Human Capital:

Posthearing Questions Related to Proposed DOD Human Capital Reform

GAO-03-965R: Published: Jul 3, 2003. Publicly Released: Jul 3, 2003.

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On June 4, 2003, GAO testified before the Senate Committee on Governmental Affairs at a hearing entitled "Transforming the Department of Defense Personnel System: Finding the Right Approach." This letter responds to a request that we provide answers to posthearing questions from Senator George V. Voinovich and Senator Thomas R. Carper concerning the proposed Department of Defense (DOD) Human Capital Reform.

GAO found that it is critical that agencies or components have in place the human capital infrastructure and safeguards before implementing new human capital reforms. This institutional infrastructure includes, at a minimum (1) a human capital planning process that integrates the agency's human capital policies, strategies, and programs with its program mission, goals, and desired outcomes, (2) the capabilities to develop and implement a new human capital system effectively, and (3) a modern, effective, credible and, as appropriate, validated performance appraisal and management system that includes adequate safeguards, such as reasonable transparency and appropriate accountability mechanisms, to ensure the fair, effective, and nondiscriminatory implementation of the system. As we noted in our high risk series, modern, effective and credible human capital strategies will be essential in order to maximize performance and assure accountability of the government for the benefit of the American people. GAO was pleased that both the House of Representatives' version of the proposed National Defense Authorization Act for Fiscal Year 2004 and the proposed National Security Personnel System Act contain statutory safeguards and standards along the lines that we have been suggesting to help ensure that DOD's pay for performance efforts are fair to employees and improve both individual and organizational performance. In our view, it would be preferable to employ a governmentwide approach to address certain flexibilities that have broad-based application and serious potential implications for the civil service system, in general, and the Office of Personnel Management, in particular. The authority DOD is seeking is not directly tailored to meet department-specific needs. In addition, DOD has not provided a written justification for much of its proposal. Nevertheless, DOD does need certain additional human capital flexibilities in order to facilitate its overall transformation effort.

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