[Federal Register Volume 62, Number 124 (Friday, June 27, 1997)]
[Notices]
[Pages 34906-34932]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16849]



[[Page 34905]]

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Part V





Office of Personnel Management





_______________________________________________________________________



Science and Technology Reinvention Laboratory Personnel Demonstration 
Project at the Aviation Research, Development, and Engineering Center 
(AVRDEC); Notice

  Federal Register / Vol. 62, No. 124 / Friday, June 27, 1997 / 
Notices  

[[Page 34906]]



OFFICE OF PERSONNEL MANAGEMENT


Science and Technology Reinvention Laboratory Personnel 
Demonstration Project at the Aviation Research, Development, and 
Engineering Center (AVRDEC)

AGENCY: Office of Personnel Management.

ACTION: Notice of approval of demonstration project final plan.

-----------------------------------------------------------------------

SUMMARY: The National Defense Authorization Act for fiscal year 1995 
(Pub. L. 103-337) authorizes the Secretary of Defense, with Office of 
Personnel Management (OPM) approval, to conduct a Personnel 
Demonstration Project at Department of Defense (DoD) laboratories 
designated as Science and Technology Reinvention Laboratories. The 
legislation requires that most requirements of Section 4703 of Title 5 
shall apply to the Demonstration Project. Section 4703 requires OPM to 
publish the project plan in the Federal Register.

DATE: This Demonstration project may be implemented by the AVRDEC 
September 28, 1997.

FOR FURTHER INFORMATION CONTACT:

AVRDEC: James A. Ray, Deputy Director for Engineering, Commander, U.S. 
Army Aviation and Troop Command, Attn: AMSAT-R-E, Federal Center, 4300 
Goodfellow Boulevard, St. Louis, Missouri 63120-1798, 314 263-1100.
OPM: Fidelma A. Donahue, U.S. Office of Personnel Management, 1900 E. 
Street, NW, Room 7460, Washington, D.C. 20415, 202-606-1138.

SUPPLEMENTARY INFORMATION:

1. Overview

    Two letters and one E-mail were received and a total of eleven 
individuals commented on the Federal Register notice at the three 
Public Hearings. These comments brought several new perspectives to the 
attention of those responsible for implementing, overseeing, and 
evaluating the project. The comments highlighted instances of 
miscommunication and misunderstanding with the present system as well 
as the project interventions. Further, they underscored the importance 
of providing training to employees and supervisors on the Demonstration 
Project. The substance of all comments received has been conveyed to 
the Executive Director, AVRDEC. A summary of all comments received, 
along with accompanying responses, is provided below.
    Because the AVRDEC demonstration project has been closely modeled 
on the MRDEC demonstration project and both projects will be operating 
in tandem at Redstone Arsenal, changes made to the MRDEC demonstration 
project, as a result of comments received, will, to the maximum extent 
feasible, be reflected in the AVRDEC demonstration project.

A. Competitive Area

    Comments: There was one comment in this area that expressed concern 
over the revised Reduction-in-Force (RIF) procedures that limit a 
competitive area to occupational families in all geographic areas. The 
concern was that the reduced number of employees in a particular 
occupational family will result in smaller competitive levels and may 
lead to more separations from that occupational family if a RIF occurs 
within the AVRDEC. (Note that MRDEC demonstration proposal received 
seventy-three comments in this area.)
    Response: The project designers proposed this intervention as a 
means of minimizing the severe turbulence that is normally caused 
during a Reduction-In-Force (RIF). Since the AVRDEC is extensively 
customer funded, its vitality and future credibility depend upon a 
reasonably stable work force that is highly trained and motivated to 
the precepts of customer service and quality products. This 
intervention would achieve the desired goal of minimizing personnel 
turbulence but at the same time it may put some loyal and recently 
hired employees at an added risk of separation. For this reason, the 
proposal design will be changed to define the competitive areas as each 
separate geographic location of the AVRDEC, i.e., Redstone Arsenal, AL; 
Ft. Eustis and Langley, VA; and Moffett Field, CA. This change was made 
in full recognition that prior to any RIF action being taken, action 
will be taken to place impacted employees in other parts of the parent 
organization and that the provisions of the DoD Stability of Employment 
Programs (Priority Placement Program) will be used to assist impacted 
employees. These changes are in Section III.F (Revised Reduction-In-
Force (RIF) Procedures).

B. Supervisory Pay Differentials

    Comments: One comment was received in this area regarding the 
absence of any pay incentive for team leaders. (Note that the MRDEC 
demonstration proposal received seventy-one comments in this area.)
    Response: At this time, pay incentives are limited to those who are 
in supervisory positions with formal supervisory authority meeting that 
required for coverage under the criteria of OPM General Schedule 
Supervisory Guide and the criteria prescribed in Section III.B 
(Supervisory Pay Adjustment and Supervisory Pay Differentials). As a 
result, no additional pay incentives for team leaders have been 
incorporated into the demonstration proposal.
    Supervisory Differentials were designed to compensate supervisors 
who supervise employees that are typically at the same grade level or 
higher. This normally occurs at the higher bands in the E&S 
occupational families. However, in recognition that restricting 
supervisory differentials to just the E&S occupational families may be 
perceived as an unfair application, the plan will be changed in Section 
III.B (Supervisory Pay Differentials) to state that supervisory 
differentials may be used, at the discretion of the AVRDEC Executive 
Director, to incentivize and reward supervisors who are in paybands 
III, IV, or V in any occupational family, except for employees in 
Payband V of the E&S occupational family. Additionally, the plan is 
modified in Section III.B (Supervisory Pay Adjustments and Supervisory 
Pay Differentials) to state that supervisory differentials and 
supervisory adjustments will not be funded from the performance pay 
pools.

C. Performance Evaluation System

    Comments: Four comments were received in this area that raised 
questions and concerns about the mechanics of implementing the 
performance evaluation system and also about perceived shortcomings of 
the system. Concerns relating to the mechanics of implementation are: 
(1) How personnel on long term training (LTT) will receive performance 
ratings and (2) how the demonstration proposal would affect current 
rating periods. Perceived shortcomings are: (1) supervisors will not be 
effective, impartial, or fair, and (2) concerns about abuses of the 
current personnel system and that the new system will allow even more 
abuses due to increased flexibility in authority afforded supervisors. 
(Note that the MRDEC demonstration proposal received eleven comments on 
this subject area.)
    Response: Procedures for rating the performance of personnel on LTT 
are being defined in locally developed guidance, i.e., personnel on LTT 
will fall into one of two categories: developmental (on the job) or 
classroom. The LTT developmental assignment will be treated as any 
other temporary assignment that continues for 120 days or more, and for 
the LTT

[[Page 34907]]

classroom, if the training covers most or all of the rating period, two 
options exist: (a) Render a rating as soon as the employee returns to 
the position and completes 120 days under performance objectives and 
weighted performance elements; or (b) render a rating for the LTT 
classroom. The driving concern here is that individuals on LTT might 
receive a presumed fully successful rating for RIF purposes and thus be 
disadvantaged. This will not be the case. As regards the demonstration 
project's affect on current rating periods, prior to employees entering 
the demonstration proposal, each will receive a closeout rating under 
the current system, as appropriate.
    Like many performance evaluation systems, the proposed intervention 
makes appropriate provisions for supervisory judgement. The use of 
benchmark performance standards as universal criteria for evaluating 
all employees in the demonstration project on any element will lead to 
greater fairness and reliability of evaluation, thus reducing the 
potential for subjectivity in the evaluation process. These benchmark 
performance standards define expected performance at the 100%, 70%, 
50%, and unsatisfactory levels, thus assuring a clear definition of 
expected performance levels.
    The AVRDEC intends to address concerns about supervisory fairness, 
impartiality, effectiveness, and potential abuses of the personnel 
system through significant training of managers and supervisors prior 
to and after implementation of the proposal and through employee 
feedback capability. Employee feedback to supervisors in a non-
threatening and not-for-attribution environment is considered essential 
for the success of this demonstration and therefore, the proposal is 
changed in Section III.B (Performance Evaluation) to provide employee 
feedback capability.

D. Pay-for-Performance System

    Comments: Five comments were received in this area. Of the five, 
one comment stated that the loss of the within-grade increases would 
lead to a lower standard of living for all non-engineers; two comments 
concerned the equity of the pay system; one comment questioned if funds 
would be distributed based on perceived organizational importance; and 
one comment questioned how the responsibilities and salaries of team 
leaders and first and second-line supervisors in the same payband will 
be differentiated. (Note that the MRDEC demonstration proposal received 
seventy-six comments on this area.)
    Response: In regards to pay system equity, the demonstration 
proposal establishes a Personnel Management Board, chartered by the 
AVRDEC Executive Director, with the requirement to define the pay pool 
structure that will be used in the demonstration, administer pay pool 
funds allocation, and review/monitor operation of the pay/award pools. 
Bands will be assigned based on an employee's nature and level of work. 
Pay progression within a band will be based on employee performance and 
contributions over time.
    Regarding salaries and responsibilities, supervisors will have a 
separate benchmark job description in each payband; additionally, 
supervisors have a critical performance element ``Supervision/EEO.'' 
Supervisory salaries are augmented by supervisor pay adjustments and 
supervisor pay differentials. The rating given against the performance 
element ``Supervision/EEO'' can directly impact the salary augmentation 
received for being a supervisor. Team leader responsibilities are 
defined in the performance standard ``Management/Leadership''; however, 
there is no salary augmentation for team leaders in the demonstration 
proposal.
    Within-grade increases have not been lost, rather, they have been 
incorporated into the performance pay pools. This provides the 
opportunity for high performers to receive in excess of the value of 
the current within-grade increases on an annual basis.
    The proposal will be revised in Section III.B (Pay-for-Performance) 
to clarify that the General Increase will be received by all covered 
employees whose rating of record is greater than U (except those 
receiving retained rates), and to state that performance bonuses have 
no impact on benefits such as retirement.

E. Pay Bands and Occupational Families

    Comments: Four comments were received in this area. Comments 
included: (1) Concern about opportunity for movement between E&S and 
non-E&S occupational families for career development purposes; (2) 
expanding payband III of the E&S Support occupational family to include 
GS-13s to allow for career progression for contracting personnel; (3) 
consideration of career progression specific to the Acquisition Corps 
in pay banding; and (4) revising the paybands of the Business 
Management occupational family to mirror the E&S occupational family 
payband. (Note that the MRDEC demonstration proposal received eighty-
two comments in this area.)
    Response: The demonstration does not present barriers to employees 
who want to cross occupational family lines for career development 
purposes. The proposal will be changed to clarify that no barrier 
exists and that the benchmark position descriptions identify position 
series, specialty code, and function code.
    The proposed paybands were designed considering OPM design 
guidelines, developments within the Acquisition Corps and the 
requirements for critical Acquisition Corps positions (GS 14 and 15), 
the designs of the China Lake experiment (banding of GS 14 and 15), and 
the job needs of the AVRDEC. Therefore, no change will be made to the 
proposal. The comment to revise paybands II and III of the Business 
Management occupational family does not take into account that payband 
II of the E&S occupational family reflects the current accelerated 
advancement for E&S local hire interns and their higher journeyman 
level grade structure. Therefore, the banding structure is considered 
proper and will remain as proposed.
    Additionally, Section III.A (Paybands) and Appendix A are changed 
to reflect that the E&S Support and Business Management occupational 
families have been combined into one occupational family titled 
``Technical and Business Support.'' This proposal modification is a 
technical change, and is a natural consequence of changing the AVRDEC 
competitive areas from occupational families to the entire geographic 
area of AVRDEC. The new occupational family has one payband structure 
and benchmark position descriptions have been developed for each 
payband.

F. Management Issues

    Comments: One comment was received in this area. This comment 
addressed concerns about the rating chain for collocated matrix support 
personnel under the demonstration proposal. (Note that the MRDEC 
demonstration proposal received twenty comments in this area.)
    Response: Discussion continues on which of several approaches 
should be used regarding the rating chain of AVRDEC collocated matrix 
support personnel. However, for purposes of the demonstration project, 
whatever rating chain approach or mix of approaches is used, training 
and guidance will be provided to all supervisors involved in the 
demonstration project.

[[Page 34908]]

G. RIF Retention

    Comments: One comment questioned how computation of RIF retention 
points would be accomplished between the demonstration proposal and 
other personnel systems.
    Response: Ratings given under non-demo systems will be converted to 
the demo rating scheme and provided the equivalent rating credit. The 
specifics of the methodology will be defined in locally developed 
guidance.

H. Miscellaneous Comments

    Comments: Twelve comments were received in this area. These 
comments reflect that the proposal: (1) Limits employee ability to seek 
employment elsewhere; (2) provides advantages only to engineers and 
scientists; (3) normalizes the E&S special pay rates; (4) provides 
unique educational opportunities for engineers and scientists; (5) 
permits non-competitive promotions by banding; (6) may adversely effect 
Equal Employment Opportunity and Affirmative Action (EEO/AA); (7) has 
an impact on personnel on saved pay; and (8) excludes engineers not in 
the AVRDEC. (Note that the MRDEC demonstration proposal received 
ninety-one comments in this area.)
    Response: The proposal has been changed to clarify that the 
proposal does not present barriers to applying for jobs outside the 
AVRDEC and for movement between occupational families for career 
development purposes. Training for degrees was always intended to apply 
to the entire workforce. The proposal will be changed to clarify 
Section III.E.2 (Training for Degrees) that training for degrees is 
available for all occupational families. The Expanded Developmental 
Opportunity Program (sabbaticals) has been extended, in Section III.E.1 
(Expanded Developmental Opportunity Program) to all occupational 
families except for the General Support occupational family. Movement 
through a payband is not considered a promotion, but is based on 
individual performance. Nothing within the demonstration proposal 
inherently violates either EEO, AA, or merit principles; rather, the 
proposal links employees' pay to their performance. The proposal offers 
significant safeguards in terms of the oversight responsibilities of 
the Personnel Management Board, and the use of the ``Supervision/EEO'' 
performance element to rate supervisors on meeting their EEO/AA 
requirements. Employees receiving retained (``saved'') pay at the time 
of conversion will not suffer a reduction in pay. If their former GS 
retained rate does not fit into the pay band range, they will be 
entitled to a retained rate under the demonstration project. Finally, 
the existence of engineers outside the AVRDEC is outside the purview of 
the demonstration proposal.

2. Demonstration Project System Changes

    The following is a summary of changes and clarifications in the 
project proposal that were of paramount interest to employees:
    (1) In Section III.F (Revised Reduction-in-Force (RIF) Procedures), 
the project design is changed to define the competitive areas as each 
separate geographic location of the AVRDEC, i.e., Redstone Arsenal, AL; 
Ft. Eustis and Langley, VA; and Moffett Field, CA. Also, the method of 
bumping and retreating is redefined as follows: ``In the Demonstration 
Project an employee can bump to a position held by another employee in 
a lower subgroup or tenure group; the position may be no lower than the 
equivalent of three GS grades (or appropriate grade intervals) below 
the minimum GS grade level of his/her current band, in accordance with 
procedures outlined in Section V (Conversion or Movement from a Project 
Position to a General Schedule Position), a. Grade-Setting Provisions. 
An employee can retreat to a position held by another employee in the 
same subgroup who has a lower adjusted RIF service computation date; 
the position may be no lower than the equivalent of three GS grades (or 
appropriate grade intervals) below the minimum GS grade level of his/
her current band. A preference eligible with a compensable service-
connected disability of 30 percent or more may retreat to a position 
equivalent to five GS grades below the minimum grade level of his/her 
current band.''
    (2) In Section III.A (Paybands) and Appendix A, the proposal is 
changed to combine the E&S Support occupational family with the 
Business Management occupational family to form one occupational family 
called ``Technical and Business Support.''
    (3) Additionally, editorial and technical changes were made to 
correct the final version of the Project.
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 AVRDEC strives to exceed 
the greatest expectations of its many customers. To achieve this, the 
AVRDEC must be able to balance customer requirements for near-term 
technical and scientific products and information with the evolving 
capabilities of the workforce. These purposes will be significantly 
enhanced by interventions such as training for degrees in critical 
skills areas, the contingent employee appointment authority, and those 
interventions designed to rapidly hire highly qualified individuals.
    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.

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    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 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 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; Fort Eustis, Virginia; 
Langley, Virginia, and Washington, D.C.
    Successor organization(s) which may result from actions associated 
with the 1995 Base Realignment and Closure Commission (BRAC) or future 
Commissions 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 and positions will be included for employee development, 
performance appraisal, and award provisions only; their classification, 
staffing, and compensation, however, will not change. Senior Executive 
Service employees and positions, 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 after implementation, 
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 BRAC commission action disestablishing ATCOM and 
the uncertainty as to the implementation date of this project, it was 
uncertain what labor organization would represent AVRDEC employees at 
the time the demonstration project is implemented. Therefore, NFFE has 
not been involved in the development of the project.
    As of 24 April 1997, NFFE Local 405 requested to become an integral 
part of this personnel demonstration project and to be a full partner 
in arriving at

[[Page 34910]]

major decisions involving program implementation. Since the project is 
now scheduled to be implemented prior to any BRAC action, and NFFE 
Local 405 will represent many professional and nonprofessional 
employees of the AVRDEC at the time of implementation, they will be 
included in arriving at major decisions involving program 
implementation as long as they continue to represent these employees.
    Currently, no union represents AVRDEC employees at the Moffett 
Field, California, and Fort Eustis and Langley, Virginia geographic 
locations.

G. Project Design

    As a result of the 1995 BRAC recommendation transferring the AVRDEC 
to Redstone Arsenal; the subsequent identification of the 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 (other than the union and Equal Employment 
Opportunity Office members) will be appointed by the Director. The 
union and the Equal Employment Opportunity Office will have permanent 
membership in the PMB, and their representatives will be selected by 
the respective organizations. The establishment of this Board shall not 
affect the authority of any management official in the exercise of 
their management rights set forth in 5 U.S.C. 7106(b)(1). The PMB 
membership includes 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 three occupational families described below:
    1. Engineers and Scientists (E&S). This occupational family 
includes all technical professional positions, such as engineers, 
physical scientists, and mathematicians. Predominantly, specific course 
work or educational degrees are required for these occupations.
    2. Technical & Business 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, 
engineering and electronics technicians, accounting, administrative 
computing, counsel, finance, management analysis, personnel, 
procurement, public information, and safety. Employees in these jobs 
may or may not require college course work. Analytical ability and 
specialized knowledge in administrative fields or special degrees are 
required. Knowledge of and training in the various electrical, 
mechanical, chemical, or computer principles, methods, and techniques 
are also generally required.
    3. 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.

[[Page 34911]]

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:
    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 
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 
Scientific Technical Managers.
    Current legal definitions of Senior Executive Service (SES) 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 reserved for bench research scientists and engineers; these 
positions require a very high level of technical expertise and they 
have little or no supervisory responsibility.
    AVRDEC currently has several positions, typically division chiefs, 
that have characteristics of both SES and ST classifications. Most 
division chiefs in AVRDEC are responsible for supervising other GS-15 
positions, including branch chiefs, non-supervisory researcher 
engineers and scientists and, in some cases, ST positions. Most 
division chiefs are classified at the GS-15 level, although their 
technical expertise warrants classification beyond GS-15. Because of 
their management responsibilities, these individuals are excluded from 
the ST system. Because of management considerations, they cannot be 
placed in the SES. Management considers the primary requirement for 
division chiefs to be knowledge of and expertise in the specific 
scientific and technology areas related to the mission of their 
divisions. Historically, incumbents of these positions have been 
recognized within the community as scientific and engineering leaders, 
who possess primarily scientific/engineering credentials and are 
considered experts in their field. However, they must also possess 
strong managerial and supervisory ability. Therefore, although some of 
these employees have scientific credentials that might compare 
favorably with ST criteria, classification of these positions as ST is 
not an option because the managerial and supervisory responsibilities 
inherent in the positions cannot be ignored.
    The purpose of Payband V (which will reinforce the equal pay for 
equal work principle) is to solve a critical classification problem. It 
will also contribute to an SES ``corporate culture'' by excluding from 
the SES positions for which technical expertise is paramount. Payband V 
proposes to overcome the difficulties identified above by creating a 
new category of positions, the Senior Scientific Technical Manager, 
which has both scientific/technical expertise and full managerial and 
supervisory authority.
    Current GS-15 division chiefs will convert into the demonstration 
project at Payband IV. After conversion they will be reviewed against 
established criteria 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 a minimum of 120% of the minimum rate of basic pay for 
GS-15 with a maximum rate of basic pay established at the rate of basic 
pay (excluding locality pay) for SES level 4 (ES-4). Vacant positions 
in Payband V will be competitively filled to ensure that selectees are 
preeminent researchers and technical leaders in the specialty fields 
who also possess substantial managerial and supervisory abilities. 
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 later those 
in Payband V, and an equal number of individuals of equivalent stature 
from outside the AVRDEC 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.
    DoD will test the establishment of Payband V for a five-year 
period. Positions established in Payband V will be subject to 
limitations imposed by OPM and DoD. Payband V positions will be 
established only in an S&T Reinvention Laboratory which employs 
scientists, engineers, or both. Incumbents of Payband V positions will 
work primarily in their professional capacity on basic or applied 
research and secondarily perform managerial or supervisory duties. The 
number of Payband V positions within the Department of Defense will not 
exceed 40. These 40 positions will be allocated by ASD (FMP), DoD, and 
administered by the respective Services. The number of Payband V 
positions will be reviewed periodically to determine appropriate 
position requirements. Payband V position allocations will be managed 
separately from SES, ST, and SL positions. An evaluation of the Payband 
V concept will be performed during the fifth year of the demonstration 
project.
    The final component of Payband V is the management of all Payband V 
assets. Specifically, this authority will be exercised at the DA level, 
and includes the following: authority to classify, create, or abolish 
positions within the limitations imposed by OPM and DoD; recruit and 
reassign employees in this payband; set pay and to have their 
performance appraised under this project's Pay for Performance System. 
The laboratory wants to demonstrate increased effectiveness by gaining 
greater managerial control and authority, consistent with merit,

[[Page 34912]]

affirmative action, and equal employment opportunity principles.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN27JN97.000


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 six paybands (see Figure 1) where employees can be 
either exempt or nonexempt from overtime provisions. For these six 
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 FLSA criteria under 5 CFR part 551. Additionally, the 
advice and assistance of the Civilian Personnel Office (CPO)/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

[[Page 34913]]

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 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 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.
Employee Feedback to Supervisors
    Employee feedback to supervisors (in a non-threatening and not-for-
attribution environment) is considered essential for the success of 
this demonstration. A feedback process will be developed and 
implemented within six months after implementation of the 
demonstration. The employee feedback will be for the supervisors' 
information only, and will not be a factor in determining annual 
ratings of record. Additionally, the individual supervisor ratings will 
be aggregated into a summary for the Director's use (with copies 
furnished to the union) in assessing the quality of supervision 
provided and to take whatever steps are needed in supervisory training 
and development.
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

[[Page 34914]]

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 
and performance objectives.
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 
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). Pay increases for    
  employees receiving retained rates will be determined in accordance   
  with 5 U.S.C. 5363 except that those with a U rating will receive no  
  pay increase.                                                         

    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 for 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, not 
necessarily at the end of an appraisal period. This process begins when 
the supervisor identifies a deficiency(ies) which 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. Employees whose performance is 
recognized as failing shall be notified and provided appropriate 
guidance to assist in improving their performance. This performance 
review will be documented, with a copy being provided to the employee. 
Normally, performance based actions will not be initiated in the 
absence of such performance reviews.
    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, within the 
same pay band, the employee will receive written notification that they 
will be given a minimum of ninety (90) calendar days in length, to 
demonstrate performance at a level that is at least equal to that of a 
summary level C rating. If reassigned in the next lower pay band, the 
employee will receive written notification that they will be given a 
reasonable opportunity period of no less than thirty (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 minimum of ninety (90) 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 to below level C again, in any area, during succeeding 
rating

[[Page 34915]]

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 thirty (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.
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. The first performance payout will be 
made effective with the first full pay period of FY 1999 (October 
1998). Future pay adjustments will be effective at the beginning of the 
first full pay period of subsequent fiscal years. General increase 
payouts in January 1998 will be provided to all covered employees 
regardless of their rating of record or current performance status.
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. The basic rates of pay used in computing 
the pay pool and performance payouts exclude locality pay. All covered 
employees will be given the full amount of locality pay adjustments 
when they occur regardless of performance. Additionally, all covered 
employees who have a rating of record above U will receive a full 
general schedule increase, except that employees receiving retained 
rates will receive a pay increase in accordance with 5 U.S.C. 5363. 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

[[Page 34916]]

special act awards--and will not be included as part of the performance 
pay pool.
    The AVRDEC Business Management Support Office/MRDEC Management of 
Operations and Business Office, in consultation with Executive 
Director, AVRDEC, NFFE Local 405, and supporting personnelists, will 
calculate the total performance pay increase fund and allocate pay 
pools to prior to implementation 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. The Center will reexamine the pay-out factor (F) at the end 
of the first assessment period to determine if a pay-out factor of 2% 
was maintained by revised labor rates. If not, then the factor F must 
be adjusted prior to the first year payments to compensate for the 
early payment of step increases which would have been used to form the 
full robust value of this factor. 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:
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

    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 midpoint principle applies (see 
below), and when the 50 percent rule applies (see below). Also, for 
employees receiving retained rates above the applicable payband 
maximum, the entire performance payout will be in the form of a bonus 
payment.
    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 rule will not apply when an employee's current 
basic rate of pay is within $100 of the maximum band rate. 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 are cash payments and are not part of the 
basic pay for any purpose (e.g., lump sum payments of annual leave on 
separation, life insurance, and retirement).
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) position, or to employees in Payband V of 
the E&S occupational family.
    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

[[Page 34917]]

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. Supervisory adjustments will not be funded from 
performance pay pools.
    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 pay 
retention provisions of 5 CFR part 536 will prevail.
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, IV, and V of any occupational family, except 
employees in Payband V 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, or no longer meets the 
established eligibility criteria. Supervisory differentials will not be 
funded from performance pay pools.
    As specified in Supervisory Pay Adjustments, after initiation of 
the demonstration project, all personnel actions involving a 
supervisory 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 paid in 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).
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.

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 workforce. 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

[[Page 34918]]

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 broadband level of his or her position at any time. An 
employee must formally raise the areas of concern to the supervisors in 
the immediate chain of command, either verbally or in writing. If the 
employee is not satisfied with the supervisory response, he or she may 
then appeal to the DoD appellate level. If an employee is not satisfied 
with the DoD response, he or she may then appeal to the Office of 
Personnel Management, only after DoD has rendered a decision under the 
provisions of this demonstration project. Appellate decisions from OPM 
are final and binding on all administrative, certifying, payroll, 
disbursing, and accounting officials of the Government. Time periods 
for case processing under Title 5 apply.
    An employee may not appeal the accuracy of the position 
description, the demonstration project classification criteria, the 
pay-setting criteria, or the assignment of occupational series, to an 
occupational family, the title of a position, the propriety of a 
procedure, or an alternative dispute resolution procedure.
    The evaluation of classification appeals under this demonstration 
project are based upon the demonstration project classification 
criteria. Case files will be forwarded for adjudication through the 
CPO/CPOC/CPAC providing personnel service and will include copies of 
appropriate demonstration project criteria.

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, but recruitment bulletins 
must indicate that there is a potential for conversion to permanent 
employment.
    Employees hired under the contingent employee authority may be 
eligible for conversion to career-conditional appointments. To be 
converted, the employee must (1) have been selected for the term 
position under competitive procedures, with the announcement 
specifically stating that the individual(s) selected for the term 
position(s) may be eligible for conversion to career-conditional 
appointment at a later date; (2) served two years of substantially 
continuous service in the term position; (3) be selected under merit 
promotion procedures for the permanent position; and (4) have a current 
rating of B or better.
    Employees serving under regular term appointments at the time of 
conversion to the Demonstration Project will be converted to the new 
contingent employee appointments provided they were hired for their 
current positions 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 term positions prior to 
conversion to the contingent employee appointment is creditable to the 
requirement for two years of continuous service stated above, 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, 
Technical and Business Support 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,

[[Page 34919]]

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 AVRDEC. 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, 
or interfere with career opportunities of employees.
    To be accepted into the emeritus program, a volunteer must be 
recommended by AVRDEC 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, 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 Technical and 
Business 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 uncompensated developmental work 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) basic 
pay, leave to which the employee is otherwise entitled, or credit for 
time or service. Employees accepting an expanded developmental 
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 or 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.

[[Page 34920]]

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 currently 
permitted for non-shortage occupations involving critical skills.
    The AVRDEC proposes to expand the authority to provide degree 
payment to employees in all occupational families 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.
Competitive Areas
    All positions included in the Demonstration Project at a specific 
geographic location will be considered a separate competitive area 
(exception: positions at Ft. Eustis and Langley, Virginia will be 
combined in one competitive area). Bumps and retreats will occur only 
within the competitive area and only to positions for which the 
employee is qualified.
    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 by an employee in a formally designated trainee or developmental 
program.
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 to a position 
held by another employee in a lower subgroup or tenure group; the 
position may be no lower than the equivalent of three GS grades (or 
appropriate grade intervals) below the minimum GS grade level of his/
her current band, in accordance with Section V (Conversion or Movement 
from a Project Position to a General Schedule Position, a. Grade-
Setting Provisions). An employee can retreat to a position held by 
another employee in the same subgroup who has a lower adjusted RIF 
service computation date; the position may be no lower than the 
equivalent of three GS grades (or appropriate grade intervals) below 
the minimum GS grade level of his/her current band. A preference 
eligible with a compensable service-connected disability of 30 percent 
or more may retreat to a position 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, an average of the ratings 
received for the past four years will be used. Ratings given under non-
demo 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

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 before 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. 
NFFE Local 405 will be given an opportunity to describe their role and 
function in the demonstration project.

Supervisors

    The focus of this project on management-centered personnel

[[Page 34921]]

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, performance evaluation, and interaction with 
NFFE Local 405 as a partner. 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 NFFE Local 405 and 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 when 
the grade level of the promotion is encompassed within the same 
broadband, the employee's performance warrants the promotion and 
promotions 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. Under the current pay structure, employees progress through 
their assigned grade in step increments. Since this system is being 
replaced under the demonstration project, employees (including those 
added to the AVRDEC by BRAC 95 actions) will be awarded that portion of 
the next higher step, based upon the portion of the waiting period they 
have completed up until the effective date of implementation. As under 
the current system, supervisors will be able to withhold these partial 
step increases if the employee's performance falls below fully 
successful. Rules governing Within-Grade Increases (WGI) under the 
current Army performance plan will continue in effect until the 
implementation date. Adjustments to the employee's base salary for WGI 
equity will be computed effective the date of implementation to 
coincide with the beginning of the first formal PFP assessment cycle. 
WGI equity will be acknowledged by increasing base salaries by a 
prorated share based upon the number of weeks an employee has completed 
towards the next higher step. Payment will equal the current value of 
the employee's next WGI times the proportion of the waiting period 
completed (weeks completed in waiting period/weeks in the waiting 
period) at the time of conversion. Employees at step 10, or receiving 
retained rates, on the date of implementation will not be eligible for 
WGI equity adjustments since they are already at or above the top of 
the step scale.
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

[[Page 34922]]

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. E&S Payband V Employees: An employee in Payband V of the E&S 
Occupational Family will convert out of the demonstration project at 
the GS-15 level. AVRDEC, in consultation with the MICOM CPAC, will 
develop a procedure to ensure that employees entering Payband V 
understand that if they leave the demonstration project and their 
adjusted pay exceeds the GS-15, step 10 rate, there is no entitlement 
to retained pay. Their GS-equivalent rate will be deemed to be the rate 
for GS-15, step 10. For those Payband V employees paid below the 
adjusted GS-15, step 10 rate, the converted rates will be set in 
accordance with paragraph b.
    d. Employees with Band or Pay Retention: (1) If an employee is 
retaining a band level under the demonstration project, apply the 
procedures in paragraphs a and b, above, using the grades encompassed 
in the employee's retained band to determine the employee's GS-
equivalent retained grade and pay rate. The time in a retained band 
under the demonstration project counts toward the 2-year limit on grade 
retention in 5 U.S.C. 5382.
    (2) If an employee is retaining rate under the demonstration 
project, the employee's GS-equivalent grade is the highest grade 
encompassed in his or her band level. MRDEC will coordinate with OPM to 
prescribe a procedure for determining the GS-equivalent pay rate for an 
employee retaining a rate under the demonstration project.
    e. 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.
    Use of benchmark position descriptions is not anticipated to 
adversely impact an employee's ability to seek employment outside of 
AVRDEC. AVRDEC employees participating in the project will have short 
generic benchmark position descriptions which describe the general type 
of work performed, and the range of complexity and supervisory 
controls. The benchmark position description cover sheet lists the OPM 
occupational series, e.g., 855 for Electronics Engineer, to which the 
employee is assigned, and, where additional specificity is needed, 
lists a specialty code, which ties the employee's benchmark description 
to a particular technology or functional area. The OPM occupational 
code will serve as ready identification Government-wide of the basic 
qualifications and experience that the employee possesses. In addition, 
virtually all federal employment systems, including the Office of 
Personnel Management's, rely on employee-generated resumes which allow 
the applicants to summarize or describe the details of their experience 
and training. Any pertinent information regarding the AVRDEC employees' 
knowledge, skills or abilities not contained in the benchmark position 
description can be conveyed to potential employers through their 
resume.

[[Page 34923]]

Automation

    The AVRDEC will continue to use the Defense Civilian Personnel Data 
System (DCPDS) for the processing of personnel-related data. Payroll 
servicing will continue from the respective payroll offices.
    Local automated systems will be developed to support computation of 
performance related pay increases and awards and other personnel 
processes and systems associated with this project.

Experimentation and Revision

    Many aspects of a demonstration project are experimental. Upon 
written request by Management or the union to the other party, 
modifications may be negotiated at any 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 negotiated with the union and published in the 
Federal Register. See 5 CFR Part 470.

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)                                                                  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          FY 96               FY 97               FY 98               FY 99               FY 00              FY 01      
--------------------------------------------------------------------------------------------------------------------------------------------------------
Training.........................  ..................  $ 33K               $ 16K                                                                        
Project Evaluation...............  $ 13K               25K                 25K                 $ 25K               $ 25K               $ 25K            
Automation.......................  ..................  6K                  1K                                                                           
      Totals.....................  13K                 64K                 42K                 25K                 25K                 25K VIII.        
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 34924]]

IX. Required Waivers to Law and Regulation

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

1. Title 5, U.S. Code

    Chapter 31, Section 3111: Acceptance of Volunteer Service--To the 
extent that the acceptance of retired or separated engineers and 
scientists are included as volunteers under current statute.
    Chapter 31, Section 3132: The Senior Executive Service; Definitions 
and exclusions.
    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. Employees in Payband V of the E&S 
occupational family are treated as ST employees for the purposes of 
these provisions.
    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 ``payband'; (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; (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 
payband of the employee's position; and, (5) ensure that for employees 
of Payband V of the E&S occupational family, payband retention is not 
applicable and pay retention provisions are modified so that no rate 
established under these provisions may exceed the rate of basic pay for 
GS-15, step 10 (i.e., there is no entitlement to retained rate). 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(d): Hazardous duty differential--This 
waiver applies only to the extent necessary to allow demonstration 
project employees to be treated as General Schedule employees. This 
waiver does not apply to ST employees or employees in Payband V of the 
E&S occupational family.
    Chapter 57, Section 5753, 5754, 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. Employees in Payband V of the E&S 
occupational family are treated as ST employees for the purposes of 
these provisions.
    Chapter 75, Section 7512(3): Adverse actions--This waiver applies 
only to the extent necessary to replace ``grade'' with ``payband'.
    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 a nonsupervisory position.

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.
    Part 351.403: Competitive level--To the extent that payband is 
substituted for grade.
    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.
    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-

[[Page 34925]]

 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. Employees in Payband V of the E&S 
occupational family are treated as ST employees for the purposes of 
these provisions.
    Part 536: Grade and pay retention--This waiver applies only to the 
extent necessary to (1) replace ``grade'' with ``payband''; (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 the removal 
of a supervisory pay adjustment upon voluntarily leaving a supervisory 
position; (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 
payband of the employee's position; and, (4) ensure that for employees 
of Payband V of the E&S occupational family, payband retention is not 
applicable and pay retention provisions are modified so that no rate 
established under these provisions may exceed the rate of basic pay for 
GS-15, step 10 (i.e., there is no entitlement to retained rate). 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 or employees in Payband V of the E&S occupational family.
    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 
positions under the demonstration project covered by broadbanding 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. Employees in Payband V of the E&S 
occupational family are treated as ST employees for the purposes of 
these provisions.
    Part 752.401 (a)(3): Adverse Actions--This waiver applies only to 
the extent necessary to replace ``grade'' with ``payband.''
    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 a nonsupervisory position.

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. Technical and Business Support
    0018  Safety & Occupational Specialist
    0201  Personnel Management Specialist
    0301  Data & Configuration Management, Standardization
    0301  Misc Admin & Program
    0334  Computer Specialist
    0341  Administrative Officer
    0343  Management/Program Analyst
    0346  Log Mgt Spec
    0510  Operating Account
    0560  Budget Analyst
    0802  Aerospace Engineering Technician
    0856  Electronics Technician
    0905  Attorney Advisor
    1035  Public Affairs Officer
    1060  Photographer
    1071  TV Production Specialist
    1082  Technical Information Writer
    1083  Technical Writer/Editor
    1084  Visual Information Specialist
    1102  Contract 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 Spec
    2184  Aircraft Pilot
III. General Support
    0303  Misc Clerk and Asst
    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. In case of disagreements, the decision of the supervisor 
will prevail. 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 occupational 
families, 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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