[Federal Register Volume 68, Number 63 (Wednesday, April 2, 2003)]
[Notices]
[Pages 16120-16142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7816]



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Part II





Department of Defense





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Office of the Secretary



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Science and Technology (S&T) Reinvention Laboratory Personnel 
Management Demonstration Program; Notice

  Federal Register / Vol. 68, No. 63 / Wednesday, April 2, 2003 / 
Notices  

[[Page 16120]]


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DEPARTMENT OF DEFENSE

Office of the Secretary


Science and Technology (S&T) Reinvention Laboratory Personnel 
Management Demonstration Program

AGENCY: Office of the Deputy Under Secretary of Defense (Civilian 
Personnel Policy), DoD.

ACTION: Notice of amendment of demonstration project plans.

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SUMMARY: Section 342 of the National Defense Authorization Act for 
Fiscal Year 1995, as amended by Section 1114 of the National Defense 
Authorization Act for Fiscal Year 2001, authorizes the Secretary of 
Defense to conduct personnel demonstration projects at Department of 
Defense (DoD) laboratories designated as Science and Technology (S&T) 
Reinvention Laboratories. The above-cited statute authorizes the 
Department of Defense 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.

DATES: This amendment to the listed demonstration project plans may be 
implemented as early as the date of publication of the final notice of 
this change in the Federal Register. Implementation strategies will be 
developed over time as appropriate. Upon implementation, and upon 
completion of appropriate bargaining obligations for applicable 
bargaining units, the changes in this amendment shall supersede all 
previously published Federal Register notices that established or 
modified demonstration projects at one or more DoD S&T reinvention 
laboratories. The Department of Defense will consider written comments 
if received no later than May 2, 2003.

ADDRESSES: Send written comments to Patricia M. Stewart, CPMS-AF, Suite 
B-200, 1400 Key Boulevard, Arlington, VA 22209-5144.

FOR FURTHER INFORMATION CONTACT: Patricia M. Stewart, CPMS-AF, Suite B-
200, 1400 Key Boulevard, Arlington, VA 22209-5144.

SUPPLEMENTARY INFORMATION:

1. Background

    In March 2002, the Under Secretary of Defense (Personnel and 
Readiness) (USD(P&R)) directed the establishment of the Department of 
Defense (DoD) Human Resources Best Practices Task Force. The Task 
Force, consisting of representatives from both the human resources and 
functional communities, was chartered to review all demonstration 
projects in the Federal government, plus alternative personnel systems 
such as the one in operation within the National Institute of Standards 
and Technology (NIST).
    The purpose of this review was to compile best practices that show 
promise in terms of DoD's civilian human resources strategy. The Task 
Force identified best practices by reviewing initiatives that have been 
subject to testing and evaluation in demonstrations and alternative 
personnel systems (APSs). The demonstrations and APSs the Task Force 
reviewed are listed in Figure 1.

                                                   Figure 1.--Demonstration Projects and APSs Reviewed
--------------------------------------------------------------------------------------------------------------------------------------------------------
          Demonstration or APS                 Type of demonstration or APS                 Department or agency               Name of project or APS
--------------------------------------------------------------------------------------------------------------------------------------------------------
Demonstration..........................  Workforce..............................  Defense................................  Civilian Acquisition
                                                                                                                            Workforce (AcqDemo).
Demonstration..........................  Science and technology reinvention lab   Army...................................  Army Research Laboratory
                                          (STRL).                                                                           (ARL).
Demonstration..........................  STRL...................................  Army...................................  Aviation & Missile Research,
                                                                                                                            Development, & Engineering
                                                                                                                            Center (AMRDEC).
Demonstration..........................  STRL...................................  Army...................................  Engineer Research &
                                                                                                                            Development Center (ERDC).
Demonstration..........................  STRL...................................  Army...................................  Medical Research & Materiel
                                                                                                                            Command (MRMC).
Demonstration..........................  STRL...................................  Navy...................................  Naval Research Laboratory
                                                                                                                            (NRL).
Demonstration..........................  STRL...................................  Navy...................................  Naval Warfare Centers (NWC).
Demonstration..........................  STRL...................................  Air Force..............................  Air Force Research Laboratory
                                                                                                                            (AFRL).
Demonstration..........................  Civilian agency........................  Commerce...............................  Department of Commerce
                                                                                                                            (DoC).*
APS....................................  Workforce..............................  Defense................................  National Imagery & Mapping
                                                                                                                            Agency (NIMA).
APS....................................  Civilian agency........................  Commerce...............................  National Institute of
                                                                                                                            Standards & Technology
                                                                                                                            (NIST).
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* This demonstration covers units within the following four organizations: Economics and Statistics Administration, National Oceanic and Atmospheric
  Administration, National Telecommunications and Information Administration, and Technology Administration.

    Some current APSs are not shown in Figure 1. For instance, the APS 
at the General Accounting Office (GAO) was not fully implemented by 
mid-April 2002, and the APSs for the Federal Aviation Administration 
(FAA), Internal Revenue Service (IRS), and Bureau of Alcohol, Tobacco, 
and Firearms (ATF) were either recently implemented or limited in 
application. Finally, in addition to demonstrations and APSs, the Task 
Force considered the outcome of the 1997 Personnel System Initiative 
(PSI), a DoD-initiated collaborative effort that involved the 
Department of Defense, the Office of Personnel Management (OPM), and 
union representatives.
    In May 2002, USD(P&R) and the Under Secretary of Defense for 
Acquisition, Technology, and Logistics (USD(AT&L)) communities received 
the Task Force's in-process review briefing, followed in July 2002 by 
the Task Force's final briefing. From August through December 2002, a 
steering group of senior leaders reviewed, revised, and approved Task 
Force products with the intention of broadly applying these results as 
best practices.

2. Overview

    Personnel demonstration project best practices encompass the 
following areas: (1) Pay banding; (2) classification; (3) hiring and 
appointment authorities; (4) pay administration; (5) pay-for-
performance evaluation system; (6) expanded sabbatical authority; (7) 
volunteer emeritus program; and (8) revised reduction-in-force (RIF) 
procedures.

    Dated: March 26, 2003.
Patricia L. Toppings,
Alternate OSD Federal Register Liaison Officer, Department of Defense.

Table of Contents

I. Participating Organizations and Collective Bargaining 
Requirements
    A. Participating Organizations
    B. Labor-Management Responsibilities

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II. Mass Conversion to Personnel Demonstration Project Best 
Practices (BP)
    A. Conversion of General Schedule (GS) Employees
    1. Determination of Career Group (CG)
    2. Determination of Pay Band Level
    3. Pay Setting
    4. Fair Labor Standards Act (FLSA) Exemption
    5. Employees on Grade Retention
    6. Employees on Pay Retention
    7. Employees on Temporary Promotion
    B. Conversion of Employees in Organizations with Pay Banding or 
Broadbanding
    1. Determination of Career Group (CG)
    2. Determination of Pay Band Level
    3. Pay Setting
    4. Fair Labor Standards Act (FLSA) Exemption
    5. Titling of Positions
    6. Employees on Pay Retention
    7. Temporarily Promoted Employees
    C. One-Time Mass Conversion Exception Rule
III. Pay Banding
    A. Career Groups
    B. Nonsupervisory Pay Banding Architecture
    1. Architecture Graphic
    2. Nonsupervisory Descriptors
    C. Supervisory Architecture
    1. Determination of Supervisory Status
    2. Supervisory Descriptors
IV. Classification System
    A. Occupational Series
    B. Classification Standards
    C. Classification Authority
    D. Position Descriptions
    E. Fair Labor Standards Act (FLSA)
    F. Pay Category Reconsideration
V. Hiring and Appointment Authorities
    A. Definitions
    1. Job Change--Higher Earning Potential
    2. Job Change--No Higher Earning Potential
    3. Job Change--Lower Earning Potential
    B. Internal Placement
    1. Competition Upon Job Change
    2. Expanded Forms of Competition
    3. Exceptions to Competition
    4. Probation Upon Competitive Job Change
    5. Temporary Job Change
    C. External Hiring and Appointment Authorities
    1. Delegated Examining Unit (DEU) Authority
    2. Appointing Authorities
    D. DoD Alternative Qualifications or Criteria
VI. Pay Administration
    A. Special Pay Rules
    1. Supervisory Pay Tables
    2. Special Salary Rate Supplements
    3. Pay Retention
    B. Pay Setting
    1. Upon Accession (After Mass Conversion of the Organization)
    2. Upon Job Change--No Higher Earning Potential
    3. Upon Job Change--Lower Earning Potential
    4. Upon Job Change--Higher Earning Potential
    5. Upon Assignment to and From a Supervisory Position Outside 
the Existing Pay Band Level
VII. Pay-for-Performance (PFP) Evaluation System
    A. Overview
    B. Performance Objectives
    C. Performance Factors
    1. Technical Competence/Problem Solving
    2. Cooperation/Teamwork
    3. Communication
    4. Customer Care
    5. Resource Management
    6. Leadership/Supervision
    7. Contribution to Mission Accomplishment
    D. Benchmark Performance Standards
    E. Performance Rating Process
    1. Duration of the Rating Cycle
    2. Minimum Rating Period
    3. Communication at the Beginning of the Rating Cycle
    4. Feedback During the Rating Cycle
    5. End-of-Cycle Evaluation
    F. Payout Process
    1. Basic Pay Increases and Performance Incentives
    2. College Cooperative Education Program
    3. Awards
    G. Grievance Procedures
VIII. Performance That Fails to Meet Expectations
    A. Notice to Employee and Performance Improvement Plan
    B. Action Upon Completion of Performance Improvement Period
IX. Expanded Sabbatical Authority
X. Volunteer Emeritus Program
XI. Revised Reduction-in-Force (RIF) Procedures
    A. Competitive Area
    B. Retention Level
    C. Retention List
    D. Retention Standing
    1. Tenure
    2. Performance
    3. Veterans' Preference
    E. Credit for Performance
    1. First Cycle
    2. Second Cycle
    3. Third Cycle
    4. Accessions After First Cycle
    5. Cutoff Dates
    F. Assignment Rights
XII. Evaluation Plan
XIII. Project Duration
XIV. Required Waivers and Adaptations of Law and Regulation
Appendix A. Occupational Series in Career Group 2, Professional and 
Administrative Management
Appendix B. Occupational Series in Career Group 3, Engineering, 
Scientific, and Medical Support
Appendix C. Occupational Series in Career Group 4, Business and 
Administrative Support
Appendix D. Supervisory Pay Tables

I. Participating Organizations and Collective Bargaining Requirements

A. Participating Organizations

    This amendment applies to all current and future organizational 
entities designated as DoD science and technology reinvention 
laboratories by the Secretary of Defense or by any future applications 
required by law. Currently, there are eight science and technology 
reinvention laboratory demonstration projects, as follows:

Department of the Army--Army Research Laboratory; Aviation and Missile 
Research,
Development, and Engineering Center; Communications-Electronics Command 
Research,
Development, and Engineering Community; Engineer Research and 
Development Center; Medical Research and Materiel Command;
Department of the Navy--Naval Research Laboratory; Naval Sea Systems 
Warfare Centers; and
Department of the Air Force--Air Force Research Laboratory.

B. Labor-Management Responsibilities

    Participating organizations must fulfill any collective bargaining 
obligations to unions that represent employees covered by the personnel 
demonstration project best practices (hereafter referred to as ``best 
practices'' or ``BP''). Employees within a unit for which a labor 
organization is accorded exclusive recognition under chapter 71 of 
title 5, United States Code, shall not be covered by this amendment 
unless the exclusive representative and the participating organization 
have entered into a written agreement covering participation in and 
implementation of the personnel demonstration project best practices.

II. Mass Conversion to Personnel Demonstration Project Best Practices 
(BP)

    Procedures under II, Mass Conversion to BP, apply only to DoD 
employees upon initial conversion of their organization, or a portion 
thereof, into BP.

A. Conversion of General Schedule (GS) Employees

    These procedures apply only to GS employees upon initial mass 
organization-wide conversion into BP.
1. Determination of Career Group (CG)
    General Schedule employees will be converted into the CG that 
corresponds with the occupational series (and in some cases, GS grade) 
of their GS position, in accordance with III.A. and III.B.
2. Determination of Pay Band Level
    General Schedule employees will be converted into the pay band 
level, within the appropriate CG, that

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corresponds with their existing GS grade.
3. Pay Setting
    Initial entry into BP will ensure each employee is placed in the 
appropriate CG and pay band level without loss of pay.
    a. Concurrent Geographic Move. For any employee who incurs a 
concurrent geographic move on the date of mass conversion, pay 
entitlements shall be based on the new geographic area.
    b. Concurrent Pay Actions. Any pay actions (e.g., within-grade 
increase (WGI)) effective on the date of conversion will be processed 
before the conversion.
    c. Within-Grade Increase (WGI) Buy-In. Employees whose existing 
rate of basic pay is less than step 10 of the applicable GS grade 
before conversion will receive a prorated ``buy-in'' of a WGI, unless 
documented performance is not at an acceptable level of competence. 
Employees in a pay retention status at the time of conversion will not 
receive a within-grade buy-in adjustment.
    The WGI buy-in will be funded from the BP initial year's pay pool 
(which consists of the general pay increase). This ``buy-in'' is 
applicable to employees only at the initial entry of the employee's 
organization into BP.
    On the effective date of conversion, the employee's rate of basic 
pay will be adjusted by an amount equal to the prorated value of a WGI. 
The amount to be added to the employee's rate of basic pay is computed 
by determining the value of the elapsed creditable days in the 
employee's current waiting period toward the next WGI and adding that 
amount to the employee's existing rate of basic pay. Using the 
following formula, the WGI buy-in is calculated:

(Elapsed days in waiting period Number of days in waiting period) x 
Value of WGI = Prorated value
Prorated value + Existing basic pay = New basic pay upon mass 
conversion into BP

    d. Special Salary Rates (SSRs). When the maximum special salary 
rate (SSR) of the GS grade (that matches the highest GS grade 
incorporated into a pay band level) exceeds the maximum rate, adjusted 
for locality, of the pay band level, the maximum rate of the pay band 
level is extended to equal the maximum SSR for the occupational series 
and geographic area covered. Employees in such positions will receive a 
special salary rate supplement in lieu of a locality factor for the 
geographic area. SSR procedures described at VI.A.2. will be followed.
    Existing SSRs will no longer apply to a BP employee when the 
maximum SSR of the GS grade that matches the highest GS grade 
incorporated into a pay band level is equal to or less than the maximum 
rate, adjusted for locality, for the pay band level. The pay of 
employees in such positions will be recomputed upon conversion to 
include the full locality factor for the geographic area.
    Adverse action and pay retention provisions will not apply to the 
conversion process, as there will be no change to employee total pay.
4. Fair Labor Standards Act (FLSA) Exemption
    Employees will be converted using their existing FLSA exemption 
status.
5. Employees on Grade Retention
    Grade retention will terminate upon mass conversion into BP. Before 
conversion into the BP, the employee's pay will be adjusted by an 
amount equal to the prorated value of a WGI for the retained grade, 
using procedures under II.A.3.c. The employee will be placed in the CG 
and pay band level that correspond to the new GS grade. If the 
employee's adjusted pay exceeds the rate range for the assigned pay 
band level, the employee will be placed on pay retention not to exceed 
2 years, effective on the date of conversion into BP.
6. Employees on Pay Retention
    Employees on pay retention at the time of mass conversion are 
converted into BP to the CG and pay band level that correspond to their 
GS occupational series and grade. If the existing rate of pay exceeds 
the maximum rate of the assigned pay band level, the employee is placed 
in a pay retention status, not to exceed 2 years from the date of 
conversion into BP, under provisions found in VI.A.3.
7. Employees on Temporary Promotion
    An employee in a temporary promotion status will be returned to the 
permanent position of record before conversion. When the temporary 
promotion is cancelled, the employee's pay will be computed based on 
the employee's permanent position of record, with adjustments for any 
pay actions otherwise due during the temporary promotion. The employee 
is converted to BP with a rate of pay that includes any such 
adjustments.

B. Conversion of Employees in Organizations With Pay Banding or 
Broadbanding

    These procedures apply only to initial mass conversion into BP of 
organizations where pay banding or broadbanding currently exists.
1. Determination of Career Group (CG)
    Employees will be converted into the career group that corresponds 
with the occupational series of their position, in accordance with 
III.A. and III.B.
2. Determination of Pay Band Level
    a. Direct Conversion. Where an organization's existing GS-
equivalent banded level matches exactly a BP pay band level in the 
appropriate CG, such employees are converted directly from the existing 
demonstration project or alternative personnel system (APS) into BP, 
without change in pay.
    b. Conversion Using Applicable Conversion-Out Procedures. Where GS 
grades included in a BP career group and pay band level do not 
correspond directly to GS grades included in a banded level in an 
existing demonstration project, employees in such demonstration project 
positions will be converted to the GS using the applicable conversion 
out procedures, for purposes of determining GS grade only. Such 
employees will then be converted into the BP CG and pay band level that 
correspond with the derived GS grade, without change in pay.
3. Pay Setting
    Initial entry into BP will ensure each employee a place in the 
appropriate career group and pay band level without loss of pay.
    a. Concurrent Geographic Move. For any employee who incurs a 
concurrent geographic move on the date of mass conversion, pay 
entitlements shall be based on the new geographic area. b. Concurrent 
Pay Actions. Any pay actions effective on the date of conversion will 
be processed before the conversion. Pay will be set under II.B.2.a. and 
under II.B.2.b. at the same rate of pay as the employee received under 
the demonstration project or APS from which the employee was converted. 
Demonstration project or APS procedures to place an employee ``on-
step'' in a GS grade will not be used.
4. Fair Labor Standards Act (FLSA) Exemption
    Employees will be converted using their existing FLSA exemption 
status.

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5. Titling of Positions
    Positions with titles other than those authorized by OPM 
classification standards will be re-titled to the appropriate, 
authorized title upon conversion into BP.
6. Employees on Pay Retention
    Employees on pay retention at the time of mass conversion are 
converted into BP to the CG and pay band level that correspond to the 
occupational series and demonstration project pay band level, using 
procedures in II.B.2.a. or II.B.2.b., as appropriate. If the existing 
retained rate of pay exceeds the maximum rate of the assigned pay band 
level under BP, the employee is placed in a pay retention status not to 
exceed 2 years from the date of conversion, under provisions found in 
VI.A.3.
7. Temporarily Promoted Employees
    Employees in a temporary promotion status will be returned to the 
permanent position of record before conversion. When the temporary 
promotion is cancelled, the employee's pay will be computed based on 
the employee's permanent position of record, with adjustments for any 
pay actions otherwise due during the temporary promotion. The employee 
is converted to BP with a rate of pay that includes any such 
adjustments.

C. One-Time Mass Conversion Exception Rule

    The mass conversion procedures defined in this section apply to 
current DoD employees who will be covered by BP. If application of the 
mass conversion procedures would otherwise result in loss of pay for 
any employee, the employee is entitled to retain the existing rate of 
pay, notwithstanding any other provision in this section.

III. Pay Banding

    White-collar occupations in the Department of Defense were analyzed 
to determine appropriate associations into career groups (CGs). Career 
groups under BP are established according to similarity in type of work 
and common qualifications and advancement patterns. Each CG contains 
discrete pay band levels.

A. Career Groups

    Occupations with similar characteristics are grouped together into 
five CGs under BP. The BP CGs are described in this section.
    Career Group 1 (CG 1), Scientific and Engineering Research, 
includes positions in professional scientific, engineering, or medical 
occupations that meet the criteria of the OPM Research Grade Evaluation 
Guide or Part III of the OPM Equipment Development Grade Evaluation 
Guide (both available at http://www.opm.gov/fedclass) (or equivalent 
successor OPM standards or guides).
    Career Group 2 (CG 2), Professional and Administrative Management, 
includes positions in professional occupations that are excluded from 
CG 1 and positions in administrative occupations, in addition to 
certain other positions that exceed established pay band levels in CGs 
3 and 4. A comprehensive list of occupations included in CG 2 is at 
Appendix A.
    Career Group 3 (CG 3), Engineering, Scientific, and Medical 
Support, includes positions in occupations that are associated with 
support of professional engineering, scientific, and medical 
occupations. A comprehensive list of occupations included in CG 3 is at 
Appendix B.
    Career Group 4 (CG 4), Business and Administrative Support, 
includes positions in occupations that are associated with support of 
business, financial, and administrative positions, in addition to 
certain other occupations, such as Firefighters, Security Guards, and 
Police. A comprehensive list of occupations included in CG 4 is at 
Appendix C.
    Career Group 5 (CG 5), College Cooperative Education Program, 
includes positions in occupational series in any of the various 
``XX99'' student trainee series (e.g., GS-899, Engineering and 
Architecture Student Trainee Series).

B. Nonsupervisory Pay Banding Architecture

    Pay banding will replace the current GS system of 15 grades (used 
for classification and pay setting). In each career group, pay band 
levels are designated. These pay band levels are designed to facilitate 
pay progression and to allow for more competitive recruitment of 
quality candidates at differing rates. Career groups have either three 
or four pay band levels that incorporate some or all of the 15 GS 
grades, as appropriate. Comparison to the GS grades was used in setting 
the upper and lower dollar limits of each pay band level, except for 
the above GS-15 levels in CGs 1 and 2.
    The pay range for pay band level 3 of CG 1 and for pay band level 4 
of CG 2 is a minimum of 120 percent of the minimum rate of basic pay 
for GS-15; and a maximum of the rate of basic pay for Senior Executive 
Service (SES) level 4 (ES-4).
    Once employees are converted into BP, GS grades will no longer 
apply.
1. Architecture Graphic
    The five career groups and their associated pay band levels are as 
follows:

                                                             Figure 2.--Architecture Graphic
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    Career Group (CG)      Career Group Name          Level 1                  Level 2                  Level 3                      Level 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
CG 1....................  Science and         GS 5-12 *..............  GS 13-15...............  Above GS-15............  Not applicable
                           Engineering
                           Research.
CG 2....................  Professional and    GS 5-11 *..............  GS 12-13...............  GS 14-15...............  Above GS-15
                           Administrative
                           Management.
CG 3....................  Engineering,        GS 1-4.................  GS 5-7.................  GS 8-11................  (GS-12 & above to CG 2)
                           Scientific, and
                           Medical Support.
CG 4....................  Business and        GS 1-4.................  GS 5-7.................  GS 8-10................  (GS-11 & above to CG 2)
                           Administrative
                           Support.
CG 5....................  College             GS 1-5.................  GS 6-8.................  GS 9-11................  GS-12
                           Cooperative
                           Education Program.
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* There is no level incorporating GS 1-4, as these grades do not represent continuing DoD work.

2. Nonsupervisory Descriptors
    Nonsupervisory pay band level descriptors are used under BP instead 
of grading criteria in OPM classification standards and guides. 
Nonsupervisory pay band level descriptors articulate characteristics of 
positions at the top of the pay band level. Nonsupervisory descriptors 
are established by the Office of the Deputy Under Secretary of Defense 
(Civilian Personnel Policy) (ODUSD(CPP)).

[[Page 16124]]

C. Supervisory Architecture

    1. Determination of Supervisory Status
    a. Allocation to Pay Band Level and Supervisory Level. Determining 
whether a position is allocated to a supervisory pay schedule is 
predicated on supervisory level (i.e., meeting the narrative criteria 
in the supervisory descriptors A, B, C, or D (see III.C.2.) and base 
level of work supervised).
    The CG and pay band level of a supervisory position are predicated 
upon the CG and level of the nonsupervisory workforce in the 
supervisor's organization. The difficulty and worth of a supervisory 
position are directly related to the difficulty and worth of the work 
accomplished by the subordinate workforce. A supervisory position in an 
administrative occupation may supervise work of a professional nature.
    The CG and pay band level of a full deputy are normally the same 
CG, supervisory level, and supervisory pay table as the supervisory 
position to which it reports. Pay for the full deputy position may be 
set at any point within the pay table range management deems 
appropriate. There is no requirement that the deputy's pay equal the 
pay of the supervisory position. Where a full deputy reports to a 
position outside this system (e.g., military officer or member of the 
SES), the full deputy position will be compared directly to the 
supervisory descriptors and criteria for base level determination to 
decide the supervisory pay table.
    b. Substantive Work. It is necessary to determine the functions 
that best represent the substantive work of the supervisor's 
organization, i.e., the work that accomplishes the organization's 
primary mission. Substantive work can be performed by Federal civilian 
employees, as well as by contractor personnel and military personnel. 
In determining the substantive work of the organization, do not include 
positions that perform services that facilitate the substantive work of 
the unit, such as clerical support positions in an administrative unit, 
or budget or information technology positions in an engineering design 
unit.
    c. Base Level of Work. Base level is defined as the highest CG and 
pay band level of nonsupervisory work that meets both of the following 
criteria: (1) It is performed by two or more subordinate positions; and 
(2) it constitutes at least 25 percent of the organization's 
substantive positions.
    d. Determination of Base Level. i. If all subordinate positions are 
in a single CG, base level is determined by application of 
III.C.1.c.(1). and III.C.1.c.(2).
    ii. Where subordinate positions perform substantive work in two or 
more CGs, first determine which CG and pay band level represent the 
base level of the substantive work of the supervisor's organization. 
This would include the primary occupational knowledge requirement for 
the supervisory position. To determine the appropriate base level, 
first eliminate all support positions.
    (a) If the remaining substantive positions are all in one CG, use 
III.C.1.c.(1). and III.C.1.c.(2). to determine which pay band level of 
the CG constitutes the base level of work.
    (b) If the remaining substantive positions are in two or more CGs, 
apply III.C.1.c.(1). and III.C.1.c.(2). to all substantive positions in 
the supervisor's organization to determine which CG and pay band level 
constitute the base level of work.
    Once the base level is determined, the position's supervisory 
functions are compared to supervisory descriptors (see III.C.2.) to 
determine the appropriate level, i.e., A, B, C, or D. Career group and 
pay band level of the base level, in combination with supervisory 
level, determines the supervisory pay schedule that applies (see 
Appendix D). Supervisory descriptors are established by ODUSD(CPP).
    e. Adjustment to Supervisory Pay Table. When application of base 
level criteria results in assignment to a supervisory pay table with a 
lower maximum rate of basic pay than one subordinate employee, the 
maximum rate of the supervisory pay table may be extended to match or 
exceed the maximum rate of pay of the highest CG and level supervised 
by up to ten percent. When a subordinate employee is on pay retention, 
and the appropriate supervisory pay table does not exceed that 
subordinate's retained rate of pay, management has the discretion to 
set the supervisor's pay (including supervisory adjustment) ten percent 
above the pay of the employee for the duration of the period that the 
subordinate employee remains on pay retention.
    f. Allocation Based on Nonsupervisory Duties. Some supervisory 
positions perform nonsupervisory work in addition to their supervisory 
functions. When application of base level criteria to a supervisor A or 
B position results in a supervisory pay schedule with a maximum rate 
lower than the maximum rate of pay for the CG and pay band level of 
nonsupervisory work performed, the supervisor's career group and level 
will be set by the nonsupervisory functions, while the position will be 
titled and coded as supervisory (or other authorized title designating 
supervision).
2. Supervisory Descriptors
    Supervisory descriptors define limited supervision (supervisor A), 
first-level (supervisor B), second-level (supervisor C), and third-
level managerial (supervisor D), respectively. To be assigned a 
supervisory level, a position must meet the narrative criteria in the 
descriptor and perform such supervisory functions a significant portion 
of the time. Supervisory descriptors are established by ODUSD(CPP).

IV. Classification System

    Personnel Demonstration Project Best Practices uses OPM 
occupational series and titles for allocation of positions. Allocation 
of BP positions to the appropriate pay band level and supervisory pay 
table uses BP criteria instead of OPM grading criteria.

A. Occupational Series

    OPM occupational series definitions, series codes, and authorized 
titles will be used under BP, as well as the OPM designations of white-
collar occupational series as professional, administrative, technical, 
clerical, or other.

B. Classification Standards

    The present system of OPM classification standards will be used for 
determination of occupational series and position titles in BP. 
References in the OPM position classification standards to grading 
criteria will not be used. Rather, the nonsupervisory and supervisory 
descriptors (in combination with base level determinations) will be 
used for the purpose of determining pay band level and pay table. The 
nonsupervisory descriptors are derived from the OPM Primary Standard of 
the Factor Evaluation System. Under this system, each pay band level 
and supervisory level is represented by a descriptor, against which 
individual positions are compared in order to establish the appropriate 
level. Consequently, the need for use of OPM grading criteria is 
eliminated.

C. Classification Authority

    Under BP, classification authority flows from the Secretary of 
Defense to the Secretaries of the Military Departments, heads of the 
Defense agencies, and heads of DoD Field Activities with independent 
appointing

[[Page 16125]]

authority. This authority may be redelegated.

D. Position Descriptions

    Position descriptions are used to document major duties in writing. 
A position description is a statement of duties that accurately 
describes the level of work of a position; has been certified (signed) 
by the supervisor; and is adequate for determination of occupational 
series, title, career group, pay band level, and supervisory schedule.

E. Fair Labor Standards Act (FLSA)

    Fair Labor Standards Act (FLSA) exemption determinations will be 
made consistent with criteria in Title 5 of the Code of Federal 
Regulations (CFR), part 551. All employees are covered by the FLSA 
unless they meet criteria for exemption. Exemption status of individual 
positions will be evaluated by comparing duties and responsibilities 
assigned, the pay band level descriptors, and the 5 CFR part 551 FLSA 
criteria.

F. Pay Category Reconsideration

    An employee may request reconsideration of the pay system, 
occupational series, title, or pay band level of his/her own position 
at any time. An employee must raise the areas of concern to the first-
line supervisor, a supervisor at supervisor level B or above, or 
military equivalent. Employees who are not satisfied with the 
supervisor's response may then request a DoD decision-level 
reconsideration of the pay category determination. The DoD Civilian 
Personnel Management Service (CPMS), Field Advisory Services (FAS) 
Division, is the final level of pay category reconsideration under BP. 
Decisions by DoD CPMS FAS are final and binding on all administrative, 
certifying, payroll, disbursing, and accounting officials of the 
Department of Defense.
    Employees may file a request for pay category reconsideration at 
any time. However, when the issue involves a loss in pay, employees 
must request reconsideration no later than 15 calendar days after the 
effective date of the subject personnel action in order to preserve any 
entitlement to retroactive correction. Employees must submit requests 
for pay category reconsideration through the supporting human resources 
office. Supporting human resources offices will forward case files to 
the Department of Defense for decision within 30 days of receipt of the 
employee's formal request for pay category reconsideration, unless DoD 
deciding officials grant a longer period of time. The Department of 
Defense will make final pay category determination decisions within 60 
calendar days from date of receipt of a complete file. Pay category 
reconsideration decisions will use OPM criteria to determine pay 
system, occupational series, and title. Career group and pay band level 
decisions under the pay category reconsideration process will be based 
on BP career group definitions, pay band level descriptors, and other 
BP criteria, as appropriate.
    Under a request to DoD CPMS for BP pay category reconsideration, an 
employee may not request review of the accuracy of his/her position 
description, the BP allocation or 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.

V. Hiring and Appointment Authorities

A. Definitions

    The current terms of promotion, reassignment, and change to lower 
grade that are used to describe an employee's movement from one 
position to another will be replaced with the following to describe 
more appropriately movement within a pay banded environment.
1. Job Change--Higher Earning Potential
    Movement to a position with higher earning potential (e.g., CG 2, 
level 1 to CG 1, level 1; CG 1, level 1 to CG 1, level 2).
2. Job Change--No Higher Earning Potential
    Movement from one position to another with no higher earning 
potential (e.g., CG 3, level 2 to CG 4, level 2).
3. Job Change--Lower Earning Potential
    Movement from one position to another with lower earning potential 
(e.g., CG 1, level 1 to CG 2, level 1).
    A position is defined by career group, pay band level, title, and 
series. Job change does not include assignment or termination of 
supervisory or locality pay.

B. Internal Placement

    The following rules will be used to determine when competitive 
procedures are required for job change and when they are not. Job 
change does not include assignment of supervisory or locality pay.
1. Competition Upon Job Change
    Competition, or an exception to competitive procedures, is required 
for a job change--higher earning potential. Competition is not required 
for a job change--no higher earning potential. Competition is not 
required for a job change--lower earning potential.
2. Expanded Forms of Competition
    Competitive procedures and plans under 5 CFR 335 will be 
supplemented by the procedures listed below.
    a. Assessment Boards. Boards of individuals with appropriate levels 
of knowledge may convene to assess candidates for current and future 
advancement and distinguish among them for job changes to positions and 
duties with higher earning potential. Ranking and selection criteria 
must distinguish among employees. Employees selected must meet 
qualification standards. An assessment board may be held in conjunction 
with the annual performance appraisal process or convened on an ad hoc 
basis. Candidates will be assessed based on order of merit, and can be 
assigned to positions with higher earning potential without further 
competitive procedures.
    b. Alternative Certification Process (ACP). Two alternative 
certification processes are described:
    i. Management may name request an individual using an ACP. Since 
management has the right to consider candidates from any appropriate 
source of agency employees, an employee may be selected, absent formal 
certification, provided the employee is within the highest quality 
group for referral for the position. Documentation to support the 
action includes the source of candidates, name request, and 
documentation showing the individual meets the required criteria.
    ii. A second ACP allows positions to be filled competitively 
without issuing a formal vacancy announcement. This process may be used 
when the work unit from which the position will be filled is such that 
the selecting official has had the opportunity to observe and assess 
all potential applicants, thus enabling the selecting official to 
evaluate each candidate equitably. The selecting official must possess 
enough information about the knowledges, skills, abilities, and 
experience of each of the candidates being considered to ensure they 
are assessed fairly. The selecting official must also know that there 
will be a sufficient number of qualified candidates to consider without 
formally announcing the vacancy. This determination will be made in 
conjunction with the human resources office.
3. Exceptions to Competition
    Job change (higher earning potential) will be processed under 
competitive procedures in accordance with merit

[[Page 16126]]

principles and requirements of merit promotion plans and procedures of 
the BP. The following actions are excepted from such competitive 
procedures:
    a. Job change to a position that is in the same pay band/level and 
career group (or equivalent in another pay system) as the employee 
previously held on a permanent basis within the competitive service.
    b. Job change to a position having higher earning potential no 
greater than the potential of a position an employee currently holds or 
previously held on a permanent basis in the competitive service.
    c. Job change without current competition when the employee was 
appointed through competitive procedures to a position with a 
documented career ladder.
    d. Temporary job change for 1 year (and any approved extension as 
provided for in V.B.5.) to a position with higher earning potential.
    e. Job change based on employee's position being officially 
established at a higher earning level because of additional duties and 
responsibilities.
    f. Job change resulting from the correction of an initial 
classification or pay category or level error, or the issuance of new 
classification standards or supervisory and nonsupervisory descriptors.
    g. Job change of a candidate not given proper consideration in a 
competitive action.
    h. Individual conversion into system: Job change into a career 
group/level with higher earning potential within the employee's current 
series for movements into the system after the mass conversion, e.g., 
GS-201-12 employee with FAA entering CG-201-2, level 2 position. Absent 
this provision, there is no equivalent grade to which the employee 
could be assigned noncompetitively. (This is equal to movement provided 
employees upon mass conversion).
    i. Job change from one career group to another when the series 
appears in two different career groups, e.g., CG 2, level 1 into CG 1, 
level 1.
    j. Job change of an employee one level above the pay category of 
the position when the employee adds a significant value to the 
organization that goes beyond the classifiable duties of the position.
    k. Job change as a result of a decision in a negotiated or agency 
grievance procedure, or by a court or administrative forum with 
authority to issue such decisions, as the result of the equal 
employment opportunity (EEO) complaint process, or written settlement 
agreement that has the approval of the appropriate local authority.
4. Probation Upon Competitive Job Change
    a. Basic Requirements. An employee is required to serve a 1-year 
probationary period upon each competitive job change to a position with 
higher earning potential. This probationary period will apply to all 
competitive job changes. For a job change to a position with higher 
earning potential which is identified as an exception to competitive 
procedures the selecting official, in coordination with the human 
resources office, may, at his/her discretion, require an employee to 
serve a probationary period of up to 1 year.
    An employee who has an additional job change to a position with no 
higher earning potential following the competitive job change will be 
required to complete the 1 year probationary period, except for those 
serving on the discretionary probationary period. An employee serving 
on a discretionary probationary period as a result of a job change to a 
position with higher earning potential (made as an exception to 
competitive procedures) will be considered to have completed the 
probationary period.
    This requirement does not apply upon assignment of supervisory 
duties within the same CG and pay band level.
    The duration of the probationary period may be extended only under 
exceptional circumstances.
    The employee is to be given notice of the probationary period 
requirement before entering the position.
    b. Failure to Complete the Probationary Period. Satisfactory 
completion of the probationary period is a prerequisite for continued 
service in the position. An employee who, for reasons of performance, 
does not satisfactorily complete the probationary period is entitled to 
placement in a position no lower than the CG and pay band level (or 
equivalent from another pay system) the employee left before accepting 
the position.
    c. Relationship to Other Probationary Period Requirements. In the 
event an employee is serving the initial probationary period for career 
appointment (see V.C.2.a.) concurrently with the probation upon 
competitive job change, the initial probationary period takes 
precedence.
    For an employee who has a job change while serving a probationary 
period based on a previous job change, that probationary period is 
considered to have been met and the employee starts the new 
probationary period on the effective date of the assignment.
    No employee will be required to serve the probationary period for 
competitive job change upon initial mass conversion of their 
organization, or a portion thereof, into BP.
    d. Appeals. An employee who is returned to a position from which 
competitively assigned is not entitled to appeal rights.
    e. A job change returning an employee to his/her former CG/pay band 
level may include pay increase, pay decrease, or no change in pay.
5. Temporary Job Change
    Temporary job changes may be made to cover time-limited needs. 
Temporary job changes (higher earning potential) are permitted for up 
to 1 year and may be extended for up to 1 additional year with the 
approval of the second level supervisor. Temporary job changes effected 
under this authority may not be made permanent. A temporary job change 
may include pay increase, pay decrease, or no change in pay. If the job 
change is voluntary and results in a decrease in pay, appeal rights do 
not apply.

C. External Hiring and Appointment Authorities

1. Delegated Examining Unit (DEU) Authority
    Examining processes under the DEU authority may be used to fill 
positions, with the exception of the following: positions in the SES or 
the Executive Assignment System; Senior Level (SL) and Scientific or 
Professional (ST) positions; positions at CG 1, level 3 and CG 2, level 
4; Administrative Law Judge positions; and positions subject to any 
examining process covered by court order.
    a. Referral of All Candidates. At management's option, all 
qualified candidates may be referred to the selecting official by the 
human resources support organization.
    When there are no veterans' preference eligible applicants and when 
requested by management, all qualified candidates are referred for 
consideration. Managers must document the basis for selection.
    When there are applicants entitled to 5 or 10 point veterans' 
preference, other than those with a compensable service-connected 
disability of 10 percent or more, evaluation, including adding 
veterans' preference points, will be accomplished by the human 
resources office before referral to selecting officials. For scientific 
and professional positions equivalent to GS-9 or higher,

[[Page 16127]]

evaluation, including adding veterans' preference points, will be 
accomplished by the human resources office before referral to selecting 
officials. For all other positions, where there are disabled veterans 
who have a compensable service-connected disability of 10 percent or 
more, they shall be listed at the top of the list in order of their 
ratings, including preference points. The names of preference eligibles 
shall be entered ahead of others having the same rating. Where a 
preference eligible is listed above a nonpreference eligible on any 
referral list, the preference eligible cannot be passed over for 
selection without application of passover procedures as authorized by 
the Department of Defense.
    b. Categorical Rating, Ranking, and Referral. When rating and 
ranking is accomplished, candidates who meet basic (minimum) 
qualifications shall be assigned to one of three previously defined 
quality group categories (best qualified, highly qualified, or 
qualified), depending upon the quality and relevance of their 
qualifications to the job. Candidates may be further ranked within each 
quality group. Veterans' preference points will be added to the 
candidate's overall score. Addition of veterans' preference points does 
not impact the quality group assignment. For other than scientific and 
professional positions equivalent to GS-9 or higher, qualified 
preference-eligibles who have a compensable service-connected 
disability of 10 percent or more shall be listed at the top of their 
quality group. For all positions, candidates will be referred by 
quality group.
    Selecting officials should be provided with a reasonable number of 
qualified candidates from which to choose. All candidates in the 
highest quality group will be referred for consideration. If management 
determines there are insufficient numbers of candidates in the highest 
group, candidates in the next lower group(s) may also be referred. When 
more than one group is referred, candidates shall be identified in 
group order from the best-qualified to the qualified group.
    Where a preference eligible is listed above a nonpreference 
eligible on any referral list, the preference eligible cannot be passed 
over for selection without application of passover procedures as 
authorized by the Department of Defense.
2. Appointing Authorities
    a. Career Appointment and Initial Probationary Period. Personnel 
Demonstration Project Best Practices will use the career appointment 
authority for employees upon initial appointment other than to 
temporary, term, or indefinite positions in the competitive service. An 
employee on his/her initial career appointment under this authority is 
appointed as a career employee subject to an initial probationary 
period of up to 3 years to allow supervisors an adequate amount of time 
to fully evaluate an employee's performance and conduct.
    The Department of Defense shall utilize the probationary period as 
fully as possible to determine the fitness of the employee. An employee 
who fails to demonstrate fitness or whose work performance is 
unsatisfactory shall be separated. The employee will be notified in 
writing why a separation action is being taken and the effective date 
of the action. The information in the notification shall, at a minimum, 
consist of conclusions as to the inadequacies of performance or 
conduct.
    i. Permanent Status: A newly appointed employee must serve for up 
to 3 years of substantially continuous creditable service as a 
probationary employee. A single break in creditable service of more 
than 30 calendar days will require the beginning of a new probationary 
period of up to 3 years upon reappointment. Permanent status is 
acquired only under a permanent appointment in the competitive service 
after completing the probationary period.
    ii. Creditable Service: Prior Federal civilian service (including 
nonappropriated fund, temporary, or modified term service) will count 
toward the completion of the probationary period as long as there has 
been no break in service.
    The following provisions apply to the completion of an initial 
probationary period under special circumstances:
    Excepted service employment leading to career status in the 
competitive service will count toward the completion of the initial 
probationary period as long as there has been no break in service of 
more than 30 calendar days.
    Intermittent employment, i.e., employment without a regularly 
scheduled tour of duty, will count toward completion of the initial 
probationary period of up to 3 years, calculating each day or part of a 
day in pay status as 1 day of credit toward the requirement of up to 
780 days in a pay status.
    Employees serving on career conditional appointments in other 
agencies will not be converted to permanent status until they have met 
the requirement for up to 3 years of substantially continuous service. 
The length of time served on career conditional appointment will count 
toward the probationary requirement.
    iii. Completion of Probationary Period: The probationary period 
ends when the employee completes the scheduled tour of duty on the day 
before the applicable anniversary date of the employee's appointment. 
For example, when the last workday is a Friday and the anniversary date 
is the following Monday, the probationer must be separated before the 
end of the tour of duty on Friday.
    Employees who have served continuously the length of time required 
for probation on a competitively filled modified term appointment will 
be considered to have met the probationary period upon conversion to 
permanent status.
    iv. Extensions: The probationary period required for new 
appointments is up to 3 years and may be extended only under rare 
circumstances as provided for in DoD guidance.
    v. Tenure: Probationary career employees are in tenure group I for 
reduction in force purposes.
    vi. Appeals: A probationary employee may appeal to the Merit 
Systems Protection Board (MSPB) an agency decision to terminate the 
employee as outlined in 5 CFR 315.806.
    b. Modified Term Appointment. The modified term appointment is 
designed to be used to augment the existing workforce; for special 
projects, 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 other positions, are on extended leave, or have entered 
military service. Modified term appointments differ from term 
appointments as described in 5 CFR part 316 in that initially they are 
for a period of over one year but not to exceed 5 years, rather than 
the traditional 4 years. The appointing official is authorized to 
extend the modified term for 1 additional year to a maximum length of 6 
years.
    Absent any DoD specific eligibility or qualifications criteria, 
appointees must meet OPM qualifications and eligibility requirements 
for the pay band level and occupation to which appointed.
    i. Noncompetitive modified term appointments. For time-limited 
needs, term appointments may be made noncompetitively for up to 5 
years, with extensions authorized for up to 1 additional year. Further 
extensions will not be permitted using the

[[Page 16128]]

noncompetitive authority. Notice of positions to be filled under the 
noncompetitive term appointment authority shall be made to ensure the 
merit principle of fair and open competition. Employees appointed under 
this authority may not be converted to career appointments. Time served 
may be used to satisfy the probationary period service requirement 
consistent with probationary period guidance. Any candidate who is 
eligible for veterans' preference under Title 5 of the United States 
Code (U.S.C.), Section 2108 shall be considered ahead of candidates who 
are not eligible for preference.
    ii. Competitive modified term appointments. Rating, ranking, and 
referral for competitive modified term appointments will be conducted 
in accordance with provisions contained in V.C.1. Employees hired under 
this modified term appointment authority may be eligible for conversion 
to career appointments without further external competition.
    To be eligible for conversion to a career appointment, the employee 
must:
    (a) Have been selected for the term position under competitive 
procedures, with the announcement specifically stating that the 
individual(s) selected for the term position(s) may be eligible for 
conversion to career appointment at a later date;
    (b) Have served 1 year of continuous service in the term position; 
and
    (c) Have a current assessment documenting adequate performance.
    Conversion to a career appointment may be made:
    (a) To a permanent position in the same occupational series, CG, 
and pay band level, or
    (b) Through internal merit procedures. New modified term employees 
shall serve the initial probationary period of up to 3 years currently 
in use for career appointments under this personnel system. Service 
under the modified term appointment immediately preceding a permanent 
appointment without a break in service shall count toward the 
probationary period requirements of the permanent position provided 
performance is adequate.
    c. Noncompetitive Temporary Appointment. For time-limited needs, 
temporary appointments may be made noncompetitively for up to 1 year, 
with extensions authorized for up to 1 additional year. Further 
extensions will not be permitted using the noncompetitive authority. 
Advance notice of positions to be filled under the noncompetitive 
temporary appointment authority shall be made to ensure the merit 
principle of fair and open competition.
    Absent any DoD specific eligibility or qualifications criteria, 
appointees must meet OPM qualifications and eligibility requirements 
for the pay band level and occupation to which appointed.
    Any candidate who is eligible for veterans' preference under 5 
U.S.C. 2108 shall be considered ahead of candidates who are not 
eligible for preference.
    Appointments made under this authority do not confer competitive 
status. Time served may be used to satisfy the probationary period 
service requirement consistent with probationary period guidance above.
    d. Scholastic Achievement Appointment. The scholastic achievement 
appointment provides an alternative examining process to appoint 
candidates with bachelor or advanced degrees. Advance notice of 
scholastic achievement appointment and positions to be filled shall be 
made to ensure the merit principle of fair and open competition. A 
candidate may be appointed under this procedure if:
    i. The candidate meets the minimum standards for the positions as 
(a) published in OPM's Operating Manual, ``Qualification Standards for 
General Schedule Positions,'' (available at www.opm.gov/qualifications) 
or (b) established in DoD alternative qualifications or criteria for 
specific occupations and/or tailored to the pay banding architecture;
    ii. The candidate meets any selective placement factors stated in 
the vacancy announcement; and
    iii. The candidate has an overall grade point average of 3.0 or 
better on a 4.0 scale (or equivalent on a different scale) grade point 
average overall, or has either a 3.5 or better cumulative grade point 
average on a 4.0 scale (or the equivalent on a different scale) in the 
field of study qualifying for the occupation, or is ranked in the upper 
10 percent of the major college or subdivision attended.
    Scholastic achievement appointments may also be made on the basis 
of graduate education, provided the criteria in V.C.2.d.i. through 
V.C.2.d.iii. are met.
    Any candidate who is eligible for veterans' preference under 5 
U.S.C. 2108 shall be considered ahead of candidates who are not 
eligible for preference.
    e. On-the-spot hiring. Candidates may be directly appointed using 
the on-the-spot appointing authority to positions for which it has been 
determined that one or more of the following conditions apply:
    i. There is a severe shortage of candidates;
    ii. The position is unique and/or has special qualifications;
    iii. The position has a historically high turnover rate;
    iv. The occupation is covered by a special salary rate;
    v. An exceptional need exists. Requirements for determining 
exceptional need will be detailed in DoD guidance.
    In all cases, the servicing personnel office, in consultation with 
the activity/organization manager, will determine if a position or 
group of positions meets the established criteria and will authorize 
the use of on-the-spot hiring. All determinations must be documented.
    Advance notice of on-the-spot appointing authority and positions 
for which it may be used shall be made to ensure the merit principle of 
fair and open competition.
    Absent any DoD specific eligibility or qualifications criteria, 
appointees must meet OPM qualifications and eligibility requirements 
for the pay band level and occupation to which appointed.
    Any candidate who is eligible for veterans' preference under 5 
U.S.C. 2108 shall be considered ahead of candidates who are not 
eligible for preference.
    f. Use of Other Appointing Authorities. Nothing in BP shall 
prohibit use of existing competitive service appointing authorities 
cited in various provisions of 5 CFR (e.g., a preference eligible under 
Veterans' Employment Opportunity Act (5 CFR 315.611), a family member 
who served 52 weeks overseas (5 CFR 315.608)) except to the extent that 
career-conditional appointments shall not be used. Conditions for 
granting such appointments must be fully met.
    Nothing in BP shall prohibit use of existing excepted service 
appointing authorities cited in 5 CFR 213 (e.g., Veterans' Readjustment 
Appointment, Student Educational Employment Program). Conditions for 
granting such appointments must be fully met.
    g. Noncitizen Hires. The Department of Defense will have the 
authority to approve the hiring of noncitizens when qualified United 
States citizens are not available. As with current 5 CFR requirements, 
a noncitizen may be appointed only if it has been determined there are 
no qualified United States citizens. If a noncitizen is the only 
qualified candidate for the position, the candidate may be appointed. 
The selection is subject to approval by the appointing official. All 
security requirements otherwise

[[Page 16129]]

applicable to the position continue to apply.

D. DoD Alternative Qualifications or Criteria

    DoD has authority to develop qualification standards consistent 
with the pay banding architecture of the BP or to meet unique position 
requirements.

VI. Pay Administration

    As the rates of the General Schedule are increased due to GS pay 
increases, the minimum and maximum rates of nonsupervisory pay band 
levels and supervisory pay tables will also increase. No adjustments in 
employees' pay are automatic, other than locality adjustments.

A. Special Pay Rules

1. Supervisory Pay Tables
    Once the base level of work and supervisor level (A, B, C, or D) 
are determined, the table at Appendix D is used to determine the salary 
range (basic pay and supervisory adjustment) for the supervisory 
position. For supervisory positions in occupational series covered by a 
special salary rate supplement, as defined in VI.A.2., the maximum rate 
of the applicable supervisory pay table may be extended to equal the 
maximum special salary rate for the corresponding grade. A supervisor's 
pay may be set at any point within the supervisory pay table range that 
management determines appropriate. The supervisory rate ranges include 
a supervisory adjustment that corresponds to the supervisory level 
(i.e., 10, 20, 30, or 45 percent supervisory adjustment for supervisor 
A, B, C, or D, respectively). The supervisor's total pay will not 
exceed the maximum rate of the applicable supervisory pay table, 
adjusted for locality, except under circumstances that meet III.C.1.e., 
Adjustment to Supervisory Pay Tables. Supervisory adjustments are 
considered basic pay for purposes of retirement, life insurance, 
premium pay and for such other purposes as may be expressly provided 
for by law.
    If the employee moves to another position, the supervisory 
adjustment shall be increased, reduced, or terminated as required under 
conditions set forth by the agency. The supervisory adjustment shall 
terminate when the employee moves to a position that does not qualify 
for a supervisory adjustment and the adjustment shall be recomputed 
when the employee moves to a supervisory position at a different 
supervisory level. The reduction or elimination of a supervisory 
adjustment upon movement to a new position is not appealable.
    If levels of supervision are established that the supervisory pay 
tables at Appendix D do not anticipate, e.g., a supervisor B position 
over CG 1, level 1 base level, or a supervisor C position over CG 3, 
level 1 base level, the supervisory pay adjustment may be set up to 20 
percent above the maximum rate of pay established for the base level 
supervised.
2. Special Salary Rate Supplements
    When a maximum SSR rate of a GS grade exceeds the maximum rate of 
the corresponding pay band level under BP, the maximum rate of that pay 
band level is extended to equal the maximum SSR rate for that grade. 
Such extension will apply only to occupational series and geographic 
areas covered by the corresponding GS SSR. Affected employees will be 
eligible for pay increases up to the maximum of the applicable pay band 
level table extension. Total pay for these employees will include an 
SSR supplement.
    a. Formula Upon Conversion. When an employee is eligible for an SSR 
supplement upon conversion into BP, the BP total pay will include an 
SSR supplement that is determined by applying an SSR factor to the 
employee's total GS pay.
    b. Formula After Conversion. After conversion, when an employee 
enters a position that is covered by an SSR pay band level extension, 
the employee will receive the salary set by the supervisor as the BP 
total pay. The BP total pay will incorporate an SSR supplement.
    c. Applicability. Special salary rate supplements do not apply when 
the maximum SSR of a corresponding GS grade is equal to or less than 
the maximum rate of a corresponding pay band level. Total pay, in this 
case, will consist of basic pay plus locality pay.
3. Pay Retention
    A nonsupervisory employee, under appointment other than temporary 
or modified term, is entitled to pay retention when placed 
involuntarily into a new position for reasons other than those listed 
under VI.B.3.b. and the employee's current pay is above the maximum 
rate applicable to the new position. The pay retention entitlement is 
not to exceed 2 years, or until the rate range of the new position 
encompasses the employee's retained rate of pay, whichever occurs 
first. During pay retention, an employee is not eligible for any 
permanent pay increases, other than locality adjustments.
    Employees paid from a supervisory pay table are not eligible for 
pay retention. (See VI.A.1.)

B. Pay Setting

1. Upon Accession (After Mass Conversion of the Organization)
    Management may establish pay at any rate up to the maximum of the 
pay band level, any applicable SSR extension, or any applicable rate 
from a supervisory pay table. The hiring official will determine 
starting pay based on available labor market considerations; special 
qualifications requirements; scarcity of qualified applicants; program 
needs; education or experience of the candidate; and other criteria, as 
appropriate.
2. Upon Job Change--No Higher Earning Potential
    An employee who moves to a position with the same maximum rate of 
pay (irrespective of a SSR extension) will have pay set at the existing 
rate of pay, or with a pay increase up to 5 percent of the existing 
rate, not to exceed the maximum of the pay band level or the applicable 
SSR extension.
3. Upon Job Change-Lower Earning Potential
    a. Voluntary. An employee may request a voluntary change to a 
position with a lower maximum rate of pay. The employee's pay may be 
set at any point within the level but not more than 5 percent above the 
employee's current base pay. The new salary shall not exceed the 
maximum rate of the applicable pay table for the position to which 
assigned.
    b. Involuntary-Adverse Action. When an employee is changed, due to 
an adverse personnel action based on either misconduct or poor 
performance, to a position with a lower maximum rate of pay, pay 
retention will not apply. The employee's pay must be reduced by up to 
five percent. However, in no case will pay be set above the maximum 
rate of the new range.
    c. Involuntary--Inadequate Pay Progression. As a consequence of the 
administration of the performance payout process, an employee's basic 
pay may fall below the minimum rate of basic pay for the pay band level 
to which he/she is assigned. In such cases, supervisors shall initiate 
an involuntary change to lower level promptly after the pay pool 
manager approves the annual payout; the employee's position description 
shall be redescribed accordingly. The employee's rate of basic pay 
shall remain unchanged. Change to a lower pay band level due

[[Page 16130]]

to inadequate pay progression is not considered an adverse action.
    d. Involuntary-Management Action. If a job change is the result of 
a management directed action, e.g., reduction in force or pay category 
reconsideration, a nonsupervisory employee is entitled to his/her 
current rate of pay if it is at or below the maximum of the applicable 
pay table for the new position. If the employee's rate of basic pay 
exceeds the maximum applicable rate for the new position, the employee 
is entitled to pay retention not to exceed 2 years. (See VI.B.5.a. and 
VI.B.5.c. for job change--lower earning potential involving 
supervisors.)
4. Upon Job Change--Higher Earning Potential
    When an employee moves to a position with a higher maximum rate of 
pay, the pay upon job change may include a pay increase, a pay 
decrease, or no change in pay. The pay will be at least the minimum of 
the pay band level, and may not exceed the maximum of the applicable 
pay table. If the job change is voluntary and results in a decrease in 
pay, it is not considered an adverse action; therefore, appeal rights 
do not apply.
5. Upon Assignment to and from a Supervisory Position Outside the 
Existing Pay Band Level
    a. Supervisory to Nonsupervisory Position. When an employee paid 
from a supervisory pay table moves to a nonsupervisory position, the 
supervisory adjustment will not be retained. Pay will be set at the 
employee's existing rate of basic pay or at the employee's rate of 
basic pay in a nonsupervisory position immediately preceding the prior 
movement to the supervisory position, whichever is higher. If the 
employee's rate of basic pay exceeds the new rate range, pay will be 
set at the maximum of the pay band level.
    b. Nonsupervisory to Supervisory Position. When an employee paid 
from a nonsupervisory pay table moves to a supervisory position, pay 
will be set at the employee's existing rate of basic pay, or a rate 
determined by management not to exceed the maximum of the applicable 
supervisory pay table. If the employee's existing rate of pay exceeds 
the maximum of the applicable supervisory pay table, and the employee 
is placed involuntarily for reasons other than VI.B.3.b., the 
employee's pay will be set not to exceed 20 percent above the maximum 
rate payable for the subordinate base level for a period not to exceed 
2 years, as a supervisory adjustment.
    c. Supervisory to Supervisory Position. When an employee paid from 
a supervisory pay table moves to another position paid from a 
supervisory pay table, pay will be within the applicable new rate range 
to include a supervisory adjustment that corresponds to the supervisory 
level (i.e., 10, 20, 30, or 45 percent for supervisor A, B, C, or D, 
respectively).

VII. Pay-for-Performance (PFP) Evaluation System

A. Overview

    The purpose of the PFP evaluation system is to provide an equitable 
method for appraising and compensating covered employees. It is 
essential for the development of a highly productive workforce and to 
provide management, at the lowest practical level, the authority, 
control, and flexibility needed to accomplish the mission and meet 
organizational goals, including the requirements of the organization's 
strategic plan. PFP allows for more employee involvement in the 
evaluation process, increases communication between supervisor and 
employee, promotes a clear accountability of contribution by each 
employee, facilitates employee progression by linking individual 
employee performance to mission accomplishment, and provides an 
understandable basis for salary and structural changes.

B. Performance Objectives

    Performance objectives are an individual's job assignments or 
position responsibilities that contribute to accomplishing the mission 
and goals of the organization during the rating cycle. Performance 
objectives deal with outputs and outcomes of a particular job. At the 
beginning of the rating cycle, employees and supervisors will jointly 
develop performance objectives that reflect the types of duties and 
responsibilities expected at the respective pay band level. These 
objectives are to be based on the work unit's mission and goals and 
must be consistent with the employee's position description. 
Performance objectives will be tailored to each individual employee's 
job assignments or position responsibilities. The supervisor makes the 
final decision concerning the development of performance objectives.
    The performance objectives, representing joint efforts of employees 
and their rating chains, should be in place within 30 days from the 
beginning of each rating cycle. Performance objectives may be modified 
and/or changed as appropriate during the rating cycle. It is 
appropriate to change objectives when mission or workload changes 
occur. How well performance objectives are accomplished will be 
measured by a series of performance factors, which may be weighted.

C. Performance Factors

    Performance factors are used to evaluate accomplishment of 
performance objectives. The use of factors for scoring purposes helps 
to ensure comparable scores are assigned while accommodating diverse 
individual objectives that contribute to accomplishment of the mission 
and goals of the organization. The DoD Component has the discretion to 
weight performance factors based on the importance in accomplishing an 
individual's performance objectives. This discretion may be 
redelegated.
    When weighting performance factors, each performance factor used is 
assigned a weight within a specified range. Where performance factors 
are not weighted, it is understood that all factors used are of equal 
point value. The total value of all performance factors used, weighted 
or unweighted, is 100 points.
    The seven performance factors used to evaluate accomplishment of 
performance objectives are as follows: Technical Competence/Problem 
Solving; Cooperation/Teamwork; Communication; Customer Care; Resource 
Management; Leadership/Supervision; and Contribution to Mission 
Accomplishment. Additional factors may not be created without Office of 
the Secretary of Defense approval. However, management may exclude any 
performance factor that does not apply to a specific position. These 
seven performance factors are generally described:
1. Technical Competence/Problem Solving
    Demonstrates the knowledge and skills required to execute the 
position's assigned duties and responsibilities; ability to apply the 
knowledge and skills to solve problems. Exhibits and maintains current 
technical knowledge, skills, and abilities to produce timely and 
quality work with the appropriate level of supervision. Makes prompt, 
technically sound decisions and recommendations that add value to 
mission priorities and needs. Flexibility, adaptability, and decision-
making are exercised appropriately.
2. Cooperation/Teamwork
    Demonstrates traits of flexibility, adaptability, and decisiveness 
and the ability to exhibit and foster cooperation

[[Page 16131]]

in team efforts and organizational settings. Personal and 
organizational interactions exhibit and foster cooperation and 
teamwork. Accepts personal responsibility for assigned tasks. Is 
considerate of others' views and open to compromise on areas of 
difference. Exercises tact and diplomacy and maintains effective 
relationships, particularly in immediate work environment and/or 
teaming situations. Readily/willingly gives assistance. Shows 
appropriate respect and courtesy.
3. Communication
    Demonstrates effective listening, writing, and oral communication 
skills. Provides or exchanges oral/written ideas and information that 
are timely, accurate, and easily understood. Listens effectively so 
that resultant actions show understanding of what was said. Coordinates 
so that all relevant individuals and functions are included in, and 
informed of, decisions and actions.
4. Customer Care
    Demonstrates effective interactions with internal and external 
customers. Demonstrates care for customers through respectful, 
courteous, reliable, and conscientious actions. Seeks out, develops, 
and/or maintains solid working relationships with customers to identify 
their needs, quantifies those needs, and develops practical solutions. 
Keeps customer informed. Within the scope of job responsibility, seeks 
out and develops new programs and/or reimbursable customer work.
5. Resource Management
    Demonstrates effective use/management of personal and 
organizational resources such as time, personnel, equipment, and/or 
funds. Meets schedules and deadlines, and accomplishes work in order of 
priority (set by the employee's supervisor or team leader); generates 
and accepts new ideas and methods for increasing work efficiency; 
effectively utilizes and properly controls available resources; 
supports organization's resource development and conservation goals.
6. Leadership/Supervision
    This factor (VII.C.6.a. and VII.C.6.b.) is mandatory for 
supervisory/designated team leader positions. This factor is optional 
for all other employees using description VII.C.6.a. only.
    a. Demonstrates effective individual and organizational leadership 
to assess situations realistically; identifies and recommends or 
implements needed changes. Actively furthers the mission of the 
organization. Exercises leadership skills within the environment to 
include sensitivity to diversity and to ensure equity and fairness, as 
appropriate. (Description VII.C.6.a. may be applied to all employees, 
e.g., employee leads work group on special projects ensuring 
organizational mission and program success; employee effectively 
represents the interests of the organization on inter-agency groups, 
etc.)
    b. Works toward recruiting, developing, motivating, and training 
quality employees; initiates timely/appropriate personnel actions; 
applies EEO/merit principles; communicates mission and organizational 
goals; by example, creates a positive, safe, and challenging work 
environment; distributes work and empowers employees. (Description 
VII.C.6.b. may only be applied to supervisory/designated team leader 
positions.)
7. Contribution to Mission Accomplishment
    Executes the position's assigned duties in a manner that 
contributes to the successful outcome of strategic goals and 
objectives. Within the scope of job responsibility, develops approaches 
or solutions to tasks and problems impacting mission in a positive 
manner.

D. Benchmark Performance Standards

    Benchmark performance standards are descriptors that are used to 
measure, evaluate, and score each performance factor with regard to the 
accomplishment of performance objectives. Benchmark performance 
standards for each performance factor are established by ODUSD(CPP). 
The descriptors for these benchmark performance standards indicate the 
level of performance appropriate for the high end of each score range 
for the performance factor. These performance standards will assist the 
supervisor in determining the percentage of the performance factor that 
the employee actually attained. The DoD Component has the discretion to 
supplement standards to describe levels of performance throughout the 
score range. This discretion may be redelegated.

E. Performance Rating Process

1. Duration of the Rating Cycle
    The duration of the rating cycle will be 12 months. The rating 
cycle shall be October 1 through September 30 each year.
2. Minimum Rating Period
    In order to provide for meaningful evaluation of an employee's 
performance, the minimum rating period will be 90 days.
3. Communication at the Beginning of the Rating Cycle
    Within 30 days from the beginning of each rating cycle, the 
performance factors and benchmark performance standards should be 
provided to employees, so that they know the basis on which their 
performance and contributions will be assessed. At this time, employees 
and supervisors will jointly develop performance objectives as noted in 
VII.B. Supervisors are encouraged to cite specific examples to each 
employee of how to achieve the benchmark performance standards at each 
level of performance. The supervisor will define or clarify key terms 
for the employee.
4. Feedback During the Rating Cycle
    The supervisor may provide on-going feedback as necessary to 
employees on how well they are accomplishing performance objectives. 
Additionally, employees may request periodic feedback on how well they 
are performing. If the supervisor judges that the employee is not 
performing at an acceptable level on one or more performance factors, 
the supervisor must inform the employee and document the problem. This 
feedback will be provided at any time during the rating cycle. 
Deficiencies identified will be accompanied by a plan, if necessary, to 
correct them as noted in section VIII.
5. End-of-Cycle Evaluation
    a. Performance Feedback. At the end of the rating period, the 
supervisor may request that the employee provide narrative comments 
describing accomplishment of his/her performance objectives throughout 
the year. These narrative comments will permit the supervisor to 
evaluate more fully the performance of the employee during the rating 
period.
    The supervisor must communicate to the employee the supervisor's 
appraisal of the employee's performance on performance objectives, and 
the employee's performance score and rating on performance factors. 
Communication may occur through use of, but is not limited to, a 
performance review meeting to discuss job performance and 
accomplishments.
    b. Performance Scores. Following a review of the employee's 
accomplishments, the supervisor will score each relevant performance 
factor by assigning a value to each performance factor. Using the 
benchmark performance standards as a guideline, the supervisor will 
determine the level of performance actually performed or accomplished 
by the

[[Page 16132]]

employee and assign the appropriate point value to arrive at a total 
performance score. This performance score may total as high as 100 
points. In addition to determining the employee's performance score, a 
supervisor may provide a narrative evaluation of an employee's 
potential to perform in positions of greater responsibility or for 
other appropriate matters. Such narrative evaluations of potential may 
only be provided in accordance with DoD Component policy.
    c. Score Ranges and Shares for Payout. The overall score is the sum 
of the individual performance factor scores. The scores will be used to 
determine basic pay increases and/or performance incentives.

              Figure 3.--Score Ranges and Shares for Payout
------------------------------------------------------------------------
             Score range                  Performance payout (shares)
------------------------------------------------------------------------
98-100..............................  13, 14, 15, or 16
95-97...............................  11 or 12
91-94...............................  9 or 10
86-90...............................  7 or 8
81-85...............................  5 or 6
66-80...............................  3 or 4
51-65...............................  1 or 2
0-50................................  0
------------------------------------------------------------------------

    An employee will receive a performance payout as a percentage of 
current basic pay. This percentage is based on the number of shares 
that equate to his/her final rating score. After a rating has been 
assigned, the rater will recommend the number of shares that should be 
granted. The rater has discretion in determining the recommended number 
of shares within the framework listed above. The rater will take into 
consideration several factors, e.g., the score, the employee's current 
basic pay, and overall funding availability. The shares earned by an 
employee will be used in calculating the employee's performance payout 
as outlined in the payout formula in VII.F.1.
    d. Use of Performance Review Board. A performance review board or 
an equivalent process for oversight will be established for reviewing 
supervisors' preliminary scores and recommendations for the number of 
shares to be granted. The DoD Components may determine the composition 
of the review board. This review process gives raters the opportunity 
to verify that their evaluations and approach to scoring conform to 
that of other raters within the pay pool and ensures that performance 
assessments of employees are comparable and equitable within the pay 
pool. An order of merit listing will be developed by each rater and 
provided to the performance review board. Each listing will include all 
employees supervised by the rater, their corresponding scores, and 
recommended shares. This listing will be ordered from highest scores 
received to lowest scores received to facilitate the review process. If 
there are employees with identical scores, the rater will differentiate 
between these employees and prioritize them in the appropriate order on 
the listing. Consistent with BP requirements in this notice, this order 
of merit listing may be considered in determining such matters as 
reduction in force, promotions, training assignments, basic pay 
determinations or other matters deemed appropriate by the DoD 
Component. Listings may be developed for each career group to 
facilitate making distinctions between occupations if necessary. 
Operating procedures for the performance review board will be developed 
by each DoD Component.

F. Payout Process

    Each Component shall determine the pay pool structure. Authority to 
determine pay pool structure may be redelegated. Generally, pay pools 
are combinations of organizational elements (e.g. Divisions, Branches, 
etc.) that are defined for purposes of determining performance payouts 
under the PFP system. Typically, pay pools may range from as small as 
25 to as large as 500 employees. Decisions regarding the amount of the 
performance payout are based on the established performance payout 
calculations. Each DoD Component shall establish a pay pool manager for 
each pay pool. The pay pool manager is responsible for ensuring that 
distribution of funds is based upon employees' performance and 
contributions. A pay pool manager's final yearly pay adjustment 
decisions may still be subject to higher management review. Generally, 
supervisors will be placed in a pay pool separate from their employees.
1. Basic Pay Increases and Performance Incentives
    The amount of money available for performance payouts is divided 
into two elements, basic pay increases and performance incentives. The 
payouts made to employees from the performance pay pool will be basic 
pay increases and/or performance incentive payments, subject to the 
amounts available in the respective funds.
    The amount of money available within a pay pool for basic pay 
increases is determined by the general pay increase (GPI) and the money 
that would have been available for quality step increases, within-grade 
increases, and promotions between grades that are banded. This amount 
will be established at a certain percentage of the total of basic pay 
salaries in the pay pool (typically 2 to 2.4 percent plus the GPI), as 
determined by the pay pool manager. Performance incentive payments are 
funded separately, but the amount of money available for performance 
incentive payments must be equivalent to a minimum of 1 percent of 
total salary dollars (typically 1.3 to 1.8 percent). The sum of these 
two factors is referred to as the pay pool payout factor (e.g., 4.0 
percent performance basic pay, including the GPI, +1.3 percent 
performance incentive).
    Performance pay increases (i.e., basic pay increases) will not be 
granted to employees at the top of their pay band or in a pay retention 
status. In these cases, payouts earned as a function of performance may 
be paid as a performance incentive to the maximum authorized. A local 
activity may reallocate to employees not at the top of their pay band 
(uncapped employees) some or all of any unexpended basic pay funds for 
employees at the top of their pay band (capped employees). This 
reallocation is placed back into the pay pool and distributed to the 
uncapped employees based on shares earned. Any increase in an uncapped 
employee's basic pay as a result of this reallocation will be offset by 
an equivalent reduction in the employee's performance incentive 
payment. Thus, the uncapped employee's total performance payout is 
unchanged.
    Consistent with the requirements of DoD Component policy, the pay 
pool payout factor may be adjusted as necessary. Performance payouts 
will be calculated and administered so that a pay pool manager will not 
exceed the resources that are available in the pay pool.
    In making the annual performance payouts, the amount of that year's 
pay pool and share value will be determined as follows:
    a. The pay pool payout factor must be determined first. The pay 
pool payout factor is the percentage amount budgeted for basic pay 
increases and performance incentives. For purposes of illustration, 
assume that the organization has budgeted 4.2 percent for basic pay 
increases and 1.2 percent for performance incentive payments. 
Therefore, the pay pool payout factor is 5.4 percent.
    b. Next, the pay pool value is determined by multiplying the pay 
pool payout factor determined in VII.F.1.a. by the sum of the combined 
basic pay

[[Page 16133]]

salaries of all employees in the pay pool as follows:

Pool Value = Pay pool payout factor x Total Salaries of all employees

    Continuing the illustration from VII.F.1.a., assume there are 40 
employees in the pay pool with total combined basic pay salaries of 
$2,377,888. The total combined salaries is multiplied by the pay pool 
payout factor of 5.4 percent to provide an available total pay pool of 
$128,406 for basic pay increases and performance incentive payments. 
Based on the percentages budgeted by the organization in VII.F.1.a., $ 
98,871 would be for basic pay increases with the remaining $28,535 for 
performance incentive payments.
    c. Next, the share value is calculated. Each individual employee's 
basic pay salary is multiplied by the number of shares awarded to that 
employee (Salary x Shares). The sum total of (Salary x Shares) for all 
employees in the pay pool is divided into the pool value to arrive at 
the share value as follows:

Share Value = Pool Value/(Sum Total (Salary x Shares))

    The share value represents a fixed percentage basic pay increase 
for each employee. The value of a share cannot be exactly determined 
until the rating and review board process is complete. Continuing the 
illustration from VII.F.1.b., the pay pool amount of $128,406 is 
divided by 2,377,888 (which represents the sum total of each individual 
employee's basic pay multiplied by the number of shares awarded to that 
employee). This results in a share value of 0.00847059 or 0.85%.
    d. An employee's total performance payout is the share value 
multiplied by the employee's end-of-rating cycle basic pay salary 
multiplied by the number of shares earned by the employee.

Employee Performance Payout = Salary x Shares x Share Value

    This is illustrated by highlighting the performance payout of one 
of the employees in the example pay pool. The employee's end-of rating 
cycle basic pay salary is $75,112. The employee earned 15 shares. The 
salary is multiplied by the number of shares (15) multiplied by the 
share value (0.00847059). This results in a total performance payout of 
$9,544 with $7,423 as a basic pay increase and $2,121 as a performance 
incentive payout based on the percentages budgeted by the organization 
in VII.F.1.a.
2. College Cooperative Education Program
    Career group 5 employees shall not be assigned to any pay pool and 
shall not participate in PFP payouts. Salary adjustments, including the 
GPI, will be funded outside of the pay pools. CG 5 employees will be 
placed in the PFP system for payout purposes when they successfully 
complete the college cooperative education program and are converted to 
a career appointment.
3. Awards
    Awards may be used to acknowledge an employee's extraordinary 
contributions or exceptional accomplishments. Consistent with current 
DoD Component/activity awards authorities and delegations, awards may 
be granted to employees, either as individuals or as members of a team, 
consistent with DoD Component awards regulations. Awards are not part 
of the PFP system. The granting of such awards shall be based on a 
suggestion, invention, superior accomplishment, productivity gain, or 
other personal effort that contributes to the efficiency, economy, or 
other improvement to Government operations or achieves a significant 
reduction in paperwork. The award itself may be monetary, non-monetary, 
informal recognition, honorary, time-off, or a combination thereof.
    The awards budget is separate from money used for base pay 
increases and performance incentives. The amount of money available for 
awards must be equivalent to a minimum of one-half percent of total 
salary dollars.

G. Grievance Procedures

    An employee may grieve the performance score. If an employee is 
covered by a negotiated grievance procedure that permits grievances 
over performance scores, then the employee must resolve a grievance 
over the performance score under that procedure (i.e., that procedure 
is the sole and exclusive procedure for resolving such grievances for 
bargaining unit employees). If an employee is not in a bargaining unit, 
or is in a bargaining unit but grievances over performance scores are 
not covered under the negotiated grievance procedure, then the employee 
may use the appropriate administrative grievance procedure. Base pay 
increases and performance incentive payments will not be delayed as a 
result of an employee filing a grievance concerning the performance 
score. Any decisions on the grievance shall not affect other employees' 
performance payouts.

VIII. Performance That Fails To Meet Expectations

A. Notice to Employee and Performance Improvement Plan

    Informal employee performance reviews will be provided on an on-
going basis, so that corrective action, to include placing an employee 
on a performance improvement plan (PIP), may be taken at any time 
during the rating cycle. Whenever a supervisor determines that an 
employee's overall performance score falls below 51 points, the 
supervisor will immediately inform the employee. The reasons for the 
unacceptable performance will be identified and communicated to the 
employee as follows.
    The supervisor will provide written notification outlining the 
unacceptable performance to the employee. At this point, an opportunity 
to improve will be structured in a PIP. The employee will be required 
to identify to the supervisor what actions the employee will take to 
improve the items identified by the supervisor as needing correction or 
improvement. The employee will also recommend a time frame for making 
such corrections or improvements. The supervisor makes the final 
determination on the actions necessary to correct or improve the 
employee's performance and the required time frame. If the employee's 
unacceptable performance impacts the employee's performance payout, the 
PIP shall be a minimum of 90 days. In all other instances, PIPs should 
generally be no less than 30 days. The employee will be provided with 
any available assistance, as appropriate. The supervisor will monitor 
the employee's progress during the PIP, counsel the employee, and 
document all counseling sessions. If the employee fails to achieve a 
level of performance that is at least equal to that of an overall 
performance score of 51 points or higher following completion of the 
PIP, the supervisor will take appropriate action as outlined in VIII.B.

B. Action Upon Completion of Performance Improvement Period

    If the employee's performance is acceptable at the conclusion of 
the PIP, no further action is necessary. If a PIP ends before the end 
of the annual rating cycle and the employee's performance improves to 
an acceptable level, the employee is appraised at the end of the annual 
rating cycle.
    If the employee fails to improve during the PIP, the employee will 
be given written notice of the proposed personnel action. This action 
may include reduction in pay, reduction in pay band level, change in 
position or

[[Page 16134]]

occupational family at a lower rate of pay, or removal from the Federal 
Service. The advance written notice period will be a minimum of 15 
calendar days, and the employee will have 7 calendar days in which to 
reply. The employee will be given a written notice of decision to 
include all applicable grievance and appeal rights, as appropriate.
    Employees who fail to improve performance to a level that is at 
least equal to that of an overall performance score of 51 points or 
higher may not remain at their current salary and may be reduced in 
pay, pay band level or removed from Federal service. Reductions in 
salary within the same pay band or changes to a lower pay band will be 
up to 5 percent of base pay.
    All relevant documentation concerning a reduction in pay or removal 
based on unacceptable performance will be preserved and made available 
for review by the affected employee or a designated representative. As 
a minimum, the record will consist of a copy of the notice of proposed 
personnel action and the employee's written reply, if any, or a summary 
when the employee makes an oral reply. Additionally, the record will 
contain the written notice of decision and the reasons therefore, along 
with any supporting material (including documentation regarding the 
opportunity afforded the employee to demonstrate improved performance 
and any input the employee provided on what actions the employee would 
take to correct or improve their performance).
    With regard to an employee who successfully completes a performance 
improvement period, management may reduce in pay, reduce in pay band 
level, change in position or occupational family at a lower rate of 
pay, or remove the employee with no additional improvement opportunity 
within 2 years following successful completion of the PIP if the 
employee's performance deteriorates to an overall performance score 
less than 51 points or the employee fails to perform at an acceptable 
level in a performance factor. The employee will be given written 
notice of the proposed personnel action. The advance written notice 
period will be a minimum of 15 calendar days, and the employee will 
have 7 calendar days in which to reply. The employee will be given a 
written notice of decision to include all applicable grievance and 
appeal rights, as appropriate.

IX. Expanded Sabbatical Authority

    DoD activities have the authority to grant paid sabbaticals to 
career employees to permit them to engage in study or uncompensated 
work experience that will contribute to their development and 
effectiveness. One developmental opportunity for a sabbatical (3-12 
months in duration) may be granted to an employee in any 10-year 
period. Employees will be eligible after completion of 7 years of full-
time Federal service. Each opportunity must result in a product, 
service, report, or study that will benefit the DoD activity mission as 
well as increase the employee's individual effectiveness. Various 
learning or developmental experiences may be considered, such as 
advanced academic teaching; study; research; self-directed or guided 
study; and on-the-job work experience with a public, private 
commercial, or private nonprofit organization. Employees approved for a 
paid sabbatical must sign a service obligation agreement to continue in 
service for a period equivalent to the length of the sabbatical. If an 
employee voluntarily leaves Federal service before this service 
obligation is completed, the employee is liable for repayment of any 
expenses associated with the sabbatical. Conflict of interest laws and 
regulations continue to apply.

X. Volunteer Emeritus Program

    The volunteer emeritus program will provide continued quality 
experience and technical support while reducing the overall salary line 
by allowing higher paid individuals to accept retirement incentives 
with the opportunity to retain a presence in the organization. Each 
activity head will have the authority to offer retired or separated 
individuals volunteer assignments in support of the continuance of 
specialized work projects or to retain corporate knowledge as advisors 
or mentors, but not to perform duties that would otherwise be performed 
by DoD employees, including the duties that the separated or retired 
employee performed before leaving the Department of Defense. Volunteer 
emeritus program assignments are not considered employment by the 
Federal Government (except for purposes of injury compensation). Thus, 
such assignments do not affect an employee's entitlement to buy-outs or 
severance payments based on an earlier separation from Federal Service. 
This program will be of most benefit during manpower reductions, as 
senior members of the workforce could accept retirement and return to 
provide valuable on-the-job training or mentoring to less experienced 
employees.
    Volunteer service shall not be used to replace any employee, or 
interfere with career opportunities of employees. In addition, an 
employee may not continue to perform his/her former duties as a 
volunteer emeritus.
    To be accepted into the emeritus corps, a volunteer must be 
recommended by a supervisor and approved by the activity head. An 
individual wanting consideration for the emeritus corps may submit a 
request to his/her decision-making authority; however, no one who 
applies is entitled to a volunteer assignment.
    The volunteer's Federal retirement pay (whether military or 
civilian) will not be affected while serving in a volunteer capacity. 
Retired or separated Federal employees may accept an emeritus position 
without a break in service or mandatory waiting period.
    Volunteer emeritus corps members will not be permitted to perform 
any inherently Governmental functions, including monitoring contracts 
on behalf of the Government. The volunteers may be required to submit a 
financial disclosure form annually and will not be permitted to 
participate on any contracts or other activities where a conflict of 
interest exists. The same rules that currently apply to source 
selection members will apply to volunteers.
    In each case, there must be a written agreement between the 
volunteer, the decision-making authority, and the personnel servicing 
activity stating the volunteer's duties and agreement by the volunteer 
that he or she is not entitled to any pay or compensation for 
performance of volunteer duties. The agreement must be finalized before 
the assumption of duties.

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

    RIF shall be conducted according to the following provisions.
    Policy: The DoD policy is to accomplish required civilian personnel 
reductions through attrition whenever practicable. Involuntary 
separation or furlough of employees will occur only when other prudent 
actions cannot accomplish the required results.
    Competition in RIF: Employees compete for retention within their 
retention levels and the next lower retention level for positions with 
the same title and in the same series during RIF competition. When 
positions are abolished, employees are released from their retention 
levels in inverse order of their retention standing, beginning with the 
employee having the lowest standing. If an employee is reached for 
release from a retention level, he or she

[[Page 16135]]

could have a right to be assigned to another position in the next lower 
retention level containing positions with the same title and series. If 
so, the employee must be offered that position or an equivalent one.

A. Competitive Area

    The competitive area may be determined by career groups, lines of 
business, product line(s), organizational unit(s), funding lines and/or 
geographical location, or a combination of these elements, and must 
include all employees within the defined competitive area. Descriptions 
of all competitive areas must be made readily available for review.

B. Retention Level

    1. Separate retention levels are established for all positions, 
based on the following:
    a. Service (competitive and excepted service).
    b. Within the excepted service, for each different appointment 
authority (e.g., Veterans' Readjustment Appointment, Schedule A 
authority).
    c. Career group.
    d. Title/specialization, series, pay band level (may include 
primary functional code, as appropriate).
    e. Work schedule (full-time, part-time, intermittent, seasonal, or 
on-call basis). No distinction may be made on the basis of number of 
hours or weeks scheduled to be worked.
    f. Trainee status (formally designated trainee or development 
program having all the characteristics covered in 5 CFR 351.702(e)(1) 
through (e)(4)). Trainees may be placed in a separate competitive area.
    2. Factors that do not justify establishment of separate retention 
levels:
    a. Rotating shift requirements.
    b. Supervisory positions.
    Supervisors compete in the career group and level of the work 
supervised, or the technical work accomplished, that forms the basis 
for the classification of the position.

C. Retention List

    The retention list consists of all positions in a retention level 
and contains the name of each competing employee who is officially 
assigned to that level in retention standing order. Retention 
determinations are based on each employee's official position, not the 
employee's personal qualifications.

D. Retention Standing

    Competing employees shall be listed on the retention list according 
to their retention standing. Preference eligibles with a service-
connected disability of 30 percent or more and whose current 
performance score exceeds 50 will be listed at the top of the list for 
the retention level according to their tenure group in individual 
performance score order. If there is more than one preference eligible 
with a service-connected disability of 30 percent or more in a tenure 
group, they shall be ordered by individual performance score.
    Retention standing for all other employees shall be based on the 
following factors:
1. Tenure
    Tenure group I includes all career employees, including those 
serving on an initial probationary period. Tenure group II includes 
those employees on indefinite appointments, temporary appointments for 
more than 12 months pending establishment of a register, status quo 
appointments, term appointments, and any other nonstatus nontemporary 
appointments, which meet the definition of provisional appointments 
contained in 5 CFR 316.401 and 316.403. The tenure group provisions 
apply equally to employees in both the competitive and excepted 
services.
2. Performance
    Within each tenure group, employees will be listed in individual 
performance score order. Employees with performance scores between 0 
and 50 are ineligible to compete in RIF, regardless of tenure or 
preference.
3. Veterans' Preference
    Within each performance score, employees will be sorted by 
veterans' preference. The A sort includes preference eligibles other 
than those with a service-connected disability of 30 percent or more. 
Sort B includes nonpreference eligibles.
    Ties will be broken first by RIF service computation date and 
second by order of merit ranking.

E. Credit for Performance

    Prior to the initial rating of record under the BP schema, 
employees are entitled to retention credit based on 5 CFR 351.504, 
``Credit for performance.''
    After the initial rating of record under the BP PFP management 
system, employees are entitled to retention credit based on the 
employee's performance scores. (See VII.E.5.d.) This includes employees 
converted during system stand-up and all employees converted at a later 
time. Employees receive retention credit for up to a maximum of three 
performance scores received during the 4-year period before the date of 
the issuance of RIF notices or cut-off date, as follows:
1. First Cycle
    After completion of the first rating cycle, employees will be 
provided credit for performance based on their actual performance 
scores.
2. Second Cycle
    After completion of the second rating cycle, employees will be 
provided performance credit based on the average of their first two 
performance scores.
3. Third Cycle
    After completion of the third rating cycle, employees will be 
provided performance credit based on the average of their last three 
performance scores.
4. Accessions After First Cycle
    Employees entering this system after the first rating cycle has 
been accomplished will be assigned a performance score based on the 
modal score range for the competitive area. This includes employees who 
have not been in this system 90 days and have not received a rating 
during any cycle.
5. Cutoff Dates
    To provide adequate time to determine employee retention standing, 
organizations may provide for a cutoff date, a specified number of days 
prior to the issuance of RIF notices, after which no new ratings of 
record will be used. When a cutoff date is used, an employee will 
receive performance credit for the three most recent performance scores 
received during the 4-year period before the cutoff date. Regardless of 
the number of applicable ratings, the average will be used to determine 
retention standing, unless only a modal rating has been assigned. In 
this circumstance, only the modal rating will be used.
    To be creditable for retention standing, a performance score must 
have been issued to the employee, with all appropriate reviews and 
signatures, and must be on record (i.e., the performance score is 
available for use by the office responsible for establishing retention 
lists).

F. Assignment Rights

    Employees can displace other employees with lower retention 
standing in the same or next lower retention level for positions with 
the same title and series within the competitive area of the RIF. When 
a tenure group I competitive service employee with a current 
performance score of 51 or higher is reached for

[[Page 16136]]

release from the retention list for that employee's retention level, an 
offer of assignment shall be made to another competitive service 
position which requires no reduction, or the least possible reduction, 
in earning potential.
    Vacancies may be used (within the employee's assignment rights). 
Additionally, an employee reached for release from the retention list 
shall be offered assignment (as defined in XI.F.) to another position 
encumbered by an employee with lower retention standing. If the 
employee accepts, the employee shall be assigned to the position 
offered. If the employee has no assignment right or does not accept an 
offer of assignment, the employee shall be furloughed or separated.
    Employees reached for release who qualify for positions occupied by 
employees with lower retention may displace a lower standing employee 
as long as undue interruption does not occur, except that they may not 
displace employees who occupy positions with higher earning potential. 
Undue interruption means the degree of interruption that would prevent 
the completion of required work by the employee 90 days after the 
employee has been placed in a different position.
    If there is no placement within the employee's retention level, a 
displaced employee may be assigned to a position in the next lower 
retention level (level determined on same retention level factors 
including same title and series) from which the employee is being 
displaced in accordance with the assignment rights designated as 
follows.
    Assignment rights are determined by retention level and may be 
defined by (1) the pay band level within a given career group and (2) 
the pay schema (e.g., displacement within a pay band level may extend 
no lower than 75 percent of the affected employee's current base pay). 
When the assignment range (e.g., 75 percent of base pay) exceeds the 
pay band level, assignment may be made in a lower pay band level within 
a retention level defined by the same factors. If assignment is offered 
into a lower pay band level, employees (other than 30 percent 
compensably disabled veterans) may displace only within the highest 25 
percent of the salary rate range for the career group and lower pay 
band level. Thirty percent compensably disabled veterans may displace 
within a range of 100 percent of basic pay within their current career 
group and pay band level; additionally, when the range exceeds the 
current pay band level, such veterans may displace within the highest 
50 percent of the salary rate range for the level lower and within the 
retention level defined by the same factors.

XII. Evaluation Plan

    Chapter 47 of 5 U.S.C. requires that an evaluation be performed to 
measure the results of a demonstration project and its impact on 
improving public management (5 U.S.C. 4703(h)). A comprehensive 
evaluation plan for the entire science and technology (S&T) reinvention 
laboratory demonstration program was developed by a joint OPM/DoD 
Evaluation Committee in 1995, and the resultant final summative 
evaluation report covering 1997-2001 (the first 5 years of operation) 
was issued in August 2002. As noted in the Supplementary Information 
section of this notice, best practices were identified through a review 
of initiatives that have been subject to testing and evaluation in 
demonstrations and alternative personnel systems (APSs). An evaluation 
plan is established by ODUSD(CPP) to assess program results as the S&T 
reinvention laboratory demonstrations continue in operation under best 
practices. Under this plan, evaluation of S&T laboratory demonstration 
program results and the program's impact on improving DoD human 
resources management will continue to address six general issues, as 
follows:

    A. The degree to which the program's purpose and goals are met;
    B. Cost;
    C. Project implementation and operation;
    D. Impact on veterans, minorities, and women;
    E. Impact on merit system principles and prohibited personnel 
practices; and
    F. Degree of potential applicability of the program to other groups 
within the Department of Defense.

XIII. Project Duration

    Section 342 of Pub. L. 103-337 removed any mandatory expiration 
date for the S&T reinvention laboratory demonstration project program. 
Major changes and modifications to the demonstration project plan 
contained in this amendment can be made through announcement in the 
Federal Register.

XIV. Required Waivers and Adaptations of Law and Regulation

    Section 342 of Pub. L. 103-337, as amended, gave the Department of 
Defense the authority to experiment with several personnel management 
innovations in the Department of Defense science and technology (S&T) 
reinvention laboratories. In addition to the authorities granted by the 
law, the following are waivers and adaptations of law and regulation 
that will be necessary for implementation of best practices in the S&T 
reinvention laboratory demonstration project program. In due course, 
additional laws and regulations may be identified for waiver.
    Those personnel policies, programs, and entitlements not included 
as part of the demonstration project best practices (e.g., discipline, 
benefits, and entitlements) will be administered in accordance with 
existing statutes and regulations. The following waivers and 
adaptations of certain provisions are required only to the extent that 
these statutory provisions limit or are inconsistent with the actions 
contemplated under demonstration project best practices.

Waivers and Adaptations of Title 5, United States Code (U.S.C.)

    Chapter 5, Section 552a: Records Maintained on Individuals. This 
section is adapted only to the extent necessary to allow volunteers 
under the volunteer emeritus program to be treated as ``Federal 
personnel,'' as that term is defined in this section.
    Chapter 31, Section 3132: The Senior Executive Service; Definitions 
and Exclusions. This section is adapted to the extent necessary to 
allow creation of pay band level 3, CG 1, Science and Engineering 
Research, and pay band level 4, CG 2, Professional and Administrative 
Management.
    Chapter 33, Section 3308: Competitive Service; Examinations; 
Educational Requirements Prohibited; Exceptions. This section is waived 
with respect to the scholastic achievement appointment authority.
    Chapter 33, Section 3317(a): Competitive Service; Certification 
from Registers. This section is waived to eliminate the ``rule of 
three.''
    Chapter 33, Section 3318(a): Competitive Service; Selection from 
Certificates. This section is waived to eliminate the ``rule of three'' 
and to allow preference eligibles to be passed over.
    Chapter 33, Section 3319: Alternative Ranking and Selection 
Procedures. This section is adapted only to the extent necessary to 
give the Department of Defense authority to use alternative ranking and 
selection procedures without OPM regulation, and to allow rating, 
ranking, and referral by quality groups of all candidates, including 
disabled veterans with a compensable service-connected disability of 10 
percent or more.
    Chapter 33, Section 3321(a)(2): This section is waived to eliminate 
the

[[Page 16137]]

requirement for probationary period before initial appointment as a 
supervisor or manager.
    Chapter 33, Section 3324: Appointment to Positions Classified Above 
GS-15. This section is waived to allow creation of pay band level 3, CG 
1, Science and Engineering Research, and pay band level 4, CG 2, 
Professional and Administrative Management.
    Chapter 33, Section 3341: Details; Within Executive or Military 
Departments. This section is adapted to allow details to extend beyond 
120 days.
    Chapter 35, Section 3502(c): This section is waived to allow 
performance score as a retention factor before veterans' preference.
    Chapter 43, Section 4301(3): Definitions. This section is waived to 
allow a different definition of the term, ``unacceptable performance.''
    Chapter 43, Section 4302: Establishment of Performance Appraisal 
Systems. This section is adapted to allow pay banding and to 
accommodate performance-focused pay features of the PFP evaluation 
system.
    Chapter 43, Section 4302(a)(3): Establishment of Performance 
Appraisal Systems. This section is adapted to replace the term 
``grade'' with ``pay band level'' and accommodate best practices 
procedures for taking actions on unacceptable performance.
    Chapter 43, Section 4302(b)(1): Establishment of Performance 
Appraisal Systems. This section is waived to accommodate demonstration 
project best practices establishment of benchmark performance 
standards.
    Chapter 43, Section 4302(b)(2): Establishment of Performance 
Appraisal Systems. This section is adapted only to the extent necessary 
to replace the term ``critical elements'' with ``performance objectives 
and performance factors.''
    Chapter 43, Sections 4303(a), (b), and (c): Actions Based on 
Unacceptable Performance. These sections are adapted to replace the 
term ``grade'' with ``pay band level'' and accommodate demonstration 
project best practices procedures for taking actions based on 
unacceptable performance. Appeal rights apply as provided for in BP 
requirements.
    Chapter 43, Sections 4304(b)(1) and (3): Responsibilities of the 
Office of Personnel Management. These sections are waived to reflect 
changes in responsibilities authorized by section 342 of Pub. L. 103-
337, as amended by section 1114 of Pub. L. 106-398.
    Chapter 51, Sections 5101-5115: Classification. These sections 
regarding classifying and grading positions are waived to permit 
allocation of demonstration project best practices positions to pay 
band levels on the basis of descriptors.
    Chapter 53, Sections 5301; 5302(1), (8), and (9); 5303; and 5304: 
Pay Comparability System. These sections are adapted to: (1) Allow 
employees in CG 1, level 3, Science and Engineering Research, and CG 2, 
level 4, Professional and Administrative Management, to be treated as 
ST employees; (2) allow supervisor B and C employees of CG 1, level 2; 
supervisor D employees of CG 2, level 2; and supervisor B and C of CG 
2, level 3, to be treated as ST employees; (3) allow all other 
demonstration project best practices employees to be treated as GS 
employees; and (4) allow basic rates of pay under demonstration project 
best practices to be treated as scheduled rates of basic pay. These 
adaptations do not apply to ST employees, who will continue to be 
covered by these title 5 statutory provisions, as appropriate.
    Chapter 53, Section 5305: Special Pay Authority. This section is 
waived to make special salary rates inapplicable to BP employees after 
their conversion into demonstration project best practices and to allow 
special salary rate supplements only when specifically incorporated 
through the use of the SSR supplement provisions of demonstration 
project best practices.
    Chapter 53, Section 5305 Special Pay Authority Reference to Federal 
Employees Pay Comparability Act of 1990 (Public Law 101-509): Federal 
Law Enforcement Pay Reform. This title is adapted only to allow law 
enforcement officers covered by demonstration project best practices to 
be treated as law enforcement officers under the GS.
    Chapter 53, Section 5306: Pay Fixed By Administrative Action. This 
section is adapted to the extent that pay may not be paid, through the 
exercise of authority under this section, at a rate in excess of the 
rate of basic pay payable for SES level 4 (ES-4).
    Chapter 53, Sections 5331-5338: General Schedule Pay Rates. These 
sections are waived to allow career groups and pay band levels and 
accommodate performance-focused pay features of demonstration project 
best practices.
    Chapter 53, Sections 5361-5366: Grade and Pay Retention. These 
sections are waived to: (1) Eliminate grade retention; (2) eliminate 
pay retention provisions for reductions in pay due solely to the 
removal or reduction of supervisory pay upon leaving a supervisory 
position; (3) provide that pay retention provisions apply to 
nonsupervisory employees for a maximum of two years after pay is 
reduced; (4) provide that pay retention provisions do not apply to 
conversions from GS special rates to demonstration project best 
practices pay, as long as total pay is not reduced; (5) provide that 
pay retention does not apply to reduction in basic pay due solely to 
the reallocation of demonstration project best practices pay rates in 
the implementation of a SSR supplement; (6) provide that, for employees 
assigned to level 3, CG 1, Science and Engineering Research, and 
employees assigned to level 4, CG 2, Professional and Administrative 
Management, pay retention is not applicable and pay retention 
provisions are modified so that no rate established under these 
provisions may exceed the rate of basic pay for GS-15, step 10 (i.e., 
there is no entitlement to retained rate); and (7) otherwise allow 
demonstration project best practices employees to be treated as GS 
employees. These adaptations do not apply with respect to coverage for 
ST employees, except when an ST employee moves to a GS-equivalent 
position within demonstration project best practices under conditions 
that trigger entitlement to pay retention.
    Chapter 55, Sections 5542(a)(1)-(2): Overtime Rates; Computation. 
These sections are adapted only to the extent necessary to provide that 
the GS-10 minimum special rate (if any) for the special rate category 
to which a demonstration project best practices employee belongs is 
deemed to be the ``applicable special rate'' in applying the pay cap 
provisions in 5 U.S.C. 5542.
    Chapter 55, Section 5543: Compensatory Time Off. This section is 
adapted only to the extent necessary to provide that the GS-10 maximum 
special rate (if any) for the special rate category to which a 
demonstration project best practices employee belongs is deemed to be 
the ``applicable special rate'' in applying the compensatory time off 
provisions in 5 U.S.C. 5543.
    Chapter 55, Section 5545(d): Hazardous Duty Differential. This 
section is adapted to allow demonstration project best practices 
employees to be treated as GS employees. However, this adaptation does 
not apply to ST employees or employees in CG 1, level 3, Science and 
Engineering Research, and CG 2, level 4, Professional and Business 
Management; supervisor B and C employees of CG 1, level 2; supervisor D 
employees of CG 2, level 2; and supervisor B and C of CG 2, level 3. 
They are excluded from coverage under 5 U.S.C. 5545(d).
    Chapter 55, Section 5547(a)-(b): Limitation on Premium Pay. These 
sections are adapted only to the extent necessary to provide that the 
GS-15 maximum special rate (if any) for the

[[Page 16138]]

special rate category to which a project employee belongs is deemed to 
be the ``applicable special rate'' in applying the pay cap provisions 
in 5 U.S.C. 5547.
    Chapter 57, Sections 5753, 5754, and 5755: Recruitment and 
Relocation Bonuses; Retention Allowances; and Supervisory 
Differentials. These sections are adapted only to: (1) Allow employees 
in CG 1, level 3, Scientific and Engineering Research, and CG 2, level 
4, Professional and Business Management; (supervisor B and C employees 
of CG 1, level 2; supervisor D employees of CG 2, level 2; and 
supervisor B and C of CG 2, level 3 to be treated as ST employees; (2) 
allow all other demonstration project best practices employees to be 
treated as GS employees; and (3) allow basic rates of pay under 
demonstration project best practices to be treated as scheduled rates 
of basic pay. However, these adaptations do not apply to ST employees, 
who will continue to be covered by these Title 5 statutory provisions, 
as appropriate.
    Chapter 59, Section 5941: Allowances Based on Living Costs and 
Conditions of Environment; Employees Stationed Outside Continental 
United States or in Alaska. This section is adapted only to the extent 
necessary to provide that cost of living allowances (COLAs) paid to 
employees under demonstration project best practices are paid in 
accordance with regulations prescribed by the President (as delegated 
to OPM).
    Chapter 71: Labor-Management Relations. This chapter is waived only 
to the extent that 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 employees represented by the union will be 
converted into this demonstration project.
    Chapter 75, Section 7512(3) and (4): Adverse Actions. These 
sections are adapted only to the extent necessary (1) to replace 
``grade'' with ``pay band level,'' (2) to provide that reductions in 
pay band level not accompanied by a reduction in pay are not covered by 
chapter 75, subchapter II, (3) to ensure that adverse action provisions 
do not apply (a) to conversions from GS special rates to demonstration 
project pay or from other demonstration project pay to this 
demonstration project pay, as long as total pay is not reduced, and (b) 
to supervisory pay when an employee moves to a lower level supervisory 
position or to a nonsupervisory position, and (4) to otherwise 
accommodate demonstration project best practices features.
    Chapter 75, Section 7513: Cause and Procedure. This section is 
adapted only to the extent necessary to accommodate demonstration 
project best practices features.

Waivers and Adaptations of Title 5, Code of Federal Regulations (CFR)

    Section 213.3102(bb): Excepted Schedules. This section is adapted 
to eliminate the requirement for prior OPM approval.
    Sections 300.601-300.605: Time-in-Grade Restrictions. These 
sections are waived to eliminate time-in-grade restrictions under this 
demonstration project.
    Sections 315.801 and 315.802: Probationary Period. These sections 
are adapted only to the extent necessary to allow extended probationary 
periods up to three years, as specified in the project plan for this 
demonstration project.
    Section 315.901-315.909: Probation on Initial Appointment to a 
Supervisory or Managerial Position. These sections are waived to 
eliminate supervisory probationary period.
    Section 316.301: Term Employment; Purpose and Duration. This 
section is adapted to allow modified term employee appointments to 
cover a maximum period of 6 years.
    Section 316.303: Tenure of Term Employees. This section is adapted 
to allow employees on demonstration project modified term employee 
appointments to compete for permanent status through local merit 
promotion plans.
    Section 332.402: Regular Order of Certification for Appointment. 
This section is waived.
    Section 332.404: Order of Selection from Certificates. This section 
is adapted to eliminate the ``rule of three'' under this demonstration 
project.
    Section 332.406: Objections to Eligibles. This section is adapted 
only to the extent necessary to allow the Department of Defense to act 
on objections to eligibles.
    Part 333: Recruitment and Selection for Temporary and Term 
Appointments Outside the Register. This section is adapted to allow 
noncompetitive temporary and term appointments.
    Section 335.103 (c)(i): Agency Promotion Programs. This section is 
adapted only to the extent necessary to allow temporary job changes of 
2 years or less to a position in a higher pay band level and to expand 
discretionary exemptions to agency promotion programs.
    Section 339.306: Processing Medical Eligibility Determinations on 
Certificates of Eligibles. Adapted to allow the Department of Defense 
to make the necessary medical determinations.
    Part 351: Reduction in Force. This part is adapted to the extent 
necessary to allow provisions of the RIF plan as described in this 
Federal Register notice for this demonstration project. Specific 
adaptations and waivers include:
    Section 351.203: Definitions. This section is adapted to conform to 
Federal Register notice and best practices.
    Section 351.205: Authority of OPM. This section is waived.
    Section 351.402(b): Competitive Area. This section is waived only 
to the extent necessary to allow competitive area to be defined by 
career group, line of business, product line, organization unit, 
funding line, and/or geographic location.
    Section 351.403: Competitive Level. This section is waived.
    Section 351.404: Retention Register. This section is eliminated to 
allow establishment of retention levels and retention register as 
provided in this Federal Register notice for this demonstration 
project.
    Sections 351.501-351.504: These sections are waived.
    Section 351.701: Assignment Involving Displacement. This section is 
waived.
    Part 430, Subpart B: Performance Appraisal for General Schedule, 
Prevailing Rate, and Certain Other Employees. This subpart is waived to 
accommodate the establishment of this demonstration project's pay for 
performance evaluation system.
    Part 432: Performance Based Reduction in Grade and Removal. This 
part is adapted to (1) allow employees to be removed, reduced in pay 
band level with a reduction in pay, reduced in pay without a reduction 
in pay band level, and reduced in pay band level without a reduction in 
pay based on unacceptable performance, (2) eliminate performance 
standards and critical elements, (3) incorporate what constitutes 
``acceptable performance'' and ``unacceptable performance,'' as defined 
in the demonstration project plan, (4) replace the term ``grade'' with 
``pay band level,'' and (5) provide that, for employees who are reduced 
in pay band level without a reduction in pay, Sections 432.105 and 
432.106(a) do not apply.
    Section 432.102: Coverage. This section is adapted to the extent 
necessary to replace ``grade'' with ``pay band level.''
    Sections 432.104 and 432.105: Addressing Unacceptable Performance; 
Proposing and Taking Action Based on Unacceptable Performance. These 
sections are waived to allow the establishment of alternative 
procedures

[[Page 16139]]

under the pay for performance evaluation system.
    Part 511, Sections 511.101-511.703: Classification Under the 
General Schedule. These sections are waived to: (1) Permit allocation 
of best practices positions to pay band levels on the basis of pay band 
level descriptors; (2) permit reconsideration of pay system, 
occupational series, title, or pay band level according to the 
procedures established by the BP.
    Part 530, Subpart C: Special salary rates. This subpart is waived 
to the extent necessary to provide that special salary rates are 
inapplicable to BP employees after their conversion into BP.
    Part 531, Subpart C: Special Pay Adjustments for Law Enforcement 
Officers. This subpart is adapted only to: (1) Allow law enforcement 
officers in CG 2, level 4, Professional and Administrative Management, 
to be treated as ST employees; (2) allow all other law enforcement 
officers to be treated as GS employees; and (3) allow basic rates of 
pay under BP to be treated as scheduled rates of basic pay. However, 
these adaptations do not apply to ST employees, who will continue to be 
covered by these Title 5 regulatory provisions, as appropriate.
    Part 531, Subparts B, D and E: Determining Rates of Basic Pay; 
Within-Grade Increases; and Quality Step Increases. These subparts are 
waived to allow pay banding and accommodate performance-focused pay 
features of this demonstration project's pay for performance evaluation 
system.
    Part 531, Subpart F: Locality-Based Comparability Payments. This 
subpart is adapted only to the extent necessary to: (1) Allow employees 
in CG 1, leve1 3, Scientific and Engineering Research, and CG 2, level 
4, Professional and Administrative Management, to be treated as ST 
employees; (2) allow supervisor B and C employees of CG 1, level 2; 
supervisor D employees of CG 2, level 2; and supervisor B and C 
employees of CG 2, level 3 to be treated as ST employees; (3) allow all 
other BP employees to be treated as GS employees; and (4) allow basic 
rates of pay under best practices to be treated as scheduled rates of 
basic pay. However, these adaptations do not apply to ST employees, who 
will continue to be covered by these Title 5 regulatory provisions, as 
appropriate.
    Part 536: Grade and Pay Retention. This part is adapted to: (1) 
Eliminate grade retention; (2) eliminate pay retention provisions for 
reductions in pay due solely to the removal of or reduction in a 
supervisory adjustment upon leaving a supervisory position for another 
supervisory position or a nonsupervisory position; (3) provide that pay 
retention provisions do not apply to conversions from GS special rates 
to BP pay, as long as total pay is not reduced; (4) provide that pay 
retention provisions do not apply to reductions in basic pay due solely 
to the reallocation of BP pay rates in the implementation of a SSR 
supplement; (5) provide that pay retention provisions apply to 
nonsupervisory employees for a maximum of two years after pay is 
reduced; and (6) ensure that for employees of CG 1, level 3, Scientific 
and Engineering Research, and CG 2, level 4, Professional and 
Administrative Management, pay retention is not applicable and pay 
retention provisions are modified so that no rate established under 
these provisions may exceed the rate of basic pay for GS-15, step 10 
(i.e., there is no entitlement to retained rate). These adaptations do 
not apply with respect to coverage for ST employees, except when an ST 
employee moves to a GS-equivalent position within BP under conditions 
that trigger entitlement to pay retention.
    Part 550, Sections 550.105-550.106: Biweekly and Annual Maximum 
Earnings Limitations. These sections are adapted only to the extent 
necessary to provide that the GS-15 maximum special rate (if any) for 
the special rate category to which a BP employee belongs is deemed to 
be the ``applicable special rate'' in applying the pay cap provisions 
in 5 U.S.C. 5547.
    Part 550, Section 550.113(a): Computation of Overtime Pay. This 
section is adapted only to the extent necessary to provide that the GS-
10 minimum special rate (if any) for the special rate category to which 
a BP employee belongs is deemed to be the ``applicable special rate'' 
in applying the pay cap provisions in 5 U.S.C. 5542.
    Section 550.703: Definitions. This section is adapted only to the 
extent necessary to modify the definition of ``reasonable offer'' by 
replacing ``two grade or pay levels'' with ``one pay band level'' and 
``grade or pay level'' with ``pay band level.''
    Section 550.902: Hazardous Duty Differential. This section is 
adapted only to the extent necessary to allow BP employees to be 
treated as GS employees. However, this adaptation does not apply to ST 
employees or employees in CG 1, level 3, Scientific and Engineering 
Research; CG 2, level 4, Professional and Administrative Management; 
supervisor B and C employees of CG 1, level 2; supervisor D employees 
of CG 2, level 2; and supervisor B and C employees of CG 2, level 3. 
They are excluded from coverage under section 550.902.
    Part 575, Subparts A, B, C, and D: Recruitment Bonuses; Relocation 
Bonuses; Retention Allowances; and Supervisory Differentials. These 
subparts are adapted only to the extent necessary to: (1) Allow 
employees in CG 1, level 3, Scientific and Engineering Research; CG 2, 
level 4, Professional and Administrative Management; supervisor B and C 
employees of CG 1, level 2; supervisor D employees of CG 2, level 2; 
and supervisor B and C employees of CG 2, level 3, to be treated as ST 
employees; (2) allow all other BP employees to be treated as GS 
employees; and (3) allow basic rates of pay under BP to be treated as 
scheduled rates of basic pay. However, these adaptations do not apply 
to ST employees, who will continue to be covered by these Title 5 
regulatory provisions, as appropriate.
    Part 591, Subpart B: Cost-of-Living Allowances and Post 
Differential--Nonforeign Areas. This subpart is adapted only to the 
extent necessary to allow BP employees to be treated as employees under 
the GS, and employees in CG 1, level 3, Scientific and Engineering 
Research; CG2, level 4, Professional and Administrative Management; 
supervisor B and C employees of CG 1, level 2; supervisor D employees 
of CG 2, level 2; and supervisor B and C employees of CG 2, level 3, to 
be treated as ST employees.
    Section 731.202: Criteria. Adapted to allow DoD to make all 
suitability determinations.
    Part 752, Subpart D: Regulatory Requirements for Removal, 
Suspension for More than 14 Days, Reduction in Grade or Pay, or 
Furlough for 30 Days or Less. This subpart is waived.

Appendix A: Occupational Series in Career Group 2, Professional and 
Administrative Management

------------------------------------------------------------------------
             Series                      Occupational series title
------------------------------------------------------------------------
 0006...........................  Correctional Institution
                                   Administration.
 0018...........................  Safety and Occupational Health
                                   Management.
 0020...........................  Community Planning.
 0023...........................  Outdoor Recreation Planning.
 0025...........................  Park Ranger.
 0028...........................  Environmental Protection Specialist.
 0030...........................  Sports Specialist.
 0050...........................  Funeral Directing.
 0060...........................  Chaplain.
 0062...........................  Clothing Design.
 0072...........................  Fingerprint Identification.
 0080...........................  Security Administration.
 0082...........................  US Marshall.
 0101...........................  Social Science.
 0110...........................  Economist.
 0130...........................  Foreign Affairs.

[[Page 16140]]

 
 0131...........................  International Relations.
 0132...........................  Intelligence.
 0135...........................  Foreign Agricultural Affairs.
 0142...........................  Manpower Development.
 0150...........................  Geography.
 0160...........................  Civil Rights Analysis.
 0170...........................  History.
 0180...........................  Psychology.
 0184...........................  Sociology.
 0185...........................  Social Work.
 0188...........................  Recreation Specialist.
 0190...........................  General Anthropology.
 0193...........................  Archeology.
 0201...........................  Human Resources Management.
 0222...........................  Occupational Analysis.
 0223...........................  Salary and Wage Administration.
 0243...........................  Apprenticeship and Training.
 0246...........................  Contractor Industrial Relations.
0249............................  Wage and Hour Compliance.
 0260...........................  Equal Employment Opportunity.
 0301...........................  Miscellaneous Administration and
                                   Program.
 0334...........................  Computer Specialist.
 0340...........................  Program Management.
 0341...........................  Administrative Officer.
 0342...........................  Support Services Supervisor.
 0343...........................  Management and Program Analysis.
 0346...........................  Logistics Management.
 0360...........................  Equal Opportunity Compliance.
 0391...........................  Telecommunications.
 0401...........................  General Biological Science.
 0403...........................  Microbiology.
 0405...........................  Pharmacology.
 0408...........................  Ecology.
 0410...........................  Zoology.
 0413...........................  Physiology.
 0414...........................  Entomology.
 0415...........................  Toxicology.
 0430...........................  Botany.
 0434...........................  Plant Pathology.
 0435...........................  Plant Physiology.
 0437...........................  Horticulture.
 0440...........................  Genetics.
 0454...........................  Rangeland Management.
 0457...........................  Soil Conservation.
 0460...........................  Forestry.
 0470...........................  Soil Science.
 0471...........................  Agronomy.
 0480...........................  General Fish and Wildlife
                                   Administration.
 0482...........................  Fishery Biology.
 0486...........................  Wildlife Biology.
 0487...........................  Animal Science.
 0493...........................  Home Economics.
 0501...........................  Financial Administration and Program.
 0505...........................  Financial Management.
 0510...........................  Accounting.
 0511...........................  Auditing.
 0526...........................  Tax Specialist.
 0560...........................  Budget Analysis.
 0592...........................  Tax Examining Series.
 0601...........................  General Health Science.
 0603...........................  Physician's Assistant.
 0610...........................  Nurse.
 0630...........................  Dietitian and Nutritionist.
 0631...........................  Occupational Therapist.
 0633...........................  Physical Therapist.
 0638...........................  Recreation/Creative Arts Therapist.
 0639...........................  Educational Therapist.
 0644...........................  Medical Technologist.
 0660...........................  Pharmacist.
 0662...........................  Optometrist.
 0665...........................  Speech Pathology and Audiology.
 0668...........................  Podiatrist.
 0669...........................  Medical Records Administration.
 0670...........................  Health System Administration.
 0671...........................  Health System Specialist.
 0673...........................  Hospital Housekeeping Management.
 0680...........................  Dentist.
 0685...........................  Public Health Program Specialist.
 0688...........................  Sanitarian.
 0690...........................  Industrial Hygiene.
 0701...........................  Veterinary Medical Science.
 0801...........................  General Engineering.
 0803...........................  Safety Engineering.
 0804...........................  Fire Protection Engineering.
 0806...........................  Materials Engineering.
 0807...........................  Landscape Architecture.
 0808...........................  Architecture.
 0810...........................  Civil Engineering.
 0819...........................  Environmental Engineering.
 0828...........................  Construction Analyst.
 0830...........................  Mechanical Engineering.
 0840...........................  Nuclear Engineering.
 0850...........................  Electrical Engineering.
 0854...........................  Computer Engineering.
 0855...........................  Electronics Engineering.
 0858...........................  Biomedical Engineering.
 0861...........................  Aerospace Engineering.
 0871...........................  Naval Architecture.
 0873...........................  Ship Surveying.
 0881...........................  Petroleum Engineering.
 0890...........................  Agricultural Engineering.
 0892...........................  Ceramic Engineering.
 0893...........................  Chemical Engineering.
 0894...........................  Welding Engineering.
 0896...........................  Industrial Engineering.
 0901...........................  General Legal and Kindred
                                   Administration.
 0904...........................  Law Clerk.
 0905...........................  General Attorney.
 0930...........................  Hearings and Appeals.
 0950...........................  Paralegal Specialist.
 0967...........................  Passport and Visa Examining.
 0991...........................  Workers' Compensation Claims
                                   Examining.
 1001...........................  General Arts and Information.
 1008...........................  Interior Design.
 1010...........................  Exhibits Specialist.
 1015...........................  Museum Curator.
 1016...........................  Museum Specialist and Technician.
 1020...........................  Illustrating.
 1035...........................  Public Affairs.
 1040...........................  Language Specialist.
 1051...........................  Music Specialist.
 1054...........................  Theater Specialist.
 1056...........................  Art Specialist.
 1060...........................  Photography.
 1071...........................  Audiovisual Production.
 1082...........................  Writing and Editing.
 1083...........................  Technical Writing and Editing.
 1084...........................  Visual Information.
 1101...........................  General Business and Industry.
 1102...........................  Contracting.
 1103...........................  Industrial Property Management.
 1104...........................  Property Disposal.
 1130...........................  Public Utilities Specialist.
 1140...........................  Trade Specialist.
 1144...........................  Commissary Store Management.
1150............................  Industrial Specialist.
1152............................  Production Control.
1160............................  Financial Analysis.
1163............................  Insurance Examining.
1170............................  Realty.
1171............................  Appraising.
1173............................  Housing Management.
1176............................  Building Management.
1221............................  Patent Adviser.
1222............................  Patent Attorney.
1301............................  General Physical Science.
1306............................  Health Physics.
1310............................  Physics.
1313............................  Geophysics.
1315............................  Hydrology.
1320............................  Chemistry.
1321............................  Metallurgy.
1330............................  Astronomy and Space Science.
1340............................  Meteorology.
1350............................  Geology.
1360............................  Oceanography.
1361............................  Navigational Information.
1370............................  Cartography.
1372............................  Geodesy.
1373............................  Land Surveying.
1382............................  Food Technology.
1384............................  Textile Technology.
1386............................  Photographic Technology.
1397............................  Document Analysis.
1410............................  Librarian.
1412............................  Technical Information Services.
1420............................  Archivist.
1510............................  Actuary.
1515............................  Operations Research.
1520............................  Mathematics.
1529............................  Mathematical Statistician.
1530............................  Statistician.
1550............................  Computer Science.
1601............................  General Facilities and Equipment.
1630............................  Cemetery Administration.
1640............................  Facility Management.
1654............................  Printing Management.
1658............................  Laundry and Dry Cleaning Plant
                                   Management.
1667............................  Steward.
1670............................  Equipment Specialist.
1701............................  General Education and Training.
1702............................  Education and Training Technician.
1710............................  Education and Vocational Training.
1712............................  Training Instruction.
1720............................  Education Program.
1725............................  Public Health Educator.
1740............................  Education Services.
1750............................  Instructional Systems.
1801............................  General Inspection, Investigation, and
                                   Compliance.
1810............................  General Investigating.
1811............................  Criminal Investigating.
1812............................  Game Law Enforcement.
1815............................  Air Safety Investigating.
1825............................  Aviation Safety.
1831............................  Securities Compliance Examining.
1890............................  Customs Inspection.
1910............................  Quality Assurance.
1980............................  Agricultural Commodity Grading.
2001............................  General Supply.
2003............................  Supply Program Management.
2010............................  Inventory Management.
2030............................  Distribution Facilities and Storage
                                   Management.
2032............................  Packaging.
2050............................  Supply Cataloging.
2101............................  Transportation Specialist.
2110............................  Transportation Industry Analysis.
2123............................  Motor Carrier Safety.
2130............................  Traffic Management.
2150............................  Transportation Operations.
2152............................  Air Traffic Control.
2161............................  Marine Cargo.
2181............................  Aircraft Operation.
2183............................  Air Navigation.

[[Page 16141]]

 
2185............................  Aircrew Technician.
2210............................  Information Technology Management.
------------------------------------------------------------------------

Appendix B: Occupational Series in Career Group 3, Engineering, 
Scientific, and Medical Support

------------------------------------------------------------------------
             Series                      Occupational series title
------------------------------------------------------------------------
 0102...........................  Social Science Aid and Technician.
0119............................  Economics Assistant.
0181............................  Psychology Aid and Technician.
0186............................  Social Services Aid and Assistant.
0187............................  Social Services.
0404............................  Biological Science Technician.
0455............................  Range Technician.
0458............................  Soil Conservation Technician.
0462............................  Forestry Technician.
0620............................  Practical Nurse.
0621............................  Nursing Assistant.
0625............................  Autopsy Assistant.
0636............................  Rehabilitation Therapy Assistant.
0640............................  Health Aid and Technician.
0642............................  Nuclear Medicine Technician.
0644............................  Medical Technologist.
0645............................  Medical Technician.
0646............................  Pathology Technician.
0647............................  Diagnostic Radiologic Technician.
0648............................  Therapeutic Radiologic Technician.
0649............................  Medical Instrument Technician.
0651............................  Respiratory Therapist.
0661............................  Pharmacy Technician.
0667............................  Orthotist and Prosthetist.
0681............................  Dental Assistant.
0682............................  Dental Hygiene.
0683............................  Dental Laboratory Aid and Technician.
0698............................  Environmental Health Technician.
0704............................  Animal Health Technician.
0802............................  Engineering Technician.
0809............................  Construction Control.
0817............................  Surveying Technician.
0818............................  Engineering Drafting.
0856............................  Electronics Technician.
0895............................  Industrial Engineering Technician.
1311............................  Physical Science Technician.
1316............................  Hydrologic Technician.
1341............................  Meteorological Technician.
1371............................  Cartographic Technician.
1374............................  Geodetic Technician.
1521............................  Mathematics Technician.
1531............................  Statistical Assistant.
------------------------------------------------------------------------

Appendix C: Occupational Series in Career Group 4, Business and 
Administrative Support

------------------------------------------------------------------------
             Series                      Occupational series title
------------------------------------------------------------------------
0019............................  Safety Technician.
0021............................  Community Planning Technician.
0025............................  Park Ranger.
0029............................  Environmental Protection Assistant.
0081............................  Fire Protection and Prevention.
0083............................  Police.
0085............................  Security Guard.
0086............................  Security Clerical and Assistance.
0090............................  Guide.
0120............................  Food Services.
0134............................  Intelligence Aid and Clerk.
0189............................  Recreation Aid and Assistant.
0203............................  Human Resources Assistance.
0302............................  Messenger.
0303............................  Miscellaneous Clerk and Assistant.
0304............................  Information Receptionist.
0305............................  Mail and File.
0309............................  Correspondence Clerk.
0312............................  Clerk-Stenographer and Reporter.
0313............................  Work Unit Supervising.
0318............................  Secretary.
0319............................  Closed Microphone Reporting.
0322............................  Clerk-Typist.
0326............................  Office Automation Clerical and
                                   Assistance.
0332............................  Computer Operation.
0335............................  Computer Clerk and Assistant.
0342............................  Support Services Supervisor.
0344............................  Management and Program Clerical and
                                   Assistance.
0350............................  Equipment Operator.
0351............................  Printing Clerical.
0355............................  Calculating Machine Operation.
0356............................  Data Transcriber.
0357............................  Coding.
0361............................  Equal Opportunity Assistance.
0382............................  Telephone Operating.
0390............................  Telecommunications Processing.
0392............................  General Telecommunications.
0394............................  Communications Clerical.
0503............................  Financial Clerical and Technician.
0525............................  Accounting Technician.
0530............................  Cash Processing.
0540............................  Voucher Examining.
0544............................  Civilian Pay.
0545............................  Military Pay.
0561............................  Budget Clerical and Assistance.
0622............................  Medical Supply Aide and Technician.
0664............................  Restoration Technician.
0675............................  Medical Records Technician.
0679............................  Medical Support Assistance.
0962............................  Contact Representative.
0963............................  Legal Instruments Examining.
0986............................  Legal Assistance.
0994............................  Unemployment Compensation Claims
                                   Examining.
0995............................  Dependent and Estate Claims Examining.
0998............................  Claims Assistance and Examining.
1001............................  General Arts and Information.
1021............................  Office Drafting.
1046............................  Language Clerical.
1087............................  Editorial Assistance.
1101............................  General Business and Industry.
1105............................  Purchasing.
1106............................  Procurement Clerical and Technician.
1107............................  Property Disposal Clerical and
                                   Technician.
1182............................  Retail Manager.
1202............................  Patent Technician.
1411............................  Library Technician.
1421............................  Archives Technician.
1702............................  Education and Training Technician.
1802............................  Compliance Inspection and Support.
1860............................  Public Health Inspection.
1863............................  Food Inspection.
1890............................  Customs Inspection.
1897............................  Customs Aid.
2005............................  Supply Clerical and Technician.
2091............................  Sales Store Clerical.
2102............................  Transportation Clerk and Assistant.
2111............................  Transportation Rate and Tariff
                                   Examining.
2131............................  Freight Rate.
2135............................  Transportation Loss and Damage Claims
                                   Examining.
2144............................  Cargo Scheduling.
2151............................  Dispatching.
2154............................  Air Traffic Assistance.
------------------------------------------------------------------------

Appendix D: Supervisory Pay Tables

(Based on 2003 Basic General Schedule Salary Table)

    The supervisory rate ranges include basic pay and supervisory 
adjustment in the following percentages:

Supervisor A--10%
Supervisor B--20%
Supervisor C--30%
Supervisor D--45%
Locality pay adjustments will apply to the nonsupervisory and 
supervisory pay ranges, as appropriate

----------------------------------------------------------------------------------------------------------------
                                         Level 1 rate       Level 2 rate       Level 3 rate     Level 4 does not
           Career Group 1              range  $23,442-     range $61,251-    range $102,168-     exist in this
                                           $66,961            $110,682           $133,800         Career Group
----------------------------------------------------------------------------------------------------------------
 Supervisor A.......................                N/A                N/A                N/A
 Supervisor B.......................                N/A   $61,241-$129,498                N/A
 Supervisor C.......................                N/A   $61,251-$150,865                N/A
                                                                        **
 Supervisor D.......................                N/A                N/A                N/A
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                         Level 1 rate       Level 2 rate       Level 3 rate       Level 4 rate
           Career Group 2               range $23,442-     range $51,508-     range $72,381-    range $102,168-
                                           $55,873            $79,629            $110,682           $133,800
----------------------------------------------------------------------------------------------------------------
 Supervisor A.......................    $23,442-$61,460    $51,508-$87,592                N/A                N/A
 Supervisor B.......................    $23,442-$66,961    $51,508-$94,098   $72,381-$129,498                N/A

[[Page 16142]]

 
 Supervisor C.......................    $23,442-$79,629   $51,508-$110,682   $72,381-$150,865                N/A
                                                                                           **
 Supervisor D.......................    $23,442-$94,098   $51,508-$129,498                N/A                N/A
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                         Level 1 rate       Level 2 rate       Level 3 rate     Level 4 does not
           Career Group 3               range $15,214-     range $23,442-     range $32,158-     exist in this
                                           $27,234            $37,749            $55,873          Career Group
----------------------------------------------------------------------------------------------------------------
 Supervisor A.......................    $15,214-$28,868    $23,442-$40,014    $32,158-$61,460
 Supervisor B.......................    $15,214-$30,471    $23,442-$41,806    $32,158-$66,961
 Supervisor C.......................                N/A    $23,442-$46,175    $32,158-$79,629
 Supervisor D.......................                N/A    $23,442-$50,851                N/A
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                         Level 1 rate       Level 2 rate       Level 3 rate     Level 4 does not
           Career Group 4               range $15,214-     range $23,442-     range $32,158-     exist in this
                                           $27,234            $37,749            $50,851          Career Group
----------------------------------------------------------------------------------------------------------------
 Supervisor A.......................    $15,214-$28,868    $23,442-$40,014    $32,158-$55,936
 Supervisor B.......................    $15,214-$30,471    $23,442-$41,806    $32,158-$61,021
 Supervisor C.......................                N/A    $23,442-$46,175    $32,158-$66,961
 Supervisor D.......................                N/A    $23,442-$50,851                N/A
----------------------------------------------------------------------------------------------------------------

Career Group 5 Does Not Have Associated Supervisory Tables.
** Not to exceed SES level 4 (ES-4 = $133,800)

    Note: The basis for ``N/A'' is that establishment of supervisory 
positions at these levels is not anticipated. However, if a 
supervisory position is established at such a level, the maximum 
rate of pay is 20 percent above the maximum rate for the base level 
supervised (see VI.A.1). However, in no case will pay exceed the 
rate of basic pay for SES level 4 (ES-4).


[FR Doc. 03-7816 Filed 3-27-03; 4:11 pm]
BILLING CODE 5001-08-P