American forces press service (Nov. 25, 2003): Chu calls Authorization Act "transformational".

WASHINGTON -- The Defense Department's top personnel and readiness official called the fiscal 2004 National Defense Authorization Act "transformational" for its support of the department's aim to change to confront the threats of the future.

President Bush signed the act into law during a Pentagon ceremony Nov. 24. The $401.3 billion budget funds the department through Sept. 30, 2004.

David Chu, under secretary of defense for personnel and readiness, spoke about the personnel provisions of the legislation. "The department is very grateful for Congress's action in passing the act," Chu said during an interview.

The under secretary said the act is historic and will allow the department to rewrite those rules that need to be modernized for DoD to be effective in the early 21st century.

The act doesn't give the Bush administration all it wanted in the personnel realm, Chu said, but it does substantially advance the agenda on three key fronts. "First, it has given us authority for a new era in how we manage and treat our civilian personnel--the National Security Personnel System," he said.

Second, he said, the act provides a better balance between environmental stewardship and the training needs of the Department of Defense.

Finally, the act continues to support the transformational aspect of military compensation, Chu said. The act provides for an across-the-board military pay increase of 3.7 percent. In addition, mid-grade officers and mid-grade noncommissioned and petty officers will receive targeted raises of up to 6.25 percent.

On the civilian personnel side, the legislation sets up the National Security Personnel System. The system is a new way of managing DoD's civilian workforce, and was a centerpiece of Defense Secretary Donald H. Rumsfeld's transformation efforts. The new system will make managing the civilian workforce easier and will allow defense managers to reshape the force to respond to the challenges of the 21st century, Chu said.

"We have great civilians in the department, but frankly they, as an institutional element of the department, were handicapped by the rules in which we had to operate," he said. "What this does is liberate us from the perceived restrictions of the past. It gives us a modern transformational way of hiring people, advancing them, reassigning them."

The system also will give the civilian workforce a whole new pay construct called "pay banding," which will include pay for performance. "We will be moving away from the general-schedule system," Chu said. "This allows us to be much more competitive in terms of setting salaries, and allows us to adjust salaries as duties change."

The change will make it easier for defense managers to reward top performers. Chu said. "It will be helpful in terms of recruiting, because it says to a young person, 'This is the kind of organization that if you are a high performer, you'd like to join,'" Chu said.

The legislation also gives the department a new way to negotiate with unions. Now the department will be able to bargain at the national level on cross-cutting human resource issues, the under secretary said.

"It's now our job to implement the act," Chu said. Department officials will communicate with workers and listen to their suggestions. "One of the first things we will resolve is who gets to be the first group of employees to join this new system, and how is that transition going to unfold," Chu said. He is appointing an implementation team and said he will have the answers shortly. He added that employees will start to see changes from the new system in 2004.

The under secretary also spoke about the environmental provision of the authorization act. He said the changes to the Marine Mammal Act and the Endangered Species Act recognize that DoD is a good steward of the environment. He said that when many DoD installations have been closed, the areas make "extraordinary wildlife areas because we kept out development."

But there has been an increasing clash between stewardship and military training, he said. "It is critical that our people train in a realistic way: that they are prepared, and they know exactly what to do when they hit the ground in a combat environment," Chu said. The changes Congress made will allow the military to do just that, he added.

DoD officials still believe the pay of a mid-career NCO still is a little short of comparable salaries in the private sector, so another targeted pay raise is a possibility. "Ultimately it's the president's decision to make," Chu said. "I can't commit to what we're going to do, but I do think we will look seriously at this (targeted pay raise) again. We want to be fair to our people, especially with the burdens they bear."