Langley Research Center has William and Mary nearby. Glenn Research Center has Cleveland State University. These universities could be natural and willing partners for some R&D work NASA will no longer fund.

In field visits, the study team met with individuals who were concerned that the nation as a whole would be hurt because of funding cuts to previous NASA functions, such as astrobiology. Some individuals expressed general concern with the cuts to NASA research and technology development, believing that these are short-sighted cuts that will have long-term negative consequences for the country. Although advocates for a strong NASA or for federal investment in an affected area may view out-placement of the function or program as a “second-best” option, it may be a possible way for the nation to retain useful capabilities in the absence of NASA sponsorship. If research continued in the affected area, NASA could access it in the future if it was needed.174 In addition, a base of substantive knowledge and institutional/programmatic resources might be available for NASA to build upon in restarting a program of its own if, in the future, it determined an in-house capability was necessary.

It would take a considerable amount of work to identify potential candidate organizations for the function, broker the deal, structure the agreement, deal with intellectual property issues, and possibly out-place NASA personnel who were conducting research in the area. Such efforts would not represent entirely new skills for NASA officials. Employees with experience in structuring Space Act Agreements and brokering deals with outside organizations are found throughout the agency. NASA also has the facilities for an expanded effort in this area. Ames has a NASA Research Park in Silicon Valley

Obviously, NASA would only strategically out-place agency functions or programs for which Congress was no longer providing funding and/or was unlikely to provide full funding in the future. If NASA expected a future in-house need for the function or program after the Vision is fully implemented, a short-term Space Act partnership agreement to continue supporting its personnel and building up capability in external partners would be an alternative. If, however, NASA expects that it will not have an in-house need for the function or program over the long-

174 NASA would have to pay for it, unless it negotiated a Space Act Agreement that established otherwise.

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term, it could consider out-placing the function so that its current and future benefits will be available to the nation.

The agency could utilize a current headquarters initiative to identify candidates for strategic outsourcing. In late August 2006, NASA’s Associate Administrator established a small team to do a Mission Focus Review, which will look broadly across NASA to identify resources it can redeploy to more directly support its missions. Although the review is concerned with identifying ways to streamline to achieve operational efficiencies, the underlying purpose is to identify activities that no longer contribute to the agency’s missions. The Associate Administrator asked senior leaders throughout the agency to identify activities that the agency “can eliminate or reduce without negative consequence to our missions.” Specifically, he asked that agency executives “nominate five or more activities to be considered for elimination or reduction.” They could include programs, projects, contracted activities, and institutional functions. The agency required each center to identify a point of contact for this team to work through for periodic data calls through November 2006.

NEED TO USE EXISTING STATUTORY AUTHORIZATIONS FOR RECRUITMENT AND WORKFORCE MANAGEMENT

The current human capital initiatives utilized by NASA are important tools for recruitment, retention, and utilization of the workforce. The Panel strongly supports the agency’s view that term appointments are a vitally important mechanism to enhance workforce flexibility and alignment. NASA has also used the co-operative education program to hire an average of 195 co-ops a year between FY 2000 and 2006. When moving forward, however, NASA will need to pay additional attention to other important tools currently available to it, some of which are discussed below.

INNOVATIVE RECRUITMENT PROGRAMS

While NASA has long relied on its co-op program as its primary recruitment mechanism for recent graduates, agencies are typically more effective over the long-term if they diversify their recruitment strategy. Several federal agencies have long-established innovative recruitment programs to recruit top talent into their organizations and use these programs to elevate the stature of federal employment, likening competitive selection into a program equal to a federal judicial clerkship or Fulbright scholarship. The programs are also a critical link in agency leadership succession planning, with a high percentage of these recruits staying with the agency and becoming the next generation of senior civil service leaders and managers.

Based on flexibilities available across the federal government, some agencies have tailored recruitment programs to meet specific agency needs. Although the federal government has had – since 1977 –a competitive Presidential Management Intern program175 that provides NASA with the opportunity to hire management, legal, and public policy types from among the successful candidates, such non-technically oriented programs are unlikely to meet the majority of NASA’s demands. Other federal agencies have had positive results marketing developmental “intern”

175 Now called the Presidential Management Fellows program.

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programs to outstanding candidates in their mission fields and, in some cases, offering pay rates above the General Schedule. Four specific models developed by others in the federal sector may have particular applicability to NASA’s needs:

• The Department of Justice’s (DOJ’s) Attorney General’s Honors Program—a competitive and prestigious program and the only way that DOJ hires new entry-level attorneys

• The Department of Labor (DOL) program—a comprehensive, entry-level employment and career development program designed to recruit the next generation of DOL leaders

• EPA’s Intern Program—a career development program that also focuses on recruitment for the next generation of leadership and, through focused marketing, generates thousands of applications annually for some 20 to 30 GS-7 and GS-9 openings in 10 primary disciplines

• Special salary rate and benefit programs at the Securities and Exchange Commission (SEC) and the Office of the Comptroller of the Currency (OCC)—authorized because of strong competition from the private sector for the financial management skills these agencies need.

(For a more detailed description of these programs, see Appendix C.)

NASA’s Office of Education is managing a diverse programmatic portfolio that will contribute to national efforts to achieve excellence in science, technology, engineering, and mathematics (STEM) education. Appendix A-5 in Volume 2 contains a full listing of NASA’s education programs. According to the Workforce Strategy, the agency’s education programs are designed to:

• Fill the agencies workforce needs by linking program participation to NASA workforce requirements.

• Build a diverse pipeline of science and engineering talent to serve in the coming decades and continue America's preeminence in space and aeronautics research and development.

Because succeeding at the exploration vision and other scientific and aeronautics programs requires that NASA have a highly skilled and diverse workforce, these educational investments should make substantial long-term contributions to the agency’s workforce needs. These are not a substitute, however, for innovative recruitment practices for the present day.

DETAILED PERSONNEL

Healthy organizations provide their employees with a diverse set of developmental experiences, while also encouraging employees at a crossroads in their career to seek outside opportunities that will fully utilize or enrich their skills. If these employees return to the agency, they typically bring back a fresh perspective and broader knowledge base. Federal agencies can access the services of employees from other federal agencies via interagency agreements and details,

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typically with reimbursement by the utilizing agency. The Intergovernmental Personnel Act (IPA) is a useful way of bringing talent from non-federal sectors (state, local, non-profits, and universities) into a federal agency. It is also a useful tool for temporarily sending some of the federal government’s own personnel to other sectors. Throughout government, IPAs are for two- year terms, with a maximum renewal time of an additional two years. Under the NASA Flexibilities Act, NASA can extend assignments for four additional years, for a total of six years.

In the Workforce Strategy, NASA mentions IPA appointments once, viewing them as a potential retention tool:

Intergovernmental Personnel Act (IPA) assignments offer employees with an interest in broadening their career knowledge an opportunity to do so, while at the same time providing an avenue for them to bring that knowledge back to NASA.

The data shows that NASA is more likely to have IPA detailees come into the agency than go to other sectors. Likewise, from FY 2003 through FY 2005, NASA sent only 72 employees on details to other federal agencies, while detailing in some 235 employees. This shows that NASA shares its workforce very sparingly with other federal agencies and/or through IPA assignments to eligible universities, state and local governments, or non-profits.

Table 7-1 NASA’s Use of Detail Assignments

Fiscal Year Details to NASA Details from NASA176 2003 192 (185 reimbursable) 23 (1 Reimbursable) • 112 IPA • 13 IPA • 69 Military • 10 Other • 11 Other 2004 147 (138 reimbursable) 34 (6 reimbursable) • 72 IPA • 7 IPA • 68 Military • 26 Other • 7 Other 2005 151 (136 reimbursable) 43 (10 reimbursable)177 • 71 IPA • 7 IPA • 65 Military • 36 Other • 15 Other

In addition, few of NASA’s new hires are transfers from other federal agencies. For example, of the 411 engineers hired in 2005, only six were from other federal agencies.

NASA’s Office of Procurement has, however, partnered with the U.S. Department of Energy to establish a Rotational Assignment with Industry Program that appears to be an emerging

176 Excludes short-term and developmental assignments. 177 NASA provided projected, rather than actual data for FY2005 details from NASA.

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effective practice. This program is aimed at providing high-performing, mid-career members of the acquisition workforce (GS-13, 14, and 15) with access to private industry work experience. NASA benefits by having its employees learn about commercial contracting, customer service, performance measurement, marketing, and other useful tools as they are applied in the private sector. The Office of Procurement believes that “adding a corporate experience dimension to … existing training and developmental efforts will fill a current void in the way NASA prepares its senior acquisition personnel to assume management roles within the organization in the future.”

EXPERTS AND CONSULTANTS

In recent years, NASA has made little use of its authority, under Title 5, Section 3109, to hire temporary or intermittent experts and consultants via personal appointment, without regard to the restrictions governing appointment in the competitive service. Under liberalized OPM guidelines, federal experts and consultants are an important flexibility because they may work on a strictly intermittent basis and be appointed without time limit or for any period determined by the agency. Temporary appointees who work part-time or intermittent work schedules and do not work more than 130 days in a service year can be reappointed with no limit on the number of reappointments. While federal agencies may not fill positions in the SES with experts or consultants, agencies can typically pay these temporary appointees up to the top step of a GS-15, and in some cases higher.

The current NASA guidance on the employment of experts and consultants states that: “The use of this authority shall be kept to an essential minimum.”

The guidance does, however, set forth appropriate use of this authority to obtain:

• Specialized opinions not available within NASA or another agency

• Outside points of view to avoid too limited judgment on critical issues

• Advice on developments in industry, academic, and foundation research

• Opinions of noted national and international authorities

• Advisory participation of members of the general public, especially scientists and engineers, in the development of NASA programs

• Assistance in the evaluation of highly technical and complex contract proposals

Over the course of the last 15 fiscal years, the agency has utilized up to 314 consultants in one year, with its peak usage in FY 1997. Over the years, this number has declined dramatically, with FY 2006 usage at only 42 (34 at headquarters and 8 at JSC). This may in part be due to an alternative practice, noted by Marshall, where the Office of Human Capital uses contracts rather

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than personal appointments to access the services of former NASA technical employees, who serve as mentors.178

NASA’s Workforce Strategy did not mention the possibility of using experts or consultants as a way to fill critical skill gaps. Nor did the study team find any enthusiasm for this approach in field visit interviews. The agency NPR is silent on the topic of pay setting for experts and consultants and does not explicitly reflect recent OPM liberalization of appointment duration.

Guest Researcher Programs

The study team has learned that the National Institute of Standards and Technology (NIST) has a very robust Guest Researcher program that allows university or industry employees to work alongside experts at NIST for one to six years. This is advantageous to non-federal partners because it allows them to improve their skills and open up potential business opportunities. Other than the approximately $3,000 to $4,000 a month of administrative expenses to operate the total program, it does not cost NIST anything else because the university or industry pays the costs of their employees. Thus, the agency receives the services of a highly qualified professional with minimal expense. The National Science Foundation (NSF) has a similar program, known as the NSF Rotator Program. Its goal is to bring new ideas and first-hand knowledge to NSF, while providing participants with excellent experience they can take back to their home institutions. (See Appendix C for more detailed discussion of the NIST and NSF programs.)

ADDITIONAL STATUTORY AND REGULATORY FLEXIBILITIES WOULD IMPROVE NASA’S ABILITY TO MANAGE ITS WORKFORCE

To achieve its human capital and programmatic goals, NASA will also need to utilize a comprehensive set of tools to:

• Recruit top talent, both domestically and internationally

• Align the workforce with the current mission

• Retain the employees whose skills are critical to programs

• Outplace, as appropriate, those employees whose skills are no longer needed

The skill mismatches that result from changes in competency requirements and discussed throughout this report are not a reflection of either individual or organizational failings. Any public or private organization experiencing such a dramatic shift of priorities would have a skill

178 If these retirees were hired on personal appointments as reemployed annuitants, unless the agency secured a waiver from OPM, that reemployed annuitant would not receive his or her full salary, but rather the difference between their full salary and their pension. Working on a contract, these mentors should not have an employer- employee relationship with NASA. Experts and consultants, however, are classified as special government employees.

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imbalance unless its workforce had initially been misaligned. Unlike private organizations, federal organizations are constrained by current civil service rules, which limit an organization’s ability to significantly influence turnover. Specifically, NASA cannot bring in employees with new competencies if employees, who possess skills no longer needed, do not voluntarily leave the agency. Compounding the problem is NASA’s expectation that its overall FTE allocation, between FY 06 and FY 11, will likely decline by over 9 percent (from 18,624 FTE to 16,908). Within this constrained environment, it is understandable why some NASA officials have described attrition management as the agency’s biggest human capital challenge.

How should the agency respond to this challenge? Can attrition be effectively managed without additional statutory flexibilities? NASA has done internal studies of additional human capital flexibilities requiring congressional authorization, but decided not to pursue them due to concerns about internal opposition from employees and concern about congressional response. NASA’s current strategy for dealing with workforce realignment is to rely on buy-outs, natural attrition through voluntary retirements, and retraining. Where necessary, the field centers are essentially relying on contractors to fill critical skill gaps. NASA has used directed reassignments for positions in the SES, but has never used them below that level. It has provided career counselors for staff, but few employees have utilized these services. In fact, NASA stopped sponsoring its internal job fairs because turnout was too low. Given Congress’s prohibition on RIF until March 2007, at the earliest, it is unsurprising that there have not been significant departures among those with unneeded competencies. Although a few employees have moved to other centers through the job fairs, interviews with human capital officials indicate that many of those who moved were funded staff returning to centers at which they previously worked. NASA headquarters is encouraging the use of term employees, with only truly critical positions being made permanent, as a way to develop a more flexible, scalable workforce. This allows the agency to retain its current permanent workforce and institutional knowledge, yet still have some flexibility in managing its workforce.

Even if NASA were utilizing all of its current discretionary tools, it is highly doubtful that these would be enough. Will NASA’s essentially passive current strategy be sufficient over the long- term to realign the workforce? The Panel believes the time has come to consider some promising additional statutory flexibilities that will help NASA efficiently and effectively restructure its workforce to achieve its mission and programmatic goals.

RIF Policies and Procedures

Title 5 requires federal agencies governed by it to use formal RIF procedures when an employee is faced with separation or downgrading for such reasons as reorganization, lack of work, shortage of funds, or insufficient personnel ceiling. Under existing OPM regulations, three elements are used to generate retention registers for purposes of designating which employees would be separated in the event of a RIF. The elements are:

• Competitive Areas, which define the geographic and organizational boundaries in which employees compete for retention

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• Competitive Levels, which, within competitive areas, group employees with similar characteristics regarding the same type of service, work schedule, and job series

• Retention Factors, which rank employees within each competitive level according to the employee’s tenure or type of appointment (career, career conditional, or term) veteran’s preference, length of service, and performance ratings179

NASA’s NPR establishes the agency’s current RIF policies for employees. For headquarters, NASA defines the default competitive area as all NASA headquarters employees within the same commuting area. When NASA employees within a commuting area are under different administrative authorities, they will be in separate competitive areas even though they may share the same physical location. For centers, the agency defines the default competitive area as all NASA employees of a center, within the commuting area, who are under the administrative authority of the center director. Center directors may request a change to the default competitive area, but must (1) provide clear evidence of separate administrative authority and (2) submit the request to the Chief Human Capital Officer. In addition, any change to the competitive area that would occur within 90 days of the effective date of a RIF requires OPM approval and must be accompanied by documentation to support the rationale and timing of the requested change.

When defining competitive areas for headquarters and the centers, NASA must comply with OPM regulations, which require an agency to:

Define the competitive area only on the basis of organization and geography. An agency may not define a competitive area on the basis of other considerations (e.g., bargaining unit membership, grade, occupation, etc.). Once defined by the agency, the competitive area includes all employees in the organization(s) and location(s) included in the competitive area definition (e.g., the agency may not make an exception to the competitive area definition based on bargaining unit membership, grade, occupation, etc.).

“Establish separate competitive areas for different components in the same local commuting area if each component is under separate administration, which includes that each is independent of the other in operation, work function, and staff.”

NASA employees are granted additional retention service credit for performance based on their three most recent performance ratings received during the four-year period prior to the date RIF notices were issued, or the four-year period prior to the cutoff date for ratings of record.

In the Academy’s 2005 Human Capital Flexibilities report, the Panel identified current RIF policies governing layoffs as a major concern, explaining that a RIF under existing rules could be very damaging to NASA’s ability to achieve its mission, causing considerable problems for programs and projects:

179 Under Title 5, these retention factors must be considered in this order. Top performers have 20 years added to their service time, while “fully successful” performers have 12 years added.

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• Because it is difficult to limit a reduction to specific occupations or positions, employees in eliminated positions can “bump” or “retreat” across occupational lines and grades if they appear to be qualified for other positions and have higher retention standing than incumbents of those other positions. This disruption can wreak havoc with programs and projects.

• As the lowest tenure category, term employees are the most vulnerable during a RIF, which would exacerbate the agency’s overall generational imbalance because term employees tend to be younger than permanent employees.

• Given the weight placed on length of service related to performance, NASA could disproportionately lose its more recently acquired cutting-edge expertise. Because the performance credit ranges from 12 to 20 years, a newly hired top performer could be let go before a “fully successful” employee with eight or more years’ seniority.

• NASA could face significant administrative burdens.

Because the current RIF system is widely acknowledged to be counterproductive, some federal agencies have obtained relief from the existing rules, either through legislative modifications or OPM-sponsored demonstration projects under which personnel rules are waived. With flexibility to make changes, agencies have been able to weight performance more heavily, redefine competitive areas, and establish additional criteria for determining retention standing. The 1999 reduction at several naval weapon laboratories, for example, demonstrates the potentially powerful effect of rule changes. In that case, the labs narrowed competitive areas and focused on occupations—rather than organization or geography—and weighted performance more heavily. These changes enabled the demonstration project units to retain significantly more top performers than in a parallel reduction conducted under non-demonstration rules. Fifteen percent of those adversely affected in the demonstration project were “outstanding” or “highly successful” performers, compared with 65 percent in the non-demonstration project.180

Academy staff obtained information on modifications to RIF rules from agencies that were implementing OPM demonstration projects or alternative personnel systems. These included DoD laboratories, DoD’s acquisition workforce, the National Security Personnel System (NSPS), the Government Accountability Office, and the National Institute of Standards and Technology (NIST). A common feature in most all of the RIF modifications was increasing the weight of an employee’s performance in determining retention ranking. These agencies achieved this increased emphasis by changing the ordering of retention factors (which can only occur outside Title 5 authority) or within the current retention ordering scheme by providing additional service credit for high-performing employees. NASA’s RIF regulations already include this latter feature. Of all the systems reviewed, NIST’s RIF policies and procedures may be the most instructive for NASA, considering the similarity in their workforce composition of scientists and engineers. NIST’s RIF policies and procedures are discussed below. (See Appendix C for additional information on the modifications to RIF policies by other federal agencies.)

180 National Academy of Public Administration. Review of Demonstration Project Reduction in Force Procedures: Department of the Navy Naval Air Warfare Center Weapons Division (January 2001) p. 20.

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NIST’s alternative personnel system includes several modifications to RIF regulations, only one of which is clearly a deviation from current OPM RIF regulations. Specifically, NIST redefined competitive areas to include career paths (a change that would be prohibited under current regulations), made detailed distinctions among employees when establishing competitive levels, and provided additional service credit based on area of expertise as well as high-performance.. NIST did not change the order of the retention factors.

Buyout Reform

Voluntary Separation Incentive Payment (VSIP), commonly referred to as a “buyout,” is a payment of up to $25,000 to encourage eligible employees to separate from service voluntarily (either by retirement or resignation) to avoid or minimize the need for involuntary separations due to RIF, reorganization, transfer of function, or workforce restructuring. The buyout payment is equivalent to an employee’s severance pay entitlement up to a maximum of $25,000 (before taxes).

To offer buyouts, an agency must submit a plan for OPM approval. The plan must describe how the agency will use VSIPs to facilitate its restructuring goals. OPM reviews each agency’s plan and, in consultation with the Director of OMB, may make any appropriate modifications to the agency’s plan for these payments. The review may include a consideration of costs and benefits associated with using the authority. OPM issues supplemental guidance for agency use in preparing a VSIP implementation plan. The agency must have OPM approval before using this flexibility. The Panel’s Human Capital Flexibilities study in 2005 recommended that NASA be given blanket authorization to offer early-outs and buyouts without having to obtain OPM approval. A former employee who accepts any employment with the federal government for compensation within five years after the date of separating for such a buyout must repay the entire amount of the incentive payment before the first day of reemployment in the federal service. Under exceptional circumstances, and at the request of the hiring agency, the OPM Director may waive the repayment requirement for former executive branch employees.

The buyout amount has been capped at $25,000 since it was first established in 1992. Even at that time, the buyout amount was a relatively small incentive, especially for a senior official. In 1992, the typical NASA employee would have had to work six months to earn the buyout amount.181 Today, with an average salary of approximately $85,000, the typical NASA employee would have to work only three or four months to earn the equivalent amount. Because the cap has not kept up with the rate of inflation, its effectiveness in encouraging employees to voluntarily retire has been reduced. The Panel’s earlier report showed that the buyout, if adjusted for inflation, would have been $33,000 in 2005 dollars.

NASA has conducted three agency-wide buyouts and is currently requesting authority from OPM for another round.182

181 National Academy of Public Administration, NASA: Human Capital Flexibilities for the 21st Century Workforce, (2005), p. 51. 182 As a result of these buy-outs, a total of 950 employees have voluntarily retired or resigned from the agency.

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In order to encourage the voluntary attrition of targeted categories of employees, NASA could also seek statutory authorization to increase the monetary cap. In addition, given NASA’s belief that some individuals who are not eligible to retire would voluntarily leave the agency if they were able to carry their health benefits with them for a period of time, the agency could seek statutory or regulatory authorization to temporarily continue to pay the government’s share of health care premiums for certain non-retiring employees who agree to leave the agency voluntarily and who are not otherwise eligible to carry their health benefits with them. The Panel’s 2005 report also addressed this issue.

Reemployed Annuitants

NASA officials have found that the pay offset for reemployed annuitants is a barrier to attracting annuitants to return to work on a temporary and/or part-time basis. Current OPM regulations allow the head of an agency to request OPM’s approval of a waiver to approve reemployment without reduction of the annuity on a case-by-case basis to meet temporary hiring needs. The justification can be “based on an emergency or other unusual circumstances or when the agency has encountered exceptional difficulty in recruiting or retaining a qualified candidate for a particular position.”183 NASA has made little use of this process. In June 2006, OPM issued proposed regulations that would allow it to provide a blanket waiver to agencies to approve reemployment without the pay offset in emergencies or other unusual circumstances. “The situation must result from emergencies posing immediate and direct threat to life or property or from other unusual circumstances.”184

At the state and local level, some organizations have implemented reforms to post-employment pay offsets. For example, the Richmond School District now allows recent retirees to return to work, with pay, for up to 800 hours a year without a reduction in their pension. In NASA’s case, reemployed annuitants may be useful in filling certain skill gaps. It may also help the Shuttle program find experienced spaceflight staff to backfill positions vacated by civil servants and/or contractors who leave for the new exploration work. For example, if OPM granted NASA broad authority to waive the salary offset, the agency could entice Shuttle retirees to return to work as reemployed annuitants for the duration of the program. NASA officials have not yet successfully sought approval of individual waiver authority, with some managers citing the limited duration of such waivers and the difficulty of gaining internal as well as OPM approval. The Panel’s 2005 report also addressed this issue.

Career Life Cycle Modifications

According to the NASA Workforce Strategy, the agency currently has approximately 2,300 permanent full-time employees who are eligible for retirement; the average age of these individuals is 61.8 years. In fact, the data shows that engineers are now working an average of almost six years beyond their initial retirement eligibility dates, and scientists seven years. A full 25 percent of the workforce will become retirement eligible over the next five years. According to the 2006 NAS Interim Report, by 2011, 28 percent of NASA’s engineers and 45 percent of its

183 Code of Federal Regulations, Section 553.201. 184 Code of Federal Regulations, Section 553.202.

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scientists will be eligible to retire.185 It is highly doubtful, however, that most of these individuals will retire at the same time. NASA’s annual attrition rate is currently only 3.5 percent, and the rate for scientists and engineers is even a bit lower. This is significantly smaller than the 7 percent attrition rate across the federal government and the 40 percent attrition rate for the total U.S. workforce.186

Despite the programmatic opportunities and needs associated with the significant new mission, OPM reports that NASA only hired 411 new engineers in 2005, with the total number of civil servant engineers declining from 11,051 to 10,766 between 2001 and 2005. Not only is NASA’s age distribution much more concentrated than the U.S. aerospace workforce as a whole, but the civil service-run centers also have a much more concentrated age distribution than JPL (the only FFRDC-run center).

Under existing civil service legislation and regulations, an employee has a right to remain in his or her job following the probationary period, except for a RIF or termination due to performance, misconduct, or failure to meet a condition of employment. Once an employee reaches retirement eligibility, he or she has the sole right to determine whether to continue working with the agency or to retire. Changing agency needs due to events, such as new missions, skills shifts, or technology advances, while highly germane to the agency’s success, do not convey to the agency any opportunity to translate these mission practicalities into workforce considerations. Nor is the agency allowed to consider whether or not a retirement eligible employee is covered by project funding.187 Data shows that many of the recently uncovered employees at NASA are retirement eligible. In addition, the current system impedes succession planning efforts because it is difficult to obtain commitments from retirement-eligible employees who may choose to stay or leave.

The current system leaves agencies with limited options for reshaping or downsizing their workforce. Agencies must either entice the “right” employees (for example, those whose skills are no longer required) to separate voluntarily through various incentives or else resort to RIF procedures. Both approaches have serious drawbacks. The right employees may not be the ones who want to leave, buyouts may not be sufficient to yield the number of departures needed, and RIFs are widely viewed as an irrational and expensive workforce management tool.

As a result of these challenges, the Panel’s 2005 Human Capital Flexibilities report recommended that NASA be able to alter its agency’s career lifecycle by modifying retirement rules “to allow the agency to separate an employee eligible for optional retirement if doing so would help it achieve workforce reshaping or downsizing goals.”188 This would provide NASA as an agency with more flexibility to manage the workforce at the front and back ends of an employee’s career.

185 National Academy of Sciences, Issues Affecting the Future of the U.S. Space Science and Engineering Workforce: Interim Report (2006), p. 13. 186 National Academy of Sciences, p. 13. 187 Although the agency can abolish totally unfunded positions, this would likely trigger a Reduction in Force, with its corresponding potential to significantly disrupt the workforce. In NASA’s situation, many positions are only partially unfunded. 188 National Academy of Public Administration, NASA: Human Capital Flexibilities for the 21st Century Workforce, p. 48.

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CONCLUSIONS

• Despite NASA’s efforts to date, some civil servants within the legacy workforce are most appropriately aligned with the agency’s previous programmatic portfolio, not the Vision. Although civil service misalignments are a significant challenge for the agency, especially at the research centers, Title 5 statutory and regulatory constraints provide the agency with very limited options in reshaping its workforce.

• Under existing personnel rules and regulations, attrition management will continue to be a significant challenge for the agency.

Given existing civil service constraints and Congress’s current ban on RIFs until at least March 2007, NASA has adopted an essentially passive and entirely voluntary strategy of buyouts, annual attrition, and retraining to align the workforce to the new mission. In order to successfully implement the Vision, the Panel believes that the use of such existing tools as voluntary attrition, buyouts, and retraining are necessary. But they are unlikely to be sufficient to reshape the workforce over the mid- and long-term.

• NASA’s people-based approach to workforce management is characterized by a desire to protect permanent civil servants to the maximum extent possible. This has hindered its ability to develop the most appropriate strategies for workforce utilization in this time of great change.

NASA’s approach has been based on the needs and wants of individual employees. The agency has not been proactive in promoting outplacement opportunities for groups of employees. This insular approach means that most NASA employees can expect to spend their entire careers at the agency, despite dramatic changes to the mission and its supporting programs.

• Because of past hiring freezes and a continuing inability to hire in significant numbers, NASA has a much smaller pool of future technical and administrative leaders than in previous generations.

• Within its limited ability to hire fresh-outs over the past few years, NASA has made substantial and productive use of the co-op program.

NASA has also established a number of fellowship programs, but these appear to be primarily research-oriented, not major feeder programs for hiring. While they are good for the nation as a whole and stimulate interest in space, there are other more strategic and targeted recruitment tools.

• With the recent selection of a prime contractor for the Crew Exploration Vehicle, NASA may face some challenges in retaining its Shuttle workforce, especially current contractor personnel.

Current personnel working on the Shuttle will be prime candidates as Vision contractors begin to staff their operations. If NASA’s Shuttle program lost certain key civil servant and contractor

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personnel, it could face difficulties with knowledge transfer, safe operations, and mentorship/training of younger employees because few people will want to move into a program slated for close-out in three years.

• As an R&D agency, the Panel has found NASA to be generally resistant to work measurement, using this tool on a very limited basis.

RECOMMENDATIONS

• The Panel recommends that NASA make broad use of all appropriate existing authorities for recruitment and retention management. Table 7-2 ties key strategic needs to recommended responses based on existing legal flexibilities.

Table7-2 Use of Existing Flexibilities to Meet Strategic Needs

NASA Strategic Need Panel Recommendation Through Existing Flexibility Recruitment Establish a nationally recognized, prestigious recruitment program similar to Justice, Labor, and EPA: • Use to attract exemplar applicants with technical and administrative strengths. • Focus on long-term core competency needs of the agency. • Use existing Distinguished Scholar Authority as the linchpin.

Strategic Workforce Encourage the temporary or permanent outplacement of blocks of Partnerships employees with competencies no longer needed by NASA. • Use inter-agency details for assignments with other federal partners. • Partner with non-federal entities through the IPA program.

Strategic Outplacement of Explore the possibility of strategically out-placing some existing Functions research programs that NASA will not need in the future, but are important to the nation as a whole. • NASA headquarters should identify potential opportunities across the agency and provide initial seed-money to the university, non-profit, or foundation assuming responsibility for the function. • Affected field centers would identify potential candidate institutions within their area and negotiate with them.

• The Panel recommends that NASA pursue and Congress or OPM authorize, as appropriate, a package of additional statutory authorities that would provide the

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agency with key tools for realigning the workforce in an appropriate way. The recommended statutory and regulatory authorities are described in Table 7-3.

Table 7-3 Additional Statutory and Regulatory Flexibilities

Reform Area Panel Recommendation for Additional Legal Authorization Buyouts Congress increase the monetary cap on buyouts to $35,000 and adjust the amount for inflation every year thereafter.189

OPM grant blanket authority to NASA to conduct buyouts over the next five years.

Health Insurance Premiums Congress authorize NASA to temporarily continue to pay the government’s share of health care premiums for non-retiring employees who agree to resign and are not otherwise eligible to carry their health benefits with them.

Reemployed Annuitants OPM grant NASA blanket authority to waive salary offsets when recruiting reemployed federal annuitants for critical areas.

RIF Rules Congress exempt NASA from the Title 5 RIF rules. It should establish a new RIF framework, modeled on NIST’s Alternative Personnel Management System that would: • Define competitive areas in a more targeted manner, such as career path. • Limit both “bumping” and “retreating” to within the same occupational series or specialty. • Give enhanced weight to performance.

• The Panel also recommends that, given the immediate need for NASA to begin reshaping its workforce, Congress provide the agency with limited emergency authority to invoke retirement. The specific conditions would include some combination of the following and focus on work-based needs:

o The employee is fully eligible for retirement o The employee’s skills are no longer required for mission accomplishment o The employee’s skills are outdated or unnecessary, and management determines that retraining would not be practical in terms of time or cost-effectiveness, or the employee is unwilling to update skills o Funding for the employee’s existing work is not available

189 Because the current monetary cap of $25,000 has not even kept up with the rate of inflation, its usefulness as a way to encourage voluntary retirement is declining.

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o The employee’s skills are not easily transferred to other work within required timeframes for mission accomplishment, or the employee is unwilling to accept reassignment to other work or other work locations

The Panel focuses its attention on fully retirement-eligible employees for three major reasons. First, generally speaking, it is not as much of a hardship for someone who is fully eligible for their annuity to retire from their job. Second, this would allow NASA to realign its workforce while minimizing overall workforce disruption. It is clearly preferable to a RIF, especially if it had to be conducted under current laws and regulations. Third, this would allow NASA to begin recruiting the competencies and technological expertise it requires.

As part of this new authority, the Panel believes that fully eligible employees whose retirement is invoked should be compensated fairly. Under existing government-wide laws and regulations, a severed employee is not eligible for severance pay if he or she “is eligible upon separation for an immediate annuity from a federal civilian retirement system or from the uniformed services.” The Panel recommends that NASA employees severed under such an emergency statutory provision be eligible for severance pay, even though they are fully eligible to retire. This would be fair compensation for such individuals and provide NASA with a means to reshape its workforce during this time of dramatic change and skill mismatch. NASA would not likely use this emergency statutory authority on a broad basis, but its availability would ensure the agency has the means to secure the expertise required for its highly complex mission and thereby ensure the safety and integrity of the space program.

If implemented, this recommendation would establish a more realistic balance between organizational and employee needs:

• It would guarantee that federal employees continue to enjoy the security, protections, and benefits derived from the civil service system for the vast majority of their careers.

• It would provide managers with some additional discretion to reduce or reshape the workforce in accord with organizational demands at the very end of an employee’s career.

• It would allow managers to improve succession planning by focusing on the government’s work requirements and plan, with more certainty, the timing of replacements. It would also put increased emphasis on an employee’s responsibility for their own career development and need to keep skills current.

If NASA were given such a statutory authorization, the Panel fully recognizes that it would need to establish a rigorous training program for leaders, managers, supervisors, and employees, as well as a systematic communications effort to allay concerns about the new provision. NASA would also need to establish internal and external review mechanisms to address any employee challenges to NASA- invoked retirements.

The Panel understands that pursuing additional flexibilities, especially those with the largest impact on realigning the workforce, will be controversial. Absent these flexibilities, however,

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the Panel believes that NASA will likely be unable to achieve the ambitious exploration goals the nation has established within the existing budget constraints.

• Finally, the Panel recommends that NASA use work measurement as a tool in functional areas susceptible to quantitative analysis. This would help NASA quantify work timeliness expectations, realign the workforce to meet changing work demands in both volume and complexity, and continually adapt to changing circumstances.

As an R&D organization, the Panel recognizes that not all of NASA’s work is susceptible to work measurement, but believes there are likely substantial blocks of work within certain functions that might benefit from this rigorous kind of quantitative analysis. Consistent with recent federal emphasis on quantitative and qualitative metrics for project outcomes, e.g. in GPRA and PART, the Panel believes NASA should capitalize on its ongoing strategic integration of its data systems by using work measurement as an additional tool to project future staffing needs, needed efficiency improvements, and possible work redirections.

187 APPENDIX A

188 APPENDIX A

PANEL AND STAFF LISTING

PANEL

Sallyanne Harper,∗ Panel Chair—Chief Administrative Officer and Chief Financial Officer, U.S. Government Accountability Office. Former positions with the U.S. Environmental Protection Agency: Chief Financial Officer/Acting Assistant Administrator for Administration and Resources Management; Deputy Assistant Administrator for Management and Administration/Deputy Chief Financial Officer; Finance Director; Associate Director, Superfund Procurement Operations. Former Contract Specialist and Contracting Officer in major weapons systems acquisition with the Naval Air Systems Command and the Naval Regional Contracting Office.

Benita A. Cooper—Consultant. Former Associate Administrator for Management Systems and Facilities, National Aeronautics and Space Administration (NASA); Assistant Administrator for Headquarters Operations (NASA); Director of Management Operations for Goddard Space Flight Center (NASA); and Director of Manpower Utilization, Goddard Space Flight Center. Recipient of Meritorious and Distinguished Executive Rank awards, NASA Exceptional Performance Award, and NASA Exceptional Service Medal. Education: BA Political Science— Earlham College; MA Government—Indiana University; and MS Management—Massachusetts Institute of Technology.

Harold B. Finger*—Consultant. Former President and Chief Executive Officer, U.S. Council for Energy Awareness; Vice President for Strategic Planning and Development Operations, and General Manager, Center for Energy Systems, General Electric Company; Assistant Secretary for Research and Technology, U.S. Department of Housing and Urban Development; Associate Administrator for Organization and Management, NASA; Director, NASA Space Power and Nuclear Systems.

Harriett G. Jenkins*—Consultant. Former Director, Office of Senate Fair Employment Practices, U.S. Senate; Assistant Administrator, Equal Opportunity Programs, National Aeronautics and Space Administration; Teacher, Principal, Director of Elementary Education, and Assistant Superintendent for Instruction, Berkeley Public School System.

Bernard D. Rostker*—Senior Fellow, RAND Corporation. Former Under Secretary of Defense (Personnel and Readiness); Special Assistant to the Secretary of Defense for Gulf War Illnesses, Medical Readiness, and Military Deployment; Under Secretary of the Army. Former positions with the Department of the Navy: Assistant Secretary for Manpower and Reserve Affairs; Principal Deputy Assistant Secretary for Manpower and Reserve Affairs; Economist, Office of the Assistant Secretary of Defense for Systems Analysis. Former positions with RAND Corporation: Director, Defense Manpower Research Center, National Defense Research Institute; Program Director, Force Development and Employment Program; Associate Director, Arroyo Center.

∗ Academy Fellow

189 APPENDIX A

John G. Stewart∗—Partner, Stewart, Wright & Associates, LLC. Former Executive Director, Consortium of Research Institutions; Vice President, Resource Development, Manager of Corporate Administration, and Manager of Planning and Budget, Tennessee Valley Authority; Member, Aerospace Safety Advisory Panel, National Aeronautics and Space Administration; Staff Director, Subcommittee on Science, Technology, and Space, U.S. Senate; Staff Director, Subcommittee on Energy, Joint Economic Committee, U.S. Congress; Executive Assistant to the Vice President of the United States.

STAFF

J. William Gadsby,* Vice President for Academy Studies—Former Director, Management Studies Program, National Academy of Public Administration. Former positions with U.S. General Accounting Office: Senior Executive Service; Director, Government Business Operations Issues; Director, Federal Management Issues; Director, Intergovernmental and Management Issues. Former Assistant Director, Financial Management Branch, U.S. Office of Management and Budget.

Alethea Long-Green, Program Area Director—Former Director of Human Capital Planning and Management, U.S. Department of Commerce; Director of Human Resources, Chief of the Workforce Effectiveness Division, U.S. Patent and Trademark Office; President, Strategic Technical Resources, Inc.; Vice President, Tech International, Inc.; Consultant with various contractors to the Department of Defense.

Laurie J. May, Project Director—Former Director, Organizational Management and Integrity Staff, U.S. Environmental Protection Agency. At EPA, served as a Program Management Officer, with organizational leadership and policy direction responsibilities for a full range of management issues, including financial integrity, fraud prevention, ethics, human resources, and organizational management. Confidential management advisor to numerous presidential appointees. Recent Academy projects include work at the U.S. Patent and Trademark Office, Centers for Disease Control, and the National Institutes of Health.

Joseph P. Mitchell, III, Senior Research Analyst—Project staff on past Academy studies: Airport Security, Federal Bureau of Investigation, National Marine Fisheries Service, Patent and Trademark Office, Wildfire Mitigation, National Aeronautics and Space Administration, and National Institutes of Health. Adjunct Professor, Center for Public Administration and Public Policy, Virginia Polytechnic Institute and State University.

Sherrie Russ, Senior Project Advisor—Former Senior Manager with the Government Accountability Office with experience overseeing performance audits of Internal Revenue Service (IRS) programs and many other federal agencies. Senior project advisor for other Academy reviews of the U.S Patent and Trademark Office and the FBI's human capital program.

∗ Academy Fellow

190 APPENDIX A

Julia Mensah, Research Associate—Project staff on past Academy studies: Corporation for National and Community Service and National Aeronautics and Space Administration; Bachelor of Arts, Mount Holyoke College, Massachusetts.

Martha S. Ditmeyer, Senior Administrative Specialist—Staff on past Academy studies: Airport Security, Federal Bureau of Investigation, National Marine Fisheries Service, Patent and Trademark Office, and Wildfire. Former staff positions at the Massachusetts Institute of Technology and the Communications Satellite Corporation.

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192 APPENDIX B

INDIVIDUALS AND ORGANIZATIONS INTERVIEWED OR CONTACTED (Titles and locations listed are as of the time of the Academy’s contact)

NASA HEADQUARTERS

Office of Institutions and Management Charles H. Scales, Associate Administrator for Institutions and Management

Office of Human Capital Management (OHCM) Craig D. Conlin, Senior Analyst Carolyn E. Davis, Human Resources Specialist Antonia T. Dawsey, Assistant Administrator for Human Capital Management Jay M. Henn, Deputy Assistant Administrator for Human Capital Management Timothy M. Sullivan, Director, Workforce Strategy Division James M. Tingwald, Human Resources Specialist

Office of the Inspector General (OIG) Robert W. Cobb, NASA Inspector General Thomas J. Howard, Deputy Inspector General

Office of Procurement Kimberly A. Dalgleish, Procurement Analyst Sheryl J. Goddard, Director, Program Operations Division Tom Luedtke, Assistant Administrator for Procurement Diane S. Thompson, Procurement Analyst

Office of the Comptroller David Schurr, Comptroller

Space Operations Mission Directorate (SOMD) Mike Milsted, Institutional Assets Management and Investments Office Adam D. West, Electrical Engineer/ Lead on NASA Headquarters Transition Working Group Karen White, Program Analyst

Office of Program Analysis and Evaluation (PA&E) Howard Ross, Program Analyst Johnny F. Stephenson, Director (Acting), Organizational Readiness Division Douglass A. Terrier, OneNASA Lead, Office of Program Analysis and Evaluation

Facilities Engineering and Real Property Division E.F. “Gene” Hubbard, Director

193 APPENDIX B

NASA FIELD CENTERS

Ames Research Center (ARC) Jan S. Aikins, Associate Director for Strategy & Integration Carolina M. Blake, Associate Director, Human Capital Office Janet E. Carson, Assistant Chief, Resource Management Office Marvin R. Christensen, Deputy Center Director Paul K. Davis, President, Ames Federal Employees Union, International Federation of Professional and Technical Engineers (IFPTE) Local # 30 Laura W. Doty, Deputy Director, Project Management and Engineering Directorate Michael W. George, Deputy Director, Aeronautics Directorate Lynn D. Harper, Aerospace Engineer, Space Technology Center Leticha A. Hawkins, Human Resources Manager Dan A. Heacock, Chief, Financial Reporting Branch Gary Heagy, Deputy Procurement Officer Rod Ketchum, Crew-Vehicle Systems Research Facility Bernadette Luna, Associate Director, Science Directorate Phil M. Luna, Associate Director, Project Management and Engineering Directorate Sharon L. Mathis, Chief, Resource Management Office Joan M. McCullough, Human Resources Director Suzanne Meyer, Chief Steward, Ames Federal Employees Union, IFPTE Local # 30 Dee M. Morrison, Chief, Procurement Officer Cheryl M. Quinn, Associate Director Carol J. Russo, Deputy Director, Exploration Technology Directorate Maureen Y. Sarjeant, Human Resources Director Steve F. Zornetzer, Associate Director

Glenn Research Center (GRC) Earnest A. Arrington, Engineering Manager Sheila Bailey, Electrical Engineer Bradley Baker, Chief, Procurement Division Edward Becks, Engineering Services Manager Richard Christiansen, Deputy Center Director David P. Fleming, Senior Research Engineer, Mechanical Components Branch Olga Gonzalez-Sanabria, Director, Engineering and Technical Services Directorate Jih-Fen Lei, Director, Research and Technology Sandra T Reehorst, Acting Deputy Director and Associate Director for Science Debra Watson, Acting Chief Financial Officer Carol Wessel, Chief, Office of Human Resources Vernon Wessel, Director, Safety and Mission Assurance

Goddard Space Flight Center (GSFC) Nancy Abell, Chief Financial Officer Julie M. Baker, Deputy, Chief Financial Officer George Barth, Deputy Director for Resources

194 APPENDIX B

Verron Brade, Deputy Director, Office of Human Capital Valorie Burr, Associate Director for Acquisition John Dalton, Deputy Director, Science and Exploration Directorate Stacey Day, Human Capital Strategist Karen Flynn, Assistant to the Director for Strategic Planning, Management Operations Directorate Curtis Johnson,Chief, Business Management Office, Applied Engineering and Technology Directory Tom Magner, Deputy Director, Applied Engineering Directorate Tom Paprocki, Chief, Institutional Support Office Krista Paquin, Associate Center Director Debra Parsons, Chief, Organization Capability Office, Office of Human Capital Management Dolly Perkins, Deputy Center Director Diane Williams, Director of Management Operations

Jet Propulsion Laboratory (JPL) Tom Gavin, Associate Director, Flight Projects and Mission Success Cozette M. Hart, Director, Human Resources Dale Johnson, Chief Financial Officer Johnny Kwok, Institutional Workforce Planning Manager Matthew Landano, Director for Safety and Mission Success Jeffery M. Lupis, Procurement Officer Firouz Naderi, Associate Director Steven Proia, Deputy Chief Financial Officer and Acting Acquisition Manager Vicci Stratman, Deputy General Counsel Eugene Tattini, Deputy Director Peter Theisinger, Director of Engineering and Science Directorate

Johnson Space Center (JSC) Jeff Cullen, Deputy Director, Office of Procurement Mark Geyer, Deputy Manager, Constellation Program Randy Gish, Associate Center Director Karen E. Jackson, Assistant to Director for Management, Mission Operations Mike Kincaid, Deputy Director, Human Resources David Leestma, Director, Advanced Planning Office Susan Leibert, Deputy Manager, HR Management Office Angela Martin, Manager, Human Resources Operations Officer Bradford O. Mudgett, Strategic Workforce Planning Analyst, Human Resources Office Nancy Muir, Program Analyst Lee Norbraten, Manager, Space Shuttle Strategic Planning Office Natalie Saiz, Human Resources Director Kathy Symons, Associate Director, Engineering Scott Wood, Deputy Manager, Astronaut Candidate and HR Programs

195 APPENDIX B

Kennedy Space Center (KSC) Tracy Anania, Human Resources Director Richard Cota, Deputy Chief Financial Officer Jennifer Hall, United Space Alliance Contractor Dicksy Hansen, Supv, Workforce Planning James E. Hattaway, Associate Director Cheryl Hurst, Deputy, Procurement Office Jim W. Kennedy, Center Director Ramon Lugo, Deputy Director, Launch Services Program John Newport, President, American Federation of Government Employees (AFGE) Local # 2568 Russell Romanella, Director, International Space Station & Spacecraft Processing Patrick Simpkins, Director, Engineering Directorate John Talone, Director, Constellation Project Office Mike Wetmore, Director, Launch Vehicle

Langley Research Center (LaRC) Jim Batterson, Deputy Director for Strategic Development, Advanced Planning Office Carl Gray, Deputy Associate Director Charles E. Harris, Director, Research & Technology Directorate John B. Herrin, Director, Exploration and Flight Projects Directorate Stephen G. Jurczyk, Deputy Center Director Karen Koch, Human Resources Management Specialist Cynthia Lee, Chief of Staff John B. Malone, Deputy Director, Office of Safety and Mission Assurance Thomas E. Noll, Deputy Director, Systems Engineering Directorate Donna L. Phillips, Branch Head, OHCM-Organizational Development and Workforce Relations Branch Delores K. Poupard, Deputy for Resources, Science Directorate Kimberly G. Stone, Director, Office of Procurement Kathryn Suddreth, Asst. Director for Strategy Deployment and Integration, Advanced Planning Office Francine A. Taliaferro, Labor Relations Officer, Office of Human Capital Management Cindy Wiessner, Chief, Human Resource Management Branch Kenneth J Winter, Chief Financial Officer

Marshall Space Flight Center (MSFC) Steve P. Beale, Director, Office of Procurement Ron Belz, Senior Director, S & MS Support, Sverdup David E. Brock, MSFC Small Business Specialist Keith Brock, Manager, Program, Planning and Control Ralph Carruth, Manager, Material and Processes Laboratory Charles B. Chitwood, Deputy Center Director Gena A. Cox, Protocol Specialist George Hamilton, Executive Vice President, Marshall Engineers and Scientists Association (MESA), International Federation of Professional and Technical Engineers (IFPTE), Local # 27 Robin Henderson, Associate Director

196 APPENDIX B

Bill Hicks, Manager, Performance and Capabilities Management Office Danny R. Hightower, Manager, Employee Services and Operations Office, Office of Human Capital John M. Horack, Assistant Manager of the Science and Mission Systems Office Nedra Hundley, Steward, MESA, IFPTE Local # 27 David Jeffreys, Manager, Workforce Strategy and Planning Roy W. Malone, Director, Safety and Mission Assurance Directorate Frank D. Mayhall, Deputy Chief Financial Officer Alan F. Patterson, Assistant Manager, Test Laboratory Kathy P. Pollard, Associate Manager, ELO, Program Planning and Control Office Teresa Vanhooser, Deputy, Engineering Directorate John H Vickers, Project Manager, National Center for Advanced Manufacturing (NCAM) Tereasa Washington, Director, Office of Human Capital Management James D. Young, Chief Steward, American Federation of Government Employees (AFGE) Local # 3434

AEROSPACE INDUSTRIES ASSOCIATION

Andrew Barber, Manager, Space Operations Jana Denning, Director, Legislative Affairs J.P Stevens, Vice President, Space Systems John Douglass, President and Chief Executive Officer Jeremiah Gertler, Assistant Vice President

GOVERNMENT ACCOUNTABILITY OFFICE

Rick Eiserman, Senior Analyst,Acquisition and Sourcing Management Susan A. Fleming, Acting Director, Physical Infrastructure Team Allen Li, Director, Acquisition and Sourcing Management Shelby Oakley, Senior Analyst, Acquisition and Sourcing Management Lisa R. Shames, Assistant Director, Strategic Issues Carolyn M. Taylor, Assistant Director, Education, Workforce, and Income Security

OFFICE OF MANAGEMENT AND BUDGET

Irene Brahmakulam, Program Examiner, Science and Space Programs Amy Kaminski, Programs Examiner, Science and Space Programs Paul Shawcross, Program Examiner, Science and Space Programs

OFFICE OF PERSONNEL MANAGEMENT

Jeanne Friedrich, Human Capital Officer for NASA Shanean J. Fowlkes, USA Jobs Team Thomas A. Glennon, Personnel Management Specialist, Employment Services, Workforce Restructuring Policy Division) Michael Orenstein, Public Affairs Specialist

197 APPENDIX B

OTHER CONTACTS

DeeAnn Batten, Senior Research Analyst, Office of Policy and Evaluation, US Merit Systems Protection Board Agnes Bell, Human Resources Advisor, Civilian Acquisition Workforce Demonstration Project, Department of Defense John Birkler, Research Leader, Acquisition, Defense Production and Technology Base Issues Thomas Bock, Consultant to Army Research Laboratory Demonstration Project, Department of the Army Ellen Bromfield, Human Resource Specialist, Army Medical Research and Materiel Command, Department of the Army Kathleen DelBalzo, Human Resource Specialist, National Institute of Standards and Technology (NIST) Keith Dorr, Human Resources Specialist, Army Communications-Electronics Command Research Demonstration Project, Department of the Army Susan Krup Grunin, Senior OD/Training Consultant, Watson Wyatt Daniel Guttman, Attorney-at-Law Lana Hargrove, Human Resources Specialist, Aviation and Missile Research, Development, and Engineering Center Demonstration Project, Department of the Army James Hill, Acting Deputy Director, NIST Sean O'Keefe, Chancellor, Louisiana State University/Former NASA Administrator Mary Vander Linden, Director, Human Resources, Defense Advanced Research Project Agency Gregory T. Linteris, Mechanical Engineer, NIST Carolyn Miller, Government Consulting Services, Watson Wyatt Vicki A. Novak, Special Consultant, Partnership for Public Service/Former NASA Chief of Human Capital Management Doug Rippey, Consultant, Workforce Planning, Watson Wyatt Ronald P. Sanders, Chief Human Capital Officer, Department of National Intelligence (DNI) John F. Schank, Senior Operations Analyst, RAND Corporation Patricia Stewart, Human Resource Specialist, Office of Policy, Civilian Personnel Management Service, Department of Defense Vicki Warner, Human Resources Advisor, Naval Surface Warfare Center Demonstration Project, Department of the Navy

BENCHMARKED ORGANIZATIONS

Administrative Office of the United States Courts (AOUSC) Defense Advanced Research Projects Agency (DARPA) Department of Defense (DoD) Department of Housing and Urban Development (HUD) Department of Justice (DOJ) Department of Labor (DOL) Department of National Intelligence (DNI) Government Accountability Office (GAO) National Institutes of Standards and Technology (NIST)

198 APPENDIX B

National Science Foundation (NSF) Office of the Comptroller of the Currency (OCC) RAND Corporation Securities and Exchange Commission (SEC) The Department of the Navy United States Environmental Protection Agency (EPA) United States Patent and Trademark Office (USPTO)

NASA CONTRACTING ORGANIZATIONS

Honeywell International Incorporated Jacobs Engineering Group Incorporated Lockheed Martin Corporation QSS Group, Incorporated Stinger Ghaffarain Technologies (SGT), Incorporated Science Applications International Corporation (SAIC) Sierra Lobo, Incorporated Test Facilities, Operation, Maintenance, and Enginerering, TFOME The Boeing Company/Checkout, Assembly and Payload Processing Services (CAPPS) United Space Alliance (USA) University of California at Santa Cruz (University Affiliated Research Center)

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200 APPENDIX C

FEDERAL LESSONS LEARNED

This appendix discusses the results of the Academy Panel’s work related to lessons learned or innovative practices in the following seven areas: (1) recruitment and career development programs for the next generation of leaders, (2) term employment, (3) strategic workforce planning, (4) modifications to existing Reduction-in-Force (RIF) regulations, (5) work measurement, (6) the National Institute of Standards and Technology Guest Researcher program, and (7) the National Science Foundation rotator program.

1. INNOVATIVE FEDERAL RECRUITMENT AND CAREER DEVELOPMENT PROGRAMS

Three federal agencies have developed programs, within current Title 5 provisions, for recruiting high-caliber employees for the next generation of leaders. These programs are:

• The Department of Justice's Attorney General's Honors Program is the only way DOJ hires entry-level attorneys. This highly competitive and prestigious program allows new attorneys to step immediately into demanding, sensitive, and important positions with significant responsibility on crucial matters from the day they join.190 Candidates with law degrees begin at the GS-11 level, with the potential to reach the GS-15 level in three-and-a-half years. Attorneys who have graduate law degrees or who have served judicial clerkships begin at the GS-12 level.

• The Department of Labor’s Master of Business Administration (MBA) Fellows program, begun in 2002, is “a comprehensive, entry-level employment and career development program designed to recruit and nurture the next generation of DOL leaders.” Inspired by the President’s Management Agenda, the Labor Secretary initiated the program to attract individuals with the types of business skills required to help the federal government become more results and business-oriented as well as citizen centered. The two-year program includes rotational assignments and formal training, with the option of conversion to a competitive permanent position. DOL hires these individuals with business skills at the GS-9 level, with a target grade of GS-12 upon program completion. The key competencies on which DOL focuses are planning and evaluation, research and analysis, teamwork, and written and verbal communications. The MBA Fellows program has been recognized as a model program in several publications, including the Wall Street Journal and the Washington Post.191

• The U.S. Environmental Protection Agency's Intern Program (EIP), very much like the DOL Fellows program, focuses on recruitment for the next generation of EPA’s leadership. It too is a comprehensive, entry-level, professional, full-time employment

190 Letter from John Ashcroft to Applicants for the Attorney General’s Honors Program, April 15, 2003. 191 U.S. Department of Labor press release, “U.S. Department of Labor Launches Third MBA Fellows Class,” December 23, 2003.

201 APPENDIX C

and career development program designed to “jump-start” the individual’s career and develop their potential for advancement within the agency. With an extensive nation- wide marketing campaign, the program hires primarily environmental protection specialists, biologists, and environmental scientists from among the thousands of applications it receives each year. Applicants are required to submit two one-page essays: one on a particular environmental issue on which they would like to work and one describing an activity utilizing planning, organization, team work, leadership, and written and verbal communication skills. The agency typically hires 20 to 30 EIPs a year, but circulates the applications of the remaining eligibles, who have not made the final cut after the panel interview of the top 70 candidates, to EPA hiring officials who have other entry-level job openings. EIPs are hired at the GS-7 or GS-9 level and typically have promotion potential to the GS-13.

Other agencies have received authority to pay salary rates higher than those provided for under Title 5 because of concerns about the federal government’s ability to compete with private sector salaries in certain program areas. In addition to paying employees higher base salaries, employees in some agencies may also receive a locality pay adjustment. Two examples of these special salary rate programs are:

• Securities and Exchange Commission (SEC): Attorneys at the Security and Exchange Commission who work in the Washington, D.C. area and have one year of legal experience earn between $75,000 and $96,000; those with two years of experience earn between $89,000 and 114,000, and those in senior or supervisory positions earn from $102,000 to $159,000. . According to a 2004 employee survey, 77 percent of SEC workers surveyed said they were very or generally satisfied with their pay.192

• Office of the Comptroller of the Currency (OCC): Career civil servants at OCC, a component of the Department of Treasury, are placed into one of nine pay bands, with the maximum salary set at the same level as the Vice-President’s salary─$208,383 in 2005. Maximum pay rates for employees in the top three OCC pay bands exceed the current maximum for the SES, with those in Pay Band VII, for example, eligible to receive up to $191,803—about $27,000 higher than the maximum SES salary for agencies with certified performance appraisal systems. In addition to special salary rates, employees may receive geographic pay differentials, which are paid in addition to base salary to recognize cost-of-labor differences. For example, Washington, D.C. area employees currently receive an 8 percent differential.

In addition to higher salaries, OCC pays many benefits at no cost to its employees, including dental and vision benefits. Additionally, the OCC offers a separate 401(k) plan, with employees eligible to contribute up to 10 percent of salary on a pre-tax basis and the OCC providing a discretionary matching contribution currently at two percent of salary. They are also eligible for the government-wide Thrift Savings Plan.

192 “Changes in Pay and Schedules at SEC Bring Higher Employee Satisfaction Rates,” The Washington Post, November 15, 2004, p. B 2.

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2. TERM EMPLOYMENT AND VARIATIONS

Agencies are generally required to use OPM’s regulations regarding term appointments. Also, OPM must approve any extensions of the four-year appointment period. However, some federal agencies have the authority to modify regulations for term appointments if they (1) have obtained approval for conducting an OPM Demonstration Project, (2) have agency-specific legislative authority for specific flexibilities similar to those provided to NASA, or (3) have broad authority to implement an alternative personnel system, such as the one for the National Security Personnel System (NSPS) in the Department of Defense (DoD). The Academy’s work on lessons learned and best practices focused on agencies in these three categories.

Overall, there were not significant variations in the policies governing use of term employees or the conditions for converting them to permanent status. Generally, these agencies had authority to hire term employees for five years (as opposed to the traditional four years), with the option to extend the appointment for an additional year. The most significant difference between NASA’s policies and the policies of these other agencies was the inability of these agencies to make non- competitive conversions beyond the three circumstances identified by OPM regulation: (1) reinstatement eligibles (former career federal employees), (2) veterans (with more than 180 days active duty) eligible for VRA, and (3) 30 percent disabled veterans. One of the DoD laboratories required a higher level of performance for term employee eligibility for conversion—a performance grade of B in lieu of the fully successful level generally used by other agencies.

Additional information about the use of modified term appointments in these agencies is discussed below. Also, during the course of conducting work on lessons learned work, Academy staff identified other special programs using term appointments to hire experts outside of Title 5.

OPM Demonstration Projects and the NSPS

OPM demonstration projects provide for conducting pilot tests of various changes to existing federal human resource management laws and regulations in Title 5, United States Code, and Title 5, Code of Federal Regulations. OPM demonstration projects are generally no more than five years and may cover only 5,000 employees per project. To conduct a demonstration project, an agency is required to (1) submit a formal plan, (2) consult and negotiate with affected employees and unions, (3) notify Congress and employees of the intent to conduct a project, and (4) complete an evaluation of the project.

Several OPM demonstration projects include features similar to NASA’s term appointment authority. For example, several of the DoD laboratories193 that conducted demonstration

193 The DoD laboratory project began as an OPM demonstration project, but the 2000 Defense Authorization Act removed OPM’s shared responsibility for the project. Also, restrictions on the number of employees to be covered in the project were removed. The DoD laboratories that used modified term appointment authority were (1) Army Medical Research and Materiel Command, (2) Aviation and Missile Research, Development, and Engineering Center, (3) Army Communications-Electronics Command Research Development, and Engineering Community, (4) Army Research Laboratory, and (5) Army Engineer and Research Development Center.

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projects included modified term appointment authority that allowed them to make term appointments for five years, with an option to renew the appointment for an additional year. Also, employees serving in term appointments in DoD labs could be converted to career conditional status if (1) they had competed for the term appointment and (2) were considered under the agency’s merit selection process, along with other internal employees. Another DoD demonstration project, focused solely on DoD’s acquisition workforce, used the same modifications to term appointment authority as those used by the DoD laboratories.

Evaluations of both DoD demonstration projects found that the DoD agencies made limited use of term appointments. For example, the evaluation of DoD Laboratories’ demonstration project noted that the laboratories that implemented modified term appointments actually reduced the number of term appointments due to mandated staffing reductions.194 Similarly, the evaluation of the DoD acquisition workforce demonstration project found that DoD used the modified term appointment authority on only a limited basis—about 40 per year.195 The evaluation also noted that through 2002, conversion of term employees to permanent employees averaged about 40 employees annually.

Academy staff spoke with officials from four of the five DoD laboratory demonstration projects196 and the DoD acquisition workforce demonstration project to determine the extent to which they used term appointments and whether they had developed any specific criteria for using term appointments in addition to OPM’s criteria. Only one of the four DoD laboratories made frequent use of term appointments. According to a laboratory human resources specialist, it made about 15-20 term appointments per year. The decision criterion for using such appointments was very general—an activity/mission need for a position to perform a function not expected to last more than five years. The specialist noted that, while term employees are eligible to receive recruitment and relocation incentives, the agency generally filled term vacancies without using these incentives. The specialist estimated that about 60 percent of the term employees subsequently applied for permanent positions. To be eligible for conversion, the laboratory required that employees have a performance rating of “B” or better.

According to an interim evaluation of the DoD Acquisition workforce demonstration project, the organization used modified term appointments on a “relatively limited basis.”197 The evaluation did not examine reasons for not using term appointments more extensively. According to one of the demonstration project managers, the organization does not plan to collecting additional data on the use of term appointments because it is preparing to transition to the DoD’s new National Security Personnel System (NSPS). This system and other DoD programs providing for term appointment are discussed below.

DoD’s new National Security Personnel System (NSPS) also includes authority for extending term appointments to five years, with an option to extend the term for an additional year. The

194 Summative Evaluation 2002 DoD S & T Reinvention Laboratory Demonstration Project, August 2002. 195 DoD Civilian Acquisition Workforce Personnel Demonstration Project Update, Interim Evaluation Report, Volume 1- Management Report, July 2003. 196 At the time Academy staff prepared this report, the fifth DoD laboratory had not responded to the Academy’s request for information. 197 DoD Civilian Acquisition Workforce Personnel Demonstration Project, Interim Evaluation Report: Volume II: Technical Report, July 2003.

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NSPS term appointment policies reiterate OPM’s criteria and provide for converting term employees to permanent positions under circumstances similar to those in the OPM demonstration projects. NSPS issued implementation guidance in April 2006; and Air Force and Navy officials indicated it was too early to provide lessons learned on using this authority.

Other Programs Using Term Appointments

With NASA’s new mission for space exploration and need to obtain expertise in leading edge technology that may be more readily available in the private sector, the experience of other organizations seeking this type of expertise may be instructive for NASA. Specifically, DoD has two programs that use non-competitive term appointments focused on obtaining state of the art experts—one exclusively for scientists and engineers and the other for experts related to DoD’s mission.

The National Defense Authorization Act for Fiscal Year 1999 provided the Defense Advanced Research Projects Agency (DARPA) with experimental hiring authority to hire up to 20 eminent scientists and engineers for non-competitive term appointments for up to four years without regard to the provisions of Title 5. Although DARPA has authority to extend a term appointment two additional years, it cannot convert term employees to permanent employees. In fact, according to DARPA, this conversion is not in the best interests of the agency. DARPA is a relatively small agency, employing about 140 program managers who rotate about every four years. According to DARPA’s 2000 report to Congress, turnover is desired and a function of the need to obtain “new pioneering ideas” in the science and engineering fields.198

DARPA is required to submit an annual report that includes: (1) a detailed discussion of the exercise of authority under this section, (2) a listing of the recruiting sources for term appointments, (3) the methodology used for identifying and selecting term appointees, and (4) any additional information that the Secretary considers helpful in assessing the utility of the this authority

Under this authority, DARPA may offer basic pay not to exceed Level IV of the Executive Schedule and provide additional annual payments beyond basic pay not to exceed the least of (1) $25,000, (2) 25 percent of annual basic pay, or (3) the annual rate of basic pay payable for Level I of the Executive Schedule.

DARPA has developed three generic term appointment position descriptions that management may modify as required: office director, deputy director, and program manager. Compensation packages for these positions range from $115,000- $155,200.199 DARPA was also authorized to provide retention bonuses for each year of the appointment. According to the special assistant for DARPA’s HR strategy, the ability to award these bonuses is key to the program’s success, considering the competitive salaries offered by the private sector. She said that a key lesson learned from implementing this program is to make term appointments for a short period of time, generally two years, and conduct a six-month career planning interview. The career-planning

198 2000 Report to Congress on Defense Advanced Research Projects Agency Experimental Personnel Management Program for Technical Personnel. 199 Ibid.

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interview helps to determine whether the term appointment should continue and whether management should offer any additional compensation to a term employee, such as a retention bonus. She said that term employees receive lucrative offers from the private sector, and the ability to pay a retention bonus or performance award improves the government’s ability to compete with private sector salaries.

The National Defense Authorization Act for Fiscal Year 2001 authorized 20 additional appointments for DARPA, and Section 1113 extended this experimental hiring authority to the DoD laboratories, the National Imagery and Mapping Agency, and the National Security Agency. According to DoD laboratories managers, they have not had as much success in attracting scientists and engineers under this program because candidates for these positions withdrew their applications because of financial disincentives related to compliance with the federal government’s conflict of interest requirements. According to one manager of a DoD laboratory, DoD laboratory directors met in July 2006 to discuss additional personnel flexibilities needed to manage DoD laboratories and agreed that action is needed to minimize the financial hardships associated with the federal government’s conflict of interest requirements.

Another new program, DoD’s Highly Qualified Expert (HQE) program, authorized in the National Defense Authorization Act for Fiscal Year 2004, also provides term appointment authority DoD-wide, similar to that provided to DARPA and DoD laboratories. The total number of HQEs serving in term appointments may not exceed 2,500 at any time. DoD’s policy states that this program can be used to employ “an individual possessing uncommon, special knowledge or skills in a particular occupational field beyond the usual range of expertise, who is regarded by others as an authority or practitioner of unusual competence and skill.” This flexibility is not to be used to provide temporary employment in anticipation of permanent employment.200 The program differs somewhat from the DARPA-like authority described above. Although the HQE program provides for payments above basic pay up to $50,000 or 50 percent of basic pay during a 12-month period, whichever is less, term employees cannot receive retention bonuses. As a result of this prohibition on retention bonuses, DARPA’s special assistant for HR strategy said DARPA has reverted to using its original term appointment authority.

DoD’s policies for the HQE program require DoD components to maintain written documentation of the criteria used for each appointment, as well as factors and criteria used in setting initial pay, pay increases, and additional payments. The policies also require that the DoD components retain documentation for three years after the term appointment expires.

200The Under Secretary of Defense issued policies on February 27, 2004, describing other circumstances under which the HQE appointment authority should not be used: (1) to provide desired services that are readily available within the Department or another federal agency, (2) to perform continuing Department functions, including work of a policy, decision-making or managerial nature, (3) to bypass or undermine personnel ceilings or pay limitation, (4) to aid in influencing or enacting legislation, (5) to give former federal employees preferential treatment, or (6) to do work performed by regular employees or to fill in during staff shortages.

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3. STRATEGIC WORKFORCE PLANNING MODELS ACROSS THE FEDERAL GOVERNMENT

The Academy’s Center for Human Resources Management as well as other organizations have identified specific elements for workforce planning models. Workforce planning is defined as a systematic process for identifying the human capital required to meet organizational goals and developing strategies to meet those goals.

Figure 1 shows GAO’s strategic workforce planning.

Figure C-1 GAO’s Workforce Planning Model

GAO’s model includes the following elements:

• Set strategic direction. Link workforce planning to the agency’s strategic goals and involve top management, employees, and other stakeholders in developing, communicating, and implementing the strategic workforce plan.

• Workforce gap analysis. Determine the critical skills and competencies needed to achieve current and future programmatic results.

• Workforce strategies to fill the gaps. Develop strategies (i.e., programs, policies, and practices) tailored to addressing gaps in number, deployment, and alignment of human capital approaches for enabling and sustaining the contributions of all critical skills and competencies. “Strategies include the programs, policies, and practices that will enable

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an agency to recruit, develop, and retain the critical staff needed to achieve program goals.”

• Build capability to support workforce strategies. Build the capability needed to address administrative, educational, and other requirements important to support workforce planning strategies.

• Evaluation of and revisions to strategies. Monitor and evaluate the agency’s progress toward its human capital goals and the contribution that human capital results have made toward achieving programmatic results. GAO’s model also emphasizes the importance of including the organization’s entire workforce, which includes not just civil servants, but part-time federal staff and contractors.201

As Table 1 shows, workforce planning models developed by other organizations mirror the elements in GAO’s model.

Table C-1 Elements of Various Workforce Planning Models

Workforce Element or Step SOURCE OF WORKFORCE MODEL Academy/International Personnel GAO OPM Management Association Strategic direction 9 9 9 Workforce gap analysis 9 9 9 Strategies/Action Plan 9 9 9 Capability to support strategies 9 Evaluation of and revisions to 9 9 9 strategies Source: GAO: Human Capital: Key Principles for Effective Strategic Workforce Planning, December 2003. National Academy of Public Administraiton: Building the Workforce of the Future to Achieve Organizational Success, 1999. OPM: http://www.opm.gov/hcaaf_resource_center/assets/Sa_tool4.pdf

201 Ibid. p. 1.

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4. MODIFICATIONS TO EXISTING RIF REGULATIONS

Academy staff reviewed OPM’s listing of demonstration projects and alternative personnel systems to identify agencies that could be a source of lessons learned for NASA as it endeavors to reshape it workforce. In addition, Academy staff reviewed the RIF regulations for the Department of Defense’s National Security Personnel System (NSPS) and the Government Accountability Office (GAO). The results of this review identified the following types of changes that were made to OPM’s current RIF regulations. NASA would need to obtain additional authority to make some of the following changes.

• Various DoD laboratories demonstration projects modified their RIF rules to the extent necessary to accommodate the shift from the GS grade pay system to pay banding. In addition, two army laboratories modified competitive areas to include occupational family in addition to geographic and organizational boundaries. Two army laboratories changed the order of the retention criteria by moving up the performance factor ahead of length of service. According to the evaluation of the DoD laboratory demonstration project, despite the large-scale workforce reductions in DoD laboratories, few employees were actually separated.202 In lieu of conducting RIFs, DoD laboratories used voluntary retirements and separation incentives and reassignments.

• One Navy laboratory eliminated competitive levels and merged the bump and retreat processes into a single displacement process. According to a human resource advisor for this laboratory, these changes simplified the process and increased its transparency to employees and managers. However, this change actually increased retention of senior employees who would have been previously restricted from bumping junior employees at a certain level.

• Under its RIF policies, GAO ranks performance higher than length of service within the retention factors. Also, the Comptroller General has the authority, at his discretion, to use other objective measures, such as skills and knowledge, to determine the retention standing of employees subject to certain conditions.

• NSPS’s initial policies for revising its RIF policies included making significant changes to the ordering of retention factors. In April 2003, DoD proposed changing the order in which employees are placed on a retention register so that veterans’ preference eligibility would be the lowest factor. However, DoD’s final policies did not provide for this change, and veterans’ preference remains as the second retention factor, followed by performance, and length of service.

Another implementation “lessons learned” mentioned by two DoD laboratories and NIST is the importance of having an automated system to support the decision-making process associated with revised RIF regulations.

202 Summative Evaluation 2002 DOD S & T Reinvention Laboratory Demonstration Project, August 2002, p.vii.

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5. WORK MEASUREMENT

The Department of Housing and Urban Development (HUD), the U..S. Patent and Trademark Office, and the Administrative Office of the U.S. Courts have used work measurement to enhance their organizational effectiveness. Although these organizations have missions that are significantly different from NASA’s mission, their experiences may well translate to administrative and operational functions at NASA and provide insights into the potential benefits of work measurement tools, particularly in the projection of workforce needs and needed resource redirections.

In the past, HUD confronted some challenges that are similar to those NASA is experiencing, such as:

• A National Performance Review mandate to streamline

• A 6,000 plus reduction in full-time-equivalent staff

• Consideration, but ultimate rejection, of regional office elimination203

• Congressional criticism about the analytical basis of agency decisions to contract out functions

• Questions about whether or not work could be performed more efficiently or less expensively in-house204

An Academy Panel study of HUD’s restructuring challenges concluded that “the absence of a task-based resource estimation process limits a department’s capability”205 to be fully aware of its work requirements. This is particularly true when there is a mismatch between resources and work.

While such systems can require substantial short-term costs for development and maintenance, the Academy Panel concluded that, in addition to increasing the capacity to accurately estimate resource requirements, there are other significant long-term benefits to such a system:

• A clearer picture of how work is accomplished, including efficiencies gained or expected to arise from work consolidation and opportunities for work process reengineering

• Better information on work and staff distribution

• A stronger ability to assess how new factors affect workload and the workforce

203 National Academy of Public Administration, Aligning Resources and Priorities at HUD: Designing A Resource Management System, October 1999 , p.8 204 Ibid, p. 16. 205 Ibid, HUD, p. v.

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• Added capacity to express the relationship between an agency’s stated goals and objectives and its resource needs. 206

The U.S. Patent and Trademark Office, as the fulcrum of the U.S. intellectual property system, operates under the close scrutiny of those concerned about the quality of U.S. patents and the time it takes to get a patent. The agency, whose budget is derived from its user fees, has over the last decade been faced with dramatically increased volume and complexity in its applications and a Congressional decision to limit the agency’s access to its full fees. With a highly technical, knowledge worker workforce and quantifiable work, USPTO has long utilized a patent examination work measurement and standard system directly linked to its performance appraisal and awards system. As a Performance Based Organization (PBO), the USPTO is, by design, focused on measuring performance.

In place since 1976, the system sets production expectancy goals for each examiner, based on the technology class and subclass examined and the grade level of the examiner. With time factors applied to each grade level, the system also establishes the number of hours estimated to complete an application. For example, an experienced GS-14 gets 20.4 hours, a GS-12 gets 27.5 hours, and a newcomer, at the GS-7 level gets 39.3 hours─all for search and examination of the same application.

Examiners earn credits, called counts, at two different times in the examination process, when an application is first examined and when an application is disposed of by an allowance, abandonment, or examiner’s answer. The credit is posted towards the examiner’s productivity goal. The agency calculates expected annual productivity for an examiner by assuming 80 percent of the 2080 hours in a 52 work-week year of 40 hours per week is spent examining applications. 207

Some critics, including its own Inspector General, have found the agency’s work measurement and incentive system:

• Too rigid • Not structured effectively • Outdated • With insufficient emphasis on quality208

Others point to the system benefits, such as:

• Accuracy in projecting human capital needs associated with workload209

• Enhanced ability to shift staff to related art units experiencing upswings in application volume

206 Ibid, HUD,, p. vi. 207 National Academy of Public Administration, U.S. Patent and Trademark Office: Transforming to Meet the Challenges of the 21st Century, August 2005, p.99. 208 Ibid, p. 104. 209 Ibid USPTO, p. 108.

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• Increased ability to sustain probationary period discharges and other performance-based actions

The Administrative Office of the U.S. Courts is another agency that has developed a methodology for workforce determination that is objective and provides a rational basis to support resourcing and staffing decisions. Faced with an ever growing percentage of non- discretionary expenditures (54 percent and projected to 70 percent by 2009) and some fluidity in workload (particularly in the cyclical bankruptcy area), the courts implemented this system for allocating staff and resources in the late 1990’s. Decentralization of human resource and procurement decisions was a natural outgrowth of this new resource allocation system.

Into this system, the office integrates process redesign to ensure the incorporation of automation, policy updates, and other efficiencies. The organization uses a six-step work measurement cycle:

1. Work Center Description Development 2. Task Measurement 3. Initial Formula Development 4. Formula Coordination 5. Formula Approval 6. Workforce/Work Units Allocation

The staffing formula has three main phases:

• Phase I: collaborative development of work center descriptions

• Phase II: subject matter experts and work measurement analysts conduct on-site data collection

• Phase III: data analysis, computation, review, and formula decision

The courts use this process to select the most appropriate staffing formula that is a quantitative expression of workforce requirements and use a trend-based forecast system as the best predictor of staff needed to support workload:210 Critical to the success of this workforce measurement system is a recognition that it is part science and part art. The science provides a solid qualitative and quantitative basis for conclusions. The art is what ultimately makes it real, workable, and acceptable to the various stakeholders within and outside of the judiciary.

Key features of this system, which may have applicability to NASA, are its use of:

• A scientific approach to work year numbers based on analysis of historical data, clearer to external parties, including OMB and Congress

210 Administrative Office of the U.S. Courts, Office of Human Resources, Policy and Strategic Initiatives Office, 2006 Briefing, Workforce Measurement.

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• Time and motion studies

• Perpetual sampling in three year cycles

• Program advisory group participation to increase buy-in and provide reality test of formulae

• Staff/resource allocation rather than position/FTE allocation as the core concept

• Local problem-solving, frequently resulting in increased efficiency and productivity

• Increased accountability and flexibility at the local level

• Longer range predictability

Linkages to Work Measurement in the Private Sector

Since nearly all agencies rely on third parties to help carry out their work, GPRA and work measurement have significance as well for the contractor community. Some scholars have opined that GPRA has helped federal managers seeking the flexibility and competition offered by contractors to overcome the accompanying management and accountability challenges.211 The act requires agencies to set performance goals and outcome measures for these third parties even though the federal agency has only partial control. Work measurement in the contractor workforce may thus merit consideration as part of multisector workforce planning.

Industry has for many years recognized the need to control and measure workforce productivity and has developed and demonstrated techniques of work measurement that facilitate improved management utilization of human resources. As long ago as 1965, such companies as North American Aviation, Douglas Aircraft, and Lockheed in the aerospace industry were cited for their extensive work measurement programs.212 Most major oil companies and banking institutions have developed and applied work standards as well.213

Based on over 275 public and private sector responses to a 2004 web-based survey about the uses of work measurement, the Institute of Industrial Engineers (IIE)-related survey team found:

• A significant number of both public and private sector employers are using work measurement tools

211 David G. Frederickson, The Potential of the Government Performance and Results Act as a Tool to Manage Third-Party Government, PricewaterhouseCoopers Endowment for the Business of Government, August 2001, p. 10. 212 A.C. Rubel, Letter to County of Los Angeles Board of Supervisors, Productivity in County Departments, October 19, 1965. 213 Ibid., A.C. Rubel

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• Executive leadership to be the dominant force in the private sector behind the use of work measurement.

• Work measurement impacts direct and indirect labor in a broad range of industries

• More than 50 percent of employers report a benefit-to-cost ratio of 2:1 or better214

6. NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY GUEST RESEARCHER PROGRAM

Lessons learned from the National Institute of Standards and Technology (NIST) Guest Researcher program may be helpful to NASA as it seeks to identify ways to augment the knowledge and skill sets of its existing workforce. NIST is a non-regulatory federal agency that works to promote U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. NIST has approximately 1,500 permanent employee scientists located at two main campuses: Gaithersburg, Maryland; and Boulder, Colorado. This workforce is augmented by between 1,500 and 2,000 Guest Researchers—either domestic or foreign.215 These researchers can spend as little as two weeks at NIST or as long as several years.

Guest Researchers are technically qualified individuals, with access to NIST facilities and equipment, who work collaboratively with the agency’s research staff on projects of mutual interest. Individuals who are interested in such collaboration contact the appropriate NIST division. NIST staff members also identify likely candidates through their own contacts. If an appropriate opportunity is identified, the division submits a short description of the collaborative work to be performed, along with other relevant information, to the responsible laboratory director for approval.

Guest Researchers (and/or their employer) own their sole inventions, subject to a federal government-use license. Sole NIST inventions are owned by NIST. Joint inventions are jointly owned by NIST and the Guest Researcher/employing organization.

Domestic and Foreign Guest Researchers

A Domestic Guest Researcher (DGR) must be (1) a technically qualified U.S. citizen; (2) working with NIST staff on a project of mutual interest; (3) sponsored by an organization or self- employed;216 (4) working at NIST under the auspices of a Domestic Guest Researcher Agreement. Domestic guest access is also provided for U.S. citizens working under NIST funding agreements: contracts, grants and fellowships, cooperative agreements, or simplified

214 http://www.omni-engineering.com/announcement.htm, Work Measurement: Impact in the Private Sector, May 2004 presentation, Institute of Industrial Engineers (IIE) 2004 Conference, pp 2-3. 215 The Domestic Guest Researcher program is managed by the Office of Technology Partnerships. The Foreign Guest Researcher program is managed by the Office of International Affairs 216 A Domestic Guest may be a student or an employee of another federal agency, state or local government, profit or non-profit organization.

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acquisitions. NIST does not provide financial support for Domestic Guest Researchers. They are paid by their company or university.

Because the DGR agreement does not provide for confidentiality of research results, they are available to the public. If the researcher wishes to maintain the confidentiality of his or her research, NIST recommends that a Cooperative R&D Agreement (CRADA) be considered.

NIST Foreign Guest Researchers (FGR) fall into three categories:

• Those supported by their home institutions

• Researchers supported through bilateral programs or international organizations

• Direct scientist-to-scientist collaboration or support

Although NIST sometimes can provide a modest monthly stipend (up to $40,000 per year) to compensate for the cost of living in the U.S., support for guest researchers generally comes from sponsoring companies or organizations. NIST provides Foreign Guest Researchers with assistance on:

• Policy and procedures on foreign guest researcher appointments;

• Visas: serves as the primary point of contact at NIST for the Bureau of Citizenship and Immigration Services (BCIS), formerly the Immigration and Naturalization Service (INS), and the Department of State; manages the Exchange Visitor J-1 program

• Coordinates hiring of non-U.S. citizens at NIST

• Tax Information: provides tax consultations for non-U.S. citizens.

Lessons Learned

NIST has found these programs to be useful in attracting highly qualified individuals with a wide variety of backgrounds, including physics, chemistry, engineering, and math. Guest Researchers come to NIST at all levels in their careers, from full professors to undergraduate students. NIST has found that a key benefit for the guests is access to NIST facilities and research tools. NIST researchers benefit from collaborating with other highly qualified individuals. Although NIST incurs some administrative costs as a result of providing the guests with administrative support and office space, these costs are not significant.

In general, NIST does not have performance problems with guest researchers, but is able to terminate an agreement should these emerge. The relationship works best when expectations are clearly defined. Private industries tend to develop a program plan of specific objectives and tasks for their employees to accomplish while at NIST. But NIST tends to use its own employees, over whom it has more control, for such sensitive governmental work as responding

215 APPENDIX C to specific requests from Congress. In some cases, NIST has subsequently hired Guest Researcher program participants, primarily graduate students as federal employees.

The Domestic Guest Researcher program has also been a useful tool for keeping NIST retirees involved in the agency’s work. Approximately eight retirees are currently serving as Guest Researchers.217 Some retirees end up working full-time because of their continued dedication to the agency’s mission.

If NASA decided to develop a similar Guest Researcher program, NASA should consider the following lessons learned from the NIST program:

• View the skills received through the program as a supplement to organizational core competencies, not a substitute for them.

• Use the program primarily in the science programs, where basic research is being conducted.

• Do not rely on the program for mission-driven or developmental work because the agency has more control over employees than guests.

• Pay particular attention to matching an expert’s skills to an appropriate project.

217 In a few cases, the agency may hire retirees as reemployed annuitants, but this is no longer very common.

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7. THE NATIONAL SCIENCE FOUNDATION ROTATOR PROGRAM

The National Science Foundation (NSF) was created in 1950 to promote American science and engineering. Today, with an annual budget of over $5 billion, it supports research across a broad spectrum of academic disciplines as well as initiatives to improve teaching and attract students to the sciences at all levels of education. Unlike most other federal research agencies, NSF does not operate any research facilities or laboratories itself (except for polar programs), but instead seeks and funds the best ideas and most promising people.

Within NSF, approximately half of its nearly 700 science and engineering personnel serve on non-permanent appointments, many as “rotators.” The use of rotators at NSF is a long standing practice whereby the agency brings experts from the scientific and engineering community to fill program officer and management positions. These rotators typically fall into two categories: (1) Visiting Scientists, Engineers & Educators (VSEE) and (2) researchers detailed to NSF under the Intergovernmental Personnel Act ( IPAs).

Lessons Learned

Based on an April 2004218 study by the National Academy of Public Administration on governance and management in NSF, the Panel obtained the following lessons learned, features of which may be applicable to NASA:

• Rotators come to top-level NSF positions from a variety of responsible positions, including university professors, department heads and deans, as well as scientists, researchers, and administrators from non-profit organizations and private firms.

• Rotators provide NSF with science currency that other grant making agencies, such as NASA, often obtain through intramural research.

• Rotators bring new ideas and first-hand knowledge of the university working environment, its opportunities, and constraints. They keep NSF current with trends and opportunities in science.

• At least nine out of 10 randomly selected permanent employees in program officer positions and 18 of 32 in manager and executive positions had previously served as rotators. This “try before you buy” approach benefits both NSF and the recruits— providing both selecting official and NSF job candidates with in-depth information prior to permanent commitment.

The National Science Foundation uses the IPA to appoint rotators, with the following tailored provisions:

218 National Academy of Public Administration, National Science Foundation: Government and Management for the Future, April 2004, pp. 91 - 106

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• Incoming IPA assignments are funded through grants to the institution for incoming assignees. It is NSF’s policy to request at least 15 percent cost sharing of salary and benefits for incoming rotators.

• IPA assignees are usually detailed to the foundation.

• It is NSF’s expectation that assignees will not be employed by NSF in any capacity for at least one year upon completion of the IPA assignment.

• IPA assignee salary is usually annualized to 12 months. Pay is supplemented when the salary at the home institution is below the minimum of the NSF position. When an annualized academic salary exceeds the NSF salary for the assigned position, the full academic salary may be preserved and salary for the summer months will be calculated based on the federal rate of pay of the assigned position. The agreement allows for supplements when there is an increase in salary and/or benefit rates at the home institution. NSF's contribution to salary increases may not exceed the annual federal pay increase, plus three percent.

• NSF may provide compensation for lost consulting income. Payments, which are administered by NSF, are based on an average of the consulting income during the last two years (supported by tax records), up to a maximum of $10,000 per year. No consulting may be conducted if payment is received for any lost consulting activities. This income is paid directly to the assignee and reported on an IRS Form 1099, "Miscellaneous Income," at the end of each year. Any decision to continue consulting activities while at NSF must be discussed with an Ethics Counselor in the NSF's Office of the General Counsel.

• The Independent Research/Development Program permits individuals serving in the IPA program, with approved plans, to maintain their involvement with their professional research.

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Table C-2 Provisions for Visiting Scientist, Engineer, and Educator Program at NSF

VSEE policy information is contained in the NSF Personnel Manual, PER Chapter II-400 and the NSF Act (pages 9-10).

Employee Status Individuals appointed to the VSEE program are on a non-paid leave of absence from their institution. NSF pays salary while benefits are maintained with the home institution. An appointee must be a U.S. citizen or citizen of a country which has a mutual security agreement with the U.S. The Division of Human Resource Management (HRM) will determine eligibility for non-citizens.

Length of Appointment Appointments are usually made for up to one year and may be extended for an additional year by mutual agreement between NSF, the home institution, and the VSEE.

Salary Salary is set within a range for “Administratively Determined (AD) level” positions, using pre- established criteria. HRM determines the initial salary after verification is received from the home institution. The NSF salary is comprised of the annualized academic salary, cost of living allowance (if applicable), lost consulting (if applicable), and a locality payment. VSEEs are not eligible to receive the annual government-wide comparability pay adjustments; however, when salary is increased at the home institution, the NSF salary will be adjusted accordingly.

Lost Consulting NSF may provide compensation for lost consulting income. Payments, which are administered by NSF, are based on an average of the consulting income during the last two years (supported by tax records). No consulting may be conducted if payment is received for lost consulting activities. This income is included as part of the NSF base pay and will be reflected on W-2 forms. Any decision to continue consulting activities while at NSF must be discussed with an Ethics Counselor in the NSF's Office of the General Counsel.

Per Diem A VSEE may be entitled to receive a per diem allowance or a round-trip movement of household goods. The annual per diem rate is established and paid by NSF based on Federal Travel Regulations. The maximum period for receiving per diem is two years. Per diem will typically be paid each pay period in an amount prorated over the term of the appointment; however per diem may be paid in a yearly lump sum instead, if requested by the VSEE. Since all per diem payments are reported to the IRS on W-2 forms, VSEEs are encouraged to consult a tax advisor and carefully consider the tax implications before requesting lump sum payments.

Household Move A VSEE may be entitled to receive a round-trip movement of household goods in lieu of a per diem allowance.

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Supplemental Pay If the basic salary calculation is below the minimum rate of pay for the federal position, the salary is raised to the minimum federal rate of pay for that position. This income is included as part of the NSF base pay which will be reflected on W-2 forms.

Benefits VSEEs are not eligible for federal benefits. Current legislation authorizes NSF to reimburse the home institution for the employer's share of retirement, life insurance, and health benefits. Some state laws may not allow for this arrangement. NSF recommends that candidates meet with a benefits counselor at the home institution to discuss the effect of being in a non-paid leave status. NSF cannot withhold the employee's contributions to benefits; therefore, tax-sheltered savings plans cannot continue while at NSF. Social Security deductions are withheld from the NSF salary.

Leave VSEEs are responsible for adhering to the policies and procedures governing the administration of leave for federal employees as described in the NSF Personnel Manual, Chapter VIII-300, Absence and Leave.

Legal Advisory The IRS has ruled that appointments away from the VSEE's permanent home for more than one year are considered to be indefinite, and living expenses are no longer deductible. NSF recommends that tax implications be discussed with a CPA or other tax advisor. For information on travel expenses, see Tax Treatment of Travel Expenses

Incurred by NSF Rotators Independent Research/Development (IR/D) Program The Independent Research/Development (IR/D) Program permits individuals with approved IR/D plans, serving on VSEE appointments, to maintain their involvement with their professional research.

220 APPENDIX D

DECISION GUIDE METHODOLOGY AND UTILIZATION

As one of the deliverables for this study, the Academy has developed the two Decision Guides, presented in Chapter VI, for use by NASA managers. The first is for deciding whether to hire a civil servant or to buy the services of a contractor; the second is for deciding whether to hire a permanent or a term civil servant. This appendix provides more information on how NASA managers should use these guides—in particular, details on weighting and scoring the various categories and statements.

Each Guide has a set of major categories relevant to making the decision about whether it is most appropriate to use a civil servant or contractor; or, for civil service hires, whether to use a permanent or term appointment. Each Guide uses a similar structure and methodology. These tools are intended to be flexible. As they are implemented, the Panel expects that NASA will engage its managers at all levels to tailor the tool to their circumstances and to add any other relevant categories or statements.

As shown in Figure D-1, the Civil Servant-Contractor Guide is organized as follows:

• Column A. the major categories to consider when deciding whether to use a civil servant or a contractor

• Column B. statements that, if accurate, should lead an agency to hire a civil servant

• Column C. respondents’ level of agreement with each statement in Column B (see further discussion below)

• Column D. statements that, if accurate, should lead an agency to use a contractor

• Column E. respondents’ level of agreement with each statement in Column D (see further discussion below)

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Figure D-1 Partial Screen Shot of Civil Servant-Contractor Decision Guide

As shown in Figure D-2, the Permanent-Term Decision Guide is organized as follows:

• Column A. the major categories to consider when deciding whether to hire a permanent or term civil servant

• Column B. statements that, if accurate, should lead an agency to hire a permanent civil servant

• Column C. respondents’ level of agreement with each statement in Column B (see further discussion below)

• Column D. statements that, if accurate, should lead an agency to hire a term civil servant

• Column E. respondents’ level of agreement with each statement in Column D (see further discussion below)

Figure D-2 Partial Screen Shot of Permanent-Term Decision Guide

In assessing their level of agreement with the statements, respondents use a five-tier Likert scale:

5 = Strongly Agree 4 = Agree 3 = Neither Agree nor Disagree 2 = Disagree 1 = Strongly Disagree

For each category, the responses are summed and averaged to create a subtotal (maximum value of five) for each category. An average (arithmetic mean) is computed by summing the raw scores divided by the number of statements within each category. Some categories have an uneven number of statements; for example, the “workload” column of the Civil Service-

222 APPENDIX D

Contractor Guide has two statements under Civil Servant and three statements under Contractor. Similarly, the “Labor Market” category of the Permanent-Term Guide has six statements under Permanent and four statements under Term. These differences do not affect the final score, however, because the raw scores for each statement within in a category are averaged. Regardless of the number of statements, the maximum mean score within each category is 5. (The mean standardizes the results of the ratings to make the values comparable.)

The Decision Guide does not assign a pre-determined weight to each of the categories. NASA officials at the headquarters and/or center levels are able to determine the appropriate weights based on level of importance; the sum of all the assigned weights will be 100 percent. The weighted mean for each category is calculated by multiplying the mean by the assigned weight. The weighted mean provides a way for respondents to assign relative importance to each of the categories. If NASA officials decide to weigh the categories equally, respondents would not assign differential weights to each category.

An Excel version of the Decision Guides has been saved on CD ROM and sent to NASA headquarters.

Making the Decision

Each Decision Guide is intended to help NASA managers make these critical workforce decisions in a strategic and quantifiable manner, while also providing them flexibility to rate the relative importance of various categories. The final two rows of each Guide show the total mean and, if applicable, the total weighted mean:

• Civil Servant-Contractor Decision Guide. If Column B’s mean is higher than Column D’s, the recommended action is to hire a civil servant. A mean of 5, for example, would indicate the respondent “strongly agreed” the position should be filled by a civil servant. By contrast, if Column D’s mean is higher than Column B’s, the recommendation is to hire a contractor. A mean of 4 would indicate the respondent “agreed” the position should be filled by a contractor.

• Permanent-Term Decision Guide. If Column B’s mean in the Permanent-Term Decision Guide is higher than Column D’s, the recommendation is to hire a permanent civil servant. A mean of 4, for example, would indicate the respondent “agreed” the position should be filled by a permanent civil servant. In the opposite situation, the recommendation is to hire a term civil servant. A mean of 5 would indicate the respondent “strongly agreed” the position should be filled by a term.

Although the agency’s ability to implement the Decision Guide’s recommendation may be hindered in some cases by such factors as budget or FTE limitations, the results can still facilitate needed discussions. For example, if no FTE or funding is available to hire even when a civil servant is the recommended course of action, the respondent could use the Guide as a basis for requesting relief from the Center Director or Associate Administrator at headquarters.

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Alternatively, this position could be put on a priority list to be next in line for recruitment as positions are vacated.

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