[Federal Register Volume 64, Number 5 (Friday, January 8, 1999)]
[Notices]
[Pages 1426-1492]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-79]



[[Page 1425]]

_______________________________________________________________________

Part VII





Office of Personnel Management





_______________________________________________________________________



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

  Federal Register / Vol. 64, No. 5 / Friday, January 8, 1999 / 
Notices  

[[Page 1426]]



OFFICE OF PERSONNEL MANAGEMENT


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

AGENCY: Office of Personnel Management.

ACTION: Notice of approval of a demonstration project final plan.

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

SUMMARY: Title VI of the Civil Service Reform Act, title 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. 
This demonstration project covers 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: Implementation of this demonstration project will begin by 
February 9, 1999, or earlier. Participating organizations will be 
phased into the project in accordance with the timetable approved by 
DoD and OPM in the project's implementation plan.

FOR FURTHER INFORMATION CONTACT: DoD: Richard M. Childress, Civilian 
Acquisition Workforce Personnel Demonstration, 5203 Leesburg Pike, 
Suite 1404, Falls Church, VA 22041, 703-681-6658. OPM: Gail W. Redd, 
U.S. Office of Personnel Management, 1900 E Street NW, Room 7460, 
Washington, DC 20415, 202-606-1521.

SUPPLEMENTARY INFORMATION:

1. Background

    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 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. This demonstration 
project covers 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 Civilian Acquisition Workforce Personnel 
Demonstration Project 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. This demonstration involves streamlined hiring 
processes, broadbanding, simplified job classification, a contribution-
based compensation and appraisal system, revised reduction-in-force 
procedures, expanded training opportunities, and sabbaticals.

2. Overview

    On March 24, 1998, OPM published this proposed demonstration 
project in the Federal Register (63 FR 14253). During the 60-day public 
comment period ending May 26, 1998, OPM received comments from 182 
individuals, including 37 who presented oral comments at one of the 
three public hearings. All comments were carefully considered.
    Some commentors suggested changes to areas that lie outside the 
project's scope or the demonstration project authority of 5 U.S.C. 
chapter 47. These comments are not included in the summary below.
    A number of commentors highlighted many instances of 
miscommunication and misunderstanding with the present system, as well 
as the project interventions. Others provided insight and encouragement 
to project developers. Still others emphasized the importance of 
training for all project participants.
    The following summary addresses the comments received, provides 
responses, and notes resultant changes to the original project plan in 
the first Federal Register notice. Most commentors addressed several 
topics, which were counted separately. Thus, the total number of 
comments exceeds the number of individuals cited above.

A. General Positive Comments

    Thirty-nine commentors were totally supportive of the demonstration 
and saw it as beneficial to employees, managers, the acquisition 
workforce, and the Federal civil service. One commentor thanked DoD, 
OPM, and Congress for making this project possible, saying it would 
greatly benefit workers at field-level installations. Several 
commentors said it would provide much-needed reform of workforce 
management. Others complimented the project's streamlined personnel 
management systems and application of good business practices to 
Government. Finally, several commentors simply said they looked forward 
to the project's implementation and welcomed the opportunity to 
contribute to its success.

B. Contribution-based Compensation and Appraisal System (CCAS)

    A number of positive comments were received. Three commentors 
welcomed pay adjustments based on their contributions. One said that 
pay pool panels will serve to ensure even-handed assessments and that 
poor performers ``can no longer milk the system.'' Two commentors 
viewed CCAS's varied contribution factors as a way to satisfy the 
increasing need for a multi-skilled workforce in a downsized 
environment. One commentor thought CCAS should be implemented 
immediately.
    A total of 105 comments were received about CCAS, relating to seven 
subtopics, as follows.
(1) CCAS Process
    Comments: Thirty-eight commentors thought the CCAS process was too 
complicated. Another said the Customer Relations factor seemed to 
emphasize customer satisfaction over statutory compliance, yet contract 
specialists must achieve both.
    Response: At first reading, the CCAS process may seem complicated. 
However, feedback from numerous CCAS orientation and training sessions 
throughout DoD showed that participants readily grasped the new 
system's concepts.

[[Page 1427]]

    Project developers have conducted and will continue to give 
briefings for management and the workforce across the country. 
Additionally, ``train-the-trainer'' courses have been completed so that 
the next lower echelon of trainers can spread the word. Evaluation of 
this training indicated that an understanding of the CCAS process and 
its benefits can easily be achieved.
    Each participating manager will be fully trained on the CCAS 
process and supporting software well before the end of the first 
appraisal cycle. Additionally, training materials, videotapes, and 
briefing charts are available to participating organizations, as well 
as an Internet-based tutorial.
    With respect to the Customer Relations factor, it is important to 
note that all six CCAS factors are critical factors. Accordingly, an 
employee would not be expected to violate controlling laws or 
regulations in an effort to fulfill this factor.
(2) Funds Availability and General Pay Increase
    Comments: Eight commentors inquired about funds availability for 
contribution rating increases and awards. They also believed the cost 
of living increase should be excluded from the pay pool. Nine 
commentors believed that CCAS would harm teamwork and lead to excessive 
competition among employees (or between managers and employees) for a 
finite amount of funds within a pay pool. Several others asked what 
effect achieving comparability under the Federal Employees 
Comparability Act of 1990 (FEPCA) might have on CCAS.
    Response: Regarding funds availability, the project establishes 
mandatory funding floors for pay pools, with which participating 
organizations must comply.
    As a point of clarification, the annual GS pay adjustment 
authorized under 5 U.S.C. 5303 is based on the cost of labor, not the 
cost of living. This pay increment is linked to changes in a component 
of the Employment Cost Index (ECI) that measures the overall rate of 
change in employers' wage and salary costs in the private sector. Thus, 
this pay increment is appropriately included in the pay pools.
    As to CCAS's effect on teamwork, ``Teamwork/Cooperation'' is one of 
the six CCAS factors on which participants will be rated. Employees in 
matrix-managed organizations, as well as those in functional 
organizations, will have the opportunity to work as a team to 
accomplish the mission of the organization.
    Regarding FEPCA, notwithstanding any other provision of this 
demonstration project, if General Schedule employees receive an 
increase under 5 U.S.C. 5303 that exceeds the amount otherwise required 
by that section on the date of this notice, the excess portion of such 
increase shall be paid to demonstration project employees in the same 
manner as to General Schedule employees. The excess portion of such 
increase shall not be distributed through the pay pool process.
(3) Locality Pay
    Comments: Several commentors disagreed with including locality pay 
in the pay pools.
    Response: The commentors were apparently misinformed; locality pay 
is not included in pay pool funding. Demonstration project employees 
will continue to receive locality pay as they do now.
(4) CCAS Implementation
    Comments: Three commentors suggested that overall contribution 
scores be related to the current system with an adjective rating. One 
commentor said special rates should continue in effect to attract 
quality personnel. Another said that all employees rated ``above the 
rails'' (i.e., in the ``A'' region) would be reduced in basic pay, 
which in turn would reduce their retirement annuities. Several objected 
to the terms ``overcompensated'' and ``undercompensated'' for employees 
rated above and below the rails, respectively.
    Response: The project itself does not incorporate adjective 
ratings, but it does provide an adjective rating that corresponds to 
the current system for use when employees leave the demonstration 
project.
    The project does not use special rates. However, increased 
opportunities for pay progression under broadbanding should more than 
offset this. Additionally, former special rate employees will now 
receive locality pay, for which they previously were ineligible. 
Managers will also have greater flexibility to set pay above the 
minimum rate of the range upon initial appointment and promotion under 
the demonstration's broadbanding system.
    A fundamental purpose of CCAS is to compensate employees 
appropriately. However, employees rated in the ``A'' region are not 
automatically reduced in pay. Rather, the supervisor decides whether 
corrective action is needed. If so, as under the current system, the 
supervisor informs the employee in writing, and the employee is placed 
on an improvement plan that provides a reasonable opportunity to 
demonstrate acceptable contribution for the identified factors. 
Reduction in pay can occur only if the employee fails to complete the 
plan successfully.
    Finally, CCAS terminology was changed to ``inappropriately 
compensated'' above or below the rails.
(5) Pay Pool Process
    Comments: One commentor suggested that the project plan set forth 
criteria for establishing pay pools. One commentor thought the 
recommended upper limit for the number of employees in a pay pool (300) 
should be made mandatory. Four believed panels should include union 
representation. Three said that only the immediate supervisor should 
determine an employee's overall contribution score (OCS). Several 
commentors said pay pool results should be made available to employees.
    Response: Pay pools will be established as determined by the 
participating DoD Components. The suggested size of pay pools ranges 
from 35 to 300 employees. Components have flexibility in this area in 
order to be able to tailor the pay pool process to meet their varied 
organizational needs.
    Activities whose employees are represented by a union are 
encouraged to invite that union to participate in the pay pool process. 
The project plan and operating procedures have been modified to 
incorporate this feature.
    Rather than relying on a single individual (the immediate 
supervisor), CCAS uses the pay pool panel process to ensure fairness 
and consistency in determining each employee's OCS.
    Finally, pay pool managers are encouraged to convey the outcomes of 
the CCAS assessment process, in the aggregate, to employees within 
their pay pool. This may be done, for example, by providing to 
individual employees a scattergram depicting the OCS plot of the pay 
pool, both before and after salary adjustment, with only the 
individual's name shown on the scattergram. The software developed to 
support CCAS can provide this information.
(6) Overall Contribution Scores
    Comments: Eight commentors believed CCAS would disadvantage current 
GS-15 employees at step 7 and above. Such employees would have to 
achieve near-perfect scores in all factors in order for their OCSs to 
fall between the rails (i.e., in the ``C'' region). These commentors 
believed the OCS methodology should be changed to

[[Page 1428]]

permit such employees' high achievement to be documented.
    Response: The PAT adopted this comment and changed the scoring. A 
new score category of ``very high'' has been established for those at 
the top range of broadband level IV in the Business Management and 
Technical Management Professional career path. For consistency and as 
an outgrowth of this comment, scoring was similarly changed for the 
other two career paths.
(7) Appraisal Cycle
    Comments: One commentor suggested that pay adjustments take effect 
the first pay period of September. Another thought the cutoff date for 
appraisals should be changed to August to allow more time for pay pool 
panel meetings.
    Response: These comments were not adopted. Processing the CCAS and 
locality pay increases simultaneously in January will streamline 
administrative processes. The operating procedures set forth the steps 
necessary for pay pool panels to perform their tasks timely.

C. Management Issues

    A number of positive comments were received. Seven commentors 
supported the demonstration because it gives management necessary 
flexibility, reduces administrative costs, enhances employees' career 
advancement, and improves personnel administration. Many commentors 
advocated the demonstration because it offers increased opportunity for 
them personally. Others viewed the project's compensation and hiring 
features as a way to attract and retain highly qualified personnel.
    Additional comments on the management aspect of the demonstration 
may be divided into eight subtopics, as follows.
(1) Fairness
    Comments: Thirty-eight commentors thought favoritism and the ``good 
old boy'' system would drive the demonstration and lead to inequitable 
treatment of employees. Several employees said managers would now 
determine their pay increases and, ultimately, their retirement 
annuities. Others said that monetary awards would be given to employees 
who do not challenge authority and are part of a favored clique.
    Response: The demonstration establishes a structured, group review 
process to assess employees' contributions to the mission. This process 
is designed to reduce favoritism and promote fairness.
    Specifically, the use of pay pool panels ensures that individual 
supervisors' ratings are reviewed by their peers (i.e., by other raters 
in the same pay pool) and by the supervisor of all raters in that pool. 
In addition, rated employees are rank-ordered by the entire pay pool 
panel. The intent here is not so much to require ranking per se as to 
ensure that inflation or deflation by any rater will be identified and 
corrected via the normal operation of the panel process. Finally, the 
pay pool manager (who is generally at a higher organizational level 
than all the above-mentioned supervisors) oversees and approves the 
results of the group review process.
    A focused training session has been developed to teach supervisors 
and managers how to administer CCAS correctly. Additionally, a third-
party evaluator continually collects data on project operation and 
monitors compensation trends, among other areas.
    In summary, the pay pool panel process, managerial training, and 
continuing evaluation all guard against favoritism and promote fairness 
for employees under the demonstration.
(2) Managerial Preparedness
    Comments: Three commentors thought current acquisition managers 
need preparation for the challenge of administering CCAS.
    Response: A very robust training program will be provided for all 
supervisors and managers of demonstration participants so that they may 
gain confidence and competence in performing their duties.
(3) Waivers of Federal Civil Service Laws and Regulations
    Comments: A number of commentors thought the Federal Register 
notice's list of waivers would diminish or eliminate employee 
protections.
    Response: Waivers are an integral part of any Federal personnel 
demonstration project. Their purpose is to permit innovation, not to 
diminish employees' rights. A demonstration project is defined as--

a project conducted by the Office of Personnel Management, or under 
its supervision, to determine whether a specified change in 
personnel management policies or procedures would result in improved 
Federal personnel management (5 U.S.C. 4701(a)(4)).

    Under 5 U.S.C. chapter 47, OPM is permitted to waive civil service 
laws and regulations to enable an agency, such as DoD, to conduct 
demonstration projects by experimenting with new and innovative 
personnel systems. Examples of laws and regulations that may be waived 
for demonstration purposes include methods of: appointment to 
positions; classification and compensation; assignment, reassignment, 
or promotion; and providing incentives. However, no waivers of law are 
permitted in the areas of employee leave, employee benefits, equal 
employment opportunity, political activity, merit system principles, or 
other prohibited personnel practices.
    To sum up, the Civilian Acquisition Workforce Personnel 
Demonstration is conducted jointly by DoD and OPM. Its innovations 
require waivers of various civil service laws and regulations.
(4) Work Assignments
    Comments: Thirty-two commentors raised the possibility of 
favoritism in work assignments. They said managers could assign high-
visibility tasks to certain employees and lower-level work to others, 
with predictable results when employees were compensated for their 
contributions. However, another commentor said this was possible under 
the current compensation system; it would remain so regardless of what 
system was implemented.
    Response: Management will continue to determine work assignments. 
However, under the demonstration, work assignments will increasingly 
focus on supporting mission requirements, enhancing employees' 
capabilities, and providing employees with opportunities for career 
broadening and training.
    Employees are responsible to ensure that management understands 
their capabilities and their desire to increase their contributions to 
the organization's mission. Employees should respond to work assignment 
opportunities in a proactive, rather than reactive, manner. Under the 
project, managers and employees can arrive at mutually agreeable 
opportunities to increase contributions to the organization's mission.
(5) Exercise of Managerial Authority
    Comments: Seven commentors said managers could abuse their 
authority regarding employees' pay raises. For instance, managers who 
are engineers might view only other engineers as high contributors.
    Response: Several project features help ensure visibility for all 
employees and fair assessment of both technical and functional 
contributions. In this regard, each of the six CCAS factors has 
multiple levels of increasing contribution corresponding to the 
broadband levels. Each factor contains descriptors for each respective 
level within the relevant career path. The

[[Page 1429]]

descriptors state what is important to the mission of the organization 
and describe employees' contributions at different broadband levels. 
Thus, work performed by individuals in a particular career path is 
evaluated against the same descriptors, and contribution is determined 
by a group consensus through the pay pool panel process.
(6) Dual Personnel Systems
    Comments: Five commentors projected additional workload for 
supervisors and civilian personnel/human resources staffs as a result 
of maintaining two personnel systems.
    Response: The FY 96 National Defense Authorization Act encouraged 
DoD to conduct a demonstration project for the acquisition workforce. 
In an effort to minimize the need for two personnel systems within this 
workforce, project developers made every effort to encourage eligible 
organizations and unions to participate.
    There is precedent for operating dual personnel systems. Seven 
science and technology laboratory demonstration projects are already in 
operation within the Military Services. Most of these projects do not 
include all employees within a demonstration organization.
(7) Leadership/Supervision Factor
    Comments: Seven commentors thought this factor did not emphasize 
safety and health, equal employment opportunity (EEO), etc. Some asked 
how employees' movement through the broadbands related to existing 
affirmative action (AA) goals.
    Response: Nothing in this project waives safety, health, or equal 
employment opportunity principles. Managers will apply existing 
principles appropriately in determining employees' overall contribution 
scores for this factor. A statement which specifically addresses these 
concerns has been added to all career paths for the Leadership/
Supervision factor.
    The demonstration is not intended to alter existing equal 
employment opportunity or affirmative action programs. Part of the 
project's intended cultural change, however, is to think in terms of 
broadband levels in lieu of GS grades. As a result, participating DoD 
components and activities may adjust their affirmative action plans and 
goals to accommodate broadband levels.
    Finally, through the project's evaluation process, trends will be 
identified. Any adverse trends may result in modifications to the 
ongoing demonstration project in those areas.
(8) Participation in the Project
    Comments: Twelve commentors questioned their own participation in 
the project. Some engineers wanted to be included, while several 
interns did not.
    Response: The respective DoD Components decided whether or not to 
participate. Each Component determined which organizations--and which 
positions within those organizations--would participate.

D. Broadbanding

    A number of positive comments were received. Many commentors said 
broadbanding, with its seamless progression through the rate range, 
would be very beneficial to employees.
    Additional comments received on this aspect of the personnel 
demonstration project were related to three subtopics, as follows.
(1) Broadband Structure
    Comments: A number of commentors asked why particular grades were 
grouped into a given broadband and recommended changes. Two commentors 
wanted one broadband for all 15 GS grades, while others said they did 
not want to be placed in the same broadband with lower graded 
employees. One commentor suggested that broadbands be adjustable 
locally to suit a particular workforce. Additionally, several 
commentors said employees at the top of a broadband would lack 
potential for basic pay progression. Finally, two commentors raised an 
issue about promotions under broadbanding.
    Response: When grouping GS grades into broadbands, project 
developers sought input from various sources, including other 
demonstrations, DoD, and OPM. Developers then identified natural 
breakpoints within a grouping of similar duties and responsibilities 
and used the breakpoints to determine broadband structure. (For 
instance, in most participating organizations, the journeyman level 
lies at GS-12 and 13 for the Business Management and Technical 
Management Professional career path. Hence, these two grades were 
combined into one broadband. Similarly, since GS-14s and 15s are 
generally the management core of an organization, it was logical to 
group these two grades into one broadband.) A standard broadband 
structure throughout the demonstration will ensure project integrity 
and facilitate project evaluation.
    Some employees in the project will be paid at the maximum rate for 
a broadband level, just as some are now at step 10 of a GS grade. Most 
such employees will be able to compete for promotion to a higher 
broadband and be eligible for contribution awards. A significant 
advantage of the project for all employees is that it sets aggregate 
funding thresholds for these awards, whereas under the current system, 
no similar funds are guaranteed.
    Under broadbanding, employees have greater advancement 
opportunities across a broad range of salary rates. Competitive 
promotion will continue to be required between broadbands, but most 
salary advancement will take the form of contribution rating increases.
(2) Occupational Series
    Comments: Some commentors thought it was important to maintain the 
integrity of career fields, given that different occupational series 
are being combined into a given career path. Some commentors said the 
project included too many series, but others pointed out that it did 
not include all series in the acquisition and support workforce.
    Response: Occupational series will remain in effect, and existing 
requirements for education and experience will be maintained. Degree or 
other specific requirements (including DAWIA certification) that now 
exist for certain occupations will be unchanged. Table 2 was amended to 
include all occupational series involved in the acquisition process, to 
include the support workforce.
(3) Contribution-Based Actions
    Comments: Several commentors sought to ensure that contribution-
based actions would be well-founded and reviewable by the Merit Systems 
Promotion Board.
    Response: Contribution-based actions must meet the same standard of 
evidence as performance-based actions under the current system and are 
reviewable by the Board.

E. Academic Degree and Certificate Training

    Eleven comments were received about this initiative, nine of them 
positive.
    Comments: Commentors appreciated the new ability for Administrative 
Support and Technical Management Support employees to pursue 
educational opportunities. They also supported extending the time for 
degree and certificate training throughout the project's duration. This 
initiative will help attract the next-generation worker, they said.
    Two commentors criticized DoD's paying for employees' education and 
then not capitalizing on its investment.

[[Page 1430]]

    Response: Management and employees must work together to structure 
work assignments that take advantage of employees' skills and 
education.

F. Classification

    Twenty-two comments regarding two subtopics were received about 
this initiative.
(1) Classification Process
    Comments: Under the demonstration, position requirements documents 
(PRDs) combine position information, staffing requirements, and 
contribution expectations into a single document that replaces current 
agency-developed position description forms. Several commentors sought 
accurate PRDs that can capture unique position characteristics. While 
one commentor thought writing PRDs was burdensome, two others differed, 
saying they saw the value in a simplified process that reduces 
administrative costs and processing times. Two commentors asked how PRD 
factors relate to broadband levels, and two others asked who would 
approve PRDs. Several commentors wanted assurance that line managers 
will be prepared to assume classification authority.
    Response: COREDOC, an interactive software program designed for 
development of PRDs, will be available to assist managers, along with 
training on classification. Unique position characteristics may be 
annotated in the PRDs' remarks section. Classification authority rests 
with the local commander and may be re-delegated no lower than one 
management level above the first-line supervisor of the employee or 
position under review. Personnel specialists will provide on-going 
consultation and guidance to managers and supervisors throughout the 
classification process.
(2) Classification Appeals
    Comments: One commentor suggested setting time frames to process 
classification appeals. Several said the accuracy of PRDs should be 
appealable.
    Response: The project does not change existing time frames for 
classification appeals. As under the current system, employees may not 
appeal the accuracy of a PRD, but instead may raise the issue under an 
applicable grievance procedure.

G. Reduction-in-Force (RIF)

    The 38 comments about this initiative centered on four items.
(1) Definition of Competitive Area
    Comments: Eighteen commentors wanted the same competitive area to 
cover project and non-project employees.
    Response: Project developers seriously reconsidered the matter of 
competitive areas, and two mock RIFs were subsequently run. This 
exercise compared a scenario with an entire workforce in the same 
competitive area against a second scenario with separate competitive 
areas for project and non-project employees. The overall difference in 
outcome between the two mock RIFs was negligible. However, the 
demonstration and the standard title 5 personnel systems are very 
different with respect to their classification, compensation, and 
performance management/contribution programs. The same-area scenario 
proved inadequate to accommodate those differences when employees were 
moved via RIF between the two systems. Additionally, project developers 
sought input from other demonstration projects, DoD, and OPM. All of 
these supported the separate-areas concept. Accordingly, the project 
plan was amended to specify that employees under this demonstration 
shall be placed in a different competitive area from those who are not 
covered.
(2) Retention Rights
    Comments: Other commentors said the project should not diminish 
retention of employees.
    Response: The project's procedures are not intended to diminish 
retention. Under the current system, employees may only retreat to 
positions they have previously held. The project eliminates this 
restriction. If qualified for the position in question, a project 
employee may displace any other project employee with a lower retention 
standing.
(3) DoD Downsizing; Base Re-alignment and Closure (BRAC)
    Comments: Five commentors raised the issue of conducting a 
demonstration in times of downsizing and BRAC.
    Response: The project has no influence over downsizing or BRAC 
determinations. However, it does represent a valuable opportunity to 
enhance the quality, professionalism, and management of the DoD 
acquisition workforce through an improved human resources management 
system. The FY 96 and 98 National Defense Authorization Acts encouraged 
DoD to conduct this demonstration and established a 1999 time frame to 
commence implementation.
(4) Years of Retention Service Credit
    Comments: Several commentors noted that the years of retention 
service credit in Table 7 were not consistent with OCS scores in the 
``inappropriately compensated-below the rails'' (B) region.
    Response: Table 7 was constructed in relation to the OCS normal 
range. Generally, employees whose OCSs fall within or above the top 
third of the OCS normal range for their career path and broadband level 
receive 20 years of retention service credit; those in the middle 
third, 16 years; and those in the lower third, 12 years. However, this 
breakout varies somewhat for broadband level I of each career path in 
order to accommodate the fact that the bottom of the OCS normal range 
for level I is zero.

H. Veterans' Issues

    Ten commentors said that veterans' entitlements were being eroded.
    Comments: Most of these commentors thought veterans were not 
treated fairly under this project. Specifically, they said, disabled 
veterans are at a disadvantage in scientific, engineering, and 
professional positions; veterans serving during peacetime are not 
treated fairly; and reduction-in-force rights for 5-point veterans are 
not specifically addressed when they are in the same broadband level 
with non-veterans. One commentor wanted to eliminate veterans' 
preference entirely during the hiring process, and another recommended 
a tie-breaking method or statement regarding current pass-over 
procedures.
    Response: All current veterans' preference entitlements have been 
and will be protected throughout the duration of this demonstration 
project; none have been eroded. DoD operating procedures give specific 
instructions about honoring veterans' preference during hiring and 
reduction in force.

I. Sabbaticals

    Seven comments were received on this initiative; six were positive.
    Comments: One commentor saw no real change from the current system, 
but the remainder supported this initiative's availability to all 
project participants, saying it especially benefits those who have 
never been in a manufacturing or industrial environment. One commentor 
asked whether academia, industry, or the parent organization was 
responsible for funding sabbaticals.
    Response: Under the current system, sabbaticals are available only 
to members of the Senior Executive Service. The demonstration expands 
this feature to all project employees.

[[Page 1431]]

The parent organization is responsible for funding this initiative.

J. Voluntary Emeritus Program

    Nine comments were received regarding this initiative, addressing 
three subtopics.
(1) Positive Response
    Comments: The commentor saw this program as an opportunity for the 
Government to benefit from highly qualified personnel who would provide 
their experience, judgment, and expertise on a voluntary basis.
(2) Effect on Permanent Employment
    Comments: Four commentors said this initiative would reduce 
permanent employment. One saw it as a way to induce senior employees to 
retire and then return to work without appropriate compensation.
    Response: The intent of this initiative is to afford retirees 
(primarily professionals in the Business Management and Technical 
Management Professional career path) an opportunity to return as a 
volunteer mentor. The project plan very clearly states that, ``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.''
(3) Unfair Labor Practice
    Comments: Four commentors said this program could be used 
inappropriately to obtain free labor and constitutes an unfair labor 
practice.
    Response: A personnel policy and legal review of the project plan 
during the coordination process determined that this initiative is 
lawful and appropriately administered.

K. Factors and Weights

    Three comments were received in this area.
    Comments: Some commentors said that the factors, discriminators, 
and descriptors used to evaluate employees' contributions were too 
general and not meaningful. Another thought technical competency should 
be addressed in the Business Management and Technical Management 
Professional career path.
    Response: The six factors are inherent in every job and form the 
framework for evaluating employees' contributions. Technical 
competency, while not a separate factor, is encompassed in the Problem 
Solving factor. The descriptors for the four broadband levels identify 
increases in scope, complexity, independence, and creativity. Employees 
must have a sufficient degree of technical competency at all broadband 
levels in order to solve the problems presented to them. Thus, the 
level at which they solve problems permits an assessment of their 
technical competency.

    Dated: December 28, 1998.
Janice R. Lachance,
Director, Office of Personnel Management.

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 
authority 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 This demonstration project 
will provide managers, at the lowest practical level, the authority, 
control, and flexibility 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 effectively manage multi-million-dollar programs. Additionally, 
Integrated Product Teams (IPTs) require multi-skilled personnel who can 
function in a dynamic team environment. 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

[[Page 1432]]

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 manager's ability and authority to 
manage the acquisition workforce effectively.

C. Changes Required/Expected Benefits

    This project will demonstrate that a human resources 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.

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, and the Office of the Under Secretary of Defense 
(Acquisition and Technology). Participating organizations are shown in 
Table 1.

BILLING CODE 6325-01-P

[[Page 1433]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.023



[[Page 1434]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.024



BILLING CODE 6325-01-C
    Note:
     AFMC/SMC/DET11/Peterson AFB: DET 11 was realigned from HQ 
AFMC, June 98
     AFMC/SMC/Washington DC: Based on a realignment, deleted 
SMC/AX and changed to SMC/XR
     AFMC/SMC/Schriever AFB: Realigned from HQ AFMC, Jun 98
     AFMC/SMC/Los Angeles AFB: TE (newly established 
organization); 61SFS realigned/established Aug 98; change 66 ABG to 61 
ABG (was a typo)

BILLING CODE 6325-01-P

[[Page 1435]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.025



[[Page 1436]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.026



[[Page 1437]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.027



Billing Code 6325-01-C

F. Participating Employees

    In determining the scope of the demonstration project, primary 
consideration was given to the number and diversity of occupations 
within 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 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 resources management design 
goals and priorities for the entire civilian workforce were considered.

[[Page 1438]]

While the intent of this project is to provide DoD activities with 
increased control and accountability for their covered workforce, 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 may be included, as determined by their organizations or 
components. 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. 
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 organizations and series 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, 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 organization and series 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 the OSD Acquisition Workforce Personnel Demonstration 
Project Office.

BILLING CODE 6325-01-P

[[Page 1439]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.028



[[Page 1440]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.029



[[Page 1441]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.030



[[Page 1442]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.031



[[Page 1443]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.032



[[Page 1444]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.033



[[Page 1445]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.034



[[Page 1446]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.035



BILLING CODE 6325-01-C
    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 will be 
required.
    Current demographics and union representation for the positions 
covered by this demonstration project are shown in Table 3.

BILLING CODE 6325-01-C

[[Page 1447]]

Table 3--DoD Acquisition Workforce Demographics and Union 
Representation
[GRAPHIC] [TIFF OMITTED] TN08JA99.036


BILLING CODE 6325-01-C
    Of the 14,766 personnel assigned to this project, 5,161 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. 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 resources 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. 4703. The remainder is subject to policies 
established by DoD; waivers were approved at that level.

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 quick response to economic and 
population changes. Line managers find

[[Page 1448]]

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 resources 
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 
more rapidly to 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 
establishes a streamlined examining process. This process may be used 
to fill positions covered by this demonstration project, with the 
following exceptions: positions in the Senior Executive Service or the 
Executive Assignment System; Senior Level (ST/SL) positions; 
Administrative Law Judge positions; and positions subject to any 
examining process covered by court order.
    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 positions(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 to 79); 
Highly Qualified (score of 80 to 89); 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 
then be certified; should this process not yield a sufficient number, 
groups will be certified sequentially until a selection is made or the 
qualified pool is exhausted. 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 demonstration project 
establishes 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 adapt the workforce rapidly to these 
changes. This demonstration project provides a method to expand and 
contract the workforce as needed. Under this demonstration project 
there are three appointment options: permanent, temporary limited, and 
modified term appointments. The permanent option is the existing career 
and career-conditional appointments. The temporary limited option is 
the existing temporary-authority-not-to-exceed-one-year appointment. 
The modified term option is 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.

[[Page 1449]]

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 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 from the appropriate register or if 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 through 315.610 inclusive, or under Sec. 315.703;
    (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));
    (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; or
    (h) A person eligible under OPM interchange agreements.
    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 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 Program 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 Program, 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 Program 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/Human Resources 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;

[[Page 1450]]

(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 purposes as retirement, severance 
pay, and leave as a result of being a member of the Voluntary Emeritus 
Program;
    (h) a provision allowing either party to void the agreement with 
ten days' written notice; and
    (i) the level of security access required.
4. Extended Probationary Period
    For employees in the Business Management and Technical Management 
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 
Business Management and Technical Management 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 applies 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 a 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 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. Career paths are designated by 
NH, NJ, or NK; see chart below. Competitive promotions will be less 
frequent, and movement through the broadband levels will be a more 
seamless process than under current procedures. Like the 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:

BILLING CODE 6325-01-P

[[Page 1451]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.037



BILLING CODE 6325-01-C
    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 groups. The 
acquisition personnel demonstration project currently covers numerous 
series in the 22 occupational groups, and these occupational series 
will be maintained throughout 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 position under review, except in the case of those 
employees reporting directly to the commander or equivalent. First-line 
supervisors will provide classification recommendations. Personnel 
specialists will provide on-going consultation and guidance to

[[Page 1452]]

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 single 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 may 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. Positions will be evaluated as needed 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 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 5 
CFR 511.605 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/human resources office 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 mission and 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 
``inappropriately compensated--below the rails (B)'' and smaller than 
average increases are permitted for employees who are deemed to be 
``inappropriately compensated--above the rails (A)'' 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 
organization. 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

[[Page 1453]]

work meets projects/programs 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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.038


[[Page 1454]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.039



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.040


[[Page 1455]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.041



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.042


[[Page 1456]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.043



BILLING CODE 6325-01-C

FACTOR: 4.--LEADERSHIP/SUPERVISION

FACTOR DESCRIPTION
    This factor describes/captures individual and organizational 
leadership and/or supervision to include that leaders/supervisors will 
recruit, develop, motivate, and retain quality team members in 
accordance with EEO/AA and merit principles. Takes timely/appropriate 
personnel actions, communicates mission and organizational goals; by 
example, creates a positive, safe, and challenging work environment; 
distributes work and empowers team members.
    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.

BILLING CODE 6325-01-P

[[Page 1457]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.044



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P

[[Page 1458]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.045



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P

[[Page 1459]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.046



BILLING CODE 6325-01-C

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 projects/programs 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.

BILLING CODE 6325-01-P

[[Page 1460]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.047



[[Page 1461]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.048



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.049


[[Page 1462]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.050



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.051


[[Page 1463]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.052



BILLING CODE 6325-01-C

FACTOR: 4.--LEADERSHIP/SUPERVISION

FACTOR DESCRIPTION
    This factor describes/captures individual and organizational 
leadership and/or supervision to include that leaders/supervisors will 
recruit, develop, motivate, and retain quality team members in 
accordance with EEO/AA and merit principles. Takes timely/appropriate 
personnel actions, communicates mission and organizational goals; by 
example, creates a positive, safe, and challenging work environment; 
distributes work and empowers team members.
    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.

BILLING CODE 6325-01-P

[[Page 1464]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.053



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P

[[Page 1465]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.054



BILLING CODE 6325-01-C

[[Page 1466]]

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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.055


[[Page 1467]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.056



BILLING CODE 6325-01-C

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 projects/programs 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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.057


[[Page 1468]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.058



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.059


[[Page 1469]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.060



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.061


[[Page 1470]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.062



BILLING CODE 6325-01-C

FACTOR: 4.--LEADERSHIP/SUPERVISION

FACTOR DESCRIPTION
    This factor describes/captures individual and organizational 
leadership and/or supervision to include that leaders/supervisors will 
recruit, develop, motivate, and retain quality team members in 
accordance with EEO/AA and merit principles. Takes timely/appropriate 
personnel actions, communicates mission and organizational goals; by 
example, creates a positive, safe, and challenging work environment; 
distributes work and empowers team members.
    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.

BILLING CODE 6325-01-P

[[Page 1471]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.063



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.064


[[Page 1472]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.065



BILLING CODE 6325-01-C

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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.066


[[Page 1473]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.067



BILLING CODE 6325-01-C
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, with a notional ``very high'' score of 115 
for those employees who are capped at the top of their broadband level. 
The vertical axis spans from zero dollars to the dollar equivalent of 
GS-15, step 10. This encompasses the full salary range (excluding 
locality pay) 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 ``inappropriately 
compensated--below the rail (B),'' and those falling above the NPR are 
considered ``inappropriately compensated--above the rails (A).'' The 
goal of CCAS is to make pay consistent with employees' contributions to 
the mission of the organization.

BILLING CODE 6325-01-P

Figure 1. Normal Pay Range
[GRAPHIC] [TIFF OMITTED] TN08JA99.068


BILLING CODE 6325-01-C
    The NPR was established using the following parameters:
    1. The lowest possible score is an OCS of 0, which equates to the 
lowest base salary paid under this demonstration, GS-1, step 1.
    2. The OCS of 100 equates to the highest base salary paid under 
this demonstration, GS-15, step 10. A ``very high'' score of 115 may be 
awarded for employees in the Business Management and Technical 
Management Professional career path. When a level IV individual in this 
career path is performing above the high level (79-100) in a specific

[[Page 1474]]

factor, 115 points may be awarded. There is not a point range in the 
``very high'' category; 115 points are awarded or the individual is not 
rated ``very high''. The same is true for the other two career paths: 
Technical Support with a ``very high'' score of 95, Administrative 
Support with a ``very high'' score of 70.
    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 = (GS-1 Step 1) * (1.0800)* (1.020043) OCS
Salary lower rail = (GS-1 Step 1) * (0.9200)* (1.020043) OCS

    The integrated pay schedule and the NPR are the same for all the 
career paths. What varies 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 inappropriately 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.

BILLING CODE 6325-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.069


[[Page 1475]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.070



BILLING CODE 6325-01-C
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 and weights will be established, if 
appropriate. 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 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.

BILLING CODE 6325-01-P

[[Page 1476]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.071


[GRAPHIC] [TIFF OMITTED] TN08JA99.072


BILLING CODE 6325-01-C

    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 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

[[Page 1477]]

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).

BILLING CODE 6326-01-P
[GRAPHIC] [TIFF OMITTED] TN08JA99.073


BILLING CODE 6325-01-C

Figure 2. CCAS Compensation Categories

    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: 
inappropriately compensated--above the rails (A), appropriately 
compensated (C), or inappropriately compensated--below the rails (B). 
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 Part 
536. 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.

BILLING CODE 6325-01-P

[[Page 1478]]

TABLE 6.--COMPENSATION ELIGIBILITY CHART
[GRAPHIC] [TIFF OMITTED] TN08JA99.074


    \1\ Basic pay plus locality pay may not exceed Executive Level 
IV basic pay.
    \2\ May not exceed upper rail of NPR for employee's OCS or 
maximum salary for current broadband level.
    \3\ Over 20% requires local commander's approval.
    \4\ May not exceed 6% above the lower rail or the maximum salary 
for current broadband level.
    \5\ Pay pool manager approves up to $10,000. Amounts exceeding 
$10,000 require local commander's approval.

BILLING CODE 6325-01-C
    In general, those employees who fall in the inappropriately 
compensated--B (below the rails) category of the NPR should expect to 
receive greater percentage salary increases than those who fall in the 
inappropriately compensated--A (above the rails) 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. Notwithstanding any other provision of this demonstration 
project, if General Schedule employees receive an increase under 5 
U.S.C. 5303 that exceeds the amount otherwise required by that section 
on the date of this notice, the excess portion of such increase shall 
be paid to demonstration project employees in the same manner as to 
General Schedule employees. The excess portion of such increase shall 
not be distributed through the pay pool process.
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 by

[[Page 1479]]

February 9, 1999, or as specified in the organization's implementation 
plan approved by DoD and OPM. It is acknowledged that implementation 
will be staggered and organizations will join as they successfully 
finalize negotiated agreements. Employees will receive base pay 
adjustments for accrued within-grade increases and/or career ladder 
promotions at the time they are reassigned into the demonstration 
project. All employees under the demonstration project will receive the 
January 1999 general pay increase.
8. CCAS Grievance Procedures
    Bargaining unit employees who are covered under a collective 
bargaining agreement may grieve CCAS pay determinations under the 
grievance-arbitration provisions of the agreement. Other employees not 
included in a bargaining unit may utilize the appropriate 
administrative grievance procedures to raise a grievance against CCAS 
pay (5 CFR Part 771), with supplemental instructions as described 
below.
    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 Years of Retention Service 
Credit During Reduction in Force
    Table 7 illustrates the years of retention service credit 
associated with appraisal results:

BILLING CODE 6325-01-P

TABLE 7.--RETENTION SERVICE CREDIT ASSOCIATED WITH APPRAISAL 
RESULTS

BUSINESS MANAGEMENT AND TECHNICAL MANAGEMENT PROFESSIONAL
[GRAPHIC] [TIFF OMITTED] TN08JA99.075


[[Page 1480]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.076



BILLING CODE 6325-01-C

E. Special Situations Related to Pay

1. Change in Assignment
    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, broadband level change, or change to KSAs 
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. When an employee receiving 
a retained rate is promoted to a higher broadband level, at a minimum, 
the employee's salary upon promotion will be set in the higher 
broadband level (1) at six percent higher than the maximum rate of the 
employee's existing broadband level; or (2) at the employee's existing 
retained rate, whichever is greater.
    (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

[[Page 1481]]

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 I 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 (thereby meeting 
the standards for adequate contribution) and is sustained at this 
level, the employee may be reduced in pay or removed. For broadband 
level I 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 standards 
for adequate contribution, 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 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 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. At 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 thereof, along with any supporting material 
including documentation regarding the opportunity afforded the employee 
to demonstrate adequate contribution.

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

    RIF shall be conducted according to the provisions of 5 CFR 351, 
except as otherwise specified below.
    Displacement means the movement via RIF procedures of an employee 
into a position held by an employee of lower retention standing.
    All positions participating in the demonstration project within a 
given Component and located within the same commuting area may be 
considered a separate competitive area. Alternatively, Components may 
establish all or part of the Component at a given geographic location 
as a competitive area. In any event, employees under this demonstration 
shall be placed in a different competitive area from employees who are 
not covered.
    Employees are entitled to additional years of retention service 
credit in RIF, based on appraisal results. This credit 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 RIF notices. However, if at the time RIF notices are 
issued, 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

[[Page 1482]]

appropriate. An employee who has received at least one but fewer than 
three previous ratings of record shall receive credit for performance 
on the basis of the value of the actual rating(s) of record divided by 
the number of actual ratings received. Employees with three OCS or 
performance ratings shall receive credit for performance on the basis 
of the value of the actual ratings of record divided by three. In cases 
where an individual employee has no annual OCS or performance rating of 
record, an average OCS or performance rating will be assigned and used 
to determine the additional service credit for that individual. (This 
average rating is derived from the current ratings of record for the 
employees in that individual's career path and broadband level within 
the competitive area affected by a given RIF.) See Table 7, Retention 
Service Credit Associated with Appraisal Results.
    When a competing employee is to be released from his/her position, 
the activity shall establish separate master retention lists for the 
competitive and excepted services, by type of work schedule and (for 
excepted service master retention lists ) appointing authority.
    Within the above groups, competing employees shall be listed on the 
master retention list in descending retention standing order as defined 
by their tenure, veterans' preference, and length of service as 
determined by their adjusted service computation date. Employees will 
be listed as follows: By tenure group I, group II, group III; within 
each group by veterans' preference subgroup AD (preference eligible 
employees with a compensable service-connected disability of 30 percent 
or more), subgroup A (other preference eligible employees), subgroup B 
(non-preference eligible employees); and, within each group, by length 
of service as determined by the adjusted service computation date, 
beginning with the earliest service date.
    Employees will be ranked in order of their retention standing, 
beginning with the most senior employee. This employee may displace an 
employee of lower retention standing occupying a position that is at 
the same or lower broadband level and that is in a series for which the 
senior employee is fully qualified, to include a series in a different 
career path. The undue interruption standard of 5 CFR 351.403(a)(1) 
shall 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. (However, 
statutory waivers shall continue to apply.) The displaced employee must 
be appointed under the same authority, if excepted service, and in the 
same work schedule. Offer of assignment shall be to the position that 
requires no reduction or the least possible reduction in broadband. 
Where more than one such position exists, the employee must be offered 
the position encumbered by the employee with the lowest retention 
standing.
    Displacement rights are normally limited to one broadband level 
below the employee's present position. However, a preference-eligible 
employee with a compensable service-connected disability of 30 percent 
or more may displace up to the two broadband levels below the 
employee's present position (or the equivalent of five General Schedule 
grades) below the employee's present level.
    Employees covered by the demonstration are not eligible for grade 
retention. Pay retention will be granted to employees downgraded by 
reduction in force whose rate of basic pay exceeds the maximum salary 
range of the broadband level to which assigned. Such employees will be 
entitled to retain the rate of basic pay received immediately before 
the reduction, not to exceed 150% of the maximum salary of the lower 
broadband level.
    Under the demonstration project, all employees affected by a 
reduction-in-force action, other than a reassignment, maintain the 
right to appeal to the Merit Systems Protection Board (MSPB) if they 
believe the process/procedures were not properly applied.
    Prior to RIF, employees may be offered a vacant position in the 
same broadband as the highest broadband available by displacement. 
Employees may also be offered placement into vacant positions for which 
management has waived the qualifications requirements. If the employee 
is not placed into a vacant position and cannot be made an offer of 
assignment via displacement, the employee shall be separated.

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 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 
project 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 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 project 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

[[Page 1483]]

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 software.

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 initial entry of their organization into the demonstration 
project in accordance with their approved implementation plan.
    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, and will not receive the ``buy-
in'' applied during the initial conversion process of their 
organization into the demonstration project.

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, 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

[[Page 1484]]

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 demonstration 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 demonstration 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 
demonstration 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 demonstration 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 demonstration project, 
unless since that time the employee has undergone a reduction in 
broadband level, reduction in pay based upon an adverse action, a 
contribution-based action, a reduction-in-force action, or a voluntary 
change to lower broadband level.
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 demonstration 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., Outstanding, 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.

BILLING CODE 6325-01-P

TABLE 8.--TRANSLATION OF RETENTION SERVICE CREDIT
[GRAPHIC] [TIFF OMITTED] TN08JA99.077


BILLING CODE 6325-01-P
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

[[Page 1485]]

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 demonstration 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.

BILLING CODE 6325-01-P

TABLE 9.--INTERVENTION IMPACT EVALUATION MODEL
[GRAPHIC] [TIFF OMITTED] TN08JA99.078


[[Page 1486]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.079



[[Page 1487]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.080



[[Page 1488]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.081



[[Page 1489]]

[GRAPHIC] [TIFF OMITTED] TN08JA99.082



BILLING CODE 6325-01-C

    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 demonstration 
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 demonstration project interventions to 
organizational effectiveness. In addition to assessing the impact of 
the individual demonstration 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 impact on veterans and EEO groups, adherence to the 
merit systems principles and avoidance of prohibited personnel 
practices. In addition, the evaluation will attempt to link the 
demonstration 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 demonstration 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 GS 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 which the 
employee is reassigned into the demonstration project. 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

[[Page 1490]]

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. 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.

BILLING CODE 6325-01-P

TABLE 10.--PROJECTED DEVELOPMENTAL COST [THEN YEAR DOLLARS ($K)]
[GRAPHIC] [TIFF OMITTED] TN08JA99.083


BILLING CODE 6325-01-C

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

[[Page 1491]]

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 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) and (c): 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 two 
broadband levels below the employee's present position (or 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

[[Page 1492]]

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 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. 99-79 Filed 1-7-99; 8:45 am]
BILLING CODE 6325-01-P