[Federal Register Volume 62, Number 48 (Wednesday, March 12, 1997)]
[Notices]
[Pages 11676-11698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6167]



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Part VII





Office of Personnel Management





_______________________________________________________________________



Proposed Laboratory Personnel Management Demonstration Project; 
Department of the Army, U.S. Army Medical Research and Materiel 
Command, Fort Detrick, Frederick, Maryland; Notice

  Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / 
Notices  

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OFFICE OF PERSONNEL MANAGEMENT


Proposed Laboratory Personnel Management Demonstration Project; 
Department of the Army, U.S. Army Medical Research and Materiel 
Command, Fort Detrick, Frederick, Maryland

AGENCY: Office of Personnel Management.

ACTION: Notice of Intent to Implement Demonstration Project.

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SUMMARY: Title VI of the Civil Service Reform Act, 5 U.S.C. 4703, 
authorizes the Office of Personnel Management (OPM) to conduct 
demonstration projects that experiment with new and different personnel 
management concepts to determine whether such changes in personnel 
policy or procedures would result in improved Federal personnel 
management.
    Public Law 103-337, October 5, 1994, permits the Department of 
Defense (DOD), with the approval of the OPM, to carry out personnel 
demonstration projects generally similar in nature to the China Lake 
demonstration project at DOD Science and Technology (S&T) Reinvention 
Laboratory sites. The Army is proposing demonstration projects 
initially to cover five of its S&T Reinvention Laboratories: the Army 
Research Laboratory; the Missile Research, Development, and Engineering 
Center; the Aviation Research, Development, and Engineering Center; the 
Medical Research and Materiel Command; and the Waterways Experiment 
Station. This proposal is for the Medical Research and Materiel Command 
(MRMC).

DATES: To be considered, written comments must be submitted on or 
before May 20, 1997; two public hearings will be scheduled as follows: 
(1) April 21, 1997, at 10:00 a.m., at Fort Detrick, Maryland. (2) April 
21, 1997, at 1:00 p.m by Video Teleconference (VTC) and/or conference 
calls from Fort Detrick, Maryland covering all MRMC sites 
geographically located outside of the Fort Detrick, Maryland commuting 
area. At the time of the hearings, interested persons or organizations 
may present their written or oral comments for the April 21, 1997 
hearing or oral comments for the VTC/conference call hearing on the 
proposed demonstration project. The hearings will be informal.
    Anyone wishing to testify should contact the person listed under 
FOR FURTHER INFORMATION CONTACT, and state the hearing location and 
date, so that OPM can plan the hearings and provide sufficient time for 
all interested persons and organizations to be heard. Priority will be 
given to those on the schedule, with others speaking in any remaining 
available time. Each speaker's presentation will be limited to 10 
minutes. Written comments may be submitted to supplement oral testimony 
during the public comment period.

ADDRESSES: Comments may be mailed to Fidelma A. Donahue, U.S. Office of 
Personnel Management, 1900 E Street, NW, Room 7460, Washington, DC 
20415; the public hearings will be held at the U.S. Army Research and 
Material Command, Strough Auditorium, 504 Scott Street, Building 611, 
Fort Detrick, Maryland; and, the VTC/conference call hearings will be 
conducted at the U.S. Army Research and Material Command, Strough 
Auditorium, 504 Scott Street, in Building 810, Conference Rooms 1 and 
2, Fort Detrick, Maryland.

FOR FURTHER INFORMATION CONTACT: (1) On proposed demonstration project: 
Ms. Carol Gartrell, U.S. Army Medical Research and Materiel Command, 
ATTN: MCMR-RMP, 504 Scott Street, Fort Detrick, Maryland 21702-5012, 
phone 301-619-7255.
    (2) On proposed demonstration project and public hearings: Fidelma 
A. Donahue, U.S. Office of Personnel Management, 1900 E Street, NW, 
Room 7460, Washington, DC 20415, phone 202-606-1138.

SUPPLEMENTARY INFORMATION: Since 1966, numerous studies of DOD 
laboratories have been conducted on laboratory quality and personnel. 
Almost all of these studies have recommended improvements in civilian 
personnel policy, organization, and management. The proposed project 
involves simplified job classification, pay banding, pay-for-
performance management system, streamlined hiring processes, expanded 
employee developmental opportunities, and modified Reduction-in-Force 
(RIF) procedures.

Office of Personnel Management
James B. King,
Director

Table of Contents

I. Executive Summary
ll. Introduction
    A. Purpose
    B. Problems with the Present System
    C. Changes Required/Expected Benefits
    D. Participating Organization
    E. Participating Employees
    F. Labor Participation
    G. Project Design
    H. Personnel Management Board
Ill. Personnel System Changes
    A. Broadbanding
    B. Classification
    C. Pay-for-Performance Management System
    D. Hiring and Appointment Authorities
    E. Expanded Developmental Opportunities Program
    F. Revised Reduction-In-Force (RIF) Procedures
IV. Training
V. Conversion
VI. Project Duration
VII. Evaluation Plan
VIII. Demonstration Project Costs
IX. Required Waivers to Law and Regulation

Appendix A: Occupational Series by Occupational Family
Appendix B: Project Evaluation and Oversight
Appendix C: Performance Elements
Appendix D: Benchmark Performance Standards

I. Executive Summary

    This project was designed by the Department of the Army (DA), with 
participation of and review by the Department of Defense (DOD) and the 
Office of Personnel Management (OPM). The purpose of the project is to 
achieve the best workforce for the Medical Research & Materiel Command 
(MRMC) mission, adjust the workforce for change, and improve workforce 
quality.
    The foundations of this project are based on the concept of linking 
performance to pay for all covered positions; simplifying paperwork and 
the processing of classification and other personnel actions; 
emphasizing partnerships among management, employees and unions 
representing covered employees; and delegating classification and other 
authorities to line managers. Additionally, the research intellect of 
the MRMC workforce will be revitalized through the use of expanded 
developmental opportunities. The use of these expanded opportunities 
will reinvigorate the creative intellect of the research and 
development community.
    Development and execution of this project will be in-house budget 
neutral, based on a baseline of September 1995 in-house costs and 
consistent with the DA plan to downsize laboratories. Army managers at 
the DOD S&T Reinvention Laboratory sites will manage and control their 
personnel costs to remain within established in-house budgets. An in-
house budget is a compilation of costs of the many diverse components 
required to fund the day-to-day operations of a laboratory. These 
components generally include pay of people (labor, benefits, overtime, 
awards), training, travel, supplies, non-capital equipment, and other 
costs depending on the specific function of the activity.
    This project will be under the joint sponsorship of the Assistant 
Secretary of the Army for Research, Development

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and Acquisition and the Assistant Secretary of the Army for Manpower 
and Reserve Affairs. The Commander , U.S. Army Medical Command 
(MEDCOM), will execute and manage the project. Project oversight within 
the Army will be achieved by an executive steering committee made up of 
top-level executives, co-chaired by the Deputy Assistant Secretary of 
the Army for Research and Technology and the Deputy Assistant Secretary 
of the Army (Civilian Personnel Policy)/Director, Civilian Personnel. 
Oversight external to the Army will be provided by DOD and OPM.

II. Introduction

A. Purpose

    The purpose of the project is to demonstrate that the effectiveness 
of DOD laboratories can be enhanced by allowing greater managerial 
control over personnel functions and, at the same time, expanding the 
opportunities available to employees through a more responsive and 
flexible personnel system. The quality of DOD laboratories, their 
people, and products has been under intense scrutiny in recent years. 
The perceived deterioration of quality is due, in substantial part, to 
the erosion of control which line managers have over their human 
resources. This demonstration, in its entirety, attempts to provide 
managers, at the lowest practical level, the authority, control, and 
flexibility needed to achieve quality laboratories and quality 
products.

B. Problems with the Present System

    The MRMC provides medical solutions for military requirements to 
protect and sustain the force. To do this, its management must acquire 
and retain an enthusiastic, innovative, and highly educated/trained 
workforce. The MRMC must be able to compete with the private sector for 
the best talent and be able to make job offers in a timely manner with 
the attendant bonuses and incentives to attract high quality employees. 
Today, industry laboratories can make an offer of employment to a 
promising new hire before the government can prepare the paperwork 
necessary to begin the recruitment process.
    Currently, jobs are described using a cumbersome classification 
system that is overly complex and specialized. This hampers a manager's 
ability to shape the workforce and match the positions while making 
best use of the employees. Managers must be given local control of 
positions and their classification to move both their employees and 
vacancies freely within their organization to other lines of the 
business activities to match the life cycle needs of supported 
customers.
    These issues work together to hamper supervisors in all areas of 
human resource management. Hiring restrictions and overly complex job 
classifications, coupled with poor tools for rewarding and motivating 
employees and a system that does not assist managers in removing poor 
performers, builds stagnation in the workforce and wastes valuable 
time.

C. Changes Required/Expected Benefits

    This project is expected to demonstrate that a human resource 
system tailored to the mission and requirements of the MRMC will result 
in: (a) Increased quality in the total workforce and the products they 
produce; (b) increased timeliness of key personnel processes; (c) 
increased retention of high quality employees and increased non-
retention of poor quality employees; and (d) increased satisfaction 
with the MRMC and its products by all customers served.
    The MRMC demonstration project builds on the successful features of 
demonstration projects at China Lake and the National Institute of 
Standards and Technology (NIST). These demonstration projects have 
produced impressive statistics on the job satisfaction for their 
employees versus that for the federal workforce in general. Therefore, 
in addition to expected benefits mentioned above, the MRMC 
demonstration project expects to find more satisfied employees on many 
aspects of the demonstration project including pay equity, 
classification accuracy, and fairness of performance management. A full 
range of measures will be collected during Project Evaluation (Section 
VII).

D. Participating Organization

    This demonstration project will cover approximately 1250 MRMC 
civilian employees at all geographic sites within the United States. It 
should be noted that many sites currently employ fewer than 10 people 
and that the sites may change as the MRMC reorganizes, realigns, and 
complies with Base Realignment and Closure Act requirements. Successor 
organizations will continue coverage in the demonstration project. 
Approximately 46 percent of covered employees are located at Fort 
Detrick, Frederick, Maryland. The remaining employees are located at 
the following sites: Aberdeen Proving Ground, Maryland; Falls Church, 
Virginia; Fort Rucker, Alabama; Fort Sam Houston, Texas; Natick, 
Massachusetts; Washington, DC; Tobyhanna Army Depot, Pennsylvania; Fort 
Lee, Virginia; Tracy, California; Ogden, Utah; Brooks Air Force Base, 
Texas; Dayton, Ohio; Tripler Army Medical Center, Hawaii; and Fort 
Bragg, North Carolina. Additionally, the MRMC has some employees 
participating in the Flexiplace Program who are geographically located 
at Fort Collins, Colorado; Clarksville, Tennessee; and Jefferson, 
Maryland.

E. Participating Employees

    The demonstration project includes appropriated funded civilian 
employees in the competitive and excepted service (to include non-
citizens hired in the absence of qualified citizens) paid under the 
General Schedule (GS) and Scientific and Professional (ST) pay systems, 
and DA Interns. Senior Executive Service (SES) employees, Federal Wage 
System employees, and employees assigned to the GS-080 series and 
presently covered by the Civilian Intelligence Personnel Management 
System (CIPMS), will not be covered in the demonstration project. 
Personnel added to the MRMC in like positions, either through 
appointment, promotion, reassignment, change to lower grade or where 
their functions and positions have been transferred into the MRMC, will 
be converted to the demonstration project.
    The personnel systems for 5 U.S.C. 3104 (ST) positions will change 
only to the extent that 3104 positions are in the same performance 
appraisal and awards systems as other positions. Classification, 
staffing, compensation and reduction-in-force procedures, however, will 
not change. 5 U.S.C. 3104 employees will not receive the pro rata share 
payout upon completion of one year of coverage in the demonstration 
project. Pay adjustments for their positions under the project will be 
carried out in accordance with existing Federal rules pertaining to 
3104 pay adjustments. (See 5 U.S.C. 5376)

F. Labor Participation

    The National Federation of Federal Employees (NFFE) and the 
American Federation of Government Employees (AFGE), represent 
professional and nonprofessional GS employees at some sites within the 
MRMC. The MRMC is continuing to fulfill its obligations to consult and/
or negotiate with the NFFE and AFGE, as appropriate, in accordance with 
5 U.S.C. 4703 (F) and 7117. The participation with the NFFE, and AFGE 
is within the spirit and intent of Executive Order 12871. The 
bargaining units of MRMC not endorsing the demonstration project will 
not participate.

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G. Project Design

    In October 1994, the MRMC began development of the specifics of 
this personnel demonstration proposal. A Personnel Demonstration 
Project Office was established and administrative support added in 
April 1995. Briefings of the proposal were initially conducted for the 
workforce at every participating subordinate activity with subsequent 
briefings provided upon request by Commanders/Directors.
    Status of the project is provided to subordinate activity 
Commanders/Directors, usually on a weekly basis for dissemination to 
all employees. An electronic mail address was established in the Fall 
of 1994 and made available to all employees and managers for the 
purpose of expressing opinions and/or obtaining specific information 
about the project.
    Review of the proposal and input by the MEDCOM, as well as critical 
and extensive reviews by Headquarters DA, the Office of the Secretary 
of Defense, and OPM since April 1995, have led to the current 
configuration of the proposal.

H. Personnel Management Board

    The MRMC intends to establish an appropriate balance between the 
personnel management authority/accountability delegated to subordinate 
activity Commanders/ Directors and MRMC management/oversight 
responsibilities by establishing a Personnel Management Board (PMB). 
The Chairperson and members will be appointed by the Commander MRMC, 
and oversee/provide policy, guidelines and corrective action as 
appropriate as subordinate activity Commanders/Directors execute the 
following:
    1. formulate and execute the civilian pay budget;
    2. determine the composition of the pay-for-performance pay pools 
in accordance with the guidelines of this proposal and internal 
procedures;
    3. administer funds allocation to pay pool managers;
    4. determine hiring and promotion salaries as well as exceptions to 
pay-for-performance salary increases;
    5. provide guidance to pay pool managers;
    6. manage the awards pools;
    7. select participants for the Expanded Developmental Opportunities 
Program, long term training, and any special developmental assignments;
    8. adhere to guidelines concerning the promotion of employees into 
salary ranges designated ``high grades'';
    9. ensure in-house budget neutrality to include tracking of average 
salaries, FTEs, etc.
    10. contact the PMB designee for problem resolution, recommending 
changes in policy/procedure, etc.
    11. ensure that all employees are treated in a fair and equitable 
manner in accordance with all policies, regulations, and guidelines 
covering this demonstration project.

III. Personnel System Changes

A. Broadbanding

Occupational Families
    Occupations at the MRMC will be grouped into occupational families. 
Occupations will be grouped according to similarities in type of work 
and customary requirements for formal training or credentials. The 
common patterns of advancement within the occupations as practiced at 
DOD Laboratories and in the private sector will also be considered. The 
current occupations and grades have been examined, and their 
characteristics and distribution have served as guidelines in the 
development of the four occupational families described below. 
Positions included in each occupational family are listed in Appendix 
A.
    1. Engineers and Scientists. This occupational family includes all 
technical professional positions, such as positions in the biological, 
physical and social sciences, medical, veterinary, mathematical, and 
engineering fields. Ordinarily, specific course work or educational 
degrees are required for these occupations.
    2. E&S Technicians. This occupational family contains specialized 
functions in fields that provide direct technical support to the 
scientific/engineering effort. Positions in these occupations may or 
may not require completion of formal college course work. However, 
training and skills in the various specialties are generally required.
    3. Administrative. This occupational family contains specialized 
functions in such fields as management analysis, accounting, budgeting, 
contracting, purchasing, legal, business and industry, library, quality 
assurance, and supply. Special skills in administrative fields or 
special degrees are required.
    4. General Support. This occupational family is composed of 
positions requiring special skills and knowledge, such as typing, 
shorthand, or office automation skills, and job related experience. 
Clerical work usually involves the processing and maintenance of 
records. Assistant work requires knowledge of methods and procedures 
within a specific administrative area. Support functions include 
positions such as secretary, mail clerk, medical clerk, accounting 
technician and supply technician.
Pay Bands
    Each occupational family will be composed of discrete pay bands 
(levels) corresponding to recognized advancement within the 
occupations. These pay bands will replace grades. They will not be the 
same for all occupational families. Each occupational family will be 
divided into three to five pay bands, each pay band covering the same 
pay range now covered by one or more grades. A salary overlap, similar 
to the current overlap between GS grades, will be maintained.
    Ordinarily, an individual will be hired at the lowest salary in a 
pay band. Exceptional qualifications, specific organizational 
requirements, or other compelling reasons may lead to a higher entrance 
level within a band.
    The MRMC broadbanding plan expands the broadbanding concept used at 
China Lake and NIST by creating Pay Band V of the Engineers and 
Scientists occupational family. This pay band is designed for senior 
technical managers and senior scientists/engineers.
    Current OPM guidelines covering the Senior Executive Service and 
Scientific and Professional (ST) positions do not fully meet the needs 
of MRMC. The SES designation is appropriate for executive level 
managerial positions whose classification exceeds the GS-15 grade 
level. The primary knowledges and abilities of SES positions relate to 
supervisory and managerial responsibilities. Positions classified as ST 
are designed for bench research scientists and engineers. OPM 
guidelines state that the duties and responsibilities of ST positions 
may only include minimal managerial or supervisory responsibility.
    MRMC currently has many division/directorate chief positions that 
have characteristics of both SES and ST classifications. Most division/
directorate chiefs in MRMC are responsible for supervising other GS-15 
positions, such as branch chiefs, non-supervisory researcher scientists 
and engineers. Most of these senior positions are classified at the GS-
15 level. MRMC management considers the primary requirement for 
division/directorate chiefs to have knowledge of and expertise in the 
specific scientific and technology areas related to their mission. The 
ability to manage, while important, is considered secondary. 
Historically, these positions have been filled by employees who possess 
primarily scientific/engineering credentials and who are considered 
experts in their field by the scientific

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community. While it is clear these positions warrant classification 
beyond the GS-15 level, attempts to classify most of the positions as 
SES have been difficult because of the organizational structure of 
MRMC. Classification of the positions as ST is also not an option 
because the supervisory responsibilities inherent in division/
directorate chief positions cannot be ignored. MRMC has positions that 
do not strictly conform to OPM definitions of either the SES or ST.
    The purpose of Pay Band V is to overcome the difficulties 
identified above by creating a category for two types of positions--the 
senior technical manager (with full supervisory authority) and the 
senior scientist engineer (less than full supervisory authority). 
Current GS-15 division/directorate chiefs will convert into the 
demonstration project at Pay Band IV. After conversion, they will be 
reviewed against established criteria to determine if they should be 
reclassified to Pay Band V. The proposed salary range is the same as 
currently exists for ST positions (minimum of 120% of the minimum rate 
of basic pay for GS-15 with a maximum of the basic rate of pay 
established for level IV of the Executive Schedule). Vacant positions 
in Pay Band V will be competitively filled to ensure that selections 
are made from among the world's preeminent researchers and technical 
leaders in the specialty fields. Panels of experts from the discipline 
or an allied discipline that the recruitment action seeks to fill will 
be created to assist in filling Pay Band V positions. Panel members 
will be selected from senior military and civilian employees of the 
MRMC, and an equal number of individuals of equivalent stature from 
outside the activity to ensure impartiality, breadth of technical 
expertise, and a rigorous and demanding review. The panel will apply 
criteria developed largely from the current OPM Research Grade 
Evaluation Guide for positions exceeding the GS-15 level. The same 
procedure will be used for evaluating senior technical manager 
positions however, the rating criteria will be adjusted to account for 
the differences in the positions, such as greater emphasis on technical 
program management and supervisory abilities.
    The final component of Pay Band V is the management of all Pay Band 
V assets. Specifically, this includes authority to classify, create, 
abolish positions as circumstances warrant; recruit and reassign 
employees in this pay band; set pay and to have their performance 
appraised under this project's Pay for Performance System. This 
authority will be executed within parameters to be established at the 
DA level, to include controls on the numbers of Pay Band V positions 
and recruitment/promotion criteria. The specific details regarding the 
control and management of Pay Band V assets will be included in the 
demonstration's operating procedures. The laboratory wants to 
demonstrate increased effectiveness by gaining greater managerial 
control and authority, consistent with merit, affirmative action, and 
equal employment opportunity principles.
    High-grade controls within the agency currently restrict movement 
into high grade positions (GS-14/15). OPM definition for broadbanding 
purposes is a position where the base pay exceeds that of a GS-13, Step 
10. Until the high-grade controls are lifted, demonstration employees 
will not be able to advance into the currently defined pay level of a 
high-grade, unless a high-grade authorization is available. To 
accommodate this, employees whose salary adjustment would place them 
above the high-grade pay limit in activities where high-grade 
authorizations are unavailable will receive permanent adjustments to 
basic salary up to an amount equivalent to one dollar less than the 
base of the defined high-grade pay structure. Any additional amount 
granted under pay-for-performance will be paid as a one-time bonus 
payment from pay-pool funds. This pattern of payout will continue until 
high-grade authorizations become available.
    The proposed pay bands for the occupational families and how they 
relate to the current GS grades are shown in Figure 1. Application of 
the Fair Labor Standards Act (FLSA) within each pay band is also shown 
in Figure 1. This pay band concept has the following advantages:
    1. It reduces the number of classification decisions required 
during an employee's career.
    2. It simplifies the classification decision-making process and 
paperwork. A pay band covers a larger scope of work than a grade, and 
thus will be defined in shorter and simpler language.
    3. It supports delegation of classification authority to line 
managers.
    4. It provides a broader range of performance-related pay for each 
level. In many cases, employees whose pay would have been frozen at the 
top step of a grade will now have more potential for upward movement in 
the broader pay band.
    5. It prevents the progression of low performers through a pay band 
by mere longevity, since job performance serves as the basis for 
determining pay.

BILLING CODE 6325-01-P

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[GRAPHIC] [TIFF OMITTED] TN12MR97.069



BILLING CODE 6325-01-C
Fair Labor Standards Act
    The FLSA exemption and nonexemption determinations will be made 
consistent with criteria found in 5 CFR part 551. Supervisors with 
classification authority will make the determinations on a case-by-case 
basis with reference to documentation in the operating procedures 
manual and the advice and assistance of the Civilian Personnel Offices 
(CPO)/Civilian Personnel Advisory Centers (CPAC)/Civilian Personnel 
Operations Centers (CPOC). The generic position descriptions will not 
be the sole basis for the determination. The basis for exemption/non-
exemption will be documented and attached to each description. 
Exemption criteria will be narrowly construed and applied only to those 
employees who clearly meet the spirit of the exemption. The basis for 
determinations will be reviewed as a part of the performance review 
process and when salary adjustments are warranted. Changes will be 
documented and provided to the CPO/CPAC/CPOC, as appropriate.
Simplified Assignment Process
    Today's environment of rightsizing and workforce transition 
mandates that the MRMC have maximum flexibility to assign duties and 
responsibilities to individuals. Broadbanding can be used to address 
this need. As a result of the assignment to a particular level 
descriptor, the organization will have maximum flexibility to assign an 
employee with no change in pay, within broad descriptions consistent 
with the needs of the organization, and the individual's qualifications 
and rank or level. Subsequent assignments to projects, tasks, or 
functions anywhere within the organization requiring the same level and 
area of expertise, and qualifications would not constitute an 
assignment outside the scope or coverage of the current level 
descriptor, or benchmark position description.
    Such assignments within the coverage of the generic descriptors are 
accomplished without the need to process a personnel action. For 
instance, a technical expert can be assigned to any project, task, or 
function requiring similar technical expertise. Likewise, a manager 
could be assigned to manage any similar function or organization 
consistent with that individual's qualifications. This flexibility 
allows a broader latitude in assignments and further streamlines the 
administrative process and system.
Promotions
    A promotion is the movement of an employee to a higher pay band 
within the same occupational family or to a pay band in a different 
occupational family which results in an increase in the employee's 
salary. Progression within a pay band is based upon performance pay 
increases; as such, these actions are not considered promotions and are 
not subject to the provisions of this section.
    Promotions will be processed under competitive procedures in 
accordance with merit principles and requirements. The following 
actions are excepted from competitive procedures:
    (a) Re-promotion to a position which is in the same pay band and 
occupational family as the employee previously held on a permanent 
basis within the competitive service.
    (b) Promotion, reassignment, demotion, transfer or reinstatement to 
a position having promotion potential no greater than the potential of 
a position an employee currently holds or previously held on a 
permanent basis in the competitive service.
    (c) A position change permitted by reduction-in-force procedures.
    (d) Promotion without current competition when the employee was 
appointed through competitive procedures to a position with a 
documented career ladder.
    (e) A temporary promotion, or detail to a position in a higher pay 
band, of 180 days or less.
    (f) Impact of person on the job, accretion of duties, and Factor IV 
process (application of the Research Grade Evaluation Guide, Equipment 
Development Grade Evaluation Guide or similar guides) promotions.
    (g) A promotion resulting from the correction of an initial 
classification error or the issuance of a new classification standard.

[[Page 11681]]

Link Between Promotion and Performance
    To be promoted competitively or noncompetitively from one band to 
the next, an employee must meet the minimum qualifications for the job 
and have a current performance rating of ``B'' or better (see 
Performance Evaluation) or equivalent under a different performance 
management system.

B. Classification

Introduction
    The objectives of the new classification system are to simplify the 
classification process, make the process more serviceable and 
understandable, and place more decision-making authority and 
accountability with line managers. All positions listed in Appendix A 
will be in the classification structure. Provisions will be made for 
including other occupations as employment requirements change in 
response to changing missions and technical programs.
Occupational Series
    The present GS classification system has over 400 occupations (also 
called series), which are divided into 22 groups. The occupational 
series will be maintained. New series, established by OPM, may be added 
as needed to reflect new occupations in the workforce. Appendix A lists 
the occupational series currently represented at the MRMC by 
occupational family.
Classification Standards
    MRMC will use a classification system that is a modification of the 
system now in use at the US Navy, Naval Command, Control and Ocean 
Surveillance Center, San Diego, California. The present classification 
standards will be used to create local benchmark position descriptions 
for each pay band, reflecting duties and responsibilities comparable to 
those described in present classification standards for the span of 
grades represented by each pay band. There will be at least one 
benchmark position description for each pay band. A supervisory 
benchmark position description will be added to those pay bands that 
include supervisory employees. Present titles and series will continue 
to be used in order to recognize the types of work being performed and 
educational backgrounds and requirements of incumbents. Locally 
developed speciality codes and OPM functional codes will be used to 
facilitate titling, making qualification determinations, and assigning 
competitive levels to determine retention status.
Position Descriptions and Classification Process
    The MRMC Commander will have delegated classification authority and 
will redelegate this authority to subordinate activity Commanders/
Directors for redelegation to activity managers as appropriate. New 
position descriptions will be developed to assist managers in 
exercising delegated position classification authority. Managers will 
identify the occupational family, job series, the functional code, the 
speciality code, pay band level, and the appropriate acquisition codes. 
The manager will document these decisions on a cover sheet similar to 
the present DA Form 374. Speciality codes will be developed by Subject 
Matter Experts (SMEs) to identify the special nature of work performed. 
Functional codes are those currently found in the OPM Introduction to 
the Classification Standards which defines certain kinds of activities, 
e.g., Research, Development, Test and Evaluation, etc., and covers 
Engineers & Scientists (E&S).
Classification Appeals
    An employee may appeal the occupational family, occupational 
series, or pay band of his or her position at any time. The employee 
may accomplish this by exercising any of the following options: (a) The 
employee must formally raise the areas of concern to supervisors in the 
immediate chain of command, either verbally or in writing, (b) If the 
employee is not satisfied with the supervisory response, the employee 
may appeal to the appellate level within DoD or may appeal directly to 
OPM, (c) If the employee elects to first appeal to DoD but is not 
satisfied with this response, he/she may appeal to the Office of 
Personnel Management. Appellate decisions from OPM are final.
    The evaluation of a classification appeal is based on the MRMC 
Personnel Demonstration Project Classification Standards.

C. Pay-for-Performance Management System

Performance Evaluation
Introduction
    The performance appraisal system will link compensation to 
performance through annual performance evaluations and performance 
ratings. The performance appraisal system will allow optional use of 
peer evaluation input and/or input from subordinates whenever 
appropriate. The system will have the flexibility to be modified, if 
necessary, as more experience is gained under the project. Details of 
the system may be found in the implementing instructions.
Performance Objectives
    Performance objectives are statements of job responsibilities based 
on the work unit's mission, goals, and supplemental benchmark position 
descriptions. Employees and supervisors will jointly develop 
performance objectives which will reflect the types of duties and 
responsibilities expected at the respective pay level. The performance 
objectives, representing joint efforts of employees and their rating 
chains, should be in place within 30 days from the beginning of each 
rating period.
Performance Elements
    New performance elements and rating forms will be designed to 
implement a new scoring and rating system. The new performance 
evaluation system will be based on critical performance elements 
defined in Appendix C. All elements in the new performance evaluation 
system are critical. Non-critical elements will not be used. Each 
performance element is assigned a weight between a specified range. The 
total weight of all elements in a performance plan is 100 points. The 
supervisor assigns each element some portion of the 100 points in 
accordance with its importance for mission attainment. These weights 
will be developed along with employee performance objectives.
Mid-Year Review
    A mid-year review between a supervisor and employee will be held to 
determine whether objectives are being met and whether performance 
objectives should be modified to reflect changes in planning, workload, 
and resource allocation. Additional reviews may be held as deemed 
necessary by the supervisor. The weights assigned to performance 
elements will be changed, if necessary.
Performance Appraisal
    A performance appraisal is scheduled for the final weeks of the 
annual performance cycle, although an individual performance appraisal 
may be conducted at any time after 60 days on approved standards. The 
performance appraisal process brings supervisors and employees together 
for formal discussions on performance and results in (1) written 
appraisals, (2) performance ratings, (3) performance pay increases and/
or bonuses, (4) cash awards, and (5) other individual performance-
related actions, as appropriate. A performance appraisal

[[Page 11682]]

may consist of two meetings held between employee and supervisor: the 
performance review meeting and the evaluation feedback meeting.
Performance Review Meeting Between Employee and Supervisor
    The review meeting is to discuss job performance and 
accomplishments. Supervisors do not assign scores, ratings, pay 
increases, or awards at this meeting. The supervisor notifies the 
employee of the review meeting in time to allow the employee to prepare 
a list of accomplishments. Employees will be given an opportunity at 
the meeting to give a personal performance assessment and describe 
accomplishments. The supervisor and employee discuss job performance 
and accomplishments in relation to the performance elements, 
objectives, and planned activities established in the performance plan.
Evaluation Feedback Meeting Between Employee and Supervisor
    In this second meeting between employee and supervisor, the 
supervisor informs the employee of management's appraisal of the 
employee's performance, the employee's performance score and rating, 
and any recommended related pay increase, bonus, award, or other 
personnel action. During this second meeting, the supervisor and 
employee will discuss and document performance objectives for the next 
rating period.
Performance Scores
    Selection of the weighted points to assign to an employee's 
performance is assisted by use of benchmark performance standards 
(appendix D). Each benchmark performance standard describes the level 
of performance associated with a particular point on a rating scale. 
Supervisors may add supplemental standards to the performance plans of 
the employees they supervise to further elaborate the benchmark 
performance standards.
    The overall score is the sum of the individual element scores. 
Employees will receive an academic-type rating of ``A'', ``B'', ``C'', 
or ``F'' depending upon the percentage of goal attainment. These 
summary ratings are representative of Pattern E in Summary Level Chart 
in 5 CFR 430.208(d)(1). This rating will become the rating of record, 
and only those employees rated ``C'' or higher (any element rated less 
than 50 percent is unacceptable performance) will be eligible to 
receive performance-based pay increases and/or bonuses or retention 
years credit for RIF. A rating of ``A'' will be assigned for scores of 
85 to 100 points, ``B'' for scores of 70 through 84, ``C'' for scores 
of 50 through 69, and ``F'' for scores of 0 through 49

    [Note: An ``F'' constitutes an unacceptable rating]. The 
academic-type ratings will be used to determine pay or bonus values 
and to award additional RIF retention years as follows:

------------------------------------------------------------------------
                                                         RIF retention  
             Rating                  Compensation         years added   
------------------------------------------------------------------------
``A''..........................  4 shares...........  10.               
``B''..........................  2 shares...........  7.                
``C''..........................  1 share............  3 (SEE NOTE).     
``F''..........................  0..................  0.                
------------------------------------------------------------------------

    Note: Only those employees rated ``C'' or higher (with no 
element rated less than 50 percent) will be eligible to receive 
performance-based pay increases and/or bonuses or retention years 
credit for RIF retention.
Performance Based Actions
    MRMC will implement a two step process to deal with poor 
performers. This process may lead to involuntary separations with 
grievance or appeal rights if the overall level of performance is below 
that of a ``C'' rating or the employee receives less than 50 percent of 
the assigned benchmark score in any element.
    The process will begin with the recognition that an employee's 
performance is unacceptable (any element rated less than 50 percent of 
the assigned benchmark score), or that an employee receives an annual 
rating of ``F''. The two steps are as follows: (1) performance 
improvement plan (PIP), and (2) separation.
    When the employee is determined to be performing below the ``C'' 
level, or below 50% of the assigned benchmark score in any element, the 
supervisor and employee will develop a structured PIP that will be 
monitored for a reasonable period of time.
    If the employee fails to improve after this structured plan, the 
employee will be given notice of proposed appropriate action. The 
activity may consider a change in assignment or reduction in pay as 
opposed to removal if the mission, organizational structure and 
available resources warrant such action. The separated employee will 
have subsequent due process recourse as a former employee. (Note: 
Performance based adverse actions may be taken under 5 U.S.C., Chapter 
75, rather than Chapter 43).
    If, as a result of the PIP, an employee's performance improves to 
the ``C'' or above level, or the 50% or above level in all assigned 
benchmark level elements, prior to the end of the annual performance 
cycle, the employee is appraised again at the end of the annual 
performance cycle. If the employee attains an annual rating of ``C'' or 
higher, an increase to base pay and/or bonus and RIF retention years 
credit will be earned.
    If, as a result of the PIP, an employee's performance improves to 
the ``C'' or above level, or the 50% or above level in all assigned 
benchmark level elements, after the end of the annual performance 
cycle, employment continues but no increase to base pay and/or bonus or 
RIF retention years credit are granted.
Employee Relations
    Employees covered by the project will be evaluated under a 
performance evaluation system that affords grievance rights comparable 
to those provided currently. The MRMC will maintain the substantive and 
procedural appeal rights currently afforded when taking action for 
misconduct and poor performance.
Senior Executive Service and 5 U.S.C. 3104 (ST) Employees
    Members of the SES will remain under the current SES performance 
appraisal system. 5 U.S.C. 3104 (ST) employees will be included in the 
project performance evaluation system, but will not be in the project 
pay-for-performance system.
Awards
    The MRMC currently has an extensive awards program consisting of 
both internal and external awards. While not linked to the pay-for-
performance system, awards will continue to be given for special acts 
and other categories as they occur. Awards may include, but are not 
limited to, special acts, patents, suggestions, on-the-spot, and time-
off, and may be modified or expanded as appropriate. Major Army Command 
(MACOM) and DOD awards and other honorary noncash awards will be 
retained.
    In an effort to foster and encourage team work among its employees, 
a Commander/Director may allocate a sum of money to a team for 
outstanding completion of a special task or significant achievement, 
and the team may decide the individual distribution of the total 
dollars among themselves.
    Members of the SES will remain under their current awards system 
and will not participate in the project performance recognition bonus 
awards program. 5 U.S.C. 3104 (ST) employees will be eligible for cash 
awards.

[[Page 11683]]

Pay Administration

Introduction
    The objective is to establish a pay system that will improve the 
ability of the MRMC to attract and retain quality employees. The new 
system will be a pay-for-performance system and, when implemented, will 
result in a redistribution of pay resources based upon individual 
performance.
Pay-for-Performance
    MRMC will use a simplified performance appraisal system that will 
permit both the supervisor and the employee to focus on quality of the 
work. The proposed system will permit the manager/supervisor to base 
compensation on performance or value added to the goal of the 
organization rather than on longevity and risk aversion. This system 
will allow managers to withhold pay increases from nonperformers, 
thereby giving the nonperformer the incentive to improve performance or 
leave government service.
    Pay-for-performance has two components: performance pay increases 
(i.e. base pay increases) and/or bonuses. All covered employees will be 
given the full amount of locality pay adjustments when they occur, 
regardless of performance. The funding for performance pay increases 
and/or bonuses is composed of money previously available for the annual 
general increase, within-grade increases, quality step increases, and 
promotions from one grade to another when the grades are now in the 
same pay band. Additionally, funds will be obtained from salary 
increases withheld for poor performance (see Performance Evaluation).
Performance Pay Pool
    The funding in the performance pay pool will be used for base pay 
increases and performance bonus pay. The payouts made to employees from 
the performance pay pool may be a mix of base pay increases and bonus 
payments, subject to the pay ceiling in the pay bands.
    The Headquarters, MRMC Comptroller, in conjunction with each 
subordinate activity Commander/Director, will calculate the total 
performance pay pool and allocate pay pools to subordinate activities. 
Each subordinate activity Commander/Director will allocate pay pools to 
organizational units or teams as appropriate.
Performance Pay Increases and/or Performance Bonuses
    A pay pool manager is accountable for staying within pay pool 
limits. The pay pool manager assigns pay increases and/or bonuses to 
individuals on the basis of an academic-type rating, the value of the 
performance pay pool resources available, and the individual's current 
basic rate of pay within a given pay band. A pay pool manager may 
request approval from the Commander/Director or his/her designee to 
grant a performance pay increase/performance bonus to an employee that 
is higher than the compensation formula for that employee to recognize 
extraordinary achievement or to provide accelerated compensation for 
local interns.
    A share value will be initially calculated for each individual 
based upon a pay pool assignment that will be composed of monies 
outlined previously. For illustration purposes, approximately 3 percent 
of the value of the combined basic rates of pay of the assigned 
employees will be used. A share will be calculated so that a pay pool 
manager will not exceed the resources that are available in the pay 
pool. The share value for an individual will be determined by a 
relationship that considers the individual's current basic rate of pay 
with respect to the maximum pay rate in the respective pay band. This 
relationship is as follows:
[GRAPHIC] [TIFF OMITTED] TN12MR97.068

where:
Pool Value = 0.03 * SUM (SALk); K = 1 to n
n= number of employees in pay pool
N = Number of Shares (0-4) earned by an employee based on their 
performance rating
SAL = An individual's basic rate of pay
SUM = The summation of the entities in parenthesis over the range 
indicated

    To illustrate the formula, the basic rates of pay of the 10 
employees in a pay pool, who each earn $50,000 per year, total to 
$500,000. The employees earned a total of 30 shares based on their 
ratings (5 individuals earned an ``A'' rating, and 5 individuals earned 
a ``B'' rating). The pay pool value is then 3 percent of the sum of 
$500,000, or $15,000. The individual performance pay increase being 
determined is for an individual who earns $50,000 per year and receives 
a ``B'' on the appraisal, thus earning 2 shares. Using the formula, the 
individual performance pay increase is calculated by multiplying the 
pay pool value, $15,000, by the individual basic rate of pay, $50,000, 
by the number of shares earned, 2. This product is divided by the sum 
of the products of the individual basic rates of pay times the number 
of shares earned, or 1,750,000. The resulting individual performance 
pay increase is $1,000.00 for the year.
    An annual performance pay increase could range between all of the 
performance pay increase formula or none of it, depending on the 
current pay of the employee. For example, a mid-point principle will be 
used to determine performance pay increases. This principle requires 
that employees in all pay bands must receive a B rating or higher to 
advance their basic rate of pay beyond the mid-point dollar threshold 
of their respective pay bands. If the performance pay increase formula 
yields a dollar value for a C-rated employee that would increase their 
basic rate of pay beyond the mid-point dollar threshold, then their 
basic rate of pay will be adjusted to the mid-point dollar threshold 
and the balance converted to a performance bonus. Once an employee has 
progressed beyond the mid-point dollar threshold, future performance 
pay increases will require a ``B'' rating or greater. If an employee 
attains a ``C'' rating and is beyond the mid-point dollar threshold, 
performance pay increases will be restricted to performance bonuses 
only.
    An annual performance pay increase could be all the compensation 
formula or none of it, depending on the current basic rate of pay of 
the employee. Annual performance pay increases will be limited to the 
difference between the particular band pay cap and the employee's 
current basic rate of pay, or total dollar value of shares, whichever 
is less, with the balance converted to a performance bonus. This means 
that employees whose basic rates of pay have reached the upper limits 
of a particular pay band will receive most performance compensation as 
a performance bonus. Cash bonuses will not become a part of the 
employee's basic rate of pay. Employees receiving

[[Page 11684]]

retained rates are subject to special rules governing basic pay 
adjustments. They may receive pay increases ranging from 0 to 50 
percent of the amount of the increase in the maximum rate of basic pay 
payable for the pay band of the employee's position.
Supervisory Bonus
    Supervisory bonuses of up to 10% of the basic rate of pay may be 
paid at the discretion of Commanders/Directors to supervisors with 
employees in the same pay band. In exceptional cases (approved by HQ, 
MRMC), supervisors who do not have employees in the same pay band may 
be compensated up to 5% of basic rate of pay. Supervisory bonuses are 
not part of the basic rate of pay. The bonus will not apply to 5 U.S.C. 
3104 (ST) positions. Employees who qualify for the bonus include 
supervisors in all occupational families with formal supervisory 
authority meeting that required for coverage under the OPM GS 
Supervisory Guide. The bonus may be paid at the beginning of a 
performance period.
    Because the bonus is paid at the beginning of the appraisal period, 
if the individual leaves a supervisory position or is removed from 
supervisory responsibilities (unless effected through RIF action), the 
prorated portion of the bonus for the non-supervisory portion of the 
performance year will be recovered as a debt due the Government. Before 
any supervisory bonus is paid, the supervisor will sign an agreement to 
make any required repayment.
Pay and Compensation Ceilings
    An employee's total monetary compensation paid in a calendar year 
may not exceed the basic pay of level I of the Executive Schedule, 
consistent with 5 USC 5307, and 5 CFR part 530, Subpart B, except for 
employees in Pay Band V of the Engineers and Scientists Occupational 
Family. In this case, the maximum rate of basic pay will be that which 
is established for level IV of the Executive Schedule.
    In addition, each pay band will have its own pay ceiling, just as 
grades do in the current system. The maximum basic pay rates for the 
various pay bands will be directly keyed to the maximum rate of basic 
pay for the highest grade (as in the current system) in the band or 
level IV of the Executive Schedule for Pay Band V of the Engineers and 
Scientists Occupational Family. Except for retained rates, basic pay 
will be limited to the maximum rates payable for each pay band.
Pay Setting for Promotion
    The minimum basic pay increase upon promotion to a higher pay band 
will be 6 percent. The maximum amount of pay increase upon promotion 
will not exceed $10,000.
    When a temporary promotion is terminated, the employee's pay 
entitlements will be redetermined based on the employee's position of 
record, with appropriate adjustments to reflect pay events during the 
temporary promotion, subject to the specific policies and rules 
established by MRMC. In no case may those adjustments increase the pay 
for the position of record beyond the applicable pay range maximum 
rate.
Placement in a Lower Pay Band
    Employees with ratings of ``F'' or those who receive 50 percent or 
less of an assigned benchmark score in any element will receive no pay 
increase and/or bonus. This action may result in a base salary that is 
identified in a lower pay band. This occurs because the minimum rates 
of basic pay in a pay band increase as the result of the general 
increase (5 U.S.C. 5303). This situation, (a reduction in band level 
with no reduction in pay) will not be considered an adverse action, nor 
will band retention provisions apply.

D. Hiring and Appointment Authorities

Hiring Authority
    A candidate's basic eligibility will be determined using Office of 
Personnel Management's (OPM) Qualification Standards Handbook of 
General Schedule Positions. Candidates must meet the minimum standards 
for entry into the payband. For example if the payband includes 
positions in grades GS-5 and GS-7, the candidates must meet the 
qualifications for positions at GS-5 level. Specific experience/
education required will be determined based on whether a position to be 
filled is at the lower or higher end of the band. Under the 
demonstration authority, the MRMC is authorized to modify by increasing 
QSH qualifications and/or experience or substitutable education 
requirements. Substitutable education can be modified; however, no 
changes can be made to standards with positive education requirements 
or minimum education requirements. In some cases, MRMC will update 
these standards to reflect current practices in the occupational 
families and modern curricula in recognized degree programs. Selective 
placement factors may be established when judged to be critical to 
successful job performance. These factors must be communicated to all 
candidates for specific vacancies and must be met for basic 
eligibility.
    In the proposed system, as with the current system, the individual 
manager will decide whether to fill a position from among internal 
candidates or to recruit from outside.
    The MRMC is committed to positive affirmative action and equal 
employment opportunity goals. Line managers will be accountable for 
understanding and implementing policies designed to meet these goals.
Appointment Authority
    Under the demonstration project, there will continue to be career 
and career conditional appointments and temporary appointments not to 
exceed one year. These appointments will use existing authorities and 
entitlements. Non-permanent positions (exceeding one year) needed to 
meet fluctuating or uncertain workload requirements will be filled 
using a Contingent Employee appointment authority.
    Employees hired for more than one year, under the contingent 
employee appointment authority are given term appointments in the 
competitive service for no longer than five years. The MRMC Commander 
is authorized to extend a contingent appointment one additional year. 
These employees are entitled to the same rights and benefits as term 
employees and will serve a one year trial period. The Pay-for 
Performance Management System outlined in this Plan applies to 
contingent employees.
    Appointment will be made under the same appointment authorities and 
processes as regular term appointments, but recruitment bulletins must 
indicate that there is a potential for conversion to permanent 
employment.
    Employees hired under the contingent employee authority may be 
eligible for conversion to career-conditional appointments. To be 
converted, the employee must (1) have been selected for the term 
position under competitive procedures, with the announcement 
specifically stating that the individual(s) selected for the term 
position(s) may be eligible for conversion to career-conditional 
appointment at a later date; (2) served two years of substantially 
continuous service in the term position; (3) be selected under merit 
promotion procedures for the permanent position; and (4) have a current 
rating of ``B'' or better.
    Employees serving under regular term appointments at the time of 
conversion to the Demonstration Project will be converted to the new 
contingent employee appointments provided they were hired for their 
current positions

[[Page 11685]]

under competitive procedures. These employees will be eligible for 
conversion to career-conditional appointment if they have a current 
rating of ``B'' or better (or the equivalent of ``B'' in their current 
evaluation system), and are selected under merit promotion procedures 
for their permanent position after having completed two years of 
continuous service. Time served in temporary or term positions prior to 
conversion to the contingent employee appointment is creditable, 
provided the service was continuous.
Extended Probationary Period
    The current one-year probationary period will be extended to ``up 
to three years'' for all newly hired employees in all pay bands. The 
purpose of extending the probationary period is to allow supervisors an 
adequate period of time to fully evaluate an employee's ability to 
complete a research cycle and/or to fully evaluate an employee's 
contribution and conduct. The length of the probationary period for the 
Engineer and Scientist Occupational Family will be three years. The 
probationary period for all other occupational families will be two 
years.
    Aside from extending the time period, all other features of the 
current probationary period are retained including the potential to 
remove an employee without providing the full substantive and 
procedural rights afforded a non-probationary employee. Any employee 
subject to serving a probationary period that was appointed prior to 
the implementation date will not be affected. The ``up to three year'' 
probation will apply to new hires or those who do not have reemployment 
rights or reinstatement privileges.
    Probationary employees will be terminated when the employee fails 
to demonstrate proper conduct, technical competency, and/or adequate 
contribution for continued employment. When the MRMC decides to 
terminate an employee serving a probationary period because his/her 
work performance or conduct during this period fails to demonstrate 
his/her fitness or qualifications for continued employment, it shall 
terminate his/her services by written notification of the reasons for 
separation and the effective date of the action. The information in the 
notice as to why the employee is being terminated shall, as a minimum, 
consist of the manager's conclusions as to the inadequacies of his/her 
performance or conduct.
Supervisory Probationary Periods
    Supervisory probationary periods will be made consistent with 5 CFR 
part 315, Subchapter 315.901. Employees that have successfully 
completed the initial probationary period will be required to complete 
an additional one-year probationary period for the initial appointment 
to a supervisory position. If, during the probationary period, the 
decision is made to return the employee to a non-supervisory position 
for reasons solely related to supervisory performance, the employee 
will be returned to a comparable position of no lower pay band and pay 
than the position from which he/she was promoted.
Voluntary Emeritus Program
    Under the demonstration project, Commanders/Directors will have the 
authority to offer retired or separated individuals voluntary 
assignments in their activities. This authority will include 
individuals who have retired or separated from Federal service. 
Voluntary Emeritus Program assignments are not considered 
``employment'' by the Federal Government (except for the purposes of 
injury compensation). Thus, such assignments do not affect an 
employee's entitlement to buy-outs or severance payments based on an 
earlier separation from Federal service. The Voluntary Emeritus Program 
will ensure continued quality research while reducing the overall 
salary line by allowing individuals to accept retirement incentive with 
the opportunity to retain a presence within their community. The 
program will be of most benefit during manpower reductions as 
individuals could accept retirement and return to provide valuable on-
the-job training or mentoring to less experienced individuals.
    To be accepted into the emeritus program, a volunteer must be 
approved by the subordinate activity Commander/Director. Everyone who 
applies is not entitled to a voluntary assignment. The laboratory 
Commander/Director must clearly document the decision process for each 
applicant (whether accepted or rejected) and retain the documentation 
throughout the assignment. Documentation of rejections will be 
maintained for two years.
    To ensure success and encourage participation, the individual's 
Federal retirement pay (whether military or civilian) will not be 
affected while serving in a voluntary capacity. Retired or separated 
Federal individuals may accept an emeritus position without a break or 
mandatory waiting period.
    Volunteers will not be permitted to monitor contracts on behalf of 
the government or to participate on any contracts where a conflict of 
interest exists. The same rules that currently apply to source 
selection members will apply to volunteers.
    An agreement will be established between the volunteer, the 
subordinate activity Commander/Director, and the servicing CPO/CPAC/
CPOC. The agreement will be reviewed by the Headquarters, MRMC legal 
office for ethics determinations under the Joint Ethics Regulations. 
The agreement must be finalized before the assumption of duties and 
shall include:
    (a) A statement that the voluntary assignment does not constitute 
an appointment in the civil service and is without compensation, and 
any and all claims against the Government because of the voluntary 
assignment are waived by the volunteer,
    (b) A statement that the volunteer will be considered a Federal 
employee for the purpose of injury compensation,
    (c) Volunteer's work schedule,
    (d) Length of agreement (defined by length of project or time 
defined by weeks, months, or years),
    (e) Support provided by the subordinate activity (travel, 
administrative, office space, supplies),
    (f) A one-page or less Statement of Duties and Experience,
    (g) A provision that states no additional time will be added to a 
volunteer's service credit for such purposes as retirement, severance 
pay and leave as a result of being a member of the Voluntary Emeritus 
Program,
    (h) A provision allowing either party to void the agreement with 10 
working days written notice, and
    (i) The level of security access required (any security clearance 
required by the position will be managed by the subordinate activity 
while the volunteer is a member of the Voluntary Emeritus Program).

E. Expanded Developmental Opportunities Program

    The MRMC Expanded Developmental Opportunities Program will cover 
all permanent demonstration project employees. An expanded 
developmental opportunity complements existing developmental 
opportunities such as (1) long-term training, (2) one-year work 
experiences in an industrial setting via the Relations With Industry 
Program, (3) one-year work experiences in laboratories of allied 
nations via the Science and Engineer Exchange Program, (4) rotational 
job assignments within the MRMC, (5) developmental assignments

[[Page 11686]]

in higher headquarters within the Army and DOD, (6) self-directed study 
via correspondence courses and local colleges and universities, (7) 
details within MRMC and to other Federal Agencies, and (8) 
Intergovernmental Personnel Act Agreements.
    A developmental opportunity period will not result in loss of (or 
reduction in) pay or leave to which the employee is otherwise entitled, 
or credit for time or service. Input for performance rating purposes 
will be obtained from the gaining organization to ensure a rating of 
record is on file and, if warranted, a performance award and/or bonus 
and retention years credit for RIF purposes is documented. Each 
developmental opportunity period should benefit the MRMC, as well as 
increase the employee's individual effectiveness. Various learning or 
uncompensated developmental work experiences may be considered, such as 
advanced academic teaching or research, sabbaticals, or on-the-job work 
experience with public or non-profit organizations. Final approval 
authority will rest with the activity Commander/Director.
    The opportunity to participate in the Expanded Developmental 
Opportunities Program will be announced as opportunities arise. 
Instructions for application and the selection criteria will be 
included in the announcement. Final selection for participation in the 
program will be made by activity Commanders/Directors. The position of 
employees on an expanded developmental opportunity may be backfilled by 
temporary promotion, or temporary/contingent employees. However, that 
position or its equivalent must be made available to the employee 
returning from the expanded developmental opportunity.
    In the event the employee fails to carry out the intent/conditions 
of the developmental opportunity (except for good and sufficient reason 
as determined by the activity Commander/Director), the employee shall 
be liable to the United States for payment of all expenses. The amount 
shall be treated as a debt due the United States. Employees accepting 
an Expanded Developmental Opportunity do not have to sign a continuing 
service agreement as sited in 5 USC 4108(a)(1).

F. Revised Reduction-in-Force (RIF) Procedures

Introduction
    When an employee in the MRMC Demonstration Project is faced with 
separation or downgrading due to lack of work, shortage of funds, 
reorganization, insufficient personnel ceiling, the exercise of 
reemployment or restoration rights, or furlough for more than 30 
calendar days or more than 22 discontinuous days, RIF procedures will 
be used.
    The procedures in 5 CFR part 351 and OPM RIF regulations will be 
followed with the modifications specified below pertaining to 
competitive areas, assignment rights, credit for performance ratings 
and service computation date.
Competitive Areas
    The Headquarters and each subordinate activity of the MRMC will be 
in a separate competitive area for RIF purposes. Further, within each 
subordinate activity, detachments located at different geographic sites 
will be in a separate competitive area for RIF purposes. Each of the 
four occupational families will be a separate competitive area within 
each activity. DA Interns will continue to be part of the ACTEDS 
competitive area.
Retention
    Within each competitive area, competitive levels will be 
established consisting of all positions in the same occupational family 
and pay band which are similar enough in duties, qualifications, and 
working conditions that the incumbent of one position can perform 
successfully the duties of any other position in the competitive level 
without unduly interrupting the work program.
    Current RIF regulations will be modified to restrict bumping and 
retreating to positions within the employee's current occupational 
family. This feature will minimize the disruption associated with the 
RIF process. An employee may displace another employee within the same 
occupational family by bump or retreat to one band below the employee's 
existing band. A preference eligible veteran with a compensable 
service-connected disability of 30% or more may retreat to positions 
two bands (or the equivalent of five (5) grades) below his/her current 
band.
    Reductions-in-force are accomplished using the retention factors of 
tenure, veterans preference, credit for performance ratings, and length 
of service, in that order.
    Contingent employees are in Tenure Group III for reduction-in-force 
purposes. Reduction-in-force procedures are not required when 
separating these employees when their appointments expire.
Link Between Performance and Retention
    Credit for performance based on the last three (3) ratings of 
record during the preceding four (4) years will be applied as follows: 
a rating of ``A'' equals 10 years; a rating of ``B'' equals 7 years; a 
rating of ``C'' equals 3 years, and a rating of ``F'' adds no credit 
for retention. Credit for performance is cumulative, not averaged. 
Ratings given under non-demonstration systems will be converted to the 
demonstration rating scheme and provided the equivalent performance 
rating credit.
    In some cases, an employee may not have three (3) annual 
performance ratings of record. In these situations, performance credit 
will be given on the basis of assumed ratings of ``C''.
    An employee who has received a written decision to demote him/her 
to a lower pay band because of unacceptable performance, competes in 
RIF from the position to which he/she will be/has been demoted. 
Employees who have been demoted for unacceptable performance, and as of 
the date of the issuance of the RIF notice have not received a 
performance rating in the position to which demoted, will receive a 
presumed rating of ``C'' for purposes of RIF credit.
    An employee with a current annual performance rating of ``F'' has 
assignment rights only to a position held by another employee who has 
an ``F'' rating. An employee who has been given a written decision of 
removal because of unacceptable performance will be placed at the 
bottom of the retention register for their competitive level.
Notice Period
    The RIF notice period will follow OPM guidelines.
Grade and Pay Retention
    Except where waived or modified in the waiver section of this plan, 
grade and pay retention will follow current law and regulations (e.g. 
occupational family pay bands will substitute for grade.)
Use of Voluntary Incentives
    Subordinate activity Commanders/Directors currently have delegated 
authority to grant payments under the VSIP. This authority will 
continue under this project.

IV. Training

Introduction

    The key to the success or failure of the proposed demonstration 
project will be the training provided for all involved.

[[Page 11687]]

This training will not only provide the necessary knowledge and skills 
to carry out the proposed changes, but will also lead to commitment to 
the program on the part of participants.
    Training at the beginning of implementation and throughout the 
demonstration will be provided to supervisors, employees, and the 
administrative staff responsible for assisting managers in effecting 
the changeover and operation of the new system.
    The elements to be covered in the orientation portion of this 
training will include:
    (1) A description of the personnel system, (2) how employees are 
converted into and out of the system, (3) the pay adjustment and/or 
bonus process, (4) familiarization with the new position descriptions 
and performance objectives, (5) the performance evaluation management 
system, (6) the reconsideration process, and (7) the demonstration 
project administrative and formal evaluation process.
Supervisors
    The focus of this project on management-centered personnel 
administration, with increased supervisory and managerial personnel 
management authority and accountability, demands thorough training of 
supervisors and mangers in the knowledge and skills that will prepare 
them for their new responsibilities. Training will include detailed 
information on the policies and procedures of the demonstration 
project, training in using the classification system, position 
description preparation, and performance evaluation. Additional 
training may focus on non-project procedural techniques such as 
interpersonal and communication skills.
Administrative Staff
    The administrative staff, including personnel specialists, 
subordinate activity administrative officers, and personnel points of 
contact will play a key role in advising, training, and coaching 
supervisors and employees in implementing the demonstration project. 
This staff will need training in the procedural and technical aspects 
of the project.
Employees
    The MRMC Demonstration Project Office will make and coordinate all 
arrangements necessary to train employees covered under the 
demonstration project. In the months leading up to the implementation 
date, meetings will be held for employees to fully inform them of all 
project decisions, procedures, and processes.

V. Conversion

Conversion to the Demonstration Project

    Initial entry into the demonstration project for covered employees 
will be accomplished through a full employee protection approach that 
ensures each employee an initial place in the appropriate occupational 
family and pay band without loss of pay. Covered employees will be 
initially converted to appropriate pay bands with respect to type of 
work performed in accordance with the steps below. If conversion into 
the demonstration project is accompanied by a geographic move, the 
employee's GS pay entitlement in the new area must be determined before 
performing the pay conversion.
    a. All employees will be converted at their current base pay at the 
time of conversion. [Not applicable to special rate employees.]
    b. Employees who are on temporary promotions at the time of 
conversion will be converted to a pay band commensurate with the grade 
of the position to which temporarily promoted. At the conclusion of the 
temporary promotion, the employee will revert to the pay band and 
salary which corresponds to the prior grade of record, plus any 
adjustments to base pay realized as a result of performance while on 
the temporary promotion. The only exception will be if the original 
competitive promotion announcement stipulated that the promotion could 
be made permanent.
    c. All employees in a pay grade corresponding to a pay band will be 
converted to that pay band.
    d. Employees who are covered by special salary rates, prior to the 
demonstration project, will no longer be considered special rate 
employees under the demonstration project. These employees will, 
therefore, be eligible for full locality pay. The total salaries of 
these employees will not change upon conversion. Rather, the employees 
will receive a new base pay rate computed by dividing their adjusted 
basic pay by the locality pay factor (e.g., 1.0711 in the Washington-
Baltimore locality pay area) for their area. Employees whose base pay 
upon conversion does not fit in the applicable pay range and would 
otherwise be subject to a reduction in pay, will be entitled to retain 
their converted base rate. A full locality adjustment will then be 
added to the new base pay rate. Since no employee's total pay will be 
reduced through the conversion process, adverse action and pay 
retention provisions (except as noted above) will not be applicable.
    e. Upon conversion to the project, time served toward Within-Grade 
Increases (WIGs) will be documented and paid to the employee on a 
prorated basis (number of weeks completed in the waiting period divided 
by the number of weeks in the waiting period, adjusted using credit for 
service rules). This payment will be paid to those individuals employed 
at the one-year anniversary of the demonstration project. Payment will 
be lump-sum in nature and not a part of basic pay, providing the 
employee is performing at a ``C'' level or above.
Conversion or Movement from a Project Position to a General Schedule 
Position
    If a demonstration project employee is moving to a General Schedule 
(GS) position not under the demonstration project, or if the project 
ends and each project employee must be converted back to the GS system, 
the following procedures will be used to convert the employee's project 
pay band to a GS-equivalent grade and the employee's project rates of 
pay to GS-equivalent rates of pay. The converted GS grade and GS rates 
of pay must be determined before movement or conversion out of the 
demonstration project and any accompanying geographic movement, 
promotion, or other simultaneous action. For conversions upon 
termination of the project and for lateral reassignments, the converted 
GS grade and rates will become the employee's actual GS grade and rates 
after leaving the demonstration project (before any other action). For 
transfers, promotions, and other actions, the converted GS grade and 
rates will be used in applying any GS pay administration rules 
applicable in connection with the employee's movement out of the 
project (e.g., promotion rules, highest previous rate rules, pay 
retention rules), as if the GS converted grade and rates were actually 
in effect immediately before the employee left the demonstration 
project.
Grade-Setting Provisions
    An employee in a pay band corresponding to a single GS grade is 
converted to that grade. An employee in a pay band corresponding to two 
or more grades is converted to one of those grades according to the 
following rules:
    (a) The employee's adjusted rate of basic pay under the 
demonstration project (including any locality payment) is compared with 
step 4 rates in the highest applicable GS rate range. (For this 
purpose, a ``GS rate range'' includes a rate range in (1) the GS base 
schedule, (2) the locality rate schedule for the

[[Page 11688]]

locality pay area in which the position is located, or (3) the 
appropriate special rate schedule for the employee's occupational 
series, as applicable.) If the series is a two-grade interval series, 
only odd-numbered grades are considered below GS-11.
    (b) If the employee's adjusted project rate equals or exceeds the 
applicable step 4 rate of the highest GS grade in the band, the 
employee is converted to that grade.
    (c) If the employee's adjusted project rate is lower than the 
applicable step 4 rate of the highest grade, the adjusted rate is 
compared with the step 4 rate of the second highest grade in the 
employee's pay band. If the employee's adjusted rate equals or exceeds 
step 4 of the second highest grade, the employee is converted to that 
grade.
    (d) This process is repeated for each successively lower grade in 
the band until a grade is found in which the employee's adjusted 
project rate equals or exceeds the applicable step 4 rate of the grade. 
The employee is then converted at that grade. If the employee's 
adjusted rate is below the step 4 rate of the lowest grade in the band, 
the employee is converted to the lowest grade.
    (e) Exception: If the employee's adjusted project rate exceeds the 
maximum rate of the grade assigned under the above-described ``step 4'' 
rule, but fits in the rate range for the next higher applicable grade 
(i.e., between step 1 and step 4), then the employee shall be converted 
to that next higher applicable grade.
    (f) Exception: An employee will not be converted to a lower grade 
than the grade held by the employee immediately preceding a conversion, 
lateral reassignment, or lateral transfer into the project, unless 
since that time, the employee has undergone a reduction in band.
Pay-Setting Provisions
    An employee's pay within the converted GS grade is set by 
converting the employee's demonstration project rates of pay to GS 
rates of pay in accordance with the following rules:
    (a) The pay conversion is done before any geographic movement or 
other pay-related action that coincides with the employee's movement or 
conversion out of the demonstration project.
    (b) An employee's adjusted rate of basic pay under the project 
(including any locality payment) is converted to a GS adjusted rate on 
the highest applicable GS rate range for the converted GS grade. (For 
this purpose, a ``GS rate range'' includes a rate range in (1) the GS 
base schedule, (2) an applicable locality rate schedule, or (3) an 
applicable special rate schedule.)
    (c) If the highest applicable GS rate range is a locality pay rate 
range, the employee's adjusted project rate is converted to a GS 
locality rate of pay. If this rate falls between two steps in the 
locality-adjusted schedule, the rate must be set at the higher step. 
The converted GS unadjusted rate of basic pay would be the GS base rate 
corresponding to the converted GS locality rate (i.e., same step 
position). (If this employee is also covered by a special rate schedule 
as a GS employee, the converted special rate will be determined based 
on the GS step position. This underlying special rate will be basic pay 
for certain purposes for which the employee's higher locality rate is 
not basic pay.)
    (d) If the highest applicable GS rate range is a special rate 
range, the employee's adjusted project rate is converted to a special 
rate. If this rate falls between two steps in the special rate 
schedule, the rate must be set at the higher step. The converted GS 
unadjusted rate of basic pay will be the GS rate corresponding to the 
converted special rate (i.e., same step position).
Within-Grade Increase--Equivalent Increase Determinations
    Service under the demonstration project is creditable for within-
grade increase purposes upon conversion back to the GS pay system. 
Performance pay increases (including a zero increase) under the 
demonstration project are equivalent increases for the purpose of 
determining the commencement of a within-grade increase waiting period 
under 5 CFR 531.405(b).
Personnel Administration
    All personnel laws, regulations, and guidelines not waived by this 
plan will remain in effect. Basic employee rights will be safeguarded 
and merit principles will be maintained. Supporting personnel 
specialists in CPOs/CPACs/CPOCs will continue to process personnel-
related actions and provide consultative and other appropriate 
services.
Automation
    The MRMC will continue to use the Defense Civilian Personnel Data 
System (DCPDS) for the processing of personnel-related data. Payroll 
servicing will continue from the respective payroll offices.
    Local automated systems will be developed to support computation of 
performance-related pay increases and awards and other personnel 
processes and systems associated with this project.
Experimentation and Revision
    Many aspects of a demonstration project are experimental. 
Modifications may be made from time to time as experience is gained, 
results are analyzed, and conclusions are reached on how the system is 
working. The MRMC will make minor modifications, such as changes in the 
occupational series in a occupational family without further notice. 
Major changes, such as a change in the number of occupational families, 
will be published in the Federal Register.

VI. Project Duration

    Public Law 103-337 removed any mandatory expiration date for this 
demonstration. The project evaluation plan adequately addresses how 
each intervention will be comprehensively evaluated for at least the 
first 5 years of the demonstration (Proposed Plan for Evaluation of the 
DOD Laboratory Demonstration Program, OPM, 1995). Major changes and 
modifications to the interventions can be made through announcement in 
the Federal Register and would be made if formative evaluation data 
warranted. At the 5-year point, the entire demonstration will be 
reexamined for either: (a) permanent implementation, (b) a continuing 
test period, or (c) expiration.

VII. Evaluation Plan

Introduction
    In response to the Reinvention Project legislation, OPM will 
evaluate the project annually and provide briefings and written reports 
of the findings. The Evaluation Plan stipulates both internal and 
external evaluation efforts. The phases of the plan are outlined below.
Evaluation Phases
    The evaluation effort will be carried out in three phases: 
implementation, formative, and summative evaluation. Monitoring of the 
project will be concurrent with the implementation phase. An evaluation 
of this phase is necessary to determine whether the project is 
implemented as designed and to ascertain when the monitored processes 
become stable and fully operational. The formative phase evaluation 
will extend for the duration of the project. Data will be collected 
annually and periodic reports will be issued by OPM. The summative 
evaluation phase will assess overall impact of the project during 
appropriate time intervals and/or after 5 years of operation.

[[Page 11689]]

Evaluation Methodology
    The evaluation will focus on the continuum of personnel issues and 
will be based on before-and-after comparison of the personnel data, 
using both quantitative and qualitative criteria. Personnel records and 
reports, as well as previously validated survey instruments, will be 
used to develop appropriate measures. New data collection methods and 
measures, or modifications to existing instruments, may be required for 
some criteria. Baseline data will be collected before the demonstration 
project implementation. The baseline survey was administered in the 
Summer of 1996.
Evaluation Criteria
    While it is not possible to prove a direct causal link between 
intermediate and ultimate outcomes (personnel system changes and 
improved organizational performance), indirect cause and effect 
relationships can be evidenced through the establishment of relevant 
effectiveness measures. An intervention impact model (Appendix B) will 
be used to measure the effectiveness of the various personnel system 
changes or interventions. Additional measures will be developed as new 
interventions are introduced or existing interventions modified 
consistent with expected effects. Measures may also be deleted when 
appropriate. Activity specific measures may also be developed to 
accommodate specific needs or interests which are locally unique. The 
evaluation model for the Demonstration Project identifies elements 
critical to an evaluation of the effectiveness of the interventions. 
The overall evaluation approach will also include consideration of 
context variables that are likely to have an impact on project 
outcomes: e.g., HRM regionalization, rightsizing, cross-service 
integration, and the general state of the economy. However, the main 
focus of the evaluation will be on intermediate outcomes, i.e., the 
results of specific personnel system changes which are expected to 
improve human resources management. The ultimate outcomes are defined 
as improved organizational effectiveness, mission accomplishment and 
customer satisfaction.
    Data from a variety of different sources will be used in the 
evaluation. Information from existing management information systems 
supplemented with perceptual data will be used to assess variables 
related to effectiveness. Multiple methods provide more than one 
perspective on how the demonstration project is working. Information 
gathered through one method will be used to validate information 
gathered through another. Confidence in the findings will increase as 
they are substantiated by the different collection methods. The 
following types of data will be collected as part of the evaluation: 
(1) Workforce data; (2) personnel office data; (3) employee attitudes 
and feedback using surveys, structured interviews and focus groups; (4) 
local activity histories, and (5) core measures of subordinate activity 
performance.

VIII. Demonstration Project Costs

    Costs associated with the development of the personnel 
demonstration system include software automation, training, and project 
evaluation. All funding will be provided through the MEDCOM/MRMC 
budget. The projected annual expenses are as summarized in Table 1. 
Project evaluation costs are not expected to continue beyond the first 
5 years unless the results warrant further evaluation. Projected 
developmental costs do not include potential contractor fees.

                         Table 1.--Projected Developmental Costs (Current Year Dollars)                         
----------------------------------------------------------------------------------------------------------------
                                Baseline        FY97          FY98          FY99          FY00          FY01    
----------------------------------------------------------------------------------------------------------------
Training....................  ............  $99K          $19K          $19K          $19K          $19K        
Project Eval................  $17K          $28K          $28K          $28K          $28K          $28K        
Automation..................  $80K          $10K          $10K          $10K          $10K          $10K        
Totals......................  $97K          $137K         $57K          $57K          $57K          $57K        
----------------------------------------------------------------------------------------------------------------

IX. Required Waivers to Law and Regulation

    Public Law 103-337 gave the DoD the authority to experiment with 
several personnel management innovations. In addition to the 
authorities granted by the law, the following are the waivers of law 
and regulation that will be necessary for implementation of the 
Demonstration Project. In due course, additional laws and regulations 
may be identified for waiver request.

1. Waivers to Title 5, U.S. Code

    Chapter 31, section 3111: Acceptance of volunteer service--To the 
extent that the acceptance of retired or separated civilian and 
military are included as volunteers under current statute.
    Chapter 31, Section 3324: Appointments to Positions Classified 
Above GS-15.
    Chapter 33, Section 3341: Details; within Executive or military 
departments--Increasing 120-Day Increments for Details to 180 days.
    Chapter 35, Section 3502: Order of Retention--Applies only to the 
extent that performance score is placed before length of service.
    Chapter 41, Section 4107: Pay for Degrees.
    Chapter 41, Section 4108: Employee Agreements, Service after 
training; to the extent that employees who accept an expanded 
developmental opportunity do not have to sign a continuing service 
agreement.
    Chapter 43, Section 4301: Definitions.
    Chapter 43, Section 4302: Establishment of Performance Appraisal 
Systems.
    Chapter 43, Section 4303: Actions based on Unacceptable 
Performance.
    Chapter 51, Sections 5101-5111: Purpose, definitions, basis, 
classification of positions, review, authority--Applies to the extent 
that white collar employees will be covered by broadbanding. Pay 
category determination criteria for federal wage system positions 
remain unchanged.
    Chapter 53, Sections 5301, 5302 (8) and (9), 5303 and 5304: Pay 
Comparability System--Sections 5301, 5302, and 5304 are waived only to 
the extent necessary to allow (1) demonstration project employees 
except employees in Pay Band V of the Engineers and Scientists 
Occupational Family, to be treated as General Schedule employees, (2) 
basic rates of pay under the demonstration project to be treated as 
scheduled rates of pay, and (3) employees in Pay Band V of the 
Engineers and Scientists Occupational Family to be treated as SES and 
ST employees for the purposes of these provisions.
    Chapter 53, Section 5305: Special Salary rates.
    Chapter 53, Sections 5331-5336: General Schedule Pay Rates.

[[Page 11690]]

    Chapter 53, Sections 5361-5366: Grade and pay retention--This 
waiver applies only to the extent necessary to (1) replace ``grade'' 
with ``pay band'; (2) allow demonstration project employees to be 
treated as General Schedule employees; (3) provide that pay band 
retention provisions do not apply to movements to a lower pay band as a 
result of receiving a performance pay increase that is less than the 
amount of general pay increase; (4) provide that pay retention 
provisions do not apply to conversions from General Schedule special 
rates to demonstration project pay, as long as total pay is not 
reduced; (5) provide that an employee on pay retention may receive 
between 0 and 50 percent of the amount of the increase in the maximum 
rate of basic pay payable for the pay band of the employee's position. 
This waiver does not apply to ST employees unless they move to a GS-
equivalent position under the demonstration project under conditions 
that trigger entitlement to pay retention.
    Chapter 53, Section 5371: Health Care Positions--This waiver 
applies only to the extent necessary to allow demonstration project 
employees to hold positions subject to Chapter 51 of title 5.
    Chapter 55, Section 5545 (d): Hazardous Duty Differential--This 
waiver applies only to the extent necessary to allow demonstration 
project employees to be treated as General Schedule employees. This 
waiver does not apply to employees in Pay Band V of the Engineers and 
Scientists Occupational Family or ST employees.
    Chapter 57, Sections 5753, 5754, and 5755: Recruitment and 
Relocation Bonuses; Retention Allowances and Supervisory Bonuses--This 
waiver applies only to the extent necessary to allow (1) employees and 
positions under the demonstration project to be treated as employees 
and positions under the General Schedule and (2) employees in Pay Band 
V of the Engineers and Scientists Occupational Family to be treated as 
ST employees. This waiver does not apply to ST employees who continue 
to be covered by these provisions as appropriate.
    Chapter 59, Section 5941: Allowances based on living costs and 
conditions of environment; employees stationed outside continental U.S. 
or Alaska. This waiver applies only to the extent necessary to provide 
that COLA's paid to employees under the demonstration project are paid 
in accordance with regulations prescribed by the President (as 
delegated to OPM).
    Chapter 75, Section 7512(3): Adverse actions--This provision is 
waived only to the extent necessary to (1) replace ``grade'' with ``pay 
band'' and (2) provide that a reduction in band level is not an adverse 
action if it results from the employee's pay being exceeded by the 
minimum rate of his or her pay band.
    Chapter 75, Section 7512(4): Adverse actions--This provision is 
waived only to the extent that adverse action provisions do not apply 
to conversions from General Schedule special rates to demonstration 
project pay, as long as total pay is not reduced.
    2. Title 5, Code of Federal Regulations:
    Part 300.601-605: Time-In-Grade Restrictions--Restrictions 
eliminated under the demonstration.
    Part 308.101-103: Volunteer Service--To the extent that retired/
separated civilians and military can perform voluntary services.
    Part 315.801 and 315.802: Probation on Initial Appointment to a 
Competitive Position--Demonstration project employees in some 
occupational families will have extended probationary period.
    Part 316.301: Term Employment--Adding years to exceed 4 and 
establishment of Contingent appointments.
    Part 316.303: Tenure of term employees--Demonstration allows for 
conversion.
    Part 316.305: Eligibility for within-grade increases--Demonstration 
employees no longer received WIGs.
    Part 334, section 334.102: Temporary Assignment of Employees 
Outside the Agency.
    Part 335.103: Covering the length of details and temporary 
promotions.
    Part 351.402(b): Competitive Area--To the extent that occupational 
family is the competitive area.
    Part 351.403: Competitive Level--To the extent that pay band is 
substituted for grade.
    Part 351.504: Credit for Performance--Retention standing to the 
extent that service credit will not be modified based on performance 
rating.
    Part 351.701: Assignment Involving Displacement--To the extent that 
bumping and retreating will be limited to no more than one pay band 
except for 30 percent compensable veterans who can retreat to the 
equivalent of 5 GS grades.
    Part 430: Subpart B, Performance Appraisal for General Schedule, 
Prevailing Rate, and Certain Other Employees--Employees under the 
demonstration project will not be subject to the requirements of this 
subpart.
    Part 432: Performance Based Reduction In Grade and Removal 
Actions--Modified to the extent that an employee may be removed, 
reduced in band level with a reduction in pay, reduced in pay without a 
reduction in band level and reduced in band level without a reduction 
in pay based on unacceptable performance. Also modified to delete 
reference to critical element (all elements are critical). For 
employees who are reduced in band level without a reduction in pay, 
sections 432.105 and 432.106(a) do not apply.
    Part 432, sections 104 and 105: Addressing unacceptable performance 
and proposing and taking action based on unacceptable performance--In 
so far as references to ``critical elements'' are deleted (all elements 
are critical), and adding that the employee may be ``reduced in grade, 
or pay, or removed'' if performance does not improve to acceptable 
levels after a reasonable opportunity. In addition, requirements waived 
to the extent that a reduction in band level is taken based on skill 
utilization criteria when there is not a reduction in pay.
    Part 511: Classification Under the General Schedule--To the extent 
that grades are changed to broadbands, and that white collar positions 
are covered by broadbanding.
    Part 530, subpart C: Special Salary Rate Schedules for Recruitment 
and Retention.
    Part 531, subparts B, D, and E: Pay Under the General Schedule--
Determining rate of basic pay, within-grade increases, and quality step 
increases.
    Part 531, subpart F: Locality Based Comparability Payments--This 
waiver applies only to the extent necessary to allow (1) demonstration 
project employees, except employees in Pay Band V of the Engineers and 
Scientists Occupational Family to be treated as General Schedule 
employees, (2) basic rates of pay under the demonstration project to be 
treated as scheduled annual rates of pay, and (3) employees in Pay Band 
V of the Engineers and Scientists Occupational Family to be treated as 
ST employees for the purposes of these provisions. This waiver does not 
apply to ST employees who continue to be covered by these provisions, 
as appropriate.
    Part 536: Grade and pay retention--This waiver applies only to the 
extent necessary to (1) replace ``grade'' with ``pay band''; (2) 
provide that pay band retention provisions do not apply to movements to 
a lower pay band as result of receiving a performance pay increase that 
is less than the amount of the general pay increase; (3) provide that 
pay retention provisions do not

[[Page 11691]]

apply to conversions from General Schedule special rates to 
demonstration project pay, as long as total pay is not reduced; (4) 
provide that an employee on pay retention may receive between 0 and 50 
percent of the amount of the increase in the maximum rate of basic pay 
payable for the pay band of the employee's position. This waiver does 
not apply to ST employees unless they move to a GS-equivalent position 
under the demonstration project under conditions that trigger 
entitlement to pay retention.
    Part 550.703: Severance Pay--This waiver applies only to the extent 
necessary to modify the definition of ``reasonable offer'' by replacing 
``two grade or pay levels'' with ``one band level'' and ``grade or pay 
level'' with ``band level''.
    Part 550.902: Hazardous Duty Differential--This waiver applies only 
to the extent necessary to allow demonstration project employees to be 
treated as General Schedule employees. This waiver does not apply to 
employees in Pay Band V of the Engineers and Scientists Occupational 
Family or ST employees.
    Part 575, subparts A, B, C and D: Recruitment and Relocation 
Bonuses; Retention Allowances; Supervisory Differentials--This waiver 
applies only to the extent necessary to allow (1) employees and 
positions under the demonstration project to be treated as employees 
and positions under the General Schedule and (2) employees in Pay Band 
V of the Engineers and Scientists Occupational Family to be treated as 
ST employees for the purposes of these provisions. This waiver does not 
apply to ST employees who continue to be covered by these provisions, 
as appropriate.
    Part 591, subpart B: Cost-of-Living Allowances and Post 
Differential-Nonforeign Areas--This waiver applies to the extent 
necessary to allow (1) demonstration project employees to be treated as 
employees under the General Schedule and (2) employees in Pay Band V of 
the Engineers and Scientists Occupational Family to be treated as ST 
employees for the purposes of these provisions. This waiver does not 
apply to ST employees who continue to be covered by these provisions, 
as appropriate.
    Part 752.401(a)(3): Adverse Actions--This waiver applies only to 
the extent necessary to (1) replace ``grade'' with ``pay band'' and (2) 
provide that a reduction in pay band level is not an adverse action if 
it results from the employee's pay being exceeded by the minimum rate 
of his or her pay band.
    Part 752.401(a)(4): Adverse Actions--This waiver applies only to 
the extent that adverse action provisions do not apply to conversions 
from General Schedule special rates to demonstration project pay, as 
long as total pay is not reduced.

Appendix A: Occupational Series by Occupational Family

I. Engineers and Scientists

0101  Social Science
0180  Psychology
0190  Anthropology
0401  Biology
0403  Microbiology
0405  Pharmacology
0408  Ecology
0410  Zoology
0413  Physiology
0414  Entomology
0415  Toxicology
0440  Genetics
0601  General Health Science
0602  Medical Officer
0610  Nurse
0630  Dietitian & Nutritionist
0644  Medical Technologist
0662  Optometrist
0701  Veterinary Medical Science
0801  General Engineering
0808  Architecture
0830  Mechanical Engineering
0855  Electronics Engineering
0858  Biomedical Engineering
1301  General Physical Science
1306  Health Physics
1310  Physics
1320  Chemistry
1520  Mathematics
1529  Mathematical Stat
1530  Statistician

II. E&S Technicians

0181  Psychology Aid/Technician
0404  Biological Science Technician
0499  Biological Science Student Trainee
0620  Practical Nurse
0640  Health Aid & Technician
0645  Medical Technician
0646  Pathology Technician
0647  Diagnostic Radiologic Technologist
0649  Medical Instrument Technician
0802  Engineer Technician
0809  Construction Control
0818  Engineering Drafting
0856  Electronics Technician
1311  Physical Sciences Technician
1521  Mathematics Technician

III. Administrative

0018  Safety & Occupational Health Management
0028  Environmental Protection Spec
0080  Security Administration
0201  Civilian Personnel Management
0205  Military Personnel Management
0301  Misc Administration & Program
0332  Computer Operation
0334  Computer Specialist
0340  Program Management
0341  Administrative Officer
0342  Support Services Administration
0343  Management/Program Analysis
0346  Logistics Management
0391  Telecommunications
0501  Financial Administration & Program
0510  Accounting
0511  Auditing
0560  Budget Analysis
0905  General Attorney
1020  Illustrating
1035  Public Affairs
1040  Language Specialist
1071  Audiovisual Production
1082  Writing & Editing
1083  Technical Writing & Editing
1084  Visual Information
1102  Contracting
1105  Purchasing
1152  Production Control
1222  Patent Attorney
1410  Librarian
1412  Technical Information Services
1601  General Facilities & Equipment
1640  Facility Management
1670  Equipment Specialist
1710  Educational & Vocational Training
1801  General Inspection, Investigation and Compliance
1910  Quality Assurance
2001  General Supply
2003  Supply Program Management
2010  Inventory Management
2050  Supply Cataloging
2181  Aircraft Operation

IV. General Support

0086  Security Clerical & Asst
0302  Messenger
0303  Misc Clerk and Asst
0304  Information Receptionist
0305  Mail and File
0312  Clerk-Stenographer/Reporter
0318  Secretary
0322  Clerk-Typist
0326  Office Automation Clerical/Asst
0335  Computer Clerk/Asst
0344  Management Clerical/Asst
0525  Accounting Technician
0561  Budget Clerical/Asst
0675  Medical Records Technician
0679  Medical Clerk
1016  Museum Specialist & Technician
1060  Photography
1087  Editorial Asst
1106  Procurement Clerical/Tech
1411  Library Technician
1499  Library and Archives Student Trainee
1531  Statistical Asst
2005  Supply Clerical/ Tech
2102  Transportation Clerk/Asst

[[Page 11692]]

Appendix B: Project Evaluation and Oversight

Intervention Impact Model--DoD Lab Demonstration Program
    1. Compensation

BILLING CODE 6325-01-P

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BILLING CODE 6325-01-C

Appendix C. Performance Elements.

    Each performance element is assigned a weight between a specified 
range. The total weight of all elements in a performance plan is 100 
points. The supervisor assigns each element some portion of the 100 
points in accordance with its importance for mission attainment.
    All employees will be rated against at least the five generic 
performance elements listed through ``e'' below. However, only those 
employees whose duties require supervisor or manager/leader 
responsibilities will be rated on element ``f''. Supervisors will be 
rated against an additional performance element, listed at ``g'' below:
    a. Technical Competence. Exhibits and maintains current technical 
knowledge, skills, and abilities to produce timely and quality work 
with the appropriate level of supervision. Makes prompt, technically 
sound decisions and recommendations that add value to mission 
priorities and needs. For appropriate career paths, seeks and accepts 
developmental and/or special assignments. Adaptive to technological 
change. (Weight Range: 15 to 50)
    b. Working Relationships. Accepts personal responsibility for 
assigned tasks. Considerate of others views and open to compromise on 
areas of difference, if allowed by technology, scope, budget, or 
direction. Exercises tact and diplomacy and maintains effective 
relationships, particularly in immediate work environment and teaming 
situations. Always willing to give assistance. Shows appropriate 
respect and courtesy. (Weight Range: 5 to 15)
    c. Communications. Provides or exchanges oral/written ideas and 
information in a manner that is timely, accurate and cogent. Listens 
effectively so that resultant actions show understanding of what was 
said. Coordinates so that all relevant individuals and functions are 
included in, and informed of, decisions and actions. (Weight Range: 5 
to 15)
    d. Resource Management. Meets schedules and deadlines, and 
accomplishes work in order of priority; generates and accepts new ideas 
and methods for increasing work efficiency; effectively utilizes and 
properly controls available resources; support organization's resource 
development and conservation goals. (Weight Range: 15 to 50)
    e. Customer Relations. Demonstrates care for customers through 
respectful, courteous, reliable and conscientious actions. Seeks out 
and develops solid working relationships with customers to identify 
their needs, quantifies those needs, and develops practical solutions. 
Keeps customers informed and prevents surprises. Within the scope of 
job responsibility, seeks out and develops new programs and /or 
reimbursable customer work. (Weight Range: 10 to 50)
    f. Management/Leadership. Actively furthers the mission of the 
organization. As appropriate, participates in the development and 
implementation of strategic and operational plans of the organization. 
Develops and implements tactical plans. Exercises leadership skill 
within the environment. Mentors junior personnel in career development, 
technical competence, and interpersonal skills. Exercises due 
responsibility to oversee technical/acquisition/organizational 
positions assigned to them. (Weight Range: 0 to 50)
    g. Supervision/EEO. Works toward recruiting, developing, 
motivating, and retaining quality team members; takes timely/
appropriate personnel actions, applies EEO/merit principles; 
communicates mission and organizational goals; by example, creates a 
positive, safe, and challenging work environment; distributes work and 
empowers team members. (Weight Range: 15 to 50)

BILLING CODE 6325-01-P

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[FR Doc. 97-6167 Filed 3-10-97; 8:45 am]
BILLING CODE 6325-01-C