Private Sector Gets Call to Set Up Pay System
By Stephen Barr
Monday, August 2, 2004; Page B02
There are 1,285 "human resource specialists" at the Department of Homeland Security. They do the recruiting, make sure paychecks go out, process promotions and interpret personnel policies. But they appear likely to play a subordinate role in the launch of the department's new pay system next year.
The department has decided to call in reinforcements -- from Northrop Grumman Corp., the global defense contractor -- to help design and develop the pay system.
Northrop Grumman, though, won't be coming alone. For the project, the company has assembled a team of other contractors, including Watson Wyatt & Co., Gene Rouleau & Associates Inc., BearingPoint Inc., Catapult Technology Ltd., Spectrum Solutions Group Inc. and STG International Inc.
"We are going to need them for a lot of areas that federal human resource specialists typically don't have a lot of experience in," said Melissa Allen, the department's senior human resources adviser.
"We typically don't have a lot of experience in establishing pay systems and doing pay surveys. . . . We have typically not run systems that strongly link performance management to pay, and we are aware of everyone's comment, including our own deep-held concern, that you have to have a performance management system if you are going to base pay on those decisions," Allen said.
In addition to the issue of expertise, most of the department's personnel experts are busy enough with daily responsibilities and cannot be spared to work on the new system, said Todd Turner, director of human capital innovation at Homeland Security.
"Any attempt to tap into existing government resources would have had a significant downstream impact on what those people are doing in their day-to-day work," he said.
The department's decision to hire Northrop Grumman underscores the evolving nature of federal personnel work.
After decades of administering the General Schedule -- a fairly predictable pay system -- the Bush administration is asking federal personnel offices to speed hiring and to embrace the idea of market-based or performance-based systems that give managers more discretion in setting the pay of employees.
The administration also is pushing agencies to cut costs by getting out of some lines of business, such as personnel paperwork and services, that can be outsourced to vendors.
"This is really a very unique time in the pace of change that we are seeing," said John Palguta, a civil service expert at the nonprofit Partnership for Public Service.
If plans hold, the pace will pick up this fall at the Department of Homeland Security. The department hopes to issue regulations for a new personnel system and then implement streamlined methods for conducting labor relations and handling employee appeals of disciplinary actions.
The department timetable calls for phasing in new rules on pay and job evaluations early next year, starting with several hundred employees at headquarters and in a few bureaus, including the Federal Law Enforcement Training Center.
If all goes well, the new system could influence how the Defense Department revamps some of its personnel rules and could become a model for other parts of the government.
The Northrop Grumman team will play a key role in providing research and technical assistance for the design of the pay system. Contract services may include providing program management support, "providing cradle-to-grave implementation support," conducting market research, educating managers on how to use the system, and developing a plan to replace more than 80 computer systems, according to a Department of Homeland Security fact sheet.
The company's contract could run as long as three years and pay Northrop Grumman as much as $175 million.
For fiscal 2005, the House Appropriations Committee has recommended that Congress provide $70 million for the design and deployment of the system and an additional $21 million to develop the technology for the system.
At Northrop Grumman's information technology division, Susan Wilson, director of civil solutions, and Jeffrey Zack, director of enterprise solutions, said they will focus on delivering research and recommendations aimed at helping the department operate more efficiently.
"We will be extra arms and legs," Zack said.
© 2004 The Washington Post Company
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