Science and Technology Reinvention Laboratory Personnel Management Demonstration Project, Department of the Army, Army Research, Development and Engineering Command, Armament Research, Development and Engineering Center (ARDEC), 55200-55249 [2010-22280]

Agencies

• Office of the Secretary
• DEPARTMENT OF DEFENSE

[Federal Register Volume 75, Number 174 (Thursday, September 9, 2010)]
[Notices]
[Pages 55200-55249]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-22280]



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Part VI





Department of Defense





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Science and Technology Reinvention Laboratory Personnel Management 
Demonstration Project, Department of the Army, Army Research, 
Development and Engineering Command, Armament Research, Development and 
Engineering Center (ARDEC); Notice

Federal Register / Vol. 75, No. 174 / Thursday, September 9, 2010 / 
Notices

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DEPARTMENT OF DEFENSE

Office of the Secretary


Science and Technology Reinvention Laboratory Personnel 
Management Demonstration Project, Department of the Army, Army 
Research, Development and Engineering Command, Armament Research, 
Development and Engineering Center (ARDEC)

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

ACTION: Notice of proposal to design and implement a personnel 
management demonstration project.

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SUMMARY: Section 342(b) of the National Defense Authorization Act 
(NDAA) for Fiscal Year (FY) 1995, Public Law (Pub. L.) 103-337 (10 
U.S.C. 2358 note), as amended by section 1109 of NDAA for FY 2000, 
Public Law 106-65, and section 1114 of NDAA for FY 2001, Public Law 
106-398, authorizes the Secretary of Defense to conduct personnel 
demonstration projects at DoD laboratories designated as Science and 
Technology Reinvention Laboratories (STRLs) to determine whether a 
specified change in personnel management policies or procedures would 
result in improved Federal personnel management. Section 1105 of the 
NDAA for FY 2010, Public Law 111-84, 123 Stat. 2486, October 28, 2009, 
designates additional DoD laboratories as STRLs for the purpose of 
designing and implementing personnel management demonstration projects 
for conversion of employees from the personnel system which applied on 
October 28, 2009. The ARDEC is listed in subsection 1105(a) of NDAA for 
FY 2010 as one of the newly designated STRLs.

DATES: ARDEC's demonstration project proposal may not be implemented 
until a 30-day comment period is provided, comments addressed, and a 
final Federal Register notice published. To be considered, written 
comments must be submitted on or before October 12, 2010. 
Implementation of this demonstration project, once approved, will begin 
no earlier than January 1, 2011.

ADDRESSES: Send comments on or before the comment due date by mail to 
Ms. Betty A. Duffield, CPMS-PSSC, Suite B-200, 1400 Key Boulevard, 
Arlington, VA 22209-5144; by fax to (703) 696-5462; or by e-mail to 
Betty.Duffield@cpms.osd.mil.

FOR FURTHER INFORMATION CONTACT: ARDEC: Ms. Christina Duncan, U.S. Army 
ARDEC, Human Capital Management Office, Building 1, 3rd Floor, RDAR-
EIH, Picatinny Arsenal, NJ 07806-5000.
    DoD: Ms. Betty Duffield, CPMS-PSSC, Suite B-200, 1400 Key 
Boulevard, Arlington, VA 22209-5144.

SUPPLEMENTARY INFORMATION: 

1. Background

    Since 1966, many studies of DoD laboratories have been conducted on 
laboratory quality and personnel. Almost all of these studies have 
recommended improvements in civilian personnel policy, organization, 
and management. Pursuant to the authority provided in section 342(b) of 
Public Law 103-337, as amended, a number of DoD STRL personnel 
demonstration projects were approved. These projects are ``generally 
similar in nature'' to the Department of Navy's ``China Lake'' 
Personnel Demonstration Project. The terminology, ``generally similar 
in nature,'' does not imply an emulation of various features, but 
rather implies a similar opportunity and authority to develop personnel 
flexibilities that significantly increase the decision authority of 
laboratory commanders and/or directors.
    This demonstration project involves:
    (1) Two appointment authorities (permanent and modified term);
    (2) Modified probationary period for newly hired employees;
    (3) Modified supervisory and managerial probationary period;
    (4) Pay banding;
    (5) Streamlined delegated examining;
    (6) Modified reduction-in-force (RIF) procedures;
    (7) Simplified job classification;
    (8) A contribution-based appraisal system;
    (9) Academic degree and certificate training;
    (10) Sabbaticals;
    (11) A Volunteer Emeritus Corps;
    (12) Direct hire authority for candidates with advanced degrees for 
scientific and engineering positions; and
    (13) Distinguished Scholastic Achievement Appointment Authority.

2. Overview

    The NDAA for FY 2010 not only designated new STRLs but also 
repealed the National Security Personnel System (NSPS) mandating 
conversion of NSPS covered employees to their former personnel system 
or one that would have applied absent the NSPS. A number of ARDEC 
employees are covered by the NSPS and must be converted to another 
personnel system. Section 1105 of NDAA for FY 2010 stipulates the STRLs 
designated in subsection (a) of section 1105 may not implement any 
personnel system, other than a personnel system under an appropriate 
demonstration project as defined in section 342(b) of Public Law 103-
337, as amended, without prior congressional authorization. In 
addition, any conversion under the provisions of section 1105 shall not 
adversely affect any employee with respect to pay or any other term or 
condition of employment; shall be consistent with section 4703(f) of 
title 5 United States Code (U.S.C.), and shall be completed within 18 
months after enactment of NDAA for FY 2010. Therefore, since ARDEC is 
both designated an STRL by section 1105 of NDAA for FY 2010 and has 
NSPS covered employees, it must convert, at a minimum, its NSPS covered 
employees to a personnel management demonstration project before the 
end of April 2011.

3. Access to Flexibilities of Other STRLs

    Flexibilities published in this Federal Register notice shall be 
available for use by the STRLs previously enumerated in section 
9902(c)(2) of title 5, United States Code, which are now designated in 
section 1105 of the NDAA for FY 2010, Public Law 111-84, 123 Stat. 
2486, October 28, 2009, if they wish to adopt them in accordance with 
DoD Instruction 1400.37; pages 73248 to 73252 of volume 73, Federal 
Register; and after the fulfilling of any collective bargaining 
obligations.

    Dated: September 2, 2010.
Mitchell S. Bryman,
Alternate OSD Federal Register Liaison Officer, Department of Defense.

Table of Contents

I. Executive Summary
II. Introduction
    A. Purpose
    B. Problems With the Present System
    C. Changes Required/Expected Benefits
    D. Participating Organizations
    E. Participating Employees and Union Representation
    F. Project Design
    G. Personnel Management Board
III. Personnel System Changes
    A. Pay Banding
    B. Classification
    C. Contribution-Based Contribution System (CBCS)
    D. Hiring Authority
    E. Internal Placement
    F. Pay Administration
    G. Employee Development
    H. Reduction-in-Force (RIF) Procedures
IV. Implementation Training
V. Conversion
    A. Conversion From the GS System to the Demonstration Project

[[Page 55201]]

    B. Conversion From NSPS to the Demonstration Project
    C. Conversion From Other Personnel Systems
    D. Movement Out of the Demonstration Project
VI. Other Provisions
    A. Personnel Administration
    B. Automation
    C. Experimentation and Revision
VII. Project Duration
VIII. Evaluation Plan
    A. Overview
    B. Evaluation Model
    C. Evaluation
    D. Method of Data Collection
IX. Demonstration Project Costs
    A. Cost Discipline
    B. Developmental Costs
X. Required Waivers to Law and Regulation
    A. Waivers to Title 5, U.S.C.
    B. Waivers to Title 5, CFR
Appendix A: ARDEC Employees by Duty Locations
Appendix B: Occupational Series by Occupational Family
Appendix C: Contribution Factors and Level Descriptors
Appendix D: Intervention Model

I. Executive Summary

    The Armament Research, Development and Engineering Center includes 
the ARDEC organizations at Picatinny Arsenal, NJ; Watervliet Arsenal, 
NY; Rock Island Arsenal, IL; and ARDEC employees with duty stations at 
other sites. The intent of this demonstration project is to cover all 
employees, subject to bargaining unit agreement.
    The ARDEC provides integrated science, technology, and engineering 
solutions to address the armament, munitions, and fire control needs 
for the Army. The ARDEC's core competency is working with weapon 
systems at all stages of the materiel life cycle. The ARDEC maintains 
the following fundamental capabilities:
    (1) Armaments and Weapons;
    (2) Fire Control;
    (3) Energetics, Warheads, and Ammunition;
    (4) Ammunition Logistics;
    (5) Explosive Ordnance Disposal; and
    (6) Homeland Defense Technology.
    In order to sustain these unique capabilities, the ARDEC must be 
able to hire, retain, and continually motivate enthusiastic, 
innovative, and highly-educated scientists and engineers, supported by 
accomplished business management and administrative professionals, as 
well as a skilled administrative and technical support staff.
    The goal of the project is to enhance the quality and 
professionalism of the ARDEC workforce through improvements in the 
efficiency and effectiveness of the human resource system. The project 
interventions will strive to achieve the best workforce for the ARDEC 
mission, adjust the workforce for change, and improve workforce 
satisfaction. With some modifications, this project mirrors the STRL 
personnel management demonstration project, designed by the U.S. Army 
Edgewood Chemical Biological Center (ECBC). The ARDEC Demonstration 
Project was built on the ECBC concepts and uses much of the same 
language; however, it includes several concepts from the Air Force 
Research Laboratory (AFRL), Naval Research Laboratory (NRL), and the 
DoD Civilian Acquisition Workforce (Acq Demo) personnel management 
demonstration projects. Of significant note is the inclusion of a 
contribution-based compensation and assessment system similar to that 
used in the Acq Demo program. The results of the project will be 
evaluated within five years of implementation.

II. Introduction

A. Purpose

    The purpose of the project is to demonstrate that the effectiveness 
of DoD STRLs can be enhanced by expanding opportunities available to 
employees and by allowing greater managerial control over personnel 
functions through a more responsive and flexible personnel system. 
Federal laboratories need more efficient, cost effective, and timely 
processes and methods to acquire and retain a highly-creative, 
productive, educated, and trained workforce. This project, in its 
entirety, attempts to improve employees' opportunities and provide 
managers, at the lowest practical level, the authority, control, and 
flexibility needed to achieve the highest quality organization, and 
hold them accountable for the proper exercise of this authority within 
the framework of an improved personnel management system.
    Many aspects of a demonstration project are experimental. 
Modifications may be made from time to time as experience is gained, 
results are analyzed, and conclusions are reached on how the system is 
working. The provisions of this project plan will not be modified, or 
extended to individuals or groups of employees not included in the 
project plan without the approval of the DUSD(CPP). The provisions of 
DoDI 1400.37 are to be followed for any modifications, adoptions, or 
changes to this demonstration project plan.

B. Problems With the Present System

    The ARDEC has participated in a number of personnel systems and 
personnel demonstrations over the past 25 years. These include the 
current Civil Service General Schedule (GS) system (80 percent of ARDEC 
employees are currently in this GS system); Acq Demo Project from 2001 
to 2006; and NSPS from 2006 to the present (20 percent of ARDEC 
employees are currently in NSPS). The ARDEC's experience with each of 
these prior personnel systems was that, although each had positive 
features, each also had negative aspects. As a result of the ARDEC's 
experience, it was determined that certain features from the earlier 
systems were worthwhile to carry forward and certain shortcomings/
limitations needed to be corrected or alleviated.
    The current Civil Service GS system has existed in essentially the 
same form since 1949. Work is classified into one of fifteen 
overlapping pay ranges that correspond with the fifteen grades. Base 
pay is set at one of those fifteen grades and the ten interim steps 
within each grade. The Classification Act of 1949 rigidly defines types 
of work by occupational series and grade, with very precise 
qualifications for each job. This system does not quickly or easily 
respond to new ways of designing work and changes in the work itself.
    The performance management model that has existed since the passage 
of the Civil Service Reform Act in 1980 has come under extreme 
criticism. Employees frequently report there is inadequate 
communication of performance expectations and feedback on performance. 
There are perceived inaccuracies in performance ratings with general 
agreement that the ratings are inflated and often unevenly distributed 
by grade, occupation, and geographic location.
    The need to change the current hiring system is essential as the 
ARDEC must be able to recruit and retain scientific, engineering, 
acquisition support and other professionals and skilled technicians. 
The ARDEC must be able to compete with the private sector for the best 
talent and be able to make job offers in a timely manner with the 
attendant bonuses and incentives to attract high quality employees and 
be in compliance with public law.
    Finally, current limitations on training, retraining, and otherwise 
developing employees make it difficult to correct skill imbalances and 
to prepare current employees for new lines of work to meet changing 
missions and emerging technologies.

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    The ARDEC's proposed personnel management demonstration project, by 
building on previous strengths and addressing shortcomings, is intended 
to provide the highest potential for movement to a single system that 
will meet the needs of the ARDEC and all its employees.

C. Changes Required/Expected Benefits

    The primary benefit expected from this demonstration project is 
greater organizational effectiveness through increased employee 
satisfaction. The long-standing Department of the Navy ``China Lake'' 
and National Institute of Standards and Technology (NIST) demonstration 
projects have produced impressive statistics on increased job 
satisfaction and quality of employees versus that for the Federal 
workforce in general. This project will demonstrate that a human 
resource system tailored to the mission and needs of the ARDEC 
workforce will facilitate increased:
    1. Quality in the workforce and resultant products;
    2. Timeliness of key personnel processes;
    3. Retention of excellent performers;
    4. Success in recruitment of personnel with critical skills;
    5. Management authority and accountability;
    6. Satisfaction of customers; and
    7. Workforce satisfaction.
    An evaluation model was developed for the Director, Defense, 
Research, and Engineering (DDR&E) in conjunction with STRL service 
representatives and the Office of Personnel Management (OPM). The model 
will measure the effectiveness of this demonstration project, as 
modified in this plan, and will be used to measure the results of 
specific personnel system changes.

D. Participating Organizations

    The ARDEC is comprised of employees headquartered at Picatinny 
Arsenal, NJ. The ARDEC employees are geographically dispersed at the 
locations shown in Appendix A. It should be noted that some sites 
currently employ fewer than ten people and that the sites may change 
should ARDEC reorganize or realign. Successor organizations will 
continue coverage in the demonstration project.

E. Participating Employees and Union Representation

    This demonstration project will cover approximately 3,400 ARDEC 
civilian employees under title 5 U.S.C. in the occupational series 
listed in Appendix B. The project plan does not cover members of the 
Senior Executive Service (SES), Scientific and Professional (ST) 
employees, Federal Wage System (FWS) employees, employees presently 
covered by the Defense Civilian Intelligence Personnel System (DCIPS), 
or Department of Army (DA), Army Command centrally funded interns and 
centrally funded students employed under the Student Career Experience 
Program (SCEP).
    The International Federation of Professional and Technical 
Engineers (IFPTE) Local 1437; the American Federation of Government 
Employees (AFGE) Local 225; the American Federation of Government 
Employees (AFGE) Local 15; and the National Federation of Federal 
Employees (NFFE) Local 2109 represent a majority of the ARDEC 
employees. Of those employees assigned to the ARDEC, approximately 75 
percent are represented by labor unions.
    To foster union acceptance of the ARDEC's proposed personnel 
demonstration project, initial discussions with the four unions began 
in November 2009. The ARDEC will continue to fulfill its obligation to 
consult and/or negotiate with all labor organizations in accordance 
with 5 U.S.C. 4703(f) and 7117, as applicable.

F. Project Design

    In October 2009, the 2010 National Defense Authorization Act 
directed the ARDEC to transition to a laboratory personnel management 
demonstration project. Following review and analysis of existing DoD 
demonstration projects, the ARDEC senior leadership decided to adapt 
the ECBC model, one of the latest Army projects. A series of focus 
groups, benchmarking and other sensing sessions were completed to 
determine the unique ARDEC needs and requirements. One key departure 
from the ECBC model is the shift from their Performance Management 
System to a Contribution-Based Compensation System (CBCS), similar to 
the Acq Demo project.

G. Personnel Management Board (PMB)

    1. ARDEC will create a PMB to oversee and monitor the fair, 
equitable, and consistent implementation of the provisions of the 
demonstration project to include establishment of internal controls and 
accountability. Members of the board will be senior leaders appointed 
by the ARDEC Director. As needed, ad hoc members (such as labor 
counsel, human resource representatives, etc.) will serve as advisory 
members to the board.
    2. At a minimum, duties executed by the board will be to:
    a. Determine the composition of the pay pools in accordance with 
the guidelines of this proposal and internal procedures;
    b. Review operation of pay pools and provide guidance to pay pool 
managers;
    c. Oversee disputes in pay pool issues;
    d. Formulate and manage the civilian pay pool budget;
    e. Formulate and manage the civilian bonus pool budget;
    f. Determine hiring, reassignment, and promotion base pay as well 
as exceptions to Contribution-Based Compensation System base pay 
increases;
    g. Conduct classification review and oversight, monitor and adjust 
classification practices, and decide board classification issues;
    h. Approve major changes in position structure;
    i. Address issues associated with multiple pay systems during the 
demonstration project;
    j. Manage standard Contribution Factors and Descriptors;
    k. Identify and implement improvements to demonstration project 
procedures and policies;
    l. Review requests for Supervisory/Team Leader Base Pay Adjustments 
and provide recommendations to the Director;
    m. Ensure in-house budget discipline;
    n. Manage the number of employees by Occupational Family and pay 
band;
    o. Develop policies and procedures for administering Developmental 
Opportunity Programs;
    p. Ensure that all employees are treated in a fair and equitable 
manner in accordance with all policies, regulations, and guidelines 
covering this demonstration project;
    q. Monitor the evaluation of the project; and
    r. Establish and manage the Accelerated Compensation for 
Developmental Positions (ACDP).

III. Personnel System Changes

A. Pay Banding

    The design of the ARDEC pay banding system takes advantage of the 
many reviews performed by DA, DoD, OPM, and others. The design also has 
the benefit of being preceded by exhaustive studies of pay banding 
systems currently practiced in the Federal sector, to include those 
practiced by the China Lake experiment and NIST. The ARDEC pay banding 
system will replace the current GS grade and NSPS pay band structures.
1. Occupational Families
    Occupations with similar characteristics will be grouped together

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into one of three Occupational Families with career paths and pay band 
levels designed to facilitate pay progression. These Occupational 
Families are Engineering and Science (E&S), Business and Technical 
(B&T), and General (GEN). Each Occupational Family's career path will 
be composed of pay bands corresponding to recognized advancement and 
career progression patterns within the covered occupations. These 
career paths and their pay bands will replace the NSPS pay band 
structure and the individual GS grades and will not be the same for 
each Occupational Family. Each Occupational Family will be divided into 
three to six pay bands. Employees track into an Occupational Family 
based on their current OPM classification series as provided in 
Appendix B. All employees are initially assigned to the Occupational 
Family and pay band in which their comparable grade fits based on 
position classification using the GS classification standards. 
Comparison to the GS grades is used in setting the upper and lower base 
pay dollar limits of the pay band levels with the exception of Pay Band 
VI of the E&S Occupational Family (refer to III.A.3). The current 
occupations have been examined; and their characteristics and 
distribution have served as guidelines in the development of the three 
Occupational Families.
    a. Engineering and Science (E&S) (Pay Plan DB): This Occupational 
Family includes positions as defined in Appendix B. Specific course 
work or educational degrees are required for these occupations. Six 
bands have been established for the E&S career path: (refer to Table 
1).
    (1) Band I includes student trainee positions.
    (2) Band II includes developmental positions.
    (3) Band III includes full-performance technical positions.
    (4) Band IV includes technical specialist and first level 
supervisory positions.
    (5) Band V includes senior technical and managerial positions.
    (6) Band VI includes positions classified above the GS-15 level.
    b. Business and Technical (B&T) (Pay Plan DE): This Occupational 
Family includes positions as defined in Appendix B. Employees in these 
positions may or may not require specific course work or educational 
degrees. Five bands have been established for the B&T career path: 
(refer to Table 1).
    (1) Band I includes student trainee positions.
    (2) Band II includes developmental positions.
    (3) Band III includes full-performance technical and first level 
supervisory positions.
    (4) Band IV includes senior technical specialist and supervisory 
positions.
    (5) Band V includes managerial positions.
    c. General Support (GEN) (Pay Plan DK): This Occupational Family 
includes positions as defined in Appendix B. Employees in these 
positions may or may not require specific course work or educational 
degrees. Three bands have been established for the GEN career path: 
(refer to Table 1).
    (1) Band I covers entry-level and student positions.
    (2) Band II covers full-performance positions.
    (3) Band III includes supervisory and senior positions.
2. Pay Band Design
    The pay bands for the Occupational Families and how they relate to 
the current GS/NSPS frameworks are shown in Table 1.

                                                                                    Table 1--Pay Band Charts
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                                                                                                        Equivalent GS grades
       Occupational family        --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               I                          II                        III                        IV                         V                        VI
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
E&S..............................  GS-01-04                   GS-05-11                   GS-12-13                   GS-14                     GS-15                     >GS-15
Business & Technical.............  GS-01-04                   GS-05-11                   GS-12-13                   GS-14                     GS-15                     ........................
General Support..................  GS-01-04                   GS-05-08                   GS-9                       ........................  ........................  ........................
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Equivalent NSPS pay bands \1\ \2\
       Occupational family        --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               I                          II                        III                        IV                         V                        VI
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
E&S (DB).........................  YP-1                       YD-1, YF-1, YF-2, YP-1     YD-2, YF-2                 YD-3, YF-2, YF-3          YD-3, YF-3                ........................
Business & Technical (DE)........  YP-1, YB-1, YE-1           YA-1, YA-2, YB-1, YB-2,    YA-2, YB-3, YC-2, YE-3,    YA-3, YC-2, YC-3          YA-3, YC-3                ........................
                                                               YB-3, YC-1, YC-2, YE-1,    YE-4
                                                               YE-2, YE-3, YP-1
General Support (DK).............  YB-1, YE-1, YP-1           YB-1, YB-2, YE-1, YE-2,    YB-2, YE-2, YP-1           ........................  ........................  ........................
                                                               YP-1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ NSPS Pay Bands overlap Lab Demo bands and Occupational Families.
\2\ Student Career Experience Program participants in YP pay bands are not included in this Demonstration Project.

    As the rates of the GS are increased due to the annual general pay 
increases, the upper and lower base pay rates of the pay bands will 
also be adjusted. Since pay progression through the bands depends 
directly on contribution, there will be no scheduled Within-Grade 
Increases (WGIs) or Quality Step Increases (QSIs) for former GS 
employees once the pay banding system is in place. GS special rate 
schedules and NSPS Targeted Local Market Supplements (TLMS) will no 
longer be applicable to demonstration project employees. Special 
provisions have

[[Page 55204]]

been included to ensure no loss of pay upon conversion (refer to 
III.F.11 Staffing Supplements). Except for those receiving a staffing 
supplement and employees on pay retention, employees will receive 
locality pay in addition to their base pay in the same amount and to 
the same extent as established for GS employees in accordance with 5 
U.S.C. 5304 and 5304a. However, adjusted pay (base + locality) for 
employees in Band V or below cannot exceed Executive Level IV.3. 
Science and Engineering Positions Classified Above GS-15.
    The career path for the E&S Occupational Family includes a pay band 
VI to provide the ability to accommodate positions having duties and 
responsibilities that exceed the GS-15 classification criteria. This 
pay band is based on the Above GS-15 Position concept found in other 
STRL personnel management demonstration projects that was created to 
solve a critical classification problem. The STRLs have positions 
warranting classification above GS-15 because of the technical 
expertise requirements including inherent supervisory and managerial 
responsibilities. However, these positions are not considered to be 
appropriately classified as Scientific or Professional Positions (STs) 
because of the degree of supervision and level of managerial 
responsibilities. Neither are these positions appropriately classified 
as Senior Executive Service (SES) positions because of the requirement 
for advanced specialized scientific or engineering expertise, and 
because the positions are not at the level of the general managerial 
authority and impact that is required for an SES position.
    The original Above GS-15 Position concept was to be tested for a 
five-year period. The number of trial positions was set at 40 with 
periodic reviews to determine appropriate position requirements. The 
Above GS-15 Position concept is currently being evaluated by DoD 
management for its effectiveness, continued applicability to the 
current STRL scientific, engineering, and technology workforce needs 
and appropriate allocation of billets based on mission requirements. 
The degree to which the laboratory plans to participate in this concept 
and develop classification, compensation, and performance management 
policy, guidance, and implementation processes will be based on the 
final outcome of the DoD evaluation.

B. Classification

1. Occupational Series
    The GS classification system has over 400 occupational series which 
are divided into 23 occupational groupings. The ARDEC currently has 
positions in approximately 60 occupational series that fall into 
approximately 16 occupational groupings. All positions listed in 
Appendix B will be included in the classification structure. Provisions 
will be made for including other occupations in response to changing 
missions.
2. Classification Standards and Position Descriptions
    The ARDEC may use an automated classification system. The current 
OPM classification standards will be used for the identification of 
proper series and occupational titles of positions within the 
demonstration project. The grading criteria in the OPM classification 
standards will be used as a framework to develop new and simplified pay 
band factor level descriptors for each pay band determination. The 
objective is to record the essential criteria for each pay band within 
each Occupational Family by stating the characteristics of the work, 
the responsibilities of the position, the competencies required, and 
the expected contributions. The Factor Descriptors will serve as both 
classification criteria and contribution assessment criteria and may be 
found in Appendix C. New position descriptions will replace the current 
position/job descriptions. The Factor Descriptors of each pay band will 
serve as an important component in the new position description, which 
will also include position-specific information and provide data 
element information pertinent to the job. The new descriptions will be 
easier to prepare, minimize the amount of writing time, and make the 
position description a more useful and accurate tool for other 
personnel management functions.
    Specialty work codes (narrative descriptions) will be used to 
further differentiate types of work and the competencies required for 
particular positions within an Occupational Family and pay band. Each 
code represents a specialization or type of work within the occupation.
3. Fair Labor Standards Act
    Fair Labor Standards Act (FLSA) exemption and non-exemption 
determinations will be consistent with criteria found in 5 CFR part 
551. All demonstration project positions are covered by the FLSA unless 
they meet the criteria for exemption. Positions will be evaluated as 
needed by comparing the duties and responsibilities assigned the pay 
band factor level descriptors for each pay band level, and the 5 CFR 
part 551 FLSA criteria. As a general rule, the FLSA status of a 
position can be matched to an Occupational Family, career path, and pay 
band level as indicated in Table 2. For example, positions classified 
in Pay Band I of the E&S Occupational Family are typically nonexempt, 
meaning they are covered by the overtime entitlements prescribed by the 
FLSA. An exception to this guideline includes supervisors/managers 
whose primary duty meets the definitions outlined in the OPM GS 
Supervisory Guide. Therefore, supervisors/managers in any of the pay 
bands who meet the foregoing criteria are exempt from the FLSA. 
Supervisors with classification authority will make the determinations 
on a case-by-case basis by comparing assigned duties and 
responsibilities and pay band factor level descriptors to the 5 CFR 
part 551 FLSA criteria. Additionally, the advice and assistance of the 
servicing Civilian Personnel Advisory Center (CPAC) will be obtained in 
making determinations. The position descriptions will not be the sole 
basis for the determination. The basis for exemption will be documented 
and attached to each position description. Exemption criteria will be 
narrowly construed and applied only to those employees who clearly meet 
the spirit of the exemption. Changes will be documented and provided to 
the CPAC.

                                              Table 2--FLSA Status
                                                   [Pay bands]
----------------------------------------------------------------------------------------------------------------
       Occupational family              I            II           III           IV           V            VI
----------------------------------------------------------------------------------------------------------------
E&S.............................  N             N/E           E            E            E            E
B&T.............................  N             N/E           E            E            E            ...........
GEN.............................  N             N             E            ...........  ...........  ...........
----------------------------------------------------------------------------------------------------------------
N--Non-Exempt from FLSA; E--Exempt from FLSA; and N/E--Exemption status determined on a case-by-case basis.



[[Page 55205]]

    Note: Although typical exemption status under the various pay 
bands is shown in the above table, actual FLSA exemption 
determinations are made on a case-by-case basis.

4. Classification Authority
    The ARDEC Director will have delegated classification authority and 
may in turn, re-delegate this authority to appropriate levels. Position 
descriptions will be developed to assist managers in exercising 
delegated position classification authority. Managers will identify the 
Occupational Family, occupational series, functional code, specialty 
work code, pay band level, and the appropriate acquisition codes. 
Personnel specialists will provide ongoing consultation and guidance to 
managers and supervisors throughout the classification process. These 
decisions will be documented on the position description.
5. Classification Appeals
    Classification appeals under this demonstration project will be 
processed using the following procedures: An employee may appeal the 
determination of Occupational Family, occupational series, position 
title, and pay band of his/her position at any time. An employee must 
formally raise the area of concern to supervisors in the immediate 
chain of command, either verbally or in writing. If the employee is not 
satisfied with the supervisory response, he/she may then appeal to the 
DoD appellate level. Appeal decisions rendered by DoD will be final and 
binding on all administrative, certifying, payroll, disbursing, and 
accounting officials of the Government. Classification appeals are not 
accepted on positions which exceed the equivalent of a GS-15 level. 
Time periods for cases processed under 5 CFR part 511 apply.
    An employee may not appeal the accuracy of the position 
description, the demonstration project classification criteria, or the 
pay-setting criteria; the assignment of occupational series to an 
Occupational Family; the propriety of a pay schedule; matters grievable 
under an administrative or negotiated grievance procedure; or a 
decision reached using an alternative dispute resolution procedure.
    The evaluations of classification appeals under this demonstration 
project are based upon the demonstration project classification 
criteria. Case files will be forwarded for adjudication through the 
servicing Civilian Personnel Advisory Center (CPAC) and will include 
copies of appropriate demonstration project criteria.

C. Contribution-Based Compensation System

1. Overview
    The purpose of the Contribution-Based Compensation System (CBCS) is 
to provide an effective, efficient, and flexible method for assessing, 
compensating, and managing the ARDEC workforce. CBCS is essential for 
the development and continued growth of the high quality, extremely 
productive and innovative workforce needed to meet mission 
requirements. The CBCS allows for greater employee involvement in the 
assessment process, fosters increased communication between supervisor 
and employee, promotes a clear accountability of performance, 
facilitates employee career progression, and provides an understandable 
and rational basis for base pay changes by linking pay, performance, 
and contribution. The CBCS process described herein applies to all 
Occupational Families and pay band levels except Pay Band VI of the E&S 
Occupational Family. The assessment process for E&S Pay Band VI 
positions will be based on the final outcome of the DoD evaluation and 
documented in ARDEC Internal Operating Instructions.
    CBCS is an assessment system that measures the employee's level of 
contribution to the organization's mission and how well the employee 
performed. Contribution is simply defined as the measure of the 
demonstrated value of employee actions in terms of accomplishing or 
advancing the organizational objectives and mission impact. CBCS 
promotes base pay adjustment decisions made on the basis of an 
individual's overall annual contributions and current base pay in 
relation to other employees' contributions and their level of 
compensation in the pay pool. The measurement of overall contribution 
is determined through a rating process which determines the Overall 
Contribution Score (OCS). OCS is a key component to the CBCS assessment 
system in that it:
    (1) Provides a consistent scoring scale linked to base pay even as 
salaries increase in accordance with GPI increases.
    (2) Provides a rating scale that enables direct comparison of the 
level and quality of employee contributions to the current base pay of 
that employee.

To accomplish (2) above, the employee's current base pay is converted 
to an Expected OCS (EOCS). The other OCS score, Assessed OCS (AOCS) is 
the measurement of the employee's contributions in the appraisal 
process. AOCS is the result of measuring contribution and performance 
by using the pay band level descriptors for a set of contribution 
factors and discriminators each of which is relevant to mission success 
of the organization. The comparison of EOCS and AOCS determines if the 
employee is appropriately compensated. The same factor level 
descriptors used for classification will also be used for the annual 
CBCS employee assessments (see Appendix C).
2. Contribution Factors
    The following six (6) factors will be used for evaluating the 
yearly contribution of the ARDEC personnel in all three Occupational 
Families:
    (1) Problem Solving.
    (2) Teamwork/Cooperation.
    (3) Customer Relations.
    (4) Leadership/Supervision.
    (5) Communication.
    (6) Resource Management.

Each factor has multiple levels of increasing contribution 
corresponding to the pay band levels. Each factor contains descriptors 
for each respective pay band level within the relevant Occupational 
Family.

    The appropriate Occupational Family pay band level factor 
descriptors will be used by the rating official to determine the 
employee's actual contribution score. Employees can score within, 
above, or below their pay band level. For example, a pay band level II 
employee could score in the pay band level I, II, III, or IV range.
3. Pay Pools
    The ARDEC employees will be placed into pay pools that are defined 
for the purpose of determining performance payouts under the CBCS. Pay 
pools will be established and operated in accordance with the 
guidelines provided in the following paragraphs. These guidelines will 
be followed noting the following exception. The ARDEC Director may 
deviate from the guidelines provided there is a compelling need. The 
rationale must be documented in writing.
    The ARDEC Director will establish pay pools. Typically, pay pools 
will have between 35 and 300 employees. A pay pool should be large 
enough to encompass a reasonable distribution of ratings but not so 
large as to compromise rating consistency. Neither the pay pool manager 
nor supervisors within a pay pool will recommend or set their own 
individual pay. Decisions regarding the amount of the contribution 
payout are based on the established formal payout calculations.

[[Page 55206]]

    Funds within a pay pool available for contribution payouts are 
divided into two components, base pay and bonus. These funds will be 
determined based on historical data. The base pay fund will be set at 
no less than two percent of total base pay of employees eligible for 
compensation adjustment in CBCS. The bonus fund will be set at no less 
than one percent of total base pay. The ARDEC PMB will annually review 
the pay pool funding and recommend adjustments to the ARDEC Director to 
ensure cost discipline over the life of the demonstration project. CBCS 
payouts can be in the form of increases to base pay and/or bonuses that 
are not added to base pay but rather are given as a lump-sum payment. 
Other awards such as special acts, time-off awards, etc., will be 
managed separately from the CBCS payouts.
4. Annual Appraisal Cycle and Rating Process
    The annual appraisal cycle normally begins on October 1 and ends on 
September 30 of the following year. The minimum rating period will be 
90 days. At the beginning of the annual appraisal period, the pay band 
level descriptors for each factor will be provided to employees so that 
they know the basis on which their performance will be assessed. At the 
discretion of the pay pool manager, weights will be applied to the 
factors. If weighting is used, the same weighting will be applied to 
all similar positions within an Occupational Family in a pay pool. 
Also, if weighting is used, the minimum weighting will be 10 percent 
and the sum of all weights must equal 100 percent. Employees will be 
informed of the weights at the beginning of the rating cycle.
    Each supervisor will discuss work assignment, performance and 
conduct standards, and provide clear objectives to their employees. 
Typically, the rating official is the first-level supervisor. If the 
current first-level supervisor has been in place for less than 90 days 
during the rating cycle, the second-level supervisor serves as the 
initial rating official. If the second-level supervisor is in place for 
less than 90 days during the rating cycle, the next higher level 
supervisor in the employee's rating chain conducts the assessment.
    Employees and supervisors alike are expected to actively 
participate in on-going formal and informal performance discussions 
regarding expectations. The timing of these discussions will vary based 
on the nature of work performed, but will occur at least at the mid-
point and end of the rating period. At least one review, normally the 
mid-point review, will be documented as a progress review. More 
frequent, task specific, discussions may be appropriate in some 
organizations.
    The employee will provide a list of his/her accomplishments to the 
supervisor at both the mid-point and end of the rating period. An 
employee may elect to provide self-ratings on the contribution factors 
and/or solicit input from team members, customers, peers, supervisors 
in other units, subordinates, and other sources which will assist the 
supervisor in fully evaluating contributions. At the end of the annual 
appraisal period, the immediate supervisor (rating official), from 
employees' inputs and his/her own knowledge, identifies for each 
employee the appropriate contribution level for each factor, and 
recommends the AOCS.
    To determine the AOCS, numerical values are assigned based on the 
contribution levels of individuals, using the ranges shown in Table 3. 
The AOCS is calculated by averaging the numerical values (as weighted 
if applicable) assigned for each of the six contribution factors. (All 
AOCS's will be rounded to the nearest tenth of a point. If the decimal 
is .05 or higher, the AOCS will be rounded up.) The rating official in 
conjunction with the second-level supervisor reviews the AOCS for all 
employees, correcting any inconsistencies identified and making the 
appropriate adjustments in the factor ratings.
[GRAPHIC] [TIFF OMITTED] TN09SE10.166


[[Page 55207]]


    The pay pool panel conducts a final review of the AOCS for each 
employee in the pay pool. The pay pool panel has the authority to make 
AOCS adjustments, after discussion with the initial rating officials, 
to ensure equity and consistency. Final approval of AOCS rests with the 
pay pool manager, the individual within the organization responsible 
for managing the CBCS process. The AOCS, as approved by the pay pool 
manager, becomes the rating of record. Rating officials will 
communicate the factor scores and AOCS to each employee and discuss the 
results.
    If on the last day of the appraisal cycle the employee has served 
under CBCS for less than 90 days, the first rating will be provided at 
the end of the next annual rating cycle. The first CBCS appraisal must 
be rendered within 18 months after entering the demonstration project.
    When an employee cannot be evaluated readily by the normal CBCS 
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 at his/her pay 
level.
5. Linking OCS to Compensation Adjustment
a. The Normal Pay Range (NPR)
    The CBCS integrated pay schedule provides a direct link between 
contribution level and base pay. This is shown by the graph in Figure 
1. The horizontal axis spans from 0 to the maximum OCS of 100 for 
positions in pay band levels I through V. Impact of Band VI will be 
determined after receiving DoD guidance on Band VI positions. The 
vertical axis spans from zero dollars to the dollar equivalent of the 
highest positions covered by CBCS. This encompasses the full base pay 
range (excluding locality pay and staffing supplements) under this 
demonstration for the given calendar year (note: Figure 1 currently 
depicts Calendar Year (CY) 10. Each year the rails for the NPR are 
adjusted based on the GS general pay increase under 5 U.S.C. 5303. The 
area between the upper and lower rails is considered the NPR. This pay 
range represents a base pay range of plus or minus eight percent from 
the Standard Pay Line (SPL). The SPL is a mapping of the GS base pay 
scale to OCS values (see formula below) that shows the expected level 
of contributions (EOCS) from an employee at a specific base pay rate. 
The SPL and NPR provide the means to link base pay and contribution 
using a scale that does not change even as a base pay range changes 
with GPI increases. This scale is not a linear scale but rather adopts 
and reflects the provision that the former GS basic pay increases 
(e.g., GPI, step increases) are percentage increases. Thus, the scale 
reflects that each point increase in OCS reflects a fixed percent 
increase in base pay. For example, an OCS of 61 reflects an approximate 
two percent base pay difference over an OCS of 60 and an OCS of 87 
reflects an approximate two percent base pay difference over an OCS of 
86. The SPL and NPR are established using the following parameters:
    (1) The lowest possible score is an OCS of 0, which equates to the 
lowest base pay under this demonstration project, GS-1, step 1,
    (2) The OCS of 100 equates to the base pay of GS-15, step 10.

The SPL is calculated as:

Standard Pay Line (SPL) = (GS-1, Step 1) * (1.020043)\OCS\
The factor 1.020043 is called the SPL factor and reflects the percent 
increase of salary corresponding to a one point increase in OCS:

SPL Factor = (GS-15, Step 10)/(GS-1, Step 1)\(0.01)\

The SPL Factor will remain the same value (1.020043) for as long as GPI 
increases are applied as the same percentage increase to GS-1, Step 1, 
to GS-15, Step 10.

The upper rail is calculated as: Upper Rail = SPL * 1.08
The lower rail is calculated as: Lower Rail = SPL * 0.92

    The upper and lower rails encompass an area of  8.0 
percent in terms of base pay which correlates to approximately  4.0 OCS points.
    The EOCS is the intersection of the employee's current base pay and 
the SPL. In the instance of an employee on retained pay, the EOCS is 
determined by using the maximum base pay of the employee's assigned pay 
band in lieu of their current base pay.

[[Page 55208]]

[GRAPHIC] [TIFF OMITTED] TN09SE10.167

    The NPR is the same for all the Occupational Families. What varies 
among the Occupational Families are the beginnings and endings of the 
pay band levels. The minimum and maximum numerical OCS values and 
associated base pay for each pay band level by Occupational Family are 
provided in Table 4. These minimum and maximum breakpoints represent 
the lowest and highest base pay for the bands; and the minimum and 
maximum base pay possible for each pay band level. Locality pay or 
staffing supplements are not included in the NPR but are added to base 
pay as appropriate.
[GRAPHIC] [TIFF OMITTED] TN09SE10.168

b. OCS-Based Compensation Adjustment Guidelines
    After the pay pool manager approves the OCS for all employees in 
the pay pool, the current base pay versus AOCS is plotted for all 
employees on a chart similar to Figure 2. This plot relates 
contribution to base pay, and identifies the placement of each employee 
into one of three regions: Region A--Above-the-NPR, Region C--Within-
the-NPR, or Region B--Below-the-NPR. When an employee is placed in the 
Region A--Above-the-NPR, the employee is considered to be 
overcompensated. When an employee is placed in the Region B--Below-the-
NPR the employee is considered to be undercompensated and when an 
employee is placed in the Region C--Within-the-NPR, the employee is 
considered to be adequately compensated.

[[Page 55209]]

[GRAPHIC] [TIFF OMITTED] TN09SE10.169

    c. The following delineates compensation adjustment guidelines for 
employees in each of the three regions:
    (1) All employees are entitled to the full locality pay or a 
staffing supplement, as appropriate, (subject to overall salary pay 
limitations).
    (2) The employees whose base pay falls within the NPR (Region C) 
must receive the full GPI, may receive a Contribution Base Pay Increase 
of up to 6 percent, and may receive a Contribution Bonus. The 
Contribution Base Pay Increase is included as a permanent increase in 
base pay, but the Contribution Bonus is a lump-sum payment that does 
not affect base pay.
    (3) The employees whose base pay falls above the NPR (Region A) 
could be denied part or all of the GPI and will receive no Contribution 
Base Pay Increase or Contribution Bonus. The intent of the 
demonstration project is to allow managers to retain the ability to 
determine how much, if any, of the GPI an Overcompensated (Region A) 
employee shall receive, on a case-by-case basis.
    (4) The employees whose base pay falls below the NPR (Region B) 
must receive the full GPI, may receive up to a 20 percent Contribution 
Base Pay Increase (higher amounts require the approval of the ARDEC 
Director), and may also receive a Contribution Bonus.
    (5) The employees on retained pay in the demonstration project will 
receive base pay adjustments in accordance with 5 U.S.C. 5363 and 5 CFR 
part 536. An employee receiving retained pay is not eligible for a 
Contribution Base Pay Increase, but may receive a Contribution Bonus.
    (6) Table 5 illustrates the additional pay adjustments possible for 
the three groupings of employees.

                                     Table 5--Compensation Eligibility Chart
----------------------------------------------------------------------------------------------------------------
                                                                                                 Locality pay/
            Category                 General pay      Contribution base   Contribution bonus       staffing
                                      increase          pay increase                            supplement \1\
----------------------------------------------------------------------------------------------------------------
--Above the NPR................  Could be reduced    NO................  NO.................  YES.
                                  or denied.
Within the NPR--...............  YES...............  YES \2\--Up to 6    YES \5\............  YES.
                                                      percent.
--Below the NPR................  YES...............  YES 3 4--Up to 20   YES \5\............  YES.
                                                      percent.
----------------------------------------------------------------------------------------------------------------
\1\ Base pay plus locality pay/staffing supplement may not exceed Executive Level IV, except for Band VI.
\2\ May not exceed upper rail of NPR for employee's AOCS or maximum base pay for current pay band level.
\3\ Over 20 percent requires ARDEC Director's approval.
\4\ May not exceed 6 percent above the lower rail or the maximum base pay for current pay band level.
\5\ Pay pool manager approves up to $10,000. Amounts exceeding $10,000 require ARDEC Director's approval.

    (7) In general, those employees whose base pay falls below the NPR 
should expect to receive greater percentage base pay increases than 
those whose base pay is above the NPR. Over time, people will migrate 
closer to the normal pay range and base pay appropriate for their level 
of contribution.
    (8) Employees whose AOCS would result in awarding a Contribution 
Base Pay Increase such that the base pay exceeds the maximum base pay 
for their current pay band level may receive a Contribution Bonus 
equaling the difference.
6. Accelerated Compensation for Developmental Positions (ACDP)
    ACDP provides for an increase to base pay, bonus, or a combination 
of these to employees participating in training programs or in other 
developmental capacities as determined by the ARDEC policy. ACDP 
recognizes growth and development in the acquisition of job-related 
competencies combined with successful contribution. In order to receive 
an ACDP, the employee must be in a pay and duty status and have been on 
an approved performance plan (may be from any system) for 90 days. Most 
ACDP increases will occur yearly, comparable to the GS intern career 
progression. However, when warranted (e.g., high turnover positions, 
hard-to-fill positions, exceptional performance by the employee), an 
ACDP increase may occur anytime during the year. Employees under an 
ACDP will follow the standard CBCS rating cycle. The employee is only 
entitled to the bonus component as a result of CBCS rating.

[[Page 55210]]

7. Extraordinary Achievement Recognition
    A pay pool manager may request approval from the ARDEC Director for 
use of an Extraordinary Achievement Recognition. Such recognition 
grants a base pay increase and/or bonus to an employee. The funds 
available for an Extraordinary Achievement Recognition are separately 
funded within budget constraints.
8. Awards
    To provide additional flexibility in motivating and rewarding 
individuals and groups, some portion of the award budget will be 
reserved for special acts and other categories as they occur. Awards 
may include, but are not limited to, special acts, patents, 
suggestions, on-the-spot, and time-off. The funds available to be used 
for traditional title 5 U.S.C. awards are separately funded within 
budget constraints.
    While not directly linked to the CBCS, this additional flexibility 
is important to encourage outstanding contribution and innovation in 
accomplishing the diverse mission of the ARDEC. Additionally, to foster 
and encourage teamwork among its employees, organizations may give 
group awards. The ARDEC Director will have the authority to grant 
Special Act Awards to covered employees of up to $25,000 IAW the 
criteria of AR 672-20, Incentive Awards.
9. Adverse Actions
    Except where specifically waived or modified in this plan, adverse 
action procedures under 5 CFR part 752 remain unchanged.
10. Grievance of Assessed Overall Contribution Score
    An employee may grieve the AOCS received under the CBCS. Non-
bargaining unit employees and bargaining unit employees covered by a 
negotiated grievance procedure that does not permit grievances over 
performance ratings must file under administrative grievance 
procedures. Bargaining unit employees whose negotiated grievance 
procedures cover performance rating grievances must file under those 
negotiated procedure. Payout amounts resulting from the contribution 
assessment cannot be grieved.
11. Inadequate Employee Performance/Contribution
    Inadequate performance/contribution at any time during the 
appraisal period is considered grounds for initiation of a 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 AOCS plots above the upper rail of the NPR and 
the employee is considered to be under-performing/contributing, 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 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, pay band level, or removed.
    The second option will include a Contribution Improvement Plan 
(CIP). The CIP must include standards for acceptable contribution, 
actions required of the employee, and time in which they must be 
accomplished to increase and sustain the employee's contribution at an 
acceptable level. When an employee is placed on a CIP, the rating 
official will afford the employee a reasonable opportunity (a minimum 
of 60 days) to demonstrate acceptable contribution. These provisions 
also apply to an employee whose contribution deteriorates during the 
year.
    Employees who are on a CIP at the time pay determinations are made 
do not receive performance payouts or the annual GPI. Employees who are 
on a CIP will not receive any portion of the GPI or RIF service credit 
until such time as his/her performance improves to the acceptable level 
and remains acceptable for at least 90 days. When the employee has 
performed acceptably for at least 90 days, the GPI and RIF service 
credit will be reinstated at the beginning of the next pay period. No 
retroactive GPI will be paid for time lost under a CIP.
    Once an employee has been afforded a reasonable opportunity to 
demonstrate acceptable contribution but fails to do so, a reduction-in-
pay (which may include a change to a lower pay band 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 unacceptable level, the employee will be afforded an 
additional opportunity to demonstrate acceptable 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 unacceptable 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 pay or remove an employee for unacceptable 
contribution may be based only on those instances of unacceptable 
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 unacceptable 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 unacceptable 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 acceptable contribution.

D. Hiring Authority

1. Qualifications
    The qualifications required for placement into a position in a pay 
band within an Occupational Family will be determined us