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Foreign.
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Hi, I'm Santor Ruiz. Welcome back to Statecraft. It's been a little while since we've been on and today we have a special repeat guest, Scott Cooper, director of the Office of Personnel Management. Welcome back to the show.
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A
Glad to be here.
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B
It's good to have you on again. You were on something like six months ago, I think.
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A
That's right. Yes. I was a real newbie back then. So we're, you know, I know a little bit more today than I did when we first talked.
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B
A little more seasoned. At least in the federal government, you've had a storied career outside. And we've also got Scott's senior advisor, Noah Peters. Noah, welcome.
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C
Thank you. Great to be here.
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B
Big fan of the show, longtime listener, first time caller.
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A
Exactly right. Exactly. It's very exciting.
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B
So for those who were not listening six months ago, the Office of Personnel Management, which Director Cooper directs, one way of thinking of it is like this department that sets the rules for the various HR departments in the federal government. It's the people function in the federal government. And in the last episode we did Scott, we talked a bunch about your vision for hiring in the federal government for talent. We talked a lot about this was shortly after the big Doge wave. We talked about different visions of what talent in the federal government should look like. Today. I want to spend a little bit more time with you on a particular slice of the talent question, which is something known as veterans preference. Only the real sickos, I think, who listen to Statecraft will know what veterans preference is. So I want to start by having you explain the concept for me and then we'll get into whether it's good, whether it's bad, whether it can be improved.
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A
Absolutely. Yeah, I'll start. And my colleague Noah also should feel free to weigh in. So just for people who aren't as familiar with it, the basic idea and veterans preference typically kind of shows up in the hiring process. And then as we're going to talk about also, it's also shows up in things like the RIF process, for example, where we might be, you know, RIF, meaning reduction in force, where we might be reducing headcount. But the basic idea, and this has been in place for a long time, and it's a, you know, it's a congressionally mandated preference, is that, look, we think veterans are very valuable overall. And then when we think, for example, about hiring, in addition to whatever skills and merit people bring to the job, we are expected and required to also give some preference to veterans. Above and beyond what kind of their score would be based just purely on the skills they bring to things. So just to give you a quick sense, like in most hiring, not always, but most hiring, there's kind of a 100 point scale at the end of the day where, you know, kind of we add up, you know, all the feedback we get from people and your qualifications. And typically a veteran will get between 5 and 10 points of incremental points added to their, what their otherwise score would have been. So, and the difference tends to be, I think, and Noah can correct me if you're kind of, you know, more fully disabled versus, you know, kind of a traditional veteran who may have come out without any ongoing disability. And so if you just mathematically you think about that, out of 100 points, you get 5 or 10, which means basically you have a 5% or a 10% mathematical preference in terms of your comparison, how you might look with other candidates.
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B
So here's, here's my first question. Currently, veterans make up close to 30% of the federal workforce. Outside of, you know, people in active service, like the civilian workforce, veterans are almost 30%, which if I remember correctly, is something like half a million employees, give or take.
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Yep, I think that's right.
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Is that 5 to 10% boost? What's led to that? Has veterans preference just been applied in that way historically? And that's why we've got almost a third of the federal workforce veterans or. I've seen stories of veterans preference being applied such that only veterans were considered for the final slate for a job, even if other people were much better qualified. Similar stories where the way veterans preferences have been applied has meant functionally, certain jobs only go to veterans irrespective of merit. How much has that been a factor in the application of veterans preference over time?
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C
Santi? It's a little bit of both. So veterans, you know, have often when they have their military service, they'll have a natural connection to some of the work and missions of federal agencies, especially the Department of War, which is the largest civilian employer. Also talking about a lot of law enforcement rules throughout the federal government. Right. Veterans experience will enable them, will train them, prepare them for those roles better than most.
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B
There's no surprise that veterans are at least overrepresented in the federal government. That doesn't seem crazy to me.
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A
And just so the listeners know, by the way, like, roughly, I think the number is, veterans represent about 5% generally of, you know, U.S. workforce population. So to your point, they're certainly overrepresented in government at close to 30% relative to their representation in the broader workforce.
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C
Exactly. And it's not the same in every department. So like VA and Dow have much higher percentage of veterans than something like the EPA or the Department of Education. It's not uniform and it does vary, which shows that it's not all preference driven. A lot of it's driven by qualifications, background, interests of the veterans. However, it's a little bit of both, too. With traditional competitive hiring, the veterans preference is substantial. It's conceptualized, as Scott said, as additional points on the scale. There's also a specific law that's very long standing that says that disabled veterans have to be listed first. First on a. What's called a register of eligibles. So there's even heavier preference for disabled veterans, and that's, you know, determined by point scales and VA ratings. So it's definitely both. And the preference for veterans is a real thing. It meaningfully places people who are veterans ahead of others. Not to get too technical, but the reason we call it preference eligible is, is because in some circumstances there can be family members of deceased or disabled veterans who also get a precise.
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B
I don't want to put either of you in a hard spot, but I'll just think out loud here. There's been a huge rise in the number of veterans who are listed as disabled in the past decade, I believe. I'm curious what you think of that trend, and I know that's outside of your control, that's a VA question and a DOD question. But it sure seems like there's been a remarkable spike in the number of veterans who are veterans preference eligible for these rules.
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C
Yeah.
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And look, I don't. You're exactly right, which is those determinations obviously happen outside of opm, so I'm not sure that we have any great insight into it. Look, I don't disagree with your characterization, which is, yes, if you look at numbers, certainly those numbers have gone up. I don't know how to compare that against obviously, what the disability rates, you know, should look like relative to kind of, obviously, people who have been putting their lives at stake for servicing our country. But I think your point is right. And look, you know, I think certainly there's things like that that may certainly contribute to the higher representation of veterans, you know, overall in the workforce, since, as Noah mentioned, disability can be a higher kind of preference ordering in terms of additional points that somebody can get in the system.
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C
And I do want to say that some of it may be because there's more knowledge and awareness of some of all the benefits that veterans have. So some of it may not be nefarious. Right. I think that there's been a big concerted push over the past couple decades to really make veterans aware of all the benefits that they're eligible for. So it may also just be more, more awareness in the past, it might have been more opaque in the Internet era, people can find out more what they're eligible for.
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B
Totally. And you're right. Maybe this is a better, better question for another Statecraft episode with someone from the va. I wouldn't describe it as nefarious either. I think people respond to incentives and the incentives have changed, as you've described, Noah. So we've been talking about veterans preference in hiring. That is, if I apply for a job and an equally qualified veteran applies for the job, the veteran's going to get a boost for having been a veteran. Ditto if they were disabled in their service. What about in firing, which is where you guys have been spending more of your time recently? Where does veteran's preference show up in riffs? Reductions in force is the, the term of art for government firing. Basically, I'll gloss it that way.
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In the current system of RIFs, and as we'll talk about, obviously, we have some proposed regulations that we put forward to address changes in the current situation. Essentially. Think of the way to think about the preferencing order period in rifs. Putting aside just the veterans preference is the first kind of, you know, decision that you make when you're putting together what's called the RIF register is what tenure class do people belong to. And I don't want to go too inside baseball unless you want to. But basically there's kind of three tenure classes. Either like, you're here for greater than three years, you're here kind of, you know, in like, you know, something less than that, or on a probationary type job, or you're kind of a temp worker, essentially. Basically. So there's kind of three classifications, but.
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B
So it's not a linear. The longer you've been here, the more points you get.
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Not at this first cut, it gets more complicated. But yes, at this first cut. Okay, we say great. So let's just use Santi. We say, Santi, you've been here for five years. You go into that three plus group. So number one, you're in the most favored group, period, based on the fact that you've got three years plus of service. And then within that group, then we do apply veterans preference. So if you are a disabled veteran, you would be at the top of that group. If you are a non disabled veteran, you would be, let's just call it in the middle. And then if you are neither of those categories, you would basically be at the bottom of that list. And then within that list, then there is further gradation which is kind of based on what we call length of service, which you might say it sounds like tenure, but it's a little bit more granular. It does sound like tenure in that point, actually. You know, kind of the years actually do matter, right? So if you've been here for five years versus 10 years, the 10 year person will get, you know, some additional, let's call it preference again, for lack of a better word, that's adjusted or modified by your performance. So as you probably know, Santa, we've talked about most people get ranked one through five at the end of the year. Five being the best, one being the worst. Some agencies have four letter systems, some have three letter systems. But at the end of the day,
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you get a score, you get a
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score, and then that score can then add to your points as well. So if you're a five for the last three years, then we will kind of take the average of those last three years and add that onto your score. So at the end of the day where this gets really unfortunate and complicated is we put into, you know, you're putting together this like really ugly spreadsheet which has all these various inputs on it. And then we literally kind of say, great, number one on the list, Santi, he's at the top of the list. Good news, he's not touched in this thing. And we just kind of keep going down the list based on that amalgamation score that you get. So that's kind of the current rule today. So there's think of it as time based preference category preference plus veterans preference plus time based preference. And then finally, with an adjustment for performance, basically.
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B
Right. I want to get into the details of the rule you guys have proposed for changing how those reductions in force are run. You're prompting a kind of more philosophical question here for me. And then I want to get into the details. But you've done a lot of hiring and firing in your time in the private sector. And I'm curious. Obviously OPM operates within the constraints that Congress sets the law as a law. But this process for firing is obviously not the process that many entities in the private sector follow. You have private sector companies of far more latitude generally fire people. And to determine who gets fired through the process that they determine in any given moment in hiring, there's states like Texas where you can hire somebody who walks in the door, who you met off the street. And not every state is like that. Different states have different rules. But there are certainly states where it's much easier to hire states and municipalities where you can just say, I think this person's really talented. I'm going to make a spot for them. At a philosophical level, one of the main reasons people are opposed that in the federal government is that it creates an opening for patronage or corruption or petty graft or giving your cousin a plum job.
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All of which we did in our history, basically, right?
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All of which were very real phenomena. And the current system is a response to that moment. Philosophically. Just before we get into the specific rules that you're proposing here on this very narrow question of veterans preference, what should the federal approach be to hiring and firing? How do you balance between the demand for merit on the one hand and the kind of fear of patronage and corruption on the other? What's your perspective?
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I'll give you my thoughts and obviously notice weigh in here as well is, look, I think you want to get as close to what I would consider a merit based system, right, where we actually are hiring people based upon their unique qualifications they bring to a job and that we have an ability to actually assess those qualifications in a way that we think is confident. Right. So if you're applying for a software engineering job, you know, there are lots of ways we can give you coding tests, right, As a way to determine kind of, you know, it doesn't make sense to hire you or not. And I do think you're right, which is, look, I think the whole idea of the patronage system and avoiding that is, is important. And so there's got to be some balance there. I think, you know, in my own mind, just as someone who's now kind of had a chance to study this and compare to what happens in the private sector, I think we've gone, my personal view is we've gone way too far in terms of kind of concerns around patronage related issues to create a system that is very rigid both on the hiring side and on the, you know, let's call it firing side, as much as I hate to use that word, but like on the ability of agencies to actually reshape their workforce for what they need to do. And look, as you saw, and you know, obviously Noah was, you know, here for this time period, the reason why people like Noah and others had to invent this deferred kind of Resignation program that we called drp, right. Which was where the vast majority ultimately of the roughly 300,000 people who left government last year, that's the, that was the mechanism by which they exited was because traditional things like riffs, for example, or being able to say, hey, you know what, like we really think we need 10% fewer people across the board. Let's just kind of give agencies the ability to kind of go look across their organizations and you know, do something like a 10% reduction in force. They're just practically, they're both in some cases legally and also just practically impossible to do in the organization. And so they built a very creative. But TRP was essentially a necessity to be able to give people some ability to reshape their organizations within the constraints of the rules. And a lot of what Noah and I, you know, kind of as partners here are doing at OPM is to try to really look at all those things and say, okay, how can we have a balance between the need for agencies to be able to kind of restructure their workforce where it needs to happen to reprioritize things? We haven't even talked about this, but obviously how do we, from a performance perspective, make it realistic that you can actually enforce accountability versus having to spend years in litigation trying to deal with these things within the ranks that we have? Which is, yes, like we do not want a patronage system. Right. We clearly don't want that. We don't want people hired or fired because maybe they like the current president, maybe they don't like the current president. Like those are not valid reasons. And I think certainly fight and protect those things. But we have handcuffed the ability of agencies to actually be able to reshape and both on the new hiring side as well as on the existing employee side, things that they needed to be able to do to actually make sure they can carry out the mission to the American people.
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C
I think that there's a lot of value because the federal government is such a high volume, big employer, and also to kind of backstop mission readiness and mission capability. The ability to do assessments which are not far from universal in the private sector, the ability to do real skills based testing, just given the volume of the applicants that we get in. The importance of the mission is pretty important. So I do think that that feature certainly makes sense just given the practical reality of the federal government, even beyond any anti patronage justification, which was of course the original justification for doing testing was the anti patronage one. But I think in general though, it is very complex and takes Too long. And there are too many, too many rules around it. Not all of them are necessary. The merit, we're trying to change them. You know, more to come on that on the RIFT side, the RIF regulations are so difficult and so intricate. They've evolved over the course of about 80 years through successive Civil Service Commission and then OPM rulemakings basically have been untouched for the past 40 years. They're really, really difficult to apply almost operationally, operationally very difficult. And it was a relatively small percentage of workforce reductions were actually through using these processes.
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B
So, three. Three questions for you guys that I'm going to throw to you. One, what is the problem for the public that this stuff is operationally complex? Like what? How does it cash out for the American people that you had to do this kind of elaborate deferred resignation program? Tell me about the proposed rulemaking that you guys have out on riffs and tell me why that's an improvement on the old system.
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A
Yeah, so let me hit the first one. Look, to me, the. The first one is a very simple answer, which is it's costly and does not give agencies the ability to actually serve the American people in the way that they see fit. So, look, drp, which was, you know, I certainly think was an ingenious program and very successful, but, you know, DRP is expensive. Right. We gave people effectively eight months worth of severance. Right. In order to voluntarily leave. And while agencies have the ability to accept or not accept somebody's drp, Right. So it was the case that they could do that. There's no question that you don't have the ability in all cases to control who it is that might ultimately decide that it's better for them to walk out the door than to kind of stay in the organization. So to me, again, that's a very. It was a required, but unfortunately a very crass way that you have to do these things, given kind of the way the Civil Service protection looks like. So in the perfect world, like, what you want is you want agencies to be able to say, hey, you know what? Like, we're doing these 10 things for the American people. Like, these are the most high value. We're understaffed there. We need more people there because that's critical for the American people. But the honest answer is number 9 or 10 in the list. Maybe we just don't need as many people there. And that's not rude or crass. It's just that every organization needs the ability to kind of look at its priorities and determine kind of how to staff against those priorities. And if instead you're stuck with a situation where you can't do that stuff, then basically your only option is increased deficit spending, which is just go ask Congress for more money to spend more money on items one and two on your list. Or basically it means that you continue to serve the American people in a way that's totally suboptimal. So to me it's pretty simple, which is like we're not doing that. And then, you know, the other piece, which, you know, I'll let Noah talk about what we're doing today is if you have a, if you have a rift based process that is really not focused on merit at the end of the day, that's also a real disservice to the American people because again, you know, where you actually go through all the hoops and try to do the rift stuff, if it turns out that, that you actually are getting rid of the people who actually might be the most qualified individuals. Because the way the rules work, again, like, I don't think we've done any service to anybody in that process.
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C
Yeah, I think you captured very well, Scott, which is that we're moving towards a system that places performance first as the initial, the initial kind of ranking factor. We want to move to a system that's actually a little more like how hiring veterans preference is applied in hiring, where you applied a set number of points for veteran status and for disabled veteran status. So kind of operationalizing preference veterans preference in the same way that it's done in hiring, actually giving more veterans preference points than you would under the hiring system, the hiring point system, given that it's a smaller, we're using a smaller scale. So the percentages are something like 25% for a disabled veteran and something like 15% or non disabled veteran or other preference eligible. So that's just going to make the process, we think, a lot less painful when you go through the rifts, because at least at the end of the day there's going to be some assurance that employees were rank ordered based on some measure of merit, which is their last three performance ratings. We understand performance ratings are far from perfect. We've talked about some issues with them before. Namely not enough differentiation. But they're going to be better at the end of the day than tenure or length of service is kind of what we believe. And the other thing is just to make the, the operational burden of conducting a RIF somewhat more manageable to do so. It's not this incredibly the costs of doing rifts are very high. And it's not just the costs to the employees in severance fee. There are kind of these deadweight costs of agencies having to have. Create the lists. QC the lists.
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QC the lists, meaning check, double check. Quality control.
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A
Yeah, sorry. Yeah, yeah, yeah.
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C
And there's also a lot. There's a tremendous amount of operational complexity because it's different HR systems feeding into one another to create the RIF register and everything in the employees. If the employee's records are wrong, it can create cascading errors. The bump and retreat system also creates cascading effects.
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B
No idea what that is. Fill me in.
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C
Sorry. That's.
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A
Oh, wow. This is exciting. Okay, now this is. This is one of my favorite parts of this.
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C
Sorry, getting way too technical.
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B
No, no, no, no, no. This is good, but you need to teach me.
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C
Yeah, yeah. So bump and retreat is basically, as Scott was describing, the hierarchy of the tenure groups and in the subgroups within those groups for veterans, and then the length of service and performance credit. The process by which you. Unless you're eliminating the entire unit, the process by which you determine the employees who will remain after the RRIF is called, kind of colloquially, it's actually called in our regulation, bump and retreat. It's kind of the metaphor of somebody from a higher tenure group bumping somebody in a lower tenure group and somebody within the same tenure group retreating to another position. It's kind of an unfortunate series of metaphors.
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B
Explain that one more time to me. What happens in bump and retreat?
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C
So what you do is you've set aside the number of positions that are going to remain at the end of the rif, and then you build your register, and as you run through the register and determine, make the determinations, this person is over this person, this person is over this person. That process, because it involves people from different tenure groups kind of bumping one another off or retreating within the context of the register. That's kind of referred to as bump and retreat, which is the process of this number of people who are at the agency fitting into the number of slots that the agency has determined will remain at the end of the rif. And then applying what's called assignment rights within that group is kind of colloquially known as bump and retreat. And these can have cascading effects across the organization. When you're going from like, 50 positions to five positions, or maybe you're going from 50 positions to 25 positions. So you're reshuffling the deck of who's at the agency, and you're doing it based on this rank ordering system. And so that's kind of what bump and retreat is.
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A
A very specific example I think would be the concept of retreat is, let's say like I get eliminated on the RIF register, right? Or at least on the first cut. You know, in theory my name should come up. I think if there is a lower graded job that is still available that, that we are keeping the organization. In theory, I could retreat, meaning I can say I was a GS13. I'm willing to take a GS12 that's staying in the organization and I can basically have preference over the person who otherwise normally would have gone into that 12 because I'm willing to basically take a downgraded position and retreat from. From where I was.
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C
That's exactly right. You're determining how many positions will remain within the position categories and within the unit in which you're conducting the ref. So yeah, that. That's right.
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A
As long as we're getting kind of geeky on this, there's a second piece and Santi, maybe you know about this, but that we refer to as CTAP and ictap.
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B
No idea. Goodness.
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A
I'll try to give you again the. My layman's understanding it and Noah can correct me. Let's assume a RIF has happened now, okay? And let's assume that, you know, I did get rift. And then let's say tomorrow the agency puts out a job description for some new job maybe that, you know, they didn't have before. I can apply for that job. And I don't know, I don't know numerically Noah would know how it works. But I will have a preference over any other candidate because I was rift. And therefore in the hiring of this new position, I can basically get additional points and additional kind of preference over an otherwise potentially more qualified candidate because I was subject to a rif.
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B
Is that a good idea? Is that wise rulemaking on the part of the federal government?
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A
My personal view is, look, I think if we go back to the fundamental principles, which is we want the right people in the right seats for the right jobs to ultimately deliver for the American people, I would like to get to as close of a pure merit based system as possible. I think if you were to talk to hiring managers in government, this is a challenge because again, the extent of that preference can be quite significant. It doesn't mean that everybody who got RIFT isn't qualified, but certainly it means you might have befitting a square peg in a round hole in some respects.
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B
I mean, you can imagine a World in which I'm rift. I'm just truly not qualified for the role I had. And then I come right back in, in the application for another role and you have to take me on.
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C
Yeah. To be fair though, you do have to be qualified for the position. And that's the same thing with bumping and retreating is there's guardrails to make sure that you're qualified for the position. The problem that an ICTAP has, you know, you have to be qualified. The problem that ICTAP can create for hiring managers if there's somebody who is like on paper qualified for the position. Right. But they just, you know, you, you hear that they were just terrible to work with at their old agency and they led to the failure of numerous projects. Right. Still have to hire that person given the rules. And so that, that can be really, can be really tough if you have somebody who's just like a known bad quantity.
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B
Sure. Not that they're literally unqualified for the role. If I'm just really difficult to work with and I got riffed.
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A
Although you, you would. In a merit based system, you would think considering somebody's. If, if working with other people is part of the job description, you would hope that you could actually take that into consideration. Unfortunately, I think, yeah, in practice these things become very difficult.
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B
Yeah, that makes sense. Well, we've gotten deep into the weeds here and I'm, I'm grateful. Finish out here, if you don't mind, by helping me understand what your risk proposal is. And you know, I'll tack on a question here. Who's against it? Who doesn't like it?
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A
Let me try to kind of up level it a little bit. So look, basically, if you recall, in the old way or the current way of doing rifts, because obviously we're still going through the regulatory process, you essentially, you know, tenure and time and service really are in many respects double counted, which is basically, you know, there's a huge preference associated with how long you've been in the seat, basically. Okay. And then on top of that, as we've said, of course there is veterans, veterans preference too. The basic way to think about what we're trying to do in this new system is to say, look, the most important criteria for determining where you fall should be actual performance. And so we're going to start with giving you, you know, three years of, of credit based upon the ratings that you receive. So in our model, for example, if you receive a high, the top, top rating, you get seven points per year. So if you have three fives. Every year you get, you get a 20, you get a 21 points to start with. And then we apply veterans preference on top of that. And so depending upon whether you're disabled or not, you will get between 3 and 5 incremental points added to that score at the end of the day. Okay, and then, and then our proposals, look, that's, that's it. That's how we do it. Now if it turns out Noah and I are tied after that, then we can look at, you know, 10 year length of service, right? We can say, hey, okay, great, whatever. Ty goes to Noah because he's been here longer than I have. Okay, that seems totally fair. But what we're trying to invert is like performance should be the number one criteria and the tie factor is tenure. Whereas today basically, essentially years of service coupled with veterans preference basically determines who's on the other register or not.
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B
Makes sense. So the proposal is basically to invert the current model of things that give you points without taking any of these things off the table entirely.
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A
That's exactly right. Even as Noah said, actually even on a numerical basis, veterans preference actually is even more consequential. Right. Because if the total number of scores in theory you could get is 21, if you got seven points for every five rating you get for three years and you're a disabled vet and we give you five points on top of that, you now have five out of 10, 26. Is veterans preference like that's, you know, 20 plus percent or something almost of a preference. That's even more than the, than the 5 or 10% that we were applying in the hiring situation. So, so to your question, who's against this? Look, I think I'll just say it, I guess colloquially look as anybody who believes that time in seat is more important than performance would be against that.
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B
Who might that be?
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A
My own view of that are, is people who are not excited about kind of high performance cultures basically. And maybe people who aren't performing well wouldn't like the system because certainly if you've been here a long time and you're continuous not performing well, you're going to fare worse under this system than you were. So like there's probably some people like that. I don't want to paint unions with a single brush. But certainly if you're looking for much more parity and more kind of again, time based promotional and time based kind of, you know, tenured opportunities, my guess is, you know, if you sampled most folks from a union perspective, they probably prefer that type of mechanism over a pure performance based system. Those would probably be the areas. I mean, I think we've seen comments on the veteran side. They haven't been that many and I think some of them just are, are not, have not actually dug deep enough into the rule to actually understand what we're doing with veterans preference, which is actually, as we mentioned, you know, preserving if not even increasing the percentage contribution of veterans preference. But I would say the former two categories are probably the most substantive objectors. Noah, is that fair?
- [29:47]
C
Yeah, I think the objection is that you're having people compete against each other based on kind of performance based factors in a direct way, much more so than under the current system. And that's been the objection is you're turning kind of categorical hierarchical system, which can feel like a right to somebody who's been in the government for a long time. Right. Or, you know, you're turning that into a much more performance based system where the difference between the ones who are going to be capped and the ones are going to be let go will actually be performance. It won't be something like how long have you been in the seat? In all cases. Sometimes that will matter. You know, veterans preference will matter, but there aren't going to be these kind of absolute hierarchical categories. And so there have been some folks who have objected to that aspect of it and said, you know, these feel like kind of rights to us and we don't like them. You know, we object to them being kind of watered down with a new system. And there's a lot of resistance to, there's a lot of resistance to changes, I think it's fair to say, within the federal workforce, especially from people who've been in the government for a very long time.
- [31:02]
B
Let me ask you about the strategic approach here. Knowing that it's totally possible that there's another administration after this one which is much more attentive to what public sector unions want out of it. Let's imagine that we talked, I guess, six months ago about how you make sure to bring Congress along, how you make sure to build a kind of base of support for these reforms so that they don't get overturned in 2030. How are you thinking about that right now for this stuff? There's entities that would love to get rid of this rule as soon as they can. How are you thinking about making sure it's durable?
- [31:37]
A
Yeah, I'll give you, I'll give you my quick thoughts and Noah can share his look, in the perfect world, yes, we would codify everything we're doing here from a legislative perspective. So that, yeah, to your point, we don't run the risk of people basically just rolling back regulations. I'm not an expert in this area, but look, my view is just when I look at kind of the priorities that Congress has and quite frankly, the ability to ultimately get things done for a legislative perspective. Anecdotally, like when I talk to, you know, congresspeople, I think most people agree with the general ideas that we're talking about, which is okay, yes, like merit is important and skills based assessments are important and how people perform in a job is probably the, should be the primary determinant of whether they get promoted or fired or rift. Unfortunately, I just think the realities of where we sit today make it such that, you know, kind of it's probably prohibitive to get anything done meaningful in this area. But maybe I'm jaded in my short tenure here in Washington, but, you know, no, you've been around D.C. much longer than I have.
- [32:33]
C
Well, I would say that I think that there's hope here. DoD in 2017, 2016, 2017. So it was under the late Obama administration during their last NDAA was directed by Congress to adopt a performance first RIF system and did in early 2017. And there, there was a slight rollback of the language in their particular RIF provision. So it doesn't say performance first anymore. But they kept their current system and they never changed it because they felt that it fulfilled their mission better when there was a need to downsize. They didn't want to go to a system with tenure and length of service and kind of the categorical hierarchical system that the current regulations create. So I think that in terms of just like core mission delivery, given limited budgets, given limited time, and really there's so much value in having a performance first RIFT system that I do think that there's certainly hope that it's not just going to be a light switch where it goes back the other way. And I certainly, you know, the current rules are just so incredibly unadministrable just from a technical standpoint. I do think that if you were to just kind of go back to the old rules, some of it would be a little bit difficult to justify.
- [33:55]
B
That all makes sense to me. This is basically like a, you know, us trying to forecast what Congress actually wants or cares about. Right. I feel like there's evidence on both sides. There's evidence that Congress doesn't really care about the hassles it creates for agencies in administering this or that rule. And I guess there's evidence in the other direction that hopefully the work you do will be so effective that it'll be obvious even to people who might have preferred the status quo, that it would be foolish to go back.
- [34:20]
A
I think that's right. Look, I'll give Congress the benefit of the doubt.
- [34:22]
B
I won't. But you should, like on the first
- [34:24]
A
part of your comment, like, look, I guess maybe I'm wrong, maybe, maybe I'm too nice. But like, I don't think Congress intends to create really impossible to administer rules.
- [34:32]
B
I just wonder if they, if they care one way or the other.
- [34:34]
A
The complex of the federal government has gotten so darn complicated that like, you know, it's practically impossible for them to be able to actually adjudicate in a way that would be very precise just because like, the domain expertise you need is incredible. I think I mentioned this to you, but look, anecdotally, I think as I've talked to both Congress people and senators, I think everyone agrees there are reforms needed in the federal workforce. So I think that's not even no matter what side of the aisle you're on. And obviously, look, people have stronger views depending on where they may sit. But I think everyone agrees generally that we do want to hire people as close to possible based on merit with making sure we don't have patronage there. And I think the challenge obviously that you have is just given how polarized obviously people. People are today, everything gets viewed from the lens of whatever their disposition is on these topics. Right. And so changes that Noah and I are proposing that seem totally logical to us, to somebody else, you know, their immediate thing is, well, that's a patronage thing and you must be doing that for patriot purposes. So I am maybe not as optimistic as Noah is, but I'm optimistic in the sense that the things we're talking about actually are fairly rational stuff. I'm hopeful maybe, yeah, that if we can get past some of the, you know, budget reconciliation, all fun things that are happening these days and maybe we get past a midterm election and people are like, okay, like now it's time to actually address some of these issues. You know, I think there's at least a modicum of hope that that may happen.
- [35:49]
B
I'll leave you, Scott, with a couple questions. Following up on our last conversation last year, we talked a little bit about the balance between federal headcount with full time employees and the contractors, the federal government employees to do lots of things. And in several episodes on Statecraft, we've talked about how that Balance has shifted over time. How? In the Clinton years there was a big reduction in force and part of the challenge was the contractor spend and the contractor headcount basically increased to fill that void. So we didn't overall, you know, across all the people working for the federal government in some capacity, we did not actually shrink, you know, quote unquote, headcount in that broad sense. Even though there are a few people on the payrolls, you and many other people in this administration as well as I think increasingly folks on the Democrat, Democratic side of the aisle, including folks like my mayor Zoramdani, have expressed a lot of interest in cutting back in the amount of contractor spend because it's just more expensive often than doing things in House. Six months on more or less from our last conversation, where are we on this? Are there places where OPM thinks it makes sense to bring in more headcount to replace? Congressman, give me your view of where we are right now.
- [37:01]
A
So first of all, just from a guidance perspective, how we've been talking about both internally to OPM, but also as we talk to other agencies, reviewing, if you recall, like for the first time we had agencies submit headcount plans as part of their planning. And we're just about to kick off obviously in partnership with our friends at OMB, kind of a new 28 cycle. Look, the guidance that we've been giving and that we've been talking about internally is you need to add your contractor spend and your FTE spend and treat that as a single bucket, basically. And the question is like what's the optimal mix of that spend? And we should not, you know, we should not have this world which is they're totally independent things that we don't talk about. At the end of the day. Look, those are all headcount related expenses. The question is what's the optimal. And look, the guidance we've been giving is there's nothing wrong with contractors. Contractors are, you know, are, are good people. At the end of the day the question is like you can use contractors though, where you truly have like time based needs where you have to surge capacity. But you know, there is a definitive end date that is a reasonably short term end date, not like 10 years from now. And number two is if there's just some reason why there's a specialized set of skills that we cannot recruit because we don't pay competitively or you. Whatever, whatever the answer is like. And so we're really trying to encourage people to go through the budget and say look, like if you have Areas that fall outside of those two buckets. You really ought to look at it, I can tell you. And this has been publicly talked about, you know, Jared Isaacman has made a big push on this inside of NASA and I think he's publicly announced, I may get this number wrong so you can confirm it. But I think he's publicly announced that there are 3,000 contractor roles they've identified that they want to bring in house not only because they will save money, which is definitely true because you know, look, on a per unit cost we clearly pay more for condors. But more importantly, he's like, look, these are mission critical things where these are skills that we just have to have and we have to have in house and we've got to like own those, own those skills, we've got to develop those individuals because these are core competencies of the organization. We can't afford to basically have them not living in a better organization. I can tell you. In our organization, you know, the biggest area where we have a lot of contractors, we did a huge elimination last year. So we reduced by almost 2/3 the number of contractors that we had.
- [38:58]
B
What was that area?
- [38:59]
A
It was, I mean there it was literally across the board, like we had contractors everywhere basically.
- [39:03]
B
Give me some examples just, just for color of the kinds of contractors certainly
- [39:07]
A
in our CIO organization like a massive, probably, you know, even today, I can tell you even today we have, you know, on a per headcount basis, we have 50% more headcount and contractors than we do FTEs in our CIO organization. And that number before, when we got here January 21st of last year, a lot of this got done before I got here. No end team were part of it, but it was probably three times what the number was like. It was like huge. So biggest area was cio, our Human Resource Solutions HRS group. There were a lot of contractors there. And again some of these are legit and make total sense. So we reduced our number by about 2/3 last year and now the biggest opportunity that we have and we're going to go through is looking at our CIO organization again to take another look at it and say what are those things that are so critical and mission critical that we should be doing? And I think we will reduce very substantially again that number. This is not like reduce it and don't have the skill set. It's reduce it but and replace it with people who are going to be full time employees in the organization who we think can carry the mission forward anyways. I'd Say the short answer is I think we're doing better. I know like over at treasury there's a big push on this. So there's definitely, I would say the good news is I think we brought visibility to this issue in a way that agencies are looking at it. We're nowhere, done, we got a lot of work to do. But I think it's raised to a level of kind of interest now that it just hadn't been before. And to your point, we're avoiding the situation, which is you get this yo yo effect of FTEs and contractors going in opposite directions like you, like you described, for example, in the Clinton administration.
- [40:29]
B
That's a good visual for me.
- [40:31]
A
Yeah. And look, by the way, you know, I probably talked about, look, this is not just a government thing, by the way. I've seen this happens in the private sector too all the time, which is we tell people you got to have a 10% reduction in headcount and they do two things. One is they do it but they lay off like the least costly people, basically. Which, you know, we didn't really mean 10% of your people, we meant 10% expenses. Right. And so number one is they don't actually deliver 10% expenses even though they deliver 10% headcount. And then they just naturally say great, like, okay, now I need to go spend this money on contractors. So this is not a unique problem, but the only solution I know of to this problem is you have to help people understand that you have a single budget number of headcount related expenses and it is the addition of those two factors, FTEs and contractors together.
- [41:10]
B
Your answer leads me to my last question here. You were talking about the number of contractors on the CIO side, on the, on the technology side of your stack. You thought a lot about the composition of the work of the federal workforce in tech sectors. And I think there's like a cross cut where the federal workforce all in all is less technologically savvy than we'd like it to be and is does not have as many young folks who are technologically savvy. Especially as you'd like it to be something like, what is it? 7% of the federal workforce is under the age of 30. At least one of your flagship initiatives has been Techforce, which is trying to hire in technical talent to the federal government. There's been reporting on the speed at which you guys have been getting that up to speed. But even when that's kind of fully on board, that's going to be low four digits. If I Remember correctly, of thousand thousand
- [41:58]
A
people target for the first cohort.
- [42:00]
B
I guess I'm curious just to close here, how are you thinking about getting more young folks in beyond programs like Tech Force?
- [42:07]
A
So one of the things that we're working on, and Noah has also been a big part of this, is look, there's kind of Tech Force is a very discrete project, right? As we talked about, around particular skills more generally, we have launched a broad early career effort. In fact, for your listeners, if you go to earlycareers.gov, you can see all this, which is we have set forward a goal, which is an incredibly ambitious goal to get to a third of new hiring to be early career. Now again, as you mentioned, starting from a 7% base across the workforce. It's very ambitious and we recognize that. But like, look, we're here to try to do bold things basically. So look, I think there's a couple things we have to do to make this successful. Number one is we have to go find the people where they are and tell them why that's actually interesting for them to come to government. Like, we have to tell them the cool projects we're working on and what it means for them to be not just patriotic, but for them what it does for them in terms of career development. And we have not told that narrative at all very well. We've told them a narrative which is come to the government and have job security for 40 years. Like that's a terribly not compelling narrative for anybody, at least in today's generation in that age cohort. So we're going to do that. And so part of early careers is literally you're going to see us on college campuses telling the story, meeting people where they are using the technology platforms, things like handshake that like college students are used to using to kind of communicate with. And so you're going to see us do that. Our crack social media team here is going to help me actually, you know, communicate in a way that's effective to people who don't want to read my ridiculous Twitter diatribes. So we got to do all that and then look, we've got to make the hiring process as simple as possible. So like we don't want a 22 year old to have to navigate looking at 50 different job descriptions for the same project manager job across different agencies. Like we are going to simplify that process and have a canonical project manager job description, period. And then that job may appear at HHS and IRS and others, but like we can centralize the description of that we can centralize the ability of that person to find it. So that if you say you're interested in a project manager job, my goal is like, we should go tell you, hey, great, based on your experience and you decided you're open to D.C. but you also maybe want to be in San Antonio, Texas or something. Great. It turns out these three different agencies have jobs in those areas for you, like, knock yourself out. Let us go like connect you there. We got to work on the back end process. So look, it's still the case that the idea of kind of pooled or centralized hiring is just something that's still not that familiar to government, to be completely honest. And so a big thing that Noah and I spend a lot of time thinking about with our teams is, okay, great, we can do a great job recruiting top of funnel. But at the end of the day, you got to connect the dots between that and some hiring manager that may be sitting, you know, in some organization in HHS in their, you know, Annapolis, Maryland office or something. Like, how do we get that person to think about pooled hiring and kind of, you know, working within the constraints of kind of early career hiring just in a different way. So those are all like great challenges and opportunities for us and we're super excited about it and like we're going to absolutely make it a priority. But these things are heavy lists. But I have no doubt that we'll figure out a way to do it.
- [44:57]
B
I'll just say, speaking for myself, as somebody who was looking for a job in D.C. right after college because I had to go propose to my then girlfriend, it would have been easier if more of those roles were on handshake because I spent a lot of time on handshake as a 22 year old.
- [45:11]
A
You may be beyond our target market now. You will, you can give us some feedback on handshake. Now.
- [45:17]
B
My younger, my little siblings who are graduating shortly will be neighbors our way.
- [45:22]
A
Yes, exactly.
- [45:23]
B
That's right. Well, Dr. Cooper and Noah Peters, it's been a pleasure. Thank you for joining.
- [45:28]
A
Thanks, Andy. Appreciate it.