169. Memorandum From the Under Secretary of State for Management (Read) and the Director General of the Foreign Service and Director of Personnel (Barnes) to Secretary of State Vance 1

SUBJECT

  • Areas of Consensus and Contention with Pros and Cons

A. Areas of Consensus

Since last November, consultations and discussions have been taking place in the Department, with the field, with other agencies immediately concerned, and with the Hill on the Foreign Service structure proposals. These have led to numerous adjustments, improvements and clarifications, but the major elements have not changed significantly since your meeting with us on April 20.2

Despite widespread initial skepticism and concern, there now appears to be broad support for many of the most essential features of the proposed new legislation, including:

(1) securing Congressional reaffirmation in a comprehensive mandate of the separate and essential mission of the Foreign Service in the period ahead;

(2) formal recognition of our dual Foreign Service-Civil Service personnel systems, with limitation of Foreign Service status to those obligated to worldwide service and conversion to Civil Service status for others;

(3) adoption of a single Foreign Service pay scale;

(4) not splitting any class;

(5) expansion of selection out for substandard performance to the entire Service;

(6) institution of multiple “up or out” procedures to assure more reliable promotion of the ablest and separation of the least capable;

(7) a statutory base for employee-management relations;

(8) institution of higher standards for promotion to senior rank by rigorous senior threshold selection procedures; and

(9) retention of senior officers based primarily on performance and needs of the Service and not seniority or age-related factors.

[Page 652]

B. Areas of Contention

Other important features or aspects of the proposed legislation remain controversial in varying degrees and with different groups and subgroups. Additional consultations are unlikely to produce consensus. Hearings of conflicting viewpoints by AFSA and others and decisions on the Department’s final positions on the proposals are needed prior to submission to OMB and the Congress. This section describes in the attached Tabs (A) eight principal contested proposals; (B) their pros and cons; and (C) the positions of interested parties insofar as they can be summarized:

(1) The element of risk — should there be comprehensive legislation or more limited amendments to the current Act;

(2) The Senior Foreign Service: (a) why needed; (b) entry—degree of rigor; (c) exit—increased reliance on performance rather than age-related factors; (d) performance pay as a device to motivate improved performance and to enable us to compete with the Civil Service; and (c) conversion from existing senior grades—mandatory, voluntary or selective;

(3) Authority for merit pay below the senior level—how competitive should the Service be below the SFS:

(4) Employee-management relations: size of the bargaining unit (should 110–150 additional inspectors, personnel and management people be excluded?) and scope of bargaining (AFSA is pressing for mandatory consultations on various new issues);

(5) Conversion of Foreign Service domestic service only employees to the Civil Service mandatorily by enactment of the proposals with benefits preserved vs. voluntary conversion or conversion by attrition over the years;

(6) Board of the Foreign Service—should its advisory role be based on statute or E.O. and should it continue to have a role in employee-management labor relations in view of the proposed new statutory base for such matters; and

(7) Spouse/Family Issues—should we attempt to create new benefits in bill over employee and OMB opposition or to attempt to retain existing benefits with limited marginal gains in other areas.

(8) Compatibility of Foreign Service systems and the relationship of the Civil Service system—the degree of uniformity to be imposed on agencies within the FS system.

[Page 653]

Tab 1

Paper Prepared in the Bureau of Personnel 3

1. A New Foreign Service Act or Amendments to the 1946 Act and Administrative Reform

Should we seek a comprehensive new Act to replace the Foreign Service Act of 1946, or only specific amendments where new legal authority is required and better administration of existing authority?

Proposal: Extensive new legislative authority, not just administrative reform, is necessary to remedy existing structural problems and to affirm the essential role of the Foreign Service in the period ahead. Comprehensive legislation rather than piecemeal amendments to the 1946 Act can best assure these objectives.

Pros Cons
Extensive legislation is required in order to: —affirm authoritatively the essential contemporary role of the Foreign Service; (Sec. 101, pp 1–3; Sec. 104, pp 6–7.)4 —convert to Civil Service status Foreign Service personnel who are available and obligated only for domestic service; (Sec. 2103, p. 166) —place employee-management relations on statutory basis; (Chapter 10, p. 112)—create a single unified Foreign Service pay scale and combine multiple personnel categories now impeding effective management; (Sec. [Page 654] 411 and 421, pp 21–2; Sec. 322, p. 16 and Sec. 331, p. 18.) Each of the legislative goals which is deemed desirable can be achieved through specific amendments, perhaps submitted over two or more years, rather than submission of a new Foreign Service Act.
—provide performance evaluation and selection-out for substandard performance for all FS personnel; (Sec. 601, p. 38, Sec. 603, p. 39; Sec. 642, p. 44.)
—recodify the Foreign Service Charter which now contains many redundant and obsolete provisions.
—improve interchangeability with newly reorganized Civil Service and provide comparable incentive payments. (Sec. 1201, p. 161; Sec. 441 and 442, pp 23–6.)
Specific amendments, which would have to be numerous and far-reaching to accomplish needed goals, also run risks of other amendments relating to special FS benefits. The latter are opposed by the same Members of Congress whether or not the Department submits any legislation. A comprehensive new Foreign Service Act would run the risks of amendments to limit or to end existing provisions of special benefit to the Service, e.g. mandatory retirement, early retirement after 20 years service/age 50.
A coherent, unified and comprehensive approach to updating the Foreign Service Charter and to suggesting the appropriate FS relationship to the Civil Service is the best way to affirm the essential mission of the Foreign Service. Features of Department proposals which parallel Civil Service reforms or promote compatibility risk renewed efforts to incorporate the Foreign Service in the Civil Service.
The structural defects listed above cannot be removed by administrative action. Multiple new authorities are needed to relate promotions, [Page 655] compensation and retention more closely to performance. Management has failed to use some of the authority it already possesses, such as Section 519 to remove former ambassadors not reassigned after 90 days. Why would new authority be used any better?

Opinions

AID: Limited concerns about comprehensive approach, but feels overall system proposed is “too harsh”.

ICA: Somewhat skeptical of need/desirability of comprehensive legislation, but willing to agree, if some changes are made largely in the compatibility features of the proposed Act.

OMB: Supportive of comprehensive legislation.

OPM: Supportive of comprehensive legislation.

BFS: “Recommends that only minimal legislation necessary to effect the basic purposes of the restructure plan be submitted to the Congress unless careful soundings on the Hill indicate that there is little or no risk in submitting an omnibus bill.”5

AFSA: Takes position that comprehensive legislation is undesirable and risky, and that any changes necessary should be made by specific and limited amendment.

Field/Departmental Responses: Most comments received support limited approaches, as advocated by AFSA.

Congress: Fascell and Pell have indicated willingness to work on comprehensive legislation. Staff soundings continue but views have not jelled significantly.

Tab 2

Paper Prepared in the Bureau of Personnel 6

2. Senior Foreign Service (SFS) (Sec. 101(b) (6), p. 3)

2. (a) SFS: Why Needed?

Our conception of the ideal Senior Foreign Service places high emphasis on quality and competition—a more dynamic body continuously renewing itself through movement upward of most competent people, with rewards both in assignments and compensation for those whose performance is outstanding. It would be a service in which senior numbers and the match of “skills” and “needs” can be more [Page 656] closely controlled than currently. For the first time, “officer” and “support” distinctions would be eliminated; all SFS members would be equal.

Some argue that the Foreign Service should not imitate the Civil Service by creating an SFS which parallels the Senior Executive Service (SES) to some degree. We think there are many advantages in doing so, principally: increased benefits and risks more closely related to performance; and greater compatibility between Foreign Service and Civil Service systems (in State, in other foreign affairs agencies; and in other Federal departments and agencies).

The Foreign Service should not be afraid of similarities to the SES system (some of which are borrowed from the Foreign Service); many basic differences between the SFS and the SES remain because of differing missions and requirements. The SFS would be a graded rank-in-person system which would employ selection out. In contrast, the SES is an ungraded rank-in-job system, with a “parachute” provision back to GS–15 for unsuccessful officers rather than selection out. SFS base compensation and performance pay would fall in the same range as established for the SES, but SFS performance pay would be determined by different principles based on the particular requirements of the Foreign Service, which serves worldwide.

The Senior Foreign Service is designed to encompass AID, USICA, and other foreign affairs agencies, as well as the Department.

We believe that unless a statutory, discrete Senior Foreign Service is created now, there will be considerable pressure for expansion of the Senior Executive Service to include presently excluded systems such as the Foreign Service. We conclude that it is highly desirable to have a parallel but independent SFS which is compatible with the SES for purposes of interchange, but which can be tailored more closely to unique Foreign Service career needs.

2. (b) SFS: Entry Mechanisms (Sec. 602, p. 38)

How should a rigorous threshold for entry into the Foreign Service be developed, which can meet the generally shared objective of maintaining a higher level of quality control, and simultaneously provide an earlier indication of senior career prospects to officers than is now possible?

Proposal: Upon reaching Class 1 of the new Foreign Service schedule (the current FSO/R–3–FSS–1 level), officers could choose whether and when to become eligible then or later for promotion consideration to the SFS. For FSO’s, a choice to compete would begin a limited 5 year period of eligibility. Different periods of eligibility could be established for non-FSO’s in State and for ICA and AID to meet differing circumstances. Alternatively officers could choose not to be considered, in [Page 657] which case they would leave the Service when normal Time-in-Class (TIC) limits expired. Those opting for promotion consideration but not selected by the end of their eligibility period would be required to leave the Service within a “grace” period of one year. New and more rigorous precepts, tailored to Service needs for specific kinds of skills, would guide selection boards in making their SFS promotion recommendations.

[Page 658]
Pros Cons
High performance rewarded and quality control enhanced; better indication of future prospects given sooner by a limited period of eligibility for promotion. A limited threshold period of eligibility could be unfair if an individual chooses to be considered for promotion, and then promotion rates are slowed because of external factors beyond his or her control.
Likelihood of “tombstone” promotions reduced by putting premium on high performance rather than seniority, and by selection board knowledge that tombstone promotions would require stronger justification on performance grounds. Period of eligibility should run for full allowable period for time-in-class without forcing officers to opt to be considered.
Through a supporting career development program, employees would have a better knowledge of what would be required of them to become senior officers, and an enhanced opportunity to gain the experience and skills necessary to pass the threshold.
For specialists, limited three year renewable appointments at top of occupational group would allow for retention of those most qualified, without requiring entry into the SFS in order to remain in the Service.
A difficult threshold to the SFS is necessary if retirement at the new Class 1 level is to become acceptable procedure. (Sec. 602, p. 38)

Opinions

AID: Initial concerns with fixed and limited threshold eligibility period assuaged by most recent draft of legislation providing for agency flexibility to set period and TIC limits, since longer periods needed for specialists.

ICA: Can accept threshold concept if it provides for agency flexibility; given very low FSIO promotion rates in recent years, a fixed five year threshold period would be too short.

OMB: No problems with threshold concept, but some see possible waste of talent if good officers forced to leave the system too soon.

OPM: Flexibility of management to set threshold eligibility more desirable than a fixed period, to preserve management options to meet evolving circumstances.

BFS: Supports modified proposal which “would permit the officer to determine when his/her five-year period of eligibility would begin,” so that (as the draft legislation now provides) “any designation of a specific time period should be addressed in the Department’s regulations rather than in the statute.” More generally, supports rigorous threshold criteria.

AFSA: This provision is unneeded, since rigorous threshold criteria can and should be negotiated under 1976 umbrella agreement.7

Field/Departmental Responses: Many raise specific questions about eligibility provisions, and more generally, echo AFSA criticisms.

2. (c) SFS: Exit Mechanisms

Are existing “exit” mechanisms from senior levels (mandatory retirement, Section 519 for former Chiefs of Mission not given new assignments, selection-out for excessive time-in-class (22 years now allowed in Classes 2 and 1), selection-out for substandard performance, voluntary retirement) adequate to ensure necessary turnover, or are diverse new exit mechanisms needed?

Proposal: All senior officers, after being promoted to the top available class for their occupational category, would serve on a short TIC, perhaps three years. At that point, selection boards would determine whether they should be offered limited appointments for (an) addi[Page 659]tional 3 year period(s) or alternatively, be retired. Management would provide “appointment renewal numbers”, reflecting Service needs in various categories, just as it now sets promotion numbers. Senior TIC limits at all levels would be shortened significantly for State. (Each agency would set its own TIC limits.)

Pros Cons
Senior retention would be based heavily on performance, rather than on arbitrary mandatory retirement age (which may be ruled out by Congress again soon anyway). Additional exit mechanisms are not needed, according to some; management has not used the tools it has effectively (for example, shortening senior TIC limits, using Section 519 provisions routinely).
Retention at the top would require periodic, positive selection board decisions. The limited appointment mechanism is untried and could prove to be difficult to administer fairly.
Limited appointments would apply to all, and not to any special subgroup as is now true for some exit mechanisms (existing Section 519).
Limited renewal appointments at the top grades are essential if TIC is to work independently of age factors. (Sec. 641(b), p. 43)
Availability of a variety of exit mechanisms permits greater certainty of maintaining adequate senior attrition.
Selection-out for substandard performance would apply to the entire Service for the first time—from present Career Ministers through staff corps. (Sec. 642, p. 44)
Recent experience with the suspension of mandatory retirement and long delayed pay raises (which reduced voluntary retirement [Page 660] substantially because of the “three year high” basis for annuity calculation) show that new and more equitable exit mechanisms based on performance are necessary if orderly attrition and therefore recruitment and promotion rates are to be maintained.

Opinions

AID: Prefers to use a “parachute” like the SES, rather than the TIC/Limited Appointment mechanism (the bill as drafted would permit this, using a separate reappointment authority in the Foreign Assistance Act but this may not suffice). More generally, has expressed opinion that the State proposed system would be “too harsh”.

ICA: Does not believe new exit mechanisms are necessary, in that recent administrative actions are held to have greatly reduced problem of “impactment” at senior levels.

OMB: No difficulties with limited renewable appointments or TIC limits being shortened.

OPM: Sees limited appointment as an innovative experiment, and is interested in comparing its effectiveness with that of the parachute provision of the SES.

BFS: “Serious doubts that broad application of the three-year renewable contract is the best mechanism for solving the problem of moving unproductive senior officers to retirement”; prefers reducing TIC limits instead.

AFSA: Sees some potential advantage to limited renewable appointments if procedures are negotiable. In general, thinks management has not used effectively the authorities it has. Supports significant immediate shortening of senior TIC limits.

Field/Departmental Responses: Modification of present administrative procedure would be sufficient to deal with senior surplus, e.g., reduction in senior TIC, greater use of Section 519. One AFSA election slate would favor additional inducements for early voluntary retirement. Some, however, suggest using limited renewable appointments for the entire SFS.

2. (d) SFS: Performance Pay (Sec. 441, p. 23)

Should a performance pay system similar to that already legislated for the Senior Executive Service be instituted for the proposed Senior Foreign Service?

[Page 661]

Proposal: Currently, salaries for career officers in the Foreign Service are “capped” at $47,500 (which may rise to $50,800 in October, depending upon Congressional action). In contrast, Senior Executive Service salaries can reach a maximum of $66,000 for a few, and a large proportion will have total compensation in the range of $55,000. The proposal is that in exchange for “removing the cap” on SFS salaries, the additional compensation over current levels would be awarded on the basis of performance, through decisions of selection boards. Base pay would be between $44,756 and $50,000 (perhaps $52,800 after October), and up to one-half of SFS members could earn up to 20 percent of their base pay as performance pay.

Pros Cons
Unless such a change is legislated, the principle of equal salary possibilities for senior civil servants and for the Senior Foreign Service, in effect since 1946, will be undermined. This would weaken the competitive position of the Foreign Service, making it more difficult to attract and keep the caliber of officers needed. Some hold that performance pay would cause internal divisions within the Service, by forcing supervisors to recommend only some employees and not others.
Allow SFS members to have the same salary potential as SES members, who may be working side by side with them in the Department. Would increase the level of professional competition, which is already high enough.
Ties additional compensation directly to performance. Selection Boards would have an additional burden in making the judgments necessary to award performance pay.
The Foreign Service selection boards already rank officers for promotion purposes and this would not add substantially to their existing duties.
The Foreign Service system is better prepared in general than the GS system to build on existing evaluation [Page 662] systems to devise a means of awarding performance pay fairly.

Opinions

AID: Supports, but prefers six-level base pay structure like SES, rather than three-class system proposed. Also desires that performance pay award be made totally by management action.

ICA: Supports, but somewhat skeptical of workability and practicality.

OMB: Supports, but holds performance pay should be awarded on a “lump-sum” basis to emphasize it is not an automatic part of regular compensation.

OPM: Supports strongly.

BFS: “. . . serious reservations concerning the introduction of performance pay at any level in the Service.”

AFSA: Generally opposed to performance pay, but less concerned than about merit pay below senior levels.

Field/Departmental responses: Some fears that performance pay will be awarded to “favorites”, and that it will encourage policy conformity and/or divisive in-fighting. Also a number of comments that it will be difficult to administer.

2. (e) SFS: Conversion from Current Status (Sec. 2102, p. 166)

Should all current senior officers be converted mandatorily to the SFS by legislative action? Should they have a period of time to join or else leave the Service? Should the qualifications of all current senior officers be assumed to meet SFS standards, or should there be a screening process by selection boards before SFS membership is offered?

Proposal: The qualifications of all current senior officers would be accepted as meeting SFS standards. Conversion would be mandatory and would take place upon the date the SFS comes into existence. (Alternative: there would be a three-year period for conversion, at the end of which an officer must have converted, or leave the Service.)

[Page 663]
Pros Cons
Will avoid considerable operational problems and equity issues which might arise from accepting some officers and denying others, all of whom were promoted to senior ranks by similar selection board deliberations. “Blanketing-in” of all current senior officers forfeits an opportunity to insure immediate gains in quality at the top.
Will insure that all senior officers are in the same system, whereas under voluntary conversion, we would have two senior systems for an extended period of time. Current senior officers should be allowed not to join the SFS with its added risks and benefits, just as Civil Service “supergrades”8 can opt not to join the Senior Executive Service.
Would place all officers at senior levels on a shorter TIC at the same time and under the same circumstances.

Opinions

AID: Agrees to mandatory, “blanket-in” provision.

ICA: Has raised informally the desirability of the selection-in/voluntary approach.

OMB: Accepts mandatory, “blanket-in” approach in current draft legislation.

OPM: Same as OMB.

BFS: Does not address issues because Board doubts need to create SFS at all.

AFSA: Has no firm position.

Field/Departmental Responses: In general, surprisingly few comments. Individually officers are interested in details (automatic inclusion vs. “selection-in”; options available to those who decline entry in system is voluntary; how contrasts/new TIC limits will be implemented).

Tab 3

Paper Prepared in the Bureau of Personnel9

3. Merit Pay Below the Senior Foreign Service (Sec. 442, p. 25)

Should legislative authority be sought which would allow the Secretary to establish a system of merit pay for some or all of the Foreign Service below the senior level? (Merit pay would mean that a propor[Page 664]tion of salary, that currently represented by step increases, would be distributed on the basis of performance, rather than essentially automatically.)

Proposal: We propose to seek legislative authority permitting but not requiring the Secretary to establish a system of merit pay for the Foreign Service, in lieu of within-grade salary increases. We do not propose to use any of the October comparability (“cost of living”) adjustments, although 1/2 of the comparability increase will be used in the GS system. Our intention would be to defer establishment of such a system until experience with merit pay gained from its use at the GS-13/15 level, at the Senior Executive Service, & performance pay in the Senior Foreign Service is available. This would permit additional study, resolution of possible operational problems, and consultation/negotiation with employee representative organizations before such a system is initiated, while acknowledging that we support the principle of linking Foreign Service compensation more closely to performance. If such a system is initiated in the future, it is planned to make merit pay awards through the selection board process.

Pros Cons
Supports concept of tying compensation to performance, as will be true for Civil Service, while allowing more cautious and discretionary development and implementation of merit pay system Some hold the merit pay concept is flawed in that awards to top performers can only be made by depriving others of step increases
Allows any merit pay system to be negotiable with employee representative with respect to precepts to guide selection boards Some believe impact will be divisive for the service, and that merit pay is inappropriate for rank-in-person system where rewards come by promotion
Will reward the better performers more frequently than promotions can Merit pay for GS is limited to managers/supervisors; since this is a difficult distinction to make in the FS, basis for awards may be more difficult to establish
Improves on current situation, which allows virtually everyone to get an annual merit step increase and is difficult to [Page 665] justify and vulnerable to attack in the current political climate Award of merit pay will place additional burden on selection boards

Opinions

AID: Permissive approach suggested above seems acceptable.

ICA: Same as AID.

OMB: Legislation should either contain a more developed plan, including how merit pay will be funded, or else no merit pay provision should be included, with specific legislation being sought later when it is desired to begin such a system.

OPM: Willing to accept permissive authority as way to finesse the issue for the moment; but strongly believes if such a system is begun, the funding formula must be the same as for the civil service (that is using all of the “step increase” funds and one-half of the current comparability increase funds); we think in inflationary period, it is a mistake to use any of the comparability funds.

BFS: “. . . serious reservations concerning introduction of performance (merit) pay at any level in the service.”

AFSA: Opposed to merit pay for reasons listed in “Con” column; permissive approach and deferral of implementation, with precepts being negotiable may reduce opposition somewhat.

Field/Departmental Responses: Same as AFSA. In addition, there are some fears the system will become politicized and be used as a tool to encourage policy conformity. Some support for concept, provided funds do not come from step increases.

Tab 4

Paper Prepared in the Bureau of Personnel 10

4. Employee-Management Relations: Size of Bargaining Unit and Scope of Bargaining (Chapter 10, p. 112)

Given general (but not complete) agreement that a statutorily-based labor-management relations program, similar to that afforded to most other Federal employees until Title VII of the Civil Service [Page 666] Reform Act of 1978,11 should be established in the proposed legislation, should there be changes in the size of the bargaining unit or in the scope of bargaining as provided currently under E.O. 11636?12

Proposal: Employee-management relations would be established on a statutory basis in Chapter 10 of Title 1 of the proposed new Act. A Foreign Service Labor Management Relations Board (Sec. 101, p. 121) would be established consisting of a representative of the Federal Labor Relations Board and two other members mutually agreed upon by the three foreign affairs agencies and the exclusive employee representative organizations of each. In addition to those currently excluded from the bargaining unit, personnel managers, inspectors, security officers, OPM and OMB recommend that all supervisors be excluded (Sec. 1022, p. 131). The scope of bargaining would be limited to issues which are currently consultable/negotiable, although AFSA would like to see additional issues covered (Sec. 1023, p. 131). The right of judicial review of decisions made by the Foreign Service Labor Management Relations Board would be established (Sec. 1013, p. 125).

Pros Cons
Now that Civil Service employees have statutory base, it is unrealistic to try to withhold from Foreign Service employees. Gives potentially greater opportunity for employees to limit the exercise of managerial flexibility.
By agreeing to legislation now, Department should have more effect on its provisions than if dragged in later. Moves toward greater formalization of relations; hence, more legalistic and adversarial; management versus employees.
Advantageous to have labor relations program designed specifically for FS-Department relations rather than trying to use different organization originally established for other purposes. The right to seek judicial review of FSLRB decisions may lead to increased litigation.
A legislated collective bargaining program will diminish any impression of unchecked management [Page 667] power over the fortunes of employees
Additional proposed exclusions from the bargaining unit would reduce conflicts of interest inherent when distinction between management and employees is obscure Additional exclusions from unit will be strongly opposed by AFSA/AFGE
Would help meet OMB/OPM concerns that maximum number should be excluded from the bargaining unit Additional exclusion may cause some employees who spend only a part of their time in excluded functions to feel unrepresented
Maintaining current scope of bargaining preserves existing management rights Even current scope of bargaining is broader than OPM, OMB would like
Continuation of current scope keeps a known pattern of what is bargainable which has worked reasonably well Proposed draft does not provide strong written guarantee that implementation of new features of plan will be negotiable, which AFSA strongly desires (but to do so would diminish management rights)

Opinions

AID: Agrees with proposal but would like to see more positions excluded from the bargaining unit.

ICA: Same as AID.

OMB: Would prefer caution in acquiescing to union desires for a statutory system unless other gains are possible in return. The maximum number of employees should be excluded from the bargaining unit.

OPM: Concerned with (a) supervisors being included in bargaining unit, (b) lack of a union involvement in grievance procedures.

BFS: Agrees to not having an active role in the program, but desires an oversight function.

AFSA/AFGE: Strongly support basic proposal for statutory base, but want fewer exclusions from the bargaining unit and more limitation on management. Discussions continue. For AFSA (AFGE position unclear), a sine qua non for acquiescence to innovative features of other proposals appears to be considerably expanded area of negotiability (scope of bargaining); but OPM/OMB would have great difficulty with this.

[Page 668]

Field/Department Responses: Limited comments, but those received supportive of a statutory base for labor-management relations.

Congress: House Post Office and Civil Service Committee staff would prefer as close a parallel to the Civil Service system as possible, in order to avoid reopening delicate issues confronted during legislative consideration of Civil Service Reform Act.

Tab 5

Paper Prepared in the Bureau of Personnel 13

5. Conversion of Foreign Service (domestic service only) personnel to Civil Service (Sec. 2103, p. 166)

Should the approximately 600 State and 900 ICA employees who are available for service domestically only, and who in keeping with the clear separation of the Foreign Service and the Civil Service proposal should be transferred to the GS system, be converted mandatorily with saved pay and benefits, or should this Foreign Service domestic category be eliminated through voluntary conversion and attrition?

Proposal: Seek legislative authority to convert FS (DES) employees to GS status mandatorily, but preserve their current pay, benefits, (including retirement system), & to the greatest extent possible, grade equivalents (perhaps through creation of special senior civil service positions for transitional purposes).

Pros Cons
Would preserve important employee property rights, while providing the fastest possible transition to the proposed new “dual” personnel system. (Sec. 2104, p. 168) Mandatory conversion with saved FS rights would leave ICA and State with a group of GS employees who have different and generally better pay and benefits than others at comparable levels (but of course this is the current situation, except for different “labels”)
Would emphasize the seriousness of management’s intention to [Page 669] operate a dual system, and to carry out the separation of the employee population into two distinct categories, thereby protecting special Foreign Service retirement and other benefits based on worldwide availability Could cause a serious difficulty for ICA, which has concluded a formal agreement with AFGE in December 1977 that there would not be mandatory conversion (although preservation of FS rights through legislation might change the seriousness of this problem)

Opinions

AID: Not affected.

ICA: See Cons above.

OMB: In principle, agrees with the need to provide “grandfather” provisions and a trade-off for quick separation into “clean” GS and FS systems.

OPM: Same as OMB.

BFS: Supports mandatory conversion.

AFSA: Supports mandatory conversion, if rights can be preserved.

AFGE: Strongly opposes mandatory conversion, even with grandfathering of rights, in part because they apparently believe that grandfathering will not be possible, and that management might proceed with mandatory conversion even without such provisions.

Field/Departmental Responses: Similar to those of AFSA and AFGE as reported above; worldwide available personnel support conversion, domestic service only personnel much more skeptical.

Tab 6

Paper Prepared in the Bureau of Personnel 14

6. Board of the Foreign Service

Should the Board of the Foreign Service be given a statutory base (which it once had but was later removed)? Is its composition appropriate for current circumstances? Should its labor management relations and separation appeals functions be transferred to the proposed new employee-management machinery?

[Page 670]

Proposals:

We propose that the BFS continue to be governed by Executive Order rather than by statute;15 that the EO be revised (a) to include representatives of management in its membership (as previously was the case before labor-management relations and grievance functions were assigned to the Board); (b) to transfer its labor-management relations oversight functions to the proposed Foreign Service Labor Relations Board and to a Foreign Service disputes panel independent from but attached to the FSLRA; (c) to move its responsibilities for hearing separation appeals to the Foreign Service Grievance Board; (d) to make State membership on the Board more broadly reflective of the Foreign Service as a whole; and (e) to expand user-agency representation.

The BFS proposes that it should have a statutory base; that it should continue to have responsibility for advising the Secretary on the functioning of the labor/management relations structure (including disputes, unfair labor practice complaints, consultability issues, and elections for representation rights). The current disputes panel should also be retained.

Management agrees with the BFS that the Board should continue to: serve as an advisory body to the Secretary with special responsibilities to review implementation of Foreign Service responsibilities to user agencies; and ensure maximum compatibility among State, AID, and ICA systems. It also agrees that AID should come under the Board’s review in the same way as State and ICA.

Pros Cons
Focuses BFS on work it does best—representing user-agencies and coordinating three foreign services. Non-statutory base may reduce potential impact and weight of Board recommendations.
Transfers labor-management relations functions to bodies better suited to do this work. Board independence might be somewhat reduced by inclusion of management representatives.
Supports Administration’s policy of reducing number of statutory advisory groups.
Allows Secretary greater flexibility than under [Page 671] legislation to shift BFS responsibilities and membership.

Opinions

AID: Not clearly expressed, but would like some form of statutory oversight body, in order to meet Hill criticism.

ICA: Not expressed.

OMB: BFS should not have a statutory basis, in keeping with the Administration’s policy to minimize the number of statutory bodies and commissions to the extent possible.

OPM: Suggests that BFS should relinquish its labor management relations and separation appeals responsibilities to the FSLRA and the Foreign Service Grievance Board, respectively. Does not believe the BFS requires a statutory charter.

BFS: See above.

AFSA: Supports a statutory role for the BFS.

Field/Departmental Responses: No comments.

Tab 7

Paper Prepared in the Bureau of Personnel 16

7. Spouse/Family/Dependent Issues

The present draft bill retains all provisions of law granting rights and benefits to family members which have been enacted in recent years. In addition, it modifies various provisions of the 1946 Act, as amended, to improve benefits for family members. In particular:

—It provides for “special” consideration of family members rather than “equal” consideration in filling overseas positions (Sec. 333, p. 19);

—In authorizing representation allowances, it specifically provides for reimbursement of representational expenses incurred by family members (Sec. 461, p. 31);

—It provides for training and orientation grants to facilitate functional training for family members, whereas the present law authorizes such grants only for orientation and language training (Sec. 704, p. 52);

[Page 672]

—It authorizes payments to a former family member of annuity payments on the basis of state court decrees of divorce, annulment or separation, as in the case of the Civil Service (Sec. 864(b), p. 93); and

—It authorizes continued medical care for family members for overseas service related illness or injury beyond the dissolution of marriage to a Foreign Service employee, whereas present law allows such continued health care after employees’ death or separation from the Service (Sec. 921(e), p. 111).

Lesley Dorman and Janet Lloyd will raise three additional priority issues:

1. Survivor Benefits: They will urge an amendment to Section 821 (p. 64) to require written permission by the spouse before an employee is authorized to waive the right of survivor benefits for such spouse.

2. Property Rights and Divorced Spouses: They seek legislation that would enable state courts to determine at any time respective property rights of parties to a divorce in future annuity payments. (We had this in an earlier draft of the bill, but OMB took exception because this provision raised issues affecting government employment in general.)

3. Civil Service Job Credits: They want to acquire career service status and participate in a government employee retirement system based on cumulative service in part-time, intermittent employment. (We know that OMB and OPM would oppose this provision and recommend strongly that we do not include it in the pending bill.)

Tab 8

Paper Prepared in the Bureau of Personnel 17

8. Compatibility of Foreign Service System(s) and Relationships to the Civil Service (Chapter 12)

To what extent should the Foreign Service be a compatible “government-wide” personnel system, with its members assigned to the various Foreign Affairs agencies, rather than a “personnel authority” which is used on an individual agency basis by State, AID, and ICA? How closely should the Foreign Service system parallel the Civil Service?

[Page 673]

Proposals:

Our proposals as a package are intended to bring about a more coordinated government-wide Foreign Service system, particularly at the Senior Foreign Service level, and to allow the Secretary to play a stronger role in bringing this about. At the same time, major efforts have been made for each agency to retain the freedom of action necessary to carry out its own mission effectively.

The philosophy behind the proposals with respect to relationships with the Civil Service system is that there must be enough compatibility (particularly of pay and grade structure) to allow easier interchange between the two systems and to insure that the Foreign Service is not disadvantaged relative to Civil Service; but that at the same time the unique circumstances and conditions of employment of the Foreign Service require special provisions, in particular a rank-in-person system in which employees rotate periodically from assignment to assignment, retention of earlier voluntary and mandatory retirement ages, and “up-or-out” principles.

Pros Cons
Proposals would permit considerably easier interchange between systems than at present, while at the same time largely eliminating existing anomalies such as unearned promotions as a result of transfer. Some feel a closer link of pay and grade structure with the GS system runs a risk of the FS eventually being made a part of the GS system.
Proposals should bring us considerably closer over time to a “Foreign Service of the United States” as was the original goal of the 1946 Act, and as has been recommended numerous times since. Some elements of the proposal can be seen as reducing agency autonomy in operation of personnel systems to meet special agency needs (in favor of more authority for the Secretary to maintain a more integrated Foreign Service system).
Compatibility features have considerable potential for cost savings and greater efficiencies.

Opinions

AID: Would prefer even closer relationship to GS system than is proposed, in view of needs to convert relatively large numbers of [Page 674] employees from one system to the other in the near future. Shares a concern with ICA that the goal of compatibility among the Foreign Service systems not impede agency independence of action.

ICA: States strongly that the proposals cannot be endorsed if they can be construed as limiting in any way ICA’s autonomy of action as endorsed by the Congress.

OMB: Favors as much FS/GS compatibility as possible; and as much compatibility among Foreign Service systems as it consistent with unique agency needs. In general, would prefer the FS to adopt procedures bringing it closer to the GS system, but unlikely to insist on this at this time.

OPM: Emphasizes need for easy GS/FS transferability, but does not assert that this requires a “grade for grade” match of pay scales. Feels the FS system should take into account but not necessarily copy the GS system. Finds virtue in improved compatibility among the agencies using the FS system.

BFS: Desires greater compatibility among the agencies using the FS system.

AFSA: Concern about borrowing too much from the GS system. Supports idea of compatibility among the Foreign Affairs systems.

Field/Departmental Responses: Almost no responses received from ICA/AID, but some questions from State employees about how new FS system will be integrated with ICA/AID. Some responses also reflect the concerns listed in the Con column above.

  1. Source: National Archives, RG 59, Records of the Under Secretary for Management (M), 1978–1979, Box 8, Chron May 12–16, 1979. No classification marking.
  2. See Document 165.
  3. No classification marking.
  4. Citations refer to the draft legislation, no copy of which was found.
  5. See Document 167.
  6. No classification marking.
  7. Not further identified.
  8. GS 16–18.
  9. No classification marking.
  10. No classification marking.
  11. P.L. 95–454. See Document 160.
  12. See footnote 4, Document 164.
  13. No classification marking.
  14. No classification marking.
  15. Reference to E.O. 11636.
  16. No classification marking.
  17. No classification marking.