Free Administrative Instruction No. 2, January 6, 1989 - Federal

OFFICE OF THE SECRETARY OF DEFENSE
1950 DEFENSE PENTAGON WASHINGTON, DC 20301-1950

Administration & Management

January 6, 1989 ADMINISTRATIVE INSTRUCTION NO. 2 SUBJECT: Employment of Experts and Consultants References: (a) Administrative Instruction No. 2, subject as above, January 31, 1985 (hereby canceled) (b) Federal Personnel Manual, Chapter 304 (c) Sections 3109, 5308, 5532, and Chapter 51 of title 5, United States Code (d) Office of Management and Budget (OMB) Circular No. A-120, January 4, 1988 (e) through (l), see enclosure 1

1. REISSUANCE AND PURPOSE This Instruction reissues reference (a), consistent with references (b) through (l), to update policies, procedures, and criteria for the employment of experts and consultants, including the employment of consultants as advisory committee members.

2. APPLICABILITY AND SCOPE 2.1. This Instruction applies to the Office of the Secretary of Defense (OSD), the Joint Staff, and all other activities deriving administrative support from Washington Headquarters Services (WHS) (hereafter referred to collectively as "OSD Components"). The procurement of individual services by contract are covered under AI No. 54 (reference (h)).

3. DEFINITIONS Terms used in this Instruction are defined in enclosure 2.

AI 2, January 6, 1989 4. POLICY 4.1. The temporary employment of experts and consultants on an intermittent, parttime or full-time basis is a normal, legitimate, and economical way to obtain highly specialized services to improve OSD Component services and operations. 4.1.1. The temporary services of experts and consultants may be used to obtain: 4.1.1.1. Specialized opinions or professional or technical advice when suitable in-house capability is unavailable and cannot be developed in time to meet the needs of the OSD Component concerned, or development of in-house capability would not be cost-effective because the special skills or expertise are not required full time. 4.1.1.2. Outside points of view to avoid too limited judgments on critical issues. 4.1.1.3. Opinions, special knowledge, or skills of noted experts on important projects whose national or international prestige contributes to the undertaking's success. 4.1.1.4. An enhanced understanding of, and development of, alternative solutions to complex issues. 4.1.1.5. Support and improve the operations of the OSD Components. 4.1.1.6. Ensure the more efficient or effective operation of managerial or hardware systems. 4.1.1.7. Support and improve the operation of organizations. 4.1.1.8. Obtain advice regarding developments in industry, university, or foundation research. 4.1.1.9. The advisory participation of citizens to develop or implement Government programs that by their nature or by statute call for citizen participation. 4.1.2. The authority to employ experts or consultants shall not be used to: 4.1.2.1. Provide a particular person temporary employment solely in anticipation of a career-conditional appointment or when the desired services are readily available within the Department of Defense or another Federal Agency. 4.1.2.2. Perform Government functions, including the exercise of discretion in applying Government authority and the use of value judgments in making

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AI 2, January 6, 1989 decisions regarding monetary transactions and entitlements. This applies to routine ongoing work of a policy, decision-making, or managerial nature that is the direct responsibility of OSD Component military personnel or civilian employees. 4.1.2.3. Bypass or undermine personnel ceilings, pay limitations, or competitive employment procedures. 4.1.2.4. Give former Government employees preferential treatment. 4.1.2.5. Aid specifically in influencing or enacting legislation. 4.1.2.6. Obtain repeated or extended arrangements, except under extraordinary circumstances. 4.2. Experts and consultants may be employed with or without compensation. 4.3. A concurrent appointment may be held with another DoD Component or Federal Agency. An expert or consultant holding a part-time office or position with the United States Government, and receiving compensation, shall receive no additional salary compensation for the service performed on the days worked in the part-time capacity. An intermittent expert or consultant is entitled to pay for services from more than one expert or consultant position, provided the pay is not received for the same hours of the same day. 4.4. If an expert or consultant performs work outside of the regular tour of duty; i.e., on a Saturday or Sunday, he or she shall be paid straight time rather than the overtime rate. Compensation of experts and consultants is subject to the limitation on compensation imposed by 5 U.S.C. 5308 (reference (c)), which must be applied on a pay period basis. Therefore, an expert or consultant, employed on a daily basis, may be paid the rate of basic compensation for work on days outside the prescribed tour of duty, provided compensation within any biweekly pay period does not exceed the rate of basic pay for level V of the Executive Schedule, within the statutory limits. In accordance with 5 U.S.C. 3109 (reference (c)), daily rates of pay may be granted up to the daily equivalent of the top step of grade GS-15, within the statutory maximum rate. The grade GS-18 rate (within the statutory maximum) may be paid to persons appointed to professional engineering positions primarily concerned with research and development, professional positions in medicine, and the physical and natural sciences. In some instances, the appropriations or other statute may authorize the payment of a maximum daily, rate higher or lower than the rates authorized by Section 3109 of reference (c); e.g., Pub. L. 95-561. 4.5. As a general rule, reference (c) shall be used as the statutory authority for employment of experts and consultants, including employment of such persons without compensation. However, when another authority exists that is applicable specifically to a

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AI 2, January 6, 1989 particular appointment, that authority takes precedence and may be used without special justification. 4.6. Determining the specific per diem rate to be paid experts and consultants, including the decision not to pay compensation, shall be made on an individual case basis. The rate of compensation shall be determined by taking into consideration the relative importance of the duties to be performed, the stature of the individual in his or her specialized field, and other factors such as comparable pay for positions under Chapter 51 of 5 U.S.C. (reference (c)) or other Federal pay systems, rates paid by private employers, and rates of compensation paid other consultants and experts previously employed for similar work. Normally, compensation shall be at the per diem equivalent to salaries in the GS-13 through GS-15 range. 4.7. Experts and consultants appointed on an intermittent basis shall be paid for the number of hours they actually work, with periods of less than 8 hours a day computed at the rate of 1/8 of a day's pay for each hour worked. However, it is appropriate to pay the full daily rate for each day they perform services that effectively interrupt their usual business or profession for most of the day. 4.8. An expert or consultant is not entitled to more than the daily rate prescribed, regardless of the number of hours worked; that is, for more than 8 hours a day, and is not eligible for overtime, night differential, or premium pay. 4.9. Intermittent appointees can only serve irregularly or occasionally and cannot work more than 130 days during their service year. Any day or part of a day for which an expert or consultant is paid counts toward the 130-day limit. 4.10. Experts and consultants may receive transportation and per diem expenses in connection with official travel while away from their place of residence or regular place of employment and paid per diem and travel expenses in accordance with the provisions of the Joint Travel Regulations, Volume II (reference (j)). Experts and consultants employed on an intermittent basis may be compensated at the established rate of pay for time spent in a travel status on official business. If duty pay is to be authorized for time spent in travel, it shall be established as a precondition of employment and reflected on the Time and Attendance Form (AF Form 1278), when authorized. 4.11. A retired civilian employee may be hired as an expert or consultant; however, the civil service annuity, computed on a daily rate, shall be deducted from his or her pay for the actual time worked. 4.12. The military retired pay of a retired regular commissioned or warrant officer serving as an expert or consultant shall be reduced in accordance with 5 U.S.C. 5532(b) (reference (c)). Reduction of retired pay is not required for the first 30-day period for which salary is received. The 30-day exclusion does not apply to more than one appointment aggregating more than 30 days within the same work year nor a 4

AI 2, January 6, 1989 reappointment to the same position in the succeeding work year. The reduction is effective the 31st calendar day for a full-time, temporary appointment and effective with the 31st actual day worked for a temporary, part-time, or intermittent appointment. Temporary, full-time is regular employment with a limited duration. The 30 days are calculated by the full calendar period employed including Saturdays and Sundays. 4.13. Retired Reserve officers and enlisted members are not subject to reduction of their military pay, except as prescribed in paragraph 4.14., below. 4.14. Section 5532(c) of reference (c) provides that no member of a Uniformed Service (Regular or Reserve, officer or enlisted) who retires and is employed in a civilian position after January 11, 1979, may receive income from civilian salary plus retired pay which aggregates more than the base salary for level V of the Executive Schedule, within the statutory limits. 4.15. The reduction in retired pay provisions of Section 5532(b) and (c) of reference (c) do not apply to retired members whose retirement was based on disability resulting from injury or disease received in line of duty as a direct result of armed conflict, or caused by an instrumentality of war and incurred in the line of duty during a period of war. 4.16. Advisory committee members shall not be compensated unless specifically required by law, except in unusual circumstances. Exceptions shall be granted only if the OSD Component Head certifies that the technical expertise or viewpoint to be offered by the consultant or the requirement for balanced membership is not otherwise available without cost (41 CFR 101 (reference (e))).

5. RESPONSIBILITIES 5.1. The Assistant to the Secretary of Defense (ATSD) and the Deputy Secretary of Defense, or designee, shall approve or disapprove on behalf of the Secretary of Defense and the Deputy Secretary of Defense all appointments, renewal of appointments, extensions of days, and changes in compensation of experts and consultants and consultants as members of advisory committees proposed by the Heads of the OSD Components. 5.2. The Director, Administration and Management (DA&M), or designee, shall: 5.2.1. Recommend approval and certification of proposed appointments and other personnel actions of experts, consultants, and members of advisory committees, and approve exceptions in order to compensate advisory committee members when the expertise is not available without cost.

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AI 2, January 6, 1989 5.2.2. Approve or disapprove each proposed appointment within 180 days of retirement of a former member of the Armed Forces under AI No. 45 (reference (i)). 5.3. The Under Secretaries of Defense (USDs), the Assistant Secretaries of Defense (ASDs), the Assistants to the Secretary of Defense (ATSDs), and Equivalents shall: 5.3.1. Determine the need for expert or consultant services. 5.3.2. Ensure that the required knowledge and skills are not already available within the work force. 5.3.3. Initiate requests for appointment, renewal, extension, and termination of appointments. Justify in writing the selection of each particular expert or consultant. 5.3.4. Determine the number of workdays that advisory services will be required, ensure that the days worked do not exceed the number approved, and request an extension if additional days are required. 5.3.5. Recommend a daily rate of pay or determine if the prospective appointee will serve without compensation. In recommending a pay rate, consideration shall be given to the following: 5.3.5.1. Appropriateness of the intended level of pay in relation to the work to be performed. 5.3.5.2. The qualifications and experience of the proposed expert or consultant. 5.3.5.3. The current or highest salary earned by the proposed appointee. 5.3.5.4. The comparable compensation in the private sector. 5.3.6. Monitor each consulting service arrangement to ensure properly that performance is satisfactory and results are assessed. Notify each expert or consultant that a DD Form 2525 (enclosure 3) shall be submitted for each pay period in which services are performed. 5.3.7. Maintain necessary records, at a minimum a DD Form 2525 (enclosure 3), on each expert or consultant employed. 5.3.8. Ensure that experts and consultants employed on an intermittent basis work only occasionally and irregularly and do not work in excess of the number of days approved, not to exceed a maximum of 130 days during the service year.

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AI 2, January 6, 1989 5.3.9. Review, on a quarterly basis, the records on each expert and consultant who worked 10 days or more during the quarter. The review shall ensure that: 5.3.9.1. Duties performed are still those of an expert or consultant. 5.3.9.2. Time limits are being observed. 5.3.9.3. Documentation is kept current. 5.3.9.4. Duties of record are actually being performed. 5.3.10. Provide the certification required by subparagraph 5.3.9., above, to the Director, Personnel & Security, WHS, no later than the 20th of the month following the end of each quarter (enclosure 7). 5.4. The General Counsel shall provide legal guidance on matters related to conflicts of interest in accordance with DoD Directive 5500.7 (reference (l)). 5.5. The Director, Personnel and Security, Washington Headquarters Services (WHS), shall: 5.5.1. Review appointment, extension, and renewal requests for experts and consultants to ensure they meet all legal, security, standards of conduct, and compensation requirements and recommend approval action to the ATSD and Deputy Secretary of Defense through the DA&M. 5.5.2. Terminate the appointment of experts and consultants on the not-toexceed date of their appointment if proper paperwork has not been received from the employing OSD Component to extend or terminate such appointment. No expert or consultant shall be paid for services rendered unless his or her current appointment has been approved by the appropriate authority. 5.5.3. Review each quarterly report received from the OSD Components having experts or consultants on their rolls for more than 10 days during each quarter. Summarize the findings and take action to correct any deficiencies noted. 5.5.4. Budget for experts and consultants and ensure funds are available for appointments, extensions, renewals, and increases in compensation. 5.5.5. Through the Chief, Security Division, perform appropriate security investigations and adjudications on individuals selected for expert or consultant appointments, and grant, suspend, deny, or revoke security clearances.

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AI 2, January 6, 1989 5.6. The Director, Budget and Finance, Washington Headquarters Services (WHS), shall report costs incurred in the annual CAAS budget exhibit (PB-27), as required by DoD Directive 4205.2 (reference (g)). 5.7. Appropriately designated TIME AND ATTENDANCE CLERKS shall maintain and forward AF Form 1278, "Time and Attendance Form," in accordance with established procedures. In addition, a DD Form 2525 (enclosure 3) completed by each expert or consultant who performed services during the pay period, must be maintained on file for 2 years. A reproduced copy of each form shall be forwarded to the Chief, Staffing Division, Directorate for Personnel and Security, WHS, for each salaried expert or consultant, whether or not the individual worked during the pay period, no later than the Monday following the end of the pay period. 5.8. Individual Experts and Consultants (IECs) shall complete a DD Form 2525 (enclosure 3) and submit it to the designated time and attendance clerk for each pay period in which they perform services.

6. PROCEDURES 6.1. The requesting OSD Component shall submit proper paperwork, including the forms designated in enclosures 4 and 5, through its Administrative or Executive Officer, to the Director, Personnel and Security, WHS, or the Civilian Personnel Officer, Joint Staff, as applicable, including justification as required by this Instruction for each action as described in enclosure 6. 6.1.1. If the proposed expert or consultant is retired from a Military Service and the proposed appointment is within 180 days after the effective date of retirement, the requesting OSD Component shall submit justification for a waiver of the 180-day waiting period in accordance with AI No. 45 (reference (i)). 6.1.2. The appointment of consultants as members of authorized advisory committees shall be handled in the same manner as other experts and consultants, with the exception of compensation under 41 CFR 101 (reference (e)). Subpart 101-6.1033 of reference (e) specifies that unless specifically required by law, Agencies shall not compensate advisory committee members for their service on an advisory committee. Exceptions may be made in appropriate cases if the OSD Component Head determines that the technical expertise or viewpoint to be offered by the consultant or the requirement for balanced membership is not otherwise available without cost to the Agency. In these instances, the OSD Component Head must certify that the exception is justified. Charters of advisory committees shall have final approval of the DoD Advisory Committee Management Officer, Office of the DA&M, Organizational and Management Planning (O&MP), before action can be taken to process appointments.

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AI 2, January 6, 1989 6.1.3. The OSD Component shall submit a Standard Form 52 (SF-52), completed and signed by the appropriate approving official, for each termination of appointment, ensuring that the correct mailing address is furnished. Although the civilian personnel data system automatically produces a termination of appointment SF-50 on the not-to-exceed date, the servicing civilian personnel office may not have a current forwarding address, which is essential for payroll purposes. A completed and signed Standard Form 278 (SF-278) should accompany each SF-52 for those experts or consultants who worked more than 60 calendar days at a daily rate equivalent to the current daily rate of a GS-16, step 1, or above, in accordance with DoD Directive 5500.7 (reference (l)). 6.2. Each retired Regular officer of the Military Services shall file with the Military Department, in which he or she holds retired status, a DD Form 1357 "Statement of Employment," within 30 days of the date of appointment under reference (l). 6.3. The Chief, Staffing Division, Directorate for Personnel and Security, WHS, shall review the forms submitted for completeness and compliance with this Instruction. Requesting OSD Components shall be notified promptly when an action concerning an expert, consultant, or advisory committee member has been approved or disapproved by the ATSD and Deputy Secretary of Defense. No action, such as allowing an individual to work, may be taken by the OSD Component until the Component has been advised that approval has been granted and all necessary paperwork is in order, including proper security clearances and financial disclosure documents. This includes extensions, renewals, or increase of number of days a consultant is approved to work.

7. EFFECTIVE DATE This Instruction is effective immediately.

Enclosures - 7 E1. References, continued E2. Definitions E3. DD Form 2525 E4. DD Form 2292 E5. SD Form 436 E6. Forms Required for Consultant/Expert Processing E7. SD Form 554 9

AI 2, January 6, 1989 E1. ENCLOSURE 1 REFERENCES, continued

(e) Part 101 of title 41, Code of Federal Regulations (f) DoD Directive 5105.18, "DoD Committee Management Program," March 20, 1984 (g) DoD Directive 4205.2, "DoD Contracted Advisory and Assistance Services (CASS)," January 27, 1986 (h) Administrative Instruction No. 54, "Contracted Advisory and Assistance Services (CAAS)," July 7, 1986 (i) Administrative Instruction No. 45, "Employment of Retired Members of the Armed Forces," November 5, 1984 (j) Joint Travel Regulations, Volume II (k) DoD 1340.12-M, "Military Retired Pay Manual," March 1987 (l) DoD Directive 5500.7, "Standards of Conduct," May 6, 1987

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ENCLOSURE 1

AI 2, January 6, 1989 E2. ENCLOSURE 2 DEFINITIONS

E2.1.1. Advisory Committee Member. A consultant appointed to an advisory committee. E2.1.2. Consultant. An individual possessing uncommon, special, current knowledge or skill in a broad area, combined with extensive experience in the application of such knowledge or skill in an operational setting. As a consequence, consultants are well-recognized outside of their peer group. E2.1.3. Consulting Services. Advisory and assistance services related to administration and program management that are provided by persons or organizations generally considered to have knowledge and special abilities not available within the OSD Component concerned. E2.1.4. Expert. An individual possessing uncommon, special, current knowledge or skill in a particular field. An expert is an outstanding specialist with a high level of peer recognition. E2.1.5. Individual Experts and Consultants (IECS). Persons possessing special, current knowledge or skill that may be combined with extensive operational experience. This enables them to provide information, opinions, advice, or recommendations that enhance understanding of complex issues, or improve the quality and timeliness of policy development or decision-making. These individuals may either work independently or as members of panels, commissions, or committees. E2.1.6. Intermittent Appointment. Occasional or irregular employment on programs, projects, or problems, or phases thereof, requiring intermittent service not to exceed 130 workdays in a service year. (If at any time it is determined that the expert's or consultant's work no longer is intermittent in nature, the employment shall be terminated immediately or converted to full-time, if circumstances allow.) E2.1.7. Military Services. The Army, the Navy, the Air Force, and the Marine Corps. E2.1.8. Service Year. The 365 calendar-day period that begins with the effective date of appointment. E2.1.9. Temporary Appointment. Full- or part-time employment in an authorized billet on programs, projects, or problems, or phases thereof, requiring temporary services for 1 year or less.

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ENCLOSURE 2

AI 2, January 6, 1989 E3. ENCLOSURE 3 DD FORM 2525

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ENCLOSURE 3

AI 2, January 6, 1989 E4. ENCLOSURE 4 DD FORM 2292

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ENCLOSURE 4

AI 2, January 6, 1989

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ENCLOSURE 4

AI 2, January 6, 1989 E5. ENCLOSURE 5 SD FORM 436

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ENCLOSURE 5

AI 2, January 6, 1989 E6. ENCLOSURE 6 FORMS REQUIRED FOR CONSULTANT /EXPERT PROCESSING
New ReAppointnewals ments X X X X X Increase or Change in Compensation or Days X X X

Termination

Forms Required for Consultant/Expert Processing

Memo signed by the Agency (ASD/USD level) Original and 1 Copy SF-52 (Request for Personnel Action) - Original DD 2292 (Request for Appointment or Renewal of Appointment of Consultant or Expert) - Original and 4 copies (both sides)) SF-171/SF-171A (Application for Federal Employment) - Original and 3 copies SF-61 (Appointment Affidavits) - Original SF-61B (Declaration of Appointee) - Original

X X X X X X X *

X

X

SD 436 (Conditions of Employment for Experts and Consultants) - Original Tax Withholding Forms (State and Federal) - Original (For paid consultants)

X X * * X

DD 1555 (Confidential Statement of Affiliations and Financial Interests) - Original in sealed envelope Disqualification Statement - Original (if Applicable) SF-278 (Executive Personnel Financial Disclosure Report) - Original *(Only required if the consultant is employed at the daily rate of pay requiring the filing of a SF-278 (Salary above GS-16, step 01). Send form to the Standards of Conduct Office once he/she has worked the 61st day). Submit a copy of form with Termination SF-52 to the Personnel Office. DD 214 - One copy if retired military - (furnished by employee)

X X X

Annuity Statement - One copy if reemployed annuitant (furnished by employee) - A new annuity statement must be submitted each time a change occurs. SF-1199A (Authorization for Deposit of Federal Recurring Payments) - Original (forward only if check is to be deposited in bank). (For paid consultants) DoD Directive 5500.7 (Standards of Conduct) Return receipt of Directives form. (This is provided to each new employee) Form I-9 (Employment Eligibility Verification) Original (Notarized or signed by designated Personnel Specialist)

X

X

X

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ENCLOSURE 6

AI 2, January 6, 1989
New Increase or Change ReTermiAppointin Compensation newals nation ments or Days X X X

Forms Required for Consultant/Expert Processing SF-256 (Self-Identification of Reportable Handicap) - Original SF-181 (Race and National Origin Identification) - Original DD 398 (DoD Personnel Security Questionnaire) - Original and 5 copies (All with original signatures) (TOP SECRET Clearance) SF-85 (Data for Non-sensitive or Non-critical Sensitive Position) - Original (SECRET clearance) Fingerprint Cards - 2 Originals - (FD 258 for TOP SECRET clearance) or (SF-87 for SECRET clearance or Non-sensitive clearance) DD 2221 (DoD Authority for Release for Information & Records) - Original Waiver (Memo signed by Agency Head for Military personnel appointed within 180 days of retirement)

X

X

X X

X X

X

Waiver (Memo signed by Agency Head to waive restriction to pay advisory/committee members) AF Form 1532 (Mailing Address Card) (For paid consultants)

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ENCLOSURE 6

AI 2, January 6, 1989 E7. ENCLOSURE 7 SD FORM 554

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ENCLOSURE 7