Laboratory Personnel Management Demonstration Project; Department of the Air Force

SUMMARY: Title VI of the Civil Service Reform Act, 5 U.S.C. 4703,

authorizes the Office of Personnel Management (OPM) to conduct

demonstration projects that experiment with new and different personnel

management concepts to determine whether such changes in personnel

policy or procedures would result in improved Federal personnel

management.

Public Law 103-337, October 5, 1994, permits the Department of

Defense (DoD), with the approval of OPM, to carry out personnel

demonstration projects generally similar to the China Lake

demonstration project at DoD Science and Technology (S&T) reinvention

laboratories. The Air Force is proposing one demonstration project to

cover its four S&T reinvention laboratories: Armstrong, Phillips, Rome,

and Wright.

DATES: The demonstration project will be implemented March 2, 1997.

FOR FURTHER INFORMATION CONTACT:

AF Wendy B. Campbell, HQ AFMC/ST, 4375 Chidlaw Road, Suite 6, Wright-

Patterson Air Force Base, OH 45433-5006, 513-257-1910.

OPM Fidelma A. Donahue, U.S. Office of Personnel Management, 1900 E

Street, NW, Room 7460, Washington, DC 20415, 202-606-1138.

Supplementary Information:

1. Background

Since 1966, at least 19 studies of Department of Defense (DoD)

laboratories have been conducted on laboratory quality and personnel.

Almost all of these studies have recommended improvements in civilian

personnel policy, organization, and management. The proposed project

involves simplified job classifications, pay banding, and a

contribution-based compensation system.

2. Overview

The 69 total comments received, both written and verbal, were a

valuable source of input for the Air Force Laboratory Personnel

Demonstration. They have been seriously considered and noted. Most

changes to the demonstration project are based on these public

comments. The majority of the changes are in the area of the

Contribution-based Compensation System (CCS). Several other sections of

the plan have been clarified and expanded, where necessary, to address

missing or unclear information. A few editorial changes were also made.

3. Summary of Comments

Nineteen speakers commented on the Federal Register notice at the 4

public hearings and 50 letters were received. The following is a

summary of these written and oral comments by topical area and a

response to each.

(1) High Grade Controls

Comments. Commentors expressed dissatisfaction with today's high

grade restrictions and questioned why the demonstration did not remove

these controls. Senior managers and employees alike believe that with

high grade controls the demonstration project cannot adequately and

competitively compensate the best people, a major goal of the project.

In addition, the ``seamless'' movement envisioned in the Contribution-

based Compensation System (CCS) will not occur between level II and

level III and employees felt disadvantaged by this.

Response. Due to defense drawdowns in conjunction with high grade

controls, promotions from the GS-13 to the GS-14 grades in all the

laboratories have been severely restricted. All DoD S&T reinvention

laboratory demonstration projects requested the elimination of high

grade controls. High grade controls, however, are not under OPM

demonstration authority. After project implementation, the Air Force

will evaluate the impact of high grade controls on the overall

effectiveness of the demonstration project and will seek relief as

appropriate. Regarding the treatment of level II employees under CCS,

the demonstration employees have the opportunity to be better

compensated, even under high grade control, through project procedures

not available in the traditional system. Under the current performance

management system, GS-13s with superior or excellent ratings are

typically given performance awards ranging from 1-2% and may or may not

get step increases. Under the demonstration, their CCS score may

warrant amounts of ``I'' money larger than the old performance award

money, while still enabling them to participate in the laboratory

awards program.

(2) Management Issues

Comments. Those employees who commented were greatly concerned that

the demonstration gives more authority and responsibility to laboratory

supervisors and managers. With the feeling that many supervisors

currently do not properly execute supervisory responsibilities or

utilize the power and tools provided under the current management

system, these employees fear a new system that gives supervisors

additional authority over their career and pay. They claim supervisors

who do nothing about poor performance are not being evaluated

themselves on whether they are ``good'' supervisors or managers, even

though supervision is a significant part of their job. Employees also

believe upper level management does not really know what goes on in

their organizations. Commentors state that military supervisors

exacerbate this problem due to a perceived lack of interest in civilian

issues and rapid military tour rotation. Managers are thought to be the

key to the success of this demonstration and a ``magnifying lens''

should be on them. Therefore, several commentors recommend that

employees evaluate their supervisors to attempt to bring more attention

to this issue.

Response. The demonstration project includes, as part of the CCS

annual cycle, a mid-year feedback that will emphasize employee

professional qualities and development. As a result of the public

comments received, the mid-year feedback will now include a supervisory

feedback session for all levels of supervisors, military and civilian

alike, where the supervisor's skills and abilities as a supervisor will

be assessed. Employee input will be an integral part of this

assessment. In addition, Air Force laboratory directors/commanders are

committed to assisting in solutions to these issues and anticipate,

before the first CCS assessment cycle in October 1997, to provide, as a

first step, additional supervisory skills and management training for

all supervisors.

(3) Contribution-Based Compensation System

Several subtopics were discussed relating to CCS.

(a) Level IV Ceiling

Comments. Commentors identified that the highest level IV employee

must average 4.9 on every factor to remain ``on the line''. They

claimed, as no scores are available above 4.9, that nothing can be done

to offset a potentially lower score received in one of the factors.

Thus, any score lower than 4.9 would prevent them from achieving the

necessary average of 4.9. Commentors mentioned a lack of

[[Page 60401]]

opportunity for level IV employees at the top of the broadband level to

fall below the rails. They believe this would disadvantage them during

a RIF.

Response. Due to comments received, the CCS has been amended to add

a factor score of 5.9 for contributions which represent ``higher than

level IV'' contributions. Any 5.9 score must be justified and

documented by the supervisor. Receipt of this score, however, does not

result in an increased CCS payout beyond that associated with a score

of 4.9.

Because of the upper pay limit imposed on broadband level IV and

the slope of the SPL, employees at the top salaries of that level have

no opportunity to score below the lower rail. Therefore, three

categories of additional service credit will be defined for RIF

purposes within broadband level IV: (1) Employees with CCS assessments

on or below the SPL (a G6DX equal to or greater than 0.00), (2) those

with CCS assessments above the SPL but on or below the upper rail (a

X equal to or greater than -0.30 and less than 0.00), and (3)

those with CCS assessments above the upper rail (a X less than

-0.30).

(b) Derivation of the Standard Pay Line (SPL)

Comments. Some commentors performed their own calculations on the

SPL. They criticized the ``least squares error fit'' derivation and

objected to a linear equation for the SPL. One individual also

commented that a statistical pooling error had been made. Several

commentors believe some groups (upper level GS-13s) would enter the

system overcompensated, while others (GS-15s) would enter being

undercompensated.

Response. The SPL mathematics have been revalidated and the

methodology for the derivation of the line upheld. Whereas the entire

GS schedule is to be fit as a single population set rather than by

``pools'' of individual grades, a statistical pooling error did not

occur. No employee enters the system either overcompensated or

undercompensated because such a determination is not possible until an

actual CCS assessment is given, the first occurring in October 1997. It

is their CCS scores that place employees above, within, or below the

rails--not the calculation of the SPL. Until October 1997, there is

merely a correlation between today's salary and an expected CCS score.

Figure 1 has been simplified.

(c) Payout

Comments. Some commentors expressed concerns over managers having

control over a pay pool in which the manager is a member. They

expressed concern that CCS would create competition for limited pay

pool funds and destroy team work. In addition, employees were

interested in how they would be informed of changes in ``I'' and what

would keep it from going to zero.

Response. The demonstration project does not permit managers to

control their own CCS assessment scores or to set their own pay. The

``I'' value, initially set at 2.4%, is subject to change, but not to

elimination. Within the demonstration, as a minimum, the ``I'' money

will be equal to step and promotion dollars under the General Schedule.

This is thought to be adequate to fund CCS for its intended purpose

while not creating an atmosphere of adverse competition. Changes in

``I'' will be publicized by the laboratory well in advance of the CCS

assessment period for which it will become effective.

(d) Factors and Job Opportunity

Comments. Most commentors discussing the six CCS factors believe

these will make everyone a ``Jack/Jill of all trades and master of

none.'' They claim employees will be unable to contribute across all

six factors at the necessary levels. Some employees believe they should

not be evaluated on factors on which they have not been previously

evaluated, e.g., business development and/or technology transition/

transfer. Comments indicated that their contribution opportunity is

dictated by their work assignments, claiming they are not allowed to

participate in activities which would contribute to each of the six CCS

factors. Realizing that contributions may have to span larger areas of

work in the future, they express concern at today's way of assigning

tasks. Visibility of work is also an issue. Some employees believe high

dollar or high visibility programs are associated with high

contributions, and they resent the perceived lack of opportunity.

Response. Broader work will be required under the demonstration

project. Managers will be aware that all employees need to have

contribution opportunities in each of the factors under which they are

assessed. This will be stressed during management orientation and

training sessions for the demonstration project.

(e) Weights

Comments. Comments generally supported factor weights as they

preserve some ``specialist'' culture, but disagree with the stated

intention of bringing all weights to one in future years. One

individual thought all weights should be set at one because weights

other than one may reward the less productive person who chooses not to

emphasize work in a low weighted area.

Response. Each laboratory will set its own CCS weights. Each will

also review and modify them annually. Laboratories may choose equal

weighting schemes or they may adopt a more ``specialized'' profile.

Such flexibility is a key to the demonstration project and in keeping

with the demonstration's spirit of allowing differences between

laboratories which can be evaluated to provide more effective

management.

(f) CCS Score Disclosure and CCS Assessment Under Special Circumstances

Comments. Employees' comments revealed a lack of information in the

project proposal on how CCS data will be provided back to them. They

want to know how they will be able to judge both their relative

standing in the pay pool at assessment time and their career

progression measured against their peers, particularly since promotions

are not the same as in the General Schedule system. Comments also

indicated that employees did not know how they would be assessed if

they were on extended sick leave, Long-Term Full-Time training, or

under other special circumstances.

Response. The public comments revealed that these topics were not

covered in sufficient detail in the previous version. Additional

information has been added to this plan to explain these features.

(4) Reduction-in-Force (RIF)

The FY97 Authorization Act, signed September 23, 1996, included

wording which affects the external hiring and reduction-in-force

provisions of the Air Force demonstration project; the Air Force has

opted to exclude these two sections of their original proposal from

their initial implementation. The CCS assessment score will be used as

additional service credit during reduction-in-force.

(5) Trial Period

Comments. Several commentors requested that a trial demonstration

project period be run parallel to the current system in order to ``work

out'' any difficulty with the new system.

Response. Demonstration authority is the authority to experiment

with personnel system changes. During the last two years, significant

project design and development by teams of laboratory

[[Page 60402]]

employees have produced a sound system for implementation. With yearly

formative evaluations and the ability to make major changes based on

that evaluation, the demonstration can, and will, be altered in future

years to ensure a final system that works well into the future.

(6) Project Evaluation and Human Use

Comments. Some commentors did not find enough material in the

project evaluation section to understand how each demonstration

initiative was going to be measured. Specifically, they inquired as to

how they would know if CCS was working as a system. In addition, a

comment was received asking if the demonstration project had fulfilled

its requirements to protect human subjects by obtaining necessary

waivers regarding human experimentation.

Response. Both the external evaluation, planned and conducted by

OPM, and the internal evaluation, planned and conducted by the Air

Force, are comprehensive in nature and more detailed than practical for

publication in the Federal Register. This plan ensures employees and

interested parties that a comprehensive evaluation will be conducted,

but it cannot detail all the proposed measures for each initiative, the

hypotheses, or show the data collection instruments. This is available

in a project evaluation plan. That plan and, once underway, the results

from the project evaluation will be available upon request from the

addresses listed under FOR FURTHER INFORMATION CONTACT in this

document. Regarding human use, investigation revealed that 32 CFR

219.102 (e) ``Protection of Human Subjects'' specifically excludes

research activities regulated by a federal agency from the requirements

relating to human experimentation where the regulating agency has a

broader responsibility to regulate, such as pay and classification by

OPM. As such, personnel demonstrations under OPM are not subject to

these authorities.

(7) Armstrong Laboratory Program 8 Employees

Comments. Several employees commented that their positions were not

research oriented and should be excluded from the demonstration

project. These employees believe their work is a clinical diagnostic

service and does not lend itself well to assessment under the six

factors of CCS.

Response. During the development process, several steps were taken

to determine whether or not CCS should apply to Program 8 employees at

Armstrong Laboratory. The development team for classification and CCS

included a supervisor from the Program 8 area for the express purpose

of ensuring that the factor levels adequately portrayed contributions

available to these employees. Additionally, position descriptions for

these employees were reviewed and determined to include research and

development activities. However, due to the public comments received, a

review of the existing classification of employees assigned to Program

8 at Armstrong Laboratory will be completed prior to implementation.

Once the accuracy of their classification has been verified, a separate

determination on inclusion or exclusion from the demonstration project

will be made on a case by case basis.

4. Demonstration Project System Changes

The following directs a reader to the substantive changes and

clarifications to the project plan. The page numbers below refer to the

pages of the proposed plan, published in the Federal Register on May

15, 1996.

(1) On pages 24624 and 24625, the FY97 Authorization Act included

wording which affects the external hiring provisions of the

demonstration project; categorical hiring procedures proposed in the

original proposal have been excluded. In addition, provisions for

contingent appointments have been clarified to state that these

appointments are competitive; are limited to 4 years; and include most

benefits.

(2) On pages 24625 and 24639, the definition of ``current'' GS/GM

grade for purposes of conversion into the demonstration has been

clarified as being the official permanent GS/GM grade of record.

(3) On pages 24631 and 24633, a factor assessment score of 5.9 has

been added for those employees who have demonstrated contributions

exceeding the maximum of level IV. The maximum total CCS score,

however, remains at 4.9.

(4) On pages 24631 and 24632, the provisions for a midyear feedback

have been extended to include an assessment, from both employees and

higher level management, of supervisory qualities and skills for all

supervisors, military and civilian.

(5) On pages 24631 and 24632, the section headed ``The `Standard

Pay Line' (SPL)'' has been clarified to more explicitly state the

constraints of the broadband system, analyses and selection of a linear

equation for the SPL, and derivation of the equation. An explicit

statement has been added that employees will not have CCS scores until

after the first CCS assessment process which occurs in October 1997.

(6) On page 24633, provisions for reporting CCS data and providing

employee feedback on their relative standing within the pay pool have

been adopted.

(7) On page 24633, processes for providing annual CCS scores for

employees under special circumstances have been stated.

(8) On page 24634, provisions for the equitable treatment of

employees affected by high grade restrictions have been clarified in

the section headed ``Salary Adjustment Guidelines.''

(9) On page 24635, the ``E-Zones'' have been expanded to + and

-0.25 CCS to capture the full range of the broadband level salaries.

(10) On page 24637, an explanation that the procedures for

contribution-based reduction in pay or removal actions, similar to

those established under the traditional civil service system, has been

added.

(11) On page 24637, provisions for local Staff Judge Advocate

review of Voluntary Emeritus Corps agreements have been adopted.

(12) On page 24638, the FY97 Authorization Act included wording

which affects the reduction-in-force provisions of the demonstration

project. The new RIF procedures proposed in the original proposal have

been excluded. Provisions for using the CCS assessment rating to credit

additional service under RIF have been added.

(13) On pages 24639 through 24641, the section ``Evaluation Plan''

has been replaced with a clearer, more concise statement. A formal

evaluation plan, which is not practical for publication in the Federal

Register, will be made available to employees upon request.

(14) On page 24641, the section ``Cost Neutrality'' has been

replaced with a section on out year project costs to better describe

the strategy for evaluating project costs.

Dated: November 22, 1996.

Office of Personnel Management

James B. King,

Director.

Table of Contents

I. Executive Summary

II. Introduction

A. Purpose

B. Problems with the Present System

C. Changes Required/Expected Benefits

D. Participating Organizations

E. Participating Employees

F. Project Design

III. Personnel System Changes

A. Hiring and Appointment Authorities

[[Page 60403]]

B. Broadbanding

C. Classification

D. Contribution-based Compensation System

E. Contribution-based Reduction in Pay or Removal Actions

F. Voluntary Emeritus Corps

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

IV. Training

V. Conversion

VI. Project Duration

VII. Evaluation Plan

VIII. Demonstration Project Costs

IX. Required Waivers to Law and Regulation

I. Executive Summary

The project was designed by the Department of the Air Force with

participation of and review by the Department of Defense (DoD) and the

Office of Personnel Management (OPM). The purpose of the project is to

achieve the best workforce for the laboratory mission, adjust the

workforce for change, and improve workforce quality. The project

framework addresses all aspects of the human resources life cycle

model. There are three major areas of change: (a) Laboratory-controlled

rapid hiring; (b) a contribution-based compensation system; and (c) a

streamlined removal process.

Initially, the project will cover only Scientists and Engineers

(S&Es) assigned to the laboratories. A decision point has been

programmed for the end of the second year of the demonstration project

to determine whether or not to expand coverage to other occupational

groups within the laboratory. In the event of expansion to non-S&E

employees, full approval of the expansion plan will be obtained by AF,

DOD, and OPM.

Cost neutrality is a basic requirement of the project. Extensive

evaluation of the project will be performed by both OPM and Air Force.

The Air Force has programmed a decision point 5 years into the project

for continuance, modification, or rejection of the demonstration

initiatives.

II. Introduction

A. Purpose

The purpose of the project is to demonstrate that the effectiveness

of Department of Defense (DOD) laboratories can be enhanced by allowing

greater managerial control over personnel functions and, at the same

time, expanding the opportunities available to employees through a more

responsive and flexible personnel system. The quality of DOD

laboratories, their people, and products has been under intense

scrutiny in recent years. The perceived deterioration of quality is

believed to be due, in substantial part, to the erosion of control

which line managers have over their human resources. This demonstration

project, in its entirety, attempts to provide managers, at the lowest

practical level, the authority, control, and flexibility needed to

achieve quality laboratories and quality products.

B. Problems with the Present System

Air Force laboratory products contribute to the readiness of U.S.

forces. To do this, laboratories must employ enthusiastic, innovative,

highly educated scientists and engineers to meet their mission. They

must be able to compete with the private sector for the best talent and

be able to make job offers in a timely manner with the attendant

bonuses and incentives to attract topnotch researchers. Today, industry

laboratories can make an offer of employment and two counteroffers to a

promising new hire before the government can get the first offer on the

table. When filling vacancies internally, managers are forced into

employee choices based not on research expertise, but on career program

membership or special placement programs. Currently, positions are

described using a cumbersome classification system that is overly

complex and specialized. This hampers a manager's ability to shape the

workforce and match positions with employees so as to maximize their

productivity and effectiveness. Managers must be given local control of

positions and their classification to move both their employees and

vacancies freely within their organization to other lines of research

when business or technology demands. These issues work together to

hamper supervisors in all areas of human resource management. Hiring

restrictions and overly complex job classifications, coupled with poor

tools for rewarding and motivating employees and a system that does not

assist managers in removing poor performers builds stagnation in the

workforce and wastes valuable time.

C. Changes Required/Expected Benefits

This project is expected to demonstrate that a human resource

system tailored to the mission and needs of the laboratory will result

in: (a) Increased quality in the science and engineering workforce and

the laboratory products they produce; (b) increased timeliness of key

personnel processes; (c) trended workforce data that reveals increased

retention of ``excellent contributors'' and separation rates of ``poor

contributors''; and (d) increased satisfaction with the laboratory and

its products by those Air Force and DOD customers they service.

The Air Force demonstration program builds on the successful

features of demonstration projects at China Lake and the National

Institute of Standards and Technology (NIST). These demonstration

projects have produced impressive statistics on job satisfaction for

their employees versus that for the federal workforce in general.

Therefore, in addition to the expected benefits mentioned above, it is

anticipated that the Air Force demonstration project will result in

more satisfied employees as a consequence of the demonstration's pay

equity, classification accuracy, and fairness of performance

management. A full range of measures will be collected during project

evaluation (section VII).

D. Participating Organizations

The four Air Force Materiel Command (AFMC) laboratory directors/

commanders are located as follows:

Armstrong Laboratory--Brooks AFB, Texas

Phillips Laboratory--Kirtland AFB, New Mexico

Rome Laboratory--Rome, New York

Wright Laboratory--Wright-Patterson AFB, Ohio

Scientists and Engineers (S&Es) assigned to the laboratories work

at the locations shown in Table 1.

Table 1.--S&E Duty Locations by Laboratory

[As of 31 Dec. 95]

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

Laboratory Duty Location S&Es

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

Armstrong...................... Aberdeen Proving Ground, MD..... 3

Brooks AFB, TX.................. 167

San Diego, CA................... 1

Tyndall AFB, FL................. 27

Williams AFB, AZ................ 14

Wright-Patterson AFB, OH........ 97

Phillips....................... Edwards AFB, CA................. 120

Hanscom AFB, MA................. 188

Kirtland AFB, NM................ 246

Malabar, FL..................... 1

Maui Island, HI................. 1

Sunspot, NM..................... 5

Rome........................... Rome, NY........................ 424

Hanscom AFB, MA................. 82

Wright......................... Eglin AFB, FL................... 177

Kelly AFB, TX................... 5

McClellan AFB, CA............... 10

Robins AFB, GA.................. 4

Tyndall AFB, FL................. 12

Wright-Patterson AFB, OH........ 1207

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

E. Participating Employees

In determining the scope of the demonstration project, primary

considerations were given to the

[[Page 60404]]

number and diversity of occupations within the laboratories and the

need for adequate development and testing of the Contribution-based

Compensation System (CCS). Additionally, current DoD human resource

management design goals and priorities for the entire civilian

workforce were considered. While the intent of this project is to

provide the laboratory directors/commanders with increased control and

accountability for their total workforce, the decision was made to

initially restrict development efforts to General Schedule (GS/GM)

positions within the scientific and engineering specialties. Research

Medical Officers (GS-0602) have been excluded from the project because

of special pay provisions for their occupation which exceed the upper

limits of the broadband. The series to be included in the project are

identified in Table 2.

Table 2.--Series Included in the Air Force Demonstration Proposal

[As of 31 Dec 95]

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

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

0180........................ Psychology.

0190........................ General Anthropology.

0401........................ General Biological Science.

0403........................ Microbiology.

0413........................ Physiology.

0414........................ Entomology.

0415........................ Toxicology.

0665........................ Speech Pathology & Audiology.

0701........................ Veterinary Medical Science.

0801........................ General Engineering.

0803........................ Safety Engineering.

0804........................ Fire Protection Engineering.

0806........................ Materials Engineering.

0808........................ Architecture.

0810........................ Civil Engineering.

0819........................ Environmental Engineering.

0830........................ Mechanical Engineering.

0840........................ Nuclear Engineering.

0850........................ Electrical Engineering.

0854........................ Computer Engineering.

0855........................ Electronics Engineering.

0858........................ Biomedical Engineering.

0861........................ Aerospace Engineering.

0892........................ Ceramic Engineering.

0893........................ Chemical Engineering.

0896........................ Industrial Engineering.

1301........................ General Physical Science.

1306........................ Health Physics.

1310........................ Physics.

1313........................ Geophysics.

1320........................ Chemistry.

1321........................ Metallurgy.

1330........................ Astronomy & Space Science.

1340........................ Meteorology.

1370........................ Cartography.

1515........................ Operations Research.

1520........................ Mathematics.

1529........................ Mathematical Statistician.

1530........................ Statistician.

1550........................ Computer Science.

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

Other positions may be phased in during the course of the project.

A decision point for expanded employee coverage has been programmed for

the end of the second year of the demonstration project. In the event

of expansion to non-S&E employees, full approval of the expansion plan

will be obtained by AF, DoD, and OPM.

Current demographics and union representation for the S&E positions

are shown in Table 3.

Table 3.--S&E Demographics and Union Representation

[As of 31 Dec. 95]

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

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

GS/GM 13 and above............................................ 1965

GS-12 and below............................................... 826

---------

Total..................................................... 2791

Occupational Series........................................... 40

Duty Location................................................. 17

Veterans...................................................... 19.78%

Union Representation

NFFE

Eglin AFB, Florida........................................ 145

Hanscom AFB, Massachusetts................................ 233

Tyndall AFB, Florida...................................... 33

IFPTE

McClellan AFB, California................................. 9

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

Of the 2,791 scientists and engineers assigned to the laboratories,

420 are represented by labor unions. Employees at Hanscom AFB,

Massachusetts, are represented by the National Federation of Federal

Employees (NFFE) Local 1384. Employees at Eglin AFB, Florida, are

represented by NFFE Local 1940. Employees at Tyndall AFB, Florida, are

represented by NFFE Local 1113. Employees at McClellan AFB, California,

are represented by the International Federation of Professional and

Technical Engineers (IFPTE) Local 330. Union representatives have been

separately notified about the project. The Air Force is proceeding to

fulfill its obligation to consult or negotiate with the unions, as

appropriate, in accordance with 5 U.S.C. 4703(f).

F. Project Design

In August 1994, a special action ``tiger team'' was formed by the

Director of Science and Technology for Air Force Materiel Command in

response to the proposed DoD legislation allowing reinvention

laboratories to conduct personnel demonstrations. The team was

chartered to take full opportunity of this legislation and try to

develop solutions that would solve many of the laboratory personnel

issues that have been so prevalent and well documented. The team

composition included current managers from the four Air Force

laboratories, retired and current laboratory directors, and subject

matter experts from civilian personnel and manpower. This team

developed 27 initiatives which together represented sweeping changes in

the entire spectrum of human resource management for the laboratories.

Several initiatives were designed to assist the laboratories in hiring

and placing the best people to fulfill mission requirements. Others

focused on developing, motivating, and equitably compensating employees

based on their contribution to the mission. Initiatives to effectively

manage workforce turnover and maintain organizational excellence were

also developed. These 27 initiatives were endorsed and accepted in

total by the laboratory directors/commanders.

After the authorizing legislation passed, a project office with

four employees was established in September 1994. Under the guidance of

the Director of Science and Technology, the office was charged with

further developing the demonstration concept and bringing it to

implementation. As a first task, the project office asked the four

laboratories and the civilian personnel offices that service them for

volunteers to staff six Integrated Product Teams (IPTs). Sixty civilian

managers and employees from all laboratories in most geographic

locations and from appropriate base level personnel offices came

together and have worked for 9 months to develop the detailed concept

and implementation for each initiative.

After thorough study, the original 27 initiatives were reduced to

20. Seven of the original initiatives appear herein. The remainder are

subject to either DoD or Air Force regulation, and waivers are being

sought at those levels.

III. Personnel System Changes

A. Hiring and Appointment Authorities

1. Hiring Authority

A candidate's basic eligibility will be determined using OPM's

``Qualification Standards Handbook For General Schedule Positions.''

Broadband level I minimum eligibility requirements will be the GS-07

qualifications. Broadband level II minimum eligibility requirements

will be the GS-12 qualifications. Broadband levels III and IV are

single-grade broadband levels and will mirror the minimum

qualifications for the respective General Schedule grades of 14 and 15.

Selective placement factors may be established in accordance with OPM's

Qualification Handbook when judged to be critical to successful job

performance. These factors will be communicated to all candidates for

particular position vacancies and must be met for basic eligibility.

[[Page 60405]]

2. Appointment Authority

Under the demonstration project, there will be two appointment

options: Regular career and contingent. The career-conditional

appointment authority will not be used under the demonstration project.

Regular career appointments will continue to use existing authorities

and entitlements, and employees will serve a probationary period.

Contingent appointments will use the existing term appointment

authority which includes a limit of 4 years and most benefits. This

contingent appointment will be competitive and is designed to attract

high quality new scientists and engineers and post-doctoral students

who may wish to choose an Air Force laboratory experience for a few

years, accruing some portable retirement and receiving benefits during

this tenure.

3. Extended Probationary Period

A new employee needs to demonstrate adequate contribution during

all cycles of a research effort for a laboratory manager to render a

thorough evaluation. The current 1 year probationary period will be

extended to 3 years for all newly hired regular career employees. The

purpose of extending the probationary period is to allow supervisors an

adequate period of time to fully evaluate an employee's contribution

and conduct.

Aside from extending the time period, all other features of the

current probationary period are retained including the potential to

remove an employee without providing the full substantive and

procedural rights afforded a non-probationary employee. Any employee

appointed prior to the implementation date will not be affected. The 3

year probation will apply to non-status hires. That is, it will apply

only to new hires or those who do not have reemployment or

reinstatement rights. Air Force Palace Knight and Senior Knight

appointments must complete 3 years of directly supervised employment in

the laboratory to complete the probationary period (i.e., time spent at

school does not count toward fulfilling the probationary period

requirement).

Probationary employees will be terminated when the employee fails

to demonstrate proper conduct, technical competency, and/or adequate

contribution for continued employment. When a laboratory decides to

terminate an employee serving a probationary period because their work

contribution or conduct during this period fails to demonstrate their

fitness or qualifications for continued employment, it shall terminate

their services by written notification of the reasons for separation

and the effective date of the action. The information in the notice as

to why the employee is being terminated shall, as a minimum, consist of

the laboratory's conclusions as to the inadequacies of their

contribution or conduct.

B. Broadbanding

The broadbanding system will replace the current General Schedule

(GS) structure. Currently, the 15 grades of the General Schedule are

used to classify positions and, therefore, to set pay. The General

Schedule covers all white collar work--administrative, technical,

clerical, and professional. This system will initially cover only

scientific and engineering (S&E) positions in the Air Force

laboratories. Scientific and Professional (ST) and Senior Executive

Service (SES) employees are not covered.

The broadband levels are designed to facilitate pay progression and

to allow for more competitive recruitment of quality candidates at

differing rates within the appropriate broadband level(s). Competitive

promotions will be less frequent and movement through the broadband

levels will be a more seamless process than today's procedure. Like the

previous broadband systems used at China Lake and the National

Institute of Standards and Technology (NIST), advancement within the

system is contingent on merit.

There will be four broadband levels in the demonstration project,

labeled I, II, III, and IV. They will include the current grades of GS-

7 through GS/GM-15. These are the grades in which the S&E employees in

the Air Force laboratories are found. Broadband level I includes the

current GS-7 through GS-11; level II, GS-12 and GS/GM-13; level III,

GS/GM-14; and level IV, GS/GM-15. Comparison to the GS grades was

useful in setting the upper and lower dollar limits of the broadband;

however, once the employees are moved into the demonstration project,

General Schedule grades will no longer apply.

The titles associated with each broadband level are as follows:

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

Level Title(s)

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

I.............................. Associate (Electronics Engineer,

Chemist, etc.).

II............................. Title of Appropriate Series (Physicist,

Biologist, etc.) or Supervisory

(Nuclear Engineer, etc.).

III............................ Senior (Mathematician, Computer

Scientist, etc.) or Supervisory Senior

(Physical Scientist, etc.).

IV............................. Principal (Microbiologist,

Psychologist, etc.) or Supervisory

Principal (Aerospace Engineer, etc.).

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

Generally, employees will be converted into the broadband level

which includes their permanent GS/GM grade of record. Each employee is

assured an initial place in the system without loss of pay. As the

rates of the General Schedule are increased due to general pay

increases, the minimum and maximum rates of the four broadband levels

will also move up. Individual employees receive pay increases based on

their assessments under the Contribution-based Compensation System.

Since pay progression through the levels depends on merit, there will

be no scheduled Within-Grade Increases (WGIs) for employees once the

broadbanding system is in place. Special Salary Rates will no longer be

applicable to demonstration project employees. All employees will be

eligible for the future locality pay increases of their geographical

area.

Newly hired personnel entering the system will be employed at a

level consistent with the expected contribution of the position and

individual basic qualifications for the level, as determined by rating

against qualification standards. Salaries of individual candidates will

be based on academic qualifications and experience. In addition to the

flexibilities available under the broadbanding system, the authorities

for retention, recruitment, and relocation payments granted under the

Federal Employees' Pay Comparability Act of 1990 (FEPCA) can also be

used.

Employees who leave the Air Force broadbanding system to accept

federal employment in the traditional Civil Service system will have

their pay set by the gaining activity. Where a broadband level includes

a single GS grade, the employees are considered to have attained the

grade commensurate with the broadband level they are leaving. Where

broadband levels include multiple grades, employees are considered to

have progressed to the next higher grade within that broadband level

when they have been in the level for 1 year and their salary equals or

exceeds the minimum salary of the higher grade. For employees who are

entitled to a special rate upon return to the General Schedule, the

demonstration project locality rate must equal or exceed the minimum

special rate of the higher grade. Refer to section V for information

concerning

[[Page 60406]]

conversion to and from the demonstration project.

The use of broadbanding provides a stronger link between pay and

contribution to the mission of the laboratory. It is simpler, less time

consuming, and less costly to maintain. In addition, such a system is

more easily understood by managers and employees, is easily delegated

to managers, coincides with recognized career paths, and complements

the other personnel management aspects of the demonstration project.

C. Classification

1. Occupational Series

The present General Schedule classification system has 434

occupational series which are divided into 22 groups. The Air Force

laboratories currently have scientific and engineering (S&E) positions

in 40 series which fall into 7 groups. The occupational series, which

frequently provide well-recognized disciplines with which employees

wish to be identified, will be maintained. This will facilitate

movement of personnel into and out of the demonstration project. Other

scientific and engineering series may be added to the project as the

need for new professional skills emerges within the laboratory

environment.

2. Classification Standards

The present system of OPM classification standards will be used for

the identification of proper series and occupational titles of

positions within the demonstration project. References in the position

classification standards to grade criteria will not be used as part of

the demonstration project. Rather, the CCS broadband level descriptors

will be used for the purpose of broadband level determination. Under

the demonstration project, each broadband level is represented by a set

of level descriptors. Based on a yearly assessment of the employee's

level of contribution to the organization in relation to these

descriptors, the broadband level and salary are reviewed and

appropriately adjusted. This eliminates the need for the use of grading

criteria in OPM classification standards.

The broadband level descriptors are:

Level I Descriptors

Technical Problem Solving: Conducts in-house technical

activities and/or may provide contract technical direction with

guidance from supervisor or higher level scientist or engineer.

Works closely with peers in collectively solving problems of

moderate complexity involving: limited variables, precedents

established in related projects, and minor adaptations to well-

established methods and techniques. Recognized within own

organization for technical ability in assigned areas.

Communications/Reporting: Provides data and written analysis for

input to scientific papers, journal articles, and reports and/or

assists in preparing contractual documents and/or reviews technical

reports; work is acknowledged in team publications. Effectively

presents technical results of own studies, tasks, or contract

results. Material is presented either orally or in writing, within

own organization or to limited external contacts. Conducts these

activities under the guidance of a supervisor and/or team leader.

Corporate Resource Management: May coordinate elements of in-

house work units or assist in managing a scientific or support

contract. Uses personal and assigned resources efficiently under the

guidance of a supervisor or team leader. As an understanding of

organizational activities, policies, and objectives is gained,

participates in team planning.

Technology Transition/Technology Transfer: Participates as a

team member in demonstrating technology and in interacting with

internal/external customers. With guidance, contributes to technical

content of partnerships for technology transition and/or transfer

(Advanced Technology Demonstrations, Memorandums of Understanding,

Joint Director of Labs/Project Reliance, Cooperative Research and

Development Agreements, and other dual-use vehicles). Seeks out and

uses relevant outside technologies in assigned projects.

R&D Business Development: As a team member, communicates with

customers to understand customer requirements. By maintaining

currency in area of expertise, contributes as a team member to new

program development. May technically participate in writing

proposals to establish new business opportunities.

Cooperation and Supervision: Contributes to all aspects of

teams' responsibilities. May technically guide or mentor less

experienced personnel on limited aspects of scientific or

engineering efforts. Receives close guidance from supervisor and/or

higher level scientist or engineer. Performs duties in a

professional, responsive, and cooperative manner in accordance with

established policies and procedures.

Level II Descriptors

Technical Problem Solving: Conducts in-house technical

activities and/or provides contract technical direction to programs

of moderate size and complexity with minimal oversight. Contributes

technical ideas and conceives and defines solutions to technical

problems of moderate size or complexity. Recognized internally and

externally by peers, both in governmental and industrial activities,

for technical expertise.

Communications/Reporting: Writes or is a major contributing

author on scientific papers, journal articles, or reports and/or

prepares contract documents and reviews reports pertaining to area

of technical expertise. May assist in filing innovation disclosures,

inventions, and patents. Effectively prepares and presents own and/

or team technical results. Communicates work to varied laboratory,

scientific, industry, and other government audiences. May prepare

and present presentations on critical program for use at higher

levels with some guidance.

Corporate Resource Management: Manages all aspects of

technically complex in-house work units or one or more contractual

efforts in assigned program area. Effectively plans and controls all

assigned resources. Makes and meets time and budget estimates on

assigned projects or takes appropriate corrective action.

Participates in organizational or strategic planning at team level,

taking cognizance of complementary projects elsewhere to ensure

optimal use of resources.

Technology Transition/Technology Transfer: Develops

demonstrations and interacts independently with internal/external

customers. As a team member, implements partnerships for transition

and/or transfer of technology (Advanced Technology Demonstrations,

Memorandums of Understanding, Joint Director of Labs/Project

Reliance, Cooperative Research and Development Agreements, and other

dual-use vehicles). Evaluates and incorporates appropriate outside

technology in individual or team activities.

R&D Business Development: Initiates meetings and interactions

with customers to understand customer needs. Generates key ideas for

program development based on understanding of technology and

customer needs. Demonstrates expertise to internal/external

customers. Contributes technically to proposal preparation and

marketing to establish new business opportunities.

Cooperation and Supervision: Contributes as a technical task or

team leader; is sought out for expertise by peers; and participates

in mentoring of team members. May guide on a daily basis, technical,

programmatic, and administrative efforts of individuals or team

members. May recommend selection or may select staff and/or team

members. Assists in the development and training of individuals or

team members. May participate in position and performance

management. Receives general guidance in terms of policies, program

objectives, and/or funding issues from supervisor and/or higher

level scientist or engineer. Discusses novel concepts and

significant departures from previous practices with supervisor or

team leader.

Level III Descriptors

Technical Problem Solving: Conducts and/or directs technical

activities and/or assists higher levels on challenging and

innovative projects or technical program development with only broad

guidance. Develops solutions to diverse, complex problems involving

various functional areas and disciplines. Conducts and/or directs

large programs in technically complex areas. Recognized within the

laboratory, service, DoD, industry, and academia for technical

expertise and has established a professional reputation in national

technical community.

Communications/Reporting: Lead author on major scientific

papers, refereed journal articles, and reports and/or prepares and

reviews contract documents and reviews reports of others pertaining

to overall program. May document or file inventions, patents, and

innovation disclosures relevant

[[Page 60407]]

to subject area. Prepares and presents technical and/or financial

and programmatic briefings and documentation for team, organization,

or technical area. Prepares and delivers presentations for major

projects and technology areas to scientific and/or government

audiences. Reviews oral presentation of others. Communication and

reporting functions conducted with minimal higher level oversight.

Corporate Resource Management: Defines program strategy and

resource allocations for in-house and/or contractual programs. For

assigned technical areas, conducts program planning, coordination,

and/or documentation (master plans, roadmaps, Joint Director of

Labs/Reliance, etc.). Advocates to laboratory and/or higher

headquarters on budgetary and programmatic issues for resources.

Based on knowledge of analytical and evaluative methods and

techniques, participates in strategic planning at branch and/or

division level. Considers and consults on technical programs of

other organizations working in the field to ensure optimal use of

resources.

Technology Transition/Technology Transfer: Develops customer

base and expands opportunities for technology transition and

transfer. Leads or serves as a key technical member of teams

implementing partnerships for transition or transfer of technology

(Advanced Technology Demonstrations, Memorandums of Understanding,

Joint Director of Labs/Project Reliance, Cooperative Research and

Development Agreements, and other dual-use vehicles). Ensures

incorporation of outside technology within laboratory programs.

R&D Business Development: Works to establish customer alliances

and translates customer needs to programs in a particular technical

area. Develops feasible research strategies and/or business

strategies for new technical activities. Seeks joint program

coalitions with other agencies and funding opportunities from

outside organizations. Pursues near-term business opportunities

through proposals.

Cooperation and Supervision: Is sought out for consultation and

mentors team members. Guides the research, technical and/or

programmatic, and administrative efforts of individuals or teams

with accountability for focus and quality. Recommends selection or

selects staff and/or team members. Supports development and training

of subordinates and/or team members. Participates in position and

performance management. Receives only broad policy and

administrative guidance from supervisor, such as initiation and

curtailment of programs.

Level IV Descriptors

Technical Problem Solving: Independently defines, leads, and

manages the most challenging, innovative, and complex technical

activities/programs consistent with general guidance or

independently directs overall R&D program. Conceives and develops

creative solutions to the most complex problems requiring highly

specialized areas of technical expertise. Recognized within the

laboratory, service, DoD, and other agencies for broad technical

area expertise and has established a professional reputation in

national and international technical communities.

Communications/Reporting: Lead or sole author on scientific

papers, refereed journal articles, reports, or review articles which

are recognized as major advances or resolutions in the technical

area and/or reviews and approves reporting of all technical products

of mission area. May exploit innovations which normally lead to

inventions, disclosures, and patents. Prepares and presents

technical and/or financial and programmatic briefings and

documentation for breadth of programs at or above own level. As

subject matter expert, prepares and delivers invited or contributed

presentations, papers at national or international conferences on

technical area, or gives policy level briefings. Singularly

responsible for overall quality and timeliness of technical/

scientific/ programmatic reports and presentations of group and

self.

Corporate Resource Management: Defines technology area strategy

and resource allocations for in-house and contractual programs. For

multiple technical areas, conducts overall program planning and

coordination, and/or program documentation (master plans, roadmaps,

Joint Director of Labs/Project Reliance, etc.). Advocates to

command, service, and agency levels on budgetary and programmatic

issues for resources. Utilizing advanced analytical and evaluative

methods and techniques, leads strategic planning and prioritization

processes. Develops strategy to leverage resources from other

agencies and ensures equitable distribution and appropriate use of

internal resources.

Technology Transition/Technology Transfer: Organizes, leads, and

markets overall technology transition and transfer activities for

organization at senior management levels. Leads in formulation and

oversight of Advanced Technology Demonstrations, Memorandums of

Understanding, Joint Director of Labs/Project Reliance, Cooperative

Research and Development Agreements, and other dual-use vehicles.

Creates an environment that encourages widespread exploitation of

both national and international technologies.

R&D Business Development: Works with the senior management level

to stimulate development of customer alliances for several technical

areas. Generates strategic research and/or business objectives for

core technical areas. Recognizes warfighting trends, relates

business opportunities, and convinces laboratory management to

develop and/or acquire expertise and commit funds. Secures business

opportunities supporting long-term mission relevancy through

targeted proposals and processes.

Cooperation and Supervision: Establishes team charters and

develops future team leaders and supervisors. Leads and manages all

aspects of subordinates' or team members' efforts with complete

accountability for mission and programmatic success. Recommends

selection or selects staff, team leaders, and team members; fosters

development and training of supervisory and non-supervisory

individuals. Directs or recommends position and performance

management. Works within the framework of agency policies, mission

objectives, and time and funding limitations.

3. Classification Authority

Laboratory directors/commanders will have delegated classification

authority and may, in turn, redelegate this authority no lower than two

management levels below the director/commander. Classification

approval, however, must be exercised at least one management level

above the first level supervisor of the employee or position under

review. Supervisors at the lower levels will provide classification

recommendations. Personnel specialists will provide on-going

consultation and guidance to managers and supervisors throughout the

classification process.

4. Statement of Duties and Experience (SDE)

Under the demonstration project's classification system, the

automated Statement of Duties and Experience (SDE) will replace the

current AF Form 1378, Civilian Personnel Position Description. The SDE

will include a description of job-specific information, reference the

CCS broadband level descriptors for the assigned broadband level, and

provide data element information pertinent to the job. Laboratory

supervisors will follow a computer assisted process to produce the SDE.

The objectives in developing the new SDE are to: (a) Simplify the

descriptions and the preparation process through automation, (b) make

the SDE specific to the employee, and (c) make the SDE a more useful

tool for other functions of personnel management, e.g., recruiting,

reduction-in-force, assessment of contribution, and employee

development.

5. Skill Codes

The Air Force presently uses skill code sets within the Defense

Civilian Personnel Data System (DCPDS) as a means to reflect duties of

current positions and employees' previous experiences. Each code

represents a specialization within the occupation. Specializations are

those described in classification or qualification standards and those

agreed upon by functional managers and personnel specialists to be

important to staffing patterns and career paths. These codes are used

to refer candidates for employment with the Air Force, placement of

current employees into other positions, and selection for training

under competitive procedures. To facilitate the movement of personnel

into and out of the demonstration project, the Air Force system of

skills coding will continue to

[[Page 60408]]

be used. Laboratory supervisors will select appropriate skill code sets

to describe the work of each employee through the automated SDE

process.

6. Classification Process

The SDE is accomplished by completion of the following steps

utilizing an automated system:

(a) The supervisor enters, by typing free-form, the organizational

location, SDE number, and the employee's name. From the menu, the

supervisor selects the appropriate occupational series and title, the

level descriptors corresponding to the broadband level that is most

commensurate with an employee's anticipated level of contribution, the

CCS job category, the functional classification code, and the

supervisory level. The supervisor then fills in the blanks in a

standard statement relating to the level of certification and

functional area for the Acquisition Professional Development Program

(APDP).

(b) The supervisor creates a brief description of job-specific

information by typing free-form at the appropriate point. From a menu,

the supervisor will choose statements pertaining to physical

requirements; knowledges, skills, and abilities required to perform the

work; and special licenses or certifications needed (other than APDP).

Based on the supervisory level code selected above, the system will

produce mandatory statements pertaining to affirmative employment,

safety, and security programs. The system will also produce a statement

pertaining to positive education requirements, or their equivalencies,

based on the occupational series selected.

(c) The supervisor selects up to three skill code sets from the

listing provided which are appropriate to the job. From the menu, the

supervisor also selects the position sensitivity; Fair Labor Standards

Act (FLSA) status; drug testing requirements; emergency essential and

key position information; the career program to which the position

belongs; the bargaining unit status code; the contribution factor

weights which apply to the job category previously selected; and other

relevant position description elements. This information, along with

the supervisory level and the competitive level code, constitutes the

SDE addendum. These data elements will be maintained as a separate page

of the SDE (i.e., an addendum) as this information can change

frequently. By maintaining this information as an addendum, the need to

create and classify a new SDE each time one of these elements must be

updated is alleviated.

(d) The supervisor accomplishes the SDE with a recommended

classification, then signs and dates the document. The SDE is sent to

the individual in the organization with delegated classification

authority for approval and classification, which is indicated by that

person signing and dating the SDE.

The computer assisted system will incorporate definitions for the

CCS job categories, supervisory levels, all S&E occupational series, as

well as their corresponding skill code sets and the functional

classification codes. The functional classification codes are those

currently found in OPM's ``Introduction to the Classification

Standards'' which define certain kinds of activities, e.g., research,

development, test and evaluation, etc. The FLSA status selection must

be in accordance with OPM guidance. Throughout the above process,

manpower analysts and personnel specialists will be available to advise

laboratory management.

D. Contribution-based Compensation System

1. Overview

The purpose of the Contribution-based Compensation System (CCS) is

to provide an effective, efficient, and flexible method for assessing,

compensating, and managing the laboratory S&E workforce. 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 achieve quality laboratories and

quality products. CCS allows for more employee involvement in the

assessment process, increases communication between supervisor and

employee, promotes a clear accountability of contribution, facilitates

employee career progression, provides an understandable basis for

salary changes, and delinks awards from the annual assessment process.

Funds previously allocated for performance-based awards will be

reserved for distribution under a separate laboratory awards program.

CCS is a contribution-based assessment system that goes beyond a

performance- based rating system. That is, it measures the employee's

contribution to the organization rather than how well the employee

performed a job as defined by a performance plan; one which may

represent a lower level of responsibility and expectation based on the

employee's previous performance. CCS promotes proactive salary

adjustment decisions to be made on the basis of an individual's overall

contribution to the organization.

Contribution is measured by factors, each of which is relevant to

the success of a Research and Development (R&D) laboratory. Six factors

have been developed for evaluating the yearly contribution of S&E

personnel covered by this initiative: Technical Problem Solving,

Communications/Reporting, Corporate Resource Management, Technology

Transition/Technology Transfer, R&D Business Development, and

Cooperation and Supervision.

Each factor has four levels of increasing contribution

corresponding to the four broadband levels. These factors use the same

descriptors as those presented under classification (section III C).

Under classification, for example, only level I descriptors are applied

for each of the six factors for a level I employee. For the CCS

assessment process, the six factors are presented with all four levels

of contribution to better assist supervisor assessment. Therefore, for

classification, the factors are sorted first by level and then by

factor as shown in section III C 2. For the CCS assessment process, the

level descriptors are sorted first by factor and then by level as shown

below.

Factor 1.--Technical Problem Solving

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

Level Descriptor Key elements

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

I...................... Conducts in-house technical activities and/or may Scope of Project/Level of

provide contract technical direction with guidance Impact.

from supervisor or higher level scientist or

engineer.

Works closely with peers in collectively solving Technical Complexity/Creativity.

problems of moderate complexity involving: limited

variables, precedents established in related

projects, and minor adaptations to well-established

methods and techniques.

Recognized within own organization for technical Recognition.

ability in assigned areas.

II..................... Conducts in-house technical activities and/or Scope of Project/Level of

provides contract technical direction to programs of Impact.

moderate size and complexity with minimal oversight.

[[Page 60409]]

Contributes technical ideas and conceives and defines Technical Complexity/Creativity

solutions to technical problems of moderate size or

complexity.

Recognized internally and externally by peers, both Recognition.

in governmental and industrial activities, for

technical expertise.

III.................... Conducts and/or directs technical activities and/or Scope of Project/Level of

assists higher levels on challenging and innovative Impact.

projects or technical program development with only

broad guidance.

Develops solutions to diverse, complex problems Technical Complexity/Creativity.

involving various functional areas and disciplines.

Conducts and/or directs large programs in

technically complex areas.

Recognized within the laboratory, service, DoD, Recognition.

industry, and academia for technical expertise and

has established a professional reputation in

national technical community.

IV..................... Independently defines, leads, and manages the most Scope of Project/Level of

challenging, innovative, and complex technical Impact.

activities/programs consistent with general guidance

or independently directs overall R&D program.

Conceives and develops creative solutions to the most Technical Complexity/Creativity.

complex problems requiring highly specialized areas

of technical expertise.

Recognized within the laboratory, service, DoD, and Recognition.

other agencies for broad technical area expertise

and has established a professional reputation in

national and international technical communities.

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

Factor 2.--Communications/Reporting

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

Level Descriptor Key elements

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

I...... Provides data and written analysis for Written and Oral.

input to scientific papers, journal

articles, and reports and/or assists in

preparing contractual documents and/or

reviews technical reports; work is

acknowledged in team publications.

Effectively presents technical results of Breadth of

own studies, tasks, or contract results. Responsibility.

Material is presented either orally or in Level/Diversity of

writing, within own organization or to Audiences.

limited external contacts.

Conducts these activities under the Oversight Required.

guidance of a supervisor and/or team

leader.

II..... Writes or is a major contributing author Written and Oral.

on scientific papers, journal articles,

or reports and/or prepares contract

documents and reviews reports pertaining

to area of technical expertise. May

assist in filing innovation disclosures,

inventions, and patents.

Effectively prepares and presents own and/ Breadth of

or team technical results.. Responsibility.

Communicates work to varied laboratory, Level/Diversity of

scientific, industry, and other Audiences.

government audiences.

May prepare and present presentations on Oversight Required.

critical program for use at higher

levels with some guidance.

III.... Lead author on major scientific papers, Written and Oral.

refereed journal articles, and reports

and/or prepares and reviews contract

documents and reviews reports of others

pertaining to overall program. May

document or file inventions, patents,

and innovation disclosures relevant to

subject area.

Prepares and presents technical and/or Breadth of

financial and programmatic briefings and Responsibility.

documentation for team, organization, or

technical area.

Prepares and delivers presentations for Level/Diversity of

major projects and technology areas to Audiences.

scientific and/or government audiences.

Reviews oral presentation of others. Oversight Required.

Communication and reporting functions

conducted with minimal higher level

oversight.

IV..... Lead or sole author on scientific papers, Written and Oral.

refereed journal articles, reports, or

review articles which are recognized as

major advances or resolutions in the

technical area and/or reviews and

approves reporting of all technical

products of mission area. May exploit

innovations which normally lead to

inventions, disclosures, and patents.

Prepares and presents technical and/or Breadth of

financial and programmatic briefings and Responsibility.

documentation for breadth of programs at

or above own level.

As subject matter expert, prepares and Level/Diversity of

delivers invited or contributed Audiences.

presentations, papers at national or

international conferences on technical

area, or gives policy level briefings.

Singularly responsible for overall Oversight Required.

quality and timeliness of technical/

scientific/programmatic reports and

presentations of group and self.

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

Factor 3.--Corporate Resource Management

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

Level Descriptor Key elements

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

I...... May coordinate elements of in-house work In-House/Contract

units or assist in managing a scientific Managing.

or support contract.

Uses personal and assigned resources Size and Complexity.

efficiently under the guidance of a

supervisor or team leader.

[[Page 60410]]

As an understanding of organizational Make/Buy/Rely.

activities, policies, and objectives is

gained, participates in team planning.

II..... Manages all aspects of technically In-House/Contract

complex in-house work units or one or Managing.

more contractual efforts in assigned

program area.

Effectively plans and controls all Size and Complexity.

assigned resources. Makes and meets time

and budget estimates on assigned

projects or takes appropriate corrective

action.

Participates in organizational or Make/Buy/Rely

strategic planning at team level, taking

cognizance of complementary projects

elsewhere to ensure optimal use of

resources.

III.... Defines program strategy and resource In-House/Contract

allocations for in-house and/or Managing.

contractual programs.

For assigned technical areas, conducts Size and Complexity.

program planning, coordination, and/or

documentation (master plans, roadmaps,

Joint Director of Labs/Reliance, etc.).

Advocates to laboratory and/or higher

headquarters on budgetary and

programmatic issues for resources.

Based on knowledge of analytical and Make/Buy/Rely.

evaluative methods and techniques,

participates in strategic planning at

branch and/or division level. Considers

and consults on technical programs of

other organizations working in the field

to ensure optimal use of resources.

IV..... Defines technology area strategy and In-House/Contract

resource allocations for in-house and Managing.

contractual programs.

For multiple technical areas, conducts Size and Complexity.

overall program planning and

coordination, and/or program

documentation (master plans, roadmaps,

Joint Director of Labs/Project Reliance,

etc.). Advocates to command, service,

and agency levels on budgetary and

programmatic issues for resources.

Utilizing advanced analytical and Make/Buy/Rely.

evaluative methods and techniques, leads

strategic planning and prioritization

processes. Develops strategy to leverage

resources from other agencies and

ensures equitable distribution and

appropriate use of internal resources.

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

Factor 4.--Technology Transition/Technology Transfer

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

Level Descriptor Key elements

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

I...... Participates as a team member in Customer Interaction

demonstrating technology and in Level.

interacting with internal/external

customers.

With guidance, contributes to technical Partnership/Level of

content of partnerships for technology Independence.

transition and/or transfer (Advanced

Technology Demonstrations, Memorandums

of Understanding, Joint Director of Labs/

Project Reliance, Cooperative Research

and Development Agreements, and other

dual-use vehicles).

Seeks out and uses relevant outside Leveraging Outside

technologies in assigned projects. Technology.

II..... Develops demonstrations and interacts Customer Interaction

independently with internal/external Level.

customers.

As a team member, implements partnerships Partnership/Level of

for transition and/or transfer of Independence.

technology (Advanced Technology

Demonstrations, Memorandums of

Understanding, Joint Director of Labs/

Project Reliance, Cooperative Research

and Development Agreements, and other

dual-use vehicles).

Evaluates and incorporates appropriate Leveraging Outside

outside technology in individual or team Technology.

activities.

III.... Develops customer base and expands Customer Interaction

opportunities for technology transition Level.

and transfer.

Leads or serves as a key technical member Partnership/Level of

of teams implementing partnerships for Independence.

transition or transfer of technology

(Advanced Technology Demonstrations,

Memorandums of Understanding, Joint

Director of Labs/Project Reliance,

Cooperative Research and Development

Agreements, and other dual-use vehicles).

Ensures incorporation of outside Leveraging Outside

technology within laboratory programs. Technology.

IV..... Organizes, leads, and markets overall Customer Interaction

technology transition and transfer Level.

activities for organization at senior

management levels.

Leads in formulation and oversight of Partnership/Level of

Advanced Technology Demonstrations, Independence.

Memorandums of Understanding, Joint

Director of Labs/Project Reliance,

Cooperative Research and Development

Agreements, and other dual-use vehicles.

Creates an environment that encourages Leveraging Outside

widespread exploitation of both national Technology.

and international technologies.

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

Factor 5.--R&D Business Development

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

Level Descriptor Key elements

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

I...... As a team member, communicates with Customer Interaction

customers to understand customer Level.

requirements.

By maintaining currency in area of Knowledge and Level

expertise, contributes as a team member of Planning.

to new program development.

May technically participate in writing Knowledge of Market/

proposals to establish new business Success in Getting

opportunities. Funds.

[[Page 60411]]

II..... Initiates meetings and interactions with Customer Interaction

customers to understand customer needs. Level.

Generates key ideas for program Knowledge and Level

development based on understanding of of Planning.

technology and customer needs.

Demonstrates expertise to internal/

external customers.

Contributes technically to proposal Knowledge of Market/

preparation and marketing to establish Success in Getting

new business opportunities. Funds.

III.... Works to establish customer alliances and Customer Interaction

translates customer needs to programs in Level.

a particular technical area.

Develops feasible research strategies and/ Knowledge and Level

or business strategies for new technical of Planning.

activities.

Seeks joint program coalitions with other Knowledge of Market/

agencies and funding opportunities from Success in Getting

outside organizations. Pursues near-term Funds.

business opportunities through proposals.

IV..... Works with the senior management level to Customer Interaction

stimulate development of customer Level.

alliances for several technical areas.

Generates strategic research and/or Knowledge and Level

business objectives for core technical of Planning.

areas. Recognizes war-fighting trends,

relates business opportunities, and

convinces laboratory management to

develop and/or acquire expertise and

commit funds.

Secures business opportunities supporting Knowledge of Market/

long-term mission relevancy through Success in Getting

targeted proposals and processes. Funds.

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

Factor 6.--Cooperation and Supervision

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

Level Descriptor Key elements

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

I...... Contributes to all aspects of teams' Team Role.

responsibilities.

May technically guide or mentor less Breadth of

experienced personnel on limited aspects Influence.

of scientific or engineering efforts.

Receives close guidance from supervisor Supervision and

and/or higher level scientist or Guidance Received.

engineer. Performs duties in a

professional, responsive, and

cooperative manner in accordance with

established policies and procedures.

II..... Contributes as a technical task or team Team Role.

leader; is sought out for expertise by

peers; and participates in mentoring of

team members.

May guide on a daily basis, technical, Breadth of

programmatic, and administrative efforts Influence.

of individuals or team members.

May recommend selection or may select Supervision and

staff and/or team members. Assists in Subordinate

the development and training of Development.

individuals or team members. May

participate in position and performance

management.

Receives general guidance in terms of Supervision and

policies, program objectives, and/or Guidance Received.

funding issues from supervisor and/or

higher level scientist or engineer.

Discusses novel concepts and significant

departures from previous practices with

supervisor or team leader.

III.... Is sought out for consultation and Team Role.

mentors team members.

Guides the research, technical and/or Breadth of

programmatic, and administrative efforts Influence.

of individuals or teams with

accountability for focus and quality.

Recommends selection or selects staff and/ Supervision and

or team members. Supports development Subordinate

and training of subordinates and/or team Development.

members. Participates in position and

performance management.

Receives only broad policy and Supervision and

administrative guidance from supervisor, Guidance Received.

such as initiation and curtailment of

programs.

IV..... Establishes team charters and develops Team Role.

future team leaders and supervisors.

Leads and manages all aspects of Breadth of

subordinates' or team members' efforts Influence.

with complete accountability for mission

and programmatic success.

Recommends selection or selects staff, Supervision and

team leaders, and team members; fosters Subordinate

development and training of supervisory Development.

and non-supervisory individuals. Directs

or recommends position and performance

management.

Works within the framework of agency Supervision and

policies, mission objectives, and time Guidance Received.

and funding limitations.

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

The assessment process (section III D 3) begins with employee input

which provides an opportunity to state the accomplishments and level of

contribution perceived. To determine the employee's yearly

contribution, the six factors will then be assessed by the immediate

supervisor. For each factor, the supervisor places the employee's

contribution at a particular level. If the contribution level for a

factor is at the lowest level of level I, a score of 1.0 is assigned.

Higher levels of contribution are assigned scores increasing in 0.1

increments up to 4.9. A factor score of 0.0 can be assigned if the

employee's contribution does not demonstrate a minimum level I

contribution. Likewise, a factor score of 5.9 can be assigned if the

employee's contribution exceeds the maximum level IV contribution.

Under CCS, immediate supervisors will work with other supervisors in a

group setting to render final scores. Weights may be applied to the six

factors for different job categories of S&Es (section III D 7). CCS

will also incorporate a midyear feedback session that will address

employees' professional qualities including, for supervisors,

supervisory qualities and skills. The supervisory feedback will include

input from both

[[Page 60412]]

employees and higher level management.

Employees within organizations are placed into pay pools (section

III D 4). Salary adjustments, i.e., decisions to give or withhold

salary increases, (section III D 5) are based on the relationship

between contribution scores and present salaries. The maximum available

pay rate under this demonstration project will be the rate for GS-15/

Step-10. Decisions for broadband movement (section III D 6) are also

based on this relationship.

Salary increase dollars to fund the pay pool are based on funds

available from general pay increases, step increases, and promotions.

Pay pool dollars are not transferable between pay pools. No changes

will be made to locality pay under the demonstration project.

2. The ``Standard Pay Line'' (SPL)

A mathematical relationship between assessed contribution and

compensation must be defined in order to have a Contribution-based

Compensation System. Various mathematical relationships between each

CCS score and the appropriate corresponding salary rate were examined

and analyzed given the following systemic constraints. First, CCS

necessitates that the relationship be described by a single equation

that yields a reasonable correlation between salaries in the broadband

levels and those of the corresponding GS grade(s). Second, neither the

equation nor its derivative(s) can exhibit singularities within or

between levels. That is, the equation must be continuous, smooth, and

well-defined across the four broadband levels. Third, the relationship

may not yield disincentives or inequities between employees or groups

of employees; it must demonstrate equitable (i.e., consistent) growth

at each CCS score. Mathematical analysis demonstrated that the most

reasonable relationship is a straight line--``the standard pay line''

(SPL).

Derivation of the SPL was based on distributing the General

Schedule grades and steps across the corresponding broadband levels and

plotting these against the GS salaries. Although the data are not

continuous, there is a linear trend. Each of these data points was

weighted by the actual calendar year 1995 (CY95) population data for

the demonstration laboratories. Using a ``least squares error fit''

analysis, the best straight line fit to this weighted data was computed

and is illustrated in Figure 1.

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Equation of the Standard Pay Line (without locality) for CY95

COMPENSATION=$13,572 +$15,415 x CCS SCORE.

The SPL defined in Figure 1 is tied to the basic GS pay scale for

CY95. The SPL for CY96 was calculated from the SPL for CY95 and the

general increase (G) given to GS employees in January 1996. The

equation for the CY96 SPL is: COMPENSATION = $13,843 + $15,723 x CCS

SCORE. The CY97 SPL will be the CY96 SPL increased by the ``G'' for

CY97. Continuing this calculation of SPL will maintain the same

relationships between the basic GS pay-scale and the SPL in the

demonstration project. Locality salary adjustments are not included in

the SPL.

Although a correlation with the GS system was used in the

derivation of the SPL, employees will enter the demonstration project

without a loss of pay (as detailed later in the ``Conversion to the

Demonstration Project'' section) and without a CCS score. The first CCS

score will result from the first annual CCS assessment process in

October 1997. Until then, no employee is either undercompensated or

overcompensated. Employees, however, may determine their expected

contribution level by locating the intersection of their salary with

the SPL. Rails were constructed at + and - 0.3 CCS around the SPL. The

area encompassed by the rails denotes the acceptable contribution and

compensation relationship. Future CCS assessments will likely alter an

employee's position relative to these rails.

3. The CCS Assessment Process

The annual assessment cycle begins on October 1 and ends on

September 30 of the following year. At the beginning of the annual

assessment period, the broadband level descriptors and weights (section

III D 7) will be provided to employees so that they know the basis on

which their contribution will be assessed. A midyear review, in the

March to April time frame, will be conducted for all S&Es, both

supervisory and non-supervisory employees. At this time, the employee's

professional qualities will be discussed as well as future professional

development and career opportunities. Additionally, this midyear review

will include feedback of supervisory qualities and skills for all

supervisors, military and civilian. The supervisor

[[Page 60414]]

conducting the feedback session with subordinate supervisors will

solicit employee input on the supervisor's qualities and skills. This

enables supervisors to receive feedback from higher level management as

well as from those they supervise for the purpose of future

professional development. To highlight its importance, all feedback

sessions will be certified as completed by the supervisor conducting

the feedback session.

At the end of the annual assessment period, employees will

summarize their contributions in each factor for their immediate

supervisor. The supervisor will determine initial CCS scores using the

employee input and the supervisor's assessment of the overall

contribution to the laboratory mission. For each factor, the supervisor

places the employee's contribution at a particular level (I, II, III,

or IV). If the contribution for a factor is at the lowest end of a

level, a score of 1.0, 2.0, 3.0, or 4.0 is assigned. Greater

contributions in each level are assigned scores increasing in 0.1

increments up to 1.9, 2.9, 3.9, or 4.9. A factor score of 0.0 can be

assigned if the employee does not demonstrate a minimum level I

contribution. Likewise, a factor score of 5.9 can be assigned if the

employee demonstrates a contribution that exceeds the maximum for level

IV. Supervisors must document adequate justification for each proposed

factor score of either 0.0 or 5.9.

Factor scores are then averaged to give a total CCS score. The

broadband is well defined for total CCS scores from 1.0 to 4.9.

Differing degrees of ``exceeded'' or ``failed'' contributions,

reflective of total CCS scores outside this range, have no impact on

CCS payouts. The maximum compensation for the broadband is the GS-15/

Step-10 salary and equates to a total CCS score of just below 4.9.

Therefore, when the average of CCS factor scores exceed 4.9, the total

CCS score will be set to 4.9 with the individual identified to upper

management as having exceeded the maximum contribution defined by the

broadband. Employees with a total CCS score below 1.0 are automatically

deemed to be above the upper rail for purposes of CCS assessment and

associated salary adjustments.

The immediate supervisors (for instance, branch chiefs) and the

next level supervisors (for instance, division chiefs) for a pay pool

then meet as a group to review and discuss all proposed employee

assessments and adjust individual CCS scores, if necessary. Giving

authority to the group of managers to make minor score adjustments

ensures that contributions will have been assessed and measured

similarly for all employees. Once the scores have been finalized, the

results and any training and/or career development needs will be

discussed with the individual employees. The employee will also be

given a statistical correlation (e.g., quartile, etc.) pertaining to

their relative standing within the pay pool.

When S&E employees are newly hired or transferred into the

demonstration, their contribution score is presumed to be at the

location of the intersection of their salary with the SPL. If on

October 1, the employee has served under CCS for less than 6 months,

the supervisor will wait for the subsequent annual cycle to assess the

employee. The first CCS assessment must be rendered within 18 months

after entering the demonstration project.

When an employee cannot be evaluated readily by the normal CCS

assessment process due to special circumstances that take the

individual away from normal duties or duty station (e.g., long-term

full-time training, active military duty, extended sick leave, leave

without pay, etc.), the supervisor will document the special

circumstances on the assessment form. The supervisor will then assess

the employee using one of the following options:

(a) Recertify the employee's last contribution assessment; or

(b) Assign an assessment which places the employee on the SPL at

the employee's current salary.

Pay adjustments will be made on the basis of this CCS assessment

and the employee's current salary. Pay adjustments are subject to a few

payout rules discussed in section III D 5. Final pay determinations

will be made at a management level above the group of supervisors who

rendered final CCS assessments. CCS scores, however, cannot be changed

by managerial levels above the original group of supervisors. Decisions

for any broadband level changes (section III D 6) will be submitted to

at least one level of management higher than the group of supervisors

(for instance, directorate chief) for approval. Pay adjustments and

broadband level changes will then be documented by SF-50, Notification

of Personnel Action. For historical and analytical purposes, the

effective date of CCS assessments; actual assessment scores; SPL

coordinate scores prior to salary adjustments; actual salary increases;

amounts contributed to the pay pool; individual Xs; and

applicable ``bonus'' amounts will be maintained for each demonstration

project employee.

4. Pay Pools

Pay pool structure is under the authority of the laboratory

directors/commanders. The following minimal guidelines, however, will

apply: (a) A pay pool is based on the organizational structure and

should include a range of S&E salaries and contribution levels; (b) a

pay pool must be large enough to constitute a reasonable statistical

sample, i.e., 35 or more; (c) a pay pool must be large enough to

encompass a second level of supervision since the CCS process uses a

group of supervisors in the pay pool to determine assessments and

recommend salary adjustments; (d) the pay pool manager (for instance, a

division chief or directorate chief) holds yearly pay adjustment

authority; and (e) neither the pay pool manager nor supervisors within

the pay pool will recommend or set their own individual pay. Pay pool

managers' pay determinations, however, may still be subject to higher

management review.

The amount of money available for salary increases within a pay

pool is determined by the general increase (G) and money that would

have been available for step increases and promotions (I). The latter

will be set at 2.4% upon implementing the demonstration project and is

considered adjustable to ensure cost neutrality over the life of the

demonstration project. The dollars derived from ``G'' and ``I'' to be

included in the pay pool will be computed based on the salaries of

employees in the pay pool as of September 30 each year.

5. Salary Adjustment Guidelines

After the initial assignment into the CCS system, employees' yearly

contributions will be determined by the CCS process described above,

and their CCS scores versus their current salaries will be plotted on a

graph along with the SPL (see Figure 2). The position of those points

relative to the SPL gives a relative measure (Y) of the degree

of overcompensation or undercompensation for the employees. This

permits all employees within a pay pool to be rank-ordered by

Y, from the most undercompensated employee to the most

overcompensated.

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[[Page 60416]]

In general, those employees who fall below the SPL (indicating

undercompensation, for example, employee X in Figure 2) should expect

to receive greater salary increases than those who fall above the line

(indicating overcompensation, for example, employee Z). Over time,

people will migrate closer to the standard pay line and receive a

salary appropriate to their level of contribution. The following are

more specific guidelines: (a) Those who fall above the upper rail (for

example, employee Z) will be given an increase ranging from zero to a

maximum of ``G''; (b) Those who fall within the rails (for example,

employee Y) will be given a minimum of ``G''; and (c) Those who fall

below the lower rail (for example, employee X) will be given at least

their base pay times ``G'' plus the percentage of funds set aside for

step increases and promotions which will no longer take place (I).

Should an employee's CCS assessment fall on either rail, it will be

considered to be within the rails.

Employees whose CCS score would result in awarding of ``I'' money

such that the salary exceeds the maximum salary for broadband level II

would be eligible for one of the following: movement into level III if

a high grade allocation exists (section III D 6), or salary adjustment

to the maximum salary in level II and a ``bonus'' payout of the

additional ``I'' funds warranted by the assessment.

Initially, the value of ``I'' will be 2.4%; the percentage,

however, may be changed to ensure cost neutrality in future years. Each

pay pool manager will set the necessary guidelines for the gradation of

pay adjustments in the pay pool within these general rules. Decisions

made will be standard and consistent within the pay pool, be fair and

equitable to all stakeholders, maintain cost neutrality over the

project life, and be subject to review. The maximum available pay rate

under this demonstration project will be the rate for GS-15/Step-10.

6. Movement Between Broadband Levels

It is the intent of the demonstration project to have S&E career

growth be accomplished through unrestricted movement through the

broadband levels. Movement through the broadband levels will be

determined by contribution and salary following the CCS payout

calculation. Resulting changes in broadband levels are not accompanied

by traditional promotion dollars, but rather, they will be documented

as a change in title, change in broadband level, and reaccomplishment

of a Statement of Duties and Experience (SDE) (section III C 6). The

terms Promotion and Demotion will not be used in connection with the

CCS process. Rather, these terms will be reserved for competitive

placement and adverse actions.

Broadband levels are derived from an initial grouping of one or

more GS grades. Salary overlap between adjacent levels is desirable for

broadband level movement. It is more convenient, however, to redefine

these overlaps (that is, the top and bottom salary ranges of the

broadband levels which produce the overlaps) in terms of the SPL.

Specifically, the salary overlap between two levels is defined by the

salaries at - to + 0.25 CCS around the whole number score defining the

boundary between the contribution levels. For example, the maximum

salary for level II would be that salary from the SPL corresponding to

a CCS score of 3.25. Likewise, the minimum salary for level III would

be the salary from the SPL corresponding to a CCS score of 2.75. This

definition provides a salary overlap between broadband levels that is

consistent and similar to salary overlaps in the GS schedule.

Figure 3 shows the salary overlap areas between broadband

contribution levels. These salary overlap areas are divided into three

zones designated as CL (consideration for change to lower level), CH

(consideration for change to higher level), and E (eligible for change

to higher or lower level). All the E zones have the same width, 0.5

CCS, and height. The E zone is described as the box formed by the

intersection of the integer + and - 0.25 CCS lines and the SPL.

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[[Page 60418]]

The E zones serve to stabilize the movement between adjacent

broadband levels. This allows for annual fluctuations in contribution

scores for people near the top or bottom of a level, without creating

the need for repeated changes of their titles. An employee whose

contribution score falls within an E zone is eligible for a change in

broadband level (with the associated title change), but one should not

be given unless the supervisor has a compelling reason to advance or

reduce the employee's level. Under normal circumstances, pay

adjustments under CCS will follow contribution scores. Those who

consistently achieve increased contribution assessments will progress

through their broadband level and will find their salary climbing into

the corresponding CH zone. Once the employee's CCS score is

demonstrated to be consistently within the CH zone, the employee should

be moved to the higher broadband level unless the supervisor has a

compelling reason not to request the change. Conversely, regression

through the broadband levels works the same way in the opposite

direction. Those who consistently receive decreasing contribution

assessments will regress through their broadband level and would not

have been receiving any salary adjustments greater than ``G''. They

will find that the CL zone at the bottom of their current broadband

level will catch up with their current salary. Once the employee's CCS

score is demonstrated to be consistently within the CL zone, the

employee should be moved to the lower broadband level unless the

supervisor has a compelling reason not to request the change.

Compelling reasons for retaining broadband levels in the presence of

consistent assessments in the CH or CL range must be documented in

writing and provided to the employee. If an employee moves totally

above the CH zone or below the CL zone, the employee will be changed in

broadband level without supervisory action.

At the present time, high grade controls within the agency restrict

movement between broadband level II and broadband level III. Until the

high grade controls are lifted, demonstration project employees will

not be able to advance from broadband level II to broadband level III

unless a high grade authorization is available. To accommodate this,

level II employees whose salary adjustment would place them above the

CH zone for level II in organizations where high grade authorizations

are unavailable will receive permanent adjustments to basic salary up

to an amount equivalent to the top of broadband level II. Any

additional amount granted under CCS will be paid as a ``bonus'' payment

from pay pool funds and not permanently increase base salary. This

pattern of payout will continue until high grade authorizations become

available.

Movement under CCS happens once a year. Under the demonstration

project, managers are provided greater flexibility in assigning duties

by moving employees between positions within their broadband level. If,

throughout the year, there are vacancies at higher levels (typically

supervisory positions), employees may be considered for promotion to

those positions according to the demonstration project competitive

selection procedures approved by the Air Force. Demonstration project

employees selected for positions at a higher broadband level will

receive the salary corresponding to the minimum of the new broadband

level or their existing salary, whichever is greater. Under the

approved competitive selection procedures, the selecting official may

consider candidates from any source based on viable and supportable job

related merit-based methodology. Similarly, if there is sufficient

cause, an employee may be demoted to a lower level position according

to the contribution-based reduction in pay or removal procedures

discussed in section III E or the existing procedures related to

disciplinary actions.

7. Weights

Employees under the demonstration project will be assigned to one

of five job categories:

(a) Supervisor & Manager, primary function is to supervise other

employees and/or to direct the work of an organization or

organizational segment;

(b) Plans & Programs S&E, primary function is to formulate plans

and policies to further the organizational mission;

(c) Program Manager, primary function is to run/direct research and

development (R&D) programs;

(d) Support S&E, primary function is to support the research

efforts of the laboratory; and

(e) Bench-Level S&E, primary function is to perform R&D within the

mission focus of the laboratory.

Laboratory directors/commanders will have the authority to

determine if varying weights should be applied to the six CCS factors

based on these job categories. As an example, Technical Problem Solving

may be more heavily weighted for Bench-Level S&Es than the factor of

Technology Transition/Technology Transfer.

The authority to use weights and the authority to set weights may

be delegated below the laboratory director/commander, but weights must

be the same for all employees in a particular job category in a pay

pool. This ensures that a fair comparison of employees is made, without

having the weights tailored to specific individuals. The overall CCS

score is determined by multiplying the score for each factor by the

weight, adding the results, and then dividing by the sum of the

weights.

This demonstration project, in part, is predicated on the belief

that the continued success and viability of the laboratories depends on

all employees seeking to contribute in each of the areas defined by the

six factors. Making all employees accountable for all factors shifts

organizational values in new directions. For this reason, no factor can

be given a weight of zero. Laboratory directors/commanders should

annually review the weightings for the various job categories to see if

they can be increased toward a weighting of 1.0 to encourage and allow

employees to raise their CCS contribution assessment by contributing in

a broader range of activities. Contribution in all six factors is

important to ensure both the overall success of DoD laboratories and

individual S&E career growth. Hence, the weights should be reviewed

frequently, and an effort made to move away from them in later years of

the demonstration project.

Other guidelines for setting weights for the six factors are: (a)

Weights may be assigned any value, in increments of 0.1, from 0.1 to

1.0; (b) At least three factors must have a weight of 1.0; and (c) No

more than one factor can have a weight of less than 0.5. For all six

factors, therefore, the weights must sum from 4.1 to 6.0.

8. Voluntary Pay Reduction and Pay Raise Declination

A provision exists today for an employee to request a change to

lower grade. If that request is totally the employee's choice, then the

employee's salary is lowered accordingly. Although the rationale behind

such a voluntary request varies, under CCS a voluntary request for a

pay reduction or a voluntary declination of a pay raise would

effectively put an overcompensated employee's pay closer to or below

the standard pay line. Since an objective of CCS is to properly

compensate employees for their contribution, the granting of such

requests is consistent with this goal. Under normal circumstances, all

[[Page 60419]]

employees should be encouraged to advance their careers through

increasing contribution rather than trying to be undercompensated at a

fixed level of contribution.

To handle these special circumstances, employees must submit a

request for voluntary pay reduction or pay raise declination during the

30-day period immediately following the annual payout, and show reasons

for the request. All actions will be appropriately documented.

9. Implementation Schedule

The 1996 employee annual appraisal will be done according to Air

Force performance plan rules in effect at the time of the 1996 close-

out. The 1997 appraisal cycle will also begin, but it is not

anticipated to be completed due to the implementation schedule of this

demonstration project. The first assessment cycle under CCS will

commence the day the demonstration project is implemented and run

through September 30, 1997. The first CCS payout will be given in the

traditional first full pay period in calendar year 1998.

10. CCS Grievance Procedures

An employee may grieve the assessment received under CCS.

Nonbargaining unit employees, and bargaining unit employees covered by

a negotiated grievance procedure which does not permit grievances over

performance ratings, must file assessment grievances under

administrative grievance procedures. Bargaining unit employees, whose

negotiated grievance procedures cover performance rating grievances,

must file assessment grievances under those negotiated procedures.

11. Using the CCS Assessment Score as Additional Service Credit During

Reduction-in-Force

For broadband levels I through III, CCS assessment scores below the

lower rail (a X greater than +0.30) will equate to 20

additional years of service. Scores within the rails but on or below

the SPL (a X equal to or greater than 0.00 and less than or

equal to +0.30) will equate to 16 years of service. Scores within the

rails but above the SPL (a X equal to or greater than -0.30

and less than 0.00) will be credited with 12 years of service. No

additional years of service will be given for assessment scores above

the upper rail (a X less than -0.30).

Because of the upper pay limit imposed on broadband level IV and

the slope of the SPL, employees at the top salaries of that level have

no opportunity to score below the lower rail. Therefore, three

categories of additional service credit will be defined for RIF

purposes within broadband level IV: (1) Employees with CCS assessments

on or below the SPL (a X equal to or greater than 0.00), (2)

those with CCS assessments above the SPL but on or below the upper rail

(a X equal to or greater than -0.30 and less than 0.00), and

(3) those with CCS assessments above the upper rail (a X less

than -0.30). For broadband level IV, CCS assessment scores on or below

the SPL (a X equal to or greater than 0.00) will equate to 20

years of service. Scores above the SPL but on or below the upper rail

(a X equal to or greater than -0.30 and less than 0.00) will

be credited with 12 years of service. No additional years of service

will be given for assessment scores above the upper rail (a X

less than -0.30).

E. Contribution-based Reduction in Pay or Removal Actions

CCS is a contribution-based assessment system that goes beyond a

performance-based rating system. Contribution is measured against six

factors each having four levels of increasing contribution

corresponding to the four broadband levels. This section applies to

reduction in pay or removal of demonstration project employees based

solely on inadequate contribution. The following procedures are similar

to and replace those established in 5 CFR 432 pertaining to

performance-based reduction in grade and removal actions. Adverse

action procedures under 5 CFR 752 remain unchanged.

When an employee's contribution plots in the area above the upper

rail of the SPL (section III D 3) the employee is considered to be in

the Automatic Attention Zone (AAZ). In this case, the supervisor has

two options. The first is to take no action but to document this

decision in a memorandum for record. A copy of this memorandum will be

provided to the employee and to higher levels of management. The second

option is to inform the employee, in writing, that unless the

contribution increases to, and is sustained at, a higher level, the

employee may be reduced in pay or removed.

These provisions also apply to an employee whose contribution

deteriorates during the year. In such instances, the group of

supervisors who meet during the CCS assessment process may reconvene

any time during the year to review the circumstances warranting the

recommendation to take further action on the employee.

The supervisor will afford the employee a reasonable opportunity (a

minimum of 60 days) to demonstrate increased contribution commensurate

with the duties and responsibilities of the employee's position. As

part of the employee's opportunity to demonstrate increased

contribution, the laboratory will offer assistance to the employee.

Once an employee has been afforded a reasonable opportunity to

demonstrate increased contribution, but fails to do so, the laboratory

may propose a reduction in pay or removal action. If the employee's

contribution increases to a higher level and is again determined to

deteriorate in any area within 2 years from the beginning of the

opportunity period, the laboratory may initiate reduction in pay or

removal with no additional opportunity to improve. If an employee has

contributed appropriately for 2 years from the beginning of an

opportunity period and the employee's overall contribution once again

declines, the laboratory will afford the employee an additional

opportunity to demonstrate increased contribution before determining

whether or not to propose a reduction in pay or removal.

An employee whose reduction in pay or removal is proposed is

entitled to a 30 day advance notice of the proposed action that

identifies specific instances of inadequate contribution by the

employee on which the action is based. The laboratory may extend this

advance notice for a period not to exceed an additional 30 days. The

laboratory will afford the employee a reasonable time to answer the

laboratory's notice of proposed action orally and/or in writing.

A decision to reduce in pay or remove an employee for inadequate

contribution may be based only on those instances of inadequate

contribution that occurred during the 2 year period ending on the date

of issuance of the advance notice of proposed action. The laboratory

will issue written notice of its decision to the employee at or before

the time the action will be effective. Such notice will specify the

instances of inadequate contribution by the employee on which the

action is based and will inform the employee of any applicable appeal

or grievance rights as specified in 5 CFR 432.106.

The laboratory will preserve all relevant documentation concerning

a reduction in pay or removal which is based on inadequate contribution

and make it available for review by the affected employee or designated

representative. At a minimum, the laboratory's records will consist of

a copy of the notice of proposed action; the written answer of the

employee or

[[Page 60420]]

a summary thereof when the employee makes an oral reply; and the

written notice of decision and the reasons therefor, along with any

supporting material including documentation regarding the opportunity

afforded the employee to demonstrate increased contribution.

When the action is not taken because of contribution improvement by

the employee during the notice period, the employee is not reduced in

pay or removed, and the employee's contribution continues to be deemed

adequate for 2 years from the date of the advanced written notice, any

entry or other notation of the proposed action will be removed from all

laboratory records relating to the employee.

F. Voluntary Emeritus Corps

Under the demonstration project, laboratory directors/commanders

will have the authority to offer retired or separated employees

voluntary assignments in the laboratories. This authority will include

employees who have retired or separated from Federal service, including

those who have accepted a buy-out. The voluntary emeritus corps will

ensure continued quality research while reducing the overall salary

line by allowing higher paid employees to accept retirement incentives

with the opportunity to retain a presence in the scientific community.

The program will be of most benefit during manpower reductions as

senior S&Es could accept retirement and return to provide valuable on-

the-job training or mentoring to less experienced employees.

To be accepted into the emeritus corps, a volunteer must be

recommended by laboratory managers to the laboratory director/

commander. Everyone who applies is not entitled to a voluntary

assignment. The laboratory director/commander must clearly document the

decision process for each applicant (whether accepted or rejected) and

retain the documentation throughout the assignment. Documentation of

rejections will be maintained for 2 years.

To encourage participation, the volunteer's federal retirement pay

(whether military or civilian) will not be affected while serving in a

voluntary capacity.

Volunteers will not be permitted to monitor contracts on behalf of

the government or to participate on any contracts or solicitations

where a conflict of interest exists.

An agreement will be established between the volunteer, the

laboratory director/commander, and the Civilian Personnel Flight. The

agreement will be reviewed by the local Staff Judge Advocate

representative responsible for ethics determinations under the Joint

Ethics Regulation. The agreement must be finalized in advance and shall

include as a minimum:

(a) A statement that the voluntary assignment does not constitute

an appointment in the civil service and is without compensation,

(b) The volunteer waives any and all claims against the Government

because of the voluntary assignment except for purposes of on-the-job

injury compensation as provided in 5 U.S.C. 8101(1)(B),

(c) Volunteer's work schedule,

(d) Length of agreement (defined by length of project or time

defined by weeks, months, or years),

(e) Support provided by the laboratory (travel, administrative,

office space, supplies),

(f) A one page SDE,

(g) A provision that states no additional time will be added to a

volunteer's service credit for such purposes as retirement, severance

pay, and leave as a result of being a member of the voluntary emeritus

corps,

(h) A provision allowing either party to void the agreement with 10

working days written notice, and

(i) The level of security access required (any security clearance

required by the assignment will be managed by the laboratory while the

volunteer is a member of the emeritus corps).

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

A separate competitive area will be established by geographic

location for all laboratory personnel included in the demonstration

project.

Each laboratory shall establish competitive levels consisting of

all positions in a competitive area which are in the same broadband

level and occupational family and which are similar enough that the

incumbent of one position could succeed in the new position without any

loss of productivity beyond that normally expected in the orientation

of any new, but fully qualified, employee. The laboratory directors/

commanders, or their designees, will observe and participate with the

appropriate Civilian Personnel representative in all placement actions.

IV. Training

An extensive training program is planned for support personnel and

every employee in the demonstration project including managers,

supervisors, and S&Es. Training will be tailored to fit the

requirements of every employee included and will fully address employee

concerns to ensure that everyone has a comprehensive understanding of

the program and to emphasize the benefits to employees. Additional

supervisory training will be provided to all managers and supervisors

as the new system places more responsibility and decision making

authority on their shoulders.

Using an existing task order contract through Armstrong Laboratory,

the training packages will be developed to encompass all aspects of the

project and validated prior to training the workforce. Specifically,

training is being developed for the following groups of employees:

(a) Laboratory S&Es included in the demonstration,

(b) Civilian and military supervisors and managers, and

(c) Administrative support and civilian personnel office personnel

who must understand laboratory operations under the demonstration

project.

Training requirements will vary from an overview of the new system;

to a more detailed package for laboratory S&Es; to very specific

instructions for both civilian and military supervisors, managers, and

others who provide personnel and payroll support.

Base level training personnel will provide local training

management, facilities, and support to laboratory directors/commanders.

Contract training personnel will be utilized where organic capabilities

are not available or not economically feasible. The training will

begin, and be completed, within the 90 days prior to implementation.

V. Conversion

A. Conversion to the Demonstration Project

Initial entry into the demonstration project for covered employees

will be accomplished through a full employee protection approach that

ensures each employee an initial place in the appropriate broadband

level without loss of pay. An automatic conversion from the permanent

GS/GM grade and step of record into the new broadband system will be

accomplished. Special Salary Rates will no longer be applicable to

demonstration project employees. All employees will be eligible for the

future locality pay increases of their geographical areas. Employees on

Special Salary Rates at the time of conversion will receive a new basic

pay rate computed by dividing their highest adjusted basic pay (i.e.,

special pay rate or, if higher, the

[[Page 60421]]

locality rate) by the locality pay factor for their area. A full

locality adjustment will then be added to the new basic pay rate.

Adverse action and pay retention provisions will not apply to the

conversion process as there will be no change in total salary.

Employees who enter the demonstration project later by lateral

reassignment or transfer will be subject to parallel pay conversion

rules.

B. Conversion Back to the Former System

In the event the project ends, a conversion back to the former

(regular) Federal civil service system will be required. All employees

in a broadband level corresponding to a single General Schedule (GS)

grade will be converted to that grade. Employees in a multiple grade

broadband level will be considered to have attained the next higher

grade when they have been in the level at least 1 year and their salary

equals or exceeds the minimum salary of the higher grade. For employees

who are entitled to a special rate upon return to the General Schedule,

the demonstration project locality rate must equal or exceed the

minimum special rate of the higher grade. To set GS pay upon

conversion, an employee's demonstration project locality rate would be

converted (prior to leaving the project) to the highest General

Schedule rate range (i.e., locality rate range or special rate range)

applicable to the employee. If the employee's rate falls between the

fixed rates for the applicable range, it will be raised to the next

higher rate. The employee's GS basic rate (excluding special rates or

locality payments) would then be derived based on the grade and step

associated with this converted rate. Employees who leave the

demonstration project and return to the General Schedule pay system via

reassignment, promotion, demotion, or transfer are subject to parallel

pay conversion rules to determine the converted GS rates under the

demonstration project to be used in applying GS pay administration

rules (e.g., promotion rule or maximum payable rate rule) in setting

pay at the gaining agency.

VI. Project Duration

Public Law 103-337 removed any mandatory expiration date for this

demonstration project. The project evaluation plan adequately addresses

how each intervention will be comprehensively evaluated for at least

the first 5 years of the demonstration project. Major changes and

modifications to the interventions can be made through announcement in

the Federal Register and would be made if formative evaluation data

warranted. At the 5 year point, the entire demonstration project will

be reexamined for either: (a) Permanent implementation, (b) change and

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

VII. Evaluation Plan

Authorizing legislation mandates evaluation of the demonstration

project to assess the merits of project outcomes and to evaluate the

feasibility of applications to other federal organizations. The overall

evaluation consists of two components--external and internal

evaluation. The external evaluation for the four Air Force laboratories

is part of a larger effort involving evaluation of demonstration

projects in a total of 24 reinvention laboratories in three military

services. External evaluation will be overseen by the Office of Merit

Systems Oversight and Effectiveness, OPM, and the Director Defense

Research and Engineering (DDR&E) and Civilian Personnel Policy (CPP),

DoD. OPM's Personnel Resources and Development Center (DPRC) will serve

in the role of external evaluator to ensure the integrity of the

evaluation process, outcomes, and interpretation of results. The

internal evaluation will be accomplished by the staff of the Air Force

laboratories.

The main purpose of the evaluation is to determine the

effectiveness of the personnel system changes to be undertaken by the

laboratories. To the extent possible, cause-and-effect relationships

between the changes and personnel system effectiveness criteria will be

established. The evaluation approach uses an intervention impact model

which specifies each personnel system change as an intervention, the

expected effects of each intervention, the corresponding measures, and

the data sources for obtaining the measures. Table 4 presents an

example of the intervention impact model.

Table 4.--Intervention Impact Evaluation Model

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

Interventions Expected effects Measures Data sources

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

1. Compensation

a. Broadbanding................... A. Increased 1. Perceived flexibility.. Attitude survey.

organizational

flexibility.

B. Reduced administrative 1. Actual/perceived time Personnel office

work load, paperwork savings. data, PME results,

reduction. attitude survey.

C. Advanced in-hire rates. 1. Starting salaries of Work force data.

banded vs nonbanded

employees.

D. More gradual pay 1. Progression of new Work force data.

progression at entry hires over time by band,

levels. career path.

E. Increased pay potential 1. Mean salaries by band, Work force data.

career path, demographics.

F. Higher average salaries 1. Total payroll cost..... Work force data.

G. Increased satisfaction 1. Employee perceptions of Attitude survey.

with advancement. advancement.

H. Increased pay 1. Pay satisfaction, Attitude survey.

satisfaction. internal/external equity.

I. Improved recruitment... 1. Offer/acceptance ratios Personnel office

data.

2. Percent declinations... Personnel office

data.

J. No change in high grade 1. Number/percentage of Work force data.

(GS-14+) distribution. employees at high grade

salaries pre/post banding.

2. Contribution/Performance

Management and Assessment

[[Page 60422]]

a. Cash awards/bonuses............ A. Reward/motivate 1. Amount and number of Work force data.

contribution/performance. awards by career path,

demographics performance.

2. Perceived motivational Attitude survey.

power.

3. Perceived fairness of Attitude survey.

awards.

b. Contribution-based pay A. Increased pay- 1. Pay-contribution Work force data.

progression. contribution link. correlations.

2. Perceived pay- Attitude survey.

contribution link.

3. Perceived fairness of Attitude survey.

ratings.

4. Satisfaction with Attitude survey.

ratings.

5. Employee trust in Attitude survey.

supervisors.

B. Improved contribution/ 1. Adequacy of Attitude survey.

performance feedback. contribution/performance

feedback.

C. Increased retention of 1. Turnover by Work force data.

high contributors. contribution assessment.

D. Increased turnover of 1. Turnover by Work force data.

low contributors. contribution assessment.

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

The specific measures to be collected using the different methods

are determined from the goals and objectives stated for each

intervention. Both quantitative and qualitative measures will be

obtained. Most of the potential measures can be grouped around three

major effectiveness criteria: speed, cost, and quality. Collectively,

the outcomes of the interventions are hypothesized to lead to

laboratory personnel management improvements, as reflected by

timeliness, cost-effectiveness, and quality.

A quasi-experimental design with pre- and post-implementation

comparisons will be employed. Baseline measures are being taken prior

to project implementation. Then, repeated measurements will be taken

post-implementation to allow longitudinal comparisons by intervention

within and across the four Air Force laboratories. Additional features

of the design call for comparisons of Air Force results to those for

the other 20 service laboratories that are expected to be part of the

demonstration program, as well as to those for the original Navy

demonstration project conducted at China Lake and San Diego. Further

comparisons for pay purposes will be conducted with a composite

comparison group covering similar occupations and job series to be

constructed from OPM's Central Personnel Data File.

The effectiveness of each intervention and the project as a whole

in meeting stated objectives will be addressed using a multi-method

approach. Some methods will be unobtrusive in that they do not require

reactions or inputs from employees or managers. These methods include

analysis of archival workforce data and personnel office data, review

of logs maintained by site historians documenting contextual events,

and assessment of external economic and legislative changes. Other

methods such as periodic attitude surveys, structured interviews, and

focus groups will be used to assess the perceptions of laboratory

managers, supervisors, scientists, and engineers regarding the

personnel system changes and the performance of their organizations in

general.

In addition to the intervention impact model, a general context

model will be used to determine the effects of potential intervening

variables, e.g., downsizing, regionalization of the personnel function,

and the state of the economy in general. Potential unintended outcomes

will also be monitored, and an attempt will be made by the external

evaluation team to link the outcomes of project interventions to

organizational effectiveness.

The evaluation effort will consist of two main phases: formative

and summative evaluation covering 5 years. The formative evaluation

phase will include baseline data collection and analyses,

implementation evaluation, and interim assessments.

Periodic reports and annual summaries will be prepared to document

the findings. The summative evaluation phase will focus on an overall

assessment of project outcomes after 5 years.

VIII. Demonstration Project Costs

A. Step Buy-Ins

Under the current pay structure, employees progress through their

assigned grade in step increments. Since this system is being replaced

under the demonstration project, employees will be awarded that portion

of the next higher step they have completed up until the effective date

of implementation. As under the current system, supervisors will be

able to withhold these partial step increases if the employee's

performance has fallen below fully successful.

Rules governing Within-Grade Increases (WGI) under the current Air

Force performance plan will continue in effect until the implementation

date. Adjustments to the employees base salary for WGI equity will be

computed effective the date of implementation to coincide with the

beginning of the first formal CCS assessment cycle. WGI equity will be

acknowledged by increasing base salaries by a prorated share based upon

the number of days an employee has completed towards the next higher

step. Employees at step 10 on the date of implementation will not be

eligible for WGI equity adjustments since they are already at the top

of the step scale.

The 1996 annual appraisal will be closed on the normal close-out

date of June 30, 1996. The first formal CCS assessment cycle will begin

on the effective date of implementation of the demonstration project

and will end on September 30, 1997. The general increase to employee's

base pay in January 1997 will be handled under existing procedures. The

first CCS pay adjustments will be made during the first full pay period

of CY98. Future CCS pay adjustments will be effective the beginning of

the first full pay period of subsequent calendar years.

B. Out Year Project Costs

The overall demonstration cost strategy will be to balance project

costs with benefits of the demonstration project to bring about the

projected improvements to the Air Force laboratories. The project

evaluation results will be used to ensure that out year project costs

remain neutral over the life of the project. A baseline will be

established at the start of the project and

[[Page 60423]]

salary expenditures will be tracked yearly. Implementation costs,

including the step buy-in costs detailed above, will not be included in

the cost evaluations. In addition, simulations and models will be run

to estimate future workforce and cost trends.

The amount of the ``I'' value in the out years will be determined

as part of the yearly project evaluation process, starting with a

review of the prior year's data by the Air Force Laboratory

Demonstration Project Executive Steering Committee. The ``I'' value

determination will be based on a balancing of appropriate factors,

including the following: (1) Historical spending for within-grade

increases, quality step increases, and in-level career promotions (with

dynamic adjustments to account for changes in law or in staffing

factors--e.g., average starting salaries and the distribution of

employees among job categories and broadband levels); (2) labor market

conditions and the need to recruit and retain a skilled workforce to

meet the business needs of the organization; and (3) the fiscal

condition of the organization. Given the implications of base pay

increases on long-term pay and benefit costs, the ``I'' value will be

determined after cost analysis with documentation of the mission-driven

rationale for the amount. As part of the evaluation of the project by

AF, DoD, and OPM, the base pay costs (including average salaries) under

the demonstration project will be tracked and compared to the base pay

costs under similar demonstration projects and under a simulation model

that replicates General Schedule spending. These evaluations will

balance costs incurred against benefits gained so that both fiscal

responsibility and project success are given appropriate weight.

C. Personnel Policy Boards

Each laboratory shall establish a Personnel Policy Board for the

demonstration project that will consist of the senior civilian in each

directorate within the laboratory and be chaired by the laboratory

executive director. The board is tasked with the following:

(a) Overseeing the civilian pay budget,

(b) Addressing issues associated with two separate pay systems (CCS

and GS) during the first phase of the demonstration,

(c) Determining the composition of the CCS pay pools in accordance

with the established guidelines,

(d) Reviewing operation of the laboratory CCS pay pools,

(e) Providing guidance to pay pool managers,

(f) Administering funds to CCS pay pool managers,

(g) Integrating CCS with the free-market model,

(h) Reviewing hiring and promotion salaries, and

(i) Monitoring award pool distribution by organization and by S&E

versus non-S&E.

Should the laboratory elect not to establish a Personnel Policy

Board, the charter of an existing group within each laboratory must be

modified to include the duties detailed above.

D. Developmental Costs

Costs associated with the development of the demonstration system

include software automation, simulation, training, and project

evaluation. All funding will be provided through the Air Force Science

and Technology budget. The projected annual expenses for each area is

summarized in Table 5. Project evaluation costs will continue for at

least the first 5 years and may continue beyond.

Table 5--Projected Developmental Costs

[Then Year Dollars]

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

FY95 FY96 FY97 FY98 FY99

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

Training...................................................... $170K $120K ........ ........ ........

Project Evaluation............................................ 20K 192K 280K 280K 280K

Automation/Simulation......................................... ........ 150K 240K 125K 75K

Data Systems.................................................. ........ 260K ........ ........ ........

Totals.................................................... 190K 722K 520K 405K 355K

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

IX. Required Waivers to Law and Regulation*

A. Waivers to Title 5, United States Code

Chapter 31, Section 3111: Acceptance of volunteer service.

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

* Waiver required only to the extent that the project conflicts

with pertinent provision of law and regulation.

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

Chapter 43, Sections 4301-4305: Related to performance appraisal.

Chapter 51, Sections 5101-5102 and Sections 5104-5107: Related to

classification standards and grading.

Chapter 53, Sections 5301; 5302 (8) and (9); 5303-5305; 5331-5336;

and 5361-5366: Related to special pay; pay rates and systems; grade and

pay retention (Sections 5301, 5302 (8) and (9), and 5304 are waived

only to the extent necessary to allow demonstration project employees

to be treated as General Schedule employees and to allow basic rates of

pay under the demonstration project to be treated as scheduled rates of

basic pay).

Chapter 55, Section 5545 (d): Related to hazardous duty premium pay

(only to the extent necessary to allow demonstration project employees

to be treated as General Schedule employees).

Chapter 57, Sections 5753, 5754, and 5755: Related to recruitment,

relocation, and retention payments; supervisory differential (only to

the extent necessary to allow employees and positions under the

demonstration project to be treated as employees and positions under

the General Schedule).

Chapter 75, Sections 7512 (3): Related to adverse action (but only

to the extent necessary to exclude reductions in broadband level not

accompanied by a reduction in pay) and 7512 (4): Related to adverse

action (but only to the extent necessary to exclude conversions from a

General Schedule special rate to demonstration project pay that do not

result in a reduction in the employee's total rate of pay).

B. Waivers to Title 5, Code of Federal Regulations

Part 300, Sections 300.601 through 300.605: Time-in-grade

restrictions.

Part 308, Sections 308.101 through 308.103: Volunteer service.

Part 315, Sections 315.801 and 315.802: Probationary period.

Part 334, Section 334.102 : Temporary assignment of employees

outside agency.

Part 340: Other than full-time career employment.

Part 430, Subpart A and Subpart B: Performance management;

performance appraisal.

Part 432, Sections 432.103 through 432.105: Performance-based

reduction-in-grade and removal actions.

[[Page 60424]]

Part 511, Subpart A, Subpart B, and Subpart F, sections 511.601

through 511.612: Classification within the General Schedule.

Part 530, Subpart C: Special salary rates.

Part 531, Subpart B, Subpart D, Subpart E, and Subpart F:

Determining rate of pay; within-grade increases; quality step

increases; locality payments (only to the extent necessary to allow

demonstration project employees to be treated as General Schedule

employees and to allow basic rates of pay under the demonstration

project to be treated as scheduled rates of basic pay).

Part 536, Subpart A, Subpart B, and Subpart C: Grade and pay

retention.

Part 550, Sections 550.703: Severance Pay, definition of

``reasonable offer'' (by replacing ``two grade or pay levels'' with

``one broadband level'' and ``grade or pay level'' with ``broadband

level'') and 550.902: Hazard Pay, definition of ``employee'' (only to

the extent necessary to allow demonstration project employees to be

treated as General Schedule employees).

Part 575, Sections 575.102 (a)(1), 575.202 (a)(1), 575.302 (a)(1),

and Subpart D: Recruitment and relocation bonuses; retention

allowances; supervisory differentials (only to the extent necessary to

allow employees and positions under the demonstration project to be

treated as employees and positions under the General Schedule

positions).

Part 752, Sections 752.401 (a)(3): Reduction in grade and pay (but

only to the extent necessary to exclude reductions in broadband level

not accompanied by a reduction in pay) and 752.401 (a)(4) (but only to

the extent necessary to exclude conversions from a General Schedule

special rate to demonstration project pay that do not result in a

reduction in the employee's total rate of pay).

[FR Doc. 96-30303 Filed 11-27-96; 8:45 am]

BILLING CODE 6325-01-P