173. Letter From Secretary of State Vance to the Director of the Office of Management and Budget (McIntyre)1

Dear Jim:

I am pleased to send you for OMB clearance a draft bill2 to strengthen and improve the Foreign Service of the United States.

This bill will change the Foreign Service in fundamental ways:

1) by setting higher performance standards;

2) by simplifying and consolidating in one place all legislation concerning the administration of the Foreign Service;

3) by creating a compatible personnel and pay system for all employees of the USG (primarily State, AID and ICA) who are obligated to serve most of their careers abroad;

4) by making a clear distinction between personnel obligated to serve abroad and those who serve only at home; and

5) by increasing efficiency and economy in the administration of foreign affairs.

In particular the bill would improve performance in the following respects:

1) It would create a new Senior Foreign Service, comparable to the Senior Executive Service. Entry into the Senior Foreign Service would be via special threshold performance evaluation boards which would apply higher standards than those now applied to persons considered for promotion to the senior ranks. For example, a Foreign Service Officer in the Department would be eligible for consideration for no more than five times after which he would be retired if not promoted. Members of the Senior Foreign Service would be permitted to serve for a limited period of time in each of its three grades, and failure to achieve promotion to the next within that period would also lead to retirement. However, limited extensions of career appointments could be granted and extended on the basis of outstanding performance. The performance of all personnel in the Senior Foreign Service would be reviewed annually and provision is made for the separation of those whose performance fails to meet the standard of their class.

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2) The bill provides the authority necessary to institute performance pay in the Senior Foreign Service thus linking increased compensation directly to performance.

3) Separation for relative substandard performance would be extended to all members of the Foreign Service. At the moment it is limited to officers only.

This draft bill is a major contribution to the President’s effort to improve the management of the Government, and I hope that the Administration will support it strongly for that reason. I attach a draft Presidential statement to accompany the bill.3

This draft has been considerably improved through extensive consultations with OMB, OPM and with the other agencies primarily affected, AID and ICA. I would appreciate it if OMB would accord it an expeditious clearance.

Rapid clearance is important because Dante Fascell has scheduled hearings on the proposed bill to begin June 21 and has asked me to be the first witness if the bill is transmitted in time. I would like very much to testify on that date in view of my heavy commitments on SALT and the Tokyo Summit meeting, and I would appreciate it greatly if OMB would expedite final clearance in order to make this possible.


  1. Source: National Archives, RG 59, Personal Files of Secretary of State Cyrus Vance, 1977–1980, Lot 80D135, Chron June 1979. No classification marking.
  2. Not found attached.
  3. Not found attached.