Information on the Administration's Program to Reduce Grade 11-15 Positions

In response to a congressional request, GAO provided information on the justification for the Office of Personnel Management (OPM) and Office of Management and Budget program to reduce the number of grade 11 thru 15 positions in the General Schedule and General Merit pay systems based on the findings of the Private Sector Survey on Cost Control (Grace Commission) and the Bureau of Labor Statistics.

GAO found that the goals of the program are to: (1) reduce approximately 40,000 of these positions over a 4-year period beginning in fiscal year 1985; (2) save about $1.7 billion; and (3) improve position management in the federal government. Based on the Grace Commission findings, OPM concluded that the federal government has 50 percent more of its work force at higher grades than does the private sector. However, GAO found that the data used by the Commission may not be representative of the private sector as a whole and failed to include information on the basis of its studies. OPM maintained that no more than 60 percent of the grade increases could be attributed to greater demand caused by increasingly technical and complex work. However, the Congressional Budget Office has reported that about two-thirds of the average grade increases seemed to relate to the changing character of government work. GAO has found that increased grade levels have been caused by: (1) hiring restrictions which have encouraged agencies to hire employees with specialized skills; (2) reductions in force; (3) contracting out for lower grade work; and (4) mission and program changes. Finally, GAO questioned OPM position accuracy surveys as indications that the federal government has a continuing overgrading problem and the use of Bureau of Labor Statistics data to show the occupational distribution of private sector employment. Therefore, while GAO agreed with the program's objective, it questioned the basis of the surveys used.