Defense Department Personnel Security bill

National Security Personnel System Act - (Sec. 2) Authorizes the Secretary of Defense to establish a human resources management system, to be referred to as the National Security Personnel System (the System), for some or all organizational or functional units of the Department of Defense (DOD). Excludes specified DOD research and laboratory facilities from the System. Sets forth System requirements.

Prohibits the total amount of compensation paid to certain DOD senior executive or equivalent employees from exceeding the total compensation payable to the Vice President. Sets forth requirements concerning the participation of employee representatives in the planning, development, and implementation of the System, but permits the Secretary, after following specified notice, consultation, and mediation procedures, to implement disputed proposals if, in the Secretary's discretion, further consultation and mediation are unlikely to produce an agreement. Requires the System to include a pay-for-performance evaluation system. Directs the Secretary to implement a performance management system for the included units. Sets forth provisions concerning national level bargaining and excludes the National Guard Bureau and the Army and Air National Guard from such bargaining. Permits the Secretary to establish an appeals process that provides employees of DOD organizational and functional units fair treatment in any appeals that they bring in decisions relating to their employment.

Authorizes the Secretary to establish a program within DOD under which employees may be eligible for early retirement, offered separation incentive pay, or both. Entitles to early retirement any employee who is at least 50 years of age and has completed 20 years of service or any employee who has completed at least 25 years of service. Provides separation incentive pay limits. Prohibits an employee who receives separation pay from being reemployed by the Federal Government within five years (requiring repayment of the entire amount of such pay to DOD).

Authorizes the Secretary to exercise any hiring flexibilities that would otherwise be available to the Secretary pertaining to the methods of establishing qualification requirements for, recruitment for, and appointment to positions in, demonstration projects. Provides a veterans' preference in hiring.

Authorizes the Secretary to contract with individuals for services to be performed outside the United States to support DOD programs and activities. Prohibits the consideration of such individuals, by virtue of such employment, as Federal employees for the purposes of: (1) any law administered by the Office of Personnel Management; or (2) under the System.

Authorizes the Secretary to carry out a program to attract highly qualified experts in needed occupations within DOD. Limits to five years the term of appointment under such program, with limitations on additional payments to such employees.

Authorizes the Secretary to provide special allowances, benefits, retirement accrual benefits, and disability to certain DOD civilian employees assigned to activities outside the United States in support of DOD activities abroad that are hazardous to life or health or that are so specialized because of security requirements as to be clearly distinguishable from normal Government employment.

Amends provisions relating to labor-management and employee relations to impose specified time restrictions on the completion of certain actions or activities by the Federal Labor Relations Authority or the Federal Services Impasses Panel relating to external third-party reviews of labor-management disputes that involve DOD agencies and employees.

(Sec. 3) Provides for military leave for Federal civilian and District of Columbia government employees who perform full-time military service in support of a contingency operation.