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Nonappropriated Fund Employment

DCPAS provides oversight of the Nonappropriated Fund (NAF) personnel system. NAF white-collar pay, employee benefits, performance pay, and employee grievances are among the personnel functions regulated by DOD. The Secretary of Defense has administrative authority for most functional areas of the NAF personnel system. Unless specifically provided by law, NAF employment is not subject to civil service provisions or restrictions. Most of the laws administered by the Office of Personnel Management (OPM) (title 5, U.S.C., Section 2105(c)) exclude DOD NAF employees.

The DOD Interchange Agreement between DOD and OPM permits any Federal agency to appoint noncompetitively NAF employees to career or career-conditional competitive service appointments subject to certain conditions outlined in the agreement. NAF employees are eligible to apply for competitive civil service positions under the Interchange Agreement if the position vacancy announcement’s area of consideration includes Federal employees outside the agency, individuals eligible for selection priority in hiring under the Veterans Employment Opportunities Act (VEOA), and individuals eligible under the Interagency Career Transition Assistance Program (ICTAP).

Employees appointed under this agreement may also be eligible for portability of benefits. Under the agreement, treat NAF employees hired to competitive service positions in accordance with regulations covering the transfer of employees within the competitive service. Eligibility for appointment under the Interchange Agreement requires that the employee move between positions that are not time limited, have one year of continuous service prior to the appointment, and move without a break in service or have been involuntarily separated without personal cause within the preceding year.