Price Tag Grows for Defense's Personnel System

The Defense Department's new civilian personnel system will cost more than the $158 million estimated by the Pentagon, a congressional report suggests.

And that "does not include the full cost that the department expects to incur," according to the Government Accountability Office, which prepared the report.

Left out of the estimate for implementing the National Security Personnel System from 2005 to 2008 are such direct costs as salaries for civilian and military personnel working on the project, and indirect costs, such as administration, research and rents, the GAO said.

Congress authorized the system in 2003, and Bush administration officials hope it can serve as a model for converting other parts of the government to a performance-based pay system. But the GAO report points out that the Pentagon does not know how much has been spent on the system in fiscal years 2005 and 2006, making it difficult for the Defense Department to advise other agencies that might want to replicate it.

A spokeswoman for the personnel project said that Mary E. Lacey, the executive in charge, has convened a financial work group to define direct and indirect costs. The group hopes to come up with a new cost estimate and recommendations for Lacey by mid-August, the spokeswoman said.

The National Security Personnel System, if put in place as envisioned, would change how the department's civil service employees are paid, promoted and disciplined. The system converts Defense civilians from the General Schedule, which tends to reward length of service, and seeks to more rigorously link raises to job performance. The changes will allow the Pentagon to better reward its best workers and reshape its workforce, officials have said.

Parts of the system, chiefly those involving labor relations, have been challenged by a coalition of unions in federal court, where an appeal is pending. The American Federation of Government Employees also has contended that the Pentagon had not realistically calculated the cost of training managers and employees in the rules of the system.

The system is being phased in and covers about 114,000 non-union employees. If completed as planned, nearly 700,000 Defense Department employees would convert to the system.

The GAO said the Pentagon's estimate included $51 million for the program's executive office and $107 million for program offices set up by the military services and other Defense Department agencies.

According to the GAO, the military services used different methods for estimating how much they would spend on the new personnel system. The accounting systems also did not capture the amount of funds obligated or spent, the GAO found. The Army, for example, filed quarterly reports showing that $9.8 million had been spent to implement the system, but only $6 million appeared in the Army's accounting system.

The GAO said that without better cost information, the Pentagon and Congress cannot compare how Defense Department agencies implemented the system.

Retirees to the Rescue

Congress sent legislation to President Bush yesterday that would make it easier for the State Department to use retired Foreign Service officers to help process passport applications and ease delays that have frustrated thousands of travelers this year.

The bill, sponsored by Sen. Charles E. Schumer (D-N.Y.), would permit the department to waive wage and hour caps on retired diplomats for the processing of passport and visa applications. Many retirees work for the department, but because they receive pensions, they are limited to assignments that do not exceed six months of the year and must keep their earnings below a certain level.

Schumer said his bill would permit the department to call upon a cadre of retirees with experience in adjudicating passports and help whittle down a backlog of several hundred thousand applications. Requests for passports surged this year as travelers sought to comply with a law that requires passports for all U.S. citizens traveling to other countries within the Western Hemisphere.

Routing passport processing has been taking from 10 to 12 weeks instead of the usual six, and the delays have disrupted travel plans, leading travelers to complain to members of Congress. "Hopefully, these experienced people will be at their desks this summer to help people get their passports," Schumer said.

This month, the State Department deployed about 230 presidential management fellows, career-entry civil service employees and recent graduates of those programs to assist in passport processing at centers in Louisiana and New Hampshire. Sixty junior diplomats were diverted to passport work at the centers and in Washington.

Stephen Barr's e-mail address isbarrs@washpost.com.