RELIEF FROM OMB MANYEAR CEILINGS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86-00024R000100030023-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 16, 2016
• Document Release Date: July 1, 2005
• Sequence Number: 23
• Publication Date: December 18, 1981
• Content Type: MF

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OGC 81-10691
18 December 1981
MEMORANDUM FOR:,/
Chief, Legislation ivlslon
SUBJECT: Relief from OMB Manyear Ceilings
Attached is a background paper in preparation for
our meeting on the above subject on Monday, 21 December
at 1400 in 5E-11 Headquarters. The purpose of the meeting
is to decide whether or not to seek relief from the OMB
Full Time Equivalent manyear ceilings through the FY 1983
Intelligence Authorization Bill.
STA
STAT
cc: D/Finance (Mr. Sherman)
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MEMORANDUM FOR:
FROM:
SUBJECT:
17 December 1981
Full Time Equivalent (FTE)
Personnel Management
1. Change in Federal Personnel Management Concept. Until
recently, federal agencies managed their personnel in accordance
with authorized personnel end-strengths established through the
congressional budget process. An agency could have no more
employees on the closing day of the fiscal year than the number
of personnel authorized for the agency's end-strength for that
fiscal year. Authorization of agency end-strengths, combined
with dollar budget limitations, constituted the principal tool
for managing the size of federal agencies' work forces. Recently,
on instructions from the Office of Management and Budget (OMB),
federal agencies have converted from the authorized end-strength
concept of personnel management to the Full Time Equivalent (FTE)
concept of personnel management. Under the FTE concept, federal
agencies manage their personnel resources in accordance with
a manyear ceiling OMB establishes in the budget process. An
agency must carry out its mission during the fiscal year without
exceeding by the end of the fiscal year the number of manhours
of worktime authorized for that agency. To illustrate simply
the difference between the end-strength and FTE concepts, the
personnel management ceilings for a given fiscal year of a
small federal agency with close to 10,000 employees might be
expressed as follows:
End-Strength Personnel Ceiling Meaning
10,000 Employees On 30 September (last
day of fiscal year),
the agency cannot have
more than 10,000
employees
FTE Personnel Ceiling Meaning
20,800,000 manhours
(10,000 full time employees or
equivalent, multiplied by 40
hours per week, multiplied by
52 weeks per year)
During the fiscal year,
the agency cannot use
employees for more than
20,800,000 hours of work
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2. History of the FTE Concept. In September 1977,
President Carter authorized OMB and the Civi.1 Service Commission
to conduct a pilot FTE personnel management program. For the
participating agencies, 1/ OMB established manyear ceilings
representing the maximum number of hours their employees could
work in FY 1979.
In October 1978, Congress enacted the Federal Employees
Part-Time Career Employment Act of 1978, P.L. 95-437 (50 U.S.C.
3401 et seq.) 2/ which provided in pertinent part:
"In administering any personnel ceiling applicable to
an agency (or unit therein), an employee employed by
such agency on a part-time career employment basis
shall be counted as a fraction which is determined by
dividing 40 hours into the average number of hours of
such employee's regularly scheduled workweek. This
section shall become effective October .1, 1980."
(5 U.S.C. 3404)
Although this provision could properly have been carried out
with personnel ceilings based on end-strength, OMB viewed
enactment of this provision as a sign of Congressional support
for FTE manyear personnel ceilings.
In April 1979, the Office of Personnel Management (OPM),
successor to the Civil Service Commission, favorably evaluated
the pilot FTE personnel management program. OMB extended the
FTE requirements to five Cabinet departments for FY 1981. 3/
In February 1980, OMB decided to extend the FTE requirements
to the remainder of the federal government beginning in
FY 1982. 4/
On 30 July 1980, the Director of the OMB issued OMB Circular
A-64 (revised) which requires all federal agencies to prepare
budget estimates relating to personnel requirements in terms of
full-time equivalent employment. The Circular requires all
federal departments and agencies to manage their personnel in
ll The participating agencies were the Veterans
Administration, General Services Administration, Environmental
Protection Agency, Federal Trade Commission, and the Export-
Import Bank.
2/ The Act does not apply to the Central Intelligence Agency.
5 U.S.C. 3401(l)(vii) ("agency" does not include CIA).
3/ The five departments were Agriculture, Education, Health
and Human Services, Housing and Urban Development, and the
Treasury.
4/ OMB reported to Congress its intention to move to FTE manyear
ceilings in FY 82 in its FY 81 budget submission. Special Analyses,
Budget of the United States Government, Fiscal Year 1981, 280 (1980).
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accordance with the FTE manyear employment ceilings effective
FY 1982, which began 1 October 1982. OMB and OPM monitor agency
compliance with FTE manyear ceilings through agency monthly
reports to OPM. 5/
3. Department of Defense Exemption from FTE System. Section
904 of the "Department of Defense Authorization Act, 1982,"
P.L. 97-86 (1 December 1981), establishes a new section 140b of
title 10, United States Code:
"140b. Prohibition of certain civilian personnel management
contraints.
The civilian personnel of the Department of Defense
shall be managed each fiscal year solely on the basis of
and consistent with (1) the workload required to carry
out the functions and activities of the Department,
(2) the funds made available to the department for such
fiscal year, and (3) the authorized end strength for the
civilian personnel of the department for such fiscal
year. The management of such personnel in any fiscal
year shall not be subject to any man-year constraint
or limitation."
The Department of Defense won this statutory exemption from the
OMB FTE manyear ceiling requirements over strong OMB opposition.
a. Department of Defense Position. The Department of
Defense (DOD) objected strongly to OMB imposition of the
FTE civilian personnel management requirements on DOD.
The Department argued that the FTE controls constrain DOD
managers much more than existing end-strength and dollar
budget controls, to the extent that DOD managers will be
deprived of the personnel management flexibility essential
toDOD missions, particularly those related to maintenance,,
construction, and repair, which have greatly fluctuating
workloads. DOD also argued that OMB had not sufficiently
tested FTE controls since OMB's pilot program had not
included agencies with functions remotely resembling those
of DOD. Finally, DOD argued that FTE controls cost more
to administer than do the existing end-strength and dollar
budget controls. 6/
TT Departments and agencies submit Standard Form 113-G
(Report of Full-Time Equivalency/Workyear Civilian Employment)
to OPM monthly. See OMB Circular A-64 (revised) and FPM Letter
298-11 (23 September 1980).
6/ DOD also expressed concern that OMB failed to provide
guidance on how OMB would treat under manyear ceilings DOD's
100,000 foreign indirect hire personnel engaged in U.S. defense
activities overseas.
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b. Office of Management and Budget Position. OMB
strongly opposed exemption of DOD from FTE civilian
employment ceilings. OMB would not grant DOD relief itself,
nor would it clear DOD requests to Congress for legislative
relief. Thus, the OMB-cleared version of the FY 1982 DOD
Authorization Bill (S. 815 introduced by request by Senator
John Tower, Senate Armed Services Committee Chairman, and
H.R. 2970 introduced by request by Representative Melvin
Price, House Armed Services Committee Chairman) did not
contain the DOD FTE relief provision later enacted. OMB
failed to respond to a joint letter from the Chairmen of
the House Armed Services Subcommittees on Military Personnel
and Compensation and Readiness requesting that OMB defer
applying the FTE concept to DOD for two years, to permit
adequate testing of the concept. OMB has advised DOD that
although the new provision (10 U.S.C. 140b) prohibits OMB
from imposing manyear constraints on DOD, OMB will still
require DOD to make budget submissions based on the FTE
concept and will monitor DOD personnel management in
accordance with the FTE concept. DOD has not yet responded
to this advice from OMB.
c. The Armed Services Committees Position. After
hearings on H.R. 2970, House Armed Services Committee
Chairman Price introduced a clean bill, H.R. 3519, section
910 of which prohibited the use of funds appropriated
pursuant to authority contained therein to establish or
administer FTE personnel management controls within DOD.
The Committee retained this provision of H.R. 3519 at markup
and the House passed the Bill containing the provision. The
Senate Armed Services Committee inserted in S. 815 at markup
a section 911 to prohibit imposition of any FTE manyear
constraints on DOD civilian personnel and the Senate passed
the Bill containing the provision. The House-Senate
Conference Committee on S. 815 adopted the Senate provision
permanently barring the imposition of FTE constraints on
DOD management of its civilian personnel.
4. Options for CIA With Respect to OMB Manyear Ceilings.
The Central Intelligence Agency has four basic options in dealing
with OMB FTE manyear ceiling requirements.
a. Full Compliance. The Agency would comply fully with
the OMB requirements in the same manner as all federal
agencies, other than DOD, do. If the Agency should consume
its manyear allocation prior to the end of the fiscal year,
the Agency would request a supplemental allocation from OMB
or would execute a reduction in force.
b. Limited Compliance Consistent With the Agency's Mission.
The Agency would comply with the OMB requirements only
insofar as compliance does not interfere with the Agency's
mission. If the Agency consumes its manyear allocation
prior to the end of the fiscal year, the Agency would
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continue to employ its personnel, in reliance on subsection
8(a) of the Central Intelligence Agency Act of 1949 for
authority. 71 The Agency would also, if the Agency finds
it necessary, modify or eliminate its compliance with the
requirement to report monthly to OPM on compliance with
manyear ceilings, relying on Section 6 of the Central
Intelligence Agency Act of 1949 for authority. 8/
c. Executive Branch Relief. The DCI would obtain from
the Director, OMB, or the President if necessary, an
exception to the OMB Circular A-64 (revised) requirement
that all federal agencies follow the FTE manyear ceiling
system. It should be noted that in issuing Executive
Order 12333 (4 December 1981) governing intelligence
activities, the President reduced the role of OMB in
the National Foreign Intelligence Program budget process. 9/
d. Legislative Relief. The Agency would seek legislation
similar to that contained in section 904 of the "DOD
Authorization Act, 1982," to exempt CIA from any manyear
personnel constraints. The necessary language would be
7 Subsection 8(a) of the CIA Act provides in part:
"Notwithstanding any other provisions of law, sums made available
to the Agency by appropriation or otherwise maybe expended for
purposes necessary to carry out its functions, including--(1)
personal services...."
8/ Section 6 of the CIA Act provides in part: "...the
Agency shall be exempted from... the provisions of any other law
which require the publication or disclosure of the organization,
functions, names, official titles, salaries, or numbers of
personnel employed by the Agency...."
9/ Section 1-602(c) of Executive Order 12036 (24 January 1978)
provided that:
"The Director of Central Intelligence shall review and
evaluate the national program and budget submissions and,
with the advice of the NFIB and the departments and agencies
concerned, develop the consolidated National Foreign
Intelligence Program budget and present it to the President
through the Office of Management and Budget;..." (emphasis
added).
Section 1.5(n) of Executive Order 12333 (4 December 1981)
provides that the DCI shall:
"(n) Develop, with the advice of the program managers and
departments and agencies concerned, the consolidated National
Foreign Intelligence Program budget, and present it to the
President and the Congress."
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inserted in the Fiscal Year 1983 Intelligence Authori-
zation Bill at the appropriate stage in the legislative
process.
Given the high level concern with the problems 0MB FTE manyear
ceilings have caused the Agency, a decision on which option(s)
the Agency will pursue should be made at a senior level fairly
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FTE CEILING JPDATED
25X1
CURRENT FTE
ALLOCATION
(REVISED)
L.NTT C.I PATED LESS
ADJUSTMENT* SHORTFALL
FULL-TINE PER:IANENT
PART-TIME INTERMITTENT
TOTAL
t?E D
40 - 60 1 - 21
40 - 60 3 - 17
*Adjustment allows for ceiling count employees who axe not paid and thus do not enter FTE
Reporting System (i.e., such as onrist 30 days of L.WOP)o
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