ANNUAL REPORT - FISCAL YEAR 1966

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-01826R000200100015-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 9, 2016
• Document Release Date: December 4, 2000
• Sequence Number: 15
• Publication Date: July 19, 1966
• Content Type: MF

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19 July 1966
MEMORANDUM FOR : Director of Personnel
SUBJECT Annual Report - Fiscal
Year 1966
Forwarded herewith is the Fiscal Year 1966
Annual Report for Contract Personnel Division.
25X1A9a
Chief
Contract Personnel Division
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SECTION I. MAJOR ACTIVITIES DURING FY 1966
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1. Work Load. Analysis
a. Statistical data for a four year period. is provided to show signif-
icant trends in CPD activities.
b. For the fifth year in a row the on duty strength of all categories
of contract personnel has increased.
c. The number of contracts prepared. in CPD increased 9% over
FY 1965. The number of contract amendments prepared. increased. 36%
due largely to a legislative pay increase, PCS changes, increased attention
to fringe benefits The volume of 25X1 C
field. contracts and. amendments continues at a high level. CPD's review of
field documents is thorough. Corrective action is taken where indicated..
e. The number of proposed industrial contracts on which CPD has
taken action has been included. for the first time in this year's statistics.
Under the Director of Personnel has a responsibility to review
and. approve industrial contract proposals which primarily concern the
procurement of personal services. The Director of Personnel has delegated.
this responsibility to Chief, Contract Personnel Division.
f. The sharp decrease in the number of on-board. staff agents is the
result of a mangement decision to convert JMWAVE staff agents to staff
employee status. The conversion was initiated. and completed. in FY 1966.
Approximately individuals were involved.
g. The large number of separation allowances authorized. in FY 1966
results from the Agency build.-up (staff and, contract) in South East Asia,
primarily Viet Nam.
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SECTION II. SIGNIFICANT DEVELOPMENTS IN FY 1966
1. Advisory Personnel.
The consultant regulatio and accompanying handbook
were completed and published during the early part of
FY 1966. The Office of General Counsel has recently initiated a
revision to the regulation by adding the requirement that consultants
submit supplementary statements at the end of each quarter during
which a change in employment and financial interest occurs. This
change will bring Agency regulations and practices in line with
Executive Order 11222 and the Civil Service regulations issued under
that Executive Order. OGC and CPD have also revised the consultant
employment and financial interest statement to make it more com-
patible with the form recommended by the Civil Service Commission.
2. Review of Proposed Industrial Contracts.
"Industrial contracts which are designed primarily to obtain the
personal services of individuals are permitted only under the most
unusual circumstances when the services sought cannot be obtained
in any other practicable way. " Under the Director of
Personnel has the responsibility to implement the Agency policy stated
above. These proposals have involved CPD discussions with the requesting
component and representatives of Procurement Division or Recruitment
Division regarding the availability of existing Agency personnel to
perform a like service or the Agency's ability to recruit individuals
therefor. Most proposals are in the scientific and technical area with
DD/S&T being the biggest user. The Office of Computer Services, the
Office of Elint, Foreign Missile and Space Analysis Center and the
Office of Scientific Intelligence accounted for 34 of the 46 cases reviewed
in FY 1966. In my opinion components requesting industrial contracts
of this nature do so as a last resort. They are well aware that the
costs are high, often excessive, and normally have spent both time and
effort in attempting to solve the problem in a more direct manner.
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3. Administrative Allowance Committee.
The Administrative Allowance Committee made substantial
t
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ary,
ecre
progress during FY 1966. A permanent
,
was officially added in January although she had been working with the
Committee on an informal basis several months earlier.
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sits in Contract Personnel Division. Her Secretarial duties are
supported by the clerical staff of CPD. Chief, CPD continues to be
the Office of Personnel representative on the Administrative Allowance
Committee. In addition to her Secretarial duties serves 25X1A9a
as the CPD Allowance Specialist. With the work load of the Allowance
Committee constantly increasing how long can perform 25X1A9a
both jobs is conjectural.
The Committee has agreed upon a list of 21 general principles
applied in past cases which it will use as guidelines in future Committee
cases. It has also reaffirmed its basic philosophy--to authorize total
fixed payments, treated as a single package, which are non-accountable
and non-taxable.
In May of 1966 a was published advertising the existence
of the Administrative Allowance Committee. It requests that all
4. Supplemental Retirement.
During FY 1966 a major effort was made in CPD to prepare
and coordinate a study recommending supplemental retirement benefits
for certain Agency contract employees. The study was initially approved
in principle by the Clandestine Services but late in the year the need
for further clarification developed. In June of 1966 an oral agreement
was reached between the Director of Personnel and the Chief, Operational
Services, DDP, concerning guidelines to be used in implementing the
supplemental benefit program. Before these guidelines could be approved
at the next higher level the possibility was discovered of covering most
full-time Agency contract employees under Civil Service retirement.
Many are the same individuals who would otherwise be eligible for
supplemental retirement benefits. Exploratory discussions have been
held between CIA representatives and Director, Bureau of Retirement
and Insurance, Civil Service Commission, as well as between the Office
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of Personnel and the Office of General Counsel. As of this date no
formal decision has been reached. Action has been suspended on
the Agency supplemental annuity program.
5. Contract Regulation and Handbook.
As you know, CPD has been charged with the basic responsibility
to update the contract handbooks, headquarters and field. During FY 1966
considerable time and effort was spent in this endeavor. After numerous
drafts and much internal coordination an approved Office of Personnel
version was forwarded to C/RCS/DDS. Following additional changes
and discussion the proposed handbook was forwarded to all major Agency
components for coordination. Although this is basically an updating
effort, I feel reasonably sure the Clandestine Services and the Office of
General Counsel will suggest significant changes in both form and sub-
stance.
The contract regulation has also been revised and is
out for Agency coordination. Some changes in the regulation were
necessary to correspond with changes in the proposed handbooks.
However, the basic purpose of the revision is to set forth Agency policy
6. Reemployed Annuitants.
During FY 1966 Agency policies were developed concerning the
contractual rehire of retired Government annuitants. Requests for
contracts with these individuals have been increasing for the last 3 years.
The Agency's early retirement policy, the CIA retirement act and
liberalized Government-wide retirement benefits have all increased the
number of recently retired Government employees, many of whom are
actively seeking full or part-time employment. The implications involved
in using these individuals without a clear showing of need, a high approval
level on compensation and a system of centralized monitoring are obvious.
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Early in the year a decision was made that all requests to rehire
civilian annuitants under contract would be approved by the Deputy
Director concerned and the Director of Personnel before the contract
was prepared. On 2 May 1966 this policy was incorporated in a memo-
randum from the Deputy Director for Plans to his chiefs of staffs and
divisions. The memorandum also established clear guidelines for the
rehire of all annuitants by the Clandestine Services. CPD participated
in drafting the memorandum.
At the request of the Executive Director-Comptroller CPD has
been maintaining a current roster of all civilian annuitants of the
Government rehired by personal services contract. This includes
independent contractors, contract employees and consultants. A
quarterly report on all rehired annuitants is submitted to the Executive
Director-Comptroller. Two such reports were prepared during FY 1966.
CPD has also been charged with the responsibility to work up an
Agency policy regulation on the rehire of retired civilian annuitants. A
proposed Agency notice on the subject has been drafted, coordinated
within the Office of Personnel and was recently forwarded to the Executive
Officer to the Deputy Director for Support.
7. Social Security.
As you know Mr. of CPD is the official Agency
liaison officer with the Social Security Administration. The 1965 social
security amendments, including the Medicare provisions, sharply
increased his liaison activities. Many Agency contract employees
either had applications to file for themselves or their dependents or
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OGC and CPD have agreed on the need to clarify the present
regulatory language in this area and to make more flexible the application
of the formula. This will be done during the current coordination of
9. Allowances.
The evacuation of dependents from Viet Nam and the need for
additional civilian employees to serve in Viet Nam without dependents
resulted in the creation of two special allowances by the Department of
State, both of which were adopted by CIA:
(a) The Embassy in Viet Nam is authorized to reimburse
employees up to 20o%o of their current separation allowance
provided that each individual certifies his current living
costs exceed a specified portion of his salary plus his
current separation allowance. Most CIA employees in
Viet Nam have so certified.
(b) It was officially determined that certain civilian govern-
ment employees assigned to Viet Nam incur unusual and
necessary travel costs to visit members of their family
residing outside their country of assignment. Heads of
Agencies are now authorized to reimburse employees for
such travel costs up to $2400 in any twelve month period
of assignment to Viet Nam.
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SECTION III. PLANS AND OBJECTIVES FOR FISCAL YEAR 1967
1. Of utmost importance in early FY 1967 is the need for a
formal decision from the Bureau of Retirement and Insurance, Civil
Service Commission, regarding coverage for most of our full-time
contract employees under (1) Civil Service retirement (2) FEGLI and
(3) the Health Insurance Program for appointed employees. A key
element in this decision is the degree, if any, of retroactivity involved.
We have been informally advised that prospective coverage is assured.
In any event once a decision regarding eligibility and scope has been
made, implementation by contract amendment will be a CPD respon-
sibility. This will be a formidable and time consuming task although
the results will more than justify the effort.
The thrust of an Agency program of supplemental retirement
benefits for contract employees is also directly related to the scope
of Civil Service retirement coverage. If such coverage is prospective
only and creditable service for previous contract time is denied we
will still need some supplemental program to cover those long-standing
contract employees who have only a few years to go before retirement.
Younger men with little prior contract time would not qualify for an
Agency program. (I am thinking here specifically of TSD's- "career"
contract employees.) If on the other hand creditable service for prior
contract time is authorized no supplemental program would be needed.
However, we can use the criteria of the staff study for any deserving
ad hoc case that might arise.
2. Another priority program is the coordination and publication
of the headquarters notice on the rehire of retired civilian annuitants. I
foresee no serious problem in completing this task within a relatively
short period of time. The Clandestine Services has a similar published
policy. Non DDP components have been living within the proposed policy
restriction for the last six months on an informal basis. I do hope that
when the Agency notice is published CPD can discontinue its quarterly
annuitant report.
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3. Publication of the contract handbooks, headquarters and
field, is another FY 1967 objective, but one which will probably not
be accomplished until FY 1968. The handbooks are each about 30 pages
long. They provide both general and specific instruction, guidance,
and restriction. They contain sample contracts, amendments, MOA's,
termination notices, a benefit chart etc. In short, something for
everybody--to comment on. Since we have existing handbooks on this
subject that are still readable and useable the prospect of a long
coordination process is not too discouraging- -if better handbooks are
the result.
Revision of the contract regulation is a different matter. It
contains new and important policies that need to be published as soon
25X1Aas possible, i. e. the criteria for conversion from staff to career agent
status. Publication of is in my opinion a priority item for
FY 1967.
4. I can foresee no significant decrease in CPD's contract work
load in either FY 1967 or 1968 as long as staff ceiling and other restric-
tions continue.
In addition, the personal services contract has been and continues
to be an excellent and flexible device for use in a temporary or emer-
gency situation. Many Agency programs, projects and activities are
staffed by contract personnel. are contract 25X1A2g
projects orientated basically towards Southeast Asia. TSD has at least
six projects approved for staffing with over =contract employees. 25X9
RID has a project written around the use of retired annuitants. The
Clandestine Services representative on the Historical Staff monitors
a group of contract persons hired to write historical studies. The Office
of ELINT has a training program that involves trainees hired by contract.
Upon successful completion of the course the individuals are converted
to staff status and assigned to The cooperative work 25X1A6b
study program of the Office of Communications uses the contract device.
The Office of Personnel uses part-time clerical contract employees to
support its field recruiters. The Office of Security and the Office of
Medical Services would be hard pressed to operate without contract
investigators and contract doctors. As you can see most major compo-
nents have at least one activity which is staffed by contract personnel.
In my opinion the number of these programs will increase, not decrease,
during the next two years.
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