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The Aerospace Commission Report
& NASA Workforce

Wednesday, March 12, 2003 2:00 p.m.2318 Rayburn House Office Building

Purpose of Hearing

On Wednesday, March 12, 2003, at 2:00 p.m. in room 2318 of the Rayburn House Office Building, the House Science Committee will hold a full committee hearing to review The Final Report of the Commission on the Future of the United States Aerospace Industry and NASA Workforce legislation. This hearing will consist of two panels. The first panel will review the Aerospace Commission report issued last November to the President and Congress. The second panel will review proposed legislation, H.R. 1085 The NASA Flexibility Act of 2003. This bill provides additional authorities for the agency to recruit and retain a highly-skilled workforce which was one of the primary recommendations from the Aerospace Commission.

Major Issues for Congress Taken From Aerospace Commission Recommendations

  • Making U.S. leadership in aviation and space a national imperative. The Commission urges Congress to call public attention to how the aerospace industrial base is in serious danger of decline, and to establish policies and programs to rebuild and sustain this nationally critical industry.

  • Increasing Federal Investment in Aerospace Research. The Commission calls on the federal government to significantly increase its investment in basic aerospace research. One area of research the Commission cites is the development of a new, highly automated air traffic management system that is capable of handling more traffic than could be managed with the Federal Aviation Administration's current system.

  • Government-wide Management Structure Changes. The Commission recommends a White House aerospace policy coordinating council, creation of an aerospace management office in OMB, and a joint committee in Congress to coordinate federal investment and policies decisions for aerospace.

  • Revitalize the U.S. Aerospace Workforce. The Commission recommends several programs to recruit and revitalize the U.S. aerospace workforce for government and industry. One component, to be explored in the second panel, is providing additional legislative authority to enable NASA to recruit and retain skilled employees.

Need for the Aerospace Commission

The Aerospace Commission was established in the Defense Authorization Act of 2001 (P.L. 106-398). Backers of the amendment to create the Commission were concerned that U.S. aerospace industry was at serious risk even before the tragedy of September 11, 2001. The industry was already losing ground in the international marketplace for an array of aerospace products, including commercial aircraft, space launch vehicles and satellites, and military aircraft.

The aerospace industry is a powerful force in the U.S. economy, contributing over 15 percent to the nation's Gross Domestic Product and supporting over 15 million high quality jobs. Last year, more than 600 million passengers relied on U.S. commercial air transportation, and over 40 percent of the value of all U.S. freight was transported by air. However, a convergence of negative trends in the commercial aerospace market and government spending, aerospace workforce cuts and industry consolidation, overseas competition, and a perceived lack of planning led to a growing alarm and calls to investigate these complex issues through a statutory Commission.

Charter of the Aerospace Commission

After enactment, the President, Senate, and House of Representative named twelve members to the Commission with a broad range of experience in government, industry, academia, Wall Street, trade associations and unions. The President named former Science Committee Chairman Bob Walker as chair. The Commission was chartered to study the issues associated with the future of the U.S. aerospace industry in the global economy, particularly in relationship to national security, and to assess the future importance of the domestic aerospace industry to U.S. economic and national security. The scope included an examination of the budget and acquisition processes within the Federal Government, international trade and export controls, the impact of tax policies on international competitiveness, space launch infrastructure, and science and engineering education. Over the course of a year, the Commission held six public hearings, received testimony from over 60 witnesses, and met with over 50 government and industry organizations. The Commission presented a final report to the President and Congress last November. The details of the Commission's recommendations are listed in Appendix A, and the final report is posted on the Commission's website at http://www.aerospacecommission.gov.

NASA Workforce Challenges

One of the nine recommendations from the Aerospace Commission's report was that government, industry, labor, and academia work together to develop an aerospace workforce for the 21st century. Several studies show an approximately 20 percent decline in the number of undergraduate and doctoral degrees awarded in aerospace science and engineering over the last ten years. As 60 percent of NASA's 18,800 civil service employees are scientists and engineers (S&E), the agency's workforce is adversely impacted by these larger national trends and the shrinking talent pipeline of aerospace scientists and engineers. Within NASA's S&E workforce, the over-60 population outnumbers its under-30 population by nearly 3 to 1. While the average age today of NASA's S&E employees is 46 years old, the average age of NASA S&E employees during the Apollo era was 39 years old.

These workforce trends jeopardize NASA's ability to manage its highly complex missions. Since 2001, the General Accounting Office has ranked "strengthening human capital" as one of NASA's top management challenges. The GAO reported in January 2003 (before the Columbia accident): "NASA's shuttle workforce had declined significantly in recent years to the point of reducing NASA's ability to safely support the shuttle program. Many key areas were not sufficiently staffed by qualified workers, and the remaining workforce showed signs of overwork and fatigue. To the agency's credit, NASA has recognized the need to revitalize the shuttle's workforce…" Additionally, NASA's independent Aerospace Safety Advisory Panel report in 2001 made similar observations relating to deficiencies with the Space Shuttle workforce.

Need for NASA Workforce Reform Legislation

In May 2002, NASA submitted a set of legislative proposals to augment current civil service authorities to recruit, retain, and restructure its workforce along with justifications for how each proposal would help meet the agency's workforce challenges. The Space & Aeronautics Subcommittee held a hearing on NASA's management and workforce challenges on July 18, 2002 in order to review these legislative proposals and their justification. Since then, some of these legislative proposals were enacted government-wide in the Homeland Security Act of 2002. The NASA Flexibility Act of 2003
(H.R. 1085) would provide the agency with additional civil service authorities. The individual provisions for this legislation are summarized in Appendix C along with comparisons to NASA's current civil service authority.

Panel One - Aerospace Commission

The Hon. Bob Walker, Chairman, Aerospace Commission
President, Wexler Walker Public Policy Associates

The Hon. John Douglass, Commissioner
Aerospace Industries Association

The Hon. John Hamre, Commissioner
Center for Strategic and International Studies

Panel Two - NASA Workforce
Mr. Max Stier, President
Partnership for Public Service

Mr. Bobby Harnage, President
American Federal of Government Employees

Mr. George Nesterczuk,
Nesterczuk and Associates

Appendix A
Aerospace Commission Recommendations

1. The integral role aerospace plays in our economy, our security, our mobility, and our values makes global leadership in aviation and space a national imperative. Given the real and evolving challenges that confront our nation, government must commit to increased and sustained investment and must facilitate private investment in our national aerospace sector. The Commission therefore recommends that the United States boldly pioneer new frontiers in aerospace technology, commerce and exploration.

2. The Commission recommends transformation of the U.S. air transportation system as a national priority. This transformation requires:

  • Rapid deployment of a new, highly automated air traffic management system, beyond the Federal Aviation Administration's Operational Evolution Plan, so robust that it will efficiently, safely, and securely accommodate an evolving variety and growing number of aerospace vehicles and civil and military operations;
  • Accelerated introduction of new aerospace systems by shifting from product to process certification and providing implementation support; and
  • Streamlined new airport and runway development.

3. The Commission recommends that the United States create a space imperative. The DoD, NASA, and industry must partner in innovative aerospace technologies, especially in the areas of propulsion and power. These innovations will enhance our national security, provide major spin-offs to our economy, accelerate the exploration of the near and distant universe with both human and robotic missions, and open up new opportunities for public space travel and commercial space endeavors in the 21st century.

4. The Commission recommends that the nation adopt a policy that invigorates and sustains the aerospace industrial base. This policy must include:

  • Procurement policies which include prototyping, spiral development, and other techniques which allow the continuous exercise of design and production skills;
  • Removing barriers to defense procurement of commercial products and services;
  • Propagating defense technology into the commercial sector, particularly in communications, navigation and surveillance;
  • Removing barriers to international sales of defense products;
  • Sustaining critical technologies that are not likely to be sustained by the commercial sector, e.g. space launch, solid boosters, etc.; and
  • Stable funding for core capabilities, without which the best and brightest will not enter the defense industry.

5. The Commission recommends that the federal government establish a national aerospace policy and promote aerospace by creating a government-wide management structure. This would include a White House policy coordinating council, an aerospace management office in the OMB, and a joint committee in Congress. The Commission further recommends the use of an annual aerospace sectoral budget to establish presidential aerospace initiatives, assure coordinated funding for such initiatives, and replace vertical decision-making with horizontally determined decisions in both authorizations and appropriations.

6. The Commission recommends that U.S. and multilateral regulations and policies be reformed to enable the movement of products and capital across international borders on a fully-competitive basis, and establish a level playing field for U.S. industry in the global market place. U.S. export control regulations must be substantially overhauled, evolving from current restrictions on technologies through the review of transactions to controls on key capabilities enforced through process controls. The U.S. government should neutralize foreign government market intervention in areas such as subsidies, tax policy, export financing and standards, either through strengthening multilateral disciplines or providing similar support for U.S. industry as necessary.

7. The Commission recommends a new business model, designed to promote a healthy and growing U.S. aerospace industry. This model is driven by increased and sustained government investment and the adoption of innovative government and industry policies that stimulate the flow of capital into new and established public and private companies.

8. The Commission recommends the nation immediately reverse the decline in, and promote the growth of, a scientifically and technologically trained U.S. aerospace workforce. In addition, the nation must address the failure of the math, science and technology education of Americans. The breakdown of America's intellectual and industrial capacity is a threat to national security and our capability to continue as a world leader. The Administration and Congress must therefore:

  • Create an interagency task force that develops a national strategy on the aerospace workforce to attract public attention to the importance and opportunities within the aerospace industry;
  • Establish lifelong learning and individualized instruction as key elements of educational reform; and
  • Make long-term investments in education and training with major emphasis in math and science so that the aerospace industry has access to a scientifically and technologically trained workforce.

9. The Commission recommends that the federal government significantly increase its investment in basic aerospace research, which enhances U.S. national security, enables breakthrough capabilities, and fosters an efficient, secure and safe aerospace transportation system. The U.S. aerospace industry should take a leading role in applying research to product development.

Appendix B
Aerospace Commission Members

The Honorable Robert S. Walker
Commission Chairman
Wexler & Walker Public Policy Associates

The Honorable F. Whitten Peters
Commission Vice Chairman
Partner, Williams and Connolly

Dr. Buzz Aldrin
Starcraft Enterprises, Sharespace, Starbooster
and Starcycler

Mr. Edward M. Bolen
General Aviation Manufacturers Assn.

Mr. R. Thomas Buffenbarger
International President
International Association of Machinists
and Aerospace Workers

The Honorable John W. Douglass
President and Chief Executive Officer
Aerospace Industries Association

The Honorable Tillie K. Fowler
Holland and Knight

The Honorable John J. Hamre
President and Chief Executive Officer
Center for Strategic and International Studies

The Honorable William Schneider
International Planning Services

Mr. Robert J. Stevens
President and Chief Operating Officer
Lockheed Martin Corporation

Dr. Neil deGrasse Tyson
Hayden Planetarium

Ms. Heidi R. Wood
Executive Director
Morgan Stanley

Appendix C
Major Provisions of H.R. 1085, "NASA Flexibility Act of 2003"

Section 1: Title

Section 2: Compensation for Certain Excepted Personnel. This section provides a technical correction to update section 203(c) of the NASA Act of 1958 (the Space Act). The correction ties the pay scale for NASA Excepted (NEX) Employees to level III of the Executive Schedule ($142,500) rather than the obsolescent pay scale of grade 18 of the General Schedule.

Section 3: Workforce Authorities. This section amends the National Aeronautics and Space Act of 1958 (NASA organic act) to provide an additional title, "Title V - Workforce Authorities" and the following sections would be included under that title.

Section 501. Definitions. Several terms used throughout the Act are defined in this section. One key definition used throughout the Act is the term "critical need," which is a specific and important requirement of NASA's mission that the agency is unable to fulfill due to workforce limitations. Many of the authorities in the bill can be used only to address a "critical need."

Section 502: Planning, Notification, and Reporting Requirements. This section requires NASA to provide a Workforce Plan to Congress and NASA employees before using its new authorities. The Plan would specify the kinds of cases in which NASA would use its new personnel tools. In addition, six years following enactment, the Administrator is required to provide an evaluation of workforce actions and recommendations for addressing any remaining critical needs.

Section 503: Workforce Authorities: This section lists the specific workforce authorities provided until the time limit of October 1, 2009, subject to certain exceptions specified in Section 511.

Section 504: Recruitment, Redesignation, and Relocation Bonuses. This section authorizes the NASA Administrator to pay recruitment, redesignation, and relocation bonuses. The size of the recruitment and relocation bonuses is higher than what is allowed under current law. In addition, a new category of bonus, a redesignation bonus, is added, which could be paid to an employee who is newly appointed to a position in NASA from any other Federal government position without relocating. The bonus allowed under the bill is up to 50% of an employee's annual salary multiplied by the agreed-upon service period (up to 4 years) if the position addresses a critical need, and 25% if the position does not address a critical need. Under current law, recruitment and relocation bonuses are authorized only up to 25% of annual salary without locality adjustments and without the multiplicative factor of service period.

Section 505: Retention Bonuses. This section authorizes the NASA Administrator to pay retention bonuses up to 50% of an employee's annual salary if the employee's position addresses a critical need and 25% if the position does not address a critical need. Current law authorizes retention bonuses only up to 25% of annual salary without locality adjustments.

Section 506: Voluntary Separation Incentives: This section allows the NASA Administrator to pay Voluntary Separation Incentive (VSI) payments up to 50% of an employee's annual salary (current law, under the Homeland Security Act of 2002, only allows up to $25,000) if the employee is in a position that fills a critical need. NASA employees could not receive a VSI payment if they had received any bonus or allowance in the previous 12 months.

Section 507: Term Appointments. This section authorizes the NASA Administrator to make term appointments for up to six years. Current law authorizes four year appointments. This section also allows term appointments to be converted to permanent civil service appointments, which is not allowed under current law. However, the section imposes certain conditions on the use of this term appointment conversion authority.

Section 508: Pay Authority for Critical Positions. This section authorizes the Administrator to fix pay up to the level of the Vice-President's pay ($198,600 per year) for up to ten employees at any given time.

Section 509: Assignments under the Intergovernmental Personnel Act. This section allows the NASA Administrator to extend the term for Intergovernmental Personnel Act (IPA) employees up to four years (from current two years).

Section 510: Enhanced Demonstration Project. This section allows NASA to conduct a personnel demonstration project agency-wide by exempting NASA from the current limitation of 5,000 individuals.

Section 511: Termination. This section specifies that the workforce authorities listed under section 503 terminate on October 1, 2009, but grandfathers in bonuses and appointments made before the termination date.


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