[Federal Register Volume 63, Number 56 (Tuesday, March 24, 1998)]
[Notices]
[Pages 14254-14327]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7486]



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_______________________________________________________________________

Part IV





Office of Personnel Management





_______________________________________________________________________



Proposed Civilian Acquisition Workforce Personnel Demonstration 
Project; Department of Defense; Notice

  Federal Register / Vol. 63, No. 56 / Tuesday, March 24, 1998 / 
Notices  

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OFFICE OF PERSONNEL MANAGEMENT


Proposed Civilian Acquisition Workforce Personnel Demonstration 
Project; Department of Defense (DoD)

AGENCY: Office of Personnel Management.

ACTION: Notice of intent to implement demonstration project.

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

SUMMARY: Title VI of the Civil Service Reform Act, 5 U.S.C. 4703, 
authorizes the Office of Personnel Management (OPM) to conduct 
demonstration projects that experiment with new and different personnel 
management concepts to determine whether such changes in personnel 
policy or procedures would result in improved Federal personnel 
management.
    Section 4308 of the National Defense Authorization Act for Fiscal 
Year 1996 (Pub. L. 104-106; 10 U.S.C.A. Sec. 1701 note), as amended by 
section 845 of the National Defense Authorization Act for Fiscal Year 
1998 (Pub. L. 105-85), permits the Department of Defense (DoD), with 
the approval of OPM, to conduct a personnel demonstration project 
within the Department's civilian acquisition workforce and those 
supporting personnel assigned to work directly with the acquisition 
workforce. DoD is proposing a demonstration project to cover the 
civilian acquisition workforce and teams of personnel, more than half 
of which consist of members of the acquisition workforce and the 
remainder of which consist of supporting personnel assigned to work 
directly with the acquisition workforce, throughout DoD. The total 
number of participants is limited to 95,000.

DATES: Comment date: To be considered, written comments must be 
submitted on or before public hearings will be scheduled as follows:
    1. 23 April 1998, 10 A.M.; at Essayons Theater Bldg 219, 19th St., 
Ft. Belvoir, VA 22060.
    2. 30 April 1998, 10 A.M.; at 100 N. Sepulveda Blvd., Conference 
Room Plaza Level, El Segundo, CA 90245.
    3. 5 May 1998, 10 A.M.; at Air Force Museum Auditorium, 1100 Spaatz 
St., Wright-Patterson AFB, OH 45433-7102.
    At the time of the hearings, interested persons or organizations 
may present their written or oral comments on the proposed 
demonstration project. The hearings will be informal. However, anyone 
wishing to testify should contact the person listed under FOR FURTHER 
INFORMATION CONTACT and state the hearing location, so that OPM can 
plan the hearings and provide sufficient time for all interested 
persons and organizations to be heard. Priority will be given to those 
on the schedule, with others speaking in any remaining available time. 
Each speaker's presentation will be limited to five minutes. Written 
comments may be submitted to supplement oral testimony during the 
public comment period.

ADDRESSES: Comments may be mailed to Helen C. Onufrak, U.S. Office of 
Personnel Management, 1900 E Street NW., Room 7460, Washington, DC 
20415.

FOR FURTHER INFORMATION CONTACT: On proposed demonstration project: OSD 
Greg Giddens, Acquisition Workforce Personnel Demonstration, 5203 
Leesburg Pike, Suite 1404, Falls Church, VA 22041, 703-602-8652; on 
proposed demonstration project and public hearings: OPM Helen C. 
Onufrak, U.S. Office of Personnel Management, 1900 E Street NW., Room 
7460, Washington, DC 20415, 202-606-1506.

SUPPLEMENTARY INFORMATION: The Department of Defense (DoD) has 
submitted a proposed demonstration project entitled ``Department of 
Defense Acquisition Workforce Personnel Demonstration Project'' for 
consideration under chapter 47 of title 5, United States Code.
    The purpose of this project is to demonstrate a flexible and 
responsive personnel system that will enhance the Department's ability 
to attract, retain, and motivate a high-quality workforce. To this end, 
the proposed project involves: (1) Expansion of the candidate selection 
process; (2) establishment of three appointment authorities (permanent, 
modified term, and temporary limited); (3) extended probationary period 
for new employees in certain circumstances; (4) modified reduction-in-
force (RIF) procedures; (5) broadbanding; (6) simplified job 
classification; (7) a contribution-based compensation and appraisal 
system; (8) academic degree and certificate training; (9) sabbaticals; 
and (10) a voluntary emeritus program.

    Dated: March 18, 1998.

Office of Personnel Management.
Janice R. Lachance,
Director.

Table of Contents

I. Executive Summary
II. Introduction
    A. Purpose
    B. Problems with the Present System
    C. Changes Required/Expected Benefits
    D. Bargaining Requirements
    E. Participating Organizations
    F. Participating Employees
    G. Project Design
III. Personnel System Changes
    A. Hiring and Appointment Authorities
    B. Broadbanding
    C. Classification
    D. Contribution-based Compensation and Appraisal System
    E. Special Situations Related to Pay
    F. Revised Reduction-In-Force (RIF) Procedures
    G. Academic Degree and Certificate Training
    H. Sabbaticals
IV. Training
    A. Supervisors
    B. Administrative Staff
    C. Employees
V. Conversion
    A. Conversion to the Demonstration Project
    B. Conversion Back to the Former System
VI. Project Duration
VII. Evaluation Plan
VIII. Demonstration Project Costs
    A. Step and Promotion Buy-Ins
    B. Out-Year Project Costs
    C. Personnel Policy Boards
    D. Developmental Costs
IX. Required Waivers to Law and Regulations
    A. Waivers to title 5, United States Code
    B. Waivers to title 5, Code of Federal Regulations

I. Executive Summary

    The project was designed by a Process Action Team (PAT) under the 
uthority of the Under Secretary of Defense for Acquisition and 
Technology, with the participation of and review by DoD and the Office 
of Personnel Management (OPM). The purpose of the project is to enhance 
the quality, professionalism, and management of the DoD acquisition 
workforce through improvements in the efficiency and effectiveness of 
the human resources management system. The project interventions will 
strive to achieve the best workforce for the acquisition mission, 
adjust the workforce for change, and improve workforce quality. The 
project framework addresses all aspects of the human resources life-
cycle model.

II. Introduction

A. Purpose

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

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they need to achieve quality acquisition processes and quality 
products. This project not only provides a system that retains, 
recognizes, and rewards employees for their contribution, but also 
supports their personal and professional growth.

B. Problems With the Present System

    One of the goals of the Defense Acquisition Workforce Improvement 
Act (DAWIA) is to create well-trained, multi-skilled professionals who 
can completely and effectively manage multi-million-dollar programs. 
Additionally, Integrated Product Teams (IPTs) require multi-skilled 
personnel who can function in a dynamic team environment. The 
acquisition professional who thinks ``outside the box,'' can operate 
effectively in more than one functional area, and is willing to take 
managed risks, will be the individual most likely to be a high 
contributor to the team. Because of this, the current personnel system 
must be re-engineered to provide incentives and rewards to employees 
who exhibit these characteristics and who increase their contribution 
to the acquisition mission accordingly. Hiring restrictions and overly 
complex job classifications unduly exhaust valuable resources and 
unnecessarily detract attention from the acquisition mission. Managers 
must be able to compete with the private sector for the best talent and 
be able to make timely job offers to potential employees. Those same 
managers need the tools to reward employees for excellence, so that the 
acquisition systems produced reflect the quality of such a workforce. A 
contribution-based compensation system will help managers acquire these 
tools and provide a forum in which to apply them. The acquisition 
process is continually changing and is moving more toward a team 
environment; therefore, managers must be given local control of 
positions and their classification in order to move employees freely 
within their organization when demanded by the mission, and to provide 
developmental opportunities for employees. Additionally, managers have 
only limited tools to shape the workforce to ensure continued growth of 
new ideas, perspectives, and state-of-the art skills for the 21st 
century. In summary, today's acquisition workforce management problems 
appear to be largely outside the control of the acquisition managers. 
The inflexibility of many of today's personnel processes and the 
diffused authority, accountability, and approval chains throughout the 
organizations, result in a workforce that cannot posture itself for the 
rapidly changing technological and business environment. Also, the 
current personnel system does not provide an environment that motivates 
employees to continue to increase their contribution to the 
organization and the mission. This demonstration is designed to provide 
an encouraging environment that promotes the growth of all employees 
and to improve the local acquisition managers' ability and authority to 
manage the acquisition workforce effectively.

C. Changes Required/Expected Benefits

    This project will demonstrate that a human resource system tailored 
to the mission and needs of the DoD acquisition workforce will result 
in: (a) Increased quality in the acquisition workforce and the products 
it acquires; (b) increased timeliness of key personnel processes; (c) 
workforce data trends toward higher retention rates of ``excellent 
contributors'' and separation rates of ``poor contributors''; (d) 
increased satisfaction of serviced DoD customers with the acquisition 
process and its products; and (e) increased workforce satisfaction with 
the personnel management system.
    The DoD acquisition workforce demonstration program builds on the 
features of demonstration projects at the Air Force Research 
Laboratory, Department of the Navy (China Lake), and National Institute 
of Standards and Technology (NIST). The long-standing Department of the 
Navy (China Lake) and NIST demonstration projects have produced 
impressive statistics on job satisfaction for their employees versus 
that for the Federal workforce in general. Therefore, in addition to 
the expected benefits mentioned above, it is anticipated that the DoD 
acquisition workforce demonstration project will result in more 
satisfied employees as a consequence of the demonstration's pay equity, 
classification accuracy, and fairness of performance management. A full 
range of measures will be collected during project evaluation (sections 
VII and VIII.B).

D. Bargaining Requirements

    Employees within a unit to which a labor organization is accorded 
exclusive recognition under Chapter 71 of title 5, United States Code, 
shall not be included as part of the demonstration project unless the 
exclusive representative and the agency have entered into a written 
agreement covering participation in and implementation of this project. 
The parties may use mediation or any other mutually acceptable means to 
resolve disputes over the implementation of the project with respect to 
unit employees. Neither party may request the assistance of the Federal 
Service Impasses Panel to resolve such disputes.
    Either labor or management may unilaterally withdraw from 
negotiations over the application of this demonstration project to 
bargaining unit members at any time up until final agreement approval, 
without such action being considered an unfair labor practice under 
Section 7116 of title 5, United States Code for refusing to negotiate 
in good faith.
    Written agreements addressing the initial implementation of the 
demonstration project to bargaining unit members are subject to higher-
level review and approval within DoD prior to implementation. This 
review is to ensure local agreements comply with the requirements of 
the demonstration project and any Service-wide implementing directives. 
The decision of the higher-level review is not subject to third-party 
intervention or review. Written agreements established under this 
paragraph shall be considered ``local agreements subject to a national 
or controlling agreement at a higher level'' as provided in 5 U.S.C. 
7114(c)(4), and the approved demonstration project shall be considered 
a ``national agreement'' under that section.
    Once a written agreement is reached and approved allowing for the 
local implementation of the project, all subsequent negotiations during 
the life of the project shall be subject to binding impasse procedures 
under Section 7119 of title 5, United States Code, or to alternative 
impasse procedures agreed to by the parties.

E. Participating Organizations

    The DoD Acquisition Workforce Personnel Demonstration Project will 
include various organizational elements of the Air Force, Army, Navy, 
Marine Corps, Defense Information Systems Agency, and Defense Logistics 
Agency. Participating organizations are shown in Table 1.

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F. Participating Employees

    In determining the scope of the demonstration project, primary 
consideration was given to the number and diversity of occupations with 
the DoD acquisition workforce and the teams of personnel, more than 
half of which consist of members of the acquisition workforce and the 
remainder of which consist of supporting personnel assigned to work 
directly with the acquisition workforce, as well as the need for 
adequate development and testing of the Contribution-based Compensation 
and Appraisal System (CCAS). Additionally, current DoD human resource 
management design goals and priorities for the entire civilian 
workforce were considered. While the intent of this project is to 
provide DoD activities with increased control and accountability for 
their covered workforces, the decision was made to restrict development 
efforts initially to covered General Schedule (GS) positions. Employees 
covered under the Performance Management and Recognition System 
Termination Act (pay plan code GM) are General Schedule employees and 
are covered under the demonstration project.
    Interns assigned to an organization participating in this 
demonstration are included. Employees in the Student Temporary 
Employment Program (summer hire and stay in school), all positions 
designated as primary or secondary law enforcement officer (LEO) 
positions (5 U.S.C. Secs. 5541(3)), and all positions in the Defense 
Civilian Intelligence Personnel System (DCIPS) (10 U.S.C. Chapter 83) 
are excluded from the Demonstration Project, even if their series and 
organizations are listed in Tables 1 and 2. Additionally, this 
demonstration project does not cover those positions that have 
previously been identified for coverage by a science and technology 
reinvention laboratory demonstration project, the U.S. Army Europe 
(USAREUR) demonstration project, or the permanent demonstration project 
at the Naval Command, Control, and Ocean Surveillance Center, San 
Diego, CA and the Naval Air Warfare Center, Weapons Division, China 
Lake, CA.
    The job series included in the project are identified in Table 2. 
To determine if your series and organization are included, locate your 
organization in Table 1 and then find your job series in Table 2. 
Additional questions, if any, regarding your specific position should 
be addressed to OSD, Acquisition Workforce Personnel Demonstration 
Project Office, or refer to the Web Site at www.crfpst.wpafb.af.mil/
Demo/.

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    Qualifying positions in other job series, located in participating 
organizations, may be phased in during the course of the project, up to 
the statutory maximum. However, prior OSD and OPM approval would be 
required.
    Current demographics and union representation for the positions 
covered by this demonstration project are shown in Table 3.
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    Of the 71,453 personnel assigned to this project, 46,477 are 
represented by labor unions. Union representatives have been separately 
notified about the project and participated in its development. DoD is 
proceeding to fulfill its obligation to consult or negotiate with the 
unions, as appropriate, in accordance with 5 U.S.C. 4703(f).

G. Project Design

    In September 1996, a Process Action Team (PAT) was formed by the 
Secretary of Defense in response to Section 4308 of the National 
Defense Authorization Act for Fiscal Year 1996 (Pub. L. 104-106; 10 
U.S.C. Sec. 1701 note). The PAT was chartered to take full opportunity 
of this legislation and to develop solutions for many DoD acquisition 
workforce personnel issues. The team included managers from each of the 
Military Services and DoD Components, as well as subject-matter experts 
from civilian personnel and manpower. This team developed 13 
initiatives that together represent sweeping changes to the entire 
spectrum of human resource management for the DoD acquisition 
workforce. Several initiatives were designed to assist DoD acquisition 
activities in hiring and placing the best people to fulfill mission 
requirements. Others focused on developing, motivating, and equitably 
compensating employees based on their contribution to the mission. 
Initiatives to manage workforce realignment effectively and maintain 
organizational excellence were also developed. These initiatives were 
endorsed and accepted in total by the acquisition leadership.
    After thorough study, the original 13 initiatives were refined. 
Those appearing herein constitute the demonstration project for 
purposes of 5 U.S.C. Sec. 4703. The remainder are subject to policies 
established by OMB and DoD; waivers are being sought at those levels.

III. Personnel System Changes

A. Hiring and Appointment Authorities

1. Simplified, Accelerated Hiring
    The complexity of the current system and various hiring 
restrictions create delays; hamper management's ability to hire, 
develop, realign, and retain a quality workforce that is reflective of 
our nation's diversity; and inhibit a

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quick response to economic and population changes. Line managers find 
the complexity limiting as they attempt to accomplish timely 
recruitment of needed skills. To compete with the private sector for 
the best talent available and be able to make expeditious job offers, 
managers need a process that is streamlined, easy to administer, and 
allows for timely job offers. In order to create a human resource 
management system that facilitates mission execution and organization 
excellence, this demonstration project will respond to today's dynamic 
environment of downsizing, restructuring, and installation closures by 
obtaining, developing, utilizing, incentivizing, and retaining high-
performing employees. The project will provide a flexible system that 
can reduce, restructure, or renew the workforce quickly to meet diverse 
mission needs, respond to workload exigencies, and contribute to 
quality products, people and workplaces.
    Specifically, this part of the demonstration project will provide 
simplified, accelerated hiring that allows participating organizations 
to more rapidly appoint individuals to positions. Appropriate 
recruitment methods and sources will include those that are likely to 
yield quality candidates with the knowledge, skills, and abilities 
necessary to perform the duties of the position.
(a) Delegated Examining Process
    This demonstration project proposes a streamlined examining 
process. An applicant's basic eligibility will be determined using 
OPM's Operating Manual ``Qualifications Standards for General Schedule 
Positions'' and DAWIA requirements as needed. Minimum eligibility 
requirements will be those at the lowest equivalent GS grade of the 
appropriate broadband level. Selective placement factors may be 
established in accordance with OPM's Operating Manual ``Qualifications 
Standards for General Schedule Positions'' when judged to be critical 
to successful job performance. These factors will be communicated to 
applicants and must be met for basic eligibility.
    Candidates who meet the basic ``minimum'' qualifications will be 
further evaluated based on knowledge, skills, and abilities which are 
directly linked to the position(s) to be filled. Based on this 
assessment, candidates will receive numerical scores of 70, 80, or 90. 
No intermediate scores will be granted except for those eligibles who 
are entitled to veterans' preference. Preference eligibles meeting 
basic (minimum) qualifications will receive an additional five or ten 
points (depending on their preference eligibility), added to the 
minimum scores identified above. Candidates will be placed in one of 
the quality groups based on their numerical score, including any 
veterans' preference points: Basically Qualified (score of 70 and 
above); Highly Qualified (score of 80 and above); or Superior (score of 
90 and above). The names of preference eligibles will be entered ahead 
of others having the same numerical score.
    For scientific/engineering and professional positions at the basic 
rate of pay equivalent to GS-9 and above, candidates will be referred 
by quality groups in the order of the numerical ratings, including any 
veterans' preference points. For all other positions, (i.e., other than 
scientific/engineering and professional positions at the equivalent of 
GS-9 and above), preference eligibles with a compensable service-
connected disability of ten percent or more who meet basic (minimum) 
eligibility will be listed at the top of the highest group certified.
    Selecting officials should be provided with a reasonable number of 
qualified candidates from which to choose. All candidates in the 
highest group will be certified. If there is an insufficient number of 
candidates in the highest group, candidates in the next lower group may 
be certified in rank order. When two or more groups are certified, 
candidates will be identified by quality group (i.e., Superior, Highly 
Qualified, Basically Qualified) in the order of their numerical scores. 
Passing over any preference eligible(s) to select a nonpreference 
eligible requires approval under current pass-over or objection 
procedures.
(b) Scholastic Achievement Appointment
    This project proposes to establish a Scholastic Achievement 
Appointment that provides the authority to appoint candidates with 
degrees to positions with positive education requirements. Candidates 
may be appointed under this procedure if: (1) They meet the minimum 
standards for the positions as published in OPM's Operating Manual 
``Qualification Standards for General Schedule Positions,'' plus any 
selective factors stated in the vacancy announcement; (2) the 
occupation has a positive education requirement; (3) the candidate has 
a cumulative grade point average (GPA) of 3.5 or better (on a 4.0 
scale) in those courses in those fields of study that are specified in 
the Qualification Standards for the occupational series and an overall 
undergraduate GPA of at least 3.0 on a 4.0 scale; and (4) the 
appointment is into a position at a pay level lower than the top step 
of GS-7. Appointments may also be made at the equivalent of GS-9 
through GS-11 on the basis of graduate education and experience, but 
with the requirement of a GPA of at least 3.7 on a scale of 4.0 for 
graduate courses in the field of study required for the occupation. 
Veterans' preference procedures will apply when selecting candidates 
under this authority. Preference eligibles who meet the above criteria 
will be considered ahead of nonpreference eligibles. Passing over any 
preference eligible(s) to select a nonpreference eligible requires OPM 
approval under current objection procedures. This authority allows for 
competitive appointment to positions at the broadband level II.
2. Appointment Authority
    The DoD acquisition environment is seriously affected by variable 
workload and mission changes that require flexibility not only in 
workforce numbers but required skills and knowledge. The current 
personnel system is unable to rapidly adapt the workforce to these 
changes. This demonstration project will provide a method to expand and 
contract the workforce as needed. Under this demonstration project 
there will be three appointment options: permanent, temporary limited, 
and modified term appointments. The permanent option will be the 
existing career and career-conditional appointments. The temporary 
limited option will be the existing temporary-authority-not-to-exceed-
one-year appointments. The modified term option will be a new 
appointment authority that is based on the existing term appointment, 
but may extend up to five years with a one-year locally approved 
extension. Benefits and appeal rights are the same as those currently 
afforded term employees.
    Agencies may make a modified term appointment for a period that is 
expected to last longer than one year, but not to exceed five years 
with an option for one additional year, when the need for an employee's 
service is not permanent.
    Reasons for making a modified term appointment include, but are not 
limited to, carrying out special project work; staffing new or existing 
programs of limited duration; filling a position in activities 
undergoing review for reduction or closure; and replacing permanent 
employees who have been temporarily assigned to another

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position, are on extended leave, or have entered military service.
    Selections for modified term appointments will be made under 
competitive examining processes. An agency may make a modified term 
appointment without regard to the existence of an appropriate 
certificate if there are insufficient eligibles on the appropriate 
register and the selectee is:
    (a) A person with eligibility for reinstatement;
    (b) Any veteran who meets the qualifications for a veterans 
readjustment appointment;
    (c) A person eligible for career or career-conditional employment 
under Secs. 315.601, 315.605, 315.606, 315.607,
315.609, 315.703, or 316.608;
    (d) A former term employee of the agency who left prior to the 
expiration of his/her appointment. Reappointment must be to a position 
covered by the same term authority under which the individual 
previously served, and service under such reappointment may not exceed 
the expiration date of the original term appointment;
    (e) A disabled veteran who has been retired from active military 
service with a disability rating of 30 percent or more, or has been 
rated by the Department of Veterans Affairs within the preceding year 
as having a compensable, service-connected disability of 30 percent or 
more;
    (f) A person eligible for acquisition of competitive status for 
career appointment under 5 U.S.C. 3304(c). (However, a term employee 
does not acquire a competitive status on the basis of this term 
appointment; nor does this term appointment extend or terminate the 
employee's eligibility under 5 U.S.C. 3304(c)); or
    (g) A temporary employee who is within reach for term appointment 
to the same position from an appropriate register at the time of his/
her temporary appointment, or during subsequent service in the 
position, provided that the register was being used for term 
appointments at the time the employee was reached and he/she has been 
continuously employed in the position since being reached.
    An agency may place a modified term employee in any other modified 
term position provided the employee meets the qualifying requirements 
of that position. However, such reassignment will not serve to extend 
the appointment beyond the original term appointment time period. The 
qualifications of modified term employees will be determined according 
to OPM's Operating Manual ``Qualifications Standards for General 
Schedule Positions'' and applicable DAWIA requirements.
    Employees hired under the modified term appointment authority are 
in a temporary status but 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 positions(s) may be eligible for conversion to career-
conditional appointment at a later date; (2) have served two years of 
continuous service in the term position; and (3) be selected under 
merit promotion procedures for the permanent position.
    Service under a modified term appointment immediately prior to a 
permanent appointment shall count toward the probationary period 
requirements provided contribution is adequate and the permanent 
position is in the same career path as the modified term appointment.
3. Voluntary Emeritus Program
    Under the demonstration project, Commanders/Directors will have the 
authority to offer retired or separated individuals voluntary 
assignments in their activities and to accept the gratuitous services 
of those individuals. Voluntary emeritus program assignments are not 
considered employment by the Federal Government (except as indicated 
below). Thus, such assignments do not affect an employee's entitlement 
to buy-outs or severance payments based on earlier separation from 
Federal Service. This program may not be used to replace or substitute 
for work performed by civilian employees occupying regular positions 
required to perform the mission of the command.
    The Voluntary Emeritus Corps will ensure continued quality 
acquisition by allowing higher paid employees to accept retirement 
incentives with the opportunity to retain a presence in the acquisition 
community. The program will be beneficial during manpower reductions as 
program managers, engineers, and other skilled acquisition 
professionals accept retirement and return to provide a continuing 
source of corporate knowledge and valuable on-the-job training or 
mentoring to less experienced employees.
    To be accepted into the Voluntary Emeritus Corps, a volunteer must 
be recommended to the decision-making authority by one or more 
acquisition managers. No one who applies is entitled to an emeritus 
position. The decision-making authority must 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 the volunteer is serving in emeritus status. Retired or 
separated Federal employees may accept an emeritus position without a 
``break in service'' or mandatory waiting period.
    Voluntary Emeritus Corps volunteers will not be permitted to 
monitor contracts on behalf of the Government but may participate on 
any contract if no conflict of interest exists. The volunteer may be 
required to submit a financial disclosure form annually and will not be 
permitted to participate on any contracts where a conflict of interest 
exists. The same rules that currently apply to source selection members 
will apply to volunteers.
    An agreement will be established among the volunteer, the decision-
making authority, and the Civilian Personnel Office. The agreement must 
be finalized before the assumption of duties and shall include:
    (a) a statement that the service provided is gratuitous, does not 
constitute an appointment in the Civil Service, is without compensation 
or other benefits except as provided for in the agreement itself, and 
that, except as provided in the agreement regarding work-related injury 
compensation, any and all claims against the Government because of the 
service are waived by the volunteer;
    (b) a statement that the volunteer will be considered a Federal 
employee for the purposes of:
    (i) Subchapter I of Chapter 81 of title 5, U.S.C. (using the 
formula established in 10 U.S.C. Secs. 1588 for determination of 
compensation) (work-related injury compensation);
    (ii) Chapter 171 of title 28, U.S.C. (tort claims procedure);
    (iii) Section 552a of title 5, U.S.C. (records maintained on 
individuals); and
    (iv) Chapter 11 of title 18, U.S.C. (conflicts of interest).
    (c) The 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 activity (travel, administrative, 
office space, supplies, etc.);
    (f) A one-page statement of duties and experience;
    (g) A statement specifying that no additional time will be added to 
a volunteer's service credit for such

[[Page 14283]]

purposes as retirement, severance pay, and leave as a result of being a 
member of the Voluntary Emeritus Corps;
    (h) A provision allowing either party to void the agreement with 
ten days' written notice; and
    (i) The level of security access required.
4. Extended Probationary Period
    For employees in the professional career path, the current one-year 
probationary period does not always provide managers the time needed to 
properly assess the contribution and conduct of new hires in the 
acquisition environment. Often, new hires are required to attend 
extensive training and/or educational assignments away from their 
normal work site and outside the review of their supervisors. A means 
of extending the opportunity for management to review and evaluate the 
contribution and potential of new hires so assigned is needed. 
Expansion of the current one-year probationary period will afford 
management better control over the quality of employees required to 
meet mission needs and provide sufficient opportunity to evaluate 
contribution during the beginning of an acquisition career.
    All newly hired permanent career-conditional employees in the 
professional career path may be subject to an extension of their 
probationary period equal to the length of any educational/training 
assignment that places the employee outside normal supervisory review. 
The extended probationary period could apply to non-status hires, i.e., 
new hires or those who do not have reemployment or reinstatement 
eligibility. An employee appointed prior to the implementation date of 
the demonstration project will not be affected. Aside from extending 
the probationary period, all other features of the current probationary 
period are retained.
    Probationary employees will be terminated when they fail to 
demonstrate proper conduct, technical competency, and/or adequate 
contribution for continued employment. When a supervisor decides to 
terminate an employee serving a probationary period because his/her 
work contribution or conduct during that period fails to demonstrate 
fitness or qualifications for continued employment, the supervisor 
shall terminate the employee's services by written notification of the 
reasons for separation and the effective date of the action. The 
information in the notice as to why the employee is being terminated 
shall, as a minimum, consist of the supervisor's conclusions as to the 
inadequacies of the employee's contribution or conduct.
    Service under modified term appointment with no break in service 
before a permanent appointment made under this demonstration project 
shall count toward the probationary period requirements, provided that 
the contribution is adequate and the permanent position is in the same 
career path as the modified term appointment.

B. Broadbanding

1. Broadband Levels
    The broadbanding system will replace the current General Schedule 
(GS) structure. Currently, the 15 grades of the General Schedule are 
used to classify positions and, therefore, to set pay. The General 
Schedule covers all ``white-collar'' work--administrative, technical, 
clerical, and professional. The system will initially cover only those 
positions designated by the Defense Acquisition Workforce Improvement 
Act (DAWIA) in the Department of Defense acquisition workforce and 
those positions that support the acquisition workforce.
    Occupations with similar characteristics will be grouped together 
into three career paths with broadband levels designed to facilitate 
pay progression and to allow for more competitive recruitment of 
quality candidates at differing rates. Competitive promotions will be 
less frequent and movement through the broadband levels will be a more 
seamless process than under current procedures. Like the previous 
broadband systems used at the Department of the Navy (China Lake) and 
the National Institute of Standards and Technology (NIST) permanent 
demonstration projects, advancement within the system is contingent on 
merit.
    There will be four broadband levels in the demonstration project, 
labeled I, II, III, and IV. Levels I through IV will include the 
current grades of GS-01 through GS-15. These are the grades in which 
the DoD acquisition workforce employees are currently found. Comparison 
to the GS grades was used in setting the upper and lower dollar limits 
of the broadband levels; however, once the employees are moved into the 
demonstration project, GS grades will no longer apply.
    The three career paths and their associated broadband levels are as 
follows:

[[Page 14284]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.052



[[Page 14285]]

    Generally, employees will be converted into the broadband level 
that includes their permanent GS grade of record. Each employee is 
assured an initial place in the system without loss of pay. As the 
rates of the General Schedule are increased due to General Schedule pay 
increases, the minimum and maximum rates of the broadband levels will 
also move up. Individual employees receive pay increases based on their 
appraisals under the Contribution-based Compensation and Appraisal 
System (CCAS). Since pay progression through the levels depends on 
contribution, there will be no scheduled within-grade increases (WGIs) 
or scheduled General Schedule increases for employees once the 
broadbanding system is in place. Special salary rates will no longer be 
applicable to demonstration project employees. Employees will be 
eligible for the locality pay of their geographical area (see section 
V, paragraph A, ``Conversion to the Demonstration Project'') with the 
exception of those employees stationed at an overseas location.
    Newly hired personnel entering the system will be employed at a 
level consistent with the expected basic qualifications for the level, 
as determined by rating against qualifications standards. The hiring 
official will determine the starting salary based upon available labor 
market considerations relative to special qualifications requirements, 
scarcity of qualified applicants, programmatic urgency, and education/
experience of the new candidates.
    The use of broadbanding provides a stronger link between pay and 
contribution to the mission of the organization. It is simpler, less 
time consuming, and less costly to maintain. In addition, such a system 
is more easily understood by managers and employees, is easily 
delegated to managers, coincides with recognized career paths, and 
complements the other personnel management aspects of the demonstration 
project.
2. Simplified Assignment Process
    Today's environment of downsizing and workforce transition mandates 
that the organization have maximum flexibility to assign individuals. 
Broadbanding enables the organization to have the maximum flexibility 
to assign an employee within broad descriptions, consistent with the 
needs of the organization and the individual's qualifications. 
Assignments may be accomplished as realignments and do not constitute a 
position change. 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 broader latitude in assignments and further 
streamlines the administrative process and system.

C. Classification

1. Occupational Series
    The present General Schedule classification system has 434 
occupational series that are divided into 22 occupational families.
    The acquisition personnel demonstration project currently covers 
numerous series in the 22 occupational families. The occupational 
series, which frequently provide well-recognized disciplines with which 
employees wish to be identified, will be maintained. This will 
facilitate movement of personnel into and out of the demonstration 
project.
2. Classification Standards
    The present system of OPM classification standards will be used for 
identification of proper series and occupational titles of positions 
within the demonstration project. References in the position 
classification standards to grade criteria will not be used as part of 
the demonstration project. Rather, the CCAS broadband level 
descriptors, as aligned in the three career paths, will be used for the 
purpose of broadband level determination. These descriptors are derived 
from the OPM Primary Classification Standard. Under the demonstration 
project, each broadband level is represented by a set of descriptors. 
This eliminates the need for the use of grading criteria in OPM 
classification standards. The broadband level descriptors can be found 
in section D.
3. Classification Authority
    Under the demonstration, commanders (or equivalent) will have 
delegated classification authority and may re-delegate this authority 
to subordinate management levels. Re-delegated classification approval 
must be exercised at least one management level above the first-line 
supervisor of the employee or position under review. First-line 
supervisors will provide classification recommendations. Personnel 
specialists will provide on-going consultation and guidance to managers 
and supervisors throughout the classification process.
4. Position Requirements Document
    Under the demonstration project's classification system, a new 
position requirements document (PRD) will replace the current agency-
developed position description form. The PRD will combine the position 
information, staffing requirements, and contribution expectations into 
a one- or two-page document. The new PRD will include a description of 
job-specific information, reference the CCAS broadband level 
descriptors for the assigned broadband level, and provide other 
information pertinent to the job. Supervisors will use a computer-
assisted process to produce the PRD. The objectives in developing the 
new PRD are to: (a) simplify the descriptions and the preparation 
process through automation; (b) provide more flexibility in work 
assignments; and (c) provide a more useful tool for other functions of 
personnel management, e.g., recruitment, assessment of contribution, 
employee development, and reduction in force.
5. Fair Labor Standards Act
    Fair Labor Standards Act (FLSA) exemption or non-exemption 
determinations will be made consistent with criteria found in 5 CFR 
(Code of Federal Regulations) Part 551.
    All employees are covered by the FLSA unless they meet criteria for 
exemption. The duties and responsibilities outlined in the broadband 
level descriptors for each pay band will be compared to the FLSA 
criteria and the tentative conclusions programmed into the automated 
classification system so that the system will be able to generate the 
FLSA coverage based upon the user's selection of occupational family, 
pay band, and supervisory responsibility. Each position will be 
evaluated on a case-by-case basis by comparing the duties and 
responsibilities assigned, the broadband level descriptors for each 
broadband level, and the 5 CFR Part 551 FLSA criteria.
6. Classification Appeals
    An employee may appeal the occupational series, title, or broadband 
level of his or her own position at any time. An employee must formally 
raise the areas of concern to supervisors in the immediate chain of 
command, either verbally or in writing. If an 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 appeal to the Office of Personnel Management only after 
DoD

[[Page 14286]]

has rendered a decision under the provisions of the 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 
requirements document, the demonstration project classification 
criteria, or the pay-setting criteria; the propriety of a salary 
schedule; or matters grievable under an administrative or negotiated 
grievance procedure or an alternative dispute resolution procedure.
    The evaluation of classification appeals under this demonstration 
project is based upon the demonstration project classification 
criteria. Case files will be forwarded for adjudication through the 
Civilian Personnel Office/Human Resources Office (CPO/HRO) providing 
personnel service and will include copies of appropriate demonstration 
project criteria.

D. Contribution-based Compensation and Appraisal System

1. Overview
    The purpose of the Contribution-based Compensation and Appraisal 
System (CCAS) is to provide an equitable and flexible method for 
appraising and compensating the DoD acquisition workforce. It is 
central to the objectives of the Defense Acquisition Workforce 
Improvement Act (DAWIA) and the National Performance Review, and will 
correlate individual compensation to organizational mission 
contribution. CCAS allows for more employee involvement in the 
performance appraisal process, increases communication between 
supervisors and employees, promotes a clear accountability of 
contribution by each employee, facilitates employee progression tied to 
organizational contribution, and provides an understandable basis for 
salary changes. Most of the funds previously allocated for performance-
based awards will be reserved for distribution under the CCAS system, 
based on employee contribution.
    CCAS is a contribution-based appraisal system that goes beyond a 
performance-based rating system. That is, it measures the employee's 
contribution to the goals of the organization, rather than how well the 
employee performed a job as defined by a performance plan. Past 
experience with the existing civilian performance appraisal system 
indicates that performance plans are often tailored to the individual's 
level of previous performance. Hence, an employee may have been 
rewarded by salary step increases for accomplishing a satisfactory 
level of performance against a diminishing set of responsibilities. 
CCAS promotes salary adjustment decisions made on the basis of an 
individual's overall annual contribution when compared to all other 
employees and level of compensation. Therefore, larger than average 
salary increases are possible for employees who are determined to be 
``under-compensated,'' and smaller than average increases are permitted 
for employees who are deemed to be ``over-compensated'' in relation to 
their organizational contributions.
    An employee's performance is a component of contribution that 
influences the ultimate Overall Contribution Score (OCS). Contribution 
is measured by using a set of factors, discriminators, and descriptors, 
each of which is relevant to the success of a DoD acquisition center or 
unit. Taken together, these factors, discriminators, and descriptors 
capture the critical content of jobs in each career path. The factors, 
discriminators, and descriptors may not be modified or supplemented. 
These factors, discriminators, and descriptors are the same as those 
used to classify a position at the appropriate broadband level.
    The six (6) factors are: (1) Problem Solving, (2) Teamwork/
Cooperation, (3) Customer Relations, (4) Leadership/Supervision, (5) 
Communication, and (6) Resource Management. These factors were chosen 
for evaluating the yearly contribution of DoD acquisition personnel in 
the three career paths: (1) Business Management & Technical Management 
Professional, (2) Technical Management Support, and (3) Administrative 
Support. Each factor has multiple levels of increasing contribution 
corresponding to the broadband levels. Each factor contains descriptors 
for each respective level within the relevant career path.

CAREER PATH: (1) BUSINESS MANAGEMENT & TECHNICAL MANAGEMENT 
PROFESSIONAL

FACTOR: 1.--PROBLEM SOLVING

FACTOR DESCRIPTION
    This factor describes/captures personal and organizational problem-
solving results. EXPECTED PERFORMANCE CRITERIA (Applicable to all 
contributions at all levels): Work is timely, efficient, and of 
acceptable quality. Completed work meets project/program objectives. 
Flexibility, adaptability, and decisiveness are exercised 
appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14287]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.053



[[Page 14288]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.054



FACTOR: 2.--TEAMWORK/COOPERATION

FACTOR DESCRIPTION
    This factor, applicable to all teams, describes/captures individual 
and organizational teamwork and cooperation.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Personal and organizational interactions exhibit and foster cooperation 
and teamwork. Flexibility, adaptability, and decisiveness are exercised 
appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14289]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.055



[[Page 14290]]

FACTOR: 3.--CUSTOMER RELATIONS

FACTOR DESCRIPTION
    This factor describes/captures the effectiveness of personal and 
organizational interactions with customers (anyone to whom services or 
products are provided), both internal (within an assigned organization) 
and external (outside an assigned organization).
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Personal and organizational interactions enhance customer relations and 
actively promote rapport with customers. Flexibility, adaptability, and 
decisiveness are exercised appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.
[GRAPHIC] [TIFF OMITTED] TN24MR98.056


[[Page 14291]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.057



FACTOR: 4.--LEADERSHIP/SUPERVISION

FACTOR DESCRIPTION
    This factor describes/captures individual and organizational 
leadership and/or supervision.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Leadership and/or supervision effectively promotes commitment to 
mission accomplishment. Flexibility, adaptability, and decisiveness are 
exercised appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.
[GRAPHIC] [TIFF OMITTED] TN24MR98.058


[[Page 14292]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.059



[[Page 14293]]

FACTOR: 5.--COMMUNICATION
FACTOR DESCRIPTION
    This factor describes/captures the effectiveness of oral/written 
communications.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Communications are clear, concise, and at appropriate level. 
Flexibility, adaptability, and decisiveness are exercised 
appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.
[GRAPHIC] [TIFF OMITTED] TN24MR98.060

[GRAPHIC] [TIFF OMITTED] TN24MR98.061


[[Page 14294]]



FACTOR: 6.--RESOURCE MANAGEMENT

FACTOR DESCRIPTION
    This factor describes/captures personal and organizational 
utilization of resources to accomplish the mission. (Resources include, 
but are not limited to, personal time, equipment and facilities, human 
resources, and funds.)
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Resources are utilized effectively to accomplish mission. Flexibility, 
adaptability, and decisiveness are exercised appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.
[GRAPHIC] [TIFF OMITTED] TN24MR98.062


[[Page 14295]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.063



CAREER PATH: (2) TECHNICAL MANAGEMENT SUPPORT

FACTOR: 1.--PROBLEM SOLVING

FACTOR DESCRIPTION
    This factor describes/captures personal and organizational problem-
solving.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Completed work meets project/program objectives. Flexibility, 
adaptability, and decisiveness are exercised appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14296]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.064



[[Page 14297]]

FACTOR: 2.--TEAMWORK/COOPERATION

FACTOR DESCRIPTION
    This factor describes/captures individual and organizational 
teamwork and cooperation.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Personal and organizational interactions exhibit and foster cooperation 
and teamwork. Flexibility, adaptability, and decisiveness are exercised 
appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.
[GRAPHIC] [TIFF OMITTED] TN24MR98.065

[GRAPHIC] [TIFF OMITTED] TN24MR98.066

FACTOR: 3.--CUSTOMER RELATIONS

FACTOR DESCRIPTION
    This factor describes/captures the effectiveness of personal and 
organizational interactions with customers (anyone to whom services or 
products are provided), both internal (within an assigned organization) 
and external (outside an assigned organization).

[[Page 14298]]

    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Personal and organizational interactions enhance customer relations and 
actively promote rapport with customers. Flexibility, adaptability, and 
decisiveness are exercised appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.
[GRAPHIC] [TIFF OMITTED] TN24MR98.067


[[Page 14299]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.068



FACTOR: 4.--LEADERSHIP/SUPERVISION

FACTOR DESCRIPTION
    This factor describes/captures individual and organizational 
leadership and/or supervision.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Leadership and/or supervision effectively promotes commitment to 
mission accomplishment. Flexibility, adaptability, and decisiveness are 
exercised appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14300]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.069



FACTOR: 5.--COMMUNICATION

FACTOR DESCRIPTION
    This factor describes/captures the effectiveness of oral/written 
communications.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels):
    Work is timely, efficient, and of acceptable quality. 
Communications are clear, concise, and at appropriate level. 
Flexibility, adaptability, and decisiveness are exercised 
appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14301]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.070


[GRAPHIC] [TIFF OMITTED] TN24MR98.071

FACTOR: 6.--RESOURCE MANAGEMENT

FACTOR DESCRIPTION
    This factor describes/captures personal and organizational 
utilization of resources to accomplish the mission.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels):
    Work is timely, efficient, and of acceptable quality. Resources are 
utilized effectively to accomplish mission. Flexibility, adaptability, 
and decisiveness are exercised appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14302]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.072


[GRAPHIC] [TIFF OMITTED] TN24MR98.073

CAREER PATH: (3) ADMINISTRATIVE SUPPORT

FACTOR: 1.--PROBLEM SOLVING

FACTOR DESCRIPTION
    This factor describes/captures personal and organizational problem 
solving.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels):
    Work is timely, efficient, and of acceptable quality. Completed 
work meets project/program objectives. Flexibility, adaptability, and 
decisiveness are exercised appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14303]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.074


[GRAPHIC] [TIFF OMITTED] TN24MR98.075

FACTOR: 2.--TEAMWORK/COOPERATION

FACTOR DESCRIPTION
    This factor describes/captures individual and organizational 
teamwork and cooperation.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels):
    Work is timely, efficient, and of acceptable quality. Personal and 
organizational interactions exhibit and foster cooperation and 
teamwork. Flexibility, adaptability, and decisiveness are exercised 
appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14304]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.076



FACTOR: 3.--CUSTOMER RELATIONS

FACTOR DESCRIPTION
    This factor describes/captures the effectiveness of personal and 
organizational interactions with customers (anyone to whom services or 
products are provided), both internal (within an assigned organization) 
and external (outside an assigned organization).
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels):
    Work is timely, efficient, and of acceptable quality. Personal and 
organizational interactions enhance customer relations and actively 
promote rapport with customers. Flexibility, adaptability, and 
decisiveness are exercised appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14305]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.077



FACTOR: 4.--LEADERSHIP/SUPERVISION

FACTOR DESCRIPTION
    This factor describes/captures individual and organizational 
leadership and/or supervision.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Leadership and/or supervision effectively promotes commitment to 
mission accomplishment. Flexibility, adaptability, and decisiveness are 
exercised appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14306]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.078



FACTOR: 5.--COMMUNICATION

FACTOR DESCRIPTION
    This factor describes/captures the effectiveness of oral/written 
communications.
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels):
    Work is timely, efficient, and of acceptable quality. 
Communications are clear, concise, and at appropriate level. 
Flexibility, adaptability, and decisiveness are exercised 
appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14307]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.079



FACTOR: 6.--RESOURCE MANAGEMENT

FACTOR DESCRIPTION
    This factor describes/captures personal and organizational 
utilization of resources to accomplish the mission. (Resources include, 
but are not limited to, personal time, equipment and facilities, human 
resources, and funds.)
    EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at 
all levels): Work is timely, efficient, and of acceptable quality. 
Available resources are utilized effectively to accomplish mission. 
Flexibility, adaptability, and decisiveness are exercised 
appropriately.
    Descriptors indicate the type of contribution appropriate for the 
high end of each level. Descriptors are not to be used individually to 
assess contributions, but rather are to be taken as a group to derive a 
single evaluation of the factor.

[[Page 14308]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.080


2. Normal Pay Range (NPR)
    The Contribution-based Compensation and Appraisal System (CCAS) 
integrated pay schedule provides a direct link between increasing 
levels of contribution and increasing salary. This is shown by the 
graph in Figure 1. The horizontal axis spans from 0 to the maximum 
contribution score of 100. The vertical axis spans from zero dollars to 
the dollar equivalent of GS-15, step 10. This encompasses the full 
salary range paid under this demonstration; GS-1, step 1 through GS-15, 
step 10 for Calendar Year 1998 (CY98). (Note: Figure 1 currently 
depicts CY98. Each year the rails for the NPR are adjusted based on the 
General Schedule pay increase under 5 U.S.C. 5303.) The area between 
the upper and lower rail is considered the normal pay range; employees 
whose annual overall contribution score (OCS) plotted against their 
base salary falls on or within the rails are considered ``appropriately 
compensated.'' Employees whose salaries fall below the NPR for their 
assessed contribution score are considered ``under-compensated,'' and 
those falling above the NPR are considered ``over-compensated.'' The 
goal of CCAS is to make pay consistent with employees' contributions to 
the mission of the organization.

[[Page 14309]]

Figure 1. Normal Pay Range
[GRAPHIC] [TIFF OMITTED] TN24MR98.081

    The NPR was established using the following parameters:
    1. The lowest possible score is an OCS of 0, which equates to the 
lowest salary paid under this demonstration, GS-1, step 1.
    2. The highest possible score is an OCS of 100, which equates to 
the highest salary paid under this demonstrations, GS-15, step 10.
    3. Changes in OCS correspond to a constant percentage change in 
salary along the rails.
    4. The upper and lower rails encompass an area of +/-4.0 OCS 
points, or +/-8.0 percent in terms of salary, relative to the points 
established in parameters 1 and 2, above.
FORMULAE
    Given these constraints, the formulae for the rails found in Figure 
1 are:

Salary upper rail = 13997* (1.020043) OCS
Salary lower rail = 11923* (1.020043) OCS

    The integrated pay schedule and the NPR are the same for all the 
career paths. What vary among the career paths are the beginnings and 
endings of the broadband levels. The minimum and maximum numerical OCS 
values and associated base salaries for each broadband level by career 
path are provided in Table 4. These minimum and maximum breakpoints 
represent the lowest and highest General Schedule (GS) salary rate for 
the grades banded together and, therefore, the minimum and maximum 
salaries possible for each level. Each year, the rails for the NPR are 
adjusted based on the General Schedule pay increase granted to the 
Federal workforce. Locality salary adjustments are not included in the 
NPR but are incorporated in the demonstration participants' pay.
    Employees will enter the demonstration project without a loss of 
pay (see section V) and without a CCAS score. The first CCAS score will 
result from the first annual CCAS assessment process. Until then, no 
employee is either under-compensated or over-compensated. Employees, 
however, may determine their expected contribution range by locating 
the intersection of their salary with the rails of the NPR. Future CCAS 
assessments may alter an employee's position relative to these rails.

[[Page 14310]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.082


3. CCAS Appraisal Process
    The annual appraisal cycle begins on October 1 and ends on 
September 30 of the following year. At the beginning of the annual 
appraisal period, the broadband level descriptors will be provided to 
employees so that they know the basis on which their contribution will 
be assessed for their pay pool. (A pay pool is a group of employees 
among whom the CCAS dollars are distributed. This might be all the 
employees in a division or directorate. The local commander determines 
the pay pool structure.) At that time, employees will be advised that 
all factors are critical. Key terms such as ``team'' and ``customer'' 
will be defined or clarified. Supervisor and employee discussion of 
specific work assignments, standards, objectives, and the employee's 
contributions within the CCAS framework should be conducted on an 
ongoing basis.
    At the end of the annual appraisal period, the immediate supervisor 
(rating official) meets with his/her employees, requesting them to 
summarize their contributions for each factor. From employees' inputs 
and his/her own knowledge, the rating official identifies for each 
employee the appropriate contribution level (1, 2, 3, or 4) for each 
factor. The rating officials (including second-level supervisor) meet 
to ensure consistency and equity of the contribution ratings. Then the 
rating officials calculate the overall contribution scores (OCS).
    To determine the OCS, numerical values are assigned based on the 
contribution levels of individuals, using the ranges shown in Table 5. 
Generally, the OCS is calculated by averaging the numerical values 
assigned for each of the six factors. (All OCSs will be rounded to the 
nearest whole number.) However, at the discretion of the pay pool 
manager, different weights may be applied to the factors to produce a 
weighted average, provided that the weights are applied uniformly 
across the pay pool and employees are advised in advance, i.e., at the 
beginning of the

[[Page 14311]]

rating period. Weighting may not result in any factor becoming zero.
    The rating officials (including second-level supervisor) meet again 
to review the OCS for all employees, correcting any inconsistencies 
identified and making the appropriate adjustments in the factor 
ratings, and placing the employees in rank order.
[GRAPHIC] [TIFF OMITTED] TN24MR98.083

    The pay pool panel (pay pool manager and the rating officials in 
the pay pool who report directly to him/her) conducts a final review of 
the OCS and the recommended compensation adjustments for the pay pool 
members. The pay pool panel has the authority to make OCS adjustments, 
after discussion with the initial rating officials, to ensure equity 
and consistency in the ranking of all employees.
    Final approval of OCS rests with the pay pool manager, the 
individual within the organization responsible for managing the CCAS 
process. The OCS, as approved by the pay pool manager, becomes the 
rating of record. Rating officials will communicate the factor scores 
and OCS to each employee and discuss the results.
    If on October 1, the employee has served under CCAS for less than 
six months, the rating official will wait for the subsequent annual 
cycle to assess the employee. The first CCAS appraisal must be rendered 
within 18 months after entering the demonstration project.
    When an employee cannot be evaluated readily by the normal CCAS 
appraisal process due to special circumstances that take the individual 
away from normal duties or duty station (e.g., long-term full-time 
training, active

[[Page 14312]]

military duty, extended sick leave, leave without pay, etc.), the 
rating official will document the special circumstances on the 
appraisal form. The rating official will then determine which of the 
following options to use:
    (a) Re-certify the employee's last contribution appraisal; or
    (b) Presume the employee is contributing consistently with his/her 
pay level and will be given the full general increase.
    Pay adjustments will be made on the basis of the CCAS appraisal or 
substitute determination and the employee's rate of basic pay. Pay 
adjustments are subject to pay-out rules discussed in section III D 5. 
Final pay determinations will be made at the pay pool manager's level. 
CCAS scores can only be adjusted after discussion with the rating 
official.
    Pay adjustments will be documented by SF-50, Notification of 
Personnel Action. For historical and analytical purposes, the effective 
date of CCAS assessments, actual appraisal scores, actual salary 
increases, amounts contributed to the pay pool, and applicable 
``bonus'' amounts will be maintained for each demonstration project 
employee.
4. Pay Pools
    The pay pool structure and allocated funds are under the authority 
of the local commander or equivalent. The following minimal guidelines 
will apply: (a) a pay pool is based on the organizational structure and 
should include a range of salaries and contribution levels; (b) a pay 
pool should be large enough to constitute a reasonable statistical 
sample, i.e., not less than 35 individuals (when possible) or more than 
300 individuals; (c) a pay pool must be large enough to include a 
second level of supervision, since the CCAS process uses a group of 
supervisors in the pay pool to determine OCS and recommended salary 
adjustments; and (d) neither the pay pool manager nor the supervisors 
within a pay pool will recommend or set their own individual pay 
levels.
    The amount of money available within a pay pool is determined by 
the general pay increase and the money that would have been available 
for quality step increases, within-grade increases, awards 
(performance-based awards as defined in 5 U.S.C. 4505(a)), promotions 
between grades encompassed in the same broadband level, and other 
appropriate factors (reference section VIII B). However, the awards 
money portion cannot be used for increments to salary. The dollars to 
be included in the pay pool will be computed based on the salaries of 
the employees in the pay pool as of September 30 each year.
5. Salary Adjustment Guidelines
    After the initial assignment into the CCAS, employees' yearly 
contributions will be determined by the CCAS process described above, 
and their overall contribution scores versus their current rate of 
basic pay will be plotted on a graph along with the NPR (see Figure 2). 
The position of those points relative to the upper and lower rails of 
the NPR gives a relative measure of the compensation (salary) versus 
contribution (OCS). Employees fall into one of three categories: under-
compensated (Employee A), appropriately compensated (Employee B), or 
over-compensated (Employee C). Depending on the category into which 
each employee falls, he/she is eligible for up to three forms of 
additional compensation. The pay pool panel has the option of awarding 
the employee up to the full General Schedule pay increase (as 
authorized by Congress and the President), a contribution rating 
increase (an increase in base salary), and/or a contribution award (a 
lump-sum payment that does not affect base salary). Employees on 
retained rate in the demonstration plan will receive pay adjustments in 
accordance with 5 U.S.C. 5363 and 5 CFR 536.101. An employee receiving 
a retained rate is not eligible for a contribution rating increase, 
since such increases are limited by the maximum salary rate for the 
employee's broadband level. An outline of compensation eligibility by 
contribution category is given in Table 6.

[[Page 14313]]

Figure 2. CCAS COMPENSATION CATEGORIES
[GRAPHIC] [TIFF OMITTED] TN24MR98.084


[[Page 14314]]


    In general, those employees who fall in the under-compensated 
category of the NPR should expect to receive greater percentage salary 
increases than those who fall in the over-compensated category. Over 
time, people will migrate closer to the normal pay range and receive a 
salary appropriate for their level of contribution.
    Employees whose OCS would result in awarding a contribution rating 
increase such that the salary exceeds the maximum salary for their 
current broadband level may receive a contribution award equaling the 
difference.
    The contribution rating increase fund includes what are now within-
grade increases, quality step increases, and promotions between grades 
encompassed in the same broadband level. The fund will be set at not 
less than two percent of the activity's total salary budget (2.4 
percent for the first year). This figure will be adjusted as necessary 
to maintain cost discipline over the life of the demonstration project. 
The amount of money available to each pay pool is determined annually 
by the local commander. The general pay increase fund and the 
contribution rating increase fund may be transferred to another 
category, but the contribution award fund may not be transferred.
    The contribution award fund includes what were formerly performance 
awards and will be used for awards given under the CCAS process. The 
fund will be set at not less than one percent of the activity's total 
salary budget. This fund will not exceed 90 percent of the total awards 
budget so as to allow for other awards not related to the CCAS process, 
e.g., on-the-spot awards and group awards, which will continue to be 
encouraged by management to promote excellence in acquisition and 
attainment of organizational goals. For the first year this fund will 
be set at 1.3 percent.
    Each pay pool manager will set the necessary guidelines for pay 
adjustments in the pay pool. Decisions will be consistent within the 
pay pool, reflect cost discipline over the life of the demonstration 
project, and be subject to command review. The maximum available pay 
rate under this demonstration project will be the rate for a GS-15, 
step 10.
6. Movement Between Broadband Levels
    It is the intent of the demonstration project to have career growth 
accomplished through the broadband levels. Movement within a broadband 
level will be determined by contribution and salary following the CCAS 
pay-out calculation. Movement to a higher broadband level is normally a 
competitive action, based on Office of Personnel Management 
qualifications standards. Movement to a lower broadband level may be 
voluntary or involuntary.
    Broadband levels were derived from salaries of the banded GS 
grades. The lowest salary of any given broadband level is that for step 
1 of the lowest GS grade in that broadband level. Likewise, the highest 
salary of any given broadband level is that for step 10 of the highest 
GS grade in that broadband level. There is a natural overlap in 
salaries in the GS grades that also occurs in the broadband system. 
Since the OCS is directly related to salaries, there is also an overlap 
between OCS across broadband levels.
    Under the demonstration project, managers are provided greater 
flexibility in assigning duties by moving employees between positions 
within their broadband level. If there are vacancies at higher levels, 
employees may be considered for promotion to those positions in 
accordance with competitive selection procedures. Noncompetitive 
promotion capabilities in the current system will remain viable in the 
demonstration.
    Under the approved competitive selection procedures, the selecting 
official may consider candidates from any source based on viable and 
supportable job-related, merit-based methodology. Similarly, if there 
is sufficient cause, an employee may be demoted to a lower broadband 
level position according to the contribution-based reduction-in-pay or 
removal procedures discussed in section III E 2.
7. Implementation Schedule
    The 1998 employee annual appraisal will be done according to 
Component performance plan rules in effect at the time of the 1998 
close-out. Employees will be moved by personnel action into the 
demonstration project and into the appropriate broadband level between 
October 1998 and February 1999 following an implementation plan 
approved by DoD and OPM. Employees will receive base pay adjustments 
for accrued within-grade increases and career ladder promotions at the 
time they are moved. All employees under the demonstration project will 
receive the January 1999 general pay increase.
8. CCAS Grievance Procedures
    An employee may not grieve the pay received under CCAS except where 
the employee is covered by a negotiated grievance procedure that 
includes grievances over CCAS pay.
    An employee may grieve the OCS (rating of record). If an employee 
is covered by a negotiated grievance procedure that includes grievances 
over appraisal scores, then the employee must resolve a grievance over 
an appraisal score under that procedure (i.e., that procedure is the 
sole and exclusive procedure for resolving such grievances). If an 
employee is not in a bargaining unit, or is in a bargaining unit but 
grievances over appraisal scores are not covered under a negotiated 
grievance procedure, then the employee may use the administrative 
grievance procedure (5 CFR Part 771) with supplemental instructions 
described in the following paragraph.
    The employee will submit the grievance first to the rating 
official, who will submit a recommendation to the pay pool panel. The 
pay pool panel may accept the rating official's recommendation or reach 
an independent decision. In the event that the pay pool panel's 
decision is different from the rating official's recommendation, 
appropriate justification will be provided. The pay pool panel's 
decision is final unless the employee requests reconsideration by the 
next higher official to the pay pool manager. That official would then 
render the final decision on the grievance.
9. Using the CCAS Rating as Additional Service Credit During Reduction 
in Force
    Table 7 illustrates the years of retention service credit 
associated with appraisal results:

[[Page 14315]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.085



[[Page 14316]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.086



E. Special Situations Related to Pay

1. Change in Assignment

[[Page 14317]]

    The CCAS concept, using the broadbanding structure, provides 
flexibility in making assignments. In many cases an employee can be 
assigned, without change in their rate of basic pay, within broad 
descriptions, and, at the same time, consistent with the needs of the 
organization and commensurate with the individual's qualifications. 
Subsequent organizational assignments to projects, tasks, or functions 
requiring the same level and area of expertise and the same 
qualifications would not constitute an assignment outside the scope or 
coverage of the current level descriptors. In most cases, such 
assignments would be within the factor descriptors and could be 
accomplished without the need to process a personnel action. Assignment 
resulting in series change or competitive level change shall be 
accomplished by official personnel action. Thus, this approach allows 
for broader latitude in organizational assignments and streamlines the 
administrative process. Rules for specific types of assignments under 
CCAS follow.
    (a) Competitive, Noncompetitive, and Temporary Promotions. When an 
employee is promoted to a higher broadband level, the salary upon 
promotion will be at least six percent, but not more than 20 percent, 
greater than the employee's current salary. However, if the minimum 
rate of the new broadband level is more than 20 percent greater than 
the employee's current salary, then the minimum rate of the new 
broadband level is the new salary. The employee's salary may not exceed 
the salary range of the new broadband level.
    (b) Competitive Selection for a Position with Higher Potential 
Salary. When an employee is competitively selected for a position with 
a higher target broadband level than previously held (e.g., Upward 
Mobility), upon movement to the new position the employee will receive 
the salary corresponding to the minimum of the new broadband level or 
the existing salary, whichever is greater.
    (c) Voluntary Change to Lower Broadband Level/Change in Career Path 
(except RIF). When an employee accepts a voluntary change to lower 
broadband level or different career path, salary may be set at any 
point within the broadband level to which appointed, except that the 
new salary will not exceed the employee's current salary or the maximum 
salary of the broadband level to which assigned, whichever is lower.
    (d) Involuntary Change to Lower Broadband Level Without Reduction 
in Pay Due to Contribution-based Action. Due to inadequate 
contribution, an employee's salary may fall below the minimum rate of 
basic pay for the broadband level to which he/she is assigned. When an 
employee is changed to a lower broadband level due to such a situation, 
this movement is not considered an adverse action.
    (e) Involuntary Reduction in Pay, to Include Change to Lower 
Broadband Level and/or Change in Career Path Due to Adverse Action. An 
employee may receive a reduction in pay within his/her existing 
broadband level and career path, be changed to a lower broadband level, 
and/or be moved to a new position in a different career path due to an 
adverse action. In these situations, the employee's salary will be 
reduced by at least 6 percent, but will be set no lower than the 
minimum salary of the broadband level to which assigned. Employees 
placed into a lower broadband due to adverse action are not entitled to 
pay retention.
    (f) Reduction-in-Force (RIF) Action (including employees who are 
offered and accept a vacancy at a lower broadband level or in a 
different career path). The employee is entitled to pay retention if 
all title 5 conditions are met.
    (g) Return to Limited or Light Duty from a Disability as a Result 
of Occupational Injury to a Position in a Lower Broadband Level or to a 
Career Path with Lower Salary Potential than Held Prior to the Injury. 
The employee is entitled indefinitely to the salary held prior to the 
injury and will receive full general and locality pay increases.
2. Contribution-based Reduction-in-Pay or Removal Actions
    CCAS is a contribution-based appraisal system that goes beyond a 
performance-based rating system. Contribution is measured against six 
critical factors corresponding to the three career paths, each having 
multiple levels of increasing contribution. (For the purposes of this 
section, critical factors are synonymous with critical elements as 
referenced in 5 U.S.C. Chapter 43.) This section applies to reduction 
in pay or removal of demonstration project employees based solely on 
inadequate contribution. Inadequate contribution in any one factor at 
any time during the appraisal period is considered grounds for 
initiation of reduction-in-pay or removal action. The following 
procedures replace those established in 5 U.S.C. 4303 pertaining to 
reductions in grade or removal for unacceptable performance except with 
respect to appeals of such actions. 5 U.S.C. 4303(e) provides the 
statutory authority for appeals of contribution-based actions. As is 
currently the situation for performance-based actions taken under 5 
U.S.C. 4303, contribution-based actions shall be sustained if the 
decision is supported by substantial evidence and the Merit Systems 
Protection Board shall not have mitigation authority with respect to 
such actions. The separate statutory authority to take contribution-
based actions under 5 U.S.C. 75, as modified in the waiver section of 
this notice (section IX), remains unchanged by these procedures.
    When an employee's contribution in any factor is at or less than 
the mid-point of the next lower broadband level (or a factor score of 
zero for broadband level 1 employees), the employee is considered to be 
contributing inadequately. In this case, the supervisor must inform the 
employee, in writing, that unless the contribution increases to a score 
above the midpoint of this next lower broadband level, and is sustained 
at this level, the employee may be reduced in pay or removed. For 
broadband level 1 employees, a factor score that increases to and is 
sustained above zero is determined to be adequate.
    This written notification will include a contribution improvement 
plan (CIP) which outlines specific areas in which the employee is 
inadequately contributing. Additionally, the CIP must include actions 
required of the employee, and the time in which they must be 
accomplished, to increase and sustain the employee's contribution at an 
adequate level.
    Additionally, when an employee's contribution plots in the area 
above the upper rail of the normal pay range, the employee is 
considered to be contributing inadequately. In this case, the 
supervisor has two options. The first is to take no action but to 
document this decision in a memorandum for the record. A copy of this 
memorandum will be provided to the employee and to higher levels of 
management. The second option is to inform the employee, in writing, 
that unless the contribution increases to, and is sustained at, a 
higher level, the employee may be reduced in pay or removed.
    These provisions also apply to an employee whose contribution 
deteriorates during the year. In such instances, the group of 
supervisors who meet during the CCAS assessment process may reconvene 
any time during the year to review the circumstances warranting the 
recommendation to take further action on the employee.
    When the rating official informs the employee that the employee may 
be reduced in pay or removed, the rating official will afford the 
employee a

[[Page 14318]]

reasonable opportunity (a minimum of 60 days) to demonstrate acceptable 
contribution with regard to identifiable factors. As part of the 
employee's opportunity to demonstrate adequate contribution, he or she 
will be placed on a contribution improvement plan (CIP). The CIP will 
state how the employee's contribution is inadequate, what improvements 
are required, recommendations on how to achieve adequate contribution, 
assistance that the agency shall offer to the employee in improving 
inadequate contribution, and consequences of failure to improve.
    Once an employee has been afforded a reasonable opportunity to 
demonstrate adequate contribution but fails to do so, a reduction-in-
pay (which may include a change to a lower broadband level and/or 
reassignment) or removal action may be proposed. If the employee's 
contribution increases to an acceptable level and is again determined 
to deteriorate in any factor within two years from the beginning of the 
opportunity period, actions may be initiated to effect reduction in pay 
or removal with no additional opportunity to improve. If an employee 
has contributed acceptably for two years from the beginning of an 
opportunity period, and the employee's overall contribution once again 
declines to an inadequate level, the employee will be afforded an 
additional opportunity to demonstrate adequate contribution before it 
is determined whether or not to propose a reduction in pay or removal.
    An employee whose reduction in pay or removal is proposed is 
entitled to a 30-day advance notice of the proposed action that 
identifies specific instances of inadequate contribution by the 
employee on which the action is based. The employee will be afforded a 
reasonable time to answer the notice of proposed action orally and/or 
in writing.
    A decision to reduce in pay or remove an employee for inadequate 
contribution may be based only on those instances of inadequate 
contribution that occurred during the two-year period ending on the 
date of issuance of the proposed action. The employee will be issued 
written notice at or before the time the action will be effective. Such 
notice will specify the instances of inadequate contribution by the 
employee on which the action is based and will inform the employee of 
any applicable appeal or grievance rights.
    All relevant documentation concerning a reduction in pay or removal 
that is based on inadequate contribution will be preserved and made 
available for review by the affected employee or a designated 
representative. As a minimum, the records will consist of a copy of the 
notice of proposed action; the written answer of the employee or a 
summary when the employee makes an oral reply; and the written notice 
of decision and the reasons therefor, along with any supporting 
material including documentation regarding the opportunity afforded the 
employee to demonstrate adequate contribution.

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

    The proposed RIF system will have a single round of competition to 
replace the current two-round process. Once the position to be 
abolished has been identified, the incumbent of that position may 
displace another employee when the incumbent has a higher retention 
standing and is fully qualified for the position occupied by the 
employee with lower standing. Retention standing is based on tenure, 
veterans' preference, length of service, and contribution, preserving 
the same weights as today's system. The ``undue disruption'' standard 
currently utilized will serve as the criterion to determine if an 
employee is fully qualified. In addition, to be fully qualified, the 
employee must meet DAWIA statutory requirements for the position, if 
applicable. The displaced individual may similarly displace other 
employees. Displacement is normally limited to one broadband level 
below the employee's present level. However, a preference-eligible 
employee with a compensable service-connected disability of 30 percent 
or more may displace up to the equivalent of five General Schedule 
grades below the employee's present level. If/when there is no position 
in which an employee can either be placed by this process or be 
assigned to a vacant position, that employee will be separated.
    An employee's entitlement to additional service credit associated 
with appraisal results will be based on the employee's three most 
recent annual overall contribution scores (OCSs) of record received 
during the four-year period prior to the issuance of reduction-in-force 
notices (see Table 7). However, if at that time three CCAS cycles have 
not yet been completed, the annual performance rating of record under 
the previous performance management system will be substituted for one 
or more OCSs, as appropriate. The value(s) of the actual OCS(s) or 
performance rating(s) of record will be divided by the number of actual 
rating(s) received. In cases where an individual employee has no annual 
OCS or performance rating of record, a modal OCS or performance rating 
will be assigned and used to determine the additional service credit 
for that individual.
    The new system will eliminate current provisions for retained 
grade, but will keep retained pay provisions as outlined in 5 U.S.C. 
5363 and 5 CFR 536.101 as modified in the waiver section of this notice 
(section IX). All positions within commands participating in the 
demonstration project and located within the same commuting area may be 
considered a separate competitive area.

G. Academic Degree and Certificate Training

    Trained and educated personnel are a critical resource in an 
acquisition organization. This demonstration recognizes that training 
and development programs are essential to improving the performance of 
individuals in the acquisition workforce, and thereby raising the 
overall level of performance of the acquisition workforce, and that a 
well-developed training program is also a valuable tool for recruiting 
and retaining motivated employees. Currently, DAWIA authorizes degree 
and certificate training for acquisition-coded positions through the 
year 2001. This demonstration extends that authority for the duration 
of this demonstration and expands its coverage to the acquisition 
support positions identified in this demonstration project. It also 
provides authorization at the local level to administer and pay for 
these degree and certificate training programs. This authorization will 
facilitate continuous acquisition of advanced, specialized knowledge 
essential to the acquisition workforce and provide a capability to 
assist in the recruiting and retaining of personnel critical to the 
present and future requirements of the acquisition workforce. Funding 
for this training, while potentially available from numerous sources 
(including DAWIA for employees in acquisition-coded positions), is the 
responsibility of the participating organization.

H. Sabbaticals

    Organizations participating in the Acquisition Demonstration will 
have the authority to grant sabbaticals without application to higher 
levels of authority. These sabbaticals will permit employees to engage 
in study or work experience that contributes to their development and 
effectiveness. The sabbatical provides opportunities for employees to 
acquire knowledge and expertise that cannot be acquired in the

[[Page 14319]]

standard working environment. These opportunities should result in 
enhanced employee contribution. The spectrum of available activities 
under this program is limited only by the constraint that the activity 
contribute to the organization's mission and to the employee's 
development. The program can be used for training with industry or on-
the-job work experience with public, private, or nonprofit 
organizations. It enables an employee to spend time in an academic or 
industrial environment or to take advantage of the opportunity to 
devote full-time effort to technical or managerial research.
    The Acquisition Demonstration sabbatical program will be available 
to all demonstration project employees who have seven or more years of 
Federal service. Each sabbatical will be of three to twelve months' 
duration and must result in a product, service, report, or study that 
will benefit the acquisition community as well as increase the 
employee's individual effectiveness. Requests for a sabbatical must be 
made by the employee through the chain of command to the employee's 
installation Executive Director or equivalent, who has final approval 
authority and who must ensure that the program benefits both the 
acquisition workforce and the individual employee. Funding for the 
employee's salary and other expenses of the sabbatical is the 
responsibility of the participating organization.

IV. Training

    The key to the success or failure of the proposed demonstration 
project will be the training provided for all involved. This training 
will provide not only the necessary knowledge and skills to carry out 
the proposed changes, but will also lead to participant commitment to 
the program.
    Training at the beginning of implementation and throughout the 
demonstration will be provided to supervisors, employees, and the 
administrative staff responsible for assisting managers in effecting 
the changeover and operation of the new system.
    The elements to be covered in the orientation portion of this 
training will include: (1) a description of the personnel system; (2) 
how employees are converted into and out of the system; (3) the pay 
adjustment and/or bonus process; (4) the new position requirements 
document; (5) the new classification system; and (6) the contribution-
based compensation and appraisal system.
    In conjunction with the education, training, and career development 
assets of the Military Services and DoD Agencies, the demonstration 
project team will train, orient, and keep informed all supervisors and 
employees covered by the demonstration project and administrative staff 
responsible for implementing and administering the human resource 
program changes.

A. Supervisors

    The focus of this project on management-centered personnel 
administration, with increased supervisory and managerial personnel 
management authority and accountability, demands thorough training of 
supervisors and managers in the knowledge and skills that will prepare 
them for their new responsibilities. Training will include detailed 
information on the policies and procedures of the demonstration 
project, as well as skills training in using the classification system, 
position requirements document, and contribution evaluation.

B. Administrative Staff

    The administrative staff, general 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 receive 
training in the procedural and technical aspects of the project.

C. Employees

    In the months prior to implementation, the demonstration project 
team and Military Service and DoD Agency training and career 
development offices will provide all employees covered under the 
demonstration project training through various media. This training is 
intended to fully inform all affected employees of all significant 
project decisions, procedures, and processes.

V. Conversion

A. Conversion to the Demonstration Project

    Initial entry into the demonstration project for covered employees 
will be accomplished through a full employee-protection approach that 
ensures each employee's initial placement into a broadband level 
without loss of pay. Automatic conversion from the permanent GS grade 
and step of record at time of conversion into the new broadband system 
will be accomplished. Adjustments to the employee's base salary for 
step increase and non-competitive career ladder promotion will be 
computed based on the current value of the step or promotion increase 
and a prorated share based upon the number of weeks an employee has 
completed towards the next higher step or grade, per paragraph VIII A. 
This conversion process, i.e. ``buy-in,'' is applicable to employees 
only at the initiation of the demonstration project.
    Special salary rates will no longer be applicable to demonstration 
project employees. Employees on special salary rates at the time of 
conversion will receive a new basic rate of pay computed by dividing 
their highest adjusted rate of basic pay (i.e., special pay rate, or if 
higher, the locality rate) by the locality pay factor for their area. 
All employees will be eligible for the future locality pay increases of 
their geographic area.
    When conversion into the demonstration project is accompanied by a 
simultaneous geographic move, the employee's GS pay entitlements 
(including any locality or special rate) in the new area will be 
determined before converting the employee's pay to the demonstration 
project pay system. 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. If the 
employee's rate of basic pay exceeds the maximum rate of basic pay for 
the broadband level corresponding to the employee's GS grade, the 
employee will remain at that broadband level and will receive a 
retained rate. Employees who enter the demonstration project later by 
lateral reassignment or transfer will enter at their current basic pay 
with no loss or gain due to transfer.

B. Conversion Back to the Former System

    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 procedure will be used to convert the employee's project 
pay band to a GS grade and the employee's demonstration rate of pay to 
a GS 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 assignments, 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,

[[Page 14320]]

the converted GS grade and rate will be used in applying any GS pay 
administration rules applicable in connection with the employee's 
movement out of the project (e.g., promotion rules, highest previous 
rate rules, pay retention rules) as if the GS-converted grade and rate 
were actually in effect immediately before the employee left the 
demonstration project.
1. Grade-Setting Provisions
    An employee is converted to one of the grades in their current 
broadband level according to the following rules:
    (i) The employee's adjusted rate of pay under the demonstration 
project (including any locality payment) is compared with the step 4 
rate in the highest applicable GS rate range. (For this purpose, a GS 
rate range includes a rate range in (1) the GS base schedule, (2) the 
locality rate schedule for the 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.
    (ii) 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.
    (iii) If the employee's adjusted project rate is lower than the 
applicable step 4 rate of the highest grade, the adjusted rate is 
compared with the step 4 rate of the second-highest grade in the 
employee's pay band. If the employee's adjusted rate equals or exceeds 
the step 4 rate of the second-highest grade, the employee is converted 
to that grade.
    (iv) 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.
    (v) 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.
    (vi) Exception: An employee will not be converted to a lower grade 
than the grade held by the employee immediately preceding a conversion, 
lateral assignment, or lateral transfer into the project, unless since 
that time the employee has undergone a reduction in broadband level or 
reduction in pay based upon an adverse action.
2. 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 a GS 
rate of pay in accordance with the following rules:
    (i) 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.
    (ii) An employee's adjusted rate of pay under the project 
(including any locality payment) is converted to a GS 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.)
    (iii) 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.)
    (iv) 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).
3. Employees Receiving a Retained Rate Under the Project
    If an employee is receiving a retained rate under the demonstration 
project, the employee's GS-equivalent grade is the highest grade 
encompassed in his or her broadband level. The DUSD (AR) and the DASD 
(CPP) will coordinate with OPM to prescribe a procedure for determining 
GS-equivalent pay rates for employees receiving retained rates.
4. Years of Retention Service Credit and Appraisal Rating Provisions
    Employees leaving the demonstration project will be assigned 
ratings of record that conform with pattern E of 5 CFR 430.208(d) based 
on the years of credit accumulated for the 3 most recent years during 
the last 4 years while under the demonstration project. Since the 
demonstration project does not make use of summary level designators 
(e.g., Exceptional, Level 5; Highly Successful, Level 4; Fully 
Successful, Level 3; or Unacceptable, Level 1) used in the appraisal 
system and programs constructed under 5 U.S.C. Chapter 43 and 5 CFR 
Part 430, the retention service credit that is based on the employee's 
OCS as shown in Table 7 will be translated to summary level designators 
as shown in Table 8 for use by the gaining agency.
[GRAPHIC] [TIFF OMITTED] TN24MR98.087


[[Page 14321]]


5. 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. CCAS 
base salary 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).

VI. Project Duration

    The project evaluation plan addresses how each intervention will be 
comprehensively evaluated for at least the first five years of the 
demonstration project. Major changes and modifications to the 
interventions can be made through announcement in the Federal Register, 
with OPM approval. At the five-year point, the entire demonstration 
project will be reexamined for: (a) permanent implementation; (b) 
modification and additional testing; (c) extension of the test period; 
or (d) termination.

VII. Evaluation Plan

    Demonstration-authorizing legislation (5 U.S.C. Chapter 47) 
mandates evaluation of the demonstration project to assess the effects 
of project features and outcomes. In addition, the project will be 
evaluated for the feasibility of application to other Federal Agencies. 
The overall evaluation will consist of three phases--baseline, 
formative, and summative evaluations. The evaluation for the 
participating agencies will be overseen by the Office of Merit Systems 
Oversight and Effectiveness, OPM; the Office of the Secretary of 
Defense (Acquisition & Technology); and the Office of the Deputy 
Assistant Secretary of Defense (Civilian Personnel Policy), DoD.
    The main purpose of the evaluation is to determine the 
effectiveness of the personnel system changes to be undertaken. To the 
extent possible, strong direct or indirect relationships will be 
established between the project features, outcomes, and mission-related 
changes and personnel system effectiveness criteria. The evaluation 
approach uses an intervention impact model that specifies each 
personnel system change as an intervention, the expected effects of 
each intervention, the corresponding measures, and the data sources for 
obtaining the measures. Table 9 presents the intervention impact model 
to be used for this demonstration for initiatives affecting title 5.
[GRAPHIC] [TIFF OMITTED] TN24MR98.088


[[Page 14322]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.089



[[Page 14323]]

[GRAPHIC] [TIFF OMITTED] TN24MR98.090



[[Page 14324]]

    The specific measures to be collected using the different methods 
are determined from the goals and objectives stated for each 
intervention. Both qualitative and quantitative measures will be 
obtained. Most of the potential measures can be grouped around three 
major effectiveness criteria: speed, cost, and quality. Collectively, 
the outcomes of the interventions are hypothesized to lead to agency 
personnel management improvements, as reflected by timeliness, cost 
effectiveness, and quality.
    Baseline measures will be taken prior to project implementation. 
Then, repeated post-implementation measurements will be taken to allow 
longitudinal comparisons by intervention within and across DoD 
Components. A comparison group will be selected and compared to the 
demonstration project group to determine the effects and outcomes of 
the project.
    The effectiveness of each intervention and of the project as a 
whole in meeting stated objectives will be addressed using a multi-
approach method. Some methods will be unobtrusive in that they do not 
require reactions to inputs from employees or managers. These methods 
include analysis of archival workforce data and personnel office data, 
review of logs maintained by site historians documenting contextual 
events, and assessments of external economic and legislative changes. 
Other methods such as periodic attitude surveys, structured interviews, 
and focus groups will be used to assess the perceptions of employees, 
managers, supervisors, and personnel regarding the personnel system 
changes and the performance of their organizations in general. 
Evaluation activities will also take into account the unique nature of 
this project in terms of geographic and organizational diversity.
    In addition to the intervention impact model, a general context 
model will be used to determine the effects of potential intervening 
variables (e.g., downsizing, regionalization of the personnel function, 
and the state of the economy in general). Potential unintended outcomes 
will also be monitored, and an attempt will be made by the evaluation 
team to link the outcomes or project interventions to organizational 
effectiveness. In addition to assessing the impact of the individual 
project features, the evaluation will also assess the impact of the 
project as a whole, along with possible context effects and effects of 
intervening variables. The evaluation will also monitor adherence to 
the merit systems principles and avoidance of prohibited personnel 
practices. In addition, the evaluation will attempt to link the project 
effects and outcomes to organizational outcomes such as mission 
accomplishment and productivity.
    The initial evaluation effort will consist of three main phases--
baseline, formative, and summative evaluation covering five (5) years. 
Baseline will collect workforce data to determine the ``as-is'' state. 
The formative evaluation phase will include baseline data collection 
and analyses, implementation evaluation, and interim assessments. 
Periodic reports and annual summaries will be prepared to document the 
findings. The summative evaluation phase will focus on an overall 
assessment of the project outcomes, looking initially at the first four 
(4) years, with a follow-on report covering the first five (5) years. 
The rationale for summative evaluation after the first four years is to 
assess whether the demonstration will continue after the fifth year. If 
the analysis indicates that the interventions show a positive effect 
towards meeting the goals of the demonstration, then documentation will 
be generated to support a request that the demonstration progress 
further. If the analysis indicates that the interventions do not meet 
the stated objectives, or if the participating organizations do not 
wish to continue in the demonstration, then documentation and planning 
for conversion back to the existing personnel system must be prepared. 
The fifth-year summative evaluation, used in reporting to Congress, 
will provide overall assessment of all initiatives individually and as 
a whole. It will also provide recommendations on broader Federal 
Government application.

VIII. Demonstration Project Costs

A. Step and Promotion Buy-Ins

    Under this demonstration project, implementation of the 
broadbanding pay structure eliminates the step increments of the 
current pay structure. To facilitate conversion to this system without 
loss of pay, employees will receive a basic pay increase for that 
portion of the next step corresponding to the time in-step they have 
completed up to the effective date of the employee conversion. As under 
the current system, supervisors will be able to withhold these partial 
increases (step) if the employee's performance has fallen below fully 
successful.
    Rules governing within-grade increases (WGI) within each 
participating Military Service/DoD agency will remain in effect until 
the employee conversion date. Adjustments to employees' base salary for 
WGI equity will be computed effective the first pay period in FY99 
(October 1998). WGI equity shall be acknowledged by increasing base 
salaries by a prorated share based upon the actual number of weeks an 
employee has completed towards the next higher step. Employees at step 
10, or receiving retained pay at the time of conversion will not be 
eligible for this equity adjustment. For those employees in career-
ladder promotion programs who are scheduled to be promoted to a higher 
grade and whose performance is at least fully successful, base pay will 
be increased by a prorated share of the current value of the next 
scheduled promotion increase based upon the actual number of weeks the 
employee has completed towards the next scheduled promotion. No WGI 
equity adjustment will be made if the employee's pay is adjusted for a 
promotion that would be effective before the next scheduled WGI.
    For purposes of conversion into the demonstration, the January 1999 
General Schedule increase to base pay will be given to all employees.

B. Out-Year Project Costs

    The overall demonstration cost strategy will be to balance 
projected costs with benefits of the demonstration to bring about the 
projected improvements to the DoD Acquisition Workforce. The project 
evaluation results will be used to ensure that out-year project costs 
will not outweigh the derived benefits to the demonstration. A baseline 
will be established at the start of the project, and salary 
expenditures will be tracked yearly. Implementation costs, including 
the step and grade buy-in costs detailed above, will not be included in 
the cost evaluations, but will be accounted for separately.
    The amount of money available for contribution increases in the 
out-years will be determined as part of the annual project evaluation 
process, starting with a review of the prior year's data for each 
individual participating site by the Personnel Policy Boards for that 
site, and then will be reported to the DoD Acquisition Workforce 
Demonstration Project Executive Steering Committee. The funds 
determination will be based on a balancing of appropriate factors, 
including the following: (1) Historical spending for WGI, quality step 
increases, and in-level career promotions; (2) labor market conditions 
and the need to recruit and retain a skilled workforce to meet the 
business needs of the organization; and (3) the fiscal condition of the 
organization.

[[Page 14325]]

Given the implications of base pay increases for long-term pay and 
benefit costs, the compensation levels will be determined after cost 
analysis with documentation of the mission-driven rationale for the 
amount. As part of the evaluation of the project by Military Services, 
participating Defense Agencies, DoD, and OPM, the base pay costs 
(including average salaries) under the demonstration project will be 
tracked and compared to the base pay costs under similar demonstration 
projects and under a simulation model that replicates General Schedule 
spending. These evaluations will balance costs incurred against 
benefits gained, so that both fiscal responsibility and project success 
are given appropriate weight.

C. Personnel Policy Boards

    It is envisioned that each participating DoD Component shall either 
establish a Personnel Policy Board for the demonstration project that 
will consist of the senior civilian in each Program Management Office 
and Directorate within the Component and be chaired by the Executive 
Director or modify the charter of an existing group. In either case, 
the board is tasked with the following:
    (a) Overseeing the civilian pay budget;
    (b) Addressing issues associated with two separate pay systems 
(CCAS and GS) during the first phase of the demonstration;
    (c) Determining the composition of the CCAS pay pool in accordance 
with the established guidelines; and statutory constraints;
    (d) Reviewing operation of the Component's CCAS pay pools;
    (e) Providing guidance to pay pool managers;
    (f) Administering funds to CCAS pay pool managers;
    (g) Reviewing hiring and promotion salaries;
    (h) Monitoring award pool distribution by organization and DAWIA 
vs. non-DAWIA; and
    (i) Assessing the need for changes to demonstration project 
procedures and policies.
    Should any participating Component elect not to establish a 
Personnel Policy Board, the charter of an existing group within that 
Component must be modified to include the duties detailed above.

D. Developmental Costs

    Costs associated with the development of the demonstration system 
include software automation, training, and project evaluation. These 
costs are considered shared costs and will be funded by the Deputy 
Undersecretary of Defense for Acquisition Reform (DUSD (AR)) for the 
demonstration period. Site-specific costs for follow-on training, 
employee salary conversion, and any in-house software automation will 
be borne by the individual participating sites. The projected annual 
expenses for each area are summarized in Table 10. Project evaluation 
costs will continue for at least the first five (5) years and may 
continue beyond that point.
[GRAPHIC] [TIFF OMITTED] TN24MR98.091

IX. Required Waivers to Law and Regulations

A. Waivers to Title 5, United States Code

    Chapter 5, Section 552a: Records maintained on individuals. This 
section is waived only to the extent required to clarify that 
volunteers under the Voluntary Emeritus Program are considered 
employees of the Federal Government for purposes of this section.
    Chapter 31, Section 3111: Acceptance of volunteer service. This 
section is waived only to the extent required to allow volunteer 
service under provisions of the voluntary emeritus program.
    Chapter 33, Section 3308: Competitive service; examinations; 
educational requirements prohibited; exceptions (to the extent 
necessary to accommodate the Scholastic Achievement Appointment's 
requirement for a college degree).
    Chapter 33, Section 3317(a): Competitive service; certification 
from registers (insofar as ``rule of three'' is eliminated under the 
demonstration project).
    Chapter 33, Section 3318(a): Insofar as ``rule of three'' is 
eliminated under the demonstration project. Veterans' preference 
provisions remain unchanged.
    Chapter 41, Section 4107(a).
    Chapter 43, Sections 4301-4305 except for 4303(e) and (f): Related 
to performance appraisal. In turn, 4303(e) and (f) are waived only to 
the extent necessary to: (1) Substitute ``broadband'' for ``grade'', 
and (2) provide that moving

[[Page 14326]]

to a lower broadband as a result of not receiving the full amount of a 
general pay increase because of inadequate contribution is not an 
action covered by the provisions of section 4303.
    Chapter 45, Sections 4502(a) and 4502(b).
    Chapter 51, Sections 5101-5102 and Sections 5104-5107: Related to 
classification standards and grading.
    Chapter 53, Sections 5301; 5302 (8) and (9); and 5303-5305 and 
5331-5336: Related to special pay and pay rates and systems (Sections 
5301, 5302 (8) and (9), 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 basic pay).
    Chapter 53, Section 5362: Grade retention.
    Chapter 53, Section 5363: Pay retention. This waiver applies only 
to the extent necessary to: (1) allow demonstration project employees 
to be treated as General Schedule employees; (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 (3) replace the term ``grade'' with ``broadband level.''
    Chapter 53, Section 5371: Related to health care positions. (This 
waiver applies only to the extent necessary to allow demonstration 
project employees to hold positions subject to Chapter 51 of title 5.)
    Chapter 55, Section 5545 (d): Related to hazardous duty premium pay 
(only to the extent necessary to allow demonstration project employees 
to be treated as General Schedule employees).
    Chapter 57, Sections 5753, 5754, and 5755: Related to recruitment, 
relocation, and retention payments, and supervisory differentials (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).
    Chapter 59, Section 5941: Allowances based on living costs and 
conditions of environment; employees stationed outside the continental 
United States or Alaska. (This waiver applies only to the extent 
necessary to provide that COLAs paid to employees under the 
demonstration project are paid in accordance with regulations 
prescribed by the President (as delegated to OPM)).
    Chapter 59, Section 5948: Related to physicians comparability 
allowances (only to the extent necessary to treat employees under the 
demonstration project as General Schedule employees).
    Chapter 71, to the extent its provisions (e.g., 5 U.S.C. 
7103(a)(12) and 7116) would prohibit management or the union from 
unilaterally terminating negotiations over whether the project will 
apply to employees represented by the union.
    Chapter 71, Section 7119: To the extent it gives the Federal 
Service Impasses Panel jurisdiction to resolve impasses referred to it 
by either party or both parties during or after implementation of the 
demonstration project.
    Chapter 75, Sections 7512 (3): Related to adverse action (but only 
to the extent necessary to exclude reductions in broadband level not 
accompanied by a reduction in pay and replace ``grade'' with 
``broadband level'') and 7512 (4): Related to adverse action (but only 
to the extent necessary to exclude conversions from a General Schedule 
special rate to demonstration project pay that do not result in a 
reduction in the employee's total rate of pay).

B. Waivers to Title 5, Code of Federal Regulations

    Part 300, Sections 300.601 through 300.605: Time-in-grade 
restrictions.
    Part 308, Volunteer service: Waived to allow volunteer service 
under the provisions of the voluntary emeritus program.
    Part 315, Sections 315.801 and 315.802: Probationary period.
    Part 316, Section 316.301: Term appointment (to the extent that 
modified term appointments may cover a maximum period of 6 years).
    Part 316, Section 316.303: Tenure of term employees (to the extent 
that term employees may compete for permanent status through local 
merit promotion plans).
    Part 316, Section 316.305: Eligibility for within-grade increases.
    Part 332, Section 332.402: ``Rule of three'' will not be used in 
the demonstration project.
    Part 332, Section 332.404: Order of selection is not limited to 
highest three eligibles.
    Part 351, Sections 351.402 through 351.403: Competitive Area and 
Competitive Levels; Section 351.504(a): Credit for Performance; and 
Section 351.601: Order of Release from Competitive Level.
    Part 351, Section 351.701 (b) and (c): Assignment rights (bump and 
retreat): To the extent that the distinction between bump and retreat 
is eliminated and the placement of demonstration project employees is 
limited to one broadband level below the employee's present level, 
except that a preference-eligible employee with a compensable service-
connected disability of 30 percent or more may displace up to the 
equivalent of five General Schedule grades below the employee's present 
level.
    Part 410, Section 410.308(a).
    Part 430, Subpart A and Subpart B: Performance management; 
performance appraisal.
    Part 432, Sections 432.101, 432.102, 432.106 and 432.107: (only to 
the extent necessary to (1) substitute ``broadband'' for ``grade'' and 
(2) provide that moving to a lower broadband as a result of not 
receiving the full amount of a general pay increase because of 
inadequate contribution is not an action covered by the provisions of 
section 4303).
    Part 432, Sections 432.103 through 432.105: Performance-based 
reduction-in-grade and removal actions.
    Part 451, Sections 451.106(b) and 451.107(b): Awards.
    Part 511, Subpart A; Subpart B; Subpart F, Sections 511.601 through 
511.612: Classification within the General Schedule; and Subpart G: 
Effective Dates of Position Classification Actions or Decisions.
    Part 530, Subpart C: Special salary rates.
    Part 531, Subpart B, Subpart D, Subpart E: Determining rate of pay; 
within-grade increases and quality step increases.
    Part 531, Subpart F: Locality Payments (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 basic pay).
    Part 536, Grade and Pay Retention (only to the extent necessary to 
eliminate grade retention and to provide that, for the purposes of 
applying pay retention provisions: (1) demonstration project employees 
are to be treated as General Schedule employees; (2) ``grade'' is 
replaced by ``broadband level''; and (3) 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).
    Part 550, Sections 550.703: Severance Pay, definition of 
``reasonable offer'' (by replacing ``two grade or pay levels'' with 
``one broadband level'' and ``grade or pay level'' with ``broadband 
level'') and 550.902: Hazard Pay, definition of ``employee'' (only to 
the extent necessary to allow demonstration project employees to be 
treated as General Schedule employees).
    Part 575, Sections 575.102 (a)(1), 575.202 (a)(1), 575.302 (a)(1), 
and Subpart D: Recruitment and relocation

[[Page 14327]]

bonuses, and retention allowances, and supervisory differentials (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 positions).
    Part 591, Subpart B: Cost-of-Living Allowances and Post 
Differential-Nonforeign Areas. (This waiver applies only to the extent 
necessary to allow demonstration project employees to be treated as 
employees under the General Schedule for the purposes of these 
provisions.)
    Part 752, Sections 752.401 (a)(3): Reduction in grade and pay (but 
only to the extent necessary to exclude reductions in broadband level 
not accompanied by a reduction in pay and to replace `grade'' with 
``broadband level'') and 752.401 (a)(4) (but only to the extent 
necessary to exclude conversions from a General Schedule special rate 
to demonstration project pay that do not result in a reduction in the 
employee's total rate of pay).

[FR Doc. 98-7486 Filed 43-23-98; 8:45 am]
BILLING CODE 6325-01-M