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

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

authorizes the Office of Personnel Management (OPM) to conduct

demonstration projects that experiment with new and different personnel

management concepts to determine whether such changes in personnel

policy or procedures would result in improved Federal personnel

management.

Section 4308 of the National Defense Authorization Act for Fiscal

Year 1996 (Pub. L. 104-106; 10 U.S.C.A. Sec. 1701 note), as amended by

section 845 of the National Defense Authorization Act for Fiscal Year

1998 (Pub.L. 105-85), permits the Department of Defense (DoD), with the

approval of OPM, to conduct a personnel demonstration project within

the Department's civilian acquisition workforce and those supporting

personnel assigned to work directly with the acquisition workforce.

This demonstration project covers the civilian acquisition workforce

and teams of personnel, more than half of which consist of members of

the acquisition workforce and the remainder of which consist of

supporting personnel assigned to work directly with the acquisition

workforce, throughout DoD. The total number of participants is limited

to 95,000.

DATES: Implementation of this demonstration project will begin by

February 9, 1999, or earlier. Participating organizations will be

phased into the project in accordance with the timetable approved by

DoD and OPM in the project's implementation plan.

FOR FURTHER INFORMATION CONTACT: DoD: Richard M. Childress, Civilian

Acquisition Workforce Personnel Demonstration, 5203 Leesburg Pike,

Suite 1404, Falls Church, VA 22041, 703-681-6658. OPM: Gail W. Redd,

U.S. Office of Personnel Management, 1900 E Street NW, Room 7460,

Washington, DC 20415, 202-606-1521.

SUPPLEMENTARY INFORMATION:

1. Background

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

the Office of Personnel Management (OPM) to conduct demonstration

projects that experiment with new and different personnel management

concepts to determine whether such changes in personnel policy or

procedures would result in improved Federal personnel management.

Section 4308 of the National Defense Authorization Act for Fiscal

Year 1996 (Pub. L. 104-106; 10 U.S.C.A. Sec. 1701 note), as amended by

section 845 of the National Defense Authorization Act for Fiscal Year

1998 (Pub. L. 105-85), permits DoD, with the approval of OPM, to

conduct a personnel demonstration project within the Department's

civilian acquisition workforce and those supporting personnel assigned

to work directly with the acquisition workforce. This demonstration

project covers the civilian acquisition workforce and teams of

personnel, more than half of which consist of members of the

acquisition workforce and the remainder of which consist of supporting

personnel assigned to work directly with the acquisition workforce,

throughout DoD. The Civilian Acquisition Workforce Personnel

Demonstration Project is designed to provide an encouraging environment

that promotes the growth of all employees and to improve the local

acquisition managers' ability and authority to manage the acquisition

workforce effectively. This demonstration involves streamlined hiring

processes, broadbanding, simplified job classification, a contribution-

based compensation and appraisal system, revised reduction-in-force

procedures, expanded training opportunities, and sabbaticals.

2. Overview

On March 24, 1998, OPM published this proposed demonstration

project in the Federal Register (63 FR 14253). During the 60-day public

comment period ending May 26, 1998, OPM received comments from 182

individuals, including 37 who presented oral comments at one of the

three public hearings. All comments were carefully considered.

Some commentors suggested changes to areas that lie outside the

project's scope or the demonstration project authority of 5 U.S.C.

chapter 47. These comments are not included in the summary below.

A number of commentors highlighted many instances of

miscommunication and misunderstanding with the present system, as well

as the project interventions. Others provided insight and encouragement

to project developers. Still others emphasized the importance of

training for all project participants.

The following summary addresses the comments received, provides

responses, and notes resultant changes to the original project plan in

the first Federal Register notice. Most commentors addressed several

topics, which were counted separately. Thus, the total number of

comments exceeds the number of individuals cited above.

A. General Positive Comments

Thirty-nine commentors were totally supportive of the demonstration

and saw it as beneficial to employees, managers, the acquisition

workforce, and the Federal civil service. One commentor thanked DoD,

OPM, and Congress for making this project possible, saying it would

greatly benefit workers at field-level installations. Several

commentors said it would provide much-needed reform of workforce

management. Others complimented the project's streamlined personnel

management systems and application of good business practices to

Government. Finally, several commentors simply said they looked forward

to the project's implementation and welcomed the opportunity to

contribute to its success.

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

A number of positive comments were received. Three commentors

welcomed pay adjustments based on their contributions. One said that

pay pool panels will serve to ensure even-handed assessments and that

poor performers ``can no longer milk the system.'' Two commentors

viewed CCAS's varied contribution factors as a way to satisfy the

increasing need for a multi-skilled workforce in a downsized

environment. One commentor thought CCAS should be implemented

immediately.

A total of 105 comments were received about CCAS, relating to seven

subtopics, as follows.

(1) CCAS Process

Comments: Thirty-eight commentors thought the CCAS process was too

complicated. Another said the Customer Relations factor seemed to

emphasize customer satisfaction over statutory compliance, yet contract

specialists must achieve both.

Response: At first reading, the CCAS process may seem complicated.

However, feedback from numerous CCAS orientation and training sessions

throughout DoD showed that participants readily grasped the new

system's concepts.

[[Page 1427]]

Project developers have conducted and will continue to give

briefings for management and the workforce across the country.

Additionally, ``train-the-trainer'' courses have been completed so that

the next lower echelon of trainers can spread the word. Evaluation of

this training indicated that an understanding of the CCAS process and

its benefits can easily be achieved.

Each participating manager will be fully trained on the CCAS

process and supporting software well before the end of the first

appraisal cycle. Additionally, training materials, videotapes, and

briefing charts are available to participating organizations, as well

as an Internet-based tutorial.

With respect to the Customer Relations factor, it is important to

note that all six CCAS factors are critical factors. Accordingly, an

employee would not be expected to violate controlling laws or

regulations in an effort to fulfill this factor.

(2) Funds Availability and General Pay Increase

Comments: Eight commentors inquired about funds availability for

contribution rating increases and awards. They also believed the cost

of living increase should be excluded from the pay pool. Nine

commentors believed that CCAS would harm teamwork and lead to excessive

competition among employees (or between managers and employees) for a

finite amount of funds within a pay pool. Several others asked what

effect achieving comparability under the Federal Employees

Comparability Act of 1990 (FEPCA) might have on CCAS.

Response: Regarding funds availability, the project establishes

mandatory funding floors for pay pools, with which participating

organizations must comply.

As a point of clarification, the annual GS pay adjustment

authorized under 5 U.S.C. 5303 is based on the cost of labor, not the

cost of living. This pay increment is linked to changes in a component

of the Employment Cost Index (ECI) that measures the overall rate of

change in employers' wage and salary costs in the private sector. Thus,

this pay increment is appropriately included in the pay pools.

As to CCAS's effect on teamwork, ``Teamwork/Cooperation'' is one of

the six CCAS factors on which participants will be rated. Employees in

matrix-managed organizations, as well as those in functional

organizations, will have the opportunity to work as a team to

accomplish the mission of the organization.

Regarding FEPCA, notwithstanding any other provision of this

demonstration project, if General Schedule employees receive an

increase under 5 U.S.C. 5303 that exceeds the amount otherwise required

by that section on the date of this notice, the excess portion of such

increase shall be paid to demonstration project employees in the same

manner as to General Schedule employees. The excess portion of such

increase shall not be distributed through the pay pool process.

(3) Locality Pay

Comments: Several commentors disagreed with including locality pay

in the pay pools.

Response: The commentors were apparently misinformed; locality pay

is not included in pay pool funding. Demonstration project employees

will continue to receive locality pay as they do now.

(4) CCAS Implementation

Comments: Three commentors suggested that overall contribution

scores be related to the current system with an adjective rating. One

commentor said special rates should continue in effect to attract

quality personnel. Another said that all employees rated ``above the

rails'' (i.e., in the ``A'' region) would be reduced in basic pay,

which in turn would reduce their retirement annuities. Several objected

to the terms ``overcompensated'' and ``undercompensated'' for employees

rated above and below the rails, respectively.

Response: The project itself does not incorporate adjective

ratings, but it does provide an adjective rating that corresponds to

the current system for use when employees leave the demonstration

project.

The project does not use special rates. However, increased

opportunities for pay progression under broadbanding should more than

offset this. Additionally, former special rate employees will now

receive locality pay, for which they previously were ineligible.

Managers will also have greater flexibility to set pay above the

minimum rate of the range upon initial appointment and promotion under

the demonstration's broadbanding system.

A fundamental purpose of CCAS is to compensate employees

appropriately. However, employees rated in the ``A'' region are not

automatically reduced in pay. Rather, the supervisor decides whether

corrective action is needed. If so, as under the current system, the

supervisor informs the employee in writing, and the employee is placed

on an improvement plan that provides a reasonable opportunity to

demonstrate acceptable contribution for the identified factors.

Reduction in pay can occur only if the employee fails to complete the

plan successfully.

Finally, CCAS terminology was changed to ``inappropriately

compensated'' above or below the rails.

(5) Pay Pool Process

Comments: One commentor suggested that the project plan set forth

criteria for establishing pay pools. One commentor thought the

recommended upper limit for the number of employees in a pay pool (300)

should be made mandatory. Four believed panels should include union

representation. Three said that only the immediate supervisor should

determine an employee's overall contribution score (OCS). Several

commentors said pay pool results should be made available to employees.

Response: Pay pools will be established as determined by the

participating DoD Components. The suggested size of pay pools ranges

from 35 to 300 employees. Components have flexibility in this area in

order to be able to tailor the pay pool process to meet their varied

organizational needs.

Activities whose employees are represented by a union are

encouraged to invite that union to participate in the pay pool process.

The project plan and operating procedures have been modified to

incorporate this feature.

Rather than relying on a single individual (the immediate

supervisor), CCAS uses the pay pool panel process to ensure fairness

and consistency in determining each employee's OCS.

Finally, pay pool managers are encouraged to convey the outcomes of

the CCAS assessment process, in the aggregate, to employees within

their pay pool. This may be done, for example, by providing to

individual employees a scattergram depicting the OCS plot of the pay

pool, both before and after salary adjustment, with only the

individual's name shown on the scattergram. The software developed to

support CCAS can provide this information.

(6) Overall Contribution Scores

Comments: Eight commentors believed CCAS would disadvantage current

GS-15 employees at step 7 and above. Such employees would have to

achieve near-perfect scores in all factors in order for their OCSs to

fall between the rails (i.e., in the ``C'' region). These commentors

believed the OCS methodology should be changed to

[[Page 1428]]

permit such employees' high achievement to be documented.

Response: The PAT adopted this comment and changed the scoring. A

new score category of ``very high'' has been established for those at

the top range of broadband level IV in the Business Management and

Technical Management Professional career path. For consistency and as

an outgrowth of this comment, scoring was similarly changed for the

other two career paths.

(7) Appraisal Cycle

Comments: One commentor suggested that pay adjustments take effect

the first pay period of September. Another thought the cutoff date for

appraisals should be changed to August to allow more time for pay pool

panel meetings.

Response: These comments were not adopted. Processing the CCAS and

locality pay increases simultaneously in January will streamline

administrative processes. The operating procedures set forth the steps

necessary for pay pool panels to perform their tasks timely.

C. Management Issues

A number of positive comments were received. Seven commentors

supported the demonstration because it gives management necessary

flexibility, reduces administrative costs, enhances employees' career

advancement, and improves personnel administration. Many commentors

advocated the demonstration because it offers increased opportunity for

them personally. Others viewed the project's compensation and hiring

features as a way to attract and retain highly qualified personnel.

Additional comments on the management aspect of the demonstration

may be divided into eight subtopics, as follows.

(1) Fairness

Comments: Thirty-eight commentors thought favoritism and the ``good

old boy'' system would drive the demonstration and lead to inequitable

treatment of employees. Several employees said managers would now

determine their pay increases and, ultimately, their retirement

annuities. Others said that monetary awards would be given to employees

who do not challenge authority and are part of a favored clique.

Response: The demonstration establishes a structured, group review

process to assess employees' contributions to the mission. This process

is designed to reduce favoritism and promote fairness.

Specifically, the use of pay pool panels ensures that individual

supervisors' ratings are reviewed by their peers (i.e., by other raters

in the same pay pool) and by the supervisor of all raters in that pool.

In addition, rated employees are rank-ordered by the entire pay pool

panel. The intent here is not so much to require ranking per se as to

ensure that inflation or deflation by any rater will be identified and

corrected via the normal operation of the panel process. Finally, the

pay pool manager (who is generally at a higher organizational level

than all the above-mentioned supervisors) oversees and approves the

results of the group review process.

A focused training session has been developed to teach supervisors

and managers how to administer CCAS correctly. Additionally, a third-

party evaluator continually collects data on project operation and

monitors compensation trends, among other areas.

In summary, the pay pool panel process, managerial training, and

continuing evaluation all guard against favoritism and promote fairness

for employees under the demonstration.

(2) Managerial Preparedness

Comments: Three commentors thought current acquisition managers

need preparation for the challenge of administering CCAS.

Response: A very robust training program will be provided for all

supervisors and managers of demonstration participants so that they may

gain confidence and competence in performing their duties.

(3) Waivers of Federal Civil Service Laws and Regulations

Comments: A number of commentors thought the Federal Register

notice's list of waivers would diminish or eliminate employee

protections.

Response: Waivers are an integral part of any Federal personnel

demonstration project. Their purpose is to permit innovation, not to

diminish employees' rights. A demonstration project is defined as--

a project conducted by the Office of Personnel Management, or under

its supervision, to determine whether a specified change in

personnel management policies or procedures would result in improved

Federal personnel management (5 U.S.C. 4701(a)(4)).

Under 5 U.S.C. chapter 47, OPM is permitted to waive civil service

laws and regulations to enable an agency, such as DoD, to conduct

demonstration projects by experimenting with new and innovative

personnel systems. Examples of laws and regulations that may be waived

for demonstration purposes include methods of: appointment to

positions; classification and compensation; assignment, reassignment,

or promotion; and providing incentives. However, no waivers of law are

permitted in the areas of employee leave, employee benefits, equal

employment opportunity, political activity, merit system principles, or

other prohibited personnel practices.

To sum up, the Civilian Acquisition Workforce Personnel

Demonstration is conducted jointly by DoD and OPM. Its innovations

require waivers of various civil service laws and regulations.

(4) Work Assignments

Comments: Thirty-two commentors raised the possibility of

favoritism in work assignments. They said managers could assign high-

visibility tasks to certain employees and lower-level work to others,

with predictable results when employees were compensated for their

contributions. However, another commentor said this was possible under

the current compensation system; it would remain so regardless of what

system was implemented.

Response: Management will continue to determine work assignments.

However, under the demonstration, work assignments will increasingly

focus on supporting mission requirements, enhancing employees'

capabilities, and providing employees with opportunities for career

broadening and training.

Employees are responsible to ensure that management understands

their capabilities and their desire to increase their contributions to

the organization's mission. Employees should respond to work assignment

opportunities in a proactive, rather than reactive, manner. Under the

project, managers and employees can arrive at mutually agreeable

opportunities to increase contributions to the organization's mission.

(5) Exercise of Managerial Authority

Comments: Seven commentors said managers could abuse their

authority regarding employees' pay raises. For instance, managers who

are engineers might view only other engineers as high contributors.

Response: Several project features help ensure visibility for all

employees and fair assessment of both technical and functional

contributions. In this regard, each of the six CCAS factors has

multiple levels of increasing contribution corresponding to the

broadband levels. Each factor contains descriptors for each respective

level within the relevant career path. The

[[Page 1429]]

descriptors state what is important to the mission of the organization

and describe employees' contributions at different broadband levels.

Thus, work performed by individuals in a particular career path is

evaluated against the same descriptors, and contribution is determined

by a group consensus through the pay pool panel process.

(6) Dual Personnel Systems

Comments: Five commentors projected additional workload for

supervisors and civilian personnel/human resources staffs as a result

of maintaining two personnel systems.

Response: The FY 96 National Defense Authorization Act encouraged

DoD to conduct a demonstration project for the acquisition workforce.

In an effort to minimize the need for two personnel systems within this

workforce, project developers made every effort to encourage eligible

organizations and unions to participate.

There is precedent for operating dual personnel systems. Seven

science and technology laboratory demonstration projects are already in

operation within the Military Services. Most of these projects do not

include all employees within a demonstration organization.

(7) Leadership/Supervision Factor

Comments: Seven commentors thought this factor did not emphasize

safety and health, equal employment opportunity (EEO), etc. Some asked

how employees' movement through the broadbands related to existing

affirmative action (AA) goals.

Response: Nothing in this project waives safety, health, or equal

employment opportunity principles. Managers will apply existing

principles appropriately in determining employees' overall contribution

scores for this factor. A statement which specifically addresses these

concerns has been added to all career paths for the Leadership/

Supervision factor.

The demonstration is not intended to alter existing equal

employment opportunity or affirmative action programs. Part of the

project's intended cultural change, however, is to think in terms of

broadband levels in lieu of GS grades. As a result, participating DoD

components and activities may adjust their affirmative action plans and

goals to accommodate broadband levels.

Finally, through the project's evaluation process, trends will be

identified. Any adverse trends may result in modifications to the

ongoing demonstration project in those areas.

(8) Participation in the Project

Comments: Twelve commentors questioned their own participation in

the project. Some engineers wanted to be included, while several

interns did not.

Response: The respective DoD Components decided whether or not to

participate. Each Component determined which organizations--and which

positions within those organizations--would participate.

D. Broadbanding

A number of positive comments were received. Many commentors said

broadbanding, with its seamless progression through the rate range,

would be very beneficial to employees.

Additional comments received on this aspect of the personnel

demonstration project were related to three subtopics, as follows.

(1) Broadband Structure

Comments: A number of commentors asked why particular grades were

grouped into a given broadband and recommended changes. Two commentors

wanted one broadband for all 15 GS grades, while others said they did

not want to be placed in the same broadband with lower graded

employees. One commentor suggested that broadbands be adjustable

locally to suit a particular workforce. Additionally, several

commentors said employees at the top of a broadband would lack

potential for basic pay progression. Finally, two commentors raised an

issue about promotions under broadbanding.

Response: When grouping GS grades into broadbands, project

developers sought input from various sources, including other

demonstrations, DoD, and OPM. Developers then identified natural

breakpoints within a grouping of similar duties and responsibilities

and used the breakpoints to determine broadband structure. (For

instance, in most participating organizations, the journeyman level

lies at GS-12 and 13 for the Business Management and Technical

Management Professional career path. Hence, these two grades were

combined into one broadband. Similarly, since GS-14s and 15s are

generally the management core of an organization, it was logical to

group these two grades into one broadband.) A standard broadband

structure throughout the demonstration will ensure project integrity

and facilitate project evaluation.

Some employees in the project will be paid at the maximum rate for

a broadband level, just as some are now at step 10 of a GS grade. Most

such employees will be able to compete for promotion to a higher

broadband and be eligible for contribution awards. A significant

advantage of the project for all employees is that it sets aggregate

funding thresholds for these awards, whereas under the current system,

no similar funds are guaranteed.

Under broadbanding, employees have greater advancement

opportunities across a broad range of salary rates. Competitive

promotion will continue to be required between broadbands, but most

salary advancement will take the form of contribution rating increases.

(2) Occupational Series

Comments: Some commentors thought it was important to maintain the

integrity of career fields, given that different occupational series

are being combined into a given career path. Some commentors said the

project included too many series, but others pointed out that it did

not include all series in the acquisition and support workforce.

Response: Occupational series will remain in effect, and existing

requirements for education and experience will be maintained. Degree or

other specific requirements (including DAWIA certification) that now

exist for certain occupations will be unchanged. Table 2 was amended to

include all occupational series involved in the acquisition process, to

include the support workforce.

(3) Contribution-Based Actions

Comments: Several commentors sought to ensure that contribution-

based actions would be well-founded and reviewable by the Merit Systems

Promotion Board.

Response: Contribution-based actions must meet the same standard of

evidence as performance-based actions under the current system and are

reviewable by the Board.

E. Academic Degree and Certificate Training

Eleven comments were received about this initiative, nine of them

positive.

Comments: Commentors appreciated the new ability for Administrative

Support and Technical Management Support employees to pursue

educational opportunities. They also supported extending the time for

degree and certificate training throughout the project's duration. This

initiative will help attract the next-generation worker, they said.

Two commentors criticized DoD's paying for employees' education and

then not capitalizing on its investment.

[[Page 1430]]

Response: Management and employees must work together to structure

work assignments that take advantage of employees' skills and

education.

F. Classification

Twenty-two comments regarding two subtopics were received about

this initiative.

(1) Classification Process

Comments: Under the demonstration, position requirements documents

(PRDs) combine position information, staffing requirements, and

contribution expectations into a single document that replaces current

agency-developed position description forms. Several commentors sought

accurate PRDs that can capture unique position characteristics. While

one commentor thought writing PRDs was burdensome, two others differed,

saying they saw the value in a simplified process that reduces

administrative costs and processing times. Two commentors asked how PRD

factors relate to broadband levels, and two others asked who would

approve PRDs. Several commentors wanted assurance that line managers

will be prepared to assume classification authority.

Response: COREDOC, an interactive software program designed for

development of PRDs, will be available to assist managers, along with

training on classification. Unique position characteristics may be

annotated in the PRDs' remarks section. Classification authority rests

with the local commander and may be re-delegated no lower than one

management level above the first-line supervisor of the employee or

position under review. Personnel specialists will provide on-going

consultation and guidance to managers and supervisors throughout the

classification process.

(2) Classification Appeals

Comments: One commentor suggested setting time frames to process

classification appeals. Several said the accuracy of PRDs should be

appealable.

Response: The project does not change existing time frames for

classification appeals. As under the current system, employees may not

appeal the accuracy of a PRD, but instead may raise the issue under an

applicable grievance procedure.

G. Reduction-in-Force (RIF)

The 38 comments about this initiative centered on four items.

(1) Definition of Competitive Area

Comments: Eighteen commentors wanted the same competitive area to

cover project and non-project employees.

Response: Project developers seriously reconsidered the matter of

competitive areas, and two mock RIFs were subsequently run. This

exercise compared a scenario with an entire workforce in the same

competitive area against a second scenario with separate competitive

areas for project and non-project employees. The overall difference in

outcome between the two mock RIFs was negligible. However, the

demonstration and the standard title 5 personnel systems are very

different with respect to their classification, compensation, and

performance management/contribution programs. The same-area scenario

proved inadequate to accommodate those differences when employees were

moved via RIF between the two systems. Additionally, project developers

sought input from other demonstration projects, DoD, and OPM. All of

these supported the separate-areas concept. Accordingly, the project

plan was amended to specify that employees under this demonstration

shall be placed in a different competitive area from those who are not

covered.

(2) Retention Rights

Comments: Other commentors said the project should not diminish

retention of employees.

Response: The project's procedures are not intended to diminish

retention. Under the current system, employees may only retreat to

positions they have previously held. The project eliminates this

restriction. If qualified for the position in question, a project

employee may displace any other project employee with a lower retention

standing.

(3) DoD Downsizing; Base Re-alignment and Closure (BRAC)

Comments: Five commentors raised the issue of conducting a

demonstration in times of downsizing and BRAC.

Response: The project has no influence over downsizing or BRAC

determinations. However, it does represent a valuable opportunity to

enhance the quality, professionalism, and management of the DoD

acquisition workforce through an improved human resources management

system. The FY 96 and 98 National Defense Authorization Acts encouraged

DoD to conduct this demonstration and established a 1999 time frame to

commence implementation.

(4) Years of Retention Service Credit

Comments: Several commentors noted that the years of retention

service credit in Table 7 were not consistent with OCS scores in the

``inappropriately compensated-below the rails'' (B) region.

Response: Table 7 was constructed in relation to the OCS normal

range. Generally, employees whose OCSs fall within or above the top

third of the OCS normal range for their career path and broadband level

receive 20 years of retention service credit; those in the middle

third, 16 years; and those in the lower third, 12 years. However, this

breakout varies somewhat for broadband level I of each career path in

order to accommodate the fact that the bottom of the OCS normal range

for level I is zero.

H. Veterans' Issues

Ten commentors said that veterans' entitlements were being eroded.

Comments: Most of these commentors thought veterans were not

treated fairly under this project. Specifically, they said, disabled

veterans are at a disadvantage in scientific, engineering, and

professional positions; veterans serving during peacetime are not

treated fairly; and reduction-in-force rights for 5-point veterans are

not specifically addressed when they are in the same broadband level

with non-veterans. One commentor wanted to eliminate veterans'

preference entirely during the hiring process, and another recommended

a tie-breaking method or statement regarding current pass-over

procedures.

Response: All current veterans' preference entitlements have been

and will be protected throughout the duration of this demonstration

project; none have been eroded. DoD operating procedures give specific

instructions about honoring veterans' preference during hiring and

reduction in force.

I. Sabbaticals

Seven comments were received on this initiative; six were positive.

Comments: One commentor saw no real change from the current system,

but the remainder supported this initiative's availability to all

project participants, saying it especially benefits those who have

never been in a manufacturing or industrial environment. One commentor

asked whether academia, industry, or the parent organization was

responsible for funding sabbaticals.

Response: Under the current system, sabbaticals are available only

to members of the Senior Executive Service. The demonstration expands

this feature to all project employees.

[[Page 1431]]

The parent organization is responsible for funding this initiative.

J. Voluntary Emeritus Program

Nine comments were received regarding this initiative, addressing

three subtopics.

(1) Positive Response

Comments: The commentor saw this program as an opportunity for the

Government to benefit from highly qualified personnel who would provide

their experience, judgment, and expertise on a voluntary basis.

(2) Effect on Permanent Employment

Comments: Four commentors said this initiative would reduce

permanent employment. One saw it as a way to induce senior employees to

retire and then return to work without appropriate compensation.

Response: The intent of this initiative is to afford retirees

(primarily professionals in the Business Management and Technical

Management Professional career path) an opportunity to return as a

volunteer mentor. The project plan very clearly states that, ``This

program may not be used to replace or substitute for work performed by

civilian employees occupying regular positions required to perform the

mission of the command.''

(3) Unfair Labor Practice

Comments: Four commentors said this program could be used

inappropriately to obtain free labor and constitutes an unfair labor

practice.

Response: A personnel policy and legal review of the project plan

during the coordination process determined that this initiative is

lawful and appropriately administered.

K. Factors and Weights

Three comments were received in this area.

Comments: Some commentors said that the factors, discriminators,

and descriptors used to evaluate employees' contributions were too

general and not meaningful. Another thought technical competency should

be addressed in the Business Management and Technical Management

Professional career path.

Response: The six factors are inherent in every job and form the

framework for evaluating employees' contributions. Technical

competency, while not a separate factor, is encompassed in the Problem

Solving factor. The descriptors for the four broadband levels identify

increases in scope, complexity, independence, and creativity. Employees

must have a sufficient degree of technical competency at all broadband

levels in order to solve the problems presented to them. Thus, the

level at which they solve problems permits an assessment of their

technical competency.

Dated: December 28, 1998.

Janice R. Lachance,

Director, Office of Personnel Management.

Table of Contents

I. Executive Summary

II. Introduction

A. Purpose

B. Problems with the Present System

C. Changes Required/Expected Benefits

D. Bargaining Requirements

E. Participating Organizations

F. Participating Employees

G. Project Design

III. Personnel System Changes

A. Hiring and Appointment Authorities

B. Broadbanding

C. Classification

D. Contribution-Based Compensation and Appraisal System

E. Special Situations Related to Pay

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

G. Academic Degree and Certificate Training

H. Sabbaticals

IV. Training

A. Supervisors

B. Administrative Staff

C. Employees

V. Conversion

A. Conversion to the Demonstration Project

B. Conversion Back to the Former System

VI. Project Duration

VII. Evaluation Plan

VIII. Demonstration Project Costs

A. Step and Promotion Buy-Ins

B. Out-Year Project Costs

C. Personnel Policy Boards

D. Developmental Costs

IX. Required Waivers To Law and Regulations

A. Waivers to title 5, United States Code

B. Waivers to title 5, Code of Federal Regulations

I. Executive Summary

The project was designed by a Process Action Team (PAT) under the

authority of the Under Secretary of Defense for Acquisition and

Technology, with the participation of and review by DoD and the Office

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

the quality, professionalism, and management of the DoD acquisition

workforce through improvements in the efficiency and effectiveness of

the human resources management system. The project interventions will

strive to achieve the best workforce for the acquisition mission,

adjust the workforce for change, and improve workforce quality. The

project framework addresses all aspects of the human resources life-

cycle model.

II. Introduction

A. Purpose

The purpose of the project is to demonstrate that the effectiveness

of DoD acquisition can be enhanced by allowing greater managerial

control over personnel processes and functions and, at the same time,

expand the opportunities available to employees through a more

responsive and flexible personnel system This demonstration project

will provide managers, at the lowest practical level, the authority,

control, and flexibility they need to achieve quality acquisition

processes and quality products. This project not only provides a system

that retains, recognizes, and rewards employees for their contribution,

but also supports their personal and professional growth.

B. Problems With the Present System

One of the goals of the Defense Acquisition Workforce Improvement

Act (DAWIA) is to create well-trained, multi-skilled professionals who

can effectively manage multi-million-dollar programs. Additionally,

Integrated Product Teams (IPTs) require multi-skilled personnel who can

function in a dynamic team environment. The current personnel system

must be re-engineered to provide incentives and rewards to employees

who exhibit these characteristics and who increase their contribution

to the acquisition mission accordingly. Hiring restrictions and overly

complex job classifications unduly exhaust valuable resources and

unnecessarily detract attention from the acquisition mission. Managers

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

be able to make timely job offers to potential employees. Those same

managers need the tools to reward employees for excellence so that the

acquisition systems produced reflect the quality of such a workforce. A

contribution-based compensation system will help managers acquire these

tools and provide a forum in which to apply them. The acquisition

process is continually changing and is moving more toward a team

environment; therefore, managers must be given local control of

positions and their classification in order to move employees freely

within their organization when demanded by the mission, and to provide

developmental opportunities for employees. Additionally, managers have

only limited tools to shape the workforce to ensure continued growth of

new ideas, perspectives, and state-of-the art skills for the 21st

century. In summary, today's acquisition workforce management problems

appear to be

[[Page 1432]]

largely outside the control of the acquisition managers. The

inflexibility of many of today's personnel processes and the diffused

authority, accountability, and approval chains throughout the

organizations, result in a workforce that cannot posture itself for the

rapidly changing technological and business environment. Also, the

current personnel system does not provide an environment that motivates

employees to continue to increase their contribution to the

organization and the mission. This demonstration is designed to provide

an encouraging environment that promotes the growth of all employees

and to improve the local acquisition manager's ability and authority to

manage the acquisition workforce effectively.

C. Changes Required/Expected Benefits

This project will demonstrate that a human resources system

tailored to the mission and needs of the DoD acquisition workforce will

result in: (a) Increased quality in the acquisition workforce and the

products it acquires; (b) increased timeliness of key personnel

processes; (c) workforce data trends toward higher retention rates of

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

contributors''; (d) increased satisfaction of serviced DoD customers

with the acquisition process and its products; and (e) increased

workforce satisfaction with the personnel management system.

The DoD acquisition workforce demonstration program builds on the

features of demonstration projects at the Air Force Research

Laboratory, Department of the Navy (China Lake), and National Institute

of Standards and Technology (NIST). The long-standing Department of the

Navy (China Lake) and NIST demonstration projects have produced

impressive statistics on job satisfaction for their employees versus

that for the Federal workforce in general. Therefore, in addition to

the expected benefits mentioned above, it is anticipated that the DoD

acquisition workforce demonstration project will result in more

satisfied employees as a consequence of the demonstration's pay equity,

classification accuracy, and fairness of performance management. A full

range of measures will be collected during project evaluation.

D. Bargaining Requirements

Employees within a unit to which a labor organization is accorded

exclusive recognition under Chapter 71 of title 5, United States Code,

shall not be included as part of the demonstration project unless the

exclusive representative and the agency have entered into a written

agreement covering participation in and implementation of this project.

The parties may use mediation or any other mutually acceptable means to

resolve disputes over the implementation of the project with respect to

unit employees. Neither party may request the assistance of the Federal

Service Impasses Panel to resolve such disputes.

Either labor or management may unilaterally withdraw from

negotiations over the application of this demonstration project to

bargaining unit members at any time up until final agreement approval,

without such action being considered an unfair labor practice under

Section 7116 of title 5, United States Code for refusing to negotiate

in good faith.

Written agreements addressing the initial implementation of the

demonstration project to bargaining unit members are subject to higher-

level review and approval within DoD prior to implementation. This

review is to ensure local agreements comply with the requirements of

the demonstration project and any Service-wide implementing directives.

The decision of the higher-level review is not subject to third-party

intervention or review. Written agreements established under this

paragraph shall be considered ``local agreements subject to a national

or controlling agreement at a higher level'' as provided in 5 U.S.C.

7114(c)(4), and the approved demonstration project shall be considered

a ``national agreement'' under that section.

Once a written agreement is reached and approved allowing for the

local implementation of the project, all subsequent negotiations during

the life of the project shall be subject to binding impasse procedures

under Section 7119 of title 5, United States Code, or to alternative

impasse procedures agreed to by the parties.

E. Participating Organizations

The DoD Acquisition Workforce Personnel Demonstration Project will

include various organizational elements of the Air Force, Army, Navy,

Marine Corps, and the Office of the Under Secretary of Defense

(Acquisition and Technology). Participating organizations are shown in

Table 1.

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Note:

AFMC/SMC/DET11/Peterson AFB: DET 11 was realigned from HQ

AFMC, June 98

AFMC/SMC/Washington DC: Based on a realignment, deleted

SMC/AX and changed to SMC/XR

AFMC/SMC/Schriever AFB: Realigned from HQ AFMC, Jun 98

AFMC/SMC/Los Angeles AFB: TE (newly established

organization); 61SFS realigned/established Aug 98; change 66 ABG to 61

ABG (was a typo)

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F. Participating Employees

In determining the scope of the demonstration project, primary

consideration was given to the number and diversity of occupations

within the DoD acquisition workforce and the teams of personnel, more

than half of which consist of members of the acquisition workforce and

the remainder of supporting personnel assigned to work directly with

the acquisition workforce, as well as the need for adequate development

and testing of the Contribution-based Compensation and Appraisal System

(CCAS). Additionally, current DoD human resources management design

goals and priorities for the entire civilian workforce were considered.

[[Page 1438]]

While the intent of this project is to provide DoD activities with

increased control and accountability for their covered workforce, the

decision was made to restrict development efforts initially to covered

General Schedule (GS) positions. Employees covered under the

Performance Management and Recognition System Termination Act (pay plan

code GM) are General Schedule employees and are covered under the

demonstration project.

Interns assigned to an organization participating in this

demonstration may be included, as determined by their organizations or

components. Employees in the Student Temporary Employment Program

(summer hire and stay in school), all positions designated as primary

or secondary law enforcement officer (LEO) positions (5 U.S.C.

5541(3)), and all positions in the Defense Civilian Intelligence

Personnel System (DCIPS) (10 U.S.C. Chapter 83) are excluded from the

demonstration project, even if their organizations and series are

listed in Tables 1 and 2. Additionally, this demonstration project does

not cover those positions that have previously been identified for

coverage by a science and technology reinvention laboratory

demonstration project, or the permanent demonstration project at the

Naval Command, Control, and Ocean Surveillance Center, San Diego, CA

and the Naval Air Warfare Center, Weapons Division, China Lake, CA.

The job series included in the project are identified in Table 2.

To determine if your organization and series are included, locate your

organization in Table 1 and then find your job series in Table 2.

Additional questions, if any, regarding your specific position should

be addressed to the OSD Acquisition Workforce Personnel Demonstration

Project Office.

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Qualifying positions in other job series, located in participating

organizations, may be phased in during the course of the project, up to

the statutory maximum. However, prior OSD and OPM approval will be

required.

Current demographics and union representation for the positions

covered by this demonstration project are shown in Table 3.

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[[Page 1447]]

Table 3--DoD Acquisition Workforce Demographics and Union

Representation

[GRAPHIC] [TIFF OMITTED] TN08JA99.036

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Of the 14,766 personnel assigned to this project, 5,161 are

represented by labor unions. Union representatives have been separately

notified about the project and participated in its development. DoD is

proceeding to fulfill its obligation to consult or negotiate with the

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

G. Project Design

In September 1996, a Process Action Team (PAT) was formed by the

Secretary of Defense in response to Section 4308 of the National

Defense Authorization Act for Fiscal Year 1996 (Pub.L. 104-106; 10

U.S.C. 1701 note). The PAT was chartered to take full opportunity of

this legislation and to develop solutions for many DoD acquisition

workforce personnel issues. The team included managers from each of the

Military Services and DoD Components, as well as subject-matter experts

from civilian personnel and manpower. This team developed 13

initiatives that together represent sweeping changes to the entire

spectrum of human resources management for the DoD acquisition

workforce. Several initiatives were designed to assist DoD acquisition

activities in hiring and placing the best people to fulfill mission

requirements. Others focused on developing, motivating, and equitably

compensating employees based on their contribution to the mission.

Initiatives to manage workforce realignment effectively and maintain

organizational excellence were also developed. These initiatives were

endorsed and accepted in total by the acquisition leadership.

After thorough study, the original 13 initiatives were refined.

Those appearing herein constitute the demonstration project for

purposes of 5 U.S.C. 4703. The remainder is subject to policies

established by DoD; waivers were approved at that level.

III. Personnel System Changes

A. Hiring and Appointment Authorities

1. Simplified, Accelerated Hiring

The complexity of the current system and various hiring

restrictions create delays; hamper management's ability to hire,

develop, realign, and retain a quality workforce that is reflective of

our nation's diversity; and inhibit a quick response to economic and

population changes. Line managers find

[[Page 1448]]

the complexity limiting as they attempt to accomplish timely

recruitment of needed skills. To compete with the private sector for

the best talent available and be able to make expeditious job offers,

managers need a process that is streamlined, easy to administer, and

allows for timely job offers. In order to create a human resources

management system that facilitates mission execution and organization

excellence, this demonstration project will respond to today's dynamic

environment of downsizing, restructuring, and installation closures by

obtaining, developing, utilizing, incentivizing, and retaining high-

performing employees. The project will provide a flexible system that

can reduce, restructure, or renew the workforce quickly to meet diverse

mission needs, respond to workload exigencies, and contribute to

quality products, people, and workplaces.

Specifically, this part of the demonstration project will provide

simplified, accelerated hiring that allows participating organizations

more rapidly to appoint individuals to positions. Appropriate

recruitment methods and sources will include those that are likely to

yield quality candidates with the knowledge, skills, and abilities

necessary to perform the duties of the position.

(a) Delegated Examining Process. This demonstration project

establishes a streamlined examining process. This process may be used

to fill positions covered by this demonstration project, with the

following exceptions: positions in the Senior Executive Service or the

Executive Assignment System; Senior Level (ST/SL) positions;

Administrative Law Judge positions; and positions subject to any

examining process covered by court order.

An applicant's basic eligibility will be determined using OPM's

Operating Manual ``Qualifications Standards for General Schedule

Positions'' and DAWIA requirements as needed. Minimum eligibility

requirements will be those at the lowest equivalent GS grade of the

appropriate broadband level. Selective placement factors may be

established in accordance with OPM's Operating Manual ``Qualifications

Standards for General Schedule Positions'' when judged to be critical

to successful job performance. These factors will be communicated to

applicants and must be met for basic eligibility.

Candidates who meet the basic ``minimum'' qualifications will be

further evaluated based on knowledge, skills, and abilities which are

directly linked to the positions(s) to be filled. Based on this

assessment, candidates will receive numerical scores of 70, 80, or 90.

No intermediate scores will be granted except for those eligibles who

are entitled to veterans' preference. Preference eligibles meeting

basic (minimum) qualifications will receive an additional five or ten

points (depending on their preference eligibility), added to the

minimum scores identified above. Candidates will be placed in one of

the quality groups based on their numerical score, including any

veterans' preference points: Basically Qualified (score of 70 to 79);

Highly Qualified (score of 80 to 89); or Superior (score of 90 and

above). The names of preference eligibles will be entered ahead of

others having the same numerical score.

For scientific/engineering and professional positions at the basic

rate of pay equivalent to GS-9 and above, candidates will be referred

by quality groups in the order of the numerical ratings, including any

veterans' preference points. For all other positions, (i.e., other than

scientific/engineering and professional positions at the equivalent of

GS-9 and above), preference eligibles with a compensable service-

connected disability of ten percent or more who meet basic (minimum)

eligibility will be listed at the top of the highest group certified.

Selecting officials should be provided with a reasonable number of

qualified candidates from which to choose. All candidates in the

highest group will be certified. If there is an insufficient number of

candidates in the highest group, candidates in the next lower group may

then be certified; should this process not yield a sufficient number,

groups will be certified sequentially until a selection is made or the

qualified pool is exhausted. When two or more groups are certified,

candidates will be identified by quality group (i.e., Superior, Highly

Qualified, Basically Qualified) in the order of their numerical scores.

Passing over any preference eligible(s) to select a nonpreference

eligible requires approval under current pass-over or objection

procedures.

(b) Scholastic Achievement Appointment. This demonstration project

establishes a Scholastic Achievement Appointment that provides the

authority to appoint candidates with degrees to positions with positive

education requirements. Candidates may be appointed under this

procedure if: (1) they meet the minimum standards for the positions as

published in OPM's Operating Manual ``Qualification Standards for

General Schedule Positions,'' plus any selective factors stated in the

vacancy announcement; (2) the occupation has a positive education

requirement; (3) the candidate has a cumulative grade point average

(GPA) of 3.5 or better (on a 4.0 scale) in those courses in those

fields of study that are specified in the Qualification Standards for

the occupational series and an overall undergraduate GPA of at least

3.0 on a 4.0 scale; and (4) the appointment is into a position at a pay

level lower than the top step of GS-7. Appointments may also be made at

the equivalent of GS-9 through GS-11 on the basis of graduate education

and experience, but with the requirement of a GPA of at least 3.7 on a

scale of 4.0 for graduate courses in the field of study required for

the occupation. Veterans' preference procedures will apply when

selecting candidates under this authority. Preference eligibles who

meet the above criteria will be considered ahead of nonpreference

eligibles. Passing over any preference eligible(s) to select a

nonpreference eligible requires OPM approval under current objection

procedures. This authority allows for competitive appointment to

positions at the broadband level II.

2. Appointment Authority

The DoD acquisition environment is seriously affected by variable

workload and mission changes that require flexibility not only in

workforce numbers but required skills and knowledge. The current

personnel system is unable to adapt the workforce rapidly to these

changes. This demonstration project provides a method to expand and

contract the workforce as needed. Under this demonstration project

there are three appointment options: permanent, temporary limited, and

modified term appointments. The permanent option is the existing career

and career-conditional appointments. The temporary limited option is

the existing temporary-authority-not-to-exceed-one-year appointment.

The modified term option is a new appointment authority that is based

on the existing term appointment, but may extend up to five years with

a one-year locally approved extension. Benefits and appeal rights are

the same as those currently afforded term employees.

Agencies may make a modified term appointment for a period that is

expected to last longer than one year, but not to exceed five years

with an option for one additional year, when the need for an employee's

service is not permanent.

[[Page 1449]]

Reasons for making a modified term appointment include, but are not

limited to, carrying out special project work; staffing new or existing

programs of limited duration; filling a position in activities

undergoing review for reduction or closure; and replacing permanent

employees who have been temporarily assigned to another position, are

on extended leave, or have entered military service.

Selections for modified term appointments will be made under

competitive examining processes. An agency may make a modified term

appointment from the appropriate register or if the selectee is:

(a) A person with eligibility for reinstatement;

(b) Any veteran who meets the qualifications for a veterans

readjustment appointment;

(c) A person eligible for career or career-conditional employment

under Secs. 315.601 through 315.610 inclusive, or under Sec. 315.703;

(d) A former term employee of the agency who left prior to the

expiration of his/her appointment. Reappointment must be to a position

covered by the same term authority under which the individual

previously served, and service under such reappointment may not exceed

the expiration date of the original term appointment;

(e) A disabled veteran who has been retired from active military

service with a disability rating of 30 percent or more, or has been

rated by the Department of Veterans Affairs within the preceding year

as having a compensable, service-connected disability of 30 percent or

more;

(f) A person eligible for acquisition of competitive status for

career appointment under 5 U.S.C. 3304(c). (However, a term employee

does not acquire a competitive status on the basis of this term

appointment, nor does this term appointment extend or terminate the

employee's eligibility under 5 U.S.C. 3304(c));

(g) A temporary employee who is within reach for term appointment

to the same position from an appropriate register at the time of his/

her temporary appointment, or during subsequent service in the

position, provided that the register was being used for term

appointments at the time the employee was reached and he/she has been

continuously employed in the position since being reached; or

(h) A person eligible under OPM interchange agreements.

An agency may place a modified term employee in any other modified

term position provided the employee meets the qualifying requirements

of that position. However, such reassignment will not serve to extend

the appointment beyond the original term appointment time period. The

qualifications of modified term employees will be determined according

to OPM's Operating Manual ``Qualifications Standards for General

Schedule Positions'' and applicable DAWIA requirements.

Employees hired under the modified term appointment authority are

in a temporary status but may be eligible for conversion to career-

conditional appointments. To be converted, the employee must (1) have

been selected for the term position under competitive procedures, with

the announcement specifically stating that the individual(s) selected

for the term positions(s) may be eligible for conversion to career-

conditional appointment at a later date; (2) have served two years of

continuous service in the term position; and (3) be selected under

merit promotion procedures for the permanent position.

Service under a modified term appointment immediately prior to a

permanent appointment shall count toward the probationary period

requirements, provided contribution is adequate and the permanent

position is in the same career path as the modified term appointment.

3. Voluntary Emeritus Program

Under the demonstration project, Commanders/Directors have the

authority to offer retired or separated individuals voluntary

assignments in their activities and to accept the gratuitous services

of those individuals. Voluntary Emeritus Program assignments are not

considered employment by the Federal Government (except as indicated

below). Thus, such assignments do not affect an employee's entitlement

to buy-outs or severance payments based on earlier separation from

Federal Service. This program may not be used to replace or substitute

for work performed by civilian employees occupying regular positions

required to perform the mission of the command.

The Voluntary Emeritus Program will ensure continued quality

acquisition by allowing higher paid employees to accept retirement

incentives with the opportunity to retain a presence in the acquisition

community. The program will be beneficial during manpower reductions as

program managers, engineers, and other skilled acquisition

professionals accept retirement and return to provide a continuing

source of corporate knowledge and valuable on-the-job training or

mentoring to less experienced employees.

To be accepted into the Voluntary Emeritus Program, a volunteer

must be recommended to the decision-making authority by one or more

acquisition managers. No one who applies is entitled to an emeritus

position. The decision-making authority must document the decision

process for each applicant (whether accepted or rejected) and retain

the documentation throughout the assignment. Documentation of

rejections will be maintained for two years.

To ensure success and encourage participation, the volunteer's

Federal retirement pay (whether military or civilian) will not be

affected while the volunteer is serving in emeritus status. Retired or

separated Federal employees may accept an emeritus position without a

``break in service'' or mandatory waiting period.

Voluntary Emeritus Program volunteers will not be permitted to

monitor contracts on behalf of the Government but may participate on

any contract if no conflict of interest exists. The volunteer may be

required to submit a financial disclosure form annually and will not be

permitted to participate on any contracts where a conflict of interest

exists. The same rules that currently apply to source selection members

will apply to volunteers.

An agreement will be established among the volunteer, the decision-

making authority, and the Civilian Personnel/Human Resources Office.

The agreement must be finalized before the assumption of duties and

shall include:

(a) a statement that the service provided is gratuitous, does not

constitute an appointment in the Civil Service, is without compensation

or other benefits except as provided for in the agreement itself, and

that, except as provided in the agreement regarding work-related injury

compensation, any and all claims against the Government because of the

service are waived by the volunteer;

(b) a statement that the volunteer will be considered a Federal

employee for the purposes of:

(i) Subchapter I of Chapter 81 of title 5, U.S.C. (using the

formula established in 10 U.S.C. Secs. 1588 for determination of

compensation) (work-related injury compensation);

(ii) Chapter 171 of title 28, U.S.C. (tort claims procedure);

(iii) Section 552a of title 5, U.S.C. (records maintained on

individuals); and

(iv) Chapter 11 of title 18, U.S.C. (conflicts of interest).

(c) the volunteer's work schedule;

[[Page 1450]]

(d) length of agreement (defined by length of project or time defined

by weeks, months, or years);

(e) support provided by the activity (travel, administrative,

office space, supplies, etc.);

(f) a one-page statement of duties and experience;

(g) a statement specifying that no additional time will be added to

a volunteer's service credit for such purposes as retirement, severance

pay, and leave as a result of being a member of the Voluntary Emeritus

Program;

(h) a provision allowing either party to void the agreement with

ten days' written notice; and

(i) the level of security access required.

4. Extended Probationary Period

For employees in the Business Management and Technical Management

Professional career path, the current one-year probationary period does

not always provide managers the time needed to properly assess the

contribution and conduct of new hires in the acquisition environment.

Often new hires are required to attend extensive training and/or

educational assignments away from their normal work site and outside

the review of their supervisors. A means of extending the opportunity

for management to review and evaluate the contribution and potential of

new hires so assigned is needed. Expansion of the current one-year

probationary period will afford management better control over the

quality of employees required to meet mission needs and provide

sufficient opportunity to evaluate contribution during the beginning of

an acquisition career.

All newly hired permanent career-conditional employees in the

Business Management and Technical Management Professional career path

may be subject to an extension of their probationary period equal to

the length of any educational/training assignment that places the

employee outside normal supervisory review. The extended probationary

period applies to non-status hires, i.e., new hires or those who do not

have reemployment or reinstatement eligibility. An employee appointed

prior to the implementation date of the demonstration project will not

be affected. Aside from extending the probationary period, all other

features of the current probationary period are retained.

Probationary employees will be terminated when they fail to

demonstrate proper conduct, technical competency, and/or adequate

contribution for continued employment. When a supervisor decides to

terminate an employee serving a probationary period because his/her

work contribution or conduct during that period fails to demonstrate

fitness or qualifications for continued employment, the supervisor

shall terminate the employee's services by written notification of the

reasons for separation and the effective date of the action. The

information in the notice as to why the employee is being terminated

shall, as a minimum, consist of the supervisor's conclusions as to the

inadequacies of the employee's contribution or conduct.

Service under a modified term appointment, with no break in service

before a permanent appointment made under this demonstration project,

shall count toward the probationary period requirements, provided that

the contribution is adequate and the permanent position is in the same

career path as the modified term appointment.

B. Broadbanding

1. Broadband Levels

The broadbanding system will replace the current General Schedule

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

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

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

clerical, and professional. The system will cover only those positions

designated by the Defense Acquisition Workforce Improvement Act (DAWIA)

in the Department of Defense Acquisition workforce and those positions

that support the acquisition workforce.

Occupations with similar characteristics will be grouped together

into three career paths with broadband levels designed to facilitate

pay progression and to allow for more competitive recruitment of

quality candidates at differing rates. Career paths are designated by

NH, NJ, or NK; see chart below. Competitive promotions will be less

frequent, and movement through the broadband levels will be a more

seamless process than under current procedures. Like the broadband

systems used at the Department of the Navy (China Lake) and the

National Institute of Standards and Technology (NIST) permanent

demonstration projects, advancement within the system is contingent on

merit.

There will be four broadband levels in the demonstration project,

labeled I, II, III, and IV. Levels I through IV will include the

current grades of GS-01 through GS-15. These are the grades in which

the DoD acquisition workforce employees are currently found. Comparison

to the GS grades was used in setting the upper and lower dollar limits

of the broadband levels; however, once the employees are moved into the

demonstration project, GS grades will no longer apply.

The three career paths and their associated broadband levels are as

follows:

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Generally, employees will be converted into the broadband level

that includes their permanent GS grade of record. Each employee is

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

rates of the General Schedule are increased due to General Schedule pay

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

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

appraisals under the Contribution-based Compensation and Appraisal

System (CCAS). Since pay progression through the levels depends on

contribution, there will be no scheduled within-grade increases (WGIs)

or scheduled General Schedule increases for employees once the

broadbanding system is in place. Special salary rates will no longer be

applicable to demonstration project employees. Employees will be

eligible for the locality pay of their geographical area (see section

V, paragraph A, ``Conversion to the Demonstration Project'') with the

exception of those employees stationed at an overseas location.

Newly hired personnel entering the system will be employed at a

level consistent with the expected basic qualifications for the level,

as determined by rating against qualifications standards. The hiring

official will determine the starting salary based upon available labor

market considerations relative to special qualifications requirements,

scarcity of qualified applicants, programmatic urgency, and education/

experience of the new candidates.

The use of broadbanding provides a stronger link between pay and

contribution to the mission of the organization. It is simpler, less

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

is more easily understood by managers and employees, is easily

delegated to managers, coincides with recognized career paths, and

complements the other personnel management aspects of the demonstration

project.

2. Simplified Assignment Process

Today's environment of downsizing and workforce transition mandates

that the organization have maximum flexibility to assign individuals.

Broadbanding enables the organization to have the maximum flexibility

to assign an employee within broad descriptions, consistent with the

needs of the organization and the individual's qualifications.

Assignments may be accomplished as realignments and do not constitute a

position change. For instance, a technical expert can be assigned to

any project, task, or function requiring similar technical expertise.

Likewise, a manager could be assigned to manage any similar function or

organization consistent with that individual's qualifications. This

flexibility allows broader latitude in assignments and further

streamlines the administrative process and system.

C. Classification

1. Occupational Series

The present General Schedule classification system has 434

occupational series that are divided into 22 occupational groups. The

acquisition personnel demonstration project currently covers numerous

series in the 22 occupational groups, and these occupational series

will be maintained throughout the demonstration project.

2. Classification Standards

The present system of OPM classification standards will be used for

identification of proper series and occupational titles of positions

within the demonstration project. References in the position

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

the demonstration project. Rather, the CCAS broadband level

descriptors, as aligned in the three career paths, will be used for the

purpose of broadband level determination. These descriptors are derived

from the OPM Primary Classification Standard. Under the demonstration

project, each broadband level is represented by a set of descriptors.

This eliminates the need for the use of grading criteria in OPM

classification standards. The broadband level descriptors can be found

in section D.

3. Classification Authority

Under the demonstration, commanders (or equivalent) will have

delegated classification authority and may re-delegate this authority

to subordinate management levels. Re-delegated classification approval

must be exercised at least one management level above the first-line

supervisor of the position under review, except in the case of those

employees reporting directly to the commander or equivalent. First-line

supervisors will provide classification recommendations. Personnel

specialists will provide on-going consultation and guidance to

[[Page 1452]]

managers and supervisors throughout the classification process.

4. Position Requirements Document

Under the demonstration project's classification system, a new

position requirements document (PRD) will replace the current agency-

developed position description form. The PRD will combine the position

information, staffing requirements, and contribution expectations into

a single document. The new PRD will include a description of job-

specific information, reference the CCAS broadband level descriptors

for the assigned broadband level, and provide other information

pertinent to the job. Supervisors may use a computer-assisted process

to produce the PRD. The objectives in developing the new PRD are to:

(a) simplify the descriptions and the preparation process through

automation; (b) provide more flexibility in work assignments; and (c)

provide a more useful tool for other functions of personnel management,

e.g., recruitment, assessment of contribution, employee development,

and reduction in force.

5. Fair Labor Standards Act

Fair Labor Standards Act (FLSA) exemption or non-exemption

determinations will be made consistent with criteria found in 5 CFR

(Code of Federal Regulations) Part 551.

All employees are covered by the FLSA unless they meet criteria for

exemption. Positions will be evaluated as needed by comparing the

duties and responsibilities assigned, the broadband level descriptors

for each broadband level, and the 5 CFR part 551 FLSA criteria.

6. Classification Appeals

An employee may appeal the occupational series, title, or broadband

level of his or her own position at any time. An employee must formally

raise the areas of concern to supervisors in the immediate chain of

command, either verbally or in writing. If an employee is not satisfied

with the supervisory response, he or she may then appeal to the DoD

appellate level. If an employee is not satisfied with the DoD response,

he or she may appeal to the Office of Personnel Management only after

DoD has rendered a decision under the provisions of the demonstration

project. Appellate decisions from OPM are final and binding on all

administrative, certifying, payroll, disbursing, and accounting

officials of the Government. Time periods for case processing under 5

CFR 511.605 apply.

An employee may not appeal the accuracy of the position

requirements document, the demonstration project classification

criteria, or the pay-setting criteria; the propriety of a salary

schedule; or matters grievable under an administrative or negotiated

grievance procedure or an alternative dispute resolution procedure.

The evaluation of classification appeals under this demonstration

project is based upon the demonstration project classification

criteria. Case files will be forwarded for adjudication through the

civilian personnel/human resources office providing personnel service

and will include copies of appropriate demonstration project criteria.

D. Contribution-Based Compensation and Appraisal System

1. Overview

The purpose of the Contribution-based Compensation and Appraisal

System (CCAS) is to provide an equitable and flexible method for

appraising and compensating the DoD acquisition workforce. It is

central to the objectives of the Defense Acquisition Workforce

Improvement Act (DAWIA) and the National Performance Review, and will

correlate individual compensation to organizational mission

contribution. CCAS allows for more employee involvement in the

performance appraisal process, increases communication between

supervisors and employees, promotes a clear accountability of

contribution by each employee, facilitates employee progression tied to

organizational contribution, and provides an understandable basis for

salary changes. Most of the funds previously allocated for performance-

based awards will be reserved for distribution under the CCAS system,

based on employee contribution.

CCAS is a contribution-based appraisal system that goes beyond a

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

contribution to the mission and goals of the organization, rather than

how well the employee performed a job as defined by a performance plan.

Past experience with the existing civilian performance appraisal system

indicates that performance plans are often tailored to the individual's

level of previous performance. Hence, an employee may have been

rewarded by salary step increases for accomplishing a satisfactory

level of performance against a diminishing set of responsibilities.

CCAS promotes salary adjustment decisions made on the basis of an

individual's overall annual contribution when compared to all other

employees and level of compensation. Therefore, larger than average

salary increases are possible for employees who are determined to be

``inappropriately compensated--below the rails (B)'' and smaller than

average increases are permitted for employees who are deemed to be

``inappropriately compensated--above the rails (A)'' in relation to

their organizational contributions.

An employee's performance is a component of contribution that

influences the ultimate overall contribution score (OCS). Contribution

is measured by using a set of factors, discriminators, and descriptors,

each of which is relevant to the success of a DoD acquisition

organization. Taken together, these factors, discriminators, and

descriptors capture the critical content of jobs in each career path.

The factors, discriminators, and descriptors may not be modified or

supplemented. These factors, discriminators, and descriptors are the

same as those used to classify a position at the appropriate broadband

level.

The six (6) factors are: (1) Problem Solving, (2) Teamwork/

Cooperation, (3) Customer Relations, (4) Leadership/Supervision, (5)

Communication, and (6) Resource Management. These factors were chosen

for evaluating the yearly contribution of DoD acquisition personnel in

the three career paths: (1) Business Management & Technical Management

Professional, (2) Technical Management Support, and (3) Administrative

Support. Each factor has multiple levels of increasing contribution

corresponding to the broadband levels. Each factor contains descriptors

for each respective level within the relevant career path.

CAREER PATH: (1) BUSINESS MANAGEMENT & TECHNICAL MANAGEMENT

PROFESSIONAL

FACTOR: 1.--PROBLEM SOLVING

FACTOR DESCRIPTION

This factor describes/captures personal and organizational problem-

solving results. EXPECTED PERFORMANCE CRITERIA (Applicable to all

contributions at all levels): Work is timely, efficient, and of

acceptable quality. Completed

[[Page 1453]]

work meets projects/programs objectives. Flexibility, adaptability, and

decisiveness are exercised appropriately. Descriptors indicate the type

of contribution appropriate for the high end of each level. Descriptors

are not to be used individually to assess contributions, but rather are

to be taken as a group to derive a single evaluation of the factor.

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FACTOR: 2.--TEAMWORK/COOPERATION

FACTOR DESCRIPTION

This factor, applicable to all teams, describes/captures individual

and organizational teamwork and cooperation.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels): Work is timely, efficient, and of acceptable quality.

Personal and organizational interactions exhibit and foster cooperation

and teamwork. Flexibility, adaptability, and decisiveness are exercised

appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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FACTOR: 3.--CUSTOMER RELATIONS

FACTOR DESCRIPTION

This factor describes/captures the effectiveness of personal and

organizational interactions with customers (anyone to whom services or

products are provided), both internal (within an assigned organization)

and external (outside an assigned organization).

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels): Work is timely, efficient, and of acceptable quality.

Personal and organizational interactions enhance customer relations and

actively promote rapport with customers. Flexibility, adaptability, and

decisiveness are exercised appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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FACTOR: 4.--LEADERSHIP/SUPERVISION

FACTOR DESCRIPTION

This factor describes/captures individual and organizational

leadership and/or supervision to include that leaders/supervisors will

recruit, develop, motivate, and retain quality team members in

accordance with EEO/AA and merit principles. Takes timely/appropriate

personnel actions, communicates mission and organizational goals; by

example, creates a positive, safe, and challenging work environment;

distributes work and empowers team members.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels): Work is timely, efficient, and of acceptable quality.

Leadership and/or supervision effectively promotes commitment to

mission accomplishment. Flexibility, adaptability, and decisiveness are

exercised appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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[[Page 1457]]

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FACTOR: 5.--COMMUNICATION

FACTOR DESCRIPTION

This factor describes/captures the effectiveness of oral/written

communications. EXPECTED PERFORMANCE CRITERIA (Applicable to all

contributions at all levels): Work is timely, efficient, and of

acceptable quality. Communications are clear, concise, and at

appropriate level. Flexibility, adaptability, and decisiveness are

exercised appropriately. Descriptors indicate the type of contribution

appropriate for the high end of each level. Descriptors are not to be

used individually to assess contributions, but rather are to be taken

as a group to derive a single evaluation of the factor.

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FACTOR: 6.--RESOURCE MANAGEMENT

FACTOR DESCRIPTION

This factor describes/captures personal and organizational

utilization of resources to accomplish the mission. (Resources include,

but are not limited to, personal time, equipment and facilities, human

resources, and funds.)

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels): Work is timely, efficient, and of acceptable quality.

Resources are utilized effectively to accomplish mission. Flexibility,

adaptability, and decisiveness are exercised appropriately. Descriptors

indicate the type of contribution appropriate for the high end of each

level. Descriptors are not to be used individually to assess

contributions, but rather are to be taken as a group to derive a single

evaluation of the factor.

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[[Page 1459]]

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CAREER PATH: (2) TECHNICAL MANAGEMENT SUPPORT

FACTOR: 1.--PROBLEM SOLVING

FACTOR DESCRIPTION

This factor describes/captures personal and organizational problem-

solving.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality. Completed

work meets projects/programs objectives. Flexibility, adaptability, and

decisiveness are exercised appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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FACTOR: 2.--TEAMWORK/COOPERATION

FACTOR DESCRIPTION

This factor describes/captures individual and organizational

teamwork and cooperation.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality. Personal and

organizational interactions exhibit and foster cooperation and

teamwork. Flexibility, adaptability, and decisiveness are exercised

appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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FACTOR: 3.--CUSTOMER RELATIONS

FACTOR DESCRIPTION

This factor describes/captures the effectiveness of personal and

organizational interactions with customers (anyone to whom services or

products are provided), both internal (within an assigned organization)

and external (outside an assigned organization).

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality. Personal and

organizational interactions enhance customer relations and actively

promote rapport with customers. Flexibility, adaptability, and

decisiveness are exercised appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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FACTOR: 4.--LEADERSHIP/SUPERVISION

FACTOR DESCRIPTION

This factor describes/captures individual and organizational

leadership and/or supervision to include that leaders/supervisors will

recruit, develop, motivate, and retain quality team members in

accordance with EEO/AA and merit principles. Takes timely/appropriate

personnel actions, communicates mission and organizational goals; by

example, creates a positive, safe, and challenging work environment;

distributes work and empowers team members.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality. Leadership

and/or supervision effectively promotes commitment to mission

accomplishment. Flexibility, adaptability, and decisiveness are

exercised appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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[[Page 1464]]

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FACTOR: 5.--COMMUNICATION

FACTOR DESCRIPTION

This factor describes/captures the effectiveness of oral/written

communications.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality.

Communications are clear, concise, and at appropriate level.

Flexibility, adaptability, and decisiveness are exercised

appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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[[Page 1466]]

FACTOR: 6.--RESOURCE MANAGEMENT

FACTOR DESCRIPTION

This factor describes/captures personal and organizational

utilization of resources to accomplish the mission.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality. Resources are

utilized effectively to accomplish mission. Flexibility, adaptability,

and decisiveness are exercised appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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[[Page 1467]]

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CAREER PATH: (3) ADMINISTRATIVE SUPPORT

FACTOR: 1.--PROBLEM SOLVING

FACTOR DESCRIPTION

This factor describes/captures personal and organizational problem

solving.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality. Completed

work meets projects/programs objectives. Flexibility, adaptability, and

decisiveness are exercised appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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FACTOR: 2.--TEAMWORK/COOPERATION

FACTOR DESCRIPTION

This factor describes/captures individual and organizational

teamwork and cooperation.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality. Personal and

organizational interactions exhibit and foster cooperation and

teamwork. Flexibility, adaptability, and decisiveness are exercised

appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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FACTOR: 3.--CUSTOMER RELATIONS

FACTOR DESCRIPTION

This factor describes/captures the effectiveness of personal and

organizational interactions with customers (anyone to whom services or

products are provided), both internal (within an assigned organization)

and external (outside an assigned organization).

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality. Personal and

organizational interactions enhance customer relations and actively

promote rapport with customers. Flexibility, adaptability, and

decisiveness are exercised appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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FACTOR: 4.--LEADERSHIP/SUPERVISION

FACTOR DESCRIPTION

This factor describes/captures individual and organizational

leadership and/or supervision to include that leaders/supervisors will

recruit, develop, motivate, and retain quality team members in

accordance with EEO/AA and merit principles. Takes timely/appropriate

personnel actions, communicates mission and organizational goals; by

example, creates a positive, safe, and challenging work environment;

distributes work and empowers team members.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality. Leadership

and/or supervision effectively promotes commitment to mission

accomplishment. Flexibility, adaptability, and decisiveness are

exercised appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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FACTOR: 5.--COMMUNICATION

FACTOR DESCRIPTION

This factor describes/captures the effectiveness of oral/written

communications.

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality.

Communications are clear, concise, and at appropriate level.

Flexibility, adaptability, and decisiveness are exercised

appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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FACTOR: 6.--RESOURCE MANAGEMENT

FACTOR DESCRIPTION

This factor describes/captures personal and organizational

utilization of resources to accomplish the mission. (Resources include,

but are not limited to, personal time, equipment and facilities, human

resources, and funds.)

EXPECTED PERFORMANCE CRITERIA (Applicable to all contributions at

all levels):

Work is timely, efficient, and of acceptable quality. Available

resources are utilized effectively to accomplish mission. Flexibility,

adaptability, and decisiveness are exercised appropriately.

Descriptors indicate the type of contribution appropriate for the

high end of each level. Descriptors are not to be used individually to

assess contributions, but rather are to be taken as a group to derive a

single evaluation of the factor.

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2. Normal Pay Range (NPR)

The Contribution-based Compensation and Appraisal System (CCAS)

integrated pay schedule provides a direct link between increasing

levels of contribution and increasing salary. This is shown by the

graph in Figure 1. The horizontal axis spans from 0 to the maximum

contribution score of 100, with a notional ``very high'' score of 115

for those employees who are capped at the top of their broadband level.

The vertical axis spans from zero dollars to the dollar equivalent of

GS-15, step 10. This encompasses the full salary range (excluding

locality pay) paid under this demonstration; GS-1, step 1 through GS-

15, step 10 for Calendar Year 1998 (CY98). (Note: Figure 1 currently

depicts CY98. Each year the rails for the NPR are adjusted based on the

General Schedule pay increase under 5 U.S.C. 5303.) The area between

the upper and lower rail is considered the normal pay range; employees

whose annual overall contribution score (OCS) plotted against their

base salary falls on or within the rails are considered ``appropriately

compensated.'' Employees whose salaries fall below the NPR for their

assessed contribution score are considered ``inappropriately

compensated--below the rail (B),'' and those falling above the NPR are

considered ``inappropriately compensated--above the rails (A).'' The

goal of CCAS is to make pay consistent with employees' contributions to

the mission of the organization.

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Figure 1. Normal Pay Range

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The NPR was established using the following parameters:

1. The lowest possible score is an OCS of 0, which equates to the

lowest base salary paid under this demonstration, GS-1, step 1.

2. The OCS of 100 equates to the highest base salary paid under

this demonstration, GS-15, step 10. A ``very high'' score of 115 may be

awarded for employees in the Business Management and Technical

Management Professional career path. When a level IV individual in this

career path is performing above the high level (79-100) in a specific

[[Page 1474]]

factor, 115 points may be awarded. There is not a point range in the

``very high'' category; 115 points are awarded or the individual is not

rated ``very high''. The same is true for the other two career paths:

Technical Support with a ``very high'' score of 95, Administrative

Support with a ``very high'' score of 70.

3. Changes in OCS correspond to a constant percentage change in

salary along the rails.

4. The upper and lower rails encompass an area of +/-4.0 OCS

points, or +/-8.0 percent in terms of salary, relative to the points

established in parameters 1 and 2, above.

FORMULAE

Given these constraints, the formulae for the rails found in Figure

1 are:

Salary upper rail = (GS-1 Step 1) * (1.0800)* (1.020043) OCS

Salary lower rail = (GS-1 Step 1) * (0.9200)* (1.020043) OCS

The integrated pay schedule and the NPR are the same for all the

career paths. What varies among the career paths are the beginnings and

endings of the broadband levels. The minimum and maximum numerical OCS

values and associated base salaries for each broadband level by career

path are provided in Table 4. These minimum and maximum breakpoints

represent the lowest and highest General Schedule (GS) salary rate for

the grades banded together and, therefore, the minimum and maximum

salaries possible for each level. Each year, the rails for the NPR are

adjusted based on the General Schedule pay increase granted to the

Federal workforce. Locality salary adjustments are not included in the

NPR but are incorporated in the demonstration participants' pay.

Employees will enter the demonstration project without a loss of

pay (see section V) and without a CCAS score. The first CCAS score will

result from the first annual CCAS assessment process. Until then, no

employee is inappropriately compensated. Employees, however, may

determine their expected contribution range by locating the

intersection of their salary with the rails of the NPR. Future CCAS

assessments may alter an employee's position relative to these rails.

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3. CCAS Appraisal Process

The annual appraisal cycle begins on October 1 and ends on

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

appraisal period, the broadband level descriptors will be provided to

employees so that they know the basis on which their contribution will

be assessed for their pay pool. (A pay pool is a group of employees

among whom the CCAS dollars are distributed. This might be all the

employees in a division or directorate. The local commander determines

the pay pool structure.) At that time, employees will be advised that

all factors are critical and weights will be established, if

appropriate. Key terms such as ``team'' and ``customer'' will be

defined or clarified. Supervisor and employee discussion of specific

work assignments, standards, objectives, and the employee's

contributions within the CCAS framework should be conducted on an

ongoing basis.

At the end of the annual appraisal period, the immediate supervisor

(rating official) meets with his/her employees, requesting them to

summarize their contributions for each factor. From employees' inputs

and his/her own knowledge, the rating official identifies for each

employee the appropriate contribution level (1, 2, 3, or 4) for each

factor. The rating officials (including second-level supervisor) meet

to ensure consistency and equity of the contribution ratings. Then the

rating officials calculate the overall contribution scores (OCS).

To determine the OCS, numerical values are assigned based on the

contribution levels of individuals, using the ranges shown in Table 5.

Generally, the OCS is calculated by averaging the numerical values

assigned for each of the six factors. (All OCSs will be rounded to the

nearest whole number.) However, at the discretion of the pay pool

manager, different weights may be applied to the factors to produce a

weighted average, provided that the weights are applied uniformly

across the pay pool and employees are advised in advance, i.e., at the

beginning of the rating period. Weighting may not result in any factor

becoming zero.

The rating officials (including second-level supervisor) meet again

to review the OCS for all employees, correcting any inconsistencies

identified and making the appropriate adjustments in the factor

ratings, and placing the employees in rank order.

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The pay pool panel (pay pool manager and the rating officials in

the pay pool who report directly to him/her) conducts a final review of

the OCS and the recommended compensation adjustments for the pay pool

members. The pay pool panel has the authority to make OCS adjustments,

after discussion with the initial rating officials, to ensure equity

and consistency in the ranking of all employees. Final approval of OCS

rests with the pay pool manager, the individual within the organization

responsible for managing the CCAS process. The OCS, as approved by the

pay pool manager, becomes the rating of record. Rating officials will

communicate the factor scores and OCS to each employee and discuss the

results.

If on October 1, the employee has served under CCAS for less than

six months, the rating official will wait for the subsequent annual

cycle to assess the employee. The first CCAS appraisal must be rendered

within 18 months after entering the demonstration project.

When an employee cannot be evaluated readily by the normal CCAS

appraisal process due to special circumstances that take the individual

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

training, active military duty, extended sick leave, leave without pay,

etc.), the rating official will document the special circumstances on

the appraisal form. The rating official will then determine which of

the following options to use:

(a) re-certify the employee's last contribution appraisal; or

(b) presume the employee is contributing consistently with his/her

pay level and will be given the full general increase.

Pay adjustments will be made on the basis of the CCAS appraisal or

substitute determination and the employee's rate of basic pay. Pay

adjustments are subject to pay-out rules discussed in section III D 5.

Final pay determinations will be made at the pay pool manager's level.

CCAS scores can only be adjusted after discussion with the rating

official.

Pay adjustments will be documented by SF-50, Notification of

Personnel Action. For historical and analytical purposes, the effective

date of CCAS assessments, actual appraisal scores, actual salary

increases, amounts contributed to the pay pool, and applicable

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

employee.

4. Pay Pools

The pay pool structure and allocated funds are under the authority

of the local commander or equivalent. The following minimal guidelines

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

should include a range of salaries and contribution levels; (b) a pay

pool should be large enough to constitute a reasonable statistical

sample, i.e., not less than 35 individuals (when possible) or more than

300 individuals; (c) a pay pool must be large enough to include a

second level of supervision, since the CCAS process uses a group of

supervisors in the pay pool to determine

[[Page 1477]]

OCS and recommended salary adjustments; and (d) neither the pay pool

manager nor the supervisors within a pay pool will recommend or set

their own individual pay levels.

The amount of money available within a pay pool is determined by

the general pay increase and the money that would have been available

for quality step increases, within-grade increases, awards

(performance-based awards as defined in 5 U.S.C. 4505(a)), promotions

between grades encompassed in the same broadband level, and other

appropriate factors (reference section VIII B). However, the awards

money portion cannot be used for increments to salary. The dollars to

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

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

5. Salary Adjustment Guidelines

After the initial assignment into the CCAS, employees' yearly

contributions will be determined by the CCAS process described above,

and their overall contribution scores versus their current rate of

basic pay will be plotted on a graph along with the NPR (see Figure 2).

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Figure 2. CCAS Compensation Categories

The position of those points relative to the upper and lower rails

of the NPR gives a relative measure of the compensation (salary) versus

contribution (OCS). Employees fall into one of three categories:

inappropriately compensated--above the rails (A), appropriately

compensated (C), or inappropriately compensated--below the rails (B).

Depending on the category into which each employee falls, he/she is

eligible for up to three forms of additional compensation. The pay pool

panel has the option of awarding the employee up to the full General

Schedule pay increase (as authorized by Congress and the President), a

contribution rating increase (an increase in base salary), and/or a

contribution award (a lump-sum payment that does not affect base

salary). Employees on retained rate in the demonstration plan will

receive pay adjustments in accordance with 5 U.S.C. 5363 and 5 CFR Part

536. An employee receiving a retained rate is not eligible for a

contribution rating increase, since such increases are limited by the

maximum salary rate for the employee's broadband level. An outline of

compensation eligibility by contribution category is given in Table 6.

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[[Page 1478]]

TABLE 6.--COMPENSATION ELIGIBILITY CHART

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\1\ Basic pay plus locality pay may not exceed Executive Level

IV basic pay.

\2\ May not exceed upper rail of NPR for employee's OCS or

maximum salary for current broadband level.

\3\ Over 20% requires local commander's approval.

\4\ May not exceed 6% above the lower rail or the maximum salary

for current broadband level.

\5\ Pay pool manager approves up to $10,000. Amounts exceeding

$10,000 require local commander's approval.

BILLING CODE 6325-01-C

In general, those employees who fall in the inappropriately

compensated--B (below the rails) category of the NPR should expect to

receive greater percentage salary increases than those who fall in the

inappropriately compensated--A (above the rails) category. Over time,

people will migrate closer to the normal pay range and receive a salary

appropriate for their level of contribution.

Employees whose OCS would result in awarding a contribution rating

increase such that the salary exceeds the maximum salary for their

current broadband level may receive a contribution award equaling the

difference.

The contribution rating increase fund includes what are now within-

grade increases, quality step increases, and promotions between grades

encompassed in the same broadband level. The fund will be set at not

less than two percent of the activity's total salary budget (2.4

percent for the first year). This figure will be adjusted as necessary

to maintain cost discipline over the life of the demonstration project.

The amount of money available to each pay pool is determined annually

by the local commander. The general pay increase fund and the

contribution rating increase fund may be transferred to another

category, but the contribution award fund may not be transferred.

The contribution award fund includes what were formerly performance

awards and will be used for awards given under the CCAS process. The

fund will be set at not less than one percent of the activity's total

salary budget. This fund will not exceed 90 percent of the total awards

budget so as to allow for other awards not related to the CCAS process,

e.g., on-the-spot awards and group awards, which will continue to be

encouraged by management to promote excellence in acquisition and

attainment of organizational goals. For the first year this fund will

be set at 1.3 percent.

Each pay pool manager will set the necessary guidelines for pay

adjustments in the pay pool. Decisions will be consistent within the

pay pool, reflect cost discipline over the life of the demonstration

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

rate under this demonstration project will be the rate for a GS-15,

step 10. Notwithstanding any other provision of this demonstration

project, if General Schedule employees receive an increase under 5

U.S.C. 5303 that exceeds the amount otherwise required by that section

on the date of this notice, the excess portion of such increase shall

be paid to demonstration project employees in the same manner as to

General Schedule employees. The excess portion of such increase shall

not be distributed through the pay pool process.

6. Movement Between Broadband Levels

It is the intent of the demonstration project to have career growth

accomplished through the broadband levels. Movement within a broadband

level will be determined by contribution and salary following the CCAS

pay-out calculation. Movement to a higher broadband level is normally a

competitive action, based on Office of Personnel Management

qualifications standards. Movement to a lower broadband level may be

voluntary or involuntary.

Broadband levels were derived from salaries of the banded GS

grades. The lowest salary of any given broadband level is that for step

1 of the lowest GS grade in that broadband level. Likewise, the highest

salary of any given broadband level is that for step 10 of the highest

GS grade in that broadband level. There is a natural overlap in

salaries in the GS grades that also occurs in the broadband system.

Since the OCS is directly related to salaries, there is also an overlap

between OCS across broadband levels.

Under the demonstration project, managers are provided greater

flexibility in assigning duties by moving employees between positions

within their broadband level. If there are vacancies at higher levels,

employees may be considered for promotion to those positions in

accordance with competitive selection procedures. Noncompetitive

promotion capabilities in the current system will remain viable in the

demonstration.

Under the approved competitive selection procedures, the selecting

official may consider candidates from any source based on viable and

supportable job-related, merit-based methodology. Similarly, if there

is sufficient cause, an employee may be demoted to a lower broadband

level position according to the contribution-based reduction-in-pay or

removal procedures discussed in section III E 2.

7. Implementation Schedule

The 1998 employee annual appraisal will be done according to

Component performance plan rules in effect at the time of the 1998

close-out. Employees will be moved by personnel action into the

demonstration project and into the appropriate broadband level by

[[Page 1479]]

February 9, 1999, or as specified in the organization's implementation

plan approved by DoD and OPM. It is acknowledged that implementation

will be staggered and organizations will join as they successfully

finalize negotiated agreements. Employees will receive base pay

adjustments for accrued within-grade increases and/or career ladder

promotions at the time they are reassigned into the demonstration

project. All employees under the demonstration project will receive the

January 1999 general pay increase.

8. CCAS Grievance Procedures

Bargaining unit employees who are covered under a collective

bargaining agreement may grieve CCAS pay determinations under the

grievance-arbitration provisions of the agreement. Other employees not

included in a bargaining unit may utilize the appropriate

administrative grievance procedures to raise a grievance against CCAS

pay (5 CFR Part 771), with supplemental instructions as described

below.

An employee may grieve the OCS (rating of record). If an employee

is covered by a negotiated grievance procedure that includes grievances

over appraisal scores, then the employee must resolve a grievance over

an appraisal score under that procedure (i.e., that procedure is the

sole and exclusive procedure for resolving such grievances). If an

employee is not in a bargaining unit, or is in a bargaining unit but

grievances over appraisal scores are not covered under a negotiated

grievance procedure, then the employee may use the administrative

grievance procedure (5 CFR Part 771) with supplemental instructions

described in the following paragraph.

The employee will submit the grievance first to the rating

official, who will submit a recommendation to the pay pool panel. The

pay pool panel may accept the rating official's recommendation or reach

an independent decision. In the event that the pay pool panel's

decision is different from the rating official's recommendation,

appropriate justification will be provided. The pay pool panel's

decision is final unless the employee requests reconsideration by the

next higher official to the pay pool manager. That official would then

render the final decision on the grievance.

9. Using the CCAS Rating as Additional Years of Retention Service

Credit During Reduction in Force

Table 7 illustrates the years of retention service credit

associated with appraisal results:

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TABLE 7.--RETENTION SERVICE CREDIT ASSOCIATED WITH APPRAISAL

RESULTS

BUSINESS MANAGEMENT AND TECHNICAL MANAGEMENT PROFESSIONAL

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[[Page 1480]]

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E. Special Situations Related to Pay

1. Change in Assignment

The CCAS concept, using the broadbanding structure, provides

flexibility in making assignments. In many cases an employee can be

assigned, without change in their rate of basic pay, within broad

descriptions, and, at the same time, consistent with the needs of the

organization and commensurate with the individual's qualifications.

Subsequent organizational assignments to projects, tasks, or functions

requiring the same level and area of expertise and the same

qualifications would not constitute an assignment outside the scope or

coverage of the current level descriptors. In most cases, such

assignments would be within the factor descriptors and could be

accomplished without the need to process a personnel action. Assignment

resulting in series change, broadband level change, or change to KSAs

shall be accomplished by official personnel action. Thus, this approach

allows for broader latitude in organizational assignments and

streamlines the administrative process. Rules for specific types of

assignments under CCAS follow.

(a) Competitive, Noncompetitive, and Temporary Promotions. When an

employee is promoted to a higher broadband level, the salary upon

promotion will be at least six percent, but not more than 20 percent,

greater than the employee's current salary. However, if the minimum

rate of the new broadband level is more than 20 percent greater than

the employee's current salary, then the minimum rate of the new

broadband level is the new salary. The employee's salary may not exceed

the salary range of the new broadband level. When an employee receiving

a retained rate is promoted to a higher broadband level, at a minimum,

the employee's salary upon promotion will be set in the higher

broadband level (1) at six percent higher than the maximum rate of the

employee's existing broadband level; or (2) at the employee's existing

retained rate, whichever is greater.

(b) Competitive Selection for a Position with Higher Potential

Salary. When an employee is competitively selected for a position with

a higher target broadband level than previously held (e.g., Upward

Mobility), upon movement to the new position the employee will receive

the salary corresponding to the minimum of the new broadband level or

the existing salary, whichever is greater.

(c) Voluntary Change to Lower Broadband Level/Change in Career Path

(except RIF). When an employee accepts a voluntary change to lower

broadband level or different career path, salary may be set at any

point within the broadband level to which appointed, except that the

new salary will not exceed the employee's current salary or the maximum

salary of the broadband level to which assigned, whichever is lower.

(d) Involuntary Change to Lower Broadband Level Without Reduction

in Pay Due to Contribution-based Action. Due to inadequate

contribution, an employee's salary may fall below the minimum rate of

basic pay for the broadband level to which he/she is assigned. When an

employee is changed to a lower broadband level due to such a situation,

this movement is not considered an adverse action.

(e) Involuntary Reduction in Pay, to Include Change to Lower

Broadband Level and/or Change in Career Path Due to Adverse Action. An

employee may receive a reduction in pay within his/her existing

broadband level and career path; be changed to a lower broadband level;

and/or be moved to a new position in a different career path due to an

adverse action. In these situations, the employee's salary will be

reduced by at least 6 percent, but will be set no lower than the

minimum salary of the broadband level to which assigned. Employees

placed into a lower broadband due to adverse action are not entitled to

pay retention.

(f) Reduction-in-Force (RIF) Action (including employees who are

offered and accept a vacancy at a lower broadband level or in a

different career path). The employee is entitled to pay retention if

all title 5 conditions are met.

(g) Return to Limited or Light Duty from a Disability as a Result

of Occupational Injury to a Position in a Lower Broadband Level or to a

Career Path with Lower Salary Potential than Held Prior to the Injury.

The employee is entitled indefinitely to the salary held prior to the

injury and will receive full general and locality pay increases.

2. Contribution-Based Reduction-in-Pay or Removal Actions

CCAS is a contribution-based appraisal system that goes beyond a

performance-based rating system. Contribution is measured against six

critical factors corresponding to the three career paths, each having

multiple levels of increasing contribution. (For the purposes of this

section, critical

[[Page 1481]]

factors are synonymous with critical elements as referenced in 5 U.S.C.

Chapter 43.) This section applies to reduction in pay or removal of

demonstration project employees based solely on inadequate

contribution. Inadequate contribution in any one factor at any time

during the appraisal period is considered grounds for initiation of

reduction-in-pay or removal action. The following procedures replace

those established in 5 U.S.C. 4303 pertaining to reductions in grade or

removal for unacceptable performance except with respect to appeals of

such actions. 5 U.S.C. 4303(e) provides the statutory authority for

appeals of contribution-based actions. As is currently the situation

for performance-based actions taken under 5 U.S.C. 4303, contribution-

based actions shall be sustained if the decision is supported by

substantial evidence and the Merit Systems Protection Board shall not

have mitigation authority with respect to such actions. The separate

statutory authority to take contribution-based actions under 5 U.S.C.

75, as modified in the waiver section of this notice (section IX),

remains unchanged by these procedures.

When an employee's contribution in any factor is at or less than

the mid-point of the next lower broadband level (or a factor score of

zero for broadband level I employees), the employee is considered to be

contributing inadequately. In this case, the supervisor must inform the

employee, in writing, that unless the contribution increases to a score

above the midpoint of this next lower broadband level (thereby meeting

the standards for adequate contribution) and is sustained at this

level, the employee may be reduced in pay or removed. For broadband

level I employees, a factor score that increases to and is sustained

above zero is determined to be adequate.

This written notification will include a contribution improvement

plan (CIP) which outlines specific areas in which the employee is

inadequately contributing. Additionally, the CIP must include standards

for adequate contribution, actions required of the employee, and the

time in which they must be accomplished, to increase and sustain the

employee's contribution at an adequate level.

Additionally, when an employee's contribution plots in the area

above the upper rail of the normal pay range, the employee is

considered to be contributing inadequately. In this case, the

supervisor has two options. The first is to take no action but to

document this decision in a memorandum for the record. A copy of this

memorandum will be provided to the employee and to higher levels of

management. The second option is to inform the employee, in writing,

that unless the contribution increases to, and is sustained at, a

higher level, the employee may be reduced in pay or removed.

These provisions also apply to an employee whose contribution

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

supervisors who meet during the CCAS assessment process may reconvene

any time during the year to review the circumstances warranting the

recommendation to take further action on the employee.

When the rating official informs the employee that the employee may

be reduced in pay or removed, the rating official will afford the

employee a reasonable opportunity (a minimum of 60 days) to demonstrate

acceptable contribution with regard to identifiable factors. As part of

the employee's opportunity to demonstrate adequate contribution, he or

she will be placed on a CIP. The CIP will state how the employee's

contribution is inadequate, what improvements are required,

recommendations on how to achieve adequate contribution, assistance

that the agency shall offer to the employee in improving inadequate

contribution, and consequences of failure to improve.

Once an employee has been afforded a reasonable opportunity to

demonstrate adequate contribution but fails to do so, a reduction-in-

pay (which may include a change to a lower broadband level and/or

reassignment) or removal action may be proposed. If the employee's

contribution increases to an acceptable level and is again determined

to deteriorate in any factor within two years from the beginning of the

opportunity period, actions may be initiated to effect reduction in pay

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

has contributed acceptably for two years from the beginning of an

opportunity period, and the employee's overall contribution once again

declines to an inadequate level, the employee will be afforded an

additional opportunity to demonstrate adequate contribution before it

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

An employee whose reduction in pay or removal is proposed is

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

identifies specific instances of inadequate contribution by the

employee on which the action is based. The employee will be afforded a

reasonable time to answer the notice of proposed action orally and/or

in writing.

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

contribution may be based only on those instances of inadequate

contribution that occurred during the two-year period ending on the

date of issuance of the proposed action. The employee will be issued

written notice at or before the time the action will be effective. Such

notice will specify the instances of inadequate contribution by the

employee on which the action is based and will inform the employee of

any applicable appeal or grievance rights.

All relevant documentation concerning a reduction in pay or removal

that is based on inadequate contribution will be preserved and made

available for review by the affected employee or a designated

representative. At a minimum, the records will consist of a copy of the

notice of proposed action; the written answer of the employee or a

summary when the employee makes an oral reply; and the written notice

of decision and the reasons thereof, along with any supporting material

including documentation regarding the opportunity afforded the employee

to demonstrate adequate contribution.

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

RIF shall be conducted according to the provisions of 5 CFR 351,

except as otherwise specified below.

Displacement means the movement via RIF procedures of an employee

into a position held by an employee of lower retention standing.

All positions participating in the demonstration project within a

given Component and located within the same commuting area may be

considered a separate competitive area. Alternatively, Components may

establish all or part of the Component at a given geographic location

as a competitive area. In any event, employees under this demonstration

shall be placed in a different competitive area from employees who are

not covered.

Employees are entitled to additional years of retention service

credit in RIF, based on appraisal results. This credit will be based on

the employee's three most recent annual overall contribution scores

(OCSs) of record received during the four-year period prior to the

issuance of RIF notices. However, if at the time RIF notices are

issued, three CCAS cycles have not yet been completed, the annual

performance rating of record under the previous performance management

system will be substituted for one or more OCSs, as

[[Page 1482]]

appropriate. An employee who has received at least one but fewer than

three previous ratings of record shall receive credit for performance

on the basis of the value of the actual rating(s) of record divided by

the number of actual ratings received. Employees with three OCS or

performance ratings shall receive credit for performance on the basis

of the value of the actual ratings of record divided by three. In cases

where an individual employee has no annual OCS or performance rating of

record, an average OCS or performance rating will be assigned and used

to determine the additional service credit for that individual. (This

average rating is derived from the current ratings of record for the

employees in that individual's career path and broadband level within

the competitive area affected by a given RIF.) See Table 7, Retention

Service Credit Associated with Appraisal Results.

When a competing employee is to be released from his/her position,

the activity shall establish separate master retention lists for the

competitive and excepted services, by type of work schedule and (for

excepted service master retention lists ) appointing authority.

Within the above groups, competing employees shall be listed on the

master retention list in descending retention standing order as defined

by their tenure, veterans' preference, and length of service as

determined by their adjusted service computation date. Employees will

be listed as follows: By tenure group I, group II, group III; within

each group by veterans' preference subgroup AD (preference eligible

employees with a compensable service-connected disability of 30 percent

or more), subgroup A (other preference eligible employees), subgroup B

(non-preference eligible employees); and, within each group, by length

of service as determined by the adjusted service computation date,

beginning with the earliest service date.

Employees will be ranked in order of their retention standing,

beginning with the most senior employee. This employee may displace an

employee of lower retention standing occupying a position that is at

the same or lower broadband level and that is in a series for which the

senior employee is fully qualified, to include a series in a different

career path. The undue interruption standard of 5 CFR 351.403(a)(1)

shall serve as the criterion to determine if an employee is fully

qualified. In addition, to be fully qualified, the employee must meet

DAWIA statutory requirements for the position, if applicable. (However,

statutory waivers shall continue to apply.) The displaced employee must

be appointed under the same authority, if excepted service, and in the

same work schedule. Offer of assignment shall be to the position that

requires no reduction or the least possible reduction in broadband.

Where more than one such position exists, the employee must be offered

the position encumbered by the employee with the lowest retention

standing.

Displacement rights are normally limited to one broadband level

below the employee's present position. However, a preference-eligible

employee with a compensable service-connected disability of 30 percent

or more may displace up to the two broadband levels below the

employee's present position (or the equivalent of five General Schedule

grades) below the employee's present level.

Employees covered by the demonstration are not eligible for grade

retention. Pay retention will be granted to employees downgraded by

reduction in force whose rate of basic pay exceeds the maximum salary

range of the broadband level to which assigned. Such employees will be

entitled to retain the rate of basic pay received immediately before

the reduction, not to exceed 150% of the maximum salary of the lower

broadband level.

Under the demonstration project, all employees affected by a

reduction-in-force action, other than a reassignment, maintain the

right to appeal to the Merit Systems Protection Board (MSPB) if they

believe the process/procedures were not properly applied.

Prior to RIF, employees may be offered a vacant position in the

same broadband as the highest broadband available by displacement.

Employees may also be offered placement into vacant positions for which

management has waived the qualifications requirements. If the employee

is not placed into a vacant position and cannot be made an offer of

assignment via displacement, the employee shall be separated.

G. Academic Degree and Certificate Training

Trained and educated personnel are a critical resource in an

acquisition organization. This demonstration recognizes that training

and development programs are essential to improving the performance of

individuals in the acquisition workforce, and thereby raising the

overall level of performance of the acquisition workforce, and that a

well-developed training program is a valuable tool for recruiting and

retaining motivated employees. Currently, DAWIA authorizes degree and

certificate training for acquisition-coded positions through the year

2001. This demonstration extends that authority for the duration of

this demonstration and expands its coverage to the acquisition support

positions identified in this demonstration project. It also provides

authorization at the local level to administer and pay for these degree

and certificate training programs. This authorization will facilitate

continuous acquisition of advanced, specialized knowledge essential to

the acquisition workforce, and provide a capability to assist in the

recruiting and retaining of personnel critical to the present and

future requirements of the acquisition workforce. Funding for this

training, while potentially available from numerous sources (including

DAWIA for employees in acquisition-coded positions), is the

responsibility of the participating organization.

H. Sabbaticals

Organizations participating in the acquisition demonstration

project will have the authority to grant sabbaticals without

application to higher levels of authority. These sabbaticals will

permit employees to engage in study or work experience that contributes

to their development and effectiveness. The sabbatical provides

opportunities for employees to acquire knowledge and expertise that

cannot be acquired in the standard working environment. These

opportunities should result in enhanced employee contribution. The

spectrum of available activities under this program is limited only by

the constraint that the activity contribute to the organization's

mission and to the employee's development. The program can be used for

training with industry or on-the-job work experience with public,

private, or nonprofit organizations. It enables an employee to spend

time in an academic or industrial environment or to take advantage of

the opportunity to devote full-time effort to technical or managerial

research.

The acquisition demonstration project sabbatical program will be

available to all demonstration project employees who have seven or more

years of Federal service. Each sabbatical will be of three to twelve

months' duration and must result in a product, service, report, or

study that will benefit the acquisition community as well as increase

the employee's individual effectiveness. Requests for a sabbatical must

be made by the employee through the chain of command to the employee's

installation Executive Director or equivalent, who has final approval

authority and who

[[Page 1483]]

must ensure that the program benefits both the acquisition workforce

and the individual employee. Funding for the employee's salary and

other expenses of the sabbatical is the responsibility of the

participating organization.

IV. Training

The key to the success or failure of the proposed demonstration

project will be the training provided for all involved. This training

will provide not only the necessary knowledge and skills to carry out

the proposed changes, but will also lead to participant commitment to

the program.

Training at the beginning of implementation and throughout the

demonstration will be provided to supervisors, employees, and the

administrative staff responsible for assisting managers in effecting

the changeover and operation of the new system.

The elements to be covered in the orientation portion of this

training will include: (1) a description of the personnel system; (2)

how employees are converted into and out of the system; (3) the pay

adjustment and/or bonus process; (4) the new position requirements

document; (5) the new classification system; and (6) the contribution-

based compensation and appraisal system.

In conjunction with the education, training, and career development

assets of the Military Services and DoD Agencies, the demonstration

project team will train, orient, and keep informed all supervisors and

employees covered by the demonstration project and administrative staff

responsible for implementing and administering the human resource

program changes.

A. Supervisors

The focus of this project on management-centered personnel

administration, with increased supervisory and managerial personnel

management authority and accountability, demands thorough training of

supervisors and managers in the knowledge and skills that will prepare

them for their new responsibilities. Training will include detailed

information on the policies and procedures of the demonstration

project, as well as skills training in using the classification system,

position requirements document, and contribution evaluation software.

B. Administrative Staff

The administrative staff, general personnel specialists,

technicians, and administrative officers will play a key role in

advising, training, and coaching supervisors and employees in

implementing the demonstration project. This staff will receive

training in the procedural and technical aspects of the project.

C. Employees

In the months prior to implementation, the demonstration project

team and Military Service and DoD Agency training and career

development offices will provide all employees covered under the

demonstration project training through various media. This training is

intended to fully inform all affected employees of all significant

project decisions, procedures, and processes.

V. Conversion

A. Conversion to the Demonstration Project

Initial entry into the demonstration project for covered employees

will be accomplished through a full employee-protection approach that

ensures each employee's initial placement into a broadband level

without loss of pay. Automatic conversion from the permanent GS grade

and step of record at time of conversion into the new broadband system

will be accomplished. Adjustments to the employee's base salary for

step increase and non-competitive career ladder promotion will be

computed based on the current value of the step or promotion increase

and a prorated share based upon the number of weeks an employee has

completed towards the next higher step or grade, per paragraph VIII A.

This conversion process, i.e. ``buy-in,'' is applicable to employees

only at the initial entry of their organization into the demonstration

project in accordance with their approved implementation plan.

Special salary rates will no longer be applicable to demonstration

project employees. Employees on special salary rates at the time of

conversion will receive a new basic rate of pay computed by dividing

their highest adjusted rate of basic pay (i.e., special pay rate, or if

higher, the locality rate) by the locality pay factor for their area.

All employees will be eligible for the future locality pay increases of

their geographic area. When conversion into the demonstration project

is accompanied by a simultaneous geographic move, the employee's GS pay

entitlements (including any locality or special rate) in the new area

will be determined before converting the employee's pay to the

demonstration project pay system. A full locality adjustment will then

be added to the new basic pay rate.

Adverse action and pay retention provisions will not apply to the

conversion process, as there will be no change in total salary. If the

employee's rate of basic pay exceeds the maximum rate of basic pay for

the broadband level corresponding to the employee's GS grade, the

employee will remain at that broadband level and will receive a

retained rate. Employees who enter the demonstration project later by

lateral reassignment or transfer will enter at their current basic pay

with no loss or gain due to transfer, and will not receive the ``buy-

in'' applied during the initial conversion process of their

organization into the demonstration project.

B. Conversion Back to the Former System

If a demonstration project employee is moving to a General Schedule

(GS) position not under the demonstration project, or if the project

ends and each project employee must be converted back to the GS system,

the following procedure will be used to convert the employee's project

pay band to a GS grade and the employee's demonstration rate of pay to

a GS rate of pay. The converted GS grade and GS rate of pay must be

determined before movement or conversion out of the demonstration

project and any accompanying geographic movement, promotion, or other

simultaneous action. For conversions upon termination of the project

and for lateral assignments, the converted GS grade and rate will

become the employee's actual GS grade and rate after leaving the

demonstration project (before any other action). For transfers,

promotions, and other actions, the converted GS grade and rate will be

used in applying any GS pay administration rules applicable in

connection with the employee's movement out of the project (e.g.,

promotion rules, highest previous rate rules, pay retention rules) as

if the GS-converted grade and rate were actually in effect immediately

before the employee left the demonstration project.

1. Grade-Setting Provisions

An employee is converted to one of the grades in their current

broadband level according to the following rules:

(i) The employee's adjusted rate of pay under the demonstration

project (including any locality payment) is compared with the step 4

rate in the highest applicable GS rate range. (For this purpose, a GS

rate range includes a rate range in (1) the GS base schedule, (2) the

locality rate schedule for the locality pay area in which the position

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is located, or (3) the appropriate special rate schedule for the

employee's occupational series, as applicable.) If the series is a two-

grade-interval series, only odd-numbered grades are considered below

GS-11.

(ii) If the employee's adjusted demonstration project rate equals

or exceeds the applicable step 4 rate of the highest GS grade in the

band, the employee is converted to that grade.

(iii) If the employee's adjusted demonstration project rate is

lower than the applicable step 4 rate of the highest grade, the

adjusted rate is compared with the step 4 rate of the second-highest

grade in the employee's pay band. If the employee's adjusted rate

equals or exceeds the step 4 rate of the second-highest grade, the

employee is converted to that grade.

(iv) This process is repeated for each successively lower grade in

the band until a grade is found in which the employee's adjusted

demonstration project rate equals or exceeds the applicable step 4 rate

of the grade. The employee is then converted at that grade. If the

employee's adjusted rate is below the step 4 rate of the lowest grade

in the band, the employee is converted to the lowest grade.

(v) Exception: If the employee's adjusted demonstration project

rate exceeds the maximum rate of the grade assigned under the above-

described step 4 rule but fits in the rate range for the next higher

applicable grade (i.e., between step 1 and step 4), then the employee

shall be converted to that next higher applicable grade.

(vi) Exception: An employee will not be converted to a lower grade

than the grade held by the employee immediately preceding a conversion,

lateral assignment, or lateral transfer into the demonstration project,

unless since that time the employee has undergone a reduction in

broadband level, reduction in pay based upon an adverse action, a

contribution-based action, a reduction-in-force action, or a voluntary

change to lower broadband level.

2. Pay-Setting Provisions

An employee's pay within the converted GS grade is set by

converting the employee's demonstration project rate of pay to a GS

rate of pay in accordance with the following rules:

(i) The pay conversion is done before any geographic movement or

other pay-related action that coincides with the employee's movement or

conversion out of the demonstration project.

(ii) An employee's adjusted rate of pay under the project

(including any locality payment) is converted to a GS rate on the

highest applicable rate range for the converted GS grade. (For this

purpose, a GS rate range includes a rate range in (1) the GS base

schedule, (2) an applicable locality rate schedule, or (3) an

applicable special rate schedule.)

(iii) If the highest applicable GS rate range is a locality pay

rate range, the employee's adjusted project rate is converted to a GS

locality rate of pay. If this rate falls between two steps in the

locality-adjusted schedule, the rate must be set at the higher step.

The converted GS unadjusted rate of basic pay would be the GS base rate

corresponding to the converted GS locality rate (i.e., same step

position). If this employee is also covered by a special rate schedule

as a GS employee, the converted special rate will be determined based

on the GS step position. This underlying special rate will be basic pay

for certain purposes for which the employee's higher locality rate is

not basic pay.

(iv) If the highest applicable GS rate range is a special rate

range, the employee's adjusted demonstration project rate is converted

to a special rate. If this rate falls between two steps in the special

rate schedule, the rate must be set at the higher step. The converted

GS unadjusted rate of basic pay will be the GS rate corresponding to

the converted special rate (i.e., same step position).

3. Employees Receiving a Retained Rate Under the Project

If an employee is receiving a retained rate under the demonstration

project, the employee's GS-equivalent grade is the highest grade

encompassed in his or her broadband level. The DUSD (AR) and the DASD

(CPP) will coordinate with OPM to prescribe a procedure for determining

GS-equivalent pay rates for employees receiving retained rates.

4. Years of Retention Service Credit and Appraisal Rating Provisions

Employees leaving the demonstration project will be assigned

ratings of record that conform with pattern E of 5 CFR 430.208(d) based

on the years of credit accumulated for the 3 most recent years during

the last 4 years while under the demonstration project. Since the

demonstration project does not make use of summary level designators

(e.g., Outstanding, Level 5; Highly Successful, Level 4; Fully

Successful, Level 3; or Unacceptable, Level 1) used in the appraisal

system and programs constructed under 5 U.S.C. Chapter 43 and 5 CFR

Part 430, the retention service credit that is based on the employee's

OCS as shown in Table 7 will be translated to summary level designators

as shown in Table 8 for use by the gaining agency.

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TABLE 8.--TRANSLATION OF RETENTION SERVICE CREDIT

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5. Within-Grade Increase--Equivalent Increase Determinations

Service under the demonstration project is creditable for within-

grade increase purposes upon conversion back to the GS pay system. CCAS

base salary increases (including a zero increase) under the

demonstration project are equivalent increases for the purpose of

determining the commencement of a within-grade increase waiting period

under 5 CFR 531.405(b).

VI. Project Duration

The project evaluation plan addresses how each intervention will be

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comprehensively evaluated for at least the first five years of the

demonstration project. Major changes and modifications to the

interventions can be made through announcement in the Federal Register,

with OPM approval. At the five-year point, the entire demonstration

project will be reexamined for: (a) permanent implementation; (b)

modification and additional testing; (c) extension of the test period;

or (d) termination.

VII. Evaluation Plan

Demonstration-authorizing legislation (5 U.S.C. Chapter 47)

mandates evaluation of the demonstration project to assess the effects

of project features and outcomes. In addition, the project will be

evaluated for the feasibility of application to other Federal Agencies.

The overall evaluation will consist of three phases--baseline,

formative, and summative evaluations. The evaluation for the

participating agencies will be overseen by the Office of Merit Systems

Oversight and Effectiveness, OPM; the Office of the Secretary of

Defense (Acquisition & Technology); and the Office of the Deputy

Assistant Secretary of Defense (Civilian Personnel Policy), DoD.

The main purpose of the evaluation is to determine the

effectiveness of the personnel system changes to be undertaken. To the

extent possible, strong direct or indirect relationships will be

established between the demonstration project features, outcomes, and

mission-related changes and personnel system effectiveness criteria.

The evaluation approach uses an intervention impact model that

specifies each personnel system change as an intervention, the expected

effects of each intervention, the corresponding measures, and the data

sources for obtaining the measures. Table 9 presents the intervention

impact model to be used for this demonstration for initiatives

affecting title 5.

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TABLE 9.--INTERVENTION IMPACT EVALUATION MODEL

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The specific measures to be collected using the different methods

are determined from the goals and objectives stated for each

intervention. Both qualitative and quantitative measures will be

obtained. Most of the potential measures can be grouped around three

major effectiveness criteria: speed, cost, and quality. Collectively,

the outcomes of the interventions are hypothesized to lead to agency

personnel management improvements, as reflected by timeliness, cost

effectiveness, and quality.

Baseline measures will be taken prior to project implementation.

Then, repeated post-implementation measurements will be taken to allow

longitudinal comparisons by intervention within and across DoD

Components. A comparison group will be selected and compared to the

demonstration project group to determine the effects and outcomes of

the project.

The effectiveness of each intervention and of the demonstration

project as a whole in meeting stated objectives will be addressed using

a multi-approach method. Some methods will be unobtrusive in that they

do not require reactions to inputs from employees or managers. These

methods include analysis of archival workforce data and personnel

office data, review of logs maintained by site historians documenting

contextual events, and assessments of external economic and legislative

changes. Other methods such as periodic attitude surveys, structured

interviews, and focus groups will be used to assess the perceptions of

employees, managers, supervisors, and personnel regarding the personnel

system changes and the performance of their organizations in general.

Evaluation activities will also take into account the unique nature of

this project in terms of geographic and organizational diversity.

In addition to the intervention impact model, a general context

model will be used to determine the effects of potential intervening

variables (e.g., downsizing, regionalization of the personnel function,

and the state of the economy in general). Potential unintended outcomes

will also be monitored, and an attempt will be made by the evaluation

team to link the outcomes or demonstration project interventions to

organizational effectiveness. In addition to assessing the impact of

the individual demonstration project features, the evaluation will also

assess the impact of the project as a whole, along with possible

context effects and effects of intervening variables. The evaluation

will also monitor impact on veterans and EEO groups, adherence to the

merit systems principles and avoidance of prohibited personnel

practices. In addition, the evaluation will attempt to link the

demonstration project effects and outcomes to organizational outcomes

such as mission accomplishment and productivity.

The initial evaluation effort will consist of three main phases--

baseline, formative, and summative evaluation covering five (5) years.

Baseline will collect workforce data to determine the ``as-is'' state.

The formative evaluation phase will include baseline data collection

and analyses, implementation evaluation, and interim assessments.

Periodic reports and annual summaries will be prepared to document the

findings. The summative evaluation phase will focus on an overall

assessment of the demonstration project outcomes, looking initially at

the first four (4) years, with a follow-on report covering the first

five (5) years. The rationale for summative evaluation after the first

four years is to assess whether the demonstration will continue after

the fifth year. If the analysis indicates that the interventions show a

positive effect towards meeting the goals of the demonstration, then

documentation will be generated to support a request that the

demonstration progress further. If the analysis indicates that the

interventions do not meet the stated objectives, or if the

participating organizations do not wish to continue in the

demonstration, then documentation and planning for conversion back to

the existing personnel system must be prepared. The fifth-year

summative evaluation, used in reporting to Congress, will provide

overall assessment of all initiatives individually and as a whole. It

will also provide recommendations on broader Federal Government

application.

VIII. Demonstration Project Costs

A. Step and Promotion Buy-Ins

Under this demonstration project, implementation of the

broadbanding pay structure eliminates the step increments of the

current GS pay structure. To facilitate conversion to this system

without loss of pay, employees will receive a basic pay increase for

that portion of the next step corresponding to the time in-step they

have completed up to the effective date of the employee conversion. As

under the current system, supervisors will be able to withhold these

partial increases (step) if the employee's performance has fallen below

fully successful.

Rules governing within-grade increases (WGI) within each

participating Military Service/DoD agency will remain in effect until

the employee conversion date. Adjustments to employees' base salary for

WGI equity will be computed effective the first pay period in which the

employee is reassigned into the demonstration project. WGI equity shall

be acknowledged by increasing base salaries by a prorated share based

upon the actual number of weeks an employee has completed towards the

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next higher step. Employees at step 10, or receiving retained pay at

the time of conversion will not be eligible for this equity adjustment.

For those employees in career-ladder promotion programs who are

scheduled to be promoted to a higher grade and whose performance is at

least fully successful, base pay will be increased by a prorated share

of the current value of the next scheduled promotion increase based

upon the actual number of weeks the employee has completed towards the

next scheduled promotion. No WGI equity adjustment will be made if the

employee's pay is adjusted for a promotion that would be effective

before the next scheduled WGI.

For purposes of conversion into the demonstration, the January 1999

General Schedule increase to base pay will be given to all employees.

B. Out-Year Project Costs

The overall demonstration cost strategy will be to balance

projected costs with benefits of the demonstration to bring about the

projected improvements to the DoD Acquisition Workforce. The project

evaluation results will be used to ensure that out-year project costs

will not outweigh the derived benefits to the demonstr

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