Science and Technology Reinvention Laboratory Personnel Management Demonstration Project, Department of Navy, Office of Naval Research, 77380-77447 [2010-30876]

Agencies

• Office of the Secretary
• DEPARTMENT OF DEFENSE

[Federal Register Volume 75, Number 237 (Friday, December 10, 2010)]
[Notices]
[Pages 77380-77447]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-30876]



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Part V





Department of Defense





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Office of the Secretary



Science and Technology Reinvention Laboratory Personnel Management 
Demonstration Project, Department of Navy, Office of Naval Research; 
Notice

Federal Register / Vol. 75 , No. 237 / Friday, December 10, 2010 / 
Notices

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DEPARTMENT OF DEFENSE

Office of the Secretary


Science and Technology Reinvention Laboratory Personnel 
Management Demonstration Project, Department of Navy, Office of Naval 
Research

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

ACTION: Notice.

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SUMMARY: Section 342(b) of Public Law (Pub .L.) 103-337, as amended by 
section 1114 of Public Law 106-398, authorizes the Secretary of Defense 
(SECDEF) to conduct personnel management demonstration projects at 
Department of Defense (DoD) laboratories designated as Science and 
Technology Reinvention Laboratories (STRLs). Section 1107 of Public Law 
110-181, as amended by section 1109 of Public Law 110-417, requires the 
SECDEF to execute a process and plan to employ the Department's 
personnel management demonstration project authorities found in section 
4703 of title 5, United States Code (U.S.C.) at the STRLs enumerated in 
section 9902(c)(2) of title 5 U.S.C., as redesignated in section 1105 
of Public Law 111-84 and 73 Federal Register (FR) 73248, to enhance the 
performance of the missions of the laboratories. Section 1107 of Public 
Law 110-181 further authorizes in subsection 1107(c) that any 
flexibility available to any demonstration laboratory shall be 
available for use at any other laboratory as enumerated in section 
9902(c)(2) of title 5 U.S.C. The Office of Naval Research (ONR) is 
listed as one of the designated STRLs.
    This notice announces the approval of the final personnel 
demonstration project plan for the ONR. This includes adoption of 
existing demonstration project flexibilities in other STRL 
demonstration project plans and any necessary modifications thereto for 
better conformance to the ONR mission requirements and culture.

DATES: Implementation of this demonstration project will begin no 
earlier than December 1, 2010.

FOR FURTHER INFORMATION CONTACT: Office of Naval Research: Ms. Margaret 
J. Mitchell, Director, Human Resources Office, Office of Naval 
Research, 875 North Randolph Street, Code 01HR, Arlington, VA 22203; 
Margaret.J.Mitchell@navy.mil.
    DoD: Ms. Betty A. Duffield, CPMS-PSSC, Suite B-200, 1400 Key 
Boulevard, Arlington, VA 22209-5144

SUPPLEMENTARY INFORMATION:

1. Background

    Since 1966, many studies of Department of Defense (DoD) 
laboratories have been conducted on laboratory quality and personnel. 
Almost all of these studies have recommended improvements in civilian 
personnel policy, organization, and management. 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 department heads and/or directors.
    This demonstration project involves: (1) Streamlined delegated 
examining; (2) noncitizen hiring; (3) expanded detail authority; (4) 
extended probationary period for newly hired employees; (5) expanded 
temporary promotion; (6) voluntary emeritus program; (7) pay banding; 
(8) contribution-based compensation system; (9) performance-based 
reduction-in-pay or removal actions; and (10) reduction-in-force (RIF) 
procedures.

2. Overview

    DoD published notice in 73 FR 73248, December 2, 2008, that 
pursuant to subsection 1107(c) of Public Law 110-181 the three STRLs 
listed in 73 FR 73248 not having personnel demonstration projects at 
this time may adopt the flexibilities of the other laboratories listed 
in subsection 9902(c)(2), as redesignated in section 1105 of Public Law 
111-84. ONR is one of the three STRLs specified in this provision.
    Accordingly, ONR intends to build its demonstration project using 
flexibilities adopted from existing STRL demonstration projects 
(specifically the Naval Research Laboratory (NRL), Aviation Missile 
Research, Development and Engineering Center (AMRDEC), Medical Research 
and Materiel Command (MRMC), and Communications-Electronics Research, 
Development and Engineering Center (CERDEC)). Final plans for the NRL, 
AMRDEC, MRMC, CERDEC personnel management demonstration projects were 
published in Federal Registers as follows:
     Department of the Navy: NRL--64 FR 33970, June 24, 1999. 
No amendments have been published;
     Department of the Army: AMRDEC--62 FR 34876 and 62 FR 
34906, June 27, 1997; and amendments and/or corrections to final plans 
published--64 FR 11074, March 8, 1999; 64 FR 12216, March 11, 1999; 65 
FR 53142, August 31, 2000; and 67 FR 5716, February 6, 2002;
     Department of the Army: MRMC--63 FR 10439, March 3, 1998; 
and amendments and/or corrections to final plans published--64 FR 
30377, June 7, 1999; 64 FR 12216, March 11, 1999; 65 FR 53142, August 
31, 2000; and 67 FR 5716, February 6, 2002; and
     Department of the Army: CERDEC--66 FR 10439, October 30, 
2001.
    On May 28, 2010, DoD published the proposed ONR demonstration 
project plan in 75 FR 30918. During the public comment period ending 
June 28, 2010, DoD received comments from 22 individuals. All comments 
were carefully considered.
    The following summary addresses the comments received, provides 
responses, and notes resultant changes to the original proposed project 
plan. Most commenters addressed several topics which are counted 
separately. Thus, the total number of comments exceeds the number of 
individuals cited earlier.

A. General Project Comments

    (1) Comment: Five commenters addressed the necessity and wisdom of 
implementing a laboratory personnel demonstration project at ONR 
considering the recent repeal of the DoD National Security Personnel 
System (NSPS), and that the implementation of a demonstration project 
similar to NSPS could not improve overall performance of an above-
average organization and could only create controversial concerns for 
ONR's workforce.
    Response: Government studies have validated the need for 
establishing different personnel systems within STRLs. There are 
currently eight operating STRL Personnel Demonstration Projects with 
another seven STRL personnel demonstration projects pending expected 
implementation between December 2010 and April 2011. These seven STRLs 
were mandated to implement a demonstration project within eighteen 
months of enactment of NDAA for FY 2010 (Public Law 111-84) by section 
1105 of that law. Regarding the similarity to NSPS, ONR's demonstration 
project does have foundational similarities, but its rating and payout 
structures differ from NSPS.

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    (2) Comment: One commenter wanted to know what the reasons are 
behind ONR's decision to implement a demonstration project.
    Response: Section 1105 of Public Law 111-84 requires all STRLs 
named therein to implement a demonstration project within 18 months of 
the enactment of the law. Regardless of the legal mandate to implement 
a demonstration project, ONR has displayed a continued interest in 
having a demonstration project since 2001. Since that time, ONR 
leadership has believed that a personnel demonstration project will 
enable greater overall organizational effectiveness, enable ONR to 
sustain a quality workforce, improve overall employee satisfaction, and 
ultimately improve ONR's ability to achieve its mission.
    (3) Comment: One commenter felt that the implementation of a 
demonstration project performance management system will be overly 
cumbersome, elaborate, and time consuming.
    Response: The performance management system to be carried out under 
the demonstration project will require more attention from employees 
and supervisors when compared to the General Schedule's performance 
management system. The demonstration project places a greater emphasis 
on performance management by utilizing the concepts of cascading, line-
of-sight goals and on-going performance communications. Organizations 
employing such techniques in their performance management systems 
experience increased productivity and customer satisfaction. A primary 
goal of the performance management system under ONR's demonstration 
project is to facilitate a decrease in misdirected work activities, and 
as a result, provide meaning and distinguishing value to the employee's 
work and contributions.
    (4) Comment: Three commenters questioned ONR's decision to adopt 
the Naval Research Laboratory's demonstration project, as they do not 
see a similarity between NRL's and ONR's operation, location, and 
workforce structure.
    Response: Although there are some important differences between 
work performed by NRL and ONR, there are close similarities between the 
workforces. Just like NRL, ONR has a highly educated and experienced 
workforce, with expertise in science, engineering, acquisition/
contracting, finance, and other professional areas. The demonstration 
project programs that were designed to attract, motivate, reward, and 
retain the NRL workforce have been carefully reviewed by ONR management 
to be sure they are right for the ONR workforce. Where needed, some 
modifications to NRL's programs have been made to better suit ONR's 
workforce needs and culture. The demonstration project programs are not 
dependent on where the employees are physically working, but rather 
they make up a new system for the Command to manage and reward all 
employees' work and contributions consistently and fairly.
    (5) Comment: Two commenters inquired about the possibility of 
conducting a pilot demonstration project at ONR Headquarters to test 
the demonstration project programs prior to implementation at the 
regional or global offices.
    Response: As established by section 1105 of Public Law 111-84, ONR 
must implement a demonstration project before the end of April 2011 for 
all eligible employees, regardless of the location of their official 
duty station. Due to the deadline of this mandate, there is not 
sufficient time to design, implement, and test a small pilot before 
activating the demonstration project for all eligible ONR employees.
    (6) Comment: One commenter believed that the WIGI buy-in 
calculation is flawed for OCONUS employees because the formula assumes 
everyone receives locality pay. This was specifically in reference to 
paragraph 5 on page 30217 stating that special salary employees will be 
eligible to receive full locality pay and OCONUS employees do not 
receive locality pay.
    Response: The determination of basic pay (not including locality 
pay or a special salary rate) is the foundation of the formula for both 
the WIGI buy-in and the recalculation of pay for an employee on a 
special salary rate. Once the new basic pay is determined in either 
situation, any WIGI buy-in is added to the new basic pay and the sum is 
multiplied by a locality pay percentage, if appropriate. If the new 
basic pay exceeds the maximum for the current pay band, the employee 
will be granted maintained pay.
    (7) Comment: One commenter asked how Living Quarters Allowance 
(LQA) and post allowance levels established by the Department of State 
Standardized Regulations (DSSR) would be determined under Lab Demo.
    Response: Typically, personnel demonstration projects determine a 
General Schedule grade equivalency using their conversion out of the 
demonstration project schema to determine entitlements to such items as 
Living Quarters Allowance, training, base housing, etc. The equivalent 
General Schedule grade is then used to compare with the entitlement 
requirements. For example, the demo General Schedule equivalency grade 
would be compared to the LQA matrix chart containing GS grades in 
section 135.2 of the DSSR to determine comparable LQA entitlements.
    (8) Comment: One commenter asked how the Global offices will be 
supported when there is a large time-zone difference and ONR's Human 
Resource (HR) department is not opened 24 hours a day.
    Response: ONR's Global offices will continue to receive the same 
high level of support under the demonstration project as they do 
currently under the General Schedule. Based on the experience of other 
previously implemented personnel demonstration projects, ONR does not 
anticipate any issues associated with the demonstration project that 
would require routine around-the-clock access to the Headquarters HR 
Department. ONR HR will endeavor to respond to any concern within 24 
hours on demo issues and make accommodations for their Global customers 
to ensure continued enhanced customer satisfaction.
    (9) Comment: One commenter noted that ONR has primarily adopted 
NRL's STRL personnel demonstration project, and used in its FRN the 
language from NRL's original FRN. A proposed amendment has since been 
written by NRL and the commenter recommended that ONR review NRL's 
proposed amendment and adopt the suggested changes as appropriate. The 
commenter also recommended ONR review the minor changes that NRL made 
as well and include those where appropriate.
    Response: ONR agrees with the commenter and has carefully reviewed 
NRL's amendment and list of minor changes. ONR has modified the FRN in 
a number of places as a result of this review and those changes are 
listed in the subsequent summary of substantive changes.

B. CCS Appraisal Process

    (1) Comment: One commenter expressed concern that employees will be 
told verbally by their supervisors to expect a certain Overall 
Contribution Score (OCS) and payout but the actual payout amount 
received would be less than what the employee was led to expect by 
their supervisor.
    Response: Under ONR's demonstration project, standard operating 
procedures and policies will be such that employees receive 
notification of their OCS and adjusted basic pay including locality 
only after a final decision has been rendered by the Pay Pool Panel. 
Employees are not to be

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made aware of their initial suggested score provided by their 
supervisor or potential adjusted basic pay prior to the Pay Pool 
Manager's approval of the Pay Pool Panel's final decision.
    (2) Comments: Fairness: Six commenters stated concerns about the 
equitable application of the evaluations made under the Contribution-
based Compensation System (CCS). Two commenters thought the system was 
too subjective and favoritism would drive the process. One commenter 
expressed concern that more credit would be given to scientific than 
support personnel. One commenter felt that the CCS system would only 
reward supervisors for outcomes and ultimately create a negative 
working environment for their subordinates. Two commenters discussed 
the need for a 360-degree performance evaluation plan for supervisors 
to ensure accountability for their performance management duties.
    Response: To promote fairness and reduce favoritism, the CCS 
process provides for review of employee assessments by a group of 
supervisory officials who are in the same pay pool. In the pay pool 
panel process, scores assigned by individual supervisors are reviewed 
by other supervisors in the same pay pool. The supervisors work to 
apply the CCS level descriptors consistently within their pay pool, and 
to identify and correct any inappropriately inflated or deflated 
scores. The pay pool manager provides an additional level of review and 
is the ultimate approval level. CCS contains various mechanisms to 
ensure employees receive proper credit under the generic contribution 
elements, descriptors, and discriminators. Contribution elements may be 
weighted, expectations and results to be achieved for the work assigned 
may be described in supplemental criteria, and discriminators may be 
considered either separately or in a more integrated manner for groups 
of employees. Meaningful assessment demands consideration of quality, 
value, customer service, and other criteria can be established early in 
the cycle and described in supplemental information to the CCS factors. 
Flexibility was deemed necessary for individual divisions to tailor the 
system to their special needs. Supervisors will continue to determine 
the value of employees' accomplishments when assessing their 
contributions. Work valued under the current system will continue to be 
valued under CCS. In addition, supervisors and employees will be 
encouraged to communicate throughout the appraisal period to avoid 
misunderstandings at the end of the year.
    The primary benefit expected from Lab Demo is greater 
organizational effectiveness through increased supervisor and employee 
interaction leading to enhanced employee involvement, communication, 
understanding, satisfaction, and productivity. Lab Demo training, 
targeting the CCS process and goals, has been rolled out across the 
Command to ensure a synonymous understanding of performance management 
practices for both employees and supervisors, and to ensure that proper 
performance management techniques will occur under CCS. The CCS 
performance management process is designed to help supervisors create a 
performance culture in which the performance and contributions of the 
workforce are linked to the ONR mission. This in turn will add meaning 
to the employee's job and contributions.
    Supervisors will be held accountable for their performance 
management duties under CCS. The CCS contribution elements and level 
descriptors specifically include expectations regarding performance 
management and workforce development to recognize the importance of 
this value at ONR.
    The managers/second-line supervisors have always been free to 
solicit feedback from subordinate employees and other customers to 
consider in assessing and appraising the supervisory effectiveness of 
their direct subordinates and their employees. This will continue to be 
an option under CCS. However, a formal program providing for 360-degree 
evaluations for supervisors has not currently been implemented. ONR has 
also provided mandatory hands-on training for supervisors that 
emphasized supervisory responsibilities and how to engage employees in 
the performance management process. In addition, supervisor performance 
will be evaluated as an enhancement of the normal pay pool process.
    (3) Comment: One commenter questioned the use of the CCS terms 
Overcompensated and Undercompensated. The commenter felt that both 
terms have a negative connotation and will not be received well by the 
workforce.
    Response: ONR agrees these terms could have a potential negative 
connotation to some employees. However, because ONR is adopting the CCS 
automated system from NRL where these terms are hosted, ONR has decided 
to adopt these terms as well in order to make efficient use of 
available resources. Other demos have used and are using these terms, 
including NRL which has not experienced any difficulties as a result of 
this terminology. It is important to note that the over- and 
undercompensated nomenclature do not reflect employees' work ethic and/
or the value of their work.
    (4) Comment: One commenter stated that the grouping of different 
General Schedule (GS) grades in the same pay band and pay pool will not 
incentivize the workforce to take on supervisory/team lead positions; 
instead, it will inhibit one's decision to take on a leadership role 
since, for example, a GS-14 could potentially make the same amount as a 
GS-15 without taking on the added leadership responsibilities.
    Response: This commenter may have misunderstood the purpose and 
intent behind pay banding (grouping GS grades into one pay band). One 
of the goals of ONR's demonstration project is to provide a 
compensation system that will provide more flexibility to enable ONR to 
compensate its employees equitably at a rate that is commensurate with 
their levels of responsibility and contribution, and is more 
competitive with those found in the labor market. Although the General 
Schedule system did allow an organization to distinguish levels of 
performance and provide different levels of rewards, the demonstration 
project will provide more authority and flexibility for ONR to utilize 
a wider variety of recognition. By implementing pay banding, ONR will 
have the opportunity to provide a more direct link between levels of 
individual contribution and the compensation received. ONR will be able 
to compensate their workforce in a manner that is appropriate to their 
contribution. Basic pay increases will no longer be automatic under Lab 
Demo. Therefore, the workforce should have increased motivation to take 
on leadership and/or supervisory roles in order to have a higher 
contribution, thus having eligibility for a larger payout. In addition, 
ONR has decided to adopt a Supervisory Pay Adjustment and Differential 
flexibility providing even additional incentive for the workforce to 
take on supervisory/team lead positions.
    (5) Comment: One commenter noted that the Contribution Elements had 
not yet been finalized by leadership and still needed to be reviewed 
and possibly modified.
    Response: This commenter is correct and ONR's leadership has 
reviewed and modified the Contribution Elements as needed. The revised 
Contribution Elements are included in this version of the FRN.
    (6) Comment: One commenter noted that OCSs against normal pay range

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would actually not be available until January; therefore, any reference 
to providing them at the beginning of the performance assessment cycle 
was incorrect.
    Response: ONR agrees and has modified the FRN to reflect that OCSs 
applicable to an employee's normal pay range for each appraisal period 
will be available when pay actions are effected in January.

C. Compensation

    (1) Comment: Two commenters had questions pertaining to those 
individuals who are at the top of their pay band and questioned how 
under the new system those employees would receive any benefit; whether 
these individuals could receive additional compensation, and how the 
system specifically would benefit, those that were assigned to a pay 
band that hosted only one GS grade.
    Response: If an employee's basic pay is at the top of the pay band, 
s/he can receive a pay increase that is commensurate with the general 
increase designated by Congress for that year. An employee whose basic 
pay is at the maximum of her/his pay band may receive recognition 
through a contribution award, Time-off Award, or a combination of both. 
For those employees entering into a pay band that hosts only a single 
grade, they will only be eligible for basic pay assigned to that pay 
band. However, the employee may have the opportunity to advance to a 
pay band with a higher maximum basic pay through a CCS promotion, if 
appropriate.
    (2) Comment: One commenter expressed concern over the possibility 
of the science and engineering professionals' pay pool receiving 
disproportionate funding over the other pay pools in order to provide 
greater benefit to those in the Science and Engineering Career Track 
with greater bonuses and basic pay increases over others at ONR.
    Response: The pay pool funding normally will be set percentages of 
the total basic pay of all eligible employees in a specific pay pool. 
The pay pool funding percentages are the same for all pay pools. The 
percentage of basic pay allotted for basic pay increases for employees 
in the ONR pay pools will be the same for each pay pool, and the 
percentage of basic pay allotted for contribution bonuses will also be 
the same for each pay pool. For example, if the total basic pay of the 
employees in Pay Pool A is $1,000,000 and the total basic pay of the 
employees in Pay Pool B is $2,000,000, then the pay pool funding for 
performance-based contribution awards (using ONR's historical 
percentage of 1.5% for contribution-based bonuses) would be $15,000 for 
Pay Pool A and $30,000 for Pay Pool B to be distributed among their 
respective members based on contribution.
    (3) Comment: Four commenters suggested for ONR to adopt a 
flexibility for Supervisory Pay Differentials and Adjustments to 
compensate supervisors for their additional performance management 
responsibilities and workload.
    Response: ONR agrees with the commenters and has adopted CERDEC's 
flexibility for a Supervisory Pay Differential and Adjustment.
    (4) Comment: One commenter expressed concern that a decision could 
be made by the pay pool panel to decrease an employee's compensation.
    Response: Under CCS, as with the General Schedule, an employee's 
salary can only decrease as a result of an adverse or performance-based 
action. This requirement currently operates under the General Schedule 
and will be retained by the demonstration project to preserve an 
emphasis on employee performance and conduct under a contribution-based 
compensation system. The CCS rating system by itself does not implement 
any mechanism to decrease an employee's basic pay. During the actual 
CCS rating process and pay pool panel deliberations an employee's basic 
pay will not be decreased. If based on the OCS and current salary an 
employee is assessed to be in the Overcompensated category then that 
employee would not be eligible for a merit increase or contribution 
award, and may or may not receive a general increase. They would still 
receive locality pay.
    (5) Comment: One commenter noted the adjusted minimum basic rate of 
pay for the S&E Professional Level V needs to be adjusted to be 120% of 
the GS-15, step 1, basic pay rate for 2010, or $119,554.
    Response: ONR agrees and has made the change where applicable in 
the FRN.

D. Accessions and Internal Placements

    (1) Comment: One Commenter expressed the need for ONR to have Lab 
Demo training required for all new hires.
    Response: ONR agrees and will make Lab Demo training mandatory for 
all new employees and new supervisors.
    (2) Comment: One commenter questioned if veterans' preference still 
applied under the demonstration project and if ONR's demonstration 
project complied with laws protecting veterans and disabled veterans.
    Response: All statutes and regulations covering veterans' 
preference will be observed under all lab demonstration programs.

E. Technology

    (1) Comment: One commenter expressed the concern that the RIF 
Support Systems (RIFSS) could not accommodate NRL's need and ONR should 
reconsider if they will still use this system or adopt another.
    Response: ONR agrees and prior to committing specifically to RIFSS 
will look closely at the system's availability and capacity.
    (2) Comment: One commenter pointed out that DCPDS is no longer a 
legacy system.
    Response: ONR agrees and the language in Section X.B. has been 
modified accordingly.
    (3) Comment: One commenter noted that ONR does not intend to use 
the COREDOC application to generate RDs.
    Response: The commenter is correct and ONR will be using RDWriter 
instead. The language in Section X.C. has been updated to reflect the 
correct tool intended to be used.

F. Classification

    (1) Comment: Three commenters did not believe that some of the 
occupational series were correctly aligned with the proper career 
tracks; one stated that 0335, Computer Clerk series, was listed under 
both Administrative Support and Administrative Specialist and 
Professional and only belonged in the Administrative Support Career 
Track; the second stated that 0110, Economist series, should be moved 
to the S&E Professional Career Track because of the similarities to the 
education requirements and other social science professions included in 
that Career Track; and a third stated that 0802, Engineering Technician 
series, should not be in the Science and Engineering Professional 
Career Track but rather in the Administrative Specialist and 
Professional Career Track.
    Response: ONR management agrees with the reasoning of the first 
commenter. Therefore, occupational series 0335 will only be aligned 
with the Administrative Support Career Track. Based on the work being 
done, the qualifications required, and how other STRLs, such as the Air 
Force Research Laboratory, have classified 0110, ONR management 
disagrees with the second commenter and occupational series 0110 will 
remain in the Administrative Specialist & Professional Career Track. In 
the case of the third commenter, ONR management agrees and since ONR 
does

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not have a technical career track, the proper classification for 0802 
is the Administrative Specialist and Professional Career Track.
    (2) Comment: Seven commenters felt that the construction of the pay 
band levels for the Administrative Specialist and Professional Career 
Track is either unfair or biased. One commenter specifically noted pay 
band IV in the Administrative Specialist and Professional career track 
sets an unfair barrier for those employees who are currently a GS-13, 
and in turn signals that their work is of less importance and therefore 
is not mixed with higher GS grades. Six commenters specifically 
questioned why the Administrative Specialists and Professionals Career 
Track does not have an Above 15 Pay Band the same way the S&E 
Professionals Career Track does and feel it unfairly elevates the 
importance of the S&E group over the Administrative Specialist and 
Professionals.
    Response: In accordance with DoD Instruction 1400.37, pages 73248 
to 73252 of volume 73, ONR's demonstration project was modeled after 
the demonstration project implemented at NRL. During the initial review 
of ONR's demonstration project, ONR leadership learned that any change 
to the NRL pay band structure would have created a year's delay in 
implementing ONR's demonstration project, due to additional approval 
and IT system modification requirements. Given the NDAA requirement 
that ONR be under a Lab Demo before the end of April 2011, an 
additional year to implement was not an option. ONR leadership 
evaluated NRL's pay bands and concluded that the NRL structure would 
work with ONR's current career paths and GS breakdown of the workforce. 
ONR leadership decided to move forward with the NRL pay band structure. 
Operational procedures and guidelines will address any unintended 
limitations that this structure would impose on the career progression 
of ONR employees. For example, there will be procedures for non-
competitive promotion between bands (if in a career ladder position or 
if warranted by level of work and value of contributions).
    ONR made the decision to participate in the DoD initiative to 
implement an Above 15 Pay Band for scientific and engineering 
professionals in order to take advantage of an opportunity to correct a 
critical void in classification standards and guidance for civilian 
senior executive Scientific and Professional (ST) and Senior Executive 
Service (SES) positions. This void impacted an organization's ability 
to advance scientific and engineering positions which surpass the GS-15 
classification criteria because of the combination of excellent 
scientific and/or engineering expertise and performance of high-level 
science and technology (S&T) research and development work with 
significant technical supervisory and managerial responsibilities 
comprising 25 percent or more of the position's time. These positions 
were not considered to be appropriately classified as STs because of 
the degree of supervisory and managerial responsibilities. Conversely, 
these positions were not appropriately classified as SES positions 
because of their requirement for highly specialized scientific or 
engineering expertise and because the positions were not at the level 
of general managerial authority and impact required for an SES 
position.
    (3) Comment: Two commenters questioned ONR's proposed pay band 
grade composition and if it was the most suitable structure for ONR. 
One commenter suggested that both the S&E Professional and 
Administrative Specialist and Professional Career Tracks should be 
modified to have GS-5 through GS-13 in one pay band. Another commenter 
suggested that a specific position could be more easily/appropriately 
filled if the Administrative Support Career Track pay bands were 
modified to include at least up to a GS-12 level.
    Response: As stated in the response to previous comments, ONR 
leadership evaluated NRL's pay bands and concluded that the NRL 
structure would work with ONR's current career paths and GS breakdown 
of the workforce. The different pay band structures in the Career 
Tracks support the various levels of duties, qualifications, and types 
and scope of work encompassed by ONR's position management structure. 
Therefore, ONR management considers the NRL pay banding scheme 
appropriate at this time. Since 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 new system is working.
    (4) Comment: One commenter questioned the approval process 
designated for promotions under ONR's demonstration project. The 
commenter felt that including the CNR's approval for certain promotions 
(laid out in section IV.C.8) would slow down the promotion process and 
actual create a more inflexible system for promotions.
    Response: ONR agrees with the commenter's concern and has made the 
appropriate change under section IV.C.8. It is not ONR's intent to make 
the promotion process less flexible under the demonstration project. 
Thus, all individuals covered under the demonstration project who are 
eligible for a promotion will need a promotion nomination by their 
supervisor, endorsement from the pay pool panel, and final approval by 
the pay pool manager. CCS Promotions under the demonstration project 
will not need approval beyond the pay pool manager.
    (5) Comment: One commenter stated that the Career Promotion 
Eligibility clause needed to be expanded to include those employees who 
may be eligible for an established career ladder promotion to a grade 
encompassed in the next higher pay band during the first 12 months of 
the demonstration project and as a result would advance into a higher 
pay band.
    Response: ONR agrees with the commenter's point and the Career 
Promotion Eligibility clause in the FRN has been modified to also cover 
previously established career ladders which would contain a career 
promotion that would be into a higher pay band within the first 12 
months of the demonstration project if recommended and the employee 
meets all requirements. The FRN language has been edited to make this 
clause clearer.

G. Formatting and Language

    (1) Comment: Eight commenters made note of various places in the 
FRN where language was inconsistently used or information was not 
consistent; the term pay band should be used in places where the term 
career level was used instead; score ranges and basic pay information 
listed in the appendices was in some instances different than what was 
listed in the main part of the document; in various places footnotes do 
not show up in the correct place or are non-existent; in the normal pay 
range graph in the appendix it should read mid-rail and not med-rail; 
and Figure 4 is missing the word `review' for Administrative Support 
Career Track pay band III.
    Response: ONR agrees and has made these appropriate changes and 
corrections to formatting and the text.
    (2) Comment: Three commenters noted places where language was vague 
and needed to be clarified; the language in section VI.A.4 was noted to 
be unclear; the language in section IV.C.2 and 3 is unclear if there 
will only be one pay pool manager; and section VI.A.3 the language was 
noted as not being clear if this was a prorated portion.
    Response: ONR agrees and in each of the sections listed above the 
language has been edited for clarification.

[[Page 77385]]

3. Demonstration Project Notice Changes

    The following is a summary of substantive changes and 
clarifications which have been made to the project proposal.
    A. Supplementary Information, Overview. Added MRMC and CERDEC to 
the list of existing STRL demonstration projects from which ONR is 
using flexibilities to build its demonstration project.
    B. III.H.2. Internal Actions. Added a flexibility for Supervisory 
Pay Adjustments and Supervisory Pay Differentials.
    C. IV.A.1.d. Fair Labor Standards Act. Corrected Figure 4 by 
including the word `review' for Pay Band III of the Administrative 
Support career track.
    D. IV.C.4. Annual CCS Appraisal Process. The current FRN states 
that employees will be notified of the Overall Contribution Scores 
(OCSs) which correspond to each employee's Normal Pay Range (NPR) at 
the beginning of the appraisal period. This is corrected to state that 
OCSs which correspond to each employee's NPR will be available after 
pay adjustments have been processed, normally early-to-mid January.
    E. IV.C.4 and 5. Annual CCS Appraisal Process and Exceptions. 
Provision added that requires employees who serve less than 90 days 
during an appraisal cycle to receive a presumptive rating of 
acceptable.
    F. IV.C.4. Annual CCS Appraisal Process. In order to ensure 
compliance with state bar rules a provision was added that prohibits 
the pay pool panel from changing CCS scores on ONR attorneys provided 
by the ONR Counsel.
    G. IV.C.4 and 5. Exceptions. Clarified the conditions for which 
employees who would normally be exempted from the CCS process may still 
be given a CCS score.
    H. IV.C.8.b. Career Movements based on CCS. Corrected to state that 
it is the ONR Executive Director and not the CNR which must approve 
certain promotions.
    I. IV.C.9. Grievance Process. Modified to clarify the process; 
prevent the need for the ONR Executive Director from possibly deciding 
the same grievance twice; inform employees that the contents of the CCS 
Plans are nongrievable as were the contents of performance plans in the 
traditional performance management system; and ensure compliance with 
state bar rules.
    J. VI.A.3. WGI Buy-in. Added clarifying language to state that 
employees will be provided a prorated portion.
    K. VI.A.4. Career Promotion Eligibility. Modified to state that an 
exception will also be made for employees who become eligible for a 
career ladder promotion during the first 12 months after conversion if 
their promotion would cause them to move to a higher pay band. Examples 
included providing greater clarity to the entire section.
    L. VI.D. New Hires. Modified to add that mandatory demonstration 
project training will be provided to new employees and new supervisors.
    M. VI.D.3. New Hires. Provided clarification for Federal employees 
who are on retained pay or who are receiving special salary rates and 
are moving into the ONR demonstration project.
    N. VI.E.1.Grade Determination. Clarified conversion-out rules when 
there are more than two GS grade levels in a career field.
    O. X. Automation. Clarified that DCPDS is not a legacy system, that 
RD Writer will be used instead of COREDOC, and that the automated tool 
RIFSS will not specifically be used.
    P. Appendix A. Updated chart based on the addition of the 
supervisory pay adjustment and differential flexibility, and added the 
MRMC Career Promotion flexibility which had mistakenly been left out 
previously.
    Q. Appendix B. Added required waivers for; the Supervisory Pay 
Adjustment and Differential Flexibility; the presumptive rating of 
acceptable for employees who serve less than 90 days, and the Voluntary 
Emeritus Program (which were erroneously left out previously).
    R. Appendix D. Corrected 0335, Computer Clerk series, to be listed 
only under the Administrative Support career track and moved the 0802 
series to the Administrative Specialist and Professional Career Track.
    S. Appendix E. Science & Engineering Professional contribution 
elements were updated to provide additional clarification of the 
discriminators.
    T. Appendix F. Integrated pay chart was updated to reflect the 
minimum basic pay for S&E pay band V as $119,554.

4. Access to Flexibilities of Other STRLs

    Flexibilities published in this Federal Register 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 the 
fulfilling of any collective bargaining obligations.

    Dated: December 2, 2010.
Patricia Toppings,
OSD Federal Register Liaison Officer, Department of Defense.

Table of Contents

I. Executive Summary
II. Introduction
    A. Purpose
    B. Problems with the Current System
    C. Waivers Required
    D. Expected Benefits
    E. Participating Organizations and Employees
    F. Project Design
III. Accessions and Internal Placements
    A. Hiring Authority
    1. Background
    2. Delegated Examining
    B. Legal Authority
    C. Determining Employee and Applicant Qualifications
    D. Noncitizen Hiring
    E. Expanded Detail Authority
    F. Extended Probationary Period
    G. Definitions
    1. Basic Pay
    2. Maintained Pay
    3. Promotion
    4. Reassignment
    5. Change to Lower Pay Band
    6. Pay Adjustment
    7. Detail
    8. Highest Previous Rate
    9. Approving Manager
    H. Pay Setting Determinations Outside the CCS
    1. External New Hires
    2. Internal Actions
    a. Promotion.
    b. Pay Adjustment (Voluntary Change to Lower Pay) or Change to 
Lower Pay Band (except RIF).
    c. Pay Adjustment (Involuntary Change to Lower Pay) or Change to 
Lower Pay Band Due to Adverse or Performance-based Action.
    d. Involuntary Change to Lower Pay Band or Reassignment to a 
Career Track with a Lower Salary Range, Other than Adverse or 
Performance-based.
    e. RIF Action (including employees who are offered and accept a 
vacancy at a lower pay band or in a different career track).
    f. Upward Mobility or Other Formal Training Program Selection.
    g. Return to Limited or Light Duty From a Disability as a Result 
of Occupational Injury to a Position in a Lower Pay Band or to a 
Career Track With Lower Basic Pay Potential Than Held Prior to the 
Injury.
    h. Restoration to Duty
    i. Reassignment
    j. Student Educational Employment Program
    k. Hazard Pay or Pay for Duty Involving Physical Hardship
    l. Supervisory Pay Adjustments
    m. Supervisory Pay Differentials
    I. Priority Placement Program (PPP)
    J. Expanded Temporary Promotion

[[Page 77386]]

    K. Voluntary Emeritus Program
IV. Sustainment
    A. Position Classification
    1. Career Tracks and Pay Bands
    a. Target Pay Band
    b. Occupational Series and Position Titling
    c. Classification Standards
    d. Fair Labor Standards Act (FLSA)
    (1) Guidelines for FLSA Determinations
    (2) Nonsupervisory and Leader Positions
    (3) Supervisory Positions
    2. Requirements Document (RD)
    3. Delegation of Classification Authority
    a. Delegated Authority
    b. Position Classification Accountability
    B. Integrated Pay Schedule
    1. Annual Pay Action
    2. Overtime Pay
    3. Classification Appeals
    4. Above GS-15 Positions
    5. Distinguished Contributions Allowance (DCA)
    a. Eligibility
    b. Nomination
    c. Reduction or Termination of a DCA
    d. Lump-Sum DCA Payments
    e. DCA Budget Allocation
    f. Concurrent Monetary Payments
    C. Contribution-Based Compensation System (CCS)
    1. General
    2. CCS Process
    3. Pay Pool Annual Planning
    a. Element Weights and Applicability
    b. Supplemental Criteria
    4. Annual CCS Appraisal Process (See Figure 7)
    5. Exceptions
    6. Normal Pay Range (NPR)--Basic Pay Versus Contribution
    7. Compensation
    a. General Increases
    b. Merit Increases
    c. Locality Increases
    d. Contribution Awards
    8. Career Movement Based on CCS
    a. Advancements in Pay Band Which May Be Approved by the Pay 
Pool Manager
    b. Advancements in Pay Band Which Must Be Approved by the 
Executive Director
    c. Advancement To Pay Band V of the Science and Engineering 
(S&E) Professional Career Track
    d. Regression to Lower Pay Band (See Figure 8, ``Employee A'')
    9. CCS Grievance Procedures
V. Separations
    A. Performance-Based Reduction-in-Pay or Removal Actions
    B. Reduction-in-Force (RIF) Procedures
    1. RIF Authority
    2. RIF Definitions
    a. Competition in RIF
    b. Competitive Area
    c. Competitive Level
    d. Service Computation Date (SCD)
    (1) Federal SCD
    (2) CCS Process Results
    (3) Credit From Other Rating Systems
    (4) RIF Cutoff Date
    3. Displacement Rights
    a. Displacement Process
    b. Retention Standing
    c. Vacant Positions
    d. Ineligible for Displacement Rights
    e. Change to Lower Pay Band Due to an Adverse or Performance-
Based Action
    4. Notice Period
    5. RIF Appeals
    6. Separation Incentives
    7. Severance Pay
    8. Outplacement Assistance
VI. Demonstration Project Transition
    A. Initial Conversion or Movement to the Demonstration Project
    1. Placement Into Career Tracks and Pay Bands
    3. WGI Buy-In
    4. Career Promotion Eligibility
    5. Conversion of Special Salary Rate Employees
    6. Conversion of Employees on Temporary Promotions
    7. Non-Competitive Movement Into the Demonstration Project
    B. CCS Start-Up
    C. Training
    1. Types of Training
    a. Employees
    b. Supervisors and Managers
    c. Support Personnel
    D. New Hires Into the Demonstration Project
    E. Conversion or Movement From Demonstration Project
    1. Grade Determination
    2. Pay Setting
    3. Employees in Positions Classified Above GS-15
    4. Determining Date of Last Equivalent Increase
    F. Personnel Administration
    G. Automation
    H. Experimentation and Revision
VII. Demonstration Project Duration
VIII. Demonstration Project Evaluation Plan
    A. Overview
    B. Evaluation Model
IX. Demonstration Project Costs
    A. Cost Discipline
    B. Implementation Costs
X. Automation Support
    A. General
    B. Defense Civilian Personnel Data System (DCPDS)
    C. Requirements Document Writer (RDWriter)
    D. RIF Support System (RIFSS)
    E. Contribution-Based Compensation System Data System (CCSDC)
Appendix A. Summary of Demonstration Project Features Adopted by ONR
Appendix B: Required Waivers to Laws and Regulations
Appendix C: Definitions of Career Tracks and Pay Bands
Appendix D: Table of Occupational Series Within Career Tracks
Appendix E: Classification and CCS Elements
Administrative Support
Appendix F: Computation of the IPS and the NPR

I. Executive Summary

    This project adopts with some modifications the STRL personnel 
management demonstration project designed by NRL and additional 
flexibilities from the AMRDEC, MRMC, and CERDEC personnel management 
demonstration projects. The modified design of the demonstration 
project described herein was developed by ONR with the participation of 
and review by the DON, the DoD, and incorporation of the knowledge and 
design of other STRL demonstration projects.
    The Office of Naval Research (ONR) coordinates, executes, and 
promotes the science and technology programs of the United States Navy 
and Marine Corps. ONR's directorates balance a robust science and 
technology portfolio, allocating funds to meet the warfighter's 
requirements, focusing efforts on all three major phases of development 
funding: Basic research, applied research and advanced technology 
development. ONR's six science and technology departments coordinate 
and execute research in the areas of:
    1. Expeditionary Maneuver Warfare and Combating Terrorism
    2. Command, Control, Communications, Intelligence, Surveillance, 
and Reconnaissance
    3. Ocean Battlespace Sensing
    4. Sea Warfare and Weapons
    5. Warfighter Performance
    6. Naval Air Warfare and Weapons
    In order to sustain these unique capabilities, ONR must be able to 
hire, retain, and continually motivate enthusiastic, innovative, and 
highly-educated scientists and engineers, supported by skilled 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 ONR workforce through improvements in the 
efficiency and effectiveness of the human resource system. The project 
flexibilities will strive to achieve the best workforce for the ONR 
mission, adjust the workforce for change, and improve organizational 
efficiency. 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,

[[Page 77387]]

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 Current System

    The current Civil Service GS system has existed in essentially the 
same form since the 1920's. Work is classified into one of fifteen 
overlapping pay ranges that correspond with the fifteen grades. Basic 
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 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 ONR 
must be able to recruit and retain scientific, engineering, acquisition 
support and other professionals and skilled technicians. ONR 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.
    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.

C. Waivers Required

    ONR proposes changes in the following broad areas to address its 
problems in human resources management: Accessions and internal 
placements, sustainment, and separations. Appendix B lists the laws, 
rules, and regulations requiring waivers to enable ONR to implement the 
proposed systems. All personnel laws, rules, and regulations not waived 
by this plan will remain in effect. Basic employee rights will be 
safeguarded and Merit System Principles will be maintained.

D. 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 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 ONR 
workforce will facilitate:
    (1) Sustainment of ONR's quality scientific and business management 
workforces in today's competitive environment;
    (2) Improved employee satisfaction with pay setting and adjustment, 
recognition, and career advancement opportunities;
    (3) Human Resources (HR) flexibilities needed to staff and shape a 
quality workforce of the next 10-20 years;
    (4) Increased retention of high-level contributors; and
    (5) Simpler and more cost effective HR management processes.
    An evaluation model was developed for the Director, Defense, 
Research and Engineering (DDR&E) in conjunction with STRL service 
representatives and the 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.

E. Participating Organizations and Employees

    ONR is comprised of the ONR Headquarters in Arlington, Virginia, 
and ONR employees geographically dispersed at the locations shown in 
Figure 1. It should be noted that some sites currently have fewer than 
ten people and that the sites may change should ONR reorganize or 
realign. Successor organizations will continue coverage in the 
demonstration project.
    The demonstration project will cover approximately 450 ONR civilian 
employees under title 5, U.S.C. in the occupations listed in Appendix 
D. The project plan does not cover members of the Senior Executive 
Service (SES), Senior Level (SL), Scientific and Professional (ST), 
expert and consultant employees (EH), or Administratively Determined 
(AD) pay plans. However, SES, SL, and ST employees, after leaving 
Federal government service, may participate in the Voluntary Emeritus 
Program. There are no labor unions representing ONR employees.

[[Page 77388]]

[GRAPHIC] [TIFF OMITTED] TN10DE10.095

F. Project Design

    In response to the initial authority granted by Congress to develop 
a demonstration project, ONR chartered a design team to develop the 
project plan. The team was led by a senior ONR manager from outside the 
Human Resources Office (HRO) and was responsible for developing project 
proposals. The team was composed of 20 employees of different grade 
levels and in different occupations. There was a mix of managers, 
supervisors, and non-supervisors from offices throughout ONR. The team 
had the assistance of HR personnel from ONR and from NRL. It also 
received information and advice from OPM, the Office of the DUSD (CPP), 
and a number of organizations with on-going demonstration projects. 
Information and suggestions were solicited from ONR employees and 
managers through interviews, briefings, small-group meetings, and a 
suggestion program established specifically for the design effort. This 
plan was submitted to DUSD (CPP) in 2001. Work on this plan was 
postponed pending the outcome of several Departmental HR initiatives 
addressing new personnel systems.
    Following enactment of Public Law 110-181, ONR undertook an effort 
to review and resubmit the demonstration project plan. Upon extensive 
review and discussion with internal and external stakeholders, ONR 
leadership decided to adopt existing flexibilities according to 
subsection 1107(c) of Public Law 110-181 and DoDI 1400.37. 
Specifically, ONR proposes to adopt the NRL demonstration project plus 
additional flexibilities from the AMRDEC and MRMC demonstration 
projects. Appendix A summarizes the modifications proposed for each of 
the adopted project flexibilities and administrative procedures. 
Modifications to existing flexibilities are made when necessary to 
address ONR's specific organizational, workforce, and approval needs; 
technical modifications to conform to changes in the law and governing 
Office of Personnel Management (OPM) regulations, which are not being 
waived, that were effected after the publication of the NRL personnel 
demonstration project plan. Further changes to the project plan may be 
made in response to comments received during the 30-day comment period 
following publication of this notice.

III. Accessions and Internal Placements

A. Hiring Authority

1. Background
    Private industry and academia are the principal recruiting sources 
for scientists and engineers at ONR. It is extremely difficult to make 
timely offers of employment to hard-to-find scientists and engineers. 
Even when a candidate is identified, he or she often finds another job 
opportunity before the lengthy recruitment process can be completed.
2. Delegated Examining
    a. Competitive service positions within the ONR Demonstration 
Project will be filled through Merit Staffing or under Delegated 
Examining.
    b. The ``Rule of Three'' will be eliminated. When there are no more 
than 15 qualified applicants and no preference eligibles, all eligible 
applicants are immediately referred to the selecting official without 
rating and ranking. Rating and ranking will be required only when the 
number of qualified candidates exceeds 15 or there is a mix of 
preference and nonpreference applicants. Statutes and regulations 
covering veterans'

[[Page 77389]]

preference will be observed in the selection process and when rating 
and ranking are required. If the candidates are rated and ranked, a 
random number selection method using the application control number 
will be used to determine which applicants will be referred when scores 
are tied after the rating process. Veterans will be referred ahead of 
non-veterans with the same score.

B. Legal Authority

    For actions taken under the auspices of the ONR Demonstration 
Project, the legal authority, Public Law 103-337, will be used. For all 
other actions, ONR will continue to use the nature of action codes and 
legal authority codes prescribed by OPM, DoD, or DON.

C. Determining Employee and Applicant Qualifications

    Figure 2 displays the minimum General Schedule (GS) qualifications 
requirements for each career path and pay band. Special DON or DoD 
requirements not covered by the OPM Qualification Standards Operating 
Manual for GS Positions, such as Defense Acquisition Workforce 
Improvement Act (DAWIA) qualification requirements for acquisition 
positions, physical performance requirements for sea duty, work on 
board aircraft, etc., must be met.
[GRAPHIC] [TIFF OMITTED] TN10DE10.096

D. Noncitizen Hiring

    Where Executive Orders or other regulations limit hiring 
noncitizens, ONR will have the authority to approve the hiring of 
noncitizens into competitive service positions when qualified U.S. 
citizens are not available. Under the demonstration project, as with 
the current system, a noncitizen may be appointed only if it has been 
determined there are no qualified U.S. citizens. In order to make this 
determination, the position will be advertised extensively throughout 
the nation using paid advertisements in

[[Page 77390]]

major newspapers or scientific journals, etc., as well as the 
``normal'' recruiting methods. If a noncitizen is the only qualified 
candidate for the position, the candidate may be appointed. The 
selection is subject to approval by the Department Head or Director of 
the hiring organization. The demonstration project constitutes a 
delegated examining agreement from OPM for the purposes of 5 CFR 
213.3102(bb).

E. Expanded Detail Authority

    Under the demonstration project, ONR's approving manager would have 
the authority:
    (1) To effect details up to one year to demonstration project 
positions without the current 120-day renewal requirement; and
    (2) To effect details to a higher level position in the 
demonstration project up to one year within a 24-month period without 
competition.
    Details beyond the one-year require the approval of the Chief of 
Naval Research or designee and are not subject to the 120-day renewal 
requirement.

F. Extended Probationary Period

    All current laws and regulations for the current probationary 
period are retained except that nonstatus candidates hired under the 
demonstration project in occupations where the nature of the work 
requires the manager to have more than one year to assess the 
employee's job performance will serve a three-year probationary period. 
Employees with veterans' preference will maintain their rights under 
current law and regulation.

G. Definitions

1. Basic Pay
    The total amount of pay received at the rate fixed through CCS 
adjustment for the position held by an employee including any merit 
increase but before any deductions and exclusive of additional pay of 
any other kind.
2. Maintained Pay
    An employee may be entitled to maintain his or her rate of basic 
pay if that rate exceeds the maximum rate of basic pay for his or her 
pay band as a result of certain personnel actions (as described in this 
plan). An employee's initial maintained pay rate is equal to the lesser 
of (1) the basic pay held by the employee at the time an action is 
taken which entitles the employee to maintain his or her pay or (2) 150 
percent of the maximum rate of basic pay of the pay band to which 
assigned. The employee is entitled to maintained pay for 2 years or 
until the employee's basic pay is equal to or more than the employee's 
maintained pay, whichever occurs first. Exceptions to the 2-year limit 
include employees on grade and pay retention ``grandfathered'' in upon 
initial conversion into the demonstration project, former special rate 
employees receiving maintained pay as a result of conversion into the 
project, and employees placed through the priority placement programs. 
Employees will receive half of the across-the-board GS percentage 
increase in basic pay and the full locality pay increase while on 
maintained pay. Upon termination of maintained pay, the employee's 
basic pay will be adjusted according to the CCS appraisal process. If 
the employee's basic pay exceeds the maximum basic pay of his or her 
pay band upon expiration of the 2-year period, the employee's pay will 
not be reduced; the employee will be in the overcompensated range of 
basic pay category for CCS pay increase purposes, see Figure 9.
    Maintained pay shall cease to apply to an employee who: (1) Has a 
break in service of 1 workday or more; or (2) is demoted for personal 
cause or at the employee's request. The employee's maintained rate of 
pay is basic pay for purposes of locality pay (locality pay is basic 
pay for purposes of retirement, life insurance, premium pay, severance 
pay, advances in pay, workers' compensation, and lump-sum payments for 
annual leave but not for computing promotion increases). Employees 
promoted while on maintained pay may have their basic pay (excluding 
locality pay) set up to 20 percent greater than the maximum basic pay 
for their current pay band or retain their ``maintained pay,'' 
whichever is greater.
3. Promotion
    The movement of an employee to a higher pay band within the same 
career track or to a different career track and pay band in which the 
ne