[Federal Register: June 13, 2003 (Volume 68, Number 114)]
[Rules and Regulations]               
[Page 35265-35270]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13jn03-1]                         


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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
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[[Page 35265]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 230, 301, 316, 333, 337, and 410

RIN 3206-AJ 99

 
Organization of the Government for Personnel Management, Overseas 
Employment, Temporary and Term Employment, Recruitment and Selection 
for Temporary and Term Appointments Outside the Register, Examining 
System, and Training

AGENCY: Office of Personnel Management.

ACTION: Interim rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management (OPM) is issuing interim 
regulations to implement certain Governmentwide human resources 
flexibilities contained in the Homeland Security Act of 2002. This 
regulation provides agencies with: increased flexibility in assessing 
applicants using alternative (category-based) rating and selection 
procedures; the ability to select qualified candidates for positions, 
including temporary and term positions, in the competitive service 
using direct-hire procedures; the authority to pay or reimburse the 
costs of academic degree training from appropriated or other available 
funds under specified conditions; and increased flexibility in the use 
of academic degree training to address agency-specific human capital 
requirements and objectives. This interim regulation will also remove 
part 333 of title 5, Code of Federal Regulations, Recruitment and 
Selection for Temporary and Term Appointments Outside the Register, and 
all related references to this part, including the authority to appoint 
using temporary appointments pending establishment of a register 
(TAPER).

DATES: These regulations are effective June 13, 2003. We will consider 
comments received on or before August 12, 2003.

ADDRESSES: Send, deliver or fax written comments to Ms. Ellen E. 
Tunstall, Deputy Associate Director for Talent and Capacity Policy, 
U.S. Office of Personnel Management, Room 6551, 1900 E Street, NW., 
Washington, DC 20415-9700; e-mail employ@opm.gov; fax: (202) 606-2329.

FOR FURTHER INFORMATION CONTACT: On alternative rating and selection 
procedures and direct-hire authority, Ms. Suzy Barker by telephone at 
(202) 606-0830, fax at (202) 606-2329 or by e-mail at smbarker@opm.gov. 
On emergency indefinite appointments, overseas employment, TAPER, and 
outside the register appointments, Ms. Diane Tyrrell by telephone at 
(202) 606-0830, fax at (202) 606-2329 or by e-mail at dmtyrrel@opm.gov. 
On training, Ms. LaVeen M. Ponds by telephone at (202) 606-1394, fax at 
(202) 606-2329 or by e-mail at lmponds@opm.gov. Ms. Barker, Ms. Tyrrell 
and Ms. Ponds may also be contacted by TTY at (202) 418-3134.

SUPPLEMENTARY INFORMATION: On November 25, 2002, the President signed 
the Homeland Security Act of 2002 (Act), Public Law 107-296, into law. 
This Act provides Federal agencies with a number of human resources 
(HR) flexibilities. These flexibilities include direct-hire authority 
and alternative (that is, category) rating and selection procedures, 
which will aid in recruitment and hiring. The Act also provides Federal 
agencies with the authority to pay or reimburse employees for the costs 
of academic degree training.

Direct-Hire Authority

    Title 5 U.S.C. 3304 provides agencies with the authority to appoint 
candidates directly to jobs for which OPM determines that there is a 
severe shortage of candidates or a critical hiring need. The 
requirements and justification for the direct hire authorities are 
presented separately and distinct from each other in these interim 
regulations.
    We are soliciting comments on whether we should combine the 
requirements and justification for a severe shortage of candidates and 
critical hiring needs into a single section or keep them in separate 
sections as written.
    OPM may decide, on its own, that a severe shortage of candidates or 
a critical hiring need exists, either Governmentwide or in specified 
agencies, for one or more specific occupational series, grades (or 
equivalent), or geographic locations. Alternatively, an agency may, in 
a written request to OPM, identify the position(s) for which it 
believes a severe shortage or a critical hiring need exists. The agency 
must include relevant evidence, as described below, to support its 
request. Agencies that use this direct-hire authority must adhere to 
public notice requirements, as set forth in 5 U.S.C. 3327 and 3330, and 
5 CFR part 330, subpart G.
    To demonstrate that a severe shortage of candidates exists for a 
position or group of positions, an agency must provide information 
showing that it is unable to identify candidates possessing the 
competencies required to perform the necessary duties of the position 
despite extensive recruitment, extended announcement periods, and the 
use, as applicable, of hiring flexibilities such as recruitment and 
relocation incentives. In determining whether there is a severe 
shortage of candidates for a position or group of positions, OPM will 
consider all relevant evidence, including an agency's demonstrated 
recruitment efforts, human capital management strategic plans that 
forecast agency workforce needs, relevant analyses made in connection 
with an agency's workforce planning efforts, labor market data, and 
employment trends. OPM will also consider whether a nationwide or 
geographical skills shortage exists, as well as the extent to which the 
position(s) at issue are located in an undesirable geographic location, 
will require the incumbent to perform onerous or undesirable duties, or 
will require the incumbent to work under extraordinary or extreme 
conditions.
    To prove that a critical hiring need exists, an agency must 
demonstrate that it has a critical need to fill the position or 
positions to meet mission requirements brought about by an exigency 
such as a national emergency, threat or potential threat, environmental 
disaster, or other unanticipated or unusual event or mission 
requirement. A critical hiring need may also be triggered by the need 
to conform to

[[Page 35266]]

requirements of law, Presidential directive or Administration 
initiative, or a congressional or other mandate to meet new or expanded 
mission requirements by a particular date. In a request for direct-hire 
authority due to a critical hiring need, an agency must provide 
sufficient evidence to demonstrate that filling the position(s) is 
critical to the agency's mission and that the use of other hiring 
authorities is impracticable or ineffective.
    To provide agencies with the ability to use the new direct-hire 
authority, as appropriate, for temporary and term appointments, 
emergency-indefinite appointments in a national emergency, and overseas 
limited appointments, OPM is revising 5 CFR 230.402, Agency Authority 
to Make Emergency-indefinite Appointments in a National Emergency; 5 
CFR part 301, subpart B, Overseas Limited Appointments; 5 CFR 316.302, 
Selection of Term Employees; and 5 CFR 316.402, Procedures for Making 
Temporary Appointments.
    This interim regulation will add subpart B to 5 CFR part 337 and 
amends 5 CFR parts 230, 301 and 316.

Elimination of Outside-the-Register Procedures

    OPM is eliminating 5 CFR part 333, Recruitment and Selection for 
Temporary and Term Appointments Outside the Register, based on its 
conclusion that this hiring authority is now obsolete.
    The current outside-the-register procedure is available for use 
only when there is an insufficient number of eligibles on the 
appropriate register. OPM initially established these procedures to 
give agencies an alternative to traditional examining methods when 
there were not enough qualified eligibles on a particular register. The 
Act, however, provides OPM with the authority to permit agencies to 
utilize an alternative to traditional examining methods (i.e., direct-
hire authority) when there is a severe shortage of candidates 
possessing the competencies to perform the job requirements or a 
critical hiring need. Currently, agencies using outside-the-register 
procedures are required to provide public notice, apply veterans' 
preference, and provide selection priorities to certain displaced 
employees. These requirements are essentially the same as those for the 
new direct-hire authority. Based upon the foregoing, the current 
procedures for outside-the-register appointments under 5 CFR part 333 
are duplicative and no longer needed, and we are therefore eliminating 
this regulation.
    This interim regulation removes 5 CFR part 333.

Elimination of the TAPER Authority

    Based on the elimination of the outside-the-register authority, OPM 
is also eliminating the Temporary Appointments Pending the 
Establishment of a Register (TAPER) authority. The TAPER authority was 
proposed for elimination in 1996, but was ultimately retained to 
provide agencies with a simplified examining process when filling 
Worker-Trainee (GS-1 and WG-1 and 2) positions with applicants who had 
limited education and experience. The decision to retain this authority 
thus was in response to the Governmentwide need, in connection with the 
``Welfare to Work'' initiative, to provide opportunity for welfare 
recipients to enter the workforce.
    Within the past several years, OPM has authorized the use of a 
number of alternative hiring flexibilities to assist agencies when 
recruiting individuals with limited education and experience. For 
example, in 1999, OPM gave agencies authority to use alternatives to 
the written test normally required when making appointments to clerical 
positions. These changes, combined with the flexibilities provided by 
the Act, give agencies the authority to bypass the selection procedures 
established in title 5 of the United States Code in appropriate 
circumstances, and therefore obviate the need for an authority to 
temporarily appoint an individual pending establishment of a register.
    Eliminating this regulation will not adversely affect employees 
currently serving under TAPER appointments. These individuals will 
continue to work under these appointments until they have completed the 
3 years of service that entitles them, under 5 U.S.C. 3304a, to be 
converted to career appointments. Based on the foregoing, there is no 
longer a need to retain the TAPER authority.
    This interim regulation eliminates 5 CFR part 316, subpart B.

Category Rating and Selection Procedures

    Title 5 U.S.C. 3319 provides agencies with the authority to develop 
a category-based rating method as an alternative way of assessing and 
rating job applicants for positions filled through the competitive 
examining process. Traditionally, applicants for Federal jobs are 
assigned numerical scores, including veterans' preference points, if 
appropriate, and are considered for selection based on the ``rule of 
three'' (5 U.S.C. 3318(a)). The category rating system prescribed by 
the Act does not add veterans' preference points or apply the ``rule of 
three'' but protects the rights of veterans by placing them ahead of 
non-preference eligibles within each category. For all positions other 
than scientific and professional positions at GS-9 (and equivalent) or 
higher, otherwise qualified preference eligibles who have a compensable 
service-connected disability of at least 10 percent must be listed in 
the highest quality category. This requirement is similar to the 
provisions of 5 U.S.C. 3313, which are used in numerical rating.
    Under a category rating system, the agency assesses candidates 
against job-related criteria and then places candidates into two or 
more pre-defined categories. The categories are defined through a job 
analysis conducted in accordance with the ``Uniform Guidelines on 
Employee Selection Procedures,'' at 29 CFR part 1607 and 5 CFR part 
300. The categories must be distinct from one another and clearly 
differentiate between the relative quality of candidates in each. For 
example, an agency could adopt a two-category system in which the 
higher category is used for those candidates who meet minimum 
qualifications and are highly proficient in all the requirements of the 
job, while the lower category is reserved for those candidates who meet 
the minimum qualifications and are proficient in some, but not all, of 
the requirements of the job. For each position to be filled, an agency 
must decide in advance if they will assess candidates using the 
traditional numerical ranking and ``rule of three'' procedures or 
category rating, and must publish this information in the job 
announcement. When using the category rating procedure, the job 
announcement must then clearly define the categories.
    Specific guidance on using the category rating process will be 
included in OPM's Delegated Examining Operations Handbook (www.opm.gov/deu/
).
    The category rating process provides for selections to be made from 
the highest category or, if fewer than three candidates have been 
assigned to the highest quality category, in a merged category 
consisting of the highest and the second-highest quality categories. If 
a preference eligible is in the category, an agency may not select a 
non-preference eligible unless the agency requests to pass over the 
preference eligible, and its request is approved. Objections to a 
preference eligible must be processed by the agency's delegated

[[Page 35267]]

examining office in accordance with 5 U.S.C. 3318(b) and 5 CFR 332.406. 
In addition, agencies are required to follow the provisions of 5 CFR 
330.606 and 330.705, pertaining to order of selection.
    The Act requires agencies to submit an annual report to Congress on 
the use of their category rating and selection procedures. For 
oversight purposes, OPM has required agencies to forward a copy of 
these reports to OPM.
    This interim regulation adds subpart C to 5 CFR part 337.

Expanded Academic Degree Training Authority

    Section 1331(a) of the Act amends the provisions of 5 U.S.C. 4107 
by expanding the authority of an agency to pay or reimburse employees 
for the cost of academic degree training when such training contributes 
significantly to meeting an identified agency training need, resolving 
an identified agency staffing problem, or accomplishing goals in the 
agency's human capital management strategic plan. Such training must be 
part of a planned, systemic, and coordinated agency employee 
development program linked to accomplishing strategic human capital 
goals. According to 5 U.S.C. 4107(b)(2) agencies may not provide such 
training for the sole purpose providing an academic degree or as a 
means of qualifying for a position that requires an academic degree. 
However, an agency may provide an employee with the opportunity to 
obtain an academic degree or qualify for an appointment to a particular 
position for which the degree is required provided that the training is 
consistent with the agency's human capital management strategic plan 
and that selection for such training follows established competitive 
procedures. The academic training program must be provided by a college 
or university that is accredited by a nationally recognized body. OPM 
is amending its regulations to reflect these changes.
    Agencies that pay or reimburse employees for academic degree 
training must generally require the employee benefiting from such 
training to enter into a continued service agreement with the agency 
prior to attending the training. Continued service agreement 
requirements apply to both tuition reimbursement programs and academic 
degree training programs.
    This interim regulation revises subpart C of 5 CFR part 410.

Executive Order 12866, Regulatory Review

    This interim rule has been reviewed by the Office of Management and 
Budget in accordance with Executive Order 12866.

Waiver of Delay of Effective Date

    Pursuant to 5 U.S.C. 553(d)(3), I find that good cause exists to 
waive the delay in effective date and make these regulations effective 
in less than 30 days. The delay in the effective date is being waived 
because the program changes do not mandate but will give agencies 
needed flexibilities to recruit, hire and retain high quality 
candidates quickly and effectively to respond to changing and critical 
mission requirements. The General Accounting Office has designated 
strategic human capital management as a Governmentwide high-risk area 
citing serious human capital shortfalls that erode the ability of 
agencies to ``economically, efficiently and effectively perform their 
missions.'' The President's Management Agenda calls for agencies to 
``flatten the Federal hierarchy, reduce the time to make decisions, and 
increase the number of employees that provide services to citizens. The 
reform also will pursue targeted civil service reforms, such as 
performance-based compensation and management flexibilities to recruit, 
retain, and reward a high-quality workforce.'' With 50% of Federal 
employees eligible for retirement in the coming years, agencies must 
have contemporary, flexible tools for workforce management. Recent 
media articles have highlighted the public perception that getting a 
Federal job takes too long and is far too complicated. The Government 
needs the very best applicants; in turn applicants deserve a 
streamlined, understandable application process. These changes will 
accommodate that need.
    None of the three flexibilities proposed by these regulations are 
new or untried. In fact, category rating has been used successfully by 
some agencies for a decade or more under demonstration authority and 
enabling legislation. Studies of category rating as implemented by the 
Department of Agriculture indicate that employment of veterans 
increases and diversity is not reduced. Private-sector companies 
routinely use tuition payment as a strategy to attract and retain high 
quality employees.
    These flexibilities were proposed after broad consultation with a 
variety of stakeholders including employees, managers and the human 
resources community. They long have been advocated by numerous public 
and private groups including the Merit Systems Protection Board and the 
Partnership for Public Service as forward thinking, solid human capital 
strategies that should be available Governmentwide rather that to a few 
select agencies.
    Direct hire, in particular, is critical if agencies are to respond 
effectively to the needs of the Nation. With a nationwide shortage of 
nurses and other healthcare workers, the Government must be able to 
move quickly and efficiently to hire excellent candidates--direct hire 
would provide that flexibility. Without it, the staffing to provide 
care to veterans and others in Federal medical facilities is 
diminished. Similarly, the critical need to hire talented, highly 
skilled workers to respond to a national crisis including an 
environmental threat such a raging wildfire can not be left to 
traditional hiring methods designed decades ago.
    The alternatives provided by these regulations are not mandatory 
but may be used strategically by agencies to improve the management of 
human capital, to meet mission requirements and to respond to the 
President's call for a Government that is citizen focus and results 
oriented. There is a compelling need to provide these flexibilities 
without delay.
    Finally, OPM will issue final regulations within 1 year of the 
publication of these interim regulations or these regulations will 
sunset.

Regulatory Flexibility Act

    I certify that these regulations would not have a significant 
economic impact on a substantial number of small entities (including 
small businesses, small organizational units, and small governmental 
jurisdictions) because they would only apply to Federal agencies and 
employees.

List of Subjects in 5 CFR Parts 230, 301, 316, 333, 337, and 410

    Civil defense, Education, Government employees.

Office of Personnel Management.
Kay Coles James,
Director.


0
Accordingly, OPM is amending parts 230, 301, 316, 333, 337, and 410 of 
title 5 of the Code of Federal Regulations, as follows:

PART 230--ORGANIZATION OF THE GOVERNMENT FOR PERSONNEL MANAGEMENT

0
1. The authority for part 230 continues to read as follows:

    Authority: 5 U.S.C. 1302, 3301, 3302; E.O. 10577; 3 CFR 1954-
1958 Comp., p. 218; sec. 230.401 also issued under 5 U.S.C. 1104.

[[Page 35268]]

Subpart D--Agency Authority To Take Personnel Actions in a National 
Emergency

0
2. Revise Sec.  230.402 paragraphs (c), (h)(1), and (h)(2) to read as 
follows:


Sec.  230.402  Agency authority to make emergency-indefinite 
appointments in a national emergency.

* * * * *
    (c) Appointment under direct-hire authority. An agency may make 
emergency-indefinite appointments under this section using the direct-
hire procedures in part 337 of this chapter.
* * * * *
    (h)(1) The term indefinite employee includes an emergency-
indefinite employee or an employee under an emergency appointment as 
used in the following: Parts 351, 353 of this chapter, subpart G of 
part 550 of this chapter, and part 752 of this chapter.
    (2) The selection procedures of part 337 of this chapter apply to 
emergency-indefinite appointments that use the direct-hire authority 
under paragraph (c) of this section.
* * * * *

PART 301--OVERSEAS EMPLOYMENT

0
3. The authority citation continues to read as follows:

    Authority: 5 U.S.C. 3301, 3302; E.O. 10577, 3 CFR 1954-1958 
Comp., p. 218, as amended by E.O. 10641, 3 CFR 1954-1958 Comp., p. 
274, unless otherwise noted.

Subpart B--Overseas Limited Appointment

0
4. Revise Sec.  301.201 to read as follows:


Sec.  301.201  Appointments of United States citizens recruited 
overseas.

    When there is a shortage of eligible applicants resulting from a 
competitive announcement, an agency may give an overseas limited 
appointment to a United States citizen recruited for a position 
overseas.

0
5. Revise Sec.  301.205 to read as follows:


Sec.  301.205  Requirements and restrictions.

    The requirements and restrictions in subpart F of part 300 of this 
chapter apply to appointments under this subpart.

PART 316--TEMPORARY AND TERM EMPLOYMENT

0
6. The authority citation continues to read as follows:

    Authority: 5 U.S.C. 3301, 3302; E.O. 10577, 3 CFR, 1954-1958 
Comp., p. 218.

Subpart B--[Reserved]

0
7. Remove and reserve Subpart B (Sec. Sec.  316.201 and 316.202).

Subpart C--Term Employment

0
8. Revise Sec.  316.302 paragraph (a) to read as follows:


Sec.  316.302  Selection of term employees.

    (a) Competitive term appointments. An agency may make a term 
appointment under part 332 of this title, by using competitive 
procedures, or under part 337 of this title, by using direct-hire 
procedures, as appropriate.
* * * * *

Subpart D--Temporary Limited Employment

0
9. Revise Sec.  316.402 paragraph (a) to read as follows:


Sec.  316.402  Procedures for making temporary appointments.

    (a) Competitive temporary appointments. In accordance with the time 
limits in Sec.  316.401 of this chapter, an agency may make a temporary 
appointment under part 332 of this title, by using competitive 
procedures, or under part 337 of this title, by using direct-hire 
procedures, as appropriate.
* * * * *

PART 333--[REMOVED AND RESERVED]

0
10. Remove and reserve Part 333.

PART 337--EXAMINING SYSTEM

0
11. Remove the authority citations for Sec. Sec.  337.101 and 337.102 
and add an authority citation for part 337 to read as follows:

    Authority: 5 U.S.C. 1104(a) (2), 1302, 3301, 3302, 3304, 3319, 
5364, E.O. 10577 (3 CFR 1954-1958 Comp., p. 218); 33 FR 12423, Sept. 
4, 1968; and 45 FR 18365, Mar. 21, 1980.

0
12. Add Subpart B to part 337 to read as follows:
Subpart B--Direct-Hire Authority
Sec.
337.201 Coverage and purpose.
337.202 Definitions.
337.203 Public notice requirements.
337.204 Severe shortage of candidates.
337.205 Critical hiring needs.
337.206 Terminations, modifications, extensions and reporting.
337.207 Sunset.

Subpart B--Direct-Hire Authority


Sec.  337.201  Coverage and purpose.

    OPM will permit an agency with delegated examining authority under 
5 U.S.C. 1104(a) (2) to use direct-hire authority under 5 U.S.C. 3304 
for a position or group of positions if OPM determines that there is 
either a severe shortage of candidates or a critical hiring need for 
such positions.


Sec.  337.202  Definitions.

    In this subpart:
    (a) A direct-hire authority permits hiring without regard to the 
provisions of 5 U.S.C. 3309 through 3318, and parts 211 and 337, 
subpart A of this chapter.
    (b) A severe shortage of candidates for a particular position or 
group of positions means that an agency is unable to identify 
candidates possessing the competencies required to perform the job 
requirements despite extensive recruitment, extended announcement 
periods, and the use, as applicable, of hiring flexibilities such as 
recruitment and relocation incentives.
    (c) A critical hiring need for a particular position or group of 
positions means that an agency has a need to fill the position(s) to 
meet mission requirements brought about by an emergency, potential 
threat, or unanticipated or unusual mission requirement, or to conform 
to the requirements of law, a Presidential directive or Administration 
initiative, or an unexpected event outside of an agency's control.


Sec.  337.203  Public notice requirements.

    Agencies must comply with public notice requirements, as prescribed 
in 5 U.S.C. 3327 and 3330, and part 330, subpart G of this chapter with 
respect to any position that an agency seeks to fill using direct-hire 
authority.


Sec.  337.204  Severe shortage of candidates.

    (a) OPM will determine when a severe shortage of candidates exists 
for particular occupations, grades (or equivalent), and/or geographic 
locations. OPM may decide on its own that such a shortage exists, or 
may make this decision in response to a written request from an agency.
    (b) In a request for direct-hire authority under this section, an 
agency must identify the position(s) it is unable to fill and must 
include supporting evidence that demonstrates the existence of a severe 
shortage of candidates with respect to the position(s). The evidence 
should include, as applicable, information about:
    (1) The results of workforce planning and analysis;
    (2) Employment trends including the local or national labor market;
    (3) The existence of nationwide or geographic skills shortages;

[[Page 35269]]

    (4) Agency efforts including recruitment initiatives, use of other 
appointing authorities (e.g., schedule A, schedule B) and 
flexibilities, training and development programs tailored to the 
position(s), and an explanation of why these recruitment and training 
efforts have not been sufficient;
    (5) The availability and quality of candidates;
    (6) The desirability of the geographic location of the position(s);
    (7) The desirability of the duties and/or work environment 
associated with the position(s); and
    (8) Other pertinent information such as selective placement factors 
or other special requirements of the position, as well as the agency's 
use of hiring flexibilities such as recruitment or retention 
allowances.


Sec.  337.205  Critical hiring needs.

    (a) OPM will determine when there is a critical hiring need for 
particular occupations, grades (or equivalent) and/or geographic 
locations. OPM may decide on its own that there is such a need, or may 
make this decision in response to a written request from an agency.
    (b) In a request for direct-hire authority under this section, an 
agency must:
    (1) Identify the position(s) that it must fill;
    (2) Describe the event or circumstance that has created the need to 
fill the position(s);
    (3) Specify the duration for which the critical need is expected to 
exist; and
    (4) Include supporting evidence that demonstrates why the use of 
other hiring authorities is impracticable or ineffective.


Sec.  337.206  Terminations, modifications, extensions, and reporting.

    (a) Termination and modification. On a periodic basis, for each 
direct-hire authority that it previously granted, OPM will review the 
appropriate agency's use of the authority to ensure that the agency is 
using the authority properly and to determine if the agency's continued 
use of the authority is supportable. OPM will terminate or modify a 
direct-hire authority previously granted to an agency if OPM determines 
that there is no longer a severe shortage of candidates or a critical 
hiring need. OPM may also terminate an agency's authority when the 
agency has used its authority improperly.
    (b) Extension. OPM may extend an agency's direct-hire authority if 
OPM determines that there is or will continue to be a severe shortage 
of candidates or a critical hiring need with respect to a particular 
position as of the date on which the agency's authority is due to 
expire.
    (c) Reporting requirement. On a periodic basis, OPM may request 
information from agencies regarding their use of these direct-hire 
authorities.


Sec.  337.207  Sunset.

    The authority to use direct hire authority terminates June 14, 
2004.

0
13. Add Subpart C to part 337 to read as follows:
Subpart C--Alternative Rating and Selection Procedures
Sec.
337.301 Coverage and purpose.
337.302 Definitions.
337.303 Agency responsibilities.
337.304 Veterans' preference.
337.305 Reporting requirements.
337.306 Sunset.

Subpart C--Alternative Rating and Selection Procedures


Sec.  337.301  Coverage and purpose.

    This subpart implements the category rating and selection 
procedures at 5 U.S.C. 3319. This law authorizes agencies with 
delegated examining authority under 5 U.S.C. 1104(a)(2) to develop a 
category rating method as an alternative process to assess applicants 
for jobs filled through competitive examining.


Sec.  337.302  Definitions.

    In this subpart:
    (a) Category rating is synonymous with alternative rating as 
described at 5 U.S.C. 3319, and is a process of evaluating qualified 
eligibles by quality categories rather than by assigning individual 
numeric scores. The agency assesses candidates against job-related 
criteria and then places them into two or more pre-defined categories.
    (b) Quality categories are groupings of individuals with similar 
levels of job-related knowledge, skills, abilities, or competencies.


Sec.  337.303  Agency responsibilities.

    To use a category rating system, agencies must:
    (a) Establish a system for evaluating applicants that provides for 
two or more quality categories;
    (b) Define each quality category through job analysis conducted in 
accordance with the ``Uniform Guidelines on Employee Selection 
Procedures'' at 29 CFR part 1607 and part 300 of this chapter. Each 
category must have a clear definition that distinguishes it from other 
categories;
    (c) Describe each quality category in the job announcement and 
apply the provisions of part 330, subparts B, F and G of this chapter;
    (d) Place applicants into categories based upon their job-related 
knowledge, skills, abilities or competencies; and
    (e) Establish documentation and record-keeping procedures for 
reconstruction purposes.


Sec.  337.304  Veterans' preference.

    In this subpart:
    (a) Veterans' preference must be applied as prescribed in section 
1312(a)(2) of Public Law 107-296, the Homeland Security Act, and 
codified at 5 U.S.C. 3319; and
    (b) Veterans' preference points as prescribed in Sec.  337.101 are 
not applied in category rating.


Sec.  337.305  Reporting requirements.

    Any agency that uses category rating must forward to OPM a copy of 
the annual report that it must submit to Congress pursuant to 5 U.S.C. 
3319.


Sec.  337.306  Sunset.

    The authority to use category rating terminates June 14, 2004.

PART 410--TRAINING

0
14. Revise the authority citation in part 410 to read as follows:

    Authority: 5 U.S.C. 4101, et seq., 4107; E.O. 11348, and (3 CFR, 
1967 Comp., p. 275).

Subpart C--Establishing and Implementing Training Programs

0
15. Revise Sec.  410.308 to read as follows:


Sec.  410.308  Training to obtain an academic degree.

    (a) An agency may authorize training for an employee to obtain an 
academic degree under conditions as prescribed at 5 U.S.C. 4107(a).
    (b) Colleges and universities used in an academic degree training 
program must be accredited by a nationally recognized body. A 
``nationally recognized body'' is a regional, national, or 
international accrediting organization recognized by the U.S. 
Department of Education. The listing of accrediting bodies is available 
at the Department.
    (c) The selection of employees for an academic degree training 
program must follow the requirements of Sec.  335.103(b) (3) and part 
300, subpart A of this chapter. Subject to the additional requirement 
that the purpose of the selection and assignment is to accomplish an 
identified goal consistent with the agency's human capital management 
strategic plan, an agency may competitively select and assign an 
employee to an academic degree training program that qualifies the

[[Page 35270]]

employee for promotion to a higher graded position or to a position 
that requires an academic degree.
    (d) Agency heads must assess and maintain records on the 
effectiveness of training assignments under this section.
    (e) On a periodic basis, OPM may request agency information on the 
use and effectiveness of training assignments under this section.
    (f) The authority to authorize training for an employee to obtain 
an academic degree terminates June 14, 2004.

[FR Doc. 03-14971 Filed 6-10-03; 4:46 pm]

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