[Federal Register Volume 62, Number 48 (Wednesday, March 12, 1997)]
[Notices]
[Pages 11700-11722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6171]



[[Page 11699]]

_______________________________________________________________________

Part VIII





Office of Personnel Management





_______________________________________________________________________



Proposed Laboratory Personnel Management Demonstration Project; 
Aviation Research, Development and Engineering Center, Department of 
the Army, U.S. Army Aviation and Troop Command (ATCOM), Federal Center, 
St. Louis, Missouri; Notice

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

[[Page 11700]]



OFFICE OF PERSONNEL MANAGEMENT


Proposed Laboratory Personnel Management Demonstration Project; 
Aviation Research, Development and Engineering Center, Department of 
the Army, U.S. Army Aviation and Troop Command (ATCOM), Federal Center, 
St. Louis, Missouri

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 change 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 five demonstration sites 
initially: the Army Research Laboratory, U.S. Army Waterways Experiment 
Station, Medical Research Materiel Command, the Missile Research, 
Development and Engineering Center, and the Aviation Research, 
Development, and Engineering Center. This proposal is for the Aviation 
Research, Development, and Engineering Center (AVRDEC).

DATES: To be considered, written comments must be submitted on or 
before May 20, 1997; public hearings will be scheduled as follows:

April 23, 1997, at 10:00 a.m., Aviation Applied Technology Directorate, 
Fort Eustis, Virginia
April 24, 1997, at 10:00 a.m., Federal Center, St. Louis, Missouri
May 6, 1997, at 10:00 a.m., Aeroflightdynamics Directorate, National 
Aeronautics and Space Administration--Ames Research Center, Moffett 
Field, California

    At the time of the hearings, interested persons or organization may 
present their written or oral comments on the proposed demonstration 
project. The hearing will be informal.
    Anyone wishing to testify should contact the person listed under 
FOR FURTHER INFORMATION CONTACT, and state the hearing location, 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 ten 
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; public hearings will be held at the Federal Center, Auditorium, 
Building 105, 4300 Goodfellow Boulevard, St. Louis, Missouri; the 
Aviation Applied Technology Directorate, Jacobs Theater, Ft. Eustis, 
Virginia; and the U.S. Army Aeroflightdynamics Directorate, Main 
Auditorium, Building 201, NASA--Ames Research Center, Moffet Field, 
California.

FOR FURTHER INFORMATION CONTACT: (1) On proposed demonstration project: 
James A. Ray, U.S. Army Aviation and Troop Command, ATTN: AMSAT-R-E, 
Federal Center, St. Louis, MO, 63120-1798, 314 263-1100; (2) On 
proposed demonstration project and public hearing: Fidelma A. Donahue, 
U.S. Office of Personnel Management, 1900 E Street, NW, Room 7460, 
Washington, DC 20415, 202-606-1138.

SUPPLEMENTARY INFORMATION: Since 1966, many studies of Department 
of Defense (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, streamlined hiring processes, pay-for-
performance management system, expanded developmental opportunity, 
and modified Reduction-In-Force (RIF) procedures.

Office of Personnel Management.
James B. King,
Director.

Table of Contents

I. Executive Summary
II. 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
III. Personnel System Changes
    A. Broadbanding
    B. Pay-for-Performance Management System
    C. Classification
    D. Hiring and Appointment Authorities
    E. Employee Development
    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 Laws and Regulations
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, 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 AVRDEC 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 AVRDEC workforce will be revitalized through the use of expanded 
opportunities for employee development. These 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 Department of the Army (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

[[Page 11701]]

and Acquisition and the Assistant Secretary of the Army for Manpower 
and Reserve Affairs. The Commander, U.S. Army Materiel Command, 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 the Department of 
Defense and the Office of Personnel Management.

II. Introduction

A. Purpose

    The purpose of the project is to demonstrate that the effectiveness 
of Department of Defense (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. This 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 AVRDEC products contribute to the readiness of U.S. forces and 
to the stability of the American economy. To do this, the AVRDEC must 
acquire and retain an enthusiastic, innovative, and highly educated and 
trained workforce, particularly scientists and engineers. The AVRDEC 
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 employees. Managers must be given local control of 
positions and their classification to move both their employees and 
vacancies 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 needs of the AVRDEC 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 separation rates of 
poor quality employees; and (d) increased customer satisfaction with 
the AVRDEC and its products by all customers it serves.
    The AVRDEC demonstration program 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 AVRDEC 
demonstration expects to find more satisfied employees on many aspects 
of the demonstration including pay equity, classification decisions, 
and career development opportunities. A full range of measures will be 
collected during project evaluation (Section VII).

D. Participating Organization

    AVRDEC has approximately 785 employees covered by the project. 
Approximately 59 percent of the employees are located at the Federal 
Center, St. Louis, Missouri, with the remaining located at the 
following sites: Moffett Field, California; St. Paul, Minnesota; Fort 
Eustis, Virginia; Hampton, Virginia, and Washington, DC.
    Successor organization(s) which may result from actions associated 
with the 1995 Base Realignment and Closure Commission will continue 
coverage in the demonstration project.

E. Participating Employees

    The demonstration project includes civilian appropriated funded 
employees in the competitive and excepted service paid under the 
General Schedule (GS) pay system. Scientific and Professional (ST) 
employees will only be included for the provisions of performance 
appraisal, awards, and employee development; their classification, 
staffing, and compensation will not change. Senior Executive Service 
employees, Federal Wage System employees, and employees in the Civilian 
Intelligence Personnel Management System will not be covered in the 
demonstration project. Additionally, DA interns will not be converted 
to the demonstration until they complete their intern program. 
Personnel added to the laboratory in like positions covered by the 
demonstration (either through appointment, promotion, reassignment, 
change to a lower grade or where their functions and positions have 
been transferred into the laboratory) will be converted to the 
demonstration project

F. Labor Participation

    The National Federation of Federal Employees (NFFE) Local 405 
currently represents many GS employees at AVRDEC, St. Louis. However, 
based upon the 1995 Base Realignment and Closure (BRAC) commission 
action disestablishing ATCOM, these employees will be transferred to a 
newly established major subordinate command prior to their 
participation in the demonstration project. It is uncertain, at this 
time, as to what labor organization, if any, will represent AVRDEC 
employees at the time the demonstration project is implemented.
    Therefore, NFFE has not been involved in the development of the 
project. As a courtesy, NFFE was briefed, along with all potentially 
affected employees, prior to the submission of this plan. However, it 
is noted that, if an exclusive representative is recognized prior to 
final implementation of the demonstration project, the AVRDEC may have 
bargaining obligations to that representative and is prepared to 
fulfill such prior to implementation.
    Currently, no union represents AVRDEC employees at the Moffett 
Field, Fort Eustis, and Hampton geographic locations.

G. Project Design

    As a result of the 1995 BRAC recommendation transferring the AVRDEC 
to Redstone Arsenal; the subsequent identification of the

[[Page 11702]]

AVRDEC as an Army Science and Technology Reinvention Laboratory; and 
ATCOM and the U.S. Army Missile Command (MICOM) management decisions to 
maintain two RDECs at Redstone Arsenal with common functional areas 
merged within the MRDEC; the Executive Director, AVRDEC, decided to 
accelerate the AVRDEC role in the civilian personnel demonstration 
project to that of an initial demonstration site. Since the two RDECs 
will be collocated at Redstone Arsenal, the Executive Director decided 
to formulate the AVRDEC personnel demonstration proposal based on the 
MRDEC proposal, taking maximum advantage of the MRDEC experience and 
lessons learned in developing its proposal. The following is a brief 
synopsis of the combined AVRDEC/MRDEC demonstration project design.
    An Integrated Process Team approach was used to develop the 
attributes of this personnel demonstration proposal. The team was lead 
by MRDEC management, and team members came from managers and associates 
from the MRDEC, AFGE Local 1858, the Civilian Personnel Office (CPO), 
and several other major functional organizations within MICOM. The 
AVRDEC assembled a similar team using management, business management, 
and CPO personnel.
    This personnel system design has been subjected to critical reviews 
by both MRDEC and MICOM. Additionally, negotiations with AFGE Local 
1858 have influenced the design in areas of significant concern to 
bargaining unit employees.
    The design was based upon exhaustive study of broadbanding systems 
currently practiced in the Federal sector. Additionally, consultation 
was provided by the designers of the broadbanding systems practiced by 
the Navy China Lake experiment and the National Institute of Standards 
and Technology. The preliminary demonstration concept was briefed to 
the ATCOM Command Group and the AVRDEC workforce, at all geographic 
locations. During these briefing sessions, employees were afforded the 
opportunity to ask questions and were given a list of points of contact 
for concerns and questions. Subsequent concept revisions have evolved 
from critical reviews by headquarters elements of the Department of the 
Army, Department of Defense, and the Office of Personnel Management.

H. Personnel Management Board

    The AVRDEC intends to establish an appropriate balance between the 
personnel management authority and accountability of supervisors and of 
the oversight responsibilities of a Personnel Management Board (PMB). 
The Executive Director will delegate management and oversight of the 
Project at AVRDEC to a Personnel Management Board whose members, 
Chairperson, and staff will be appointed by the Executive Director. The 
PMB membership include representation from the major geographic 
locations of the AVRDEC and will be tasked with the following:
    1. Overseeing the civilian pay budget,
    2. Determining the composition of the pay-for-performance pay pools 
in accordance with the guidelines of this proposal and internal 
procedures,
    3. Administering funds allocation to pay pool managers,
    4. Reviewing operation of AVRDEC pay pools,
    5. Reviewing hiring and promotion salaries as well as exceptions to 
pay-for-performance salary increases,
    6. Providing guidance to pay pool managers,
    7. Monitoring award pool distribution by organization or any other 
special categorization,
    8. Selecting participants for the Expanded Developmental 
Opportunity Program, long term training, and any special developmental 
assignments,
    9. Managing promotions to stay within ``high grade'' controls,
    10. Addressing in-house budget neutrality issues to include 
tracking of average salaries,
    11. Assessing the need for changes to demonstration procedures and 
policies.

III. Personnel System Changes

A. Broadbanding

Occupational Families
    Occupations at the AVRDEC will be grouped into occupational 
families. Occupations will be grouped according to similarities in type 
of work, customary requirements for formal training or credentials, and 
in consideration of the business practices at the AVRDEC. 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:
    1. Engineers and Scientists (E&S). This occupational family 
includes all technical professional positions, such as engineers, 
physicists, and mathematicians. Predominantly, specific course work or 
educational degrees are required for these occupations.
    2. E&S Support. This occupational family contains positions that 
directly support the E&S mission: it includes specialized functions in 
such fields as technical information management, librarians, equipment 
specialists, quality assurance, and engineering and electronics 
technicians. Employees in these jobs may or may not require college 
course work. However, training and skills in the various electrical, 
mechanical, chemical or computer crafts and techniques are generally 
required.
    3. Business Management. This occupational family contains 
specialized functions in such fields as accounting, administrative, 
counsel, finance, management analysis, personnel, procurement, public 
information, and safety. Analytical ability and specialized knowledge 
in administrative fields or special degrees are required.
    4. General Support. This occupational family is composed of 
positions for which minimal formal education is needed, but for which 
special skills, such as office automation or shorthand, are usually 
required. Clerical work usually involves the processing and maintenance 
of records. Assistant work requires knowledge of methods and procedures 
within a specific administrative area. Other support functions include 
the work of secretaries and office automation clerks.
Paybands
    Each occupational family will be composed of discrete paybands 
(levels) corresponding to recognized advancement within the 
occupations. These paybands will replace grades. They will not be the 
same for all occupational families. Each occupational family will be 
divided into four to five paybands; each payband 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 
payband. Exceptional qualifications, specific organizational 
requirements, or other compelling reasons may lead to a higher entrance 
level within a band.
    The proposed paybands 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 payband is also shown 
in Figure 1. This payband concept has the following advantages:

[[Page 11703]]

    1. It may reduce the number of classification decisions required 
during an employee's career.
    2. It simplifies the classification decision-making process and 
paperwork. A payband 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 payband.
    5. It prevents the progression of low performers through a payband 
by mere longevity, since job performance serves as the basis for 
determining pay.
    The AVRDEC broadbanding plan expands the broadbanding concept used 
at China Lake and NIST by creating Payband V of the Engineers and 
Scientists occupational family. This payband is designed for Senior 
Technical Managers and Senior Scientists/Engineers.
    Current OPM guidelines covering the Senior Executive System and 
Scientific and Professional (ST) positions do not fully meet the needs 
of AVRDEC. 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 
must not include any managerial or supervisory responsibility.
    AVRDEC currently has several division/office chief positions that 
have characteristics of both SES and ST classifications. These 
division/office chiefs in AVRDEC are responsible for supervising other 
GS-15 positions, including function supervisors and non-supervisory 
researcher engineers and scientists. AVRDEC management considers the 
primary requirement for division/office chiefs to be knowledgeable of 
and have expertise in the specific scientific and technology areas 
related to the mission of their organizations. 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 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 the size of the 
organizations and their location in the Center are not competitive with 
other SES level positions. Classification of the positions as ST is 
also not an option because the supervisory responsibilities cannot be 
ignored.
    As preeminent scientists and engineers, incumbents of ST positions 
are responsible for specific research and development efforts that are 
continuing and long range, generally requiring the efforts of a team. 
These ST positions usually serve as team leaders which means there is 
some responsibility for assigning work, coordinating results, and 
redirecting efforts. It is administratively convenient for these 
research team leaders to also participate in performance management. 
The restriction of including supervisory authorities in ST jobs has 
forced AVRDEC to exclude any mention of the team leader 
responsibilities in these position descriptions for fear that they will 
be interpreted as characteristic of SES rather than ST positions. 
Consequently, AVRDEC has some positions that do not strictly conform to 
OPM definitions of either the SES or ST.
    The purpose of Payband 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 
Engineer/Scientist (less than full supervisory authority or no 
supervisory authority). Current GS-15 division/office chiefs will 
convert into the demonstration project at Payband IV. After conversion 
they will be reviewed against established criteria added to determine 
if they should be reclassified to Payband V. Other positions possibly 
meeting criteria for classification to Payband V will be reviewed on a 
case-by-case basis. 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 Payband 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. AVRDEC will 
capitalize on the efficiencies that can accrue from central recruiting 
by continuing to use the expertise of the Army Materiel Command SES 
Office as the recruitment agent. Panels will be created to assist in 
filling Payband V positions. Panel members will be selected from a pool 
of current AVRDEC SES members, ST employees and those in Payband V, and 
an equal number of individuals of equivalent stature from outside the 
Center 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 except the rating 
criteria will be adjusted to account for the difference in the 
positions, such as greater emphasis on technical program management and 
supervisory abilities.
    The final component of Payband V is the management of all Payband V 
assets. Specifically, this includes authority to classify, create, 
downgrade or abolish positions as circumstances warrant; recruit and 
reassign employees in this payband; 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 Payband V positions 
and recruitment/promotion criteria. The specific details regarding 
control and management of Payband 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.

BILLING CODE 6325-01-P

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[GRAPHIC] [TIFF OMITTED] TN12MR97.091



BILLING CODE 6325-01-C
Fair Labor Standards Act
    Fair Labor Standards Act (FLSA) exemption and nonexemption 
determinations will be made consistent with criteria found in 5 CFR 
Part 551. There are eight paybands (see Figure 1) where employees can 
be either exempt or nonexempt from overtime provisions. For these eight 
paybands, supervisors with classification authorities will make the 
determinations on a case-by-case basis by comparing the duties and 
responsibilities assigned, the classification standards for each 
payband, and the 5 CFR part 551 FLSA criteria. Additionally, the advice 
and assistance of the Civilian Personnel Advisory Center/Civilian 
Personnel Operations Center (CPAC/CPOC) will be obtained in making 
determinations as part of the performance review process. The benchmark 
position descriptions will not be the sole basis for the determination. 
Basis for 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. 
Changes will be documented and provided to the CPAC/CPOC, as 
appropriate.
Simplified Assignment Process
    Today's environment of downsizing and workforce transition mandates 
that the AVRDEC have increased flexibility to assign individuals. 
Broadbanding can be used to address this need. As a result of the 
assignment to a particular level descriptor, the organization will have 
increased flexibility to assign an employee, without pay change, 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.
    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.
Promotion
    A promotion is a move of an employee to (1) a higher payband in the 
same occupational family or (2) a payband in another occupational 
family in combination with an increase in the employee's salary. 
Positions with known promotion potential to a specific band within an 
occupational family will be identified when they are filled. Not all 
positions in an occupational family will have promotion potential to 
the same band. Movement from one occupational family to another will 
depend upon individual knowledge, skills, and abilities, and needs of 
the organization.
    Promotions will be processed under competitive procedures in 
accordance with merit principles and requirements and the local merit 
promotion plan. The following actions are excepted from competitive 
procedures:
    (a) Re-promotion to a position which is in the same payband 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

[[Page 11705]]

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 
payband, of 180 days or less.
    (f) Reclassification to include impact of person on-the-job 
promotions.
    (g) A promotion resulting from the correction of an initial 
classification error or the issuance of a new classification standard.
    (h) Consideration of a candidate not given proper consideration in 
a competitive promotion action.
    (i) Impact of person on the job and Factor IV process (application 
of the Research Grade Evaluation Guide, Equipment Development Grade 
Evaluation Guide, Part III, or similar guides) promotions.
Link Between Promotion and Performance
    Career ladder promotions and promotions resulting from the addition 
of duties and responsibilities are examples of promotions that can be 
made noncompetitively. Promotions can be made noncompetitively when 
contributions and achievements are such that a higher payband is 
achieved when comparing the overall position to the Equipment 
Development Grade Evaluation Guide, Part III or the Research Grade 
Evaluation Guide. To be promoted 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. Selection of employees through competitive procedures will 
require a current performance rating of B or better.

B. Pay-for-Performance Management System

Performance Evaluation
Introduction
    The performance evaluation system will link compensation to 
performance through annual performance appraisals and performance 
scores. The performance evaluation system will allow optional use of 
peer evaluation and/or input from subordinates as determined 
appropriate by the Personnel Management Board. The system will have the 
flexibility to be modified, if necessary, as more experience is gained 
under the project.
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. In case of 
disagreements, the decision of the supervisor will prevail. Performance 
objectives deal with outputs and outcomes of a particular job. 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
    Performance elements are generic attributes of job performance, 
such as technical competence, that an employee exhibits in performing 
job responsibilities and associated performance objectives. 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 and non-critical performance elements defined 
in Appendix C. 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. As 
a general rule, essentially identical positions will have the same 
critical elements and the same weight. 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 ratings on 
performance elements are above an unsatisfactory level. Performance 
objectives should be modified as necessary to reflect changes in 
planning, workload, and resource allocation. The weights assigned to 
performance elements may be changed if necessary. Additional reviews 
may be held as deemed necessary by the supervisor or requested by the 
employee. The supervisor will provide periodic feedback to the employee 
on their level of performance. If the supervisor determines that the 
employee is not performing at an acceptable level on one or more 
elements, the supervisor must alert the employee and document the 
problem(s). This feedback will be provided at any time during the 
rating cycle.
Performance Appraisal
    A performance appraisal will be scheduled for the final weeks of 
the annual performance cycle, although an individual performance 
appraisal may be conducted at any time after the minimum appraisal 
period of 120 days is met. 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 scores, and (4) other individual performance-
related actions as appropriate. A performance appraisal shall 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 will not assign performance scores or 
performance ratings 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 will 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 on performance objectives, and the employee's 
performance score and rating on performance elements. During this 
second meeting, the supervisor and employee will discuss and document 
performance objectives for the next rating period.
Performance Scores
    The overall score is the sum of individual performance element 
scores. Employees will receive an academic-type rating of A, B, C, or U 
depending upon the score attained. These summary ratings are 
representative of pattern E (a 4 level system) in summary level chart

[[Page 11706]]

in 5 CFR 430.208(d)(1). This rating will become the rating of record, 
and only those employees rated C or higher will receive general 
increases, performance pay increases (i.e., basic pay increases), and/
or performance bonuses. A rating of A will be assigned for scores from 
85 to 100 points, B for scores from 70 to 84, C for scores from 50 to 
69, and U for scores from 0 to 49 or a failure to achieve at the 50% 
level of any critical element. The academic-type ratings will be used 
to determine performance payouts and to award additional RIF retention 
years as follows:

                                                                        
                                                                 RIF    
               Rating                     Compensation        retention 
                                                              yrs. added
                                                                        
A..................................  4 shares + c*.........           10
B..................................  2 shares + c..........            7
C..................................  1 share + c...........            3
U..................................  0.....................            0
                                                                        
*c = GS General Increase (Title 5, Section 5303).                       

    Selection of the weighted points to assign to an employee's 
performance on performance elements is assisted by use of benchmark 
performance standards (Appendix D). These benchmark performance 
standards are modified versions of the performance standards used by 
the National Institute of Standards and Technology (NIST), National 
Bureau of Standards. 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.
Performance-Based Actions
    AVRDEC will implement a process to deal with poor performers. This 
process may lead to involuntary separations, with grievance or appeal 
rights. The process may start at any time during the rating period that 
the supervisor identifies a deficiency(ies) causes the level of 
performance to be at the U (unsatisfactory) level based on a composite 
score that is less than 50 for all elements or a score on any critical 
element of less than 50 percent.
    When the employee's performance is determined to be unsatisfactory 
at the close of the annual rating period, the Unsatisfactory (U) rating 
will become the rating of record for all matters relating to pay or 
Reduction-in-Force (RIF).
    There are two processes to deal with poor performers:
    1. Change in Assignment--Because it is recognized that employees 
may be assigned to a position for which they are not suited, an attempt 
will be made to place poor performers in a position better suited to 
their skills and capabilities. The offer of change in assignment will 
be contingent upon the employee's concurrence and will be either within 
the same band or in the next lower payband. If reassigned, the employee 
will receive written notification that they will be given a reasonable 
opportunity period of no less than 30 calendar days in length to 
demonstrate performance at a level that is at least equal to that of a 
summary level C rating. The period of time considered to be reasonable 
will be determined, in part, by whether the employee's reassignment is 
to a substantially similar or the same position under a different 
supervisor, or in a different office, or in a substantially different 
position. Essential training and mentoring will be provided as 
appropriate during this opportunity period. Failure to achieve a level 
of performance that is at least equal to that of a summary level C 
rating (following the above-referenced opportunity period) will place 
the employees in Step 3 of this process. There will be no further 
opportunity period.
    2. Performance Improvement Plan (PIP)--If the employee does not 
accept an offer of change in assignment, or if there is no appropriate, 
available position to assign an employee, the supervisor will develop a 
PIP that will be monitored for a reasonable period of time (no less 
than 30 calendar days). When an employee is placed in a PIP, the 
employee will be informed in writing, that unless their level of 
performance improves to, and is sustained at a level at least equal to 
that of a summary level C rating, the employee may be removed from the 
position (change in assignment, reduction in pay, or removal from the 
Federal service).
    If, during or at the conclusion of the PIP, the employee's level of 
performance improves to a level at least equal to that of a summary 
level C rating and is again determined to deteriorate to below level C 
in any area during one year from the beginning of the PIP, the AVRDEC 
may initiate action to remove the employee from the position with no 
additional opportunity to improve. An employee whose level of 
performance improves to a level at least equal to that of a summary 
level C rating for one year from the beginning of the PIP, and then 
deteriorates again to below level C again in any area, during 
succeeding rating periods, will be placed in a second PIP before 
initiating action to remove the employee from the position.
    If and when performance improves during the period in which the 
employee is otherwise ineligible for the general increase, then the 
general increase shall be restored. Such restoration is not retroactive 
and is separate and apart from incentive pay.
    3. Removal--If the employee fails to demonstrate a level of 
performance at least equal to that of a summary level C rating after 
completing either Step 1 or Step 2, the employee will be given a 
written notice of proposed removal from the position. The notice period 
will be a minimum of 30 calendar days and the employee will have a 
reasonable period of time in which to reply. The employee will be given 
a written notice of decision to include all applicable grievance and 
appeal rights.

    Note: Performance-based adverse actions may be taken under 5 
U.S.C., Chapter 75, rather than Chapter 43.

    A decision to remove an employee for poor performance may be based 
only on those instances of poor performance that occurred during the 
opportunity period (Step 1) or during the one-year period ending on the 
date of proposed removal (Step 2). The notice of decision will specify 
the instances of poor performance on which the action is based and will 
be given to the employee at or before the time the action will be 
effective.
    The AVRDEC will preserve all relevant documentation concerning an 
action taken for poor performance and make it available to review by 
the affected employee or designated representative. At a minimum, the 
record will consist of a copy of the notice of proposed action; the 
employee's written reply, if provided, or a summary if the employee 
makes an oral reply. Additionally, the record will contain the written 
notice of decision and the reasons therefore, along with any supporting 
material including documentation regarding the opportunity afforded the 
employee to demonstrate improved performance. An employee who sustains 
their performance at a level at least equal to a summary level C rating 
for one year, will have all relevant documentation removed from their 
record.
Employee Relations
    Employees covered by the project will be evaluated under a 
performance evaluation system that affords grievance or appeal rights 
comparable to those provided currently.

[[Page 11707]]

Senior Executive Service and 5 U.S.C. 3104 (ST) Employees
    Members of the SES will remain under the current SES performance 
appraisal system. Title 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 AVRDEC currently has an extensive awards program consisting of 
both internal and external awards. On-the-spot, special act (which are 
both performance related and nonperformance related), and other 
internal awards (both monetary and nonmonetary) will continue under the 
project, and may be modified or expanded as appropriate. MACOM, DA, and 
DoD awards and other honorary noncash awards will be retained.
    Teams may distribute an award pool among themselves where 
appropriate. Thus, a team leader or supervisor may allocate a sum of 
money to a team for outstanding completion of a special task, and the 
team may decide the individual distribution of the total dollars among 
themselves.
    The AVRDEC Executive Director will have the authority to grant 
awards to covered employees of up to $10,000 for a special act. The 
scale of the award will be determined using criteria in AR 5-17.
    Members of the SES will remain under their current awards system 
and will not participate in the project performance recognition bonus 
awards program. Title 5 U.S.C. 3104 (ST) employees will be eligible for 
cash awards.
Pay Administration
Introduction
    The objective is to establish a pay system that will improve the 
ability of the AVRDEC 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
    AVRDEC 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 
incentive pay increases entirely on performance or value added to the 
goals of the organization. This system will allow managers to withhold 
pay increases from nonperformers, thereby giving the nonperformer the 
incentive to improve performance or leave government service. For 
example, employees with ratings of U will receive no performance pay 
increase, general increase, or performance bonus. This action may 
result in the employee's pay falling below the minimum rate of their 
current payband because the minimum rate is increased by the general 
increase (5 U.S.C. 5303). Under these transitory conditions, the 
employee's payband designator will remain the same. Since there is no 
reduction in band level or pay, there is no adverse action.
    Pay for performance has two components: performance pay increases 
and/or performance 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 
performance bonuses is composed of money previously available for 
within-grade increases, quality step increases, promotions from one 
grade to another where both grades are now in the same payband, and for 
some performance awards. Additionally, funds will be obtained from 
performance pay increases withheld for poor performance (see 
Performance Evaluation).
Performance Pay Pool
    The performance pay pool is composed of a base pay fund and a bonus 
pay fund. The payouts made to employees from the performance pay pool 
will be a mix of base pay increases and bonus payments, subject to the 
amounts available in the respective funds. The funding for the base pay 
fund is composed of money previously available for within-grade 
increases, quality step increases, and promotions between grades that 
are banded under the demonstration project. The bonus pay fund is 
separately funded within the constraints of the organization's overall 
performance award budget. Some portion of the performance award budget 
will be reserved for special ad hoc awards--e.g., suggestion awards or 
special act awards--and will not be included as part of the performance 
pay pool.
    The MRDEC Management of Operations and Business Office, in 
consultation with Executive Director, AVRDEC, and supporting 
personnelists, will calculate the total performance pay increase fund 
and allocate pay pools to Major Organizational Units or teams, as 
determined by the Executive Director.
Performance Pay Increases and/or Performance Bonuses
    A pay pool manager is accountable for staying within pay pool 
limits. The pay pool manager assigns performance pay increases and/or 
performance 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 payband. A 
pay pool manager may request approval from the Personnel Management 
Board (PMB) or its designee to grant a performance pay increase 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.
    Performance payouts will be calculated for each individual based 
upon a performance pay pool value that will be initially 3 percent 
(e.g., 2.0% performance pay + 1.0% performance bonus) of the combined 
basic rates of pay of the assigned employees. This percentage, a payout 
factor, will be adjusted as necessary to compensate for changing 
employee demographics which impact the elements used in the GS system, 
such as the amount of step raises, quality step increases, and 
promotions. Performance payouts will be calculated so that a pay pool 
manager will not exceed the resources that are available in the pay 
pool. An employee's performance payout is computed as follows:
[GRAPHIC] [TIFF OMITTED] TN12MR97.077

Where: Pool Value = F * SUM (SALk); k = 1 to n

n = Number of employees in pay pool
N = Number of shares earned by an employee based on their performance 
rating (0 to 4)
SAL = An individual's basic rate of pay
SUM = The summation of the entities in parenthesis over the range 
indicated
F = Payout Factor


[[Page 11708]]


    Once the individual performance payout amounts have been 
determined, the next step is to determine what portion of each payout 
will be in the form of a base pay increase as opposed to a bonus 
payment. A base pay share factor is derived by dividing the amount of 
the base pay fund by the amount of the total performance pay pool. This 
factor is multiplied by the individual performance payout amounts to 
derive each individual's projected base pay increase. Certain employees 
will not be able to receive the projected base pay increase due to base 
pay caps. Base pay is capped when an employee reaches the maximum rate 
of pay in an assigned payband, when the mid-point principle applies 
(see below), and when the 50 percent rule applies (see below).
    If the organization determines it is appropriate, it may reallocate 
a portion (up to the maximum possible amount) of the unexpended base 
pay funds for capped employees to uncapped employees. This reallocation 
must be made on a proportional basis so that all uncapped employees 
receive the same percentage increase in their base pay share (unless 
the reallocation adjustment is limited by a pay cap). Any dollar 
increase in an employee's projected base pay increase will be offset, 
dollar for dollar, by an accompanying reduction in the employee's 
projected bonus payment. Thus, the employee's total performance payout 
is unchanged.
    A midpoint principle will be used to determine performance pay 
increases. This principle requires that employees in all paybands must 
receive a B rating or higher to advance their basic rate of pay beyond 
the midpoint dollar threshold of their respective paybands. If the 
performance payout formula yields a basic pay increase for a C-rated 
employee that would increase their basic rate of pay beyond the 
midpoint dollar threshold, then their basic rate of pay will be 
adjusted to the midpoint dollar threshold and the balance converted to 
a performance bonus. Once an employee has progressed beyond the 
midpoint dollar threshold, future performance pay increases will 
require a B rating or greater. If an employee attains a C rating and is 
beyond the midpoint dollar threshold, incentive pay increases will be 
restricted to performance bonuses only.
    Annual performance pay increases will be limited to (1) 50 percent 
of the difference between the particular maximum band rate and the 
employee's current basic rate of pay, or (2) the projected performance 
pay increase, whichever is less, with the balance converted to a 
performance bonus. This means that employees whose pay has reached the 
upper limits of a particular payband will receive most performance 
incentives as a performance bonus. Performance bonuses will not become 
a part of employee basic rate of pay.
Supervisory Pay Adjustments
    Supervisory pay adjustments may be used at the discretion of the 
AVRDEC Executive Director, to compensate employees assuming positions 
entailing supervisory responsibilities. Supervisory pay adjustments are 
increases to the supervisor's basic rate of pay, ranging up to 10 
percent of that pay rate, subject to the constraint that the adjustment 
may not cause the employee's basic rate of pay to exceed the payband 
maximum rate. Only employees in supervisory positions with formal 
supervisory authority meeting that required for coverage under the OPM 
GS Supervisory Guide may be considered for the supervisory pay 
adjustment. Criteria to be considered in determining the pay increase 
percentage include the following organizational and individual employee 
factors: (1) Needs of the organization to attract, retain, and motivate 
high quality supervisors; (2) budgetary constraints; (3) years of 
supervisory experience; (4) amount of supervisory training received; 
(5) performance appraisals and experience as a group or team leader; 
(6) their organizational level of supervision; and (7) managerial 
impact on the organization. The supervisory pay adjustment will not 
apply to 5 U.S.C. 3104 (ST) positions.
    Conditions, after the date of conversion into the demonstration 
project, under which the application of a supervisory pay adjustment 
may be considered are as follows:
    (1) New hires into supervisory positions will have their initial 
rate of basic pay set at the supervisor's discretion within the pay 
range of the applicable payband. This rate of pay may include a 
supervisory pay adjustment determined using the ranges and criteria 
outlined above.
    (2) A career employee selected for a supervisory position that is 
within the employee's current payband may also be considered for a 
supervisory pay adjustment.
    If a supervisor is already authorized a supervisory pay adjustment 
and is subsequently selected for another supervisory position, within 
the same payband, then the supervisory pay adjustment will be 
redetermined.
    Within the demonstration project rating system, the performance 
element ``Supervision/EEO'' is identified as a critical element. 
Changes in the rating value for this element awarded to a supervisor 
with a supervisory pay adjustment may generate a review of the 
adjustment and may result in an increase or decrease to that 
adjustment. Decrease to a supervisory pay adjustment is not an adverse 
action if this action results from changes in supervisory duties or 
supervisory ratings.
    Supervisors, upon initial conversion into the demonstration project 
into the same, or substantially similar position, will be converted at 
their existing basic rate of pay and will not be offered a supervisory 
pay adjustment.
    The initial dollar amount of the adjustment will be removed when 
the employee voluntarily leaves the supervisory position. The 
cancellation of the adjustment under these circumstances is not an 
adverse action and is not appealable. If an employee is removed from a 
supervisory position for personal cause (performance or conduct), the 
adjustment will be removed under adverse action procedures. However, if 
an employee is removed from a non-probationary supervisory position for 
conditions other than voluntary or for personal cause, then the grade 
and pay retention provisions of 5 CFR part 536 will prevail where 
``payband level'' is substituted for ``grade.''
Supervisory Pay Differentials
    Supervisory differentials may be used, at the discretion of the 
AVRDEC Executive Director, to incentivize and reward supervisors who 
are in paybands III and IV of the E&S occupational family in 
supervisory positions with formal supervisory authority meeting that 
required for coverage under the OPM GS Supervisory Guide. A supervisory 
pay differential is a cash incentive that may range up to 10 percent of 
the supervisor's basic rate of pay. It is paid on a pay period basis 
and is not included as part of the supervisor's basic rate of pay. 
Criteria to be considered in determining the amount of this supervisory 
pay differential includes those identified for Supervisory Pay 
Adjustments.
    The supervisory pay differential may be considered, either during 
conversion into or after initiation of the demonstration project, if 
the supervisor has subordinate employees in the same payband. The 
differential must be terminated if the employee is removed from a 
supervisory position, regardless of cause.
    As specified in Supervisory Pay Adjustments, after initiation of 
the demonstration project, all personnel actions involving a 
supervisory

[[Page 11709]]

differential will require a statement signed by the employee 
acknowledging that the differential may be terminated or reduced at the 
AVRDEC Executive Director's discretion. The termination or reduction of 
the differential is not an adverse action and is not subject to appeal.
Pay and Compensation Ceilings
    An employee's total monetary compensation paid in a calendar year 
may not exceed the basic rate of pay for level I of the Executive 
Schedule consistent with 5 U.S.C. 5307 and 5 CFR part 530, subpart B.
    In addition, each payband will have its own pay ceiling, just as 
grades do in the current system. Pay rates for the various paybands 
will be directly keyed to the GS rates. Except for retained rates, 
basic pay will be limited to the maximum rates payable for each 
payband.
Pay Setting for Promotion
    Upon promotion to a higher payband, an employee will be entitled to 
a 6% pay increase or the lowest level in the payband to which promoted, 
whichever is greater. Highest previous rate also may be considered in 
setting pay upon promotion, under rules similar to the highest previous 
rate rules in 5 CFR 531.203 (c) and (d).

C. 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 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 work force. Appendix A 
lists the occupational series currently represented at the AVRDEC by 
occupational family.
Classification Standards
    AVRDEC will use a classification system that is a modification of 
the system now in use at the U.S. 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 payband, reflecting duties and 
responsibilities comparable to those described in present 
classification standards for the span of grades represented by each 
payband. There will be at least one benchmark position description for 
each payband. A supervisory benchmark position description will be 
added to those paybands 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 specialty 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 AVRDEC Executive Director will have delegated classification 
authority and may redelegate this authority to subordinate managers. 
New benchmark 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 specialty code, payband level, and the appropriate 
acquisition codes. The manager will document these decisions on a cover 
sheet similar to the present DA Form 374.
    Specialty 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 define certain kinds of activities, e.g., Research, 
Development, Test and Evaluation, etc., and covers Engineers & 
Scientists.
Classification Appeals
    An employee may appeal the occupational family, occupational 
series, or payband 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 
Office of Personnel Management (OPM); (c) If the employee elects to 
first appeal to DoD, but is not satisfied with the response, he/she may 
appeal to the OPM. Appellate decisions from OPM are final.
    The evaluation of a classification appeal is based on the AVRDEC 
Personnel Demonstration Project Classification Standards.

D. Hiring and Appointment Authorities

1. Hiring Authority
    A candidate's basic eligibility will be determined using Office of 
Personnel Management's (OPM) Qualification Standards Handbook for 
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 candidate 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. Selective placement 
factors can be established in accordance with the OPM Qualification 
Handbook when judged to be critical to successful job performance. 
These factors will be communicated to all candidates for particular 
position vacancies and must be met for basic eligibility. Under the 
demonstration authority, the AVRDEC will modify qualification standards 
only as authorized in the General Policies and instructions (paragraph 
8) of the Qualification Standard Handbook.
2. 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 AVRDEC Executive 
Director 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 described in III.B applies to 
contingent employees.
    Appointments will be made under the same appointment authorities 
and processes as regular term appointments,

[[Page 11710]]

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 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 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 one of the top two ratings on the 
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.
3. Extended Probationary Period
    The current one year probationary period will be extended to two 
years for all newly hired employees in the Engineers and Scientists, 
E&S Support, and Business Management occupational families. 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 cycle of work (such as research, program development and 
execution, and technology transfer) and to fully evaluate an employee's 
contribution and conduct. Employees in the General Support occupational 
family will serve a one year probationary period.
    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 
appointed prior to the implementation date will not be affected. The 
two 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 AVRDEC decides to 
terminate an employee serving a probationary period because his/her 
work performance or conduct during this period fails to demonstrate 
their 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 
consists of the manager's conclusions as to the inadequacies of their 
performance or conduct.
4. 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 nonsupervisory position 
for reasons solely related to supervisory performance, the employee 
will be returned to a comparable position of no lower payband and pay 
than the position from which they were promoted.
5. Voluntary Emeritus Program
    Under the demonstration project, the AVRDEC Executive Director will 
have the authority to offer retired or separated individuals (engineers 
and scientists) voluntary assignments in the Center. 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 purposes of injury 
compensation). Thus, such assignments do not affect an employee's 
entitlement to buyouts 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 higher paid individuals to accept retirement 
incentives with the opportunity to retain a presence in the scientific 
community. The program will be of most benefit during manpower 
reductions as senior S&Es could accept retirement and return to provide 
valuable on-the-job training or mentoring to less experienced 
employees. Voluntary service will not be used to replace any employee.
    To be accepted into the emeritus program, a volunteer must be 
recommended by Center managers to the AVRDEC Executive Director. 
Everyone who applies is not entitled to a voluntary assignment. The 
AVRDEC Executive 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 volunteer's 
federal retirement pay (whether military or civilian) will not be 
affected while serving in a voluntary capacity. Retired or separated 
federal employees 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 or solicitations 
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 AVRDEC 
Executive Director and the CPAC/CPOC Director. The agreement will be 
reviewed by the local Legal Office for ethics determinations under the 
Joint Ethics Regulation. 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 AVRDEC (travel, administrative, office 
space, supplies),
    (f) A one page 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,

[[Page 11711]]

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 assignment will be managed by the AVRDEC while the 
volunteer is a member of the Voluntary Emeritus Program).

E. Employee Development

1. Expanded Developmental Opportunity Program
    The AVRDEC Expanded Developmental Opportunity Program will be 
funded by the AVRDEC, and it will cover all demonstration project 
employees in the Engineers and Scientists and the E&S Support 
occupational families. 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 AVRDEC, (5) up to 
one year developmental assignments in higher headquarters within the 
Army and Department of Defense, and (6) self directed study via 
correspondence courses and local colleges and universities.
    Each developmental opportunity period should benefit the AVRDEC, as 
well as increase the employee's individual effectiveness. Various 
learning or developmental experiences may be considered, such as 
advanced academic teaching or research, or on-the-job work experience 
with public or non-profit organizations. Employees will be eligible 
after completion of seven years of Federal service. Final approval 
authority will rest with the AVRDEC Executive Director, and selection 
of an employee to be granted an expanded developmental opportunity will 
be on a competitive basis. An expanded developmental opportunity period 
will not result in loss of (or reduction in) pay, leave to which the 
employee is otherwise entitled, or credit for time or service. 
Employees accepting an expanded development opportunity do not have to 
sign a continued service agreement cited in 5 U.S.C. 4108(a)(1) 
(Supplement 1995).
    The opportunity to participate in the Expanded Developmental 
Opportunity Program will be announced annually. Instructions for 
application and the selection criteria will be included in the 
announcement. Final selection for participation in the program will be 
made by the Personnel Management Board. The position of employees on an 
expanded developmental opportunity may be backfilled with employees 
temporarily promoted, contingent employees, or employees assigned via 
the simplified assignment process in III.A. However, that position or 
its equivalent must be made available to the employee returning from 
the expanded developmental opportunity.
2. Training for Degrees
    Degree training is an essential component of an organization that 
requires continuous acquisition of advanced and specialized knowledge. 
Degree training in the academic environment of laboratories is also a 
critical tool for recruiting and retaining employees with or requiring 
critical skills. Constraints under current law and regulation limit 
degree payment to shortage occupations. In addition, current government 
wide regulations authorize payment for degrees based only on 
recruitment or retention needs. Degree payment is not permitted for 
non-shortage occupations involving critical skills.
    The AVRDEC proposes to expand the authority to provide degree 
payment for purposes of meeting critical skill requirements, to ensure 
continuous acquisition of advanced and specialized knowledge essential 
to the organization, and to recruit and retain personnel critical to 
the present and future requirements of the organization. Degree payment 
may not be authorized where it would result in a tax liability for the 
employee without the employee's express and written consent. It is 
expected that the degree payment authority will be used primarily and 
largely for advanced degrees, except where an undergraduate program is 
necessary to the attainment of an advanced degree or credits. Any 
variance from this policy must be rigorously determined and documented.
    The AVRDEC will develop guidelines to ensure competitive approval 
of degree payment and that such decisions are fully documented. In 
addition, this proposal shall be implemented consistent with 5 U.S.C. 
4107(b)(2).

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

Introduction
    Modifications include limiting competitive area to occupational 
families and increasing the emphasis on performance in the RIF Process. 
Retention criteria are in the following order; tenure, veterans' 
preference, service credit adjusted by a sum of the last three 
performance ratings. Current reduction in force regulations/procedures 
have been adjusted in the context of the occupational family and the 
payband classification system. Also regulations are being modified by 
substituting ``same payband'' for ``same grade'' and ``one payband 
lower'' for ``three grades lower'.
Competitive Areas
    The AVRDEC employees located at Ft. Eustis (to include Hampton, 
VA), Moffett Field, CA, and Redstone Arsenal, AL (to include 
individuals duty-stationed at Washington, DC and St. Paul, MN), will 
each be in separate competitive areas. Within each geographic 
competitive area, each of the four occupational families will be a 
separate competitive area. Bumps and retreats will occur only within 
the competitive area and only to positions for which the employee is 
qualified in the same or next lower payband.
    Competitive levels will be established based on the payband, 
classification series, and where responsibilities are similar enough in 
duties, qualification requirements, pay schedules, and working 
conditions so that an employee may be reassigned to any of the other 
positions within the level without requiring significant training or 
causing undue interruption. Separate competitive levels will be 
established for positions in the competitive and excepted service; for 
positions filled on a full-time, part-time, intermittent, seasonal, or 
on-call basis; and separate levels will be established for positions 
filled as a trainee or developmental.
Retention
    Competing employees are listed on a retention register in the order 
shown below. Each tenure group has three subgroups (30% or higher 
compensable veterans, other veterans, and non-veterans) and employees 
appear on the retention register in that order. Within each subgroup, 
employees are in order of years of service adjusted to include 
performance credit.

Tenure I--(Career employees)
Tenure II--(Career-Conditional employees)
Tenure III--(Contingent employees)

    In the Demonstration Project an employee can bump into a position, 
in the same occupational family in the same payband or one below, that 
is currently held by another employee in a lower retention subgroup. An

[[Page 11712]]

employee may retreat within the same occupational family in the same 
band or one payband below the one that is currently held by another 
employee in the same subgroup who has lower adjusted RIF service 
computation date. A preference eligible with a compensable service-
connected disability of 30 percent or more may displace employees in 
positions equivalent to five GS grades below the minimum grade level of 
his/her current band.
    An employee with a current annual performance rating of U has 
assignment rights only to a position held by another employee who has a 
U 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 his/her competitive level.
Link Between Performance and Retention
    An employee will have additional years of service added to the 
service computation date for retention purposes. The credit is applied 
for each of the last three annual performance ratings of record, 
received over the last four years, for a potential credit of 30 years. 
If an employee has less than three annual performance ratings of 
record, then for each missing rating, a rating of C will be assumed. 
Ratings given under nonDemo systems will be converted to the demo 
rating scheme and provided the equivalent rating credit.

Rating A adds 10 years
Rating B adds 7 years
Rating C adds 3 years
Rating U adds no credit for retention
Grade and Pay Retention
    Except where waived or modified in the waivers section of this 
plan, grade and pay retention will follow current law and regulations.

IV. Training

Introduction
    The key to the success or failure of the proposed demonstration 
project will be the training provided for all involved. This training 
will not only provide the necessary knowledge and skills to carry out 
the proposed changes, but will also lead to program commitment 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 managers 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, skills training in using the classification system, position 
description preparation, and performance evaluation. Additional 
training may focus on nonproject procedural techniques such as 
interpersonal and communication skills.
Administrative Staff
    The administrative staff, generally personnel specialists, 
technicians, and administrative officers, 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 AVRDEC, in conjunction with the education and development 
assets of the CPAC/CPOC, will 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
    a. Initial entry into the demonstration project will be 
accomplished through a full employee protection approach that ensures 
each employee an initial place in the appropriate payband without loss 
of pay. Employees serving under regular term appointments at the time 
of the implementation of the demonstration project will be converted to 
the contingent employee appointment. Position announcement, etc. will 
not be required for these contingent employee appointments. An 
automatic conversion from current GS/GM grade and pay into the new 
broadband system will be accomplished. Each employee's initial total 
salary under the demonstration project will equal the total salary 
received immediately before conversion. Employees who enter the 
demonstration project later by lateral reassignment or transfer will be 
subject to parallel pay conversion rules. If conversion into the 
demonstration project is accompanied by a geographic move, the 
employee's GS pay entitlements in the new geographic area must be 
determined before performing the pay conversion.
    b. Employees who are on temporary promotions at the time of 
conversion will be converted to a payband commensurate with the grade 
of the position to which promoted. At the conclusion of the temporary 
promotion, the employee will revert to the payband which corresponds to 
the grade of record. When a temporary promotion is terminated, the 
employee's pay entitlements will be determined 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 the AVRDEC. In no case may those adjustments 
increase the pay for the position or record beyond the applicable pay 
range maximum rate. The only exception will be if the original 
competitive promotion announcement stipulated that the promotion could 
be made permanent; in these cases actions to make the temporary 
promotion permanent will be considered, and if implemented, will be 
subject to all existing priority placement programs.
    c. Employees who are covered by special salary rates, prior to the 
demonstration project, will no longer be considered a special rate 
employee under the Demonstration Project. These employees will, 
therefore, be eligible for full locality pay. The adjusted salaries of 
these employees will not change. Rather, the employees will receive a 
new basic pay rate computed by dividing their adjusted basic pay 
(higher of special rate or locality rate) by the locality pay factor 
for their area. A full locality adjustment will then be added to the 
new basic pay rate. Adverse action and pay retention provisions will 
not apply to the conversion process as there will be no change in total 
salary.
    d. During the first 12 months following conversion, employees will 
receive pay increases for non-competitive promotion equivalents

[[Page 11713]]

when the grade level of the promotion is encompassed within the same 
broadband, the employee's performance warrants the promotion and 
promotions that would have otherwise occurred during that period. 
Employees who receive an in-level promotion at the time of conversion 
will not receive a prorated step increase equivalent as defined below.
    e. At the time of conversion, each employee's salary will include a 
pro-rated increase for the time credited to the employee toward what 
would have been the employee's next within-grade increase. This 
adjustment to an employee's base pay will be computed by: calculating 
the ratio of the number of weeks the employee will have spent in the 
current step through the week prior to the day of conversion, to the 
total number of weeks in the employee's current waiting period for a 
regular within-grade increase; and multiplying that ratio by the dollar 
value of the employee's next within-grade increase at the time of 
conversion.
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 
payband to a GS-equivalent grade and the employee's project rate of pay 
to GS equivalent rate of pay. The converted GS grade and GS rate 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 rate will become the employee's actual GS grade and rate 
after leaving the demonstration project (before any other action). For 
transfers, promotions, and other actions, the converted GS grade and 
rate 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 rate were actually 
in effect immediately before the employee left the demonstration 
project.
    a. Grade-Setting Provisions: An employee in a payband corresponding 
to a single GS grade is converted to that grade. An employee in a 
payband corresponding to two or more grades is converted to one of 
those grades according to the following rules:
    (1) 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 in (1) the GS base 
schedule, (2) the locality rate schedule for the 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.
    (2) 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.
    (3) 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 payband. If the employee's adjusted rate equals or exceeds 
step 4 rate of the second highest grade, the employee is converted to 
that grade.
    (4) 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.
    (5) 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.
    (6) 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.
    b. Pay-Setting Provisions: An employee's pay within the converted 
GS grade is set by converting the employee's demonstration project rate 
of pay to GS rate of pay in accordance with the following rules:
    (1) 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.
    (2) 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 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.)
    (3) 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.)
    (4) 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).
    c. 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 will continue to process personnel-related actions and 
provide consultative and other appropriate services.
Automation
    The AVRDEC will continue to use the Defense Civilian Personnel Data 
System (DCPDS) for the processing of personnel-related data. Payroll 
servicing

[[Page 11714]]

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 AVRDEC 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. 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) change and another 3-5 year 
test period, or (c) expiration.

VII. Evaluation Plan

    Chapter 47 (Title 5 U.S.C.) requires that an evaluation system be 
implemented to measure the effectiveness of the proposed personnel 
management interventions. An evaluation plan for the entire laboratory 
demonstration program covering 24 DoD labs was developed by a joint 
OPM/DOD Evaluation Committee. A Comprehensive evaluation plan was 
submitted to the Office of Defense Research & Engineering in 1995 and 
subsequently approved (Proposed Plan for Evaluation of the Department 
of Defense S&T Laboratory Demonstration Program, Office of Merit 
Systems Oversight & Effectiveness, June 1995). The overall evaluation 
effort will be coordinated and conducted by OPM's Personnel Resources 
and Development Center (PRDC). The primary focus of the evaluation is 
to determine whether the waivers granted result in a more effective 
personnel system than the current as well as an assessment of the costs 
associated with the new system.
    The present personnel system with its many rigid rules and 
regulations is generally perceived as an impediment to mission 
accomplishment. The Demonstration Project is intended to remove some of 
those barriers and therefore, is expected to contribute to improved 
organizational performance. While it is not possible to prove a direct 
causal link between intermediate and ultimate outcomes (improved 
personnel system performance and improved organizational 
effectiveness), such a linkage is hypothesized and data will be 
collected and tracked for both types of outcome variables.
    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, downsizing, 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 laboratory 
effectiveness.

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 ATCOM/AVRDEC 
(prior to BRAC implementation) and the U.S. Army Aviation and Missile 
Command and AVRDEC budgets (after BRAC implementation). The projected 
annual expenses for each area is summarized in Table 1.

                                     Table 1--Projected Developmental Costs                                     
                                        [Then-year dollars in thousands]                                        
----------------------------------------------------------------------------------------------------------------
                                                             FY 96    FY 97    FY 98    FY 99    FY 00    FY 01 
----------------------------------------------------------------------------------------------------------------
Training..................................................  .......      $33     $16K  .......  .......  .......
Project Evaluation........................................      $13       25       25      $25      $25      $25
Automation................................................  .......        6        1  .......  .......  .......
                                                           -----------------------------------------------------
    Totals................................................       13       64       42       25       25       25
----------------------------------------------------------------------------------------------------------------

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.

[[Page 11715]]

1. Title 5, U.S. Code
    Chapter 31, Section 3111: Acceptance of Volunteer Service--the 
extent that the acceptance of retired or separated engineers and 
scientists are not included as volunteers under current statute.
    Chapter 33, Section 3324: Appointment to positions classified above 
GS-15.
    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 (sabbatical) do not have to sign a continued 
service agreement.
    Chapter 43, Sections 4301(3): Definitions.
    Chapter 43, Section 4302: Establishment of Performance Appraisal 
Systems.
    Chapter 43, Section 4303(a), (b), and (c): Actions based on 
Unacceptable Performance.
    Chapter 51, Sections 5101-5111: Related to classification standards 
and grading; 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: 
sections 5301, 5302, and 5304 are waived only to the extent necessary 
to allow demonstration project employees to be treated as General 
Schedule employees and to allow basic rates of pay under the 
demonstration project to be treated as scheduled rates of pay. This 
waiver does not apply to ST employees who continue to be covered by 
these provisions, as appropriate.
    Chapter 53, Section 5305: Special Rates.
    Chapter 53, Sections 5331-5336: General Schedule pay rates.
    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 retention 
provisions do not apply to conversions from General Schedule special 
rates to demonstration project pay, as long as total pay is not 
reduced, and to reductions in pay due solely to the removal of a 
supervisory pay adjustment upon voluntarily leaving a supervisory 
position; and (4) provide that an employee on pay retention whose 
performance rating is ``U'' is not entitled 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. 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 55, Section 5545: 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 ST employees.
    Chapter 57, Section 5753, 5454, and 5755: Recruitment and 
Relocation Bonuses, Retention Allowances and Supervisory 
Differentials--This waiver applies only to the extent necessary to 
allow employees and positions under the demonstration project to be 
treated as employees and positions under the General Schedule. This 
waiver does not apply to ST employees who continue to be covered by 
these provisions, as appropriate.
    Chapter 75, Section 7512(3): Adverse actions--This waiver applies 
only to the extent necessary to replace ``grade'' with ``pay band'.
    Chapter 75, Section 7512(4): Adverse actions--This waiver applies 
only to the extent necessary to provide that adverse action provisions 
do not apply to (1) conversions from General Schedule special rates to 
demonstration project pay, as long as total pay is not reduced and (2) 
reductions in pay due to the removal of a supervisory pay adjustment 
upon voluntary movement to nonsupervisory positions.
    2. Title 5, Code of Federal Regulations.
    Part 300.601-605, Time-in-Grade requirements (Restrictions 
eliminated under the demonstration).
    Part 308.101 through 308.103 Volunteer Service (to the extent that 
retired engineers/scientists can perform voluntary services).
    Part 315.801 and 315.802, Probationary Period (Demonstration 
project employees in some occupational families will have extended 
probationary period).
    Part 316.301, Term Appointments (adding years to exceed 4).
    Part 316.303, Tenure of Term Employees (Demonstration allows for 
conversion).
    Part 316.305, Eligibility for Within-Grade Increases.
    Part 351.402(b) Competitive Areas (Demonstration establishes 
Competitive Areas by Occupational Family.
    Part 351.504, Credit for Performance: as it relates to years of 
credit.
    Part 351.701, Assignment Involving Displacement: to the extent that 
employees bump and retreat rights will be limited to one payband except 
in the case of 30% preference eligibles which is a position equivalent 
to five GS grades below the minimum grade level of his/her payband.
    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: 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. 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: Proposing and Taking Action Based 
on Unacceptable Performance: In so far as references to ``critical 
elements'' are deleted 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 no 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 rates.
    Part 531, Subparts B, D, and E: Determining rate of basic pay, 
within-grade increases, and quality step increases.
    Part 531, Subpart F: Locality pay--This waiver applies only to the 
extent necessary to allow demonstration project employees to be treated 
as General Schedule employees, and basic rates of pay under the 
demonstration project to be treated as scheduled annual rates of pay. 
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 retention provisions do not apply to conversions from 
General Schedule special rates to demonstration project pay, as long as 
total pay is not reduced, and to reductions in pay due solely to

[[Page 11716]]

the removal of a supervisory pay adjustment upon voluntarily leaving a 
supervisory position; and (3) provide that an employee on pay retention 
whose performance rating is ``U'' is not entitled 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. 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 ST 
employees.
    Part 575, Subparts A, B, C, and D: Recruitment Bonuses, Relocation 
Bonuses, Retention Allowances, and Supervisory Differentials--This 
waiver applies only to the extent necessary to allow employees and 
position under the demonstration project covered by broad banding to be 
treated as employees and positions under the General Schedule. 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 only to the extent 
necessary to allow demonstration project employees to be treated as 
employees under the General Schedule. 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 replace ``grade'' with ``pay band''.
    Part 752.401 (a)(4): Adverse Actions--This waiver applies only to 
the extent necessary to provide that adverse action provisions do not 
apply to (1) conversions from General Schedule special rates to 
demonstration project pay, as long as total pay is not reduced and (2) 
reductions in pay due to the removal of a supervisory pay adjustment 
upon voluntary movement to nonsupervisory positions.

Appendix A: Occupational Series by Occupational Family

I. Engineers & Scientists
    0180  Engineering Research Psychologist, Engineering 
Psychologist
    0801  General Engineer, Human Factors Engineer, Value Analysis 
Engineer
    0806  Materials Engineer
    0830  Mechanical Engineer
    0850  Electrical Engineer
    0854  Computer Engineer
    0855  Electronics Engineer
    0861  Aerospace Engineer, Senior Research Scientist
    0896  Industrial Engineer
    1301  Physical Scientist
    1515  Operations Research Analyst
    1520  Mathematician
II. E&S Support
    0301  Data & Configuration Management, Standardization
    0334  Computer Specialist
    0346  Logistics Management Specialist
    0802  Aerospace Engineering Technician
    0856  Electronics Technician
    1082  Technical Information Writer
    1083  Technical Publications Editor
    1084  Visual Information Specialist
    1103  Industrial Property Management Specialist
    1410  Librarian (Physical Sciences & Engineering)
    1412  Technical Information Specialist
    1601  Maintenance Program Specialist, Equipment Manager
    1670  Equipment Specialist
    1910  Quality Assurance Specialist
    2001  General Supply Specialist
    2181  Aircraft Pilot
III. Business Management
    0018  Safety & Occupational Specialist
    0201  Personnel Management Specialist
    0301  Misc Administrative & Program
    0341  Administrative Officer
    0343  Management/Program Analyst
    0510  Operating Accountant
    0560  Budget Analyst
    0905  Attorney Advisor
    1035  Public Affairs Officer
    1060  Photographer
    1071  TV Production Specialist
    1102  Contract Specialist
IV. General Support
    0303  Misc Clerk and Assistant
    0312  Clerk-Stenographer
    0318  Secretary
    0326  Office Automation Clerk
    0344  Management Assistant
    0525  Accounting Technician
    0561  Budget Assistant
    1105  Purchasing Agent
    1106  Procurement Technician, Procurement Assistant
    2005  Supply Clerk, Supply Technician
    2134  Shipping Clerk
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Appendix C: Performance Elements

    All employees will be rated against at least the five generic 
performance elements listed through ``e'' below. Technical 
competence is a mandatory critical element. Other elements may be 
identified as critical by agreement between the rater and the 
employee. Generally, any performance element weighted 25 or higher 
should be critical. However, only those employees whose duties 
require manager/leader responsibilities will be rated on element 
``f.'' Supervisors will be rated against an additional critical 
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; supports 
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 customer 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 skills within the environment. Mentors junior personnel 
in career development, technical competence, and interpersonal 
skills. Exercises due responsibility of 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)

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