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), 3744-3787 [2011-976]

Agencies

• DEPARTMENT OF DEFENSE
• Office of the Secretary

[Federal Register Volume 76, Number 13 (Thursday, January 20, 2011)]
[Notices]
[Pages 3744-3787]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-976]



[[Page 3743]]

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

Part III





Department of Defense





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



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. 76 , No. 13 / Thursday, January 20, 2011 / 
Notices

[[Page 3744]]


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

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), DoD.

ACTION: Notice.

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

SUMMARY: Section 342(b) of the National Defense Authorization Act 
(NDAA) for Fiscal Year (FY) 1995, Public Law 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: Implementation of this demonstration project will begin no 
earlier than March 9, 2011.

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 (Lab Demo) 
before the end of April 2011.
    The proposed STRL Demonstration Project Plan for ARDEC was 
published on September 9, 2010 in 75 Federal Register (FR) 55200 that 
was subsequently corrected by 75 FR 60091 published on September 29, 
2010. During the public comment period ending October 9, 2010, DoD 
received 40 comments. All comments were carefully considered. Some 
comments addressed topics that were outside the project's scope or the 
demonstration authority of 5 U.S.C. 4703. These comments are not 
included in the summary below.
    The following summary addresses the pertinent comments received, 
provides responses, and notes resultant changes to the original project 
plan in the first Federal Register notice.

A. General

    Seven general comments were received; responses are provided below.
    (1) Comment: Employees should be returned to the GS system because 
it is viewed that the NSPS performance system lost the classification 
restrictions and allowed for growth in salaries beyond the GS 
classification guides. Also, the merit compensation system allowed for 
compensation growth not based on merit. It would be most beneficial to 
only have one performance system, that being the GS system.
    Response: Public Law 111-84, section 1105, prevents ARDEC from 
returning to the GS system and requires ARDEC to develop a Lab Demo. 
The ARDEC Lab Demo has been designed to capture the positive features 
of various personnel management systems/projects in use today. 
Specifically, in reference to this comment, the ARDEC Lab Demo design 
is founded on the principle that standard classification criteria are 
the basis for both performance assessment and pay setting. In reference 
to the comment that it would be beneficial to have only one performance 
system, the ARDEC Lab Demo performance management system is designed to 
be the performance management system for the ARDEC workforce. No change 
to the Lab Demo plan is required.
    (2) Comment: The unions have already rejected participation in this 
Lab Demo, as they have rejected participation in the previous two 
attempts to revise the General Schedule system. All implications that 
this Lab Demo is a full workforce management process need to be 
stricken from the descriptions and pay bands. This

[[Page 3745]]

proposal is only for the management officials at ARDEC, and should be 
described as such, particularly when addressing the expected benefits 
on page 55202.
    Response: The public law directed ARDEC to develop a personnel 
system that could cover the majority of the workforce, not just 
management officials. The Lab Demo plan was designed to cover both 
bargaining and non-bargaining unit eligible employees. The intent is 
for ARDEC to continue to pursue Union acceptance. Upon initial 
conversion, there will be both non-management and management employees 
within the ARDEC in Lab Demo positions spanning the full spectrum of 
the pay bands and associated occupational families. No change to the 
Lab Demo plan is required.
    (3) Comment: Return to the Acquisition Demonstration project 
without any modifications.
    Response: Public Law 111-84, section 1105, prevents ARDEC from 
returning to the Acquisition Demonstration Project and requires ARDEC 
to convert eligible employees to a personnel system under an 
appropriate demonstration project as referred to in section 342(b) of 
Public Law 103-337, October 5, 1994. No change to the Lab Demo plan is 
necessary.
    (4) Comment: If as stated, ``The primary benefit expected from this 
demonstration project is greater organizational effectiveness through 
increased employee satisfaction.'' Why was employee opinion on this 
modification not considered?
    Response: As an integral part of the process used to develop the 
ARDEC Lab Demo Project, a number of employee outreach venues were used, 
including Town Halls, ARDEC Web-Site, Focus Groups, Union Meetings and 
ARDEC Lab Demo mail box to solicit employee ideas and recommendations 
for improvement. As a result of these outreach initiatives significant 
changes were incorporated into the Lab Demo project plan. No change to 
the initial Lab Demo Federal Register notice is needed.
    (5) Comment: The fact that the unions non-concur suggests that 
employees will not be satisfied with the proposed system.
    Response: The ARDEC Lab Demo project has been designed to capture 
the positive features of the personnel management systems/projects in 
use today with a key objective being employee acceptance and 
satisfaction. By incorporating employee suggestions into the design and 
with continuing employee feedback as the design matures, the full 
expectation is that employees will be satisfied. No change to the 
initial Federal Register notice is required.
    (6) Comment: I believe that this system is inherently unfair and 
not in line with standard US Government personnel practices. This 
system suggests ``pay for contribution.'' Contribution level is 
inherently tied to job assignment. A supervisor, upper management, or 
fiscal events could dictate responsibility reduction, at no fault of an 
employee, which would eventually result in a lower contribution rating 
and reduced salary. A salary reduction without merit is not fair and 
will definitely not result in ``increased employee satisfaction.''
    Response: The ARDEC Lab Demo project uses a contribution-based 
compensation system in that both employees' contributions assessments 
and subsequent base pay are determined by reference to the 
classification system criteria. In as much as the pay setting and 
contribution evaluation are one in the same, employees' pay would be 
comparable to the level of work and contribution results. Position 
classification defines job responsibilities and, therefore, base pay 
level. It is expected that all employees will perform, at a minimum, to 
their position responsibilities. Supervisors assign objectives and work 
assignments commensurate with position responsibilities. No change to 
the Federal Register notice is required.
    (7) Comment: This system does not capture nor reward the experience 
and expertise brought to an organization by seasoned professionals. A 
5-year employee who mentors five 1-year employees could be considered 
to contribute more than a 30-year employee who mentors three 5-year 
employees. In measuring and rewarding current ``contribution'' it 
negates and fails to reward experience and wisdom.
    Response: The ARDEC Lab Demo project uses a contribution-based 
compensation system. In as much as the pay setting and contribution 
evaluation are one in the same employees base pay would be comparable 
for the work they perform and the value of their contributions. The 
system is not designed to reward employees for experience and wisdom 
alone but rather how they apply wisdom and experience to their job. In 
addition, as in other personnel systems, employee compensation is not 
based on amount of workload but rather the level of work accomplished 
successfully. No change to the Federal Register notice is required.

B. Participating Employees

    Two similar comments regarding participating employees were 
received and the response is provided below.
    (1) Comment (two similar comments combined): ARDEC should have the 
right to exclude When Actually Employed (WAE), Summer Hires (i.e., 
STEPs) and Co-ops (i.e., SCEPs) from Lab Demo coverage at least until 
the bargaining unit employees are included. ARDEC needs to be able to 
use discretion on that point.
    Response: Public Law 111-84, section 1105(b) indicates that the 
personnel of each STRL designated in section 1105(a), which includes 
ARDEC, are to convert to an appropriate demonstration project as 
referred to in Public Law 103-337, section 342(b). These conversions 
must be consistent with title 5 U.S.C. 4703(f) and be completed before 
April 28, 2011. The conversion provisions do not apply to prevailing 
rate employees or senior executives. Thus, the categories of employees 
mentioned in the comment are covered by the conversion requirements of 
Public Law 111-84, section 1105(b).

C. Pay Administration

    Eight comments regarding Pay Administration were received and the 
responses are provided below.
    (1) Comment: Reassignments to positions of similar responsibility 
should not result in an increase to base pay.
    Response: The ARDEC Lab Demo does not provide for pay increases for 
reassignments to positions with similar responsibilities. However, pay 
increases can be granted when a reassignment significantly increases 
the complexity, responsibility, and authority or for other compelling 
reasons. Such an increase is subject to the specific guidelines 
established by the PMB. No change to the Federal Register notice is 
required.
    (2) Comment: The Federal Register does not state anything about 
overtime. The only good thing about NSPS, you actually got time and a 
half for anything over 8 hours.
    Response: The NSPS overtime feature had been considered for 
implementation in our initial Federal Register notice but was 
determined to be inconsistent with existing public law that established 
Lab Demo projects and therefore not included. The ARDEC Lab Demo will 
be using the existing GS rules for overtime. No change to the Lab Demo 
plan is needed.
    (3) Comment: It is not clear if the contribution bonus is 
continuous bonus or a onetime bonus.
    Response: The Contribution Bonus is a onetime payment to be paid 
out on a

[[Page 3746]]

yearly basis corresponding to the annual rating cycle. Language has 
been changed in the Lab Demo plan paragraph III.C.5.c(2), from `` * * * 
is a lump sum payment * * * '' to `` * * * is a onetime lump sum 
payment * * *.''
    (4) Comment: It is not clear how and when the General Pay Increase 
(GPI) will be decreased for employees that fall above the Normal Pay 
Range or above the upper rail.
    Response: Employees who fall above the Normal Pay Range or above 
the upper rail may have their GPI partially reduced or denied. The 
specific rules covering when and how much the GPI is reduced is a 
responsibility of the PMB. These rules will define under what 
circumstances the GPI will be denied or, if reduced, the amount of 
reduction. To address this concern, the Federal Register notice will be 
changed to reflect that the PMB will be responsible for establishing 
the rules for instances where implementation and operating procedures 
are required such as withholding GPI for employees that fall above the 
Normal Pay Range (NPR). The Lab Demo plan paragraph II.G.2 is changed 
from ``At a minimum, duties executed by the board will be to:'' to 
``The PMB is responsible for establishing the implementation and 
operating rules as required. At a minimum, duties executed by the board 
will be to:''. Also, a new paragraph II.G.2.s has been added stating, 
``Establish rules and procedures for denying or reducing GPI for 
employees whose contributions are in region A (above the NPR).''
    (5) Comment: Will employees that fall above the rail receive the 
full locality pay increase regardless of GPI reduction?
    Response: Yes, employees will receive locality pay regardless of a 
reduction in GPI. Locality pay is separate from the Contribution-Based 
Compensation System. No change to the Federal Register notice is 
required.
    (6) Comment: Traditionally employee recognition is not sufficient 
compared to private industry. Recommend raising the invention 
disclosures and patent award amounts to a larger limit more comparable 
to private industry.
    Response: Appreciate your comment, however after further review, 
employee recognition for invention disclosures and patents is not a 
Federal Register notice issue. These awards are controlled at the 
component level (Army) and will be further investigated through other 
channels. No change to the Federal Register notice is required.
    (1) Comment: The Federal Register does not seem to adequately 
address pay setting for employees on temporary assignments at the time 
of transition.
    Response: It is a requirement for conversion from the National 
Security Personnel System and the intent of the Lab Demo project to 
ensure an employee does not have any loss in pay on conversion to the 
project regardless if the employee is on a permanent or a temporary 
assignment prior to conversion. Employees on a temporary assignment 
will convert back to their permanent position of record and then 
convert to a new temporary assignment within the demonstration project. 
In these cases, section 1113(c)(1) would also apply to the temporary 
position, i.e., there will be no loss or decrease in pay as a result of 
the conversion of positions and employees from NSPS. This is already 
covered in paragraph V.B.2 of the Federal Register notice and no change 
is required.
    (2) Comment: For paragraph III.F.1, change ``Employees whose 
performance is acceptable and not on pay retention will receive the 
full annual general pay increase and the full locality pay.'' to, 
``Employees whose performance is acceptable and not on pay retention 
will receive the full annual general pay increase and the full locality 
pay, with the exception of those employees covered under paragraph 
III.C.5.c.(3).''
    Response: Employees whose Assessed Overall Contribution Score falls 
in the ``above the rail'' region may not be officially identified as 
``unacceptable;'' however, their GPI is subject to being withheld or 
reduced. Therefore, for clarity and completeness the Federal Register 
paragraph III.F.1 has been changed as follows: change ``Employees whose 
performance is acceptable and not on pay retention will receive the 
full annual general pay increase and the full locality pay'' to, 
``Employees whose performance is acceptable and not on pay retention 
will receive the full annual general pay increase and the full locality 
pay, with the exception of those employees' whose rating is as 
described in paragraph III.C.5.c.(3).''

D. Base Pay

    One comment regarding base pay was received and the response is 
provided below.
    (1) Comment: For persons capped at the top rate under current NSPS 
equivalent to GS-15, Step 10, + 5% or $165,300:
    Since the executive level cap does not rise by the cost of living 
and the Locality Market supplement percentage is set, then the base pay 
does not go up as much as it normally would. It seems unreasonable and 
unfair, that the distribution of pay between the local market 
supplement and base pay which comprises the full salary should be at 
the expense of base pay. While the pay is capped, the base pay should 
rise relative to the Local Market Supplement. If one were to transfer 
to a lower cost of living area where the local market supplement was 
less, then one would end up with reduced pay even after they have not 
received full or any pay raises for prior years due to the executive 
level cap. It is unclear if the same situation exists under the new 
demo project but this issue should be fixed.
    Response: The situation as described in the comment above will not 
occur in the ARDEC Lab Demo project. In the Lab Demo project an 
employee's base pay may rise to the annual GS-15, Step 10, base pay 
cap. Locality pay adjustments are added to this base pay and are 
subject to the overall total Executive Level IV salary cap. The ARDEC 
Lab Demo project uses base pay for contribution calculations/payouts 
adjustments. All salary adjustments at the end of a rating cycle are 
applied to base pay and limited to the base pay salary caps for each of 
the pay bands. Locality pay and other salary adjustments are added as 
appropriate and are also subject to overall pay cap limitations, more 
specifically Executive Level IV. This comment does not require any 
change to the Federal Register notice.

E. Conversion

    Five comments regarding conversion were received and the responses 
are provided below.
    (1) Comment (two similar comments combined): Clarify what is the 
deciding factor for putting a YF-2 supervisor in Pay Band III or Pay 
Band IV? Page 55203 (first Federal Register notice) shows that a first-
level supervisory position would be a pay band IV, however, Table 1--
Equivalent NSPS pay bands shows YF-2 (first-level supervisory position) 
in both Pay Band III and Pay Band IV. I thought it was equal pay for 
equal work?
    Response: Employees will convert to the appropriate band based on 
position classification. Table 1 identifies the possible bands to which 
employees may convert. The verbiage on Page 55203 is solely intended to 
provide examples of the types of positions that could be in each band 
but they are not absolute. Case in point, an employee's position can be 
a first-line supervisor position in pay bands II, III, IV, or V 
depending on the position's responsibilities and type and complexity of 
work supervised. The Federal Register notice has been changed to better 
reflect the potential position matching upon conversion. Paragraph 
III.A.1 has been changed by

[[Page 3747]]

adding the following at the end of the paragraph: ``The following 
descriptions of positions for the bands in the occupational families 
illustrate examples of the types of positions included.'' In addition, 
to ensure pay equity, it is the intent to set the base pay for an 
employee at the minimum base pay of the pay band to which the 
employee's position is classified. For clarification the Federal 
Register notice has been changed as follows: In section V.B.2, the 
following has been added to the end of the first paragraph, ``If the 
employee's base pay is less than the minimum rate for his/her 
position's assigned demonstration project pay band, the base pay rate 
will be increased to the minimum of that pay band.''
    (2) Comment: Conversion from NSPS is not redressing the problems 
created by the GS-Demo-NSPS-Demo sequence at ARDEC over the last 5-10 
years. The Acquisition Demo created GS-14/15 bands, where once 
selected, an employee could move up, without competition, through the 
entire pay scale of the band. In NSPS, ARDEC ``gated'' some of these 
employees, such that their max pay would be capped at essentially a GS-
14, Step 10, level. In other words, the full range of opportunity was 
taken away from some people. It would seem reasonable that under this 
Lab Demo proposal, any employee who was competitively selected for a 
GS-14/15 band in the past, be converted to a Pay Band V under this Lab 
Demo.
    Response: Employees will convert to the appropriate band based on 
classification for the position they occupy at the time of conversion. 
Table 1 (Pay Band Charts) identifies the possible bands to which 
employees may convert. Any employee that has a base pay that exceeds 
the band will be place on indefinite pay retention until such time as 
their pay falls within the Normal Pay Range. No change to the Federal 
Register notice is required.
    (3) Comment: Paragraph V.B.4, Transition Equity. Recommend this 
paragraph also apply to GS employees under paragraph V.A.
    Response: It has been determined that adding the provision of 
Transition Equity in the NSPS conversion section to the GS conversion 
section of the Federal Register notice is appropriate. The notice has 
been changed by adding the following paragraphs to the end of section 
V.A. as a new paragraph 6:
    ``6. During the first 12 months following conversion to the 
demonstration project, management may approve certain adjustments 
within the pay band for pay equity reasons stemming from conversion. 
For example, if an employee would have been otherwise promoted but 
demonstration project pay band placement no longer provides the 
opportunity for promotion, a pay equity adjustment may be authorized 
provided the adjustment does not cause the employee's base pay to 
exceed the maximum rate of his or her assigned pay band and the 
employee's performance warrants an adjustment. The decision to grant a 
pay equity adjustment is at the sole discretion of the ARDEC Director 
and is not subject to employee appeal procedures.
    During the first 12 months following conversion, management may 
approve an adjustment of not more than 20 percent, provided the 
adjustment does not cause the employee's base pay to exceed the maximum 
rate of his or her assigned pay band and the employee's performance 
warrants an adjustment, to mitigate compensation inequities that may be 
caused by artifacts of the process of conversion into STRL pay bands.''
    (4) Comment: Recommend deleting the last part of the paragraph 
V.A.5.a. and V.B.7.a, ``and may have their initial period extended in 
accordance with the demonstration project regulation and implementing 
issuances.'' This is a change in contract with a person as that person 
was promoted with the understanding of only having a one-year 
probationary period and this is not considered reasonable.
    Response: It has been determined that to change an employee's 
original probationary period contract, as defined when hired, during 
conversion to the ARDEC Lab Demo would be an unreasonable change to the 
employee's employment contract. The Federal Register notice paragraphs 
V.A.5.a. and V.B.7.a, have been changed by deleting the last part of 
the paragraph, ``and may have their initial period extended in 
accordance with the demonstration project regulation and implementing 
issuances.''

F. Contributing Factors

    Two similar comments regarding Contributing Factors were received; 
and the response is provided below.
    (1) Comments (two similar comments received): The Contribution-
Based Compensation System (CBCS) is based on 6 factors, which duplicate 
to a great degree the GS Position Classification system, and introduce 
duplication and unnecessary administrative costs. In one case, Factor 6 
on Resource Management actually proposes to add more words, and more 
confusion, to the legal definition of appropriation laws (page 55205).
    Response: The factors, descriptors, and discriminators are intended 
to be used as guides for determining the level of contribution for each 
employee across all bands and occupational families. They are not 
intended to, nor does the Federal Register notice prescribe, changes to 
the legal definition of the appropriation laws. However, additional 
clarity has been achieved by revising some of the Descriptors and 
Discriminators in Appendix C of the Federal Register notice.

G. Pay Pool Funding

    One comment regarding Pay Pool Funding was received. The response 
is provided below.
    (1) Comment: The 2 percent base pay and 1 percent bonus funding 
levels appear to be too low for proper recognition of the workforce.
    Response: The Federal Register notice identifies these pay pool 
funding levels as minimums and permits the ARDEC Director to increase 
these funding levels as needed. These minimums are base pay pool 
funding levels, not the limit to the total compensation adjustments for 
an individual employee. The system does not preclude other recognition/
awards to employees that are not part of the CBCS compensation. No 
change to the Federal Register notice is required.

H. Pay Bands

    Three comments regarding Pay Bands were received; and the responses 
are provided below.
    (1) Comment: (Two similar comments received.) Gating within bands, 
similar to what was done under the NSPS system is highly undesirable. 
The system that is put in place should prevent ARDEC managers from 
setting arbitrary limits on the pay bands and limiting the flexibility.
    Response: The ARDEC Lab Demo project has reduced the need for 
gating (control points) within a band by placing salary limits on bands 
that are commensurate with the level and difficulty of work assignments 
across the occupational families for the given bands. The notice does 
have provisions to use control points should the need arise in the 
future based on experience in operating the system to ensure employees 
are appropriately paid for the work they perform. No change to the 
Federal Register notice is required.
    (2) Comment: The equivalent NSPS Pay Band by Occupational Family 
Table appears to be missing the YH category personnel and there are at 
least two at Picatinny, ARDEC. Where do they fit in?
    Response: There was an oversight in the initial Federal Register 
notice. A revision to this table was made by

[[Page 3748]]

adding the NSPS YH category into Table 1 (Equivalent NSPS Pay Bands). 
Additionally, the General Health Science Series (0601) was moved from 
the Business and Technical to the Engineering and Science Occupational 
Family in Appendix B of the Federal Register notice to accommodate 
employees in the YH category.

I. Personnel Management Board

    One comment regarding the Personnel Management Board was received. 
The response is provided below.
    (1) Comment: It appears that the PMB is assuming responsibilities 
that should reside with Line Management. The responsibility of each 
should be clearly delineated. Suggest deleting the following paragraphs 
as these are more management functions to be performed by the line 
managers than the PMB.
    II.G.2.m. ensure in-house budget discipline
    II.G.2.n. manage the number of employees by Occupational Family and 
pay band.
    Response: After further review the following management functions 
were determined to be not required for the PMB as they are line 
management responsibilities as such. The following paragraphs were 
deleted:
    II.G.2.m. ensure in-house budget discipline.
    II.G.2.n. manage the number of employees by Occupational Family and 
pay band.

J. Employee Developmental Programs

    One comment regarding Employee Developmental Programs was received; 
and the response is provided below.
    (1) Comment: It is suggested that the language in paragraph 
II.G.2.o.--``Developmental Opportunity Programs'' be changed to 
``Employee Developmental Programs'' to be consistent with language of 
paragraph III.G.
    Response: There is an inconsistent use of terminology in the 
Initial Federal Register notice. Developmental Opportunity Programs 
should be changed to Employee Developmental Programs for consistency. 
The Federal Register notice has been changed as follows: paragraph 
II.G.2.o.--Changed from ``Developmental Opportunity Programs'' to 
``Employee Developmental Programs''.

K. Annual Appraisal Cycle

    Two comments regarding Annual Appraisal Cycle were received; and 
the responses provided below.
    (1) Comment: The Contribution-Based Compensation System requires a 
mid-point review be conducted for all employees. For employees entering 
the Lab Demo late in the rating cycle this may be an issue.
    Response: The Federal Register notice did not adequately account 
for conducting midpoint reviews for employees entering the Lab Demo 
project late in the rating cycle. The notice has been changed as 
follows: In paragraph ``III.C.4 Annual Appraisal Cycle and Rating 
Process,'' the verbiage in the third paragraph was changed from ``At 
least one review, normally the mid-point review, will be documented as 
a progress review.'' to, ``At least one review, normally the mid-point 
review, will be documented as a progress review. Exceptions may be 
established by the PMB and approved by the ARDEC Director based on 
employees that will be in the Lab Demo for less than 180 days at the 
end of the rating cycle.''
    (2) Comment: The scoring system seems unbalanced over the bands 
with different levels to score. The program should provide for more 
levels for each pay band level, either by adding a ``very high'' 
category to each or use of the five bands as in Level II.
    Response: Employees may score anywhere within the full spectrum of 
scores for their occupational family. The ``very high'' categorical 
rating exists at the top pay band level for each occupational family 
and provides the potential for employees in a top pay band level to 
score above their band level as can employees in other band levels. The 
scoring range for employees in pay band II of the Engineer and Science 
and Business and Technical occupational family is greater than other 
pay bands reflecting the broader range (equivalent to GS-05 to GS-11 
grades) of contribution levels contained in that pay band. The 
additional categorical ratings (Medium High and Medium Low) in pay band 
II facilitate the ability to assess and categorize employee 
contributions within pay band II. No change to the notice is needed.

L. Probationary Periods

    One comment regarding Probationary Periods was received. The 
response is provided below.
    (1) Comment: Consider adding written documentation for 
reassignments of supervisors on probationary periods similar to what is 
being done for the employee probationary period.
    Response: There is an inconsistent requirement for written 
documentation for different probationary periods. It is appropriate to 
document the supervisory probationary period reassignments in the same 
manner as required for the employee probationary period. The notice has 
been modified to add the following to paragraph III.D.9, ``When a 
supervisor determines to reassign a probationary supervisor to a non-
supervisory position during the probationary period because his/her 
work performance or conduct is unacceptable, the probationary 
employee's supervisor will provide written notification subject to 
higher level management approval.''

M. Position Classification

    One comment regarding Position Classification was received. The 
response is provided below.
    (1) Comment: Should specialty codes be used for Lab Demo position 
descriptions? Can any position description be established without them? 
Suggest changing from ``will'' to ``may'' or remove from the Federal 
Register notice.
    Response: Concur with the recommendation to change ``will'' to 
``may'' in paragraph III.B.2.

N. Reduction in Force

    Three comments regarding reduction in force were received. The 
responses are provided below.
    (1) Comment: Do Specialty Work Codes have any effect if ARDEC were 
to conduct a reduction in force?
    Response: The Lab Demo Federal Register notice does not mandate the 
use of Specialty Work Codes on position descriptions; and, therefore, 
the notice will not specifically make the use of Specialty Work Codes 
mandatory when conducting a reduction in force (RIF). No change to the 
Federal Register notice is required.
    (2) Comment: Paragraph III.H--Recommend changing the RIF credit 
lines to define them as 3 points below the Expected Overall 
Contribution Score (EOCS). Using 94 percent would mean 3 Overall 
Contribution Score (OCS) points for an EOCS of 50 and 6 OCS points for 
an EOCS of 100. Also, since ratings are not given to people on a 
Contribution Improvement Period (CIP), recommend deleting the 
requirement for OCS to be less than 92 percent (actually 4 points) as 
well as CIP to get 0 years of credit. Define the year as the year that 
the employee enters a CIP, so as not to penalize two years should the 
CIP overlap two years.
    Response: The use of percent was in error and the intent was to 
define the years of service augmentation based upon the delta between 
an employee's Assessed Overall Contribution Score (AOCS) and an 
employee's EOCS at the end of a rating cycle. Additionally, the Federal 
Register notice has been adjusted (see service augmentation rule 3 
below) to clarify when zero years of

[[Page 3749]]

service augmentation are applied. The following are the service 
augmentation rules:
    1. Seven (7) years of service augmentation for each year the AOCS 
is greater than or equal to the EOCS minus 3 (AOCS = EOCS -
3).
    2. Four (4) years of service augmentation for each year the AOCS is 
less than the EOCS minus 3 (AOCS < EOCS -3).
    3. Zero (0) years of service augmentation for each year the 
employee was placed on a CIP at any time during the rating cycle.
    (3) Comment: The RIF procedures have a predictable outcome on the 
rating process. If ARDEC gets into a long downsizing cycle, such as in 
the 1990s, rating will be progressively exaggerated, until almost all 
employees get the seven years of extra credit. This will return the 
workforce to the standard, GS RIF ranking of tenure, veterans' 
preference and years of service.
    Response: The Lab Demo project has been designed to improve the 
discipline of the rating process and reduces the possibility of 
inflated ratings. No change to the Federal Register notice is required.

O. Hiring Authority

    One comment regarding Hiring Authority was received. The response 
is provided below.
    (1) Comment: For paragraph III.D.3.a, change the beginning to ``The 
ARDEC has and is forecasted to have for the near future an urgent 
need.* * *'' This is not a one time need, but will continue.
    Response: The verbiage in the Federal Register notice does not 
address the anticipated near future hiring need. The following 
rewording provides for the current and future hiring needs of ARDEC. 
Change paragraph III.D.3.a from The ARDEC has an urgent need * * *'' to 
``The ARDEC has and is forecasted to have for the foreseeable future an 
urgent need.* * *'' This is not a one time need, but will continue.

P. Projected Annual Expenses

    One comment regarding Projected Annual Expenses was received; and 
the response is provided below.
    (1) Comment: The costs need to be re-visited and validated. NSPS 
costs of implementation need to be obtained and used as a comparable 
set of figures. The operating costs of NSPS, meaning the paperwork, the 
administrative support costs, the automation costs, the employee and 
supervisor time spent feeding the system need to be compiled. There 
needs to be some realistic comparison between the value of a 2% 
incentive to the life cycle cost of operating a system. The investment 
ARDEC has made in its previous attempts to shed the GS system must by 
now total millions. By the way, the $85k shown does not cover the 
salary of the lead admin officer for the project, so it can hardly be 
right.
    Response: The projected annual expenses in the initial Federal 
Register notice were determined based on benchmarks of other lab demo 
projects and do not include the normal managerial labor expenses 
typically incurred in the execution of other personnel systems. 
Subsequently, ARDEC has obtained and developed additional cost data and 
revised Table 6 of the Federal Register notice as follows:

                                                           Table 6--Projected Annual Expenses
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              FY10                    FY11                    FY12                   FY13                   FY14
--------------------------------------------------------------------------------------------------------------------------------------------------------
Training...........................  0K....................  15K...................  10K..................  5K...................  5K
Project Evaluation.................  40K...................  80K...................  30K..................  30K..................  30K
Automation.........................  97K...................  400K..................  400K.................  50K..................  50K
                                    --------------------------------------------------------------------------------------------------------------------
    Totals.........................  137K..................  495K..................  440K.................  85K..................  85K
--------------------------------------------------------------------------------------------------------------------------------------------------------

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: January 13, 2011.
Morgan F. Park,
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
    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.

[[Page 3750]]

    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.
    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

[[Page 3751]]

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. The PMB is responsible for establishing the implementation and 
operating rules as required. 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. develop policies and procedures for administering Employee 
Developmental Programs;
    n. ensure that all employees are treated in a fair and equitable 
manner in accordance with all policies, regulations, and guidelines 
covering this demonstration project;
    o. monitor the evaluation of the project;
    p. establish and manage the Accelerated Compensation for 
Developmental Positions (ACDP); and
    q. Establish rules and procedures for denying or reducing GPI for 
employees whose contributions are in region A (above the NPR).

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 
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. The following descriptions of positions in the 
pay bands of each occupational family illustrate examples of the types 
of positions included.

[[Page 3752]]

    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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   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 bands1, 2
       Occupational family       -----------------------------------------------------------------------------------------------------------------------
                                           I                  II                  III                 IV                   V                  VI
--------------------------------------------------------------------------------------------------------------------------------------------------------
E&S.............................  YP-1..............  YD-1, YF-1, YF-2,   YD-2, YF-2........  YD-3, YF-2, YF-3,   YD-3,.............  ..................
(DB)............................                       YP-1.                                   YH-3.              YF-3..............
Business & Technical............  YP-1,.............  YA-1, YA-2, YB-1,   YA-2, YB-3, YC-2,   YA-3, YC-2, YC-3..  YA-3,.............  ..................
(DE)............................  YB-1,.............   YB-2, YB-3, YC-1,   YE-3, YE-4.                            YC-3..............
                                  YE-1..............   YC-2, YE-1, YE-2,
                                                       YE-3, YP-1.
General Support.................  YB-1,.............  YB-1, YB-2, YE-1,   YB-2, YE-2, YP-1..  ..................  ..................  ..................
(DK)............................  YE-1,.............   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 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 th