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Rule2025-17125

Reinvigorating Merit-Based Hiring Through Candidate Ranking in the Competitive and Excepted Service (Rule of Many)

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Published

September 8, 2025

Effective

November 7, 2025

Issuing agencies

Personnel Management Office

Abstract

The Office of Personnel Management (OPM) is issuing this final rule to implement changes authorized by the National Defense Authorization Act (NDAA) for Fiscal Year 2019 governing the selection of candidates from competitive lists of eligibles. These changes are meant to encourage the use of rigorous, merit-based candidate rankings when hiring in the competitive and excepted service. They also provide expanded flexibility to agencies in the selection of candidates under delegated examining procedures. These changes also affect how agencies select candidates for excepted service appointments.

Full Text

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<title>Federal Register, Volume 90 Issue 171 (Monday, September 8, 2025)</title>
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[Federal Register Volume 90, Number 171 (Monday, September 8, 2025)]
[Rules and Regulations]
[Pages 43135-43146]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-17125]

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Rules and Regulations
Federal Register
________________________________________________________________________

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having general applicability and legal effect, most of which are keyed
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Federal Register / Vol. 90, No. 171 / Monday, September 8, 2025 /
Rules and Regulations

[[Page 43135]]

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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 302, 332, and 337

[Docket ID: OPM-2023-0015]
RIN 3206-AN80

Reinvigorating Merit-Based Hiring Through Candidate Ranking in
the Competitive and Excepted Service (Rule of Many)

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing this final
rule to implement changes authorized by the National Defense
Authorization Act (NDAA) for Fiscal Year 2019 governing the selection
of candidates from competitive lists of eligibles. These changes are
meant to encourage the use of rigorous, merit-based candidate rankings
when hiring in the competitive and excepted service. They also provide
expanded flexibility to agencies in the selection of candidates under
delegated examining procedures. These changes also affect how agencies
select candidates for excepted service appointments.

DATES: This rule will be effective on November 7, 2025. Agencies must
be in full compliance with this final rule not later than March 9,
2026.

FOR FURTHER INFORMATION CONTACT: Mike Gilmore by telephone at (202)
936-3261 or Katika Floyd by telephone at (202) 606-0960; by email at
<a href="/cdn-cgi/l/email-protection#67020a170b081e2708170a49000811"><span class="__cf_email__" data-cfemail="4e2b233e2221370e213e2360292138">[email&#160;protected]</span></a>; by fax at (202) 606-4430; or by TTY at (202) 418-3134.

SUPPLEMENTARY INFORMATION: The National Defense Authorization Act for
Fiscal Year 2019 (the ``Act'') authorized changes governing the
selection of candidates from delegated examining certificates. Sec.
1107, Public Law 115-232, 132 Stat. 2002. It eliminated the ``rule of
three'' and authorized agencies to certify a ``sufficient number'' of
names, not less than three, from the top of the appropriate register or
list of eligible candidates, to be considered for selection, using a
cut-off score or other mechanism established by OPM known as the ``rule
of many.'' The Act also affected how agencies may make selections under
5 CFR part 302, Employment in the Excepted Service.
On July 21, 2023, OPM issued a proposed rule at 88 FR 47059 to
implement these provisions. First, OPM proposed to revise 5 CFR 332.404
to reflect the rule of many that the Act codified in 5 U.S.C. 3317(a).
Instead of being required to select from among the top three candidates
for each vacancy on a numerically ranked list, an official may select
any eligible candidate on the certificate of eligibles.
The Act also codified at 5 U.S.C. 3318(e) the long-standing
practice of applying the ``three considerations rule.'' Under numerical
rating and ranking selection procedures, the three considerations rule
found in 5 CFR 332.405 allows an appointing officer to remove a
candidate from further consideration if they have considered that
candidate three times for three separate appointments from the same or
different certificates for the same position and makes a valid (legal)
selection of another candidate each time. OPM proposed that, when
making multiple selections from a certificate under the rule of many,
starting with the fourth selection, the three considerations rule would
allow one individual to be removed per selection.
Under the Act, these provisions also apply to the excepted service.
Accordingly, OPM proposed conforming edits to 5 CFR part 302.
The 60-day comment period for the proposed rule lasted from July
21, 2023, to September 19, 2023. During that time, OPM received a total
of 15 sets of comments from individuals, federal agencies, and
organizations. In the first section below, we discuss comments that
address topics related to the rule as a whole. In the sections that
follow, we address comments related to specific aspects of this final
rule.

General Comments

Two organizations and an agency expressed general support for the
proposed rule of many regulations. (OPM 2023-0015-0004, OPM-2023-0015-
0010, and OPM-2023-0015-0012) OPM thanks them for their support. An
individual expressed frustration that a lack of resources prevents
agencies from providing meaningful comment on the rule but noted that
the current hiring process is so cumbersome as to ``not be[ ] worth the
effort.'' (OPM-2023-0015-0002) OPM will not address this comment
because it is beyond the scope of the rulemaking.
An organization proposed the establishment of an Office of the
Ombudsman with authority to investigate individual candidates'
complaints against maladministration. It felt that this office could
also provide a more transparent look into federal hiring decisions.
(OPM-2023-0015-0015) OPM does not believe it is necessary to require
agencies to establish an Office of the Ombudsman to investigate
individual candidate complaints with respect to the application of the
rule of many or the three considerations rule. OPM notes the three
considerations rule applied to the rule of three process for decades
and did not require an Office of the Ombudsman. Further, removal of a
candidate from consideration under the three considerations rule must
be documented and added to the examining case file, which must be
audited by the Delegated Examining Unit in accordance with the agency's
Delegated Examining Agreement and the Delegated Examining Operations
Handbook \1\ (DEOH). A candidate may ask a hiring agency about the
status and disposition of the application submitted and the non-
selection. Lastly, because this provision is discretionary on the part
of hiring agencies, a requirement to establish an Office of the
Ombudsman may be overly burdensome and discourage use of this
flexibility.
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\1\ Delegated Examining Operations Handbook, available at
<a href="https://www.opm.gov/policy-data-oversight/hiring-information/competitive-hiring/deo_handbook.pdf">https://www.opm.gov/policy-data-oversight/hiring-information/competitive-hiring/deo_handbook.pdf</a>.
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An organization commented that OPM should use this rulemaking as an
opportunity to promote skills-based hiring, assessments, and efficient
processes. The organization added that the federal government will reap
the most benefit from the rule of many when agencies have access to and
use high-quality technical assessments to differentiate the best-
qualified candidates and match them effectively to the core skills
needed for open positions. The same organization also

[[Page 43136]]

recommended OPM use this opportunity to remind agencies to tailor
minimum qualifications based on position needs determined via a
thorough job analysis and more strongly signal that regardless of the
rating procedure used, agencies should focus on expanding adoption of
technical assessments. (OPM-2023-0015-0004) Although these
recommendations, which focus on the planning process, are beyond the
scope of this rulemaking, which addresses the selection process, we
acknowledge the sentiment and refer the commenter to Executive Order
14170, Reforming the Federal Hiring Process and Restoring Merit to
Government Service (90 FR 8621); and the Merit Hiring Plan; \2\ which
require the use of skills-based assessments.
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\2\ The Merit Hiring Plan is available at <a href="https://www.chcoc.gov/content/merit-hiring-plan">https://www.chcoc.gov/content/merit-hiring-plan</a>.
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Comments Regarding the Rule of Many

The ``rule of many'' is a numerical rating process in which
applicants are assigned numerical scores (including veterans'
preference points, if applicable, for preference eligible veterans),
listed in rank-order, and considered for selection. OPM proposed that
an agency must use one of four methods to determine the number of
applicants referred for selection. OPM also proposed a number of
factors that agencies should consider in determining which method to
use. The first method is to use a cut-off score based on the
assessment(s) used and supported by job analysis data. For this method,
test measurement experts knowledgeable about the assessment(s) used
establish a minimum score to identify qualified applicants that are
highly qualified and can be successful in the position. The second
method is to use a cut-off score based on business necessity. The third
method is to establish a set number of eligible applicants to refer
from the top of the ranked list of applicants. The fourth method is to
establish a percentage of the eligible applicants to refer from the top
of the ranked list of applicants. OPM also proposed that an agency must
use one of these methods to establish the number of applicants it will
refer prior to announcing the vacancy and must document the mechanism
used to allow for later review. OPM received comments and questions
about several aspects of the rule of many.
One individual asked how the rule of many is different from
category rating. (OPM-2023-0015-0003) Category rating differs in that
applicants are not given a numerical score; instead, the agency
assesses candidates against job-related criteria and then places them
into two or more pre-defined categories. With category rating,
veterans' preference is applied by listing preference eligibles ahead
of non-preference eligible applicants in each category. Selections are
made from the highest quality category. For both rule of many
certificates and category rating certificates, 10 percent or more
disabled veterans are placed at the top of the certificate (i.e., ahead
of all other applicants under rule of many and in the highest quality
category ahead of other applicants for category rating certificates),
except for scientific and professional positions at the GS-9 grade
level or above.
An agency asked if agencies would have the choice of using the
category rating process or the rule of many (OPM-2023-0015-0007). Under
this final rule, agencies have the choice to use either category rating
or the rule of many. In choosing which process to use, an agency should
consider, among other things, the extent to which it needs to make
finer distinctions among applicants based on their relative
qualifications for the position being filled, the number of people
being hired, the number of applicants the agency expects to apply for
the position, etc.
An individual observed that Executive Order (E.O.) 13932 requires
assessments that rely on more than a candidate's self-evaluations. The
commenter asked OPM to clarify how this rule requires more than self-
assessment questionnaires and HR r[eacute]sum[eacute] reviews to
determine granular rankings. (OPM-2023-0015-0005) E.O. 13932, E.O
14710, and the Merit Hiring Plan require that agencies improve the use
of assessments when hiring by not relying solely on candidates' self-
evaluations of their abilities. Instead, they must use objective
assessment hurdles when considering candidates. Agencies must ensure
that the assessment strategies and tools used when filling positions
meet the requirements of E.O. 13932. OPM notes that agencies have been
using a variety of assessments to comply with E.O. 13932 for years, and
the assessments that are currently used by agencies may still be used
under the rule of many. In addition, more recent directives--
specifically the Chance to Compete Act of 2024 (Pub. L. 118-188,
enacted in 2024), E.O. 14710, and the Merit Hiring Plan--require
greater usage of skills-based assessments and for agencies to
transition away from use of self-assessments. As described previously,
the rule of many provides four mechanisms (see Sec. Sec.
302.401(a)(i)-(iv) and 332.402(b)(1)-(4)) that can be used in
conjunction with assessments.
An individual noted that, as proposed, test measurement experts are
needed to put together a job analysis containing a cut score that
results in two categories. The commenter thought that HR professionals
and subject matter experts should be utilized more to create cut scores
for other assessments such as interviews and pass/fail tests. (OPM-
2023-0015-0005) The commenter misunderstands the term job analysis. A
job analysis is not a candidate assessment; rather, it is a process
used to determine the knowledge, skills, and abilities that are needed
to perform the tasks of a job and demonstrates a clear relationship
between the two. Once the necessary knowledge, skills, and abilities
have been identified, the type of assessment (e.g., interview or a
pass/fail test) can then be developed to determine whether applicants
do indeed possess them.
An organization thought that using an occupational questionnaire to
determine an applicant's placement in a quality category on a category
rating certificate results in job applicants being placed in
inappropriate categories due to either a candidate's under- or over-
estimation of his or her abilities. The organization proposed that OPM
revise the category rating process to allow hiring managers to
establish a cut-off, or minimum, score for the questionnaire assessment
because it would broaden the list of viewable applications and better
support hiring managers in selecting the best candidate. (OPM-2023-
0015-0015) OPM is not adopting this suggestion. Occupational
questionnaires may be used in the initial application process by an
agency to determine whether an applicant is minimally qualified for a
position. This does not require the use of a cut-off score. A cut-off
score is used in connection with other assessment tools to establish
quality categories into which candidates who have met the minimum
qualification requirements can be placed. Even if cut-off scores could
be used in the manner suggested by the commenter, OPM notes that this
approach would neither correct an applicant's mistaken perceptions
about the federal hiring process nor prevent applicants from
embellishing or falsifying their abilities.
An agency asked about what impact the rule of many would have on
(1) the referral and consideration process for bargaining unit
employees; and (2) its internal delegated examining certificate sharing
policy. (OPM-2023-0015-0011) Agencies will have the discretion to
determine the number of eligibles referred for selections made under

[[Page 43137]]

competitive examination procedures. The rule does not treat bargaining
unit employees who apply for positions under these procedures any
differently than non-bargaining unit employees or any other applicant.
However, there may be provisions in a collective bargaining agreement
that provide specific procedures or arrangements agencies must follow
when utilizing the competitive examination procedures under Part 332.
Given the number of bargaining units in the federal government, OPM
cannot assess specific impacts to bargaining unit employees. Agencies
should contact their servicing labor relations specialist and office of
general counsel for assistance. The internal delegated examining
certificate sharing policy will remain the same under the new rule
based on agency-established protocols.
An organization noted that, in the discussion of category rating in
the Supplementary Information portion of the proposed rule, OPM did not
mention the 2010 Presidential Memorandum entitled ``Improving the
Federal Recruitment and Hiring Process'', which requires category
rating be used in lieu of the rule of three when filling a job in the
competitive service. (OPM-2023-0015-0004). Similarly, an organization
stated that OPM should address how the rule of many would interact with
the memo. It felt that, if multiple rating procedures are available,
OPM should provide scenario descriptions and examples to agencies
regarding ideal use cases for the rule of many or other rating
procedures to ensure clarity on best practices. (OPM-2023-0015-0004)
The National Defense Authorization Act of 2019 eliminated the rule of
three, mooting the requirement to use category rating in lieu of the
rule of three. OPM appreciates the suggestion regarding the provision
of examples and scenarios that would show agencies the ideal use of
various rating procedures. As OPM explained in the proposed rule,
numerical ranking is appropriate when a hiring agency needs to make
granular distinctions between applicants; i.e., an individual with a
score of 97 (out of a 100 possible points) is deemed more qualified
than an applicant with a score of 96 or lower. Category rating is
appropriate when the hiring agency does not need to make such fine
distinctions among applicants as is made using numerical ranking
procedures (i.e., all applicants placed in a particular category are
deemed equally qualified). Category rating gives selecting officials
potentially more applicants to choose from because all applicants in a
given category are equally qualified: hiring officials are not limited
to selecting from only the three highest rated applicants.
Several commenters questioned what is considered to be a
``sufficient number'' of names to certify. (OPM-2023-0015-0014, OPM-
2023-0015-0004) In particular, an organization felt that OPM's sample
direction to agencies to consider setting a limit to the number of
candidates placed on a hiring certificate such as the top 10 people or
10% was unnecessarily limiting and that agencies should set a larger
limit to maximize the number of positions that could be filled from a
single certificate. (OPM-2023-0015-0004) The Act authorizes agencies to
certify a ``sufficient number'' of names, not less than three, from the
top of the appropriate register or list of eligible candidates, to be
considered for selection, using a cut-off score or other mechanism
established by OPM. The reference to ``10'' as in the ``top 10 people
or 10%'' was one example of a ``sufficient number'' for what an agency
may do and was not intended to limit the number an agency determines is
sufficient. Agencies may use one of the following ways for determining
the number of applicants referred for selection: (1) cut-off scores
based upon the assessment(s) used, supported by job analysis data; (2)
a cut-off score based on business necessity; (3) a set number of the
highest ranked applicants; or (4) a percentage of the highest ranked
applicants. Therefore, a sufficient number of names certified is the
number of candidates under the chosen methodology that allows an agency
to consider at least three candidates for each vacancy. One commenter's
examples of factors to consider (i.e., the position type and level,
availability of qualified candidates, and balance with efficiency) when
setting the number of applicants referred under either the third or the
fourth method are a good starting point. (See OPM-2023-0015-0014.)
An agency stated that the proposed rule's continued requirement
that veterans receive preference over all other candidates is
fundamentally antithetical to a fair and equitable hiring process. It
suggested language be added to the proposed rule that could help
refocus veterans' preference from an automatic advantage to one factor
in a holistic assessment that gives due consideration to veterans
without disadvantaging other qualified candidates. (OPM-2023-0015-0008)
Congress has codified veterans' preference in Title 5, United States
Code. OPM's implementation of veterans' preference in this rule is
consistent with those statutes. OPM notes, however, that the
commenter's characterization of veterans' preference is not accurate.
Only qualified preference eligibles with a compensable service-
connected disability of at least 10-percent are moved to the top of a
certificate irrespective of rating or other qualifications. Veterans'
preference does not give all veterans preference over all other
candidates.
An organization suggested that the proposed rule be modified to
include a separation of functions in the selection process. They
suggested that the persons in the selection process who have discretion
to set the number of applicants interviewed should be restricted from
knowing the identity or demographics of the applicant pool for the
position at the time they exercise that discretion; and the persons who
are scoring applicants for consideration for interview should be
restricted from knowing how many applicants will be interviewed for the
position at the time that the applications are being scored. Further,
they suggested that this could be achieved either by requiring the
number of applicants interviewed to be established prior to the close
of the vacancy announcement or by shielding the decision-maker who sets
the number of interviews from information regarding the identity or
assortment of applicants for the position. In the commenter's view,
this would help eliminate rigging of the selection process, promote
efficiency in the hiring process, and lessen litigation over abuse of
the wide discretion that is given by the proposed rule. (OPM-2023-0015-
0006)
Under the proposed rule, the hiring agency is required to determine
the number of applicants referred for selection before announcing the
vacancy and must identify the methodology (i.e., a cut-off score, set
number, or percentage of highest ranked eligible applicants) in the job
opportunity announcement. OPM does not believe that requiring
additional process for every hiring action is an appropriate method to
address intentional violations of the Merit System Principles and other
federal requirements. Accordingly, OPM is not making any changes to
this proposed mechanism in the final rule. OPM's Merit System
Accountability and Compliance (MSAC) office conducts audits of federal
agencies to whom OPM has granted delegated examining authority. The
purpose of these audits is to ensure that the agencies are not
violating federal laws and regulations; and, if any violations are
found, they are rectified.

[[Page 43138]]

An individual, referring to veterans' preference for certain
disabled veterans, asked why OPM is applying category rating floating
principles to the rule of many numerical ranking procedure (OPM-2023-
0015-0005). OPM is not applying category rating floating principles to
the rule of many. (It is also important to note that the floating
principles does not apply when filling professional and scientific
positions at the GS-9 level or higher.) When a numerical ranking
procedure is used disabled veterans who have a compensable service-
connected disability of 10 percent or more are to be listed first on
the list of eligibles. On the other hand, when category rating is used,
qualified preference eligibles who have a compensable service-connected
disability of 10 percent or more are to be listed in the highest
quality category and within each quality category, preference eligibles
are to be listed ahead of non-preference eligibles. Both methods use
the same floating principles, just in different contexts and pursuant
to different statutory directives. See 5 U.S.C. 3313(1) and 5 U.S.C.
3319(b).
An agency asked for an example of what constitutes a business need.
(OPM-2023-0015-0014) A business need is something that an agency must
have in order to fulfill its mission. For example, a cut-off score
based on a business necessity may be a score set to keep the processing
of the expected number of applicants manageable when the agency is
using costly or labor-intensive assessments such as a structured
interview. The cut-off score in this example accounts for resource
limitations the agency/Delegated Examining Unit (DEU) may have at the
time the position is being filled.
The agency also noted that the procedures that must be followed
under the rule of three are discussed in an appendix of the DEOH. It
asked if the appendix would be updated to reflect the rule of many or
if a section on the rule of many would be added to the body of the DEOH
(OPM-2023-0015-0014). OPM is updating the DEOH to reflect this final
rule.
The same agency asked which level within an agency is responsible
for determining which rating procedure to use. OPM defers to agency
Chief Human Capital Officers to determine at what level within the
agency to authorize decisions regarding which selection procedure to
use for a given hiring action.

Comments Regarding the Three Considerations Rule

The Act codifies at 5 U.S.C. 3318(e) the long-standing practice
under 5 CFR 332.405 of applying the three considerations rule under
numerical rating and ranking selection procedures, whereby, if an
appointing officer considers a candidate three times for three separate
appointments from the same or different certificates for the same
position (i.e., the same title, series, and grade) and makes a valid
(legal) selection of another candidate each time, the appointing
officer may remove that candidate from further consideration. OPM
proposed that, to constitute a bona fide consideration allowing removal
of a candidate from further consideration, a hiring manager would have
to interview each candidate considered. OPM also proposed that only one
candidate could be removed at a time for each selection starting with
the fourth selection under the three considerations rule.
An agency asked for clarification on when the three considerations
rule would apply in situations such as when using category rating, a
standing register (open continuous) announcement, or case examining.
(OPM-2023-0015-0007) The three considerations rule applies to the rule
of many, not to category rating. The Act did not apply this provision
to category rating. When using the rule of many, agencies may use the
three considerations rule for either standing register (i.e., open
continuous) announcements or case examining.
OPM received four comments specifically about the interview
requirement. An organization thought that it is unclear what is driving
the need to add the interview requirement to the three considerations
rule. It expressed the view that this requirement is overly burdensome
when agencies are filling multiple positions at the same time from one
certificate. (OPM-2023-0015-0004) Two individuals also questioned the
need to require an interview, expressing concern that the requirement
reduced agency flexibility. (OPM-2023-0015-0009; OPM-2023-0015-0016)
Another individual asked OPM to state whether the requirement for
hiring managers to conduct additional interviews after a certificate
has been generated before applying the three considerations rule was
required under the rule of three. They noted that the cost section of
the rule does not add extra time for hiring managers to conduct
additional post-certificate-generation interviews before the three
considerations rule can be applied. (OPM-2023-0015-0005)
After reviewing the comments, OPM has reconsidered the need for
agencies to interview candidates before invoking the three
considerations rule. OPM is removing from the final rule the proposed
requirement to interview candidates before removing individuals from
consideration under the three considerations rule. The agency may
remove one or several applicants with each selection up to the total
number of selections to be made. OPM is modifying Sec. 332.405(c)
accordingly. OPM notes that under both the rule of three and the rule
of many, any interview would occur after the certificate has been
generated and referred to the hiring manager.
An agency requested that OPM clarify when formal pass over
procedures must be followed when using the three considerations rule.
(OPM-2023-0015-0014). The provisions for passing over a preference
eligible veteran and the provisions for removing a candidate from
further consideration under the three considerations rule are separate
provisions. Pass overs are established in statute at 5 U.S.C. 3312 and
3318, and those procedures only apply to preference eligible veterans.
The three considerations rule is specified at 5 U.S.C. 3318(e) and
applies to any applicant (including a preference eligible veteran).
Pass over procedures are required if an agency wants to ``pass over''
the preference eligible veteran in favor of a lower ranked non-veteran.
A hiring agency may invoke pass over procedures if the agency
determines the preference eligible veteran lacks the qualifications to
successfully perform the duties of the position being filled. The three
considerations rule can be invoked beginning with the fourth selection
from a certificate of eligibles to remove any applicant from further
consideration for whom the hiring manager can document a lack of a
specific skill(s) or attribute(s) needed to perform the position being
filled. In other words, an agency should use pass over procedures to
remove a preference eligible veteran who does not meet the full
qualifications for the position (i.e., should not have been certified
as eligible). In contrast, an agency may remove a preference eligible
veteran--or any other candidate--after having given that candidate bona
fide consideration for three separate appointments for the same
position and making a different, valid selection in each instance. Pass
over procedures are not required for a preference eligible veteran who
has been removed from further consideration under the three

[[Page 43139]]

considerations rule because the agency is not ``passing over'' the
preference eligible veteran; the veteran has already been removed from
further consideration and is no longer eligible for selection.
A commenter noted the proposed rule states that, after three
considerations, the preference eligible is removed from consideration.
The commenter thought that there should be a way under the three
considerations rule to leave all preference eligible applicants on the
hiring certificate and not have veterans' preference apply to them
after they have been considered three times. In their view, this would
eliminate the advantage that non-preference eligibles have that allows
them to remain on the hiring certificate after having been considered
three times. (OPM-2023-0015-0005) OPM lacks authority to waive
veterans' preference after three considerations as described by the
commenter. Veterans' preference rules require application of the
statutory preference to each veteran on the hiring certificate unless
and until the veteran is removed from further consideration through
either pass over procedures or application of the three considerations
rule.
An individual stated that OPM is discouraging agencies from using
the three considerations rule by proposing that pass over procedures
should be used when warranted and that the three considerations rule
should be used when a pass over is not justified. (OPM-2023-0015-0005)
OPM has made a number of changes to the three considerations rule in
this final rule to address the concerns raised by the commenter,
including allowing removal from consideration of more than one
candidate at a time. Nonetheless, there are circumstances when a pass
over is required, and there is a time when the three considerations
rule can be utilized. Each hiring certificate is unique; the manner in
which it is worked determines whether a pass over is required or the
three considerations rule can be applied. As a reminder, the three
considerations rule may be used to remove any eligible from
consideration, and a pass over is required only when a hiring manager
wishes to select a non-preference eligible instead of a preference
eligible listed higher on the certificate.
An agency asked how an applicant's three bona fide considerations
would be tracked. (OPM-2023-0015-0011) Three considerations tracking
will remain the same under the new rule based on agency-established
protocols.
An individual suggested three ways that OPM could improve the three
considerations rule. (OPM-2023-0015-0009) The first suggestion was
allowing certificates which resulted in no selections to be included
under the three considerations rule. OPM's long-standing practice under
5 CFR 332.405 as described in the DEOH has provided a necessary
safeguard to ensure that any eligible candidate (including a preference
eligible) who has been deemed to be within reach on a certificate of
eligibles by the hiring agency is not subject to capricious or
otherwise baseless removal by hiring managers. However, in this final
rule, we have redefined bona fide consideration in the final rule for
purposes of 5 CFR 332.405 to require documentation to demonstrate that
the candidate's application was reviewed, and the candidate received
three considerations. Accordingly, OPM agrees that, in some cases,
certificates that do not result in a selection can be included under
the three considerations rule. OPM will revise the DEOH to provide more
specific guidance regarding certificates that result from a centralized
registers versus those that result from a single-recruitment action.
The second suggestion was that OPM should provide guidance about
how to use the three considerations rule for different certificates for
the same position (i.e., the same title, series, and grade). The
commenter specifically requested guidance regarding how a certificate
preparer should account for past considerations on certificates for the
same position. (OPM-2023-0015-0009) OPM will address specific examples
of using the three considerations rule in our supplemental guidance.
The three considerations rule (Sec. 332.405) accommodates situations
in which prior bona fide considerations may have been given by one or
more hiring managers from the same or a different certificate. When
more than one hiring manager is involved, a hiring manager must provide
documentation showing that the candidate's application has been
reviewed and considered at least three times. That documentation may
include information, support, or rationale from another hiring manager.
The third suggestion was that OPM should allow three times considered
candidates to be indicated as optional rather than removed from the
certificate, marked appropriately, and not counted when calculating the
set number or top percentage of candidates to include on the
certificate. (OPM-2023-0015-0009) OPM is not adopting this suggestion.
The three considerations rule provides for removal of applicants from
further consideration under certain conditions (see 5 CFR 332.405). As
noted previously, three times considered candidates will still be
listed on a certificate. A hiring official who wishes to consider one
of these candidates should not invoke the three considerations rule
removal option.
Two individuals expressed the view that OPM should not make the
three considerations rule more restrictive by allowing only one removal
per selection. (OPM-2023-0015-0009; OPM-2023-0015-0016) OPM agrees that
permitting only one applicant to be removed from further consideration
at a time under the three considerations rule is not required by the
statutory text. OPM has modified the final provision pertaining to the
three considerations rule in Sec. 332.405 to provide agencies with
greater flexibility for removing applicants beginning with the fourth
selection from the certificate. OPM is providing agencies with
flexibility to remove more than one candidate at a time so long as the
number removed does not exceed the number of selections remaining. For
example, an agency that is making 10 selections from a certificate of
30 eligibles may use the three considerations rule to remove up to a
total of 7 eligibles from the certificate. Consistent with the
longstanding three considerations rule, agencies may apply the
procedures of Sec. 332.405 without use of pass over procedures.
Agencies should continue to pursue pass over procedures when warranted
and consider using the three considerations provisions when agencies
are filling multiple positions and, although considered, the eligibles
do not possess the desired skills or attributes needed for the
positions being filled.

Comments Regarding Shared Certificates

An individual thought that it should be made clear in the rule that
the agency creating the rule of many certificate should be allowed to
consider all positions being filled by the job opening, even if some of
the positions, in the case of a shared certificate, are being filled by
other agencies. The commenter gave the example of a host agency that
expects 15 vacancies to be filled off a single announcement shared by
10 agencies. The agency should be able to request up to 40 applicants
on their rule of many certificates, and not only 10 applicants even if
their own agency is only hiring 3 candidates. The commenter noted that
the rule states these certificates may be shared with other agencies
under the Competitive Service Act already but should be clear that the
number of participating agency

[[Page 43140]]

vacancies can be a factor in determining the number of candidates to be
listed on the rule of many certificate (OPM-2023-0015-0005).
The commenter misinterprets how the rule of many and the
Competitive Service Act are used together. Before issuing a job
opportunity announcement, the hiring agency must choose the methodology
it will use to certify a sufficient number of candidates to allow it to
consider at least three candidates for each vacancy. It is required to
identify that methodology in the job opportunity announcement. If it
plans to share the certificate of eligibles with other agencies, the
Competitive Service Act requires it to indicate this in the
announcement. OPM strongly encourages agencies to share certificates to
the extent possible. Doing so can help reduce an agency's time-to-hire
in accordance with section 2(b)(iv) of E.O. 14170 and the Merit Hiring
Plan. At the time the announcement is made, the agency likely will not
have information available about the number of selections that may be
made after the certificate is sent to other agencies. Once the hiring
agency has issued a certificate of eligibles, it can share the
certificate with the other agencies. Each agency works the certificate
separately from one another. The hiring agency is free to amend the
certificate if it determines it needs to consider more applicants. OPM
also notes that receiving agencies may not consider candidates on the
shared certificate until the receiving agency has considered the
candidates on their own certificates. There is nothing in the
regulations that would preclude the agency from using information about
how the shared certificate may be used at other agencies when choosing
the methodology. However, we note that it is unlikely that the agency
will have sufficient information to do so.
An organization asked whether an agency can simultaneously share a
rule of many certificate and a supplemental certificate with other
agencies when the original certificate does not have a large number of
candidates (OPM-2023-0015-0004). An agency can only share the original
certificate in its original form so that the original ordering of the
certificate can be retained. If the certificate is shared, the
supplemental certificate option should not be used by the original
hiring agency to generate additional candidates for the agencies which
will share the certificate.
OPM also received comments requesting clarification regarding the
operation of the three considerations rule with shared certificates.
(OPM-2023-0015-0004; OPM-2023-0015-0005) The three considerations rule
does not apply to shared certificates. A shared certificate is shared
between agencies, not between multiple hiring managers at one or more
agencies. See 5 CFR 332.408 for more information on the shared
certificate process. Each agency considers candidates on a shared
certificate independently of the actions of any other agency with which
the certificate is shared, including the original agency. The first
agency will consider candidates and make selections. The certificate is
then shared with the next agency after the first agency has completed
its audit, including the resolutions of any objections or pass overs to
preference eligibles. The receiving agency must first consider its own
employees for the position being filled before it may select an
individual from a shared certificate. Accordingly, the actions of a
hiring manager at one agency (e.g., applying the three considerations
rule) will not affect the ability of hiring managers at the other
agencies to make a selection from the certificate.

Changes to the Final Rule

Based on the comments we received pertaining to the three
considerations rule, OPM is modifying the provisions in Sec. 332.405
as follows.
OPM is modifying the proposed rule in response to comments and
suggestions discussed in the previous section. Specifically, OPM is
adopting provisions pertaining to the three considerations rule in
Sec. 332.405 to provide agencies with greater flexibility for removing
applicants beginning with the fourth selection. OPM is offering a
method which provides agencies with more flexibility when applying the
three considerations rule. This method allows an agency to remove more
than one candidate at a time so long as the number removed does not
exceed the number of selections remaining. For example, an agency that
is making 10 selections from a certificate of 30 eligibles may use the
three considerations rule to remove up to a total of 7 eligibles from
the certificate.

Example of Using the Three Considerations Rule

If an agency is filling 10 positions and has a certificate with 30
eligible candidates, then beginning with the fourth selection the
agency may remove up to 7 individuals (either preference eligibles or
non-preference eligibles) who have received bona fide considerations in
accordance with Sec. 332.405. The following example goes through the
steps an agency may take when applying the three-considerations rule.
In this example, the agency issued the following certificate of
eligibles based on a cut-score of 95. The agency expects to make 10
selections from this certificate and conducts interviews with all 30
eligibles.
The Veterans Preference Codes used in the following charts are:

CPS--30 percent or more disabled veteran
CP--at least 10 percent disabled, but less than 30 percent, disabled
veteran
XP--other disabled veteran and those with derived preference
TP--5-point preference
SSP--0-point sole survivorship preference
NV--non-veteran/non-preference

Certificate of Eligibles
------------------------------------------------------------------------
Candidate Score/VP Action
------------------------------------------------------------------------
1................... 98.0 CP Selected (1).
2................... 98.0 CPS Declined.
3................... 98.0 TP Removed--3 considerations
(1 of 7).
4................... 98.0 TP Selected (2).
5................... 98.0 TP Selected (3).
6................... 97.0 TP Declined.
7................... 97.0 NV Removed--3 considerations
(2 of 7).
8................... 97.0 NV Selected (4).
9................... 96.0 TP Declined.
10.................. 96.0 TP Declined.
11.................. 96.0 TP Declined.
12.................. 96.0 TP Selected (5).
13.................. 96.0 TP Selected (6).
14.................. 96.0 NV Selected (7).
15.................. 96.0 NV Selected (8).
16.................. 96.0 NV Selected (9).
17.................. 96.0 NV Declined.
18.................. 96.0 NV Removed--3 considerations
(3 of 7).
19.................. 95.0 TP Removed--3 considerations
(6 of 7).
20.................. 95.0 TP Removed--3 considerations
(7 of 7).
21.................. 95.0 TP Removed--3 considerations
(4 of 7).
22.................. 95.0 TP Selected (10).
23.................. 95.0 TP Removed--3 considerations
(5 of 7).
24.................. 95.0 TP .........................
25.................. 95.0 NV .........................
26.................. 95.0 NV .........................
27.................. 95.0 NV .........................
28.................. 95.0 NV .........................
29.................. 95.0 NV .........................
30.................. 95.0 NV .........................
------------------------------------------------------------------------

Any of the veterans' preference eligibles referred on the
certificate may be selected. In this example, eligibles 2 and 6 decline
the position. In the first three rounds of selections, the agency
selects eligibles 1, 4, and 5.

[[Page 43141]]

9................... 96.0 TP .........................
10.................. 96.0 TP .........................
11.................. 96.0 TP .........................
12.................. 96.0 TP .........................
13.................. 96.0 TP .........................
14.................. 96.0 NV .........................
15.................. 96.0 NV .........................
16.................. 96.0 NV .........................
17.................. 96.0 NV .........................
18.................. 96.0 NV .........................
19.................. 95.0 TP .........................
20.................. 95.0 TP .........................
21.................. 95.0 TP .........................
22.................. 95.0 TP .........................
23.................. 95.0 TP .........................
24.................. 95.0 TP .........................
25.................. 95.0 NV .........................
26.................. 95.0 NV .........................
27.................. 95.0 NV .........................
28.................. 95.0 NV .........................
29.................. 95.0 NV .........................
30.................. 95.0 NV .........................
------------------------------------------------------------------------

The agency has now considered all eligibles in each of its earlier
selection decisions, that is, three times. The agency has 7 positions
remaining to fill; it may remove up to a total of 7 eligibles from the
certificate when making the remaining selections. The agency must
document that each candidate's application was reviewed. The agency
must also document that a candidate received three considerations prior
to removal. Eligibles 3 and 7 are removed from consideration, and the
hiring manager documents the reason(s) to remove the candidates. At
this point, the agency may consider eligible 8 or any of the veterans'
preference eligibles remaining. The agency selects eligible 8 for the
fourth selection.

Certificate of Eligibles
------------------------------------------------------------------------
Candidate Score/VP Action
------------------------------------------------------------------------
1................... 98.0 CP Selected.
2................... 98.0 CPS Declined.
3................... 98.0 TP Removed--3 considerations
(1 of 7).
4................... 98.0 TP Selected.
5................... 98.0 TP Selected.
6................... 97.0 TP Declined.
7................... 97.0 NV Removed--3 considerations
(2 of 7).
8................... 97.0 NV Selected.
9................... 96.0 TP .........................
10.................. 96.0 TP .........................
11.................. 96.0 TP .........................
12.................. 96.0 TP .........................
13.................. 96.0 TP .........................
14.................. 96.0 NV .........................
15.................. 96.0 NV .........................
16.................. 96.0 NV .........................
17.................. 96.0 NV .........................
18.................. 96.0 NV .........................
19.................. 95.0 TP .........................
20.................. 95.0 TP .........................
21.................. 95.0 TP .........................
22.................. 95.0 TP .........................
23.................. 95.0 TP .........................
24.................. 95.0 TP .........................
25.................. 95.0 NV .........................
26.................. 95.0 NV .........................
27.................. 95.0 NV .........................
28.................. 95.0 NV .........................
29.................. 95.0 NV .........................
30.................. 95.0 NV .........................
------------------------------------------------------------------------

For the fifth selection, the agency may select any of the veterans'
preference candidates. Candidates 9, 10, and 11 declined selections.
The agency selects candidate 12.

Certificate of Eligibles
------------------------------------------------------------------------
Candidate Score/VP Action
------------------------------------------------------------------------
1................... 98.0 CP Selected.
2................... 98.0 CPS Declined.
3................... 98.0 TP Removed--3 considerations
(1 of 7).
4................... 98.0 TP Selected.
5................... 98.0 TP Selected.
6................... 97.0 TP Declined.
7................... 97.0 NV Removed--3 considerations
(2 of 7).
8................... 97.0 NV Selected.
9................... 96.0 TP Declined.
10.................. 96.0 TP Declined.
11.................. 96.0 TP Declined.
12.................. 96.0 TP Selected.
13.................. 96.0 TP .........................
14.................. 96.0 NV .........................
15.................. 96.0 NV .........................
16.................. 96.0 NV .........................
17.................. 96.0 NV .........................
18.................. 96.0 NV .........................
19.................. 95.0 TP .........................
20.................. 95.0 TP .........................
21.................. 95.0 TP .........................
22.................. 95.0 TP .........................
23.................. 95.0 TP .........................
24.................. 95.0 TP .........................
25.................. 95.0 NV .........................
26.................. 95.0 NV .........................
27.................. 95.0 NV .........................
28.................. 95.0 NV .........................
29.................. 95.0 NV .........................
30.................. 95.0 NV .........................
------------------------------------------------------------------------

For the sixth selection, the agency may select any of the veterans'
preference eligibles. The agency selects candidate 13. The agency has
determined that candidates 18, 21, and 23 have been considered 3 times
and documents the hiring manager's reason(s) to remove the candidates.
Candidates 18, 21, and 23 are removed from consideration.

Certificate of Eligibles
------------------------------------------------------------------------
Candidate Score/VP Action
------------------------------------------------------------------------
1................... 98.0 CP Selected.
2................... 98.0 CPS Declined.
3................... 98.0 TP Removed--3 considerations
(1 of 7).
4................... 98.0 TP Selected.
5................... 98.0 TP Selected.
6................... 97.0 TP Declined.
7................... 97.0 NV Removed--3 considerations
(2 of 7).
8................... 97.0 NV Selected.
9................... 96.0 TP Declined.
10.................. 96.0 TP Declined.
11.................. 96.0 TP Declined.
12.................. 96.0 TP Selected.
13.................. 96.0 TP Selected.
14.................. 96.0 NV .........................
15.................. 96.0 NV .........................
16.................. 96.0 NV .........................
17.................. 96.0 NV .........................
18.................. 96.0 NV Removed--3 considerations
(3 of 7).
19.................. 95.0 TP .........................
20.................. 95.0 TP .........................
21.................. 95.0 TP Removed--3 considerations
(4 of 7).
22.................. 95.0 TP .........................
23.................. 95.0 TP Removed--3 considerations
(5 of 7).
24.................. 95.0 TP .........................
25.................. 95.0 NV .........................
26.................. 95.0 NV .........................
27.................. 95.0 NV .........................
28.................. 95.0 NV .........................
29.................. 95.0 NV .........................
30.................. 95.0 NV .........................
------------------------------------------------------------------------

For selection seven, the agency may select eligibles 14, 15, 16,
17, or any of the remaining veterans' preference eligibles. Candidate
17 declines selection. The agency selects candidate 14. Candidates 19
and 20 have been considered 3 times, and the hiring manager documents
the reason(s) to remove the candidates. Candidates 19 and 20 are
removed from consideration. At this point the agency has removed 7
eligibles from the certificate using the three considerations rule. For
the remaining three selections the agency may not remove any additional
eligibles based on the three considerations rule.

Certificate of Eligibles
------------------------------------------------------------------------
Candidate Score/VP Action
------------------------------------------------------------------------
1................... 98.0 CP Selected.
2................... 98.0 CPS Declined.
3................... 98.0 TP Removed--3 considerations
(1 of 7).
4................... 98.0 TP Selected.
5................... 98.0 TP Selected.
6................... 97.0 TP Declined.
7................... 97.0 NV Removed--3 considerations
(2 of 7).
8................... 97.0 NV Selected.
9................... 96.0 TP Declined.
10.................. 96.0 TP Declined.
11.................. 96.0 TP Declined.
12.................. 96.0 TP Selected.
13.................. 96.0 TP Selected.
14.................. 96.0 NV Selected.
15.................. 96.0 NV .........................
16.................. 96.0 NV .........................
17.................. 96.0 NV Declined.
18.................. 96.0 NV Removed--3 considerations
(3 of 7).
19.................. 95.0 TP Removed--3 considerations
(6 of 7).
20.................. 95.0 TP Removed--3 considerations
(7 of 7).
21.................. 95.0 TP Removed--3 considerations
(4 of 7).
22.................. 95.0 TP .........................
23.................. 95.0 TP Removed--3 considerations
(5 of 7).

[[Page 43142]]

24.................. 95.0 TP .........................
25.................. 95.0 NV .........................
26.................. 95.0 NV .........................
27.................. 95.0 NV .........................
28.................. 95.0 NV .........................
29.................. 95.0 NV .........................
30.................. 95.0 NV .........................
------------------------------------------------------------------------

For selections eight, nine, and ten, the agency may select
candidates 15 or 16 and any of the remaining veterans' preference
eligibles. The agency selects candidates 15, 16, and 22. Below is the
complete certificate of eligibles.

Certificate of Eligibles
------------------------------------------------------------------------
Candidate Score/VP Action
------------------------------------------------------------------------
1................... 98.0 CP Selected.
2................... 98.0 CPS Declined.
3................... 98.0 TP Removed--3 considerations
(1 of 7).
4................... 98.0 TP Selected.
5................... 98.0 TP Selected.
6................... 97.0 TP Declined.
7................... 97.0 NV Removed--3 considerations
(2 of 7).
8................... 97.0 NV Selected.
9................... 96.0 TP Declined.
10.................. 96.0 TP Declined.
11.................. 96.0 TP Declined.
12.................. 96.0 TP Selected.
13.................. 96.0 TP Selected.
14.................. 96.0 NV Selected.
15.................. 96.0 NV Selected.
16.................. 96.0 NV Selected.
17.................. 96.0 NV Declined.
18.................. 96.0 NV Removed--3 considerations
(3 of 7).
19.................. 95.0 TP Removed--3 considerations
(6 of 7).
20.................. 95.0 TP Removed--3 considerations
(7 of 7).
21.................. 95.0 TP Removed--3 considerations
(4 of 7).
22.................. 95.0 TP Selected.
23.................. 95.0 TP Removed--3 considerations
(5 of 7).
24.................. 95.0 TP .........................
25.................. 95.0 NV .........................
26.................. 95.0 NV .........................
27.................. 95.0 NV .........................
28.................. 95.0 NV .........................
29.................. 95.0 NV .........................
30.................. 95.0 NV .........................
------------------------------------------------------------------------

The Act also codified a long-standing practice of applying the
``three considerations rule'' in 5 U.S.C. 3318(e). Under numerical
rating and ranking selection procedures, the longstanding practice,
found in 5 CFR 332.405, allows an appointing officer to remove a
candidate from further consideration if they have considered that
candidate three times for three separate appointments from the same or
different certificates for the same position and the appointing officer
makes a valid (legal) selection of another candidate each time. The
rule outlines the requirements for being able to remove candidates from
further consideration. Additionally, the rule provides specific
requirements for ensuring candidates receive bona fide consideration
before being removed from consideration. Current regulations only
provide the authority to remove candidates from consideration and do
not provide any requirements regarding how an agency should do so.
Implementing instructions are currently found only in OPM's DEOH.
We have redefined bona fide consideration in the final rule for
purposes of the three considerations rule to require documentation from
the hiring manager to demonstrate that the candidate's application was
reviewed, and the candidate received three considerations in place of
the interview requirement. This change reduces the regulatory burden on
agencies, while still ensuring candidates receive full and fair
consideration.
We have conforming changes to the provisions in Part 302 for hiring
in the excepted service.
Finally, OPM is revising the Authority citations for parts 332 and
337 to comply with 1 CFR part 21, subpart B, without substantive
change. The Authority citation for part 302 is revised to comply with 1
CFR part 21, subpart B, and corrected to remove citations inadvertently
added in an unrelated final rule at 89 FR 102675.

Regulatory Analysis

Statement of Need

The longstanding rule of three in numerical rating and ranking
required that, for each selection, consideration was limited to the top
three candidates on the ranked certificate of eligibles. Many people
perceived this process as unnecessarily restrictive for hiring
managers, and some argued that it resulted in the selection of
candidates that may not be the best suited to a particular position.
Hiring managers often opted not to select any candidate, wasting
candidates' and agency resources. The Act authorized OPM to modify the
rules governing the selection of candidates from competitive lists of
eligibles and eliminated the ``rule of three.'' The Act, instead,
authorizes agencies to certify a ``sufficient number'' of names, not
less than three, from the top of the appropriate register, or list of
eligibles, to be considered for selection, using a cut-off score or
other mechanism established by OPM. The Act also affects how agencies
make selections under 5 CFR part 302 procedures for excepted service
appointments. This rule implements those statutory changes. OPM has
long permitted agencies to apply a ``three considerations rule'' by
which an agency could remove an eligible candidate from further
consideration after having considered the candidate for three separate
appointments for the same position. The Act codified this practice;
however, current regulations only provide the authority to remove
candidates and do not provide any requirements regarding how an agency
should do so. This has led to agencies needing assistance in ensuring
that adequate consideration is given before candidates are removed from
consideration.

Regulatory Alternatives

Congress directed OPM to engage in rulemaking, so no regulatory
action was not a viable option. OPM considered several options to
implement various provisions of the Act. In the NPRM, OPM proposed
requiring a one-for-one mechanism when applying the three
considerations rule. That is, a hiring manager could only remove one
eligible candidate for each candidate selected. After consideration of
comments received, OPM concluded that this mechanism imposed
restrictions on the hiring process that were not intended by Congress.
OPM also considered not imposing any restrictions on the number of
eligible candidates removed, but analysis for various scenarios showed
that doing so would effectively provide a regulatory end-around
statutory veterans' preference provisions. Accordingly, OPM concluded
that some limitations on removal of eligible candidates were necessary
to ensure that both the three considerations rule and the veterans'
preference provisions are given effect.
In the NPRM, OPM proposed to define a bona fide consideration to
require, at a minimum, an interview. OPM's goal was to ensure that
there was some regulatory criterion to demonstrate consideration. Based
on comments received, OPM reconsidered whether an interview was the
only--or best--way to demonstrate consideration. OPM concluded that
agencies could demonstrate a bona fide consideration in a number of
different ways--one of which might be by interviewing each candidate.
To reduce regulatory burden on agencies, while still ensuring
candidates receive full and fair consideration, OPM adopted a mechanism
that provides agencies flexibility but will yield demonstrable,
auditable evidence of consideration of any eligible candidate removed
from the certificate.

[[Page 43143]]

Impact

OPM is establishing four mechanisms for agencies to use to
determine a ``sufficient number'' of names to certify for
consideration, and the final rule includes provisions for using the
three considerations rule in numerical rating and ranking. The final
rule does not change the application of veterans' preference in
competitive examining--veterans are still granted preference points
under numerical rating procedures and continue to be entitled to
selection preference over non-preference eligibles with the same or
lower numerical score unless the requirements for passing over a
preference eligible are satisfied.
The final rule also replaces rule of three procedures in excepted
service hiring and allows agencies instead to use one of the same
mechanisms described under competitive examining procedures to
determine a ``sufficient number'' of names to certify for
consideration. The NDAA also amended 5 U.S.C. 3320 to allow agencies to
apply 5 U.S.C. 3319, category rating, when making excepted service
appointments in the same or similar manner as in the competitive
service. OPM's final rule revises the procedures for accepting, rating,
and arranging applications for excepted service in 5 CFR part 302 to
include the option of using the category rating procedures similar to
those adopted in 5 CFR part 332.
Federal HR practitioners will need to be educated on this new
numeric ranking and selection method. Therefore, OPM is providing a 60-
day delayed effective date to allow time for training. Agencies will
have 180 days to come into compliance with the new method.

Costs

This final rule, once in effect, will affect the operations of over
80 Federal agencies--ranging from cabinet-level departments to small
independent agencies. OPM will provide guidance on implementing this
final rule in the form of frequently asked questions and updates to the
DEOH and Delegated Examining Training. Many Federal HR practitioners
may be unfamiliar with the rule of three because of the mandate to use
category rating in the May 11, 2010, Presidential Memorandum--Improving
the Federal Recruitment and Hiring Process. Therefore, Federal HR
practitioners will need to be educated on the basics of using this new
numeric ranking and selection method.
OPM estimates that this rulemaking will require individuals
employed by these agencies to modify policies and procedures to
implement the rulemaking and train human resources (HR) practitioners
and hiring managers on its use. For this cost analysis, OPM assumed an
average salary rate of Federal employees performing this work using the
rate in 2025 for GS-14, step 5, from the Washington, DC, locality pay
table ($161,486 annual locality rate and $77.38 hourly locality rate).
We assumed that the total dollar value of labor, which includes wages,
benefits, and overhead, is equal to 200 percent of the wage rate,
resulting in an assumed labor cost of $154.76 per hour.
To comply with the regulatory changes in the final rule, affected
agencies will need to review the rule and update their policies and
procedures. We estimate that, in the first year following publication
of the final rule, doing so will require an average of 300 hours of
work by employees per agency with an average hourly cost of $154.76.
This work would result in estimated costs in that first year of
implementation of about $46,428 per agency, and about $3,714,240 in
total governmentwide.
Some agencies may incur additional costs to ensure they have staff
with the necessary assessment measurement expertise to use these
proposed procedures. Numerical ranking is appropriate when a hiring
agency needs to make finer, more granular distinctions between
candidates, i.e., an individual with a score of 97 (out of a 100
possible points) is deemed more qualified than a candidate with a score
of 96 or lower. Therefore, using these procedures will require
assessment tools that make those meaningful distinctions and
measurement experts to understand their use to establish appropriate
cut-off scores. For this cost estimate, we assumed the average salary
rate of Federal employees performing this work is the rate in 2025 for
GS-14, step 5, from the Washington, DC, locality pay table ($161,486
annual locality rate). We assume that the total dollar value of labor,
which includes wages, benefits, and overhead, is equal to 200 percent
of the wage rate, resulting in an assumed labor cost of $154.76 per
hour. We estimate that for each assessment an agency creates it will
take a minimum of 100 work hours. The number of assessments that may
need to be created will be tied to the agency's hiring goals. For the
purposes of this estimate we assume that each agency will create at
least 5 assessments each year for an annual cost of up to $77,380 and
up to $6,190,400 governmentwide.
We do not believe this rulemaking will substantially increase the
ongoing administrative costs to agencies (including the administrative
costs of using these new procedures and training new staff) because the
rulemaking is replacing existing procedures and processes. OPM notes
that agencies may incur higher costs to develop or purchase more
rigorous assessments to use in determining cut-off scores under rule of
many procedures. Alternatively, agencies may experience cost savings by
identifying and selecting highly qualified candidates more quickly
through expanded choices and may recognize cost savings by eliminating
the need to re-advertise and re-work hiring actions when selections
were not made. OPM offers assessments that agencies may use in
determining cut-off scores. Please visit <a href="https://www.opm.gov/services-for-agencies/assessment-evaluation/">https://www.opm.gov/services-for-agencies/assessment-evaluation/</a> for more information.

Benefits

This final rule is part of a larger OPM effort to improve the
hiring process. OPM expects that this rule will help agencies make
meaningful distinctions among candidates in terms of their relative
qualifications for the position being filled, while at the same time
expanding the range of candidates from which a hiring manager may make
a selection as compared to the more restrictive rule of three (i.e., a
hiring manager is not limited to choosing from among only the three
highest candidates). OPM expects that this rule will reduce agency
demand for direct hiring authority and will promote alignment with
Merit System Principles (MSP). This final rule emphasizes recruiting
candidates based on relative ability, knowledge, and skills (MSP 1).
OPM anticipates this final rule will lead to a more balanced and
diverse Federal workforce by providing a wider base of candidates from
which agencies may choose.

Procedural Issues and Regulatory Review

Severability

We intend and expect that the provisions of this rule will operate
independently and be treated as severable. If any part or section of
this rule as finalized were invalidated by a reviewing court, the
remaining provisions of the rule would continue to concern and
effectuate the purpose of the rule, which is to implement changes in
the various procedures for selecting candidates under delegated
examining authorized by the NDAA for FY 2019.

[[Page 43144]]

Regulatory Review

OPM has examined the impact of this rule as required by Executive
Orders 12866 and 13563, which direct agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public, health, and
safety effects, distributive impacts, and equity). A regulatory impact
analysis must be prepared for rules that have an annual effect on the
economy of $100 million or more or adversely affect in a material way
the economy, a sector of the economy, productivity, competition, jobs,
the environment, public health or safety, or State, local, or tribal
governments or communities. This rulemaking does not reach that
threshold but has otherwise been designated as a ``significant
regulatory action'' under section 3(f) of Executive Order 12866, as
supplemented by Executive Order 13563. This rule is not an E.O. 14192
regulatory action because it does not impose any more than de minimis
regulatory costs.

Regulatory Flexibility Act

The Acting Director of the Office of Personnel Management certifies
that this regulation will not have a significant impact on a
substantial number of small entities because it applies only to Federal
agencies and employees.

Federalism

This rule will not have substantial direct effects on the States,
on the relationship between the National Government and the States, or
on distribution of power and responsibilities among the various levels
of government. Therefore, in accordance with Executive Order 13132, it
is determined that this rule does not have sufficient federalism
implications to warrant preparation of a Federalism Assessment.

Civil Justice Reform

This rule meets the applicable standard set forth in section 3(a)
and (b)(2) of Executive Order 12988.

Unfunded Mandates Reform Act of 1995

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires that agencies assess anticipated costs and benefits before
issuing any rule that would impose spending costs on State, local, or
tribal governments in the aggregate, or on the private sector, in any 1
year of $100 million in 1995 dollars, updated annually for inflation.
That threshold is currently approximately $206 million. This rulemaking
will not result in the expenditure by State, local, or tribal
governments, in the aggregate, or by the private sector, in excess of
the threshold. Thus, no written assessment of unfunded mandates is
required.

Congressional Review Act

OMB's Office of Information and Regulatory Affairs has determined
this rule does not satisfy the criteria listed in 5 U.S.C. 804(2).

Paperwork Reduction Act

Notwithstanding any other provision of law, no person is required
to respond to, nor shall any person be subject to a penalty for failure
to comply with, a collection of information subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid Office
of Management and Budget (OMB) Control Number. This regulatory action
will not impose any additional reporting or recordkeeping requirements
under the Paperwork Reduction Act.

List of Subjects

5 CFR Part 302

Administrative practice and procedure, Authority delegations,
Government contracts, Government employees, Investigations.

5 CFR Parts 332 and 337

Government employees.

U.S. Office of Personnel Management.
Jerson Matias,
Federal Register Liaison.

Accordingly, for the reasons stated in the preamble, OPM amends 5
CFR parts 302, 332, and 337 as follows:

PART 302--EMPLOYMENT IN THE EXCEPTED SERVICE

0
1. The authority citation for part 302 is revised to read as follows:

Authority: 5 U.S.C. 1302, 3301, 3302, 3317, 3318, 3319, 3320,
8151. E.O. 10577, 19 FR 7521, 3 CFR 1954-1958 Comp., p. 218. Sec.
302.105 also issued under 5 U.S.C. 1104; sec. 3(5), Pub. L. 95-454,
92 Stat. 1111. Sec. 302.501 also issued under 5 U.S.C. ch. 77. Sec.
302.107 also issued under 5 U.S.C. 9201-9206; sec. 1122(b)(1), Pub.
L. 116-92, 133 Stat. 1607. Secs. 302.108 and 302.203 also issued
under E.O. 13764, 82 FR 8115, 3 CFR, 2017 Comp., p. 243.

Subpart B--Eligibility Standards

0
2. In Sec. 302.201, add paragraph (c) to read as follows:

Sec. 302.201 Persons entitled to veteran preference.

* * * * *
(c) When quality categories are used in the evaluation and
referral, the agency shall list preference eligibles under 5 U.S.C.
2108(3) ahead of non-preference eligibles in accord with Sec.
302.304(b)(6).

0
3. In Sec. 302.302, revise paragraphs (a) and (b) to read as follows:

Sec. 302.302 Examination of applicants.

(a) Eligibility. An evaluation of the qualifications of applicants
for positions covered by this part may be conducted at any time before
an appointment is made. The evaluation may involve only determination
of eligibility or ineligibility or may include qualitative rating of
candidates. If the evaluation involves only basic eligibility,
candidates will not receive numerical scores or be placed in quality
categories and will be referred in accordance with the procedures
described in Sec. 302.304(b)(5). If qualitative ranking is desired,
numerical scores or placement in quality categories may be assigned in
accordance with paragraph (b) of this section. Each agency shall make a
part of the records the reasons for its decision to use ranked or
unranked referral and, for ranked actions, the rating factors used.
This information about the type of referral used and any rating factors
used for ranked actions shall be made available to an applicant on his/
her request.
(b) Rating--(1) Numerical rating. Numerical scores will be assigned
on a scale of 100. Each applicant who meets the qualification
requirements for the position established under Sec. 302.202 will be
assigned a rating of 70 or more and will be eligible for appointment.
Candidates scoring 70 or more will receive additional points for
veteran preference as provided in Sec. 302.201. Numerical ratings are
not required when all qualified applicants will be offered immediate
appointment. When there are an excessive number of applicants,
numerical ratings are required only for a sufficient number of the
highest qualified applicants to meet the anticipated needs of the
agency within a reasonable period of time. The agency must, however,
adopt procedures to ensure the consideration of preference eligibles in
the order in which they would have been considered if all applicants
had been assigned numerical ratings. An agency shall furnish on an
applicant's request a notice of the rating assigned to that applicant.
(2) Category rating. In accordance with 5 CFR part 337, subpart C,
an agency must predefine at least two

[[Page 43145]]

quality categories that reflect the requirements to perform the job
successfully and to distinguish differences in the quality of
candidates' job-related competencies/knowledge, skills and abilities.
An agency may not establish a ``not qualified'' category. Only those
found qualified will be placed in a category. Quality categories must
be established and defined by the employing agency prior to accepting
applications. Quality categories are not required when all qualified
applicants will be offered immediate appointment.
* * * * *

0
4. In Sec. 302.303, add paragraph (d)(3) to read as follows:

Sec. 302.303 Maintenance of employment lists.

(d) * * *
(3) When candidates have been placed in quality categories under
Sec. 302.302(b). Within each quality category, preference eligibles
must be listed ahead of non-preference eligibles and may be listed in
preference or alphabetical order. Preference eligibles having a
compensable, service-connected disability of 10 percent or more
(designated as CPS or CP) are placed in the highest quality category
unless the list will be used to fill scientific or professional
positions at the GS-9 level or above, or equivalent.

0
5. In Sec. 302.304, revise paragraph (b) introductory text and add
paragraph (b)(6) as follows:

Sec. 302.304 Order of consideration.

* * * * *
(b) Consideration of other candidates. Except as provided in
paragraphs (b)(4), (5) and (6) of this section, an agency shall
consider applicants on the reemployment and/or regular employment list
who have been assigned eligible ratings for a given position in Order
A, Order B, or Order C, as described in paragraphs (b)(1) through (3)
of this section. Order A must be used when the agency has not
established a reemployment list.
* * * * *
(6) Category rating. In accordance with 5 CFR part 337, subpart C,
list qualified preference eligibles ahead of non-preference eligibles
within the same quality category in which they were assigned. Move
qualified preference eligibles with a compensable service-connected
disability of 30-percent or more (CPS) and those with a compensable
service-connected disability of at least 10-percent but less than 30-
percent (CP) from the quality category in which they would otherwise be
placed to the highest quality category. (This movement of preference
eligibles with service-connected disabilities is not done when filling
scientific or professional positions at the GS-9 level or higher).
Consider eligible candidates in the following order:
(i) Candidates on the reemployment list;
(ii) Candidates in the highest quality category with preference
eligibles listed ahead of non-preference eligibles; and
(iii) Candidates in each subsequent lower quality category with
preference eligibles listed ahead of non-preference eligibles.

0
6. In Sec. 302.401, revise paragraph (a) to read as follows:

Sec. 302.401 Selection and appointment.

(a) Selection--(1) Unranked lists. When making an appointment from
a priority reemployment, reemployment, or regular list on which
candidates have not received numerical scores, an agency must make its
selection from among the qualified preference eligibles, as long as at
least three candidates remain in that group. When fewer than three
preference eligibles remain, consideration may be expanded to include
the non-preference eligibles in accordance with paragraph (b) of this
section, passing over a preference applicant.
(2) Numerical lists. When making an appointment from a list on
which candidates have received numerical scores, an agency must use one
of the methodologies identified below to determine the number of
applicants referred for selection. A selecting official may select any
eligible candidate referred for selection. However, a selecting
official may not pass over a preference eligible to select a lower
standing non-preference eligible unless the agency has complied with
the pass-over procedures in paragraph (b) of this section. The
selection mechanism must be determined before soliciting for
applications and be made available to applicants upon their request.
The mechanism used must be clearly documented in the recruitment file
and available for reconstruction or third-party review. The agency may
determine, based on the position to be filled, which of the following
mechanisms will best meet the hiring needs of the agency and result in
at least three names for consideration for appointment in the order
provided in Sec. 302.304. In selecting an appropriate mechanism,
agencies should consider the assessment(s) used, historical applicant
data, current labor market conditions, and other factors appropriate
for the hiring action.
(i) The agency may establish a cut-off score based on the
assessment(s) used, supported by job analysis data;
(ii) The agency may use a cut-off score based on business necessity
(e.g., a cut-off score based on the agency's need to keep processing of
the expected number of applicants manageable because of its use of a
costly or labor-intensive assessment tool such as a structured
interview);
(iii) The agency may use a set number of the highest ranked
eligible applicants; or
(iv) The agency may use a set percentage of the highest ranked
eligible applicants.
(3) Category rating. When making appointments from a list on which
candidates have been placed in quality categories, in accordance with 5
CFR part 337, subpart C, an agency may select any eligible candidate(s)
in the highest quality category; except the selecting official may not
select a non-preference eligible over a preference eligible unless the
agency has complied with the pass-over procedures in paragraph (b) of
this section. If there are fewer than three candidates in the highest
quality category, the agency may combine (merge) the top two quality
categories and make selections from the newly merged category. The
newly merged category is the new highest quality category. Preference
eligibles must be listed ahead of non-preference eligibles in the newly
merged category.
(4) Conditions. Under any of the above selection methods, an agency
is not required to--
(i) Accord an applicant on its priority reemployment or
reemployment list the preference consideration required by Sec.
302.304 if the list on which the applicant's name appears does not
contain the names of at least three preference eligibles; or
(ii) Consider an applicant who has previously been considered three
times in accordance with Sec. 332.405 or a preference eligible if
consideration of his/her name for the position has been discontinued as
provided in paragraph (b) of this section.
* * * * *

PART 332--RECRUITMENT AND SELECTION THROUGH COMPETITIVE EXAMINATION

0
7. The authority citation for part 332 is revised to read as follows:

Authority: 5 U.S.C. 1103, 1104, 1302, 2108, 3301, 3302, 3304,
3312, 3317, 3318, 3319; sec. 2(d), Pub. L. 114-137, 130 Stat. 310;
E.O. 10577, 19 FR 7521, 3 CFR 1954-1958 Comp., p. 218.

0
8. Revise Sec. 332.402 to read as follows:

[[Page 43146]]

Sec. 332.402 Referring candidates for appointment.

OPM or a delegated examining unit (DEU) will use one of the
mechanisms identified below to refer a sufficient number of candidates
for consideration, in accordance with this section and the agency's
delegated examining policies.
(a) Each agency must establish a policy on the use of these
procedures.
(b) OPM or a DEU may determine, based on the position to be filled,
which of the following mechanisms will best meet the hiring needs of
the agency and result in at least three names for consideration.
(1) OPM or a DEU may establish a cut-off score based on the
assessment(s) used, supported by job analysis data;
(2) OPM or a DEU may establish a cut-off score based on business
necessity;
(3) OPM or a DEU may use a set number of the highest ranked
eligible applicants to certify; or
(4) OPM or a DEU may use a set percentage of the highest ranked
eligible applicants to certify.
(5) When using a set number of candidates or top percentage of
eligible applicants, all applicants with the same score as the last
candidate in the cut will also be referred.
(6) In selecting an appropriate mechanism, agencies should consider
the number of positions to be filled, the assessment(s) used,
historical applicant data, current labor market conditions, and other
factors appropriate for the hiring action.
(c) The agency must determine the mechanism before announcing the
vacancy, and the job opportunity announcement must state the mechanism
to be used.
(d) The mechanism used must be clearly documented in the examining
case file and available for reconstruction or third-party review.
(e) Hiring managers will receive sufficient names, when available,
to allow them to consider at least three candidates for each vacancy.
(f) In instances when a certificate of eligibles results in fewer
than three eligible and available candidates per vacancy and an agency
needs to issue a supplemental certification, OPM or a DEU must have
decided, before announcing the vacancy, how to expand the group of
candidates in accordance with the guidance in the Delegated Examining
Operations Handbook.
(g) OPM or a DEU will refer candidates for consideration by
simultaneously listing a candidate on all certificates for which the
candidate is interested, eligible, and within reach, except that, when
it is deemed in the interest of good administration and candidates have
been so notified, OPM or a DEU may choose to refer candidates for only
one vacancy at a time.

0
9. Revise Sec. 332.404 to read as follows:

Sec. 332.404 Order of selection from certificates.

An appointing officer, with sole regard to merit and fitness, shall
select any eligible candidate certified for appointment on a
certificate of eligibles, except the hiring manager may not pass over a
preference eligible to select a lower standing non-preference eligible
on the certificate unless the agency complies with pass over procedures
in accordance with Sec. 332.406.

0
10. Revise Sec. 332.405 to read as follows:

Sec. 332.405 Three considerations for appointment.

An appointing officer is not required to consider an eligible
candidate who has been given bona fide consideration by one or more
hiring managers for three separate appointments from the same or
different certificates for the same position (i.e., the same title,
series, and grade).
(a) Bona fide consideration. To use this provision:
(1) The hiring manager must review and consider the candidate's
application material;
(2) The hiring manager must sign a written statement documenting
the candidate received three considerations and recommending the
candidate be removed from further consideration for the position(s)
being filled due to a documented lack of a specific skills(s) or
attribute(s) needed to perform the work of the position being filled
(When more than one hiring manager is involved, a hiring manager may
include information or evidence from another hiring manager.);
(3) The Human Resources Director (at the servicing personnel office
level) must approve the request to remove the candidate from further
consideration; and
(4) The agency must provide written notification to any candidate
removed under this section upon request by the candidate.
(b) Document the case file. The agency must document in the case
file the three valid selections that were made, and the Human Resources
Director's concurrence to remove any candidate from further
consideration in accordance with paragraph (a) of this section.
(c) Selection consideration. An agency may use the three
considerations provision to remove one or more candidates from further
consideration starting with the fourth selection (which may be from the
same or different certificates for the same position (i.e., the same
title, series, and grade)). The number removed may not exceed the
remaining number of positions to be filled as long as bona fide
consideration has been given and documented as required by this
section.
(d) Inapplicability of the Three Considerations Rule. The three
considerations rule does not apply to shared certificates.

PART 337--EXAMINING SYSTEM

0
11. The authority citation for part 337 is revised to read as follows:

Authority: 5 U.S.C. 1104(a), 1302, 2302, 3301, 3302, 3304, 3319,
5364; E.O. 10577, 3 CFR 1954-1958 Comp., p. 218; 33 FR 12423, Sept.
4, 1968; and 45 FR 18365, Mar. 21, 1980; 116 Stat. 2135, 2290; 117
Stat. 1392, 1665; and E.O. 13833.

0
12. Revise the heading to subpart C to read as follows:

Subpart C--Category Rating

0
13. Revise Sec. 337.304 to read as follows:

Sec. 337.304 Veterans' preference.

In this subpart:
(a) Veterans' preference must be applied as prescribed in 5 U.S.C.
3319(b) and (c)(7);
(b) Veterans' preference points as prescribed in Sec. 337.101 are
not applied in category rating; and
(c) Sections 3319(b) and 3319(c)(7) of title 5 U.S.C. constitute
veterans' preference requirements for purposes of 5 U.S.C.
2302(b)(11)(A) and (B).

[FR Doc. 2025-17125 Filed 9-5-25; 8:45 am]
BILLING CODE 6325-39-P

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