Department of Defense Science and Technology Reinvention Laboratory Personnel Demonstration Project in the Naval Facilities Engineering Command, Engineering and Expeditionary Warfare Center (NAVFAC EXWC), 14084-14108 [2021-05172]

Agencies

• DEPARTMENT OF DEFENSE
• Office of the Secretary

[Federal Register Volume 86, Number 47 (Friday, March 12, 2021)]
[Notices]
[Pages 14084-14108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05172]


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DEPARTMENT OF DEFENSE

Office of the Secretary


Department of Defense Science and Technology Reinvention 
Laboratory Personnel Demonstration Project in the Naval Facilities 
Engineering Command, Engineering and Expeditionary Warfare Center 
(NAVFAC EXWC)

AGENCY: Under Secretary of Defense for Research and Engineering 
(USD(R&E)), Department of Defense (DoD).

ACTION: Personnel demonstration project notice.

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SUMMARY: This Federal Register Notice (FRN) serves as notice of the 
adoption of an existing STRL Personnel Management Demonstration Project 
by the Naval Facilities Engineering Command, Engineering and 
Expeditionary Warfare Center (NAVFAC EXWC). NAVFAC EXWC adopts, with 
some modifications, the STRL Personnel Demonstration Project 
implemented at the: Naval Air Systems Command (NAVAIR) Naval Warfare 
Center, Aircraft Division, Naval Air Warfare Center, Weapons Division; 
Naval Information Warfare Centers Atlantic and Pacific (NIWC Atlantic 
and Pacific) (previously designated as the Space and Naval Warfare 
Systems Command, Space and Naval Warfare Systems Centers Atlantic and 
Pacific), Naval Sea Systems Command Warfare Centers (NAVSEA), and the 
Combat Capabilities Development Command (CCDC) Army Research Laboratory 
(ARL) (previously designated as ARL).

DATES: Implementation of this demonstration project will begin no 
earlier than March 12, 2021.

FOR FURTHER INFORMATION CONTACT:
    NAVFAC EXWC: Ms. Carol Frash, 1000 23rd Avenue, Port Hueneme, CA 
93043 (805) 982-2422, or [email protected].
    DoD: Dr. Jagadeesh Pamulapati, Director, Laboratories and Personnel 
Office, 4800 Mark Center Drive, Alexandria, VA 22350, (571) 372-6372, 
[email protected].

SUPPLEMENTARY INFORMATION: Section 342(b) of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 1995, Public Law (Pub. 
L.) 103-337; as amended, authorizes the Secretary of Defense (SECDEF), 
through the USD(R&E), to conduct personnel demonstration projects at 
DoD laboratories designated as STRLs. All STRLs authorized by section 
1105(a) of the NDAA for FY 2010, Public Law 111-84, as well as any 
newly designated STRLs authorized by SECDEF, or future

[[Page 14085]]

legislation, may use the provisions described in this FRN.

1. Background

    Many studies have been conducted since 1966 on the quality of the 
laboratories and personnel. Most of the studies 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. The demonstration 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.

2. Overview

    DoD published notice on November 22, 2019 in 84 FR 64495 that 
NAVFAC EXWC will implement an STRL Personnel Demonstration Project. 
NAVFAC EXWC will adopt, with some modifications, flexibilities from the 
following approved STRL personnel demonstration projects:
    (1) Department of the Navy, NAVAIR--76 FR 8530, February 14, 2011;
    (2) Department of the Navy, NIWC Atlantic and Pacific--76 FR 1924, 
January 11, 2011;
    (3) Department of the Navy, NAVSEA--62 FR 64050, December 3, 1997; 
and
    (4) Department of the Army, CCDC ARL--63 FR 10679, March 4, 1998.

3. Access to Flexibilities of Other STRLs

    Flexibilities published in this FRN will be available for use by 
the STRLs enumerated in section 1105(a) of the NDAA for FY 2010, Public 
Law 111-84 as amended, if they wish to adopt them in accordance with 
DoD Instruction 1400.37, ``Science and Technology Reinvention 
Laboratory (STRL) Personnel Demonstration Projects'' (available at 
https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/140037p.pdf) (including revised or superseded instructions) and after 
the fulfillment of any collective bargaining obligations.

4. Summary of Comments

    Eight commenters provided comments electronically via the Federal 
eRulemaking Portal regarding the Science and Technology Reinvention 
Laboratory (STRL) Personnel Demonstration Project in the Naval 
Facilities Engineering Command, Engineering and Expeditionary Warfare 
Center (NAVFAC EXWC), 84 FR 64495, dated November 22, 2019.

(A) Editorial and General Comments

    Comment: A commenter noted inconsistencies throughout the document 
in the use of the term Technical Director (i.e., Technical Director, 
Laboratory Director, NAVFAC EXWC Director, Director, and NAVFAC EXWC 
Technical Director).
    Response: Concur with commenter. The terms ``Laboratory Director'' 
and ``NAVFAC EXWC Director'' have been changed to ``NAVFAC EXWC 
Technical Director'' or ``Technical Director''.
    Comment: A commenter noted inconsistencies throughout the document 
referring to NAVFAC EXWC as the ``Center'' and the ``Technical 
Center''.
    Response: Concur with commenter. The terms ``Center'' and 
``Technical Center'' have been changed to NAVFAC EXWC.
    Comment: A commenter noted inconsistencies throughout the document 
referring to ``salary points'' and ``control points''.
    Response: Concur with commenter. The term ``salary points'' has 
been changed to ``control points.''

(B) Introduction

1. Purpose
    Comment: One commenter requested clarification as to who can be the 
NAVFAC EXWC Technical Director's designee and must they be within EXWC.
    Response: To clarify the sentence under Purpose (section II.A) the 
following sentence has been added: ``Unless specifically stated 
otherwise, the NAVFAC EXWC Technical Director may delegate authority 
within NAVFAC EXWC to effectively implement the provisions of this 
notice.''
    Comment: Three commenters requested clarification on the 
authorities granted to the NAVFAC EXWC Technical Director and one 
commenter recommended rewording the entire section of II.A paragraph 
two to clarify.
    Response: Concur with commenters and have amended section II.A to 
adopt the following revision: ``The NAVFAC EXWC Technical Director 
(hereinafter referred to as the ``Technical Director'') has overall 
oversight and management of these authorities and any other authorities 
granted to an STRL, which includes but is not limited to, managing the 
workforce strength, structure, positions, and compensation (including 
pay pools) without regard to any limitation on appointment, positions, 
or funding with respect to STRL, and will be carried out in a manner 
consistent within the STRL budget. Also, NAVFAC EXWC's Technical 
Director has those authorities equivalent to a Technical Director 
Senior Executive Service (SES) position within a STRL. Unless 
specifically stated otherwise, the Technical Director of NAVFAC EXWC 
may delegate authority within NAVFAC EXWC to effectively implement the 
provisions of this notice.'' NAVFAC EXWC Internal Operating Procedures 
(IOPs) will document any delegation, including details of 
implementation.'' In addition, section III.C.8 has been revised to 
state that ``The Technical Director is specifically authorized to use 
recruitment, retention, and relocation incentives which are further 
described in NAVFAC EXWC IOPs. The authority in 5 CFR part 575, is 
further expanded to allow NAVFAC EXWC to offer retention counteroffers 
to high performing employees with critical scientific or technical 
skills who present evidence of an alternate employment opportunity with 
higher compensation. Such employees may be provided increased base pay 
(up to ceiling of the pay band) and/or a one-time cash payment that 
does not exceed 50 percent of one year of base pay. Retention 
counteroffers, either in the form of a base pay increase and/or a 
bonus, count toward the aggregate limitation on pay consistent with 5 
U.S.C. 5307 and 5 CFR part 530, subpart B, except as waived in section 
IX of this plan.''

(C) Personnel System Changes

1. Qualifications
    Comment: Three comments were received asking if there are any 
further qualification standards and/or applicable waivers other than 
those stated in the FRN?
    Response: The verbiage for Qualifications under section III.A.1 
`Personnel System Changes' identifies the minimum qualification 
standards. No additional applicable waivers are necessary.
2. Science and Engineering Direct Hiring Authorities
    Comment: One commenter requested clarification in regard to the use 
of STRL Direct Hiring Authorities for current federal employees and 
employees already employed at NAVFAC EXWC.
    Response: NAVFAC EXWC may utilize all available direct hiring

[[Page 14086]]

authorities to consider and appoint qualified candidates, which may 
include current federal employees. Section III.A.2.a has been revised 
as follows: ``NAVFAC EXWC may utilize all available direct hiring 
authorities to consider and appoint qualified candidates, which may 
include current federal employees. This applies to all STRL direct hire 
authorities, including but not limited to, those listed under Section 
III. 2.a (including sections 1106 and 1121 of the NDAA FY2017) and any 
other applicable direct hire authorities enacted under the Office of 
Personnel Management (OPM), DoD, or Department of Navy (DoN) or amended 
after the effective date of this demonstration project, except as 
waived in Section IX of this plan.''
3. Delegation of Classification Authority
    Comment: Two commenters requested clarification on delegated 
classification authority and recommended rewording the entire section 
of III.B.1 to clarify.
    Response: Concur with commenters and have amended section III.B.1 
as follows: ``The Technical Director has overall oversight, management, 
and delegated classification and position management authority for all 
STRL positions covered under the NAVFAC EXWC Personnel Demonstration 
Project. Classification authority will be delegated as follows: The 
NAVFAC EXWC Technical Director may delegate classification authority to 
the NAVFAC EXWC Human Resources Office (HRO) Director. The NAVFAC EXWC 
HRO Director may further delegate classification authority to the 
NAVFAC EXWC Human Resource professionals. If so delegated, the NAVFAC 
EXWC HRO Director will exercise oversight to ensure consistency 
throughout NAVFAC EXWC. Managers will provide input to classification 
requests as a means of increasing managerial effectiveness and 
expediting the classification function. Administration and management 
of Delegated Classification Authority will be outlined in the NAVFAC 
EXWC IOPs.''
4. Classification
    Comment: One commenter asked if a modified version of the Position 
Designation Record (PDR) and a modified version of the Defense 
Acquisition Workforce Improvement Act (DAWIA) Coding Sheet could be 
utilized to streamline the classification process and allow for 
automated classification systems.
    Response: We will not be using a modified version of the Position 
Designation Record or the Defense Acquisition Workforce Improvement Act 
(DAWIA) coding sheet.
5. Pay Band Structure
    Comments: Two comments expressed concern that categories 1 and 2 
contained in the NT-III and NT-IV pay bands are confusing, especially 
as to the proper placement of employees within the pay band, and 
recommended using control points to manage positions within these pay 
bands that do not support movement to the top of the pay band.
    Response: To avoid confusion and difficulty differentiating between 
the proper placement of employees within a pay band, categories 1 and 2 
have been eliminated from the NT-III and NT-IV pay bands. The NT-II pay 
band has been expanded to encompass the GS-05 to GS-11 grade equivalent 
and the NT-III pay band has been modified to include the GS-12 to GS-13 
grade equivalent. The following language was inserted to explain the 
new configuration: ``A key feature is the overlap in Science and 
Engineering (ND) career path between bands III and IV. ND-III begins at 
GS-12, step 1, and ends at GS-14, step 10. ND-IV begins at GS-14, step 
1, and ends at GS-15, step 10. Control points will be applied as 
outlined in the NAVFAC EXWC IOPs.'' Additionally, Figure 1, ``Career 
Paths and Pay Band Structure'' was updated.
6. Senior Scientific Technical Managers (SSTM)
    Comment: One commenter questioned whether SSTM positions would be 
evaluated by a performance management system versus a contribution 
management system as stated in the FRN.
    Response: Section III.B.7 has been revised to read: ``All SSTM 
positions within NAVFAC EXWC will report to and be evaluated by the 
NAVFAC EXWC Technical Director (non-delegable). SSTMs will be evaluated 
by the STRL Performance Management System as outlined in NAVFAC EXWC's 
IOPs.''
7. Professional Licensure Designations for Architectural and 
Engineering Positions
    Comment: One commenter expressed concern regarding the professional 
engineering license policy and requested that the process further 
explained.
    Response: The description of the professional engineering license 
policy was reviewed and determined to be appropriate.
8. Pay Setting for Appointment
    Comment: One commenter expressed concern about the absence of 
specified pay setting provisions and recommended waiving pay rounding 
rules in accordance with 5 CFR part 531 subpart F.
    Response: Pay setting is appropriately addressed in the FRN. 
Additional procedures will be provided in supporting IOPs. As stated in 
section III.C.1, initial pay setting is based on base pay, not total 
adjusted salary. To allow for more streamlined pay setting 
calculations, we have added a waiver of the rounding rules found in 5 
CFR 531.604(b)(4).
    Comment: One commenter asked if 5 CFR part 531 subpart F was waived 
in its entirety.
    Response: No. A waiver of 5 CFR part 531, subpart F is made to 
allow for the provisions of the demonstration project as described in 
this FRN. This waiver has been updated to also waive the section of 5 
CFR part 531 subpart F [5 CFR 531.604(b)(4)] that pertains to the 
rounding rules.
9. Promotion
    Comment: One commenter raised a concern that 6% or the minimum base 
pay of the new pay band was insufficient for promotions.
    Response: Upon review, we removed the 6% or the minimum base pay of 
the new pay band and replaced it with language stating that ``a 
promotion may be accompanied by a pay increase.'' Specific guidelines 
regarding promotions will be documented in NAVFAC EXWC IOPs.
    Comment: One commenter asked to clarify the definition of ``mission 
success'' for the rating of record under the promotion section.
    Response: To clarify this section, ``mission success'' was removed 
and the sentence was revised as follows: ``To be promoted competitively 
or non-competitively, from one pay band to the next, an employee must 
meet the minimum qualifications for the job and have a current rating 
of record of 2 or above (acceptable performance rating) or an 
equivalent under a different appraisal system. Other specific 
guidelines regarding promotions will be documented in NAVFAC EXWC IOPs.
    An additional clarification was also added under III.E.4, which now 
states: ``Employees with an acceptable rating of record, two or above, 
for each mission aligned objective will receive the equivalent of the 
authorized GS general pay increase (GPI).''

[[Page 14087]]

10. Staffing Supplements
    Comment: One commenter suggested that a special salary rate under 
the Staffing Supplements section was inconsistent with the provisions 
outlined under the Conversion section and questioned whether NAVFAC 
EXWC would be using special salary rates, staffing supplements, or 
both. Additionally, the commenter asked whether additional waivers of 
Chapter 53, section 5305 and 5 CFR part 530, subpart C were needed.
    Response: Upon review, we found no inconsistencies concerning 
special salary rates and staffing supplements. Under the demonstration 
project, special salary rates do not apply. Upon conversion into the 
demonstration project, employees who are receiving a special salary 
rate will be provided a staffing supplement. Retained pay provisions 
apply. Upon further review, the FRN was updated to waive 5 U.S.C. 5305 
in its entirety because special pay provisions no longer apply. 5 CFR 
part 530, subpart C was already waived in its entirety.
11. Pay Differential for Supervisory Positions
    Comment: One commenter expressed concern that supervisory pay 
differentials could not be applied to official limited and team lead 
positions.
    Response: The commenter's concern was considered and NAVFAC EXWC 
expanded eligibility for supervisory pay differentials by adding at 
III.C.10: ``NAVFAC EXWC will establish a pay differential to be 
provided at the discretion of the Technical Director (or designee) to 
incentivize and reward personnel in a Supervisory, Supervisor Civil 
Service Reform Act (CSRA) position, [(position that meets the 
definition of Supervisor in 5 U.S.C. section 7301(a)(10)], but does not 
constitute a major duty occupying at least 25% of the position's time) 
and Team Leader positions (position is titled with the prefix ``Lead'' 
and meets the minimum requirements for application of the General 
Schedule Team Leader Grade-Evaluation Guide).''
12. Expanded Development Opportunities Program
    Comment: One commenter suggested that the Technical Director have 
the ability to delegate final selection/approval for participation in 
the Expanded Development Opportunities Program.
    Response: The Technical Director can delegate this responsibility 
based on the provision as noted in II.A.2.
13. Performance Management
    Comments: Two commentors expressed concern regarding the need for a 
90-day minimum rating period and requested clarification concerning the 
following: Why is 90-days the minimum rating period? Why is there a 
presumptive rating for employees who do not meet the 90-day minimum 
requirement? What is a presumptive rating and why is it needed? What is 
a normal rating?
    Response: NAVFAC EXWC has previously used and is currently using a 
90-day minimum rating period, which has been determined to be an 
appropriate period of time to evaluate an employee's performance. A 
normal rating is a rating of record based on an employee's actual 
performance over at least a 90 calendar day period, within the current 
annual appraisal period. After further review, and in recognition of 
the demonstration project's foundation for providing performance 
ratings based on an evaluation of an employee's accomplishments and 
performance, presumptive ratings will not be provided to employees who 
do not meet the 90 day minimum requirement. However, specially situated 
employees (as described below), who do not meet the 90-day minimum 
requirement, may receive the same performance rating as the employee's 
last performance rating of record or a modal performance rating, 
whichever is most advantageous to the employee, as documented in NAVFAC 
EXWC's IOPs. However, when the most recent rating of record is 
unacceptable, only that rating of record will be considered for 
purposes of a performance rating. Section III.E.1 has been updated to 
state the following: ``The minimum rating period is 90-days. Employees 
who do not meet the 90-day minimum requirement will not be eligible for 
a STRL performance rating of record. However, specially situated 
employees, who do not meet the 90-day minimum requirement, may receive 
the same performance rating as the employee's last performance rating 
of record or a modal performance rating, whichever is most advantageous 
to the employee, as documented in NAVFAC EXWC's IOPs. However, when the 
most recent rating of record is unacceptable, only that rating of 
record will be considered for purposes of a performance rating. A modal 
performance rating is the most frequently received rating of record 
assigned to employees within a particular pay pool for a particular 
rating cycle. Specially situated employees include those employees who 
are absent from a STRL position for military service, employees on a 
prolonged absence resulting from a work-related injury approved for 
workers compensation pursuant to an Office of Worker's Compensation 
Program, and those employees in a STRL position, who have less than 90 
calendar days under a STRL performance plan due to being temporarily 
assigned to a non-STRL position. Those employees who do not meet the 
90-day minimum requirement, except for specifically situated employees, 
may receive only the general pay increase and they may also receive 
Title 5 cash awards, if appropriate.''
    Comment: One commenter expressed concern about the ability to 
assign 10 individual mission objectives and recommended modifying it to 
5-7 objectives.
    Response: Upon review, 3-10 mission objectives, as stated, provides 
maximum flexibility for supervisors.
14. Rating Benchmarks
    Comment: One commenter requested that Appendix B remove example 
benchmarks and include actual NAVFAC EXWC established benchmarks.
    Response: The comment has been considered; however, an actual 
NAVFAC EXWC benchmark has not been included to allow for the ability to 
revise benchmarks in the future; Appendix B has been updated to include 
an example of a notional NAVFAC EXWC benchmark.
15. Performance Feedback and Formal Ratings
    Comment: One commenter requested clarification as to who appoints 
pay pool managers and pay pool panel members.
    Response: The comment has been considered and to provide 
clarification, Section III.E.5 has been revised as follows: ``The 
Technical Director (or designee) of NAVFAC EXWC will establish pay 
pools, and appoint pay pool panels and Pay Pool Managers.''
16. Transition Equity
    Comment: One commenter expressed concern about the transition 
allowance of 12 months to adjust pay upon conversion, which would 
negatively impact employees on career ladder positions.
    Response: The concern about the transition equity of current 
employees under career ladder positions has been resolved by adding 
section IV.A.3: ``An employee on a career ladder position at the time 
of conversion may maintain the same salary trajectory and full

[[Page 14088]]

performance level as covered under the general schedule pay system. 
Additionally, they may be considered for accelerated compensation 
identified under the Accelerated Compensation for Developmental 
Positions (ACDP) of this FRN. Once an employee reaches the full 
performance pay band, control points will apply as outlined in NAVFAC 
EXWC IOPs.'' Clarifying language was added in section III.D.3: ``The 
Technical Director may authorize an increase to basic pay for employees 
participating in training programs, internships, or other development 
capacities. This may include positions that cross bands within a career 
path (formally known as career ladder positions), or developmental 
positions within a band. ACDP will be used to recognize development of 
job related competencies as evidenced by successful performance within 
NAVFAC EXWC. Additional guidance will be published in an IOP''.
17. Initial Probationary Period
    Comment: One commenter recommended removing ``DoD'' from 
``Employees who are still serving an initial probationary period upon 
conversion to the demonstration plan will receive credit for 
probationary service to date; however, they must serve any remaining 
probationary time to complete the full two-year DoD probationary 
period'' in order to maintain the two-year probationary period 
independent of DoD policy.
    Response: Concur with Commenter. Section IV.A.6 has been revised to 
the following: ``Employees who have completed an initial probationary 
period prior to conversion to the NAVFAC EXWC personnel demonstration 
project plan will not be required to serve another probationary period. 
NAVFAC EXWC will have a two-year probationary period. Employees who are 
still serving an initial probationary period upon conversion from GS to 
the demonstration project will receive credit for probationary service 
to date; however, they must serve any remaining probationary time to 
complete a full two-year probationary period.''

Table of Contents

I. Executive Summary
II. Introduction
    A. Purpose
    B. Problems with the Present System
    C. Expected Benefits
    D. Participating Organizations, Employees and Union 
Representation
    E. Project Design
    F. Executive STRL Policy Board
    G. Funding Level
III. Personnel System Changes
    A. Hiring, Appointment, and Related Authorities
    B. Classification, Career Paths and Pay Banding
    C. Pay and Compensation
    D. Employee Development and Awards
    E. Performance Management
    F. Workforce Shaping
IV. Conversion
    A. Initial Conversion or Movement Into the Demonstration Project
    B. Movement Out of the Demonstration Project
    C. Implementation Training
V. Project Duration
VI. Evaluation Plan
    A. Overview
    B. Data Collection To Support Evaluation
VII. Demonstration Project Costs
VIII. Management and Oversight
    A. Project Management With Automation
    B. Oversight
IX. Required Waivers to Laws and Regulations
    A. Waivers to Title 5, United States Code
    B. Waivers to Title 5, Code of Federal Regulations
Appendix A: Career Paths and Occupational Series
Appendix B: Rating Benchmark Examples

I. Executive Summary

    NAVFAC EXWC is a Warfare Center and distinguished DoD Laboratory 
established in 2012. NAVFAC EXWC's dedicated workforce provides 
specialized facilities engineering, technology solutions, and life-
cycle management of expeditionary equipment to the Navy, Marine Corps, 
Federal agencies, and other DoD customers. A majority of NAVFAC EXWC's 
civilian employees were hired in the General Schedule (GS) 
classification and pay system. The GS classification and pay system 
does not offer the same flexibilities and tools to attract, retain, 
motivate and fully compensate staff as the NAVFAC EXWC personnel 
demonstration project.
    Through this project, NAVFAC EXWC competes with the private sector 
for the best talent by making timely job offers with attractive 
compensation packages that land high-quality employees. Once these 
employees are hired, NAVFAC EXWC incentivizes performance and rewards 
innovation and motivation through compensation directly linked to 
individual performance. Linking compensation to performance increases 
job satisfaction and retention of high performing employees and 
encourages continued performance because reduced performance will draw 
less reward.
    NAVFAC EXWC's personnel demonstration project takes advantage of 
flexibilities to simplify and speed classification and staffing actions 
for employees, such as direct hire authorities, expanded details, 
temporary promotions, and modified/flexible term appointments.

II. Introduction

A. Purpose

    The purpose of the project is to demonstrate that the effectiveness 
of DoD laboratories can be enhanced by greater managerial control over 
personnel functions and to expand the opportunities available to 
employees through a more responsive and flexible personnel system.
    The NAVFAC EXWC personnel demonstration project will incorporate 
legal authorities and adopt practices from other STRLs to meet the 
specific needs of this Command. These tools will enable NAVFAC EXWC to 
dynamically shape the mix of technical skills and expertise in the 
laboratory workforce. As the Navy's leader in specialized facilities 
engineering, technology solutions, and life-cycle management of 
expeditionary equipment, NAVFAC EXWC must have the flexibility needed 
to quickly respond to changes in mission, organizational constraints, 
workload, and market conditions.
    The NAVFAC EXWC Technical Director (hereinafter referred to as the 
(``Technical Director'') has overall oversight and management of these 
authorities and any other authorities granted to a STRL, which includes 
but is not limited to, managing the workforce strength, structure, 
positions, and compensation (including pay pools) without regard to any 
limitation on appointment, positions, or funding with respect to STRL, 
and will be carried out in a manner consistent within the STRL budget. 
Also, NAVFAC EXWC's Technical Director has those authorities equivalent 
to a Technical Director SES position within a STRL. Unless specifically 
stated otherwise, the NAVFAC EXWC Technical Director may delegate 
authority within NAVFAC EXWC to effectively implement the provisions of 
this notice. NAVFAC EXWC IOPs will document any delegation, including 
details of implementation.
    Many aspects of a demonstration project are experimental. 
Modifications may be made from time to time as experience is gained, 
results analyzed r, and conclusions reached on how the system is 
working. The provisions of Department of Defense Instruction (``DoDI'') 
1400.37, ``Science and Technology Reinvention Laboratory (STRL) 
Personnel Demonstration Projects'' (including subsequently issued or 
superseding instructions) will be followed to modify, supplement

[[Page 14089]]

through adoption, or otherwise change this demonstration project plan.

B. Problems With the Present System

    The current Federal personnel system is incompatible with NAVFAC 
EXWC's need for a highly specialized, quality workforce to support the 
DoD and the Department of the Navy's overall strategic objectives. The 
characteristics of the current GS system have remained unchanged since 
its inception many years ago. Under the current GS system, work is 
classified into 15 grades with 10 interim steps within each grade. The 
GS system is rigidly defined by occupational series and grades with 
precise qualifications for each position. The GS system does not enable 
management to respond quickly to new ways of designing work or changes 
in the work itself. It does not offer flexibilities to accurately 
capture employee performance or to quickly adjust management 
expectations for critical scientific, engineering, acquisition support 
and other professional positions, including skilled technicians. The 
current GS hiring system's inability to provide job offers in a timely 
manner also hampers the NAVFAC EXWC's ability to attract high quality 
candidates.

C. Expected Benefits

    To remain the Department of the Navy's leader in supporting 
combatant capabilities and sustainable facilities, NAVFAC EXWC must 
compete with the private sector for the most talented, technically 
proficient candidates. NAVFAC EXWC must have a human resource system 
that fosters employee development, enhances performance and experience, 
and provides a strong retention incentive. This personnel demonstration 
project is expected to enable and enhance:
    (1) Recruitment of highly qualified scientific, technical, 
business, and support employees in today's competitive environment;
    (2) Selection of candidates and extension of job offers in a timely 
and efficient manner, with compensation sufficient to attract high 
quality, in-demand employees;
    (3) Employee satisfaction with pay setting and adjustment, 
recognition, and career advancement opportunities;
    (4) A quality workforce that rapidly adjusts to evolving 
requirements for the future;
    (5) Retention of high-level performers; and
    (6) Simple and cost-effective HR management processes.
    To effectively meet the above expectations, this notice identifies 
and establishes those features and flexibilities this demonstration 
project will use to achieve these objectives. The demonstration project 
primarily emphasizes streamlined hiring, a more flexible performance-
based compensation system, talent acquisition and retention, and 
professional human capital planning and execution. Those features and 
flexibilities alone, however, will not ensure success. Delivering that 
vision requires a human resources service model that is highly 
proactive, expertly skilled in analytical tools, and fully engaged as a 
strategic partner and a trusted agent of this modern multi-faceted 
defense laboratory.

D. Participating Organizations, Employees and Union Representation

    NAVFAC EXWC has major facilities in three geographic locations: 
Port Hueneme, California, Gulfport, Mississippi, and Washington, DC. 
Additionally, the organization employs personnel at more than ten sites 
worldwide. These sites are diverse in employment profiles and size and 
have bargaining unit populations. The organization operates throughout 
the full spectrum of research, development, test and evaluation, 
engineering and fleet support delivered by five business lines and six 
support lines. Wage Grade positions will not be included in this 
personnel demonstration project; however, NAVFAC EXWC will continue to 
evaluate possible future inclusion. Prior to including bargaining unit 
employees in the personnel demonstration project, NAVFAC EXWC will 
fulfill its obligation to consult and/or negotiate with the labor 
organizations in accordance with 5 U.S.C. 4703(f) and 7117, as 
appropriate.
    NAVFAC EXWC is predominantly a Navy Working Capital Fund (NWCF) 
activity. Over 60 percent of the employees to be initially included in 
the personnel demonstration project are funded by NWCF. Under NWCF, the 
cost of business and operations is built into the Stabilized Billing 
Rate (SBR) paid by customers for work performed; by maximizing 
management flexibility, NAVFAC EXWC can remain cost competitive.

E. Project Design

    There are four fundamental elements of this personnel demonstration 
project:
    (1) Hiring and staffing flexibilities;
    (2) Simplified classification;
    (3) Pay Banding; and
    (4) Performance-based compensation and assessment.
    The hiring and staffing flexibilities will help to better recruit, 
hire, and retain the most capable, qualified, and competent workforce 
in the job market today. Simplified classification will streamline the 
job classification process, reduce the effect of administrative 
processes on personnel, and allow for more flexibility in making job 
reassignments. The pay banding structure will create four career paths 
with multiple pay bands within each career path representing the phases 
of career progression that are typical for the respective career paths. 
This banding structure will enable managers to more appropriately 
reward and retain a diverse workforce using principles of pay equity 
and career progression. The performance-based compensation system is 
characterized by an assessment of an employee's performance and an 
appropriate pay allocation predicated on the assessed level of 
performance.

F. Executive STRL Policy Board

    The Executive STRL Policy Board (ESPB) will 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 ESPB will be appointed by the Technical 
Director. Ad hoc members may serve in an advisory capacity to the ESPB. 
The ESPB duties will include the following:
    (1) Establish policies and issue guidance on composition of pay 
pools in accordance with the guidelines of this proposal and internal 
procedures;
    (2) Review pay pool operation and resolve pay pool disputes;
    (3) Establish policies and issue guidance concerning the civilian 
pay budget, pay administration, awards and performance-based pay 
increases;
    (4) Establish policies and issue guidance to ensure in-house budget 
discipline and implement workforce staffing and budget plans; and
    (5) Develop policies and procedures for administering Developmental 
Opportunity Programs; ensure all employees are treated in a fair, 
equitable manner.

G. Funding Level

    The Under Secretary of Defense (Personnel & Readiness) may, at his/
her discretion, adjust the minimum funding levels to take into account 
factors such as the Department's fiscal condition, guidance from the 
Office of Management and Budget and equity in circumstances when 
funding is reduced or eliminated for GS pay raises or awards.

[[Page 14090]]

III. Personnel System Changes

A. Hiring, Appointment, and Related Authorities

1. Qualifications
    OPM ``Qualification Standards for General Schedule Positions,'' 
with minor modifications to address application of OPM qualifications 
in a pay banding environment, are used to determine qualifications for 
personnel demonstration project positions. ``Band'' is substituted for 
``Grade'' where appropriate and time in grade requirements are 
eliminated.
    Since the pay bands are anchored to the GS grade levels, the 
minimum qualification requirements for a position will be the 
requirements corresponding to the lowest GS grade incorporated into 
that pay band. For example, for a position in the Science and 
Engineering (S&E) career path Pay Band II, individuals must meet the 
basic requirements for a GS-5 as specified in the OPM ``Qualification 
Standard for Professional and Scientific Positions.''
    Selective factors may be established for a position in accordance 
with the OPM's ``Operating Manual: Qualifications Standards for General 
Schedule Positions,'' when determined to be critical to successful job 
performance. These factors may become part of the minimum requirements 
for the position, and applicants must meet them in order to be 
eligible. If used, selective factors will be stated as part of the 
qualification requirements in vacancy announcements and recruiting 
bulletins.
2. Science and Engineering Direct Hire Authorities
    A. NAVFAC EXWC, will use the direct hire authorities authorized in 
section 1108 of the NDAA for FY 2009, as amended by section 1103 of the 
NDAA FY 2012 and the direct hire authorities authorized in 10 U.S.C. 
2358a and published in 79 FR 43722 and 82 FR 29280, as modified, to 
appoint the following:
    Candidates with advanced degrees to scientific and engineering 
positions;
    (1) Candidates with bachelor's degrees to scientific and 
engineering positions; Veteran candidates to Scientific, Technical, 
Engineering, and Mathematics positions (STEM), including technician 
positions;
    Student candidates enrolled in a program of instruction leading to 
a bachelors or advanced degree in a STEM discipline; and
    (2) STEM Student Employment Program (SSEP).
    B. NAVFAC EXWC will use this direct hire authority for students in 
a STEM course of study at an accredited institution of higher 
education. The purpose of this direct hire authority is to provide a 
streamlined and accelerated hiring process that allows NAVFAC EXWC to 
compete successfully with private industry for high quality scientific, 
technical, engineering, or mathematics students for filling scientific 
and engineering positions. Students appointed under the SSEP are 
afforded an opportunity for non-competitive conversion to a permanent 
scientific or engineering position upon graduation from an accredited 
institution of higher education. Use of this authority will be 
consistent with the merit system principles. The SSEP student 
employment standards will be similar to the Pathways qualification 
standards, which will allow students appointed under this authority to 
be aligned to a pay band commensurate with the highest level of 
education completed and/or prior experience. SSEP students will remain 
on a term appointment until the completion of their educational 
program.
    C. NAVFAC EXWC may utilize all available direct hiring authorities 
to consider and appoint qualified candidates, which may include current 
federal employees. This applies to all STRL direct hire authorities 
including but not limited to those listed under Section III.2.a 
(including 82 FR 29280 and sections 1106 and 1121 of the NDAA FY2017) 
and any other applicable direct hire authorities enacted under OPM, 
DoD, or DoN or amended after the effective date of this demonstration 
project, except as waived in Section IX of this plan.
3. Distinguished Scholastic Achievement Appointments (DSAA)
    NAVFAC EXWC will use the Distinguished Scholastic Achievement 
Appointment Authority (DSAA) for pay banded positions. The DSAA uses an 
alternative examining process which provides the authority to appoint 
candidates possessing a bachelor's degree or higher to positions up to 
the equivalent of GS-12 for positions in the Science and Engineering 
(S&E) pay bands. This enables NAVFAC EXWC to respond quickly to hiring 
needs for eminently qualified candidates possessing distinguished 
scholastic achievements.
    The alternative examining process specifies that candidates may be 
appointed provided they meet the minimum standards for the position as 
published in OPM's operating manual, ``Qualification Standards for 
General Schedule Positions,'' plus any selective placement factors 
stated in the vacancy announcement; the occupation has a positive 
education requirement; and the candidate has a cumulative grade point 
average (GPA) of 3.5 (on a 4.0 scale) or better in their field of study 
(or other equivalent score) or are within the top 10 percent in their 
field of study in a graduate program.
4. Reemployment of Annuitants
    NAVFAC EXWC will use the authorities provided by 5 U.S.C. 9902(g) 
and 82 FR 43339 to appoint reemployed annuitants, as appropriate. The 
Technical Director may approve the appointment of reemployed annuitants 
and determine the salary, to include whether the annuitant's salary 
will be reduced by any portion of the annuity received, up to the 
amount of the full annuity as a condition of employment. Use of this 
authority will be consistent with merit system principles.
5. Volunteer Emeritus Program (VEP)
    The Technical Director will have the authority to offer former 
Federal employees who have retired or separated from the Federal 
service, voluntary assignments in NAVFAC EXWC. Volunteer Emeritus 
Program assignments are not considered ``employment'' by the Federal 
government. Thus, such assignments do not affect an employee's 
entitlement to buyouts or severance payments based on an earlier 
separation from Federal service. The Volunteer Emeritus Program will 
ensure continued quality research while reducing the overall salary 
line by allowing higher paid individuals to accept retirement 
incentives with the opportunity to retain a presence in the scientific 
community. The program will be of most benefit during manpower 
reductions as senior employees could accept retirement and return to 
provide valuable on-the-job training or mentoring to less experienced 
employees. Volunteer service will not be used to replace any employee, 
or interfere with career opportunities of employees. The Volunteer 
Emeritus Program may not be used to replace or substitute for work 
performed by civilian employees occupying regular positions required to 
perform the NAVFAC EXWC mission.
    To be accepted into the Volunteer Emeritus Program, a candidate 
must be recommended by a NAVFAC EXWC manager to the Technical Director. 
Everyone who applies is not entitled to participate in the program. The 
Technical Director will document the decision process for each 
candidate and retain selection and non-selection documentation for the 
duration of the

[[Page 14091]]

assignment or two years, whichever is longer.
    To ensure success and encourage participation, the volunteer's 
federal retirement pay (whether military or civilian) will not be 
affected while serving in a volunteer capacity. Retired or separated 
federal employees may accept an emeritus position without a break or 
mandatory waiting period.
    Volunteers will not be permitted to monitor contracts on behalf of 
the government or to participate on any contracts or solicitations 
where a conflict of interest exists. The same rules that currently 
apply to source selection members will apply to volunteers.
    An agreement will be established between the volunteer and the 
Technical Director. The agreement will be reviewed by the servicing 
legal office. The agreement must be finalized before the assumption of 
duties and will include:
    (A) A statement that the service provided is gratuitous, that the 
volunteer assignment does not constitute an appointment in the civil 
service and is without compensation or other benefits except as 
provided for in the agreement itself, and that, except as provided in 
the agreement regarding work-related injury compensation, any and all 
claims against the Government (stemming from or in connection with the 
volunteer assignment) are waived by the volunteer.
    (B) A statement that the volunteer will be considered a federal 
employee for the purpose of:
    (1) 18 U.S.C. 201, 203, 205, 207, 208, 209, 603, 606, 607, 643, 
654, 1905, and 1913;
    (2) 31 U.S.C. 1343, 1344, and 1349(b);
    (3) 5 U.S.C. chapters 73 and 81;
    (4) The Ethics in Government Act of 1978;
    (5) 41 U.S.C. chapter 21;
    (6) 28 U.S.C. chapter 171 (tort claims procedure), and any other 
Federal tort liability statute;
    (7) 5 U.S.C. 552a (records maintained on individuals);
    (8) The volunteer's work schedule; and
    (9) The length of agreement (defined by length of project or time 
defined by weeks, months, or years).
    (C) The support to be provided by the NAVFAC EXWC (travel, 
administrative, office space, supplies).
    (1) The volunteer's duties.
    (D) A provision that states no additional time will be added to a 
volunteer's service credit for such purposes as retirement, severance 
pay, and leave as a result of being a participant in the Volunteer 
Emeritus Program.
    (1) A provision allowing either party to void the agreement with 10 
working days written notice;
    (2) The level of security access required (any security clearance 
required by the assignment will be managed by the NAVFAC EXWC while the 
volunteer is a participant in the Volunteer Emeritus Program);
    (3) A provision that any written products prepared for publication 
that are related to Volunteer Emeritus Program participation will be 
submitted to the Technical Director for review and must be approved 
prior to publication;
    (4) A statement that the volunteer accepts accountability for loss 
or damage to Government property occasioned by the volunteer's 
negligence or willful action;
    (5) A statement that the volunteer's activities on the premises 
will conform to the NAVFAC EXWC regulations and requirements;
    (6) A statement that the volunteer will not improperly use or 
disclose any non-public information, to include any pre-decisional or 
draft deliberative information related to DoD programming, budgeting, 
resourcing, acquisition, procurement or other matter, for the benefit 
or advantage of the Volunteer Emeritus Program participant or any non-
Federal entities. Volunteer Emeritus Program participants will handle 
all non-public information in a manner that reduces the possibility of 
improper disclosure.
    (7) A statement that the volunteer agrees to disclose any 
inventions made in the course of work performed at NAVFAC EXWC. The 
Technical Director will have the option to obtain title to any such 
invention on behalf of the U.S. Government. Should the Technical 
Director elect not to take title, NAVFAC EXWC will retain a non-
exclusive, irrevocable, paid up, royalty-free license to practice or 
have practiced the invention worldwide on behalf of the U.S. 
Government.
    (8) A statement that the Volunteer Emeritus Program participant 
must complete either a Confidential or Public Financial Disclosure 
Report, whichever applies, and ethics training in accordance with 
office of Government Ethics regulations prior to implementation of the 
agreement.
    (9) A statement that the Volunteer Emeritus Program participant 
must receive post-government employment advice from a DoD ethics 
counselor at the conclusion of program participation. Volunteer 
Emeritus Program participants are deemed Federal employees for purposes 
of post-government employment restrictions.
6. Expanded Detail Authority and Temporary Promotions
    NAVFAC EXWC will have an Expanded Detail and Temporary Promotion 
Authority providing the ability to:
    (1) Effect details for up to one year to specified positions at the 
same or similar level (positions in a pay band with the same maximum 
salary) without the current 120-day renewal requirement specified at 5 
U.S.C. 3341.
    (2) Effect details or temporary promotions to a higher-level 
position up to 1 year within a 24-month period without competition. 
Details to higher-level positions beyond one year in a 24-month period 
require approval of the Technical Director and are subject to 
competitive procedures. The specifics of these authorities will be 
stipulated by NAVFAC EXWC IOPs.
7. Flexible Length and Renewable Term Technical Appointments
    NAVFAC EXWC may use the Flexible Length and Renewable Term 
Technical Appointments workforce shaping tool temporarily authorized by 
section 1109(b) of the NDAA for FY 2016, as amended by section 1112(b) 
of the NDAA for FY 2019. Further details on the implementation of this 
authority are contained in 82 FR 43339. Until this authority expires or 
is rescinded, it may be used to appoint qualified candidates who are 
not currently DoD civilian employees, or DoD employees on term 
appointments into any STEM positions, including technicians, for a 
period of more than one year but not more than six years. The 
appointment of any individual under this authority may be extended 
without limit in up to six-year increments at any time during any term 
of service under conditions set forth by the Technical Director. The 
Technical Director, or designee, will establish implementing guidance 
and procedures on the use of this authority.

B. Classification, Career Paths and Pay Banding

1. Delegation of Classification Authority
    The Technical Director has overall oversight, management, and 
delegated classification and position management authority for all STRL 
positions covered under the NAVFAC EXWC Personnel Demonstration 
Project. Classification authority will be delegated as follows: The 
NAVFAC EXWC Technical Director may delegate classification authority to 
the NAVFAC EXWC Human Resources Office (HRO) Director. The NAVFAC EXWC 
HRO Director may further delegate classification authority to the 
NAVFAC EXWC Human Resource

[[Page 14092]]

professionals. If so delegated, the NAVFAC EXWC HRO Director will 
exercise oversight to ensure consistency throughout NAVFAC EXWC. 
Managers will provide input to classification requests as a means of 
increasing managerial effectiveness and expediting the classification 
function. Administration and management of Delegated Classification 
Authority will be outlined in the NAVFAC EXWC IOPs.
2. Classification
    The present system of OPM classification standards will be used for 
the identification of the proper occupational series of positions and 
certain occupational titles within the NAVFAC EXWC demonstration 
project. Current OPM position classification standards will not be used 
to grade positions in this project. However, the grading criteria in 
those standards will be used as a framework to develop new and 
simplified standards for the purpose of pay band determinations. The 
classification standard for each pay band will serve as an important 
component in the creation of Standard Level Descriptors (SLDs) that 
record the essential criteria for each pay band within each career path 
by stating the characteristics of the work, the responsibilities of the 
position, and the competencies required. SLDs will replace current 
position descriptions. SLDs combined with the Position Requirements 
Document will include position specific information such as Fair Labor 
Standards Act (FLSA) coverage; selective placement factors or 
specialized knowledge, skills and abilities; degree requirements or 
other professional certification requirements; staffing requirements; 
and other data element information pertinent to the position.
3. Simplified Assignment Process
    Today's environment of rapid technology development and workforce 
transition mandates that the organization have maximum flexibility to 
assign individuals. Pay banding may be used to address these needs. As 
a result of the assignment to a particular pay band descriptor, the 
organization will have maximum flexibility to assign an employee within 
pay band descriptors consistent with the needs of the organization, the 
individual's qualifications and rank, and pay band. Subsequent 
assignments to projects, tasks, or functions anywhere within the 
organization requiring the same area of expertise and qualifications 
would not constitute an assignment outside the scope or coverage of the 
employee's pay band descriptor.
4. Career Paths
    A fundamental element of the NAVFAC EXWC personnel demonstration 
project is a simplified classification and pay component. Like other 
STRL demonstration projects, the proposed pay banding approach is tied 
to the 15 GS grade levels and the above GS-15 grade level. Career paths 
at NAVFAC EXWC are grouped by four career paths based on similarities 
in the type of work and customary requirements for formal education, 
training and credentials. Common patterns of advancement within the 
occupations as practiced at NAVFAC EXWC were considered. Current 
occupations and grades were examined and their characteristics and 
distribution were used to develop the career paths described below:
    (1) Science and Engineering (ND Pay Plan): This career path 
includes technical professional positions, such as engineers, 
physicists, chemists, mathematicians, operations analysts, and computer 
scientists. Specific course work or educational degrees are required 
for these occupations.
    (2) Science and Engineering Technician (NR Pay Plan): This career 
path includes technician positions such as engineering technicians, 
electronics technicians, and physical science technicians. These 
occupations require practical expertise in scientific or engineering 
support but specific course work or educational degrees are not 
required for these occupations.
    (3) Administrative/Professional (NT Pay Plan): This career path 
includes positions such as attorneys, IT specialists, paralegals, 
program managers, accountants, budget analysts, administrative 
officers, human resources specialists, and management analysts. 
Employees in these positions may or may not require specific course 
work or educational degrees.
    (4) General Support (NG Pay Plan): This career path includes the 
clerical and administrative support positions providing support in such 
fields as finance, supply, and human resources; positions applying 
typing, clerical or secretarial knowledge and skills; and student 
positions for training in these disciplines.
    Each career path is composed of discrete pay bands (levels) 
corresponding to recognized advancement within these occupations. These 
pay bands replace grades and are not the same for all career paths. 
Each career path is divided into three to five pay bands; each pay band 
covering the same pay range formerly covered by one or more GS grades. 
The salary range of each band begins with step 1 of the lowest grade in 
that pay band and ends with step 10 of the highest grade in the pay 
band. The grouping of GS grades into a particular band was based on a 
careful examination of NAVFAC EXWC's occupations, grade levels, and 
career development practices. Career paths and the associated 
classification occupational series for each are provided in Appendix A. 
The distribution of the occupational series to career paths reflects 
only those occupational series that currently exist within NAVFAC EXWC. 
Additional occupational series may be added as a result of changes in 
mission requirements or OPM-recognized occupations. These additional 
occupational series will be placed in the appropriate career path 
consistent with the established career path definitions.
5. Pay Band Structure
    The pay bands and their relation to the current GS framework are 
shown in Figure 1. This pay band structure allows significant 
flexibility to define and classify work assignments and to reward 
performance. A key feature is the overlap in (ND) career path between 
bands III and IV. ND-III begins at GS-12, step 1, and ends at GS-14, 
step 10. ND-IV begins at GS-14, step 1, and ends at GS-15, step 10. 
Control points will be applied as outlined in the NAVFAC EXWC IOPs.

[[Page 14093]]

[GRAPHIC] [TIFF OMITTED] TN12MR21.000

6. Fair Labor Standards Act
    Fair Labor Standards Act (FLSA) exemption and nonexempt 
determinations will be made consistent with criteria found in 5 CFR 
part 551. Generally, employees will be converted to the demonstration 
project with the same FLSA status they had previously. All employees 
are covered by the FLSA unless they meet the criteria for exemption. 
The duties and responsibilities outlined in the classification 
standards for each pay band will be compared to the FLSA criteria.
7. Senior Scientific Technical Managers (SSTM)
    The SSTM program will be managed and administered by the Technical 
Director, consistent with the provisions 10 U.S.C. 2358a, 79 FR 43722, 
and NAVFAC EXWC IOPs. The primary function of these positions is to 
engage in research and development in the physical, biological, 
medical, or engineering sciences, or another field closely related to 
the NAVFAC EXWC mission and to carry out technical supervisory 
responsibilities. The number of such positions may not exceed 2 percent 
of the number of scientists and engineers employed at NAVFAC EXWC, 
unless changed by future legislation, as of the close of the last 
fiscal year before the fiscal year in which any appointments subject to 
the numerical limitation are made. This authority is expected to 
provide an opportunity for career development and expansion of a pool 
of experienced, prominent technical candidates meeting the levels of 
proficiency and leadership essential to create and maintain a DoD 
state-of-the-art scientific, engineering and technological facility. 
The minimum basic pay for SSTM positions is 120 percent of the minimum 
rate of basic pay for GS-15. Maximum SSTM basic pay with locality pay 
is limited to Executive Level III (EX-III), and maximum salary without 
locality pay may not exceed EX-IV. All SSTM positions within NAVFAC 
EXWC will report to and be evaluated by the NAVFAC EXWC Technical 
Director (non-delegable). SSTMs will be evaluated by the STRL 
Performance Management System as outlined in NAVFAC EXWC's IOPs. Pay 
retention may be provided to SSTM, under criteria required by NAVFAC 
EXWC IOPs for those impacted by a reduction in force, work realignment 
or other planned management action that would necessitate moving the 
incumbent to a position in a lower pay band within the STRL for other 
than cause (performance or conduct).
8. Professional Licensure Designations for Architectural and 
Engineering Positions
    The Technical Director and the NAVFAC EXWC Chief Engineer have non-
delegable authority to designate those positions within NAVFAC EXWC 
requiring professional licensure. Engineering and Architectural 
positions requiring professional licensure will be monitored by the 
NAVFAC EXWC Chief Engineer. It is the policy of NAVFAC EXWC to recruit, 
hire, professionally develop, and maintain a professional workforce of 
the highest caliber. Professional licensing is required for any 
position, regardless of pay band, in responsible charge of engineering/
architectural work, whether performed in-house or by contract. The 
specific guidelines will be documented in NAVFAC EXWC's IOPs. However, 
the Technical Director has final authority regarding professional 
licensure requirements.
9. Classification Appeals
    Employees have the right to appeal the classification of their 
position at any time. A classification complaint is an employee's 
request for a review, at the activity level, of the pay plan, 
occupational series, position title and pay band of their position. The 
employee must formally make a complaint to their immediate supervisor 
to initiate the classification complaint review process. The HRO will 
review the complaint and issue a determination. If the employee is 
dissatisfied with the outcome of the classification complaint review, 
the employee may appeal the classification of the position to the 
Technical Director. If the employee is dissatisfied with the decision 
rendered by the Technical Director, the employee may initiate a formal 
classification appeal to the DoD appellate level. Appeal decisions 
rendered by DoD will be final and binding on all administrative, 
certifying, payroll, disbursing, and accounting officials of the 
government. Classification appeals are not accepted on positions that 
exceed the equivalent of a GS-15 level. An employee may not appeal the 
accuracy of the position description, the demonstration project 
classification criteria, or the pay-setting criteria; the assignment of 
occupational series to the career path; the propriety of a pay 
schedule; command developed position titles; or matters covered by an 
administrative or negotiated grievance procedure or an alternative 
dispute resolution procedure. The evaluations of classification appeal 
are based upon the demonstration project classification criteria. 
Additional guidance will be documented in NAVFAC EXWC IOPs.

[[Page 14094]]

C. Pay and Compensation

    Pay administration policies are established by the ESPB. The 
following definitions and policies will apply to the pay setting of new 
hires, movement of employees within the demonstration project from one 
career path or pay band to another, as well as any other pay action 
outside the performance-based assessment system.
1. Pay Setting for Appointment
    For initial appointments to the Federal service, base pay may be 
set anywhere within the pay band consistent with the special 
qualifications of the individual and the unique requirements of the 
position. These special qualifications may be in the form of education, 
training, and/or experience. Unique position requirements may include 
scarcity of qualified candidates, labor market considerations, 
programmatic urgency, or any combination thereof that is pertinent to 
the position in which the employee is being placed. Initial pay setting 
is based on base pay, not total adjusted salary. Specific guidelines 
for application of pay setting for appointments will be contained in 
NAVFAC EXWC IOPs.
2. Promotion
    A promotion is the movement of an employee to a higher pay band in 
the same career path or to a higher pay band in a different career 
path. It also includes movement of an employee currently covered by a 
non-demonstration project personnel system to a demonstration project 
position in a pay band with a higher level of work. Positions with a 
known promotion potential to a specific band will be identified when 
they are filled. Not all positions in a career path will have promotion 
potential to the same band. Promotion may be accompanied by a pay 
increase. Movement from one career path to another will depend upon 
individual competencies, and qualifications. Specific guidelines 
regarding promotions will be documented in NAVFAC EXWC IOPs.
    Progression within a pay band is based upon performance-based pay 
increases and as such, these actions are not considered promotions and 
are not subject to provisions of this section. Promotions will follow 
Merit System Principles and basic Federal Merit Staffing policy that 
provides for competitive and non-competitive promotions. To be promoted 
competitively or non-competitively, from one pay band to the next, an 
employee must meet the minimum qualifications for the job and have a 
current rating of record of 2 or above (acceptable performance rating) 
or an equivalent under a different appraisal system. Other specific 
guidelines regarding promotions will be documented in NAVFAC EXWC IOPs.
3. Reassignment
    A reassignment occurs when an employee moves, voluntarily or 
involuntarily, to a different position or set of duties within their 
pay band or to a position in a comparable pay band at a comparable 
level of work, or from a non-demonstration project position to a 
demonstration project position at a comparable level of work, on either 
a temporary or permanent basis. Under this system, employees may be 
eligible for an increase to base pay upon temporary or permanent 
reassignment. Such an increase is subject to the specific guidelines 
established by the ESPB and documented in NAVFAC EXWC IOPs.
4. Demotion or Change To Lower Pay Band
    A demotion is the placement of an employee into a lower pay band or 
movement from a non-demonstration project position to a demonstration 
project position at a lower level of work. Demotions may be for cause 
(performance or conduct) or for reasons other than cause (e.g., erosion 
of duties, reclassification of duties to a lower pay band, application 
under competitive announcements, at the employee's request, or 
placement actions resulting from Reduction-in-Force (RIF) procedures). 
In cases where change to a lower pay band is involuntary and 
accompanied by a reduction in pay, procedures under 5 CFR part 752 and 
432 remain unchanged.
5. Locality Pay
    Employees will be entitled to the locality pay authorized for their 
official duty station in accordance with 5 CFR part 531 subpart F, 
except as waived in Section IX of this plan. The locality adjusted pay 
of any employee may not exceed the rate for Executive Level IV. 
Geographic movement within the demonstration project will result in the 
employee's locality pay being recomputed using the newly applicable 
locality pay percentage which may result in a higher or lower locality 
payment.
6. Staffing Supplements
    Employees assigned to occupational categories and geographic areas 
where GS special rates apply may be entitled to a staffing supplement 
if the maximum adjusted base pay rate for the demonstration band to 
which the employee is assigned is exceeded by a GS special rate for the 
employee's occupational category and geographic area. Employees 
receiving a staffing supplement remain entitled to an underlying 
locality rate, which may over time supersede the need for a staffing 
supplement. If OPM discontinues or decreases a special rate schedule, 
retained pay provisions will be applied. If at any time after 
establishment of the demonstration project, special salary rates (SSRs) 
are deemed necessary by NAVFAC EXWC leadership, they will be 
implemented via a staffing supplement, and also documented in NAVFAC 
EXWC IOPs.
7. Grade and Pay Retention
    The project will eliminate retained grade under 5 CFR part 536. Pay 
retention will follow current law and regulations at 5 U.S.C. 5362 and 
5363 and 5 CFR part 536, except as modified in the Staffing Supplements 
section and waived in Section IX of this plan. If an employee is 
receiving retained pay under the personnel demonstration project, the 
employee's GS-equivalent grade is the highest grade encompassed in 
their pay band level.
8. Recruitment, Retention, and Relocation Incentives
    The project will continue to employ recruitment, retention, and 
relocation incentives as described in 5 CFR part 575, except as waived 
in section IX under this plan. The Technical Director is specifically 
authorized to use recruitment, retention, and relocation incentives, 
which are further described in NAVFAC EXWC IOPs. The authority in 5 CFR 
part 575, is further expanded to allow NAVFAC EXWC to offer retention 
counteroffers to high performing employees with critical scientific or 
technical skills who present evidence of an alternate employment 
opportunity with higher compensation. Such employees may be provided 
increased base pay (up to ceiling of the pay band) and/or a one-time 
cash payment that does not exceed 50 percent of one year of base pay. 
Retention counteroffers, either in the form of a base pay increase and/
or a bonus, count toward the aggregate limitation on pay consistent 
with 5 U.S.C. 5307 and 5 CFR part 530, subpart B, except as waived in 
section IX of this plan.
9. Extraordinary Achievement Allowance (EAA)
    NAVFAC EXWC will employ an Extraordinary Achievement Allowance

[[Page 14095]]

(EAA) designed to optimize organizational effectiveness. An EAA is 
defined as a temporary monetary allowance up to 25 percent of base pay, 
provided that an employee's total compensation does not exceed the rate 
of basic pay for Executive Level IV in effect at the end of such 
calendar year. It is paid on either a bi-weekly basis concurrent with 
normal pay days, or as a lump sum following completion of a designated 
contribution period, or combination of these, at the discretion of the 
Technical Director (or designee). It is not base pay for any purpose, 
e.g., retirement, life insurance, severance pay, promotion, or any 
other payment or benefit calculated as a percentage of base pay. The 
EAA will be available to certain employees whose present contributions 
are worthy of a higher career level and whose level of achievement is 
expected to continue at the higher career level for at least one year 
as specified by the ESPB and outlined in NAVFAC EXWC IOPs.
10. Pay Differential for Supervisory, Supervisor (CSRA), and Team 
Leader Positions
    NAVFAC EXWC will establish a pay differential to be provided at the 
discretion of the Technical Director (or designee) to incentivize and 
reward personnel in Supervisory positions, Supervisor Civil Service 
Reform Act (CSRA) positions (position meets definition of Supervisor in 
5 U.S.C. 7301(a)(10) but does not constitute a major duty occupying at 
least 25 percent of the position's time), and Team Leader positions 
(position is titled with the prefix ``Lead'' and meets the minimum 
requirements for application of the General Schedule Team Leader Grade-
Evaluation Guide). A pay differential is a cash incentive that may 
range up to 10 percent of the employee's base rate of pay. It is paid 
on a pay period basis and is not included as part of the employee's 
base rate of pay. The pay differential must be terminated if the 
employee is removed from the supervisory or team leader position (and 
is not placed in another supervisory or team leader position), 
regardless of cause. All personnel actions involving a pay differential 
will require a statement signed by the employee acknowledging that the 
differential is not part of base pay for any purpose and may be 
terminated or reduced as dictated by fiscal limitations, changes in 
assignment or scope of work, or by the Technical Director. Positions, 
titles, duties and responsibilities that are eligible for supervisory 
differential, as well as standards for differential awards, will be 
defined in an NAVFAC EXWC IOP. Any adjustment or termination of a 
supervisory pay differential will be in accordance with NAVFAC EXWC's 
IOPs and all applicable laws and regulations. The termination or 
reduction of the differential is not an adverse action and is not 
subject to appeal or grievance.
11. Educational Base Pay Adjustment
    NAVFAC EXWC will establish an educational base pay adjustment that 
is separate from other incentive pay and may not exceed the top of the 
employee's assigned pay band. The educational base pay adjustment may 
be used to adjust the base pay of individuals who have acquired a level 
of mission-related education that would otherwise make the employee 
qualified for an appointment at a higher level and would be used in 
lieu of a new appointment. For example, this authority may be used to 
adjust the base pay of employees who are participating in a graduate 
level Student Educational Employment Program, or employees who have 
obtained an advanced degree, such as a Ph.D., in a field related to the 
work of their position or the mission of their organization.

D. Employee Development and Awards

1. Expanded Development Opportunities Program
    NAVFAC EXWC will establish an Expanded Development Opportunities 
Program that will cover all demonstration project employees. Expanded 
development opportunities include:
    (1) Long term training;
    (2) One-year work experiences in an industrial setting via the 
Relations With Industry Program;
    (3) One-year work experiences in laboratories of allied nations via 
the Science and Engineer Exchange Program;
    (4) Rotational job assignments within NAVFAC EXWC;
    (5) Developmental assignments in higher headquarters within the DoN 
and DoD;
    (6) Self-directed study via correspondence courses and at colleges 
and universities;
    (7) Details within NAVFAC EXWC and to other Federal agencies;
    (8) Intergovernmental Personnel Act Program Agreements; and
    (9) Sabbaticals.
    Each developmental opportunity period should benefit the 
organization and increase the employee's individual effectiveness as 
well. Various learning or developmental work experiences may be 
considered, such as advanced academic teaching or research and 
sabbaticals. An expanded developmental opportunity period will not 
result in loss of or reduction in base pay, loss of leave to which the 
employee is otherwise entitled, or any loss of credit for time or 
service.
    Program openings will be announced as opportunities arise. 
Instructions for application and the selection criteria will be 
included in the announcement. Final selection/approval for 
participation in the program will be made by the Technical Director. 
The Technical Director can delegate this responsibility based on the 
provision as noted in II.A.2. The position of an employee participating 
in an expanded development opportunity may be backfilled by temporary 
assignment of other employee or temporary redistribution of work. 
However, that position or its equivalent must be made available to the 
employee upon return from the expanded developmental opportunity. An 
employee accepting an Expanded Developmental Opportunity must sign a 
continuing service agreement up to three times the length of the 
assignment, with the service obligation to NAVFAC EXWC. If the employee 
voluntarily leaves the organization before the service obligation is 
completed, the employee is liable for repayment unless the service 
agreement or the repayment is waived by the Technical Director. 
Conditions for waiver of service agreements or repayments will be 
established in the NAVFAC EXWC IOP.
2. Skills Training
    Training is essential for an organization that requires continuous 
development of advanced and specialized knowledge. Degree studies are 
also critical tools for recruiting and retaining employees with skills 
essential to the NAVFAC EXWC mission. The Technical Director has the 
authority to approve training.
    Individual training programs may be approved based upon a complete 
individual study program plan. Such training programs will ensure 
continuous development of advanced specialized knowledge essential to 
the organization and enhance the ability to recruit and retain 
personnel critical to the present and future requirements of the 
organization. Tuition payment may not be authorized where it would 
result in a tax liability for the employee without the employee's 
express and written consent. Any variance from this policy must be 
rigorously determined and documented. Guidelines will be developed to 
ensure competitive approval of training and those decisions will be 
fully documented. Employees

[[Page 14096]]

approved for training must sign a service obligation agreement to 
continue service at NAVFAC EXWC for a period three times the length of 
the training period commencing after the completion of the entire 
training program. If an employee voluntarily leaves NAVFAC EXWC before 
the service obligation is completed, he/she is liable for repayment of 
expenses incurred by NAVFAC EXWC that are related to the training. 
Expenses do not include salary costs. The Technical Director has the 
authority to waive this requirement. Criteria for such waivers will be 
addressed in NAVFAC EXWC IOPs.
3. Accelerated Compensation for Developmental Positions (ACDP)
    The Technical Director may authorize an increase to basic pay for 
employees participating in training programs, internships, or other 
development capacities. This may include employees in positions that 
cross bands within a career path (formally known as career ladder 
positions) or developmental positions within a band. ACDP will be used 
to recognize development of job related competencies as evidenced by 
successful performance within NAVFAC EXWC. Additional guidance will be 
published in an IOP.
4. Awards
    To provide additional flexibility to motivate and reward 
individuals and groups, some portion of the performance award budget 
will be reserved for special acts and other categories as they occur. 
Awards may include, but are not limited to, recognition for special or 
extraordinary achievements, patents, inventions, suggestions, and on-
the-spot awards. The funds available for awards are separately funded 
within the constraints of the organization's overall award budget. 
While not directly linked to the mission aligned objectives and 
performance compensation system, this additional flexibility is 
important to encourage outstanding accomplishments and innovation in 
accomplishing NAVFAC EXWC's diverse missions. Additionally, group 
awards may be given to foster and encourage teamwork. The Technical 
Director will have the authority to grant special act or achievement 
awards to covered employees of up to $10,000.

E. Performance Management

1. Mission Aligned Objectives and Performance Compensation
    The purpose of mission aligned objectives and performance 
compensation is to link the work of the employee to the mission of the 
organization and to provide a mechanism for recognizing the impact of 
the employee's accomplishments and performance to help achieve that 
mission. It provides an effective, efficient, and flexible method for 
assessing, compensating, and managing NAVFAC EXWC's workforce. This 
performance management system better aligns with developing a highly 
productive workforce and for providing the authority, control, and 
flexibility to achieve a quality organization and meet mission 
requirements. Mission aligned objectives and performance compensation 
encourages more employee involvement in the assessment process, strives 
to increase communication between supervisor and employee and promotes 
performance accountability. By linking mission directly to both annual 
evaluations and compensation outcomes, objectives facilitate employee 
career progression and provide an understandable and rational basis for 
pay changes. The normal rating period will be one year.
    Objectives, developed jointly by employees and their supervisors, 
must be in place within 30 days from the beginning of each rating 
period. The minimum rating period is 90-days. Employees who do not meet 
the 90-day minimum requirement will not be eligible for a STRL 
performance rating of record. However, specially situated employees, 
who do not meet the 90-day minimum requirement, may receive the same 
performance rating as the employee's last performance rating of record 
or a modal performance rating, whichever is most advantageous to the 
employee, as documented in NAVFAC EXWC's IOPs. However, when the most 
recent rating of record is unacceptable, only that rating of record 
will be considered for purposes of a performance rating. A modal 
performance rating is the most frequently received rating of record 
assigned to employees within a particular pay pool for a particular 
rating cycle. Specially situated employees include those employees who 
are absent from a STRL position for military service, employees on a 
prolonged absence resulting from a work-related injury approved for 
workers compensation pursuant to an Office of Worker's Compensation 
Program, and those employees in a STRL position, who have less than 90 
calendar days under a STRL performance plan due to being temporarily 
assigned to a non-STRL position. Those employees who do not meet the 
90-day minimum requirement, except for specifically situated employees, 
may receive only the general pay increase and they may also receive 
Title 5 cash awards, if appropriate. First-time hires must have 
performance plans in place within 30 days of their demonstration 
project entry effective date. Current demonstration project employees 
who change positions during the performance year should have their 
plans updated with new objectives no later than 30 days after 
assignment to their new position.
    Mission aligned objective and performance compensation can be in 
the form of increases to base pay and/or lump sum cash bonuses that are 
not added to base pay. The system can be modified, if necessary, as 
more experience is gained under the project. The flexibilities in this 
mission aligned objectives and performance compensation section are 
similar in nature to the authority granted to:
    (1) The Naval Ocean Systems Center and the Naval Weapons Center, 
China Lake, 45 FR 26504;
    (2) The CCDC ARL, 65 FR 3500; and
    (3) NAVAIR Aircraft and Weapons Divisions, 76 FR 8529.
2. Individual Mission Objectives
    Individual mission objectives are directly related to achieving the 
NAVFAC EXWC mission. Objectives identify expectations and typically 
consist of 3 to 10 results-oriented statements. Objectives are tangible 
and measurable so that achievements can be identified. These objectives 
incorporate important behavioral practices such as teamwork and 
cooperation where they are key to a successful outcome. One supervisory 
objective, including adherence to EEO principles, is mandatory for all 
managers/supervisors. The employee and their supervisor will jointly 
develop the employee's individual mission objectives at the beginning 
of the rating period. The supervisor has final approval authority of 
the objectives. Objectives will reflect the employee's duties/
responsibilities, pay band and pay level in the pay band as well as 
support the NAVFAC EXWC mission, organizational goals and priorities. 
Objectives will be reviewed annually and revised to reflect increased 
responsibilities commensurate with pay increases. Generic one-size-
fits-all objectives are to be avoided, so that individual mission 
objectives define an individual's specific responsibilities and 
expected accomplishments for the performance year. Supervisors and 
employees should focus on overall organizational objectives and develop 
supporting individual mission objectives.

[[Page 14097]]

    Individual mission objectives may be jointly modified, changed, or 
deleted as appropriate during the rating cycle. As a general rule, 
objectives should only be changed when circumstances outside the 
employee's control prevent or hamper the accomplishment of the original 
objectives. It is also appropriate to change objectives when mission or 
workload shifts occur.
    All objectives are critical. A critical mission objective is 
defined as an attribute of job performance that is of sufficient 
importance that achievement below the minimally acceptable level 
requires remedial action and may be the basis for removing an employee 
from his/her position. Each objective may be assigned a weight, which 
reflects its importance in accomplishing an individual's mission 
objectives. The minimum weight that can be assigned is 10 percent. The 
sum of the weights for all of the objectives must equal 100 percent. At 
the beginning of the rating period, higher-level managers will review 
the objectives and weights assigned to employees within the pay pool to 
verify consistency and appropriateness.
3. Rating Benchmarks
    Rating benchmarks define characteristics that will be used to 
evaluate the employee's success in accomplishing their individual 
mission objectives. Scoring characteristics help to ensure comparable 
scores are assigned while accommodating diverse individual objectives. 
A single set of rating benchmarks for each band or career stage may be 
used for evaluating the annual performance of all NAVFAC EXWC personnel 
covered by this plan. An example of rating benchmarks is shown in 
Appendix B. The set of benchmarks used may evolve over time, based on 
experience gained during each rating cycle. Critical characteristics 
evolve as our workforce actively moves toward meeting their individual 
and organizational objectives. This is particularly true in an 
environment where technology and work processes are changing at an 
increasingly rapid pace. The ESPB will annually review the set of 
benchmarks and set them for the entire organization before the 
beginning of the rating period.
4. Performance Feedback and Formal Ratings
    Employees and supervisors are expected to actively discuss 
expectations and identify potential obstacles to meeting goals. 
Employees should explain (to the extent possible) what is needed from 
their supervisor to support goal accomplishments. The timing of these 
discussions will vary based on the nature of work performed, but will 
occur at least 30 days from the beginning of each rating period, at the 
mid-point and at the end of the rating period. The supervisor and 
employee will discuss job performance and accomplishments in relation 
to the expectations in the mission aligned objectives. At least one 
review, normally the mid-point review, will be documented as a formal 
progress review. More frequent, task specific, discussions may be 
appropriate in some organizations. In cases where work is accomplished 
by a team, team discussions regarding goals and expectations will be 
appropriate. The employee may provide a statement of their 
accomplishments to the supervisor at both the mid-point and end of the 
rating period. However, this provision does not preclude an employee 
from providing a statement of their accomplishments to their supervisor 
that are outside the mid-year and year-end evaluations and rating 
period.
    Following a review of the employee's accomplishments at the end of 
the rating period, the supervisor will rate each of the individual 
mission objectives. Benchmark performance standards, set before the 
beginning of each rating period, describe the level of performance 
associated with a score that will be used to determine ratings of 
record. The supervisor decides where each employee's achievements and 
performance most closely match the benchmarks and assigns an 
appropriate score. These scores are not discussed with the employee or 
considered final until all scores are reconciled and approved by the 
Pay Pool Manager. The scores will then be multiplied by the objective-
weighting factor to determine the weighted score expressed to two 
decimal points. The weighted scores for each objective will then be 
totaled to determine the employee's overall appraisal score and rounded 
to a whole number as follows: If the first two digits to the right of 
the decimal are 0.51 or higher, it will be rounded to the next higher 
whole number; if the first two digits to the right of the decimal are 
0.50 or lower, then the decimal value is truncated. The resulting score 
determines the rating.
    NAVFAC EXWC will use a five-level rating methodology with 
associated payout point ranges in which level five signifies the 
highest level of performance. The supervisor will prepare and recommend 
the rating, number of payout points, and the distribution of the payout 
between base pay increase and bonus, as applicable, for each employee. 
These recommendations will then be reviewed by next level supervisors 
and then the pay pool panel to ensure equitable rating criteria and 
methodologies have been applied to all pay pool employees. The final 
determination of the rating, number of payout points, and payout 
distribution will be a function of the pay pool panel process and will 
be approved by the Pay Pool Manager. The criteria used to determine the 
number and distribution of payout points to assign an employee may 
include: Assessment of the employee's contribution towards achieving 
the mission, the employee's type and level of work, the employee's 
current compensation and the criticality of their contribution to 
mission success, consideration of specific achievements, or other job-
related significant accomplishments or contributions.
    The rating and payout point schema is:

------------------------------------------------------------------------
      Performance level description        Rating      Payout points
------------------------------------------------------------------------
Exceptional.............................        5  5, 6.
Exceeds Mission Expectations............        4  3, 4.
Full Mission Success....................        3  0, 1, 2.
Marginal Mission Success................        2  0.
Unacceptable............................        1  0.
------------------------------------------------------------------------

    Employees with an acceptable rating of record, two or above, for 
each mission aligned objective will receive the equivalent of the 
authorized GS general pay increase (GPI). An employee receiving an 
``Unacceptable'' rating of one for any mission-aligned objective will 
not receive the GPI and will require administrative action to address 
the performance deficiency. A rating of ``1'' on a single objective 
will also result in a rating of ``Unacceptable.'' Supervisors of 
employees who are assessed to be at the ``Unacceptable'' level, will 
take appropriate action as soon as practicable. However, at the end of 
the performance year, employees who are assessed to be at the 
``Unacceptable'' level will have their rating deferred until the end of 
a performance improvement period. If the employee's performance is 
found to be unacceptable following a performance improvement period a 
rating of record will be ``1'' and administrative action will be taken. 
If the employee's performance is found to be acceptable at the end of 
the improvement period, rating of record, and its associated payouts, 
to include GPI, will be applicable to the end of the appraisal period. 
If an employee's performance deteriorates again in any objective within 
two years from the beginning of the performance improvement period, 
actions may be

[[Page 14098]]

initiated to effect a performance based action with no additional 
opportunity to improve.
5. Pay Pools
    The NAVFAC EXWC Technical Director (or designee) will establish pay 
pools, and appoint pay pool panels and the Pay Pool Managers. 
Typically, pay pools will have between 35 and 300 employees. A pay pool 
should be large enough to encompass a reasonable distribution of 
ratings but not so large as to compromise rating consistency. Large pay 
pools may use sub pay pools subordinate to the pay pool due to the size 
of the pay pool population, the complexity of the mission, or other 
similar criteria. The covered organizations' employees will be placed 
into pay pools. Neither the Pay Pool Manager, supervisors, or pay pool 
panel members within a pay pool will in any way recommend or 
participate in setting their own rating or individual payout except for 
the normal employee self-assessment process.
    Each employee is initially scored by their supervisor. Next, the 
rating officials in an organizational unit (Directorates, Divisions, 
Branches, Teams, etc.), along with their next level of supervision, 
will review and compare recommended ratings to ensure consistency and 
equity of the ratings. In this step, each employee's individual mission 
objectives, accomplishments, preliminary scores, and pay are compared 
to benchmark performance standards. Through discussion and consensus 
building, consistent and equitable ratings are reached. Managers will 
not prescribe a distribution of ratings. The Pay Pool Manager will then 
chair a final review with the rating officials who report directly to 
him or her to validate these ratings and resolve any scoring issues. If 
consensus cannot be reached in this process, the Pay Pool Manager makes 
all final decisions. Ratings are finalized after this reconciliation 
process is complete. Decisions regarding the amount and distribution of 
the payouts are based on the employee's most recent rating of record 
for the performance year, the criteria listed above under performance 
feedback, the type and nature of the funding available to the pay pool, 
and the number of payout points assigned by the pay pool. In the case 
of NAVFAC EXWC attorneys, special consideration must be made relative 
to assigned score. To avoid conflict with state bar rules, the pay pool 
panel may not alter the mission aligned objective performance ratings 
or the overall score that NAVFAC HQ counsel assigns to an attorney; 
however, the pay pool panel may make independent judgments, such as pay 
adjustments after considering that score. A reconsideration from a 
NAVFAC EXWC attorney will be handled in accordance with the Office of 
General Counsel's grievance procedures after NAVFAC HQ counsel and the 
pay pool panel recommends a resolution.
    Funds within a pay pool available for performance payouts are 
divided into two components, base pay and bonus. The funds within a pay 
pool used for base pay increases are those that would have been 
available for within-grade increases, quality step increases and 
promotions under the GS system (excluding the costs of promotions still 
provided under the pay banding system). The funds available to be used 
for bonus payouts are funded separately within the constraints of the 
organization's overall award budget. Both amounts will be defined based 
on historical data and will initially be set at no less than one 
percent of total base pay annually. As changes in the demographics of 
the workforce or other exigencies occur, adjustments may be made to 
these two factors. The sum of these two factors is referred to as the 
pay pool percentage factor. The ESPB will annually review the pay pool 
funding and recommend adjustments to the Technical Director (or 
designee) to ensure cost discipline over the life of the demonstration 
project. Additional guidance on pay pool design and composition will be 
included in NAVFAC EXWC IOPs.
6. Performance Payout Determination
    The payout an employee will receive is based on the total 
performance rating from the mission aligned objectives and performance 
compensation assessment process. An employee will receive a payout as a 
percentage of base pay. This percentage is based on the number of 
payout points that equates to their final appraisal score. The value of 
a payout point cannot be determined until the rating and reconciliation 
process is completed and all scores are finalized. The payout point 
value is expressed as a percentage.
    The formula that computes the value of each payout point uses base 
pay rates and is based on:
    (1) The sum of the base pay of all the employees in the pay pool 
times the pay pool percentage factor;
    (2) The employee's base pay;
    (3) The number of payout points awarded to each employee in the pay 
pool; and
    (4) The total number of payout points awarded in the pay pool.
    This formula assures that each employee within the pool receives a 
payout point amount equal to all others in the same pool who are at the 
same rate of base pay and receiving the same score. The formula is 
shown in Figure 2.
[GRAPHIC] [TIFF OMITTED] TN12MR21.001

An individual payout is calculated by first multiplying the payout 
points earned by the payout point value and multiplying that product by 
base pay. An adjustment is then made to account for locality pay or 
staffing supplement. A Pay Pool Manager is accountable for staying 
within pay pool limits and final decisions on base pay increases and/or 
bonuses to individuals based on rater recommendations, the final score, 
the pay pool funds available, and the employee's base pay.
7. Base Pay Increases and Bonuses
    The amount of money available for the performance payouts is 
divided into two components: Base pay increases and bonuses. The base 
pay and bonus funds are based on the pay pool funding formula 
established annually. Once the individual performance amounts have been 
determined, the next step is to determine what portion of each payout 
will be in the form of a base pay increase as opposed to a bonus 
payment. The payouts made to employees from the pay pool may be a mix 
of base pay and bonus, such that all of the allocated funds are 
disbursed. To continue to provide performance incentives while also 
ensuring cost discipline, base pay increases may be

[[Page 14099]]

limited or capped. Certain employees will not be able to receive the 
projected base pay increase due to base pay caps. Base pay is capped 
when an employee reaches the maximum rate of base pay in an assigned 
pay band or when a control point applies. Also, for employees receiving 
retained rates above the applicable pay band maximum, the entire 
performance payout will be in the form of a bonus payment.
    When capped, the total payout an employee receives will be in the 
form of a bonus versus the combination of base pay and bonus. Bonuses 
are cash payments and are not part of the base pay for any purpose 
(e.g., lump sum payments of annual leave on separation, life insurance, 
and retirement). The maximum base pay rate under this demonstration 
project will be the unadjusted base pay rate of GS-15, Step 10, except 
for employees in ND Pay Band V.
8. Pay Band Progression
    As a compensation management tool, NAVFAC EXWC will use control 
points to manage position and pay progression within each band. Control 
points may be set within each band and may be used in the pay pool 
process to manage performance salary increases. Taking an employee's 
salary across a control point will require review of both the position 
and performance of the employee. Advancement across a control point may 
not occur without approval of the NAVFAC EXWC Technical Director.
    Employees who display continuous exemplary performance may be 
candidates for pay band movement to the next higher pay band. The 
request must be made by a Pay Pool Manager and must demonstrate that an 
employee's high-level of performance is commensurate with the 
complexities and responsibilities of a position in the next higher pay 
band and will continue into the future. Movement to a higher pay band 
level is not guaranteed. Approval of requests for movement to the next 
higher level pay band based on employee performance resides with the 
NAVFAC EXWC Technical Director. Criteria for crossing control points 
and movement to a higher pay band based on high-level performance will 
be contained in NAVFAC EXWC IOPs.
9. Requests for Reconsideration
    An employee may request reconsideration of the rating-of-record 
received under the mission aligned objectives and performance 
compensation system. A rating of record or job objective rating may be 
reconsidered by request of an employee only through the reconsideration 
process specified in an NAVFAC EXWC IOP (except for NAVFAC EXWC's 
attorneys, see section III.E.5). This process will be the sole and 
exclusive agency administrative process for employees to request 
reconsideration of a rating of record and is not subject to the agency 
administrative grievance system, or any negotiated grievance 
procedures.
    Consistent with this part, a Designated Management Official (DMO) 
will make the decision on reconsiderations of rating of record. The 
DMOs' decisions are final. The DMO is a senior NAVFAC EXWC manager who 
is appointed by the Technical Director to make this final 
determination. The DMO will not be the pay pool manager who made the 
decision on the subject rating. The payout point determination, payout 
distribution determination, or any other payout matter will not be 
subject to the reconsideration process, any other agency administrative 
grievance system or any negotiated grievance procedures.
    In the event of a reconsideration that results in an adjusted 
rating of record, the revised rating will be referred to the Pay Pool 
Manager for recalculation of the employee's performance payout amount 
and distribution. Any adjustment to base pay will be retroactive to the 
effective date of the performance payout. Base pay adjustments will be 
based on the payout point range appropriate for the adjusted rating of 
record. Payout point values for the adjusted rating of record will 
reflect the payout point value paid to other members across the pay 
pool for that rating cycle. Decisions made through the reconsideration 
process will not result in recalculation of the payout made to other 
employees in the pay pool.
    Appeals that contain allegations that a performance rating was 
based on prohibited actions that are subject to formal review and 
adjudication by a third party may not be processed through the 
reconsideration process, but instead may be processed by the employee 
through an applicable third party process. Such third parties include, 
but are not limited to: The Merit Systems Protection Board (MSPB), the 
Office of Special Counsel (OSC), the OPM, the Federal Labor Relations 
Authority (FLRA) and the Equal Employment Opportunity Commission 
(EEOC).

F. Workforce Shaping

1. Modified Voluntary Early Retirement (VERA) and Voluntary Separation 
Incentive Pay (VSIP)
    NAVFAC EXWC will use the modified VERA and VSIP authorities 
authorized by sections 1109(b)(3) and (4) of the NDAA for FY 2016. The 
Technical Director may use VERA and VSIP whenever such incentives will 
help the STRL to achieve one or more of the objectives in section 
1109(a). This authority may not be delegated further. DoD has 
published, at 82 FR 43339, specific direction and authorization for the 
use of VERA and VSIP authorities by STRLs for workforce shaping. If the 
laboratory workforce is being downsized, VERA and VSIP incentives may 
be used to minimize the need for involuntary separations. VERA and VSIP 
may also be used to restructure the laboratory workforce without 
reducing the number of assigned personnel. In this restructuring 
scenario, incentives may be offered for the purpose of creating 
vacancies that will be reshaped to align with mission objectives. 
Details on the specific use of this authority are contained in 82 FR 
43339.

IV. Conversion

A. Initial Conversion or Movement Into the Demonstration Project

1. Placement Into Career Paths and Pay Bands
    Employees will be converted automatically from their current GS 
series and grade to the appropriate career paths and pay band levels. 
It is essential to the success of the project that employees, upon 
entering the project, know that they are not losing a pay entitlement 
accrued under the GS system. Employees that were covered by local or 
national special salary rates will no longer be considered a special 
salary employee under the demonstration project and thus will gain 
eligibility for full locality pay. To control conversion costs and to 
avoid a salary increase windfall for these employees, the adjusted 
salaries will not change. Rather, the employees will receive a new 
basic pay rate computed by the locality pay factor for their area. A 
full locality adjustment will then be added to the new basic pay rate. 
Adverse action provisions will not apply to the conversion process, as 
there will be no change to total salary. New hires, including employees 
transferring from other Federal activities, will be converted into the 
demonstration project in the career path and at the level and pay 
consistent with the duties

[[Page 14100]]

and responsibilities of the position and individual qualifications.
2. Within-Grade Increase (WGI) Buy-In
    On the date that employees are converted to the project pay plans, 
they will be given a prorated permanent increase in pay equal to the 
earned (time spent in step) portion of their next Within Grade Increase 
(WGI) based on the value of the WGI at the time of conversion. 
Employees at step 10 or receiving a retained rate will not be eligible 
for the increase.
3. Career Ladder Positions
    An employee on a career ladder position at the time of conversion 
may maintain the same salary trajectory and full performance level as 
covered under the general schedule pay system. Additionally, they may 
be considered for accelerated compensation identified under the ACDP of 
this FRN. Once an employee reaches the full performance pay band, 
control points will apply as outlined in NAVFAC EXWC IOPs.
4. Transition Equity
    During the first 12 months following conversion, employees may 
receive pay increases for non-competitive promotion equivalents when 
the grade level of the promotion is encompassed within the same pay 
band, the employee's performance warrants the promotion and promotions 
would have otherwise occurred during that period. Employees who receive 
an in-pay band level promotion at the time of conversion will not 
receive a prorated step increase equivalent. Employees will not be 
eligible for a basic pay increase if their current rating of record is 
unacceptable at the time of conversion. The decision to grant a pay 
equity adjustment is at the sole discretion of management and is not 
subject to employee appeal procedures.
5. Conversion From Other Personnel Systems
    Employees who enter this demonstration project from other personnel 
systems (e.g., Defense Civilian Intelligence Personnel System, DoD 
Civilian Acquisition Workforce Demonstration Project, or other STRLs) 
due to a reorganization, mandatory conversion, Base Closure and 
Realignment Commission decision, or other directed action will be 
converted into the NAVFAC EXWC personnel demonstration project via 
movement of their positions using the appropriate Nature of Action 
Code. If applicable, a WGI buy-in may also be applied. The employee's 
position will be classified based upon the position classification 
criteria under the NAVFAC EXWC IOP and their pay upon conversion, 
maintained under applicable pay setting rules.
6. Initial Probationary Period
    Employees who have completed an initial probationary period prior 
to conversion to the NAVFAC EXWC personnel demonstration project plan 
will not be required to serve another probationary period. NAVFAC EXWC 
will have a two-year probationary period. Employees who are still 
serving an initial probationary period upon conversion from GS to the 
demonstration project will receive credit for probationary service to 
date; however, they must serve any remaining probationary time to 
complete a full two-year probationary period.
7. Supervisory Probationary Period
    NAVFAC EXWC will implement an extended supervisory probationary 
period. The probationary period for new supervisors will be two years, 
rather than the normal one-year probationary period specified by 5 CFR 
part 315. Except for the increased length, supervisory probationary 
periods will be made consistent with 5 CFR part 315. Employees who have 
already successfully completed an initial one-year probationary period 
for supervisory positions will not be required to complete a two-year 
probationary period for initial appointment to a supervisory position. 
Employees who are serving an initial supervisory probationary period 
upon conversion into this demonstration project will serve the time 
remaining on their one-year supervisory probationary period. If the 
decision is made to return the employee to a non-supervisory position 
for reasons related to supervisory performance and/or conduct, the 
employee will be returned to a comparable position of no lower base pay 
that the position from which promoted or reassigned immediately prior 
to the supervisory assignment.

B. Movement Out of the Demonstration Project

1. Termination of Coverage Under the Demonstration Project Pay Plans
    In the event employees' coverage under the NAVFAC EXWC STRL 
personnel demonstration project pay plans is terminated, employees move 
with their position to another system applicable to NAVFAC EXWC STRL 
employees. The grade of their demonstration project position in the new 
system will be based upon the position classification criteria of the 
gaining system. Employees may be eligible for pay retention under 5 CFR 
part 536 when converted to their positions classified under the new 
system, if applicable.
2. Determining GS Equivalent Grade and Pay When an Employee Exits the 
Demonstration Project
    If a demonstration project employee is moving to a GS or other pay 
system position, the following procedures will be used to translate the 
employee's personnel demonstration project pay band to a GS-equivalent 
grade and the employee's project base pay to the GS-equivalent rate of 
pay for pay setting purposes. The equivalent GS grade and GS rate of 
pay must be determined before movement out of the personnel 
demonstration project and any accompanying geographic movement, 
promotion, or other simultaneous action. For lateral reassignments, the 
equivalent GS grade and rate will become the employee's converted GS 
grade and rate after leaving the demonstration project (before any 
other action). For transfers, promotions, and other actions, the 
converted GS grade and rate will be used in applying any GS pay 
administration rules applicable in connection with the employee's 
movement out of the project (e.g., promotion rules, highest previous 
rate rules, pay retention rules), as if the GS converted grade and rate 
were actually in effect immediately before the employee left the 
demonstration project.
3. Equivalent GS-Grade-Setting Provisions
    An employee in a pay band corresponding to a single GS grade is 
provided that grade as the GS equivalent grade. An employee in a pay 
band corresponding to two or more grades is determined to have a GS 
equivalent grade corresponding to one of those grades according to the 
following rules:
    The employee's adjusted base pay under the demonstration project 
(including any locality payment or staffing supplement) is compared 
with step four rates in the highest applicable GS rate range. For this 
purpose, a GS rate range includes a rate in:
    (1) The GS base schedule;
    (2) The locality rate schedule for the locality pay area in which 
the position is located
    (3) The appropriate special rate schedule for the employee's 
occupational series, as applicable.
    If the series is a two-grade interval series, only odd-numbered 
grades are considered below GS-11:
    (1) If the employee's adjusted base pay under the demonstration 
project

[[Page 14101]]

equals or exceeds the applicable step four adjusted base pay rate of 
the highest GS grade in the band, the employee is converted to that 
grade;
    (2) If the employee's adjusted base pay under the demonstration 
project is lower than the applicable step four adjusted base pay rate 
of the highest grade, the adjusted base pay under the demonstration 
project is compared with the step four adjusted base pay rate of the 
second highest grade in the employee's pay band. If the employee's 
adjusted base pay under the demonstration project equals or exceeds the 
step four adjusted base pay rate of the second highest grade, the 
employee is converted to that grade;
    (3) This process is repeated for each successively lower grade in 
the band until a grade is found in which the employee's adjusted base 
pay under the demonstration project rate equals or exceeds the 
applicable step four adjusted base pay rate of the grade. The employee 
is then converted at that grade. If the employee's adjusted base pay is 
below the step four adjusted base pay rate of the lowest grade in the 
band, the employee is converted to the lowest grade; and
    (4) An exception whereby an employee will not be provided a lower 
grade than the grade held by the employee immediately preceding a 
conversion, lateral reassignment, or lateral transfer into the project, 
unless since that time the employee has either undergone a reduction in 
pay band or a reduction within the same pay band due to unacceptable 
performance. This provision does not apply to voluntary movement out of 
the demonstration project.
4. Equivalent GS-Rate-of-Pay-Setting Provisions
    An employee's pay within the converted GS grade is set by 
converting the employee's personnel demonstration project rates of pay 
to GS rates of pay in accordance with the following rules:
    (A) The pay conversion is done before any geographic movement or 
other pay related action that coincides with the employee's movement or 
conversion out of the demonstration project.
    (B) An employee's adjusted base pay under the demonstration project 
(i.e., including any locality payment or staffing supplement) is 
converted to a GS adjusted base pay rate on the highest applicable GS 
rate range for the converted GS grade. For this purpose, a GS rate 
range includes a rate range in:
    (1) The GS base schedule.
    (2) An applicable locality rate schedule.
    (3) An applicable special rate schedule.
    (C) If the highest applicable GS rate range is a locality pay rate 
range, the employee's adjusted base pay under the demonstration project 
is converted to a GS locality rate of pay. If this rate falls between 
two steps in the locality-adjusted schedule, the rate must be set at 
the higher step. The converted GS unadjusted rate of base pay would be 
the GS base rate corresponding to the converted GS locality rate (i.e., 
same step position).
    (D) If the highest applicable GS rate range is a special rate 
range, the employee's adjusted base pay under the demonstration project 
is converted to a special rate. If this rate falls between two steps in 
the special rate schedule, the rate must be set at the higher step. The 
converted GS unadjusted rate of base pay will be the GS rate 
corresponding to the converted special rate (i.e., same step position).

C. Implementation Training

    Training to promote understanding of the broad concepts and finer 
details is critical to successfully implement and execute this project. 
A new pay banding schema and performance management system both 
represent significant cultural change to the organization.
    Training is tailored to address employee concerns and encourage 
comprehensive understanding of the demonstration project. Training is 
required prior to implementation and at various times during the life 
of the demonstration project. The training program includes modules 
tailored for employees, supervisors, senior managers, and 
administrative staff. Typical modules are:
    (1) An overview of the demonstration project personnel system;
    (2) How employees are converted into and out of the system;
    (3) Pay banding;
    (4) The mission aligned objectives and performance compensation 
system;
    (5) Defining mission aligned performance objectives;
    (6) How weights may be used with the mission aligned performance 
objectives;
    (7) Assessing performance--giving feedback;
    (8) New position descriptions; and
    (9) Demonstration project administration and formal evaluation.
    Various types of training including videos, on-line tutorials, and 
train-the-trainer concepts will be used.

V. Project Duration

    Section 342 of the NDAA for FY 1995 (Pub. L. 103-337) does not 
require a mandatory expiration date for this demonstration project. The 
project evaluation plan addresses how each flexibility will be 
comprehensively evaluated for at least the first five years of the 
demonstration project. Changes and modifications to the interventions 
will be made using the provisions of DoDI 1400.37, or applicable 
superseding instructions.

VI. Evaluation Plan

A. Overview

    Chapter 47 of 5 U.S.C. requires that an evaluation be performed to 
measure the effectiveness of the demonstration project and its impact 
on improving public management. A comprehensive evaluation plan for the 
entire demonstration program, originally covering 24 DoD laboratories, 
was developed by a joint OPM/DoD Evaluation Committee in 1995. This 
plan was submitted to the Office of Defense Research & Engineering and 
was subsequently approved. The main purpose of the evaluation is to 
determine whether the waivers granted result in a more effective 
personnel system and improvements in ultimate outcomes (i.e., 
organizational effectiveness, mission accomplishment, and customer 
satisfaction). That plan, while useful, is dated and does not fully 
afford the laboratories the ability to evaluate all aspects of the 
demonstration project in a way that fully facilitates assessment and 
effective modification based on actionable data. Therefore, the STRL 
Technical Director will conduct an internal evaluation of the STRL 
Personnel Demonstration Program and will ensure USD(R&E) evaluation 
requirements are met in addition to applying knowledge gained from 
other DoD laboratories and their evaluations to ensure a timely, useful 
evaluation of the demonstration project.

B. Data Collection To Support Evaluation

    The ultimate outcomes sought are improved organizational 
effectiveness, mission accomplishment and customer satisfaction. 
However, the main focus of the evaluation will be on intermediate 
outcomes, i.e., the results of the authorized personnel system changes, 
which are expected to contribute to the desired goals and benefits 
identified Sections II.A and II.C. Data from several sources will be 
used in the evaluation. Information from existing management 
information systems and from personnel office records will be 
supplemented with perceptual survey data from employees to assess the 
effectiveness and perception of the project. The multiple sources of 
data collection will

[[Page 14102]]

provide a more complete picture as to how the flexibilities are 
working. The information gathered from one source will serve to 
validate information obtained through another source. The confidence of 
overall findings will be strengthened as the different collection 
methods substantiate each other. Both quantitative and qualitative data 
will be used when evaluating outcomes. The following data will be 
collected:
    (1) Workforce data (advanced degrees, etc.);
    (2) Personnel office data (hiring actions, time to hire, retention, 
etc.);
    (3) Employee attitude surveys;
    (4) Structured interviews and focus group data;
    (5) Comparison of desired results from the flexibilities 
implemented with actual results achieved;
    (6) Customer satisfaction surveys;
    (7) Core measures of laboratory effectiveness; and
    (8) Any additional data requested by Director, Laboratories and 
Personnel Office.
    The evaluation effort will consist of two phases, formative and 
summative evaluation, covering at least five years to permit inter- and 
intra-organizational estimates of effectiveness. The formative 
evaluation phase will include baseline data collection and analysis, 
implementation evaluation and interim assessments. The formal reports 
and interim assessments will provide information on the accuracy of 
project operation and current information on impact of the project on 
veterans and protected groups, Merit System Principles, and Prohibited 
Personnel Practices. The summative evaluation will focus on an overall 
assessment of project outcomes after five years. The final report will 
provide information on how well the HR system changes have achieved the 
desired goals, which flexibilities were most effective and whether the 
results can be generalized to other Federal installations.

VII. Demonstration Project Costs

    NAVFAC EXWC will model its demonstration project on existing 
demonstration projects but must assume some expanded project costs. 
Current cost estimates associated with implementing the demonstration 
project are shown in Figure 3. These include possible automation of 
training and project evaluation systems. The automation and training 
costs are startup costs. Transition costs are one-time costs. Costs for 
project evaluation will be ongoing for at least five years.
[GRAPHIC] [TIFF OMITTED] TN12MR21.002

VIII. Management and Oversight

A. Project Management With Automation

    One of the major goals of the demonstration project is to 
streamline the personnel processes to increase cost effectiveness. 
Automation should play an integral role in achieving that goal. Without 
the necessary automation to support the flexibilities proposed for the 
demonstration project, optimal cost benefit may not be realized. In 
addition, adequate information to support decision-making must be 
available to managers if line management is to assume greater authority 
and responsibility for human resources management. Automation to 
support the demonstration project is required at the DoN and DoD level 
(in the form of changes to the Defense Civilian Personnel Data System 
(DCPDS) or successor DoD personnel system) to facilitate processing and 
reporting of demonstration project personnel actions and may be 
ultimately required by the command to assist in processing a variety of 
personnel-related actions in order to facilitate management processes 
and decision making.
    DCPDS is the DoD's authoritative personnel data system and program 
of record and as such, DCPDS or its successor system will be the system 
of choice for the STRL labs. The detailed specifications for required 
system changes will be provided in the System Change Request (SCR), 
Form 804, concurrent with submission of this document.

B. Oversight

    Oversight will be carried out by the command's Senior Leadership, 
composed of the Technical Director and Commanding Officer. The 
Technical Director and Commanding Officer will be assisted initially by 
the NAVFAC EXWC STRL Demonstration Project Implementation Team, and 
once established, by the NAVFAC EXWC STRL Policy Board (ESPB).
1. Personnel Administration
    All personnel laws, regulations, and guidelines not waived by this 
plan will remain in effect. Basic employee rights will be safeguarded 
and merit system principles will be maintained. Except where 
specifically waived or modified in this plan, adverse action procedures 
under 5 CFR part 752 remain unchanged.

[[Page 14103]]

2. Modifications
    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. Modifications will be made in accordance with the 
provisions of DoDI 1400.37, or applicable superseding instructions.

IX. Required Waivers to Laws and Regulations

    Public Law 106-398 gave the DoD the authority to experiment with 
several personnel management innovations. In addition to the 
authorities granted by the law, the following are waivers of law and 
regulation that will be necessary for implementation of the 
demonstration project. In due course, additional laws and regulations 
may be identified for waiver request. The following waivers and 
adaptations of certain Title 5 U.S.C. and 5 CFR provisions are required 
only to the extent that these statutory provisions limit or are 
inconsistent with the actions contemplated under this demonstration 
project. Nothing in this plan is intended to preclude the demonstration 
project from applying, adopting or incorporating any law or OPM, DoD, 
or DoN regulation enacted, adopted, or amended after the effective date 
of this demonstration project.

A. Waivers to Title 5, United States Code

    Chapter 5, section 552a: Records. Waived to the extent required to 
clarify that volunteers under the Voluntary Emeritus Program are 
considered employees of the Federal government for purposes of this 
section.
    Chapter 31, section 3104: Employment of Specially Qualified 
Scientific and Professional Personnel. Waived to allow SSTM authority 
as described in this FRN and 79 FR 43722;
    Chapter 31, section 3132: The Senior Executive Service: Definitions 
and Exclusions. Waived to allow SSTMs.
    Chapter 33, Subchapter I: Examination, Certification, and 
Appointment;
    Waived except for sections 3302 and 3328 to allow for direct hire 
authority for scientists and engineers with advanced degrees for 
professional positions, and bachelor degree candidates for scientific 
and engineering positions.
    Waived for veteran candidates for scientific, technical, 
engineering and mathematics positions, including technician positions. 
Also waived to the extent to allow employees appointed on a Flexible 
Length or Renewable Term Technical Appointment to apply for federal 
positions as status candidates.
    Chapter 33, section 3308: Competitive Service; Examinations; 
Educational Requirements Prohibited. This section is waived with 
respect to the scholastic achievement appointment authority.
    Chapter 33, section 3321: Competitive Service; Probationary Period. 
This section is waived only to the extent necessary to replace 
``grade'' with ``pay band'' and to allow for probationary periods of 
two years.
    Chapter 33, section 3324: Appointments to Positions Classified 
Above GS-15; and 5 U.S.C. 3325, Appointments to Scientific and 
Professional Positions. Waived in its entirety.
    Chapter 33, section 3327: Civil service employment information. 
Waived to the extent necessary to allow public notice other than 
USAJobs for the Distinguished Scholastic Appointment Authority 
described in this FRN.
    Chapter 33, section 3330: Government-wide List of Vacant Positions. 
Waived to the extent necessary to allow public notice other than 
USAJobs for the Distinguished Scholastic Appointment Authority 
described in this FRN.
    Chapter 33, section 3341: Details. Waived in its entirety, to 
extend the time limits for details.
    Chapter 35, section 3522: Agency VSIP Plans; Approval. Waived to 
remove the requirement to submit a plan to OPM prior to obligating any 
resources for voluntary separation incentive payments.
    Chapter 35, section 3523(b)(3): Authority to Provide Voluntary 
Separation Incentive Payments. As provided for in 82 FR 43339, 
September 15, 2017, waived to remove the prescribed method of incentive 
payment calculation and the $25,000 incentive limit. Allows Technical 
Director to determine amount of incentive paid to employees under the 
workforce shaping pilot program voluntary early retirement and 
separation incentive payment authorities within the limit prescribed 
herein.
    Chapter 41, section 4107(a)(2): Academic Degree Training. Waived in 
its entirety.
    Chapter 41, section 4108: Employee Agreements; Service After 
Training. Waived to the extent necessary to:
    (1) Provide that the employee's service obligation is to NAVFAC 
EXWC for the period of the required service;
    (2) Permit the Technical Director to waive in whole or in part a 
right of recovery; and
    Require an employee in the student educational employment program 
who has received tuition assistance to sign a service agreement up to 
three times the length of the training.
    Chapter 43, section 4301-4305: Related to Performance Appraisal. 
Waived to the extent necessary to allow provisions of the performance 
compensation system as described in this FRN. Replace ``grade'' with 
``pay band''; does not apply to employees reduced in pay band without a 
reduction in pay; allows for removal for unacceptable performance 
within two years from the beginning of the performance improvement 
period; OPM responsibilities to the demonstration project are waived.
    Chapter 45, section 4502: Limitation of Cash Awards to Ten-Thousand 
Dollars. Waived to allow Technical Director to award up to $25,000 with 
the same level of authority as the Secretary of Defense to grant cash 
awards. The requirement for certification and approval of the cash 
awards by OPM is not required. All other provisions of section 4502 
apply.
    Chapter 51, section 5101-5112: Purpose, Definitions, Basis, 
Classification of Positions, Review, Authority. Waived to the extent 
that:
    (1) White collar employees will be covered by broad banding;
    (2) Allow classification provisions described in this FRN and to 
allow for SSTM positions;
    (3) Classification appeals will be decided by the Technical 
Director with final appeal to the DoD Appellate level.
    Chapter 53, sections 5301-5304 and 5306-5307: Related to Pay 
Comparability System and General Schedule Pay Rates. Waived to the 
extent necessary to allow demonstration project employees, including 
SSTM employees, to be treated as GS employees, and to allow base rates 
of pay under the demonstration project to be treated as scheduled rates 
of pay. SSTM pay will not exceed EX-IV and locality adjusted SSTM rates 
will not exceed EX III.
    Chapter 53, section 5305: Special Pay Authority. Waived in its 
entirety to allow for staffing supplements.
    Chapter 53, section 5331-5336: General Schedule Pay Rates. Waived 
in entirety.
    Chapter 53, sections 5361-5366: Grade and Pay Retention. Waived to 
the extent necessary to:
    (1) Replace ``grade'' with ``pay band;''
    (2) Allow demonstration project employees to be treated as GS 
employees;
    (3) Provide that an employee on pay retention whose rating of 
record is

[[Page 14104]]

``Unacceptable'' is not entitled to 50 percent of the amount of the 
increase in the maximum rate of base pay payable for the pay band of 
the employee's position.
    (4) Provided that pay retention does not apply to reduction in base 
pay due solely to the reallocation of demonstration project pay rates 
in the implementation of a staffing supplement;
    (5) Allow no provision of grade/pay band retention under this 
demonstration project; and
    (6) Allow demonstration project employees receiving a staffing 
supplement to retain.
    the adjusted base pay if the staffing supplement is discontinued or 
reduced. This waiver may apply to Scientific and Professional (ST), 
Senior Level (SL) and SSTM employees only if they move to a GS-
equivalent position within the demonstration project under conditions 
that trigger entitlement to pay retention.
    Chapter 55, section 5542(a)(1) and (2): Overtime Rates; 
Computation. These sections are adapted only to the extent necessary to 
provide that the GS-10 minimum special rate (if any) for the special 
rate category to which a project employee belongs is deemed to be the 
``applicable special rate'' in applying the pay cap provisions in 5 
U.S.C. 5542.
    Chapter 55, section 5545(d): Related to Hazardous Duty Premium Pay. 
Waived only to the extent necessary to allow demonstration project 
employees to be treated as GS employees.
    Chapter 55, section 5547(a) and (b): Limitation on Premium Pay. 
These sections are adapted only to the extent necessary to provide that 
the GS-15 maximum special rate (if any) for the special rate category 
to which a project employee belongs is deemed to be the ``applicable 
special rate'' in applying the pay cap provisions in 5 U.S.C. 5547.
    Chapter 57, sections 5753, 5754, and 5755: Related to Recruitment, 
Relocation, Retention Payments, and Supervisory Differential. These 
sections waived to the extent necessary to allow:
    (1) Employees and positions under the demonstration project to be 
treated as employees and positions under the GS;
    (2) That management may offer a bonus to incentivize geographic 
mobility to employees in a student educational employment program; and
    (3) To allow provisions of the retention counteroffer and 
incentives as described in this FRN. Also to the extent necessary, to 
allow SSTMs to receive pay retention and supervisory differentials as 
described in this FRN and 79 FR 43722.
    Chapter 59, section 5941: Allowances Based on Living Costs and 
Conditions of Environment; employees stationed outside continental 
United States or Alaska. Waived to the extent necessary to provide that 
cost-of-living-adjustment (COLA)'s paid to employees under the 
demonstration project are paid in accordance with regulations 
prescribed by the President (as delegated to OPM).
    Chapter 75, section 7512(3) and (4): Adverse Actions. Waived to the 
extent necessary to:
    Replace ``grade'' with ``pay band;''
    (1) Exclude reductions in pay band that are not accompanied by a 
reduction in pay;
    (2) Exclude conversions from GS special rates to demonstration 
project pay and reallocations of demonstration project pay rates within 
special rate extensions to locality adjusted pay rates due to 
promotions of general or locality pay increases, as long as the 
employee's total rate of pay is not reduced; and
    (3) Exclude reductions in base pay due solely to the operations of 
the pay setting rules for geographic movement within the demonstration 
project; and
    (4) Exclude reduction in pay due to the removal of a supervisory or 
team leader pay adjustment upon voluntary movement to a non-
supervisory, or non-team leader position.
    Chapter 99, section 9902(f): Related to Voluntary Separation 
Incentive Payments. Waived to the extent necessary to utilize the 
authorities authorized by Public Law 114-92 and detailed in 82 FR 
43339.

B. Waivers to Title 5, Code of Federal Regulations

    Part 210, section 210.102(b)(12): Definitions, Reassignment. Waived 
to the extent necessary to allow assigning an employee, without a 
position change, to any work falling within their general level 
descriptor. Waived to the extent necessary to allow tracking of such 
assignments as a ``realignment.''
    Part 300-330: Employment (General). Other than Subpart G of 300. 
Waived to the extent necessary to allow provisions of the direct hire 
authorities as described in 79 FR 43722 and 82 FR 29280.
    Part 300, section 300.601-300.605: Time-in-Grade Requirements. 
Waived to eliminate time-in-grade restrictions.
    Part 315, section 315.901 and 315.907: Related to Supervisory 
Probationary Periods. This waiver applies to the extent necessary to:
    (1) Replace ``grade'' with ``pay band'' or ``broad band;''
    (2) Allow NAVFAC EXWC to establish the length of supervisory 
probationary period; and
    (3) Allow time spent in a temporary position to be creditable 
toward completion of a supervisory probationary period.
    Part 316, sections 316.301, 316.303, and 316.304: Term Employment. 
These sections are waived to the extent necessary to allow modified 
term appointments and Flexible Length and Renewable Term Technical 
Appointments as described in this FRN.
    Part 330, section 330.103-330.105: Requirement to Notify OPM. 
Waived to the extent necessary to allow the STRL to publish competitive 
announcements outside of USAJobs.
    Part 332 and 335: Related to Competitive Examination. Waived to the 
extent necessary to allow employees appointed on a Flexible Length and 
Renewable Term Technical Appointment to apply for federal positions as 
status candidates.
    Part 335, section 335.103: Agency Promotion Programs. Waived to the 
extent necessary to extend the length of details and temporary 
promotions without requiring competitive procedures or numerous short-
term renewals.
    Part 338, section 338.301: Competitive Service Appointment. Waived 
to allow for Distinguished Scholastic Achievement Appointment grade 
point average requirements as described in this FRN.
    Part 359, section 359.705: Related to SES Pay. Waived to allow 
demonstration project rules governing pay retention to apply to a 
former SES placed on an SSTM position.
    Part 410, section 410.308(a) and (c): Related to Degree Programs. 
Waived to allow the command to pay for all courses related to an 
academic degree program approved by the Technical Director.
    Part 410, section 410.309: Agreements to Continue in Service. 
Waived to the extent necessary to allow the Technical Director to 
determine requirements related to continued service agreements, 
including employees under the Student Educational Employment Program 
who have received tuition assistance.
    Part 430, Subpart B: Performance Appraisal for General Schedule, 
Prevailing Rate and Certain Other Employees. Waived to the extent 
necessary to allow the performance appraisal program as described in 
this FRN. Section 430.208(a) (1) and (2), waived to allow presumptive 
ratings for new employees hired less than 90 days before the end of the 
appraisal cycle, or for other situations not providing adequate time 
for an appraisal.
    Part 432: Performance Based Reduction-in-grade and Removal

[[Page 14105]]

Actions. Replace ``grade'' with ``pay band.'' Modified to the extent 
that an employee may be removed, reduced in pay band level with a 
reduction in pay, reduced in pay without a reduction in pay band level 
and reduced in pay band level without a reduction in pay based on 
unacceptable performance. Also, modified to delete reference to 
critical element and to allow removal for unacceptable performance with 
two years from the beginning of a performance improvement period. For 
employees who are reduced in pay band level without a reduction in pay, 
sections 432.105 and 432.106(a) do not apply.
    Part 451, section 451.106(b): Agency Responsibilities. Waived to 
allow the Technical Director to award up to $25,000 with the same level 
of authority as the Secretary of Defense to grant a cash award. The 
requirement for certification and approval of cash awards by OPM is not 
required. All other provisions of 5 CFR 451.106 apply.
    Part 511, Subpart A, B and F: Classification Under the General 
Schedule. Waived to the extent necessary to allow classification 
provisions outlined in this FRN to include the list of issues that are 
neither appealable nor reviewable, the assignment of series under the 
project plan to appropriate career paths; and to allow classification 
appeals to be decided by the Technical Director with final appeal to 
the DoD Appellate level.
    Part 530, Subpart C: Special Rate Schedules for Recruitment and 
Retention. Waived in its entirety to allow for staffing supplements.
    Part 531, Subparts B, D, and E: Determining the Rate of Basic Pay, 
Within-Grade Increases and Quality Step Increases. Waived in its 
entirety.
    Part 531, Subpart F: Locality-Based Comparability Adjustments. This 
waiver applies only to the extent necessary to allow:
    (1) Demonstration project employees covered by broad banding to be 
treated as GS employees;
    (2) Basic rates of pay under the demonstration project to be 
treated as scheduled annual rates of pay; and
    (3) SSTM employees to be treated as GS employees and basic rates of 
pay under the SSTM to be treated as scheduled annual rates of pay. This 
waiver does not apply to FWS employees.
    Part 531, section 531.604(b)(4): Determining an employee's locality 
rate: Waived (rounding rule) in its entirety.
    Part 536: Grade and Pay Retention: Waived to the extent necessary 
to:
    (1) Replace ``grade'' with ``pay band;''
    (2) Provide that pay retention provisions do not apply to 
conversions from GS special rates to demonstration project pay, as long 
as total pay is not reduced, and to movement from a supervisory 
position to a non-supervisory position, as long as total pay is not 
reduced;
    (3) Allow demonstration project employees to be treated as GS 
employees;
    (4) Provide that pay retention provisions do not apply to movements 
to a lower pay band as a result of not receiving the general increase 
due to an annual performance rating of ``Unacceptable;''
    (5) Provide that an employee on pay retention whose rating of 
record is ``Unacceptable'' is not entitled to 50 percent of the amount 
of the increase in the maximum rate of base pay payable for the pay 
band of the employee's position;
    (6) Allow no provision of grade/pay band retention under this 
demonstration project;
    (7) Provide that pay retention does not apply to reduction in base 
pay due solely to the reallocation of demonstration project pay rates 
in the implementation of a staffing supplement; and
    (8) Allow demonstration project employees receiving a staffing 
supplement to retain the adjusted base pay if the staffing supplement 
is discontinued or reduced. This waiver may apply to Scientific and 
Professional (ST), Senior Level (SL) and SSTM employees only if they 
move to a GS-equivalent position within the demonstration project under 
conditions that trigger entitlement to pay retention.
    Part 550, section 550.113(a): Computation of Overtime Pay. This 
section is adapted only to the extent necessary to provide that the GS-
10 minimum special rate (if any) for the special rate category to which 
a project employee belongs is deemed to be the ``applicable special 
rate'' in applying the pay cap provisions in 5 U.S.C. 5542.
    Part 550, section 550.703: Severance Pay, Definitions. Definition 
of ``reasonable offer'' waived by replacing ``two grade or pay levels'' 
with ``one pay band'' and ``grade or pay level'' with ``pay band.''
    Part 550, section 550.902: Definition of ``Employee'' Hazardous 
Duty Pay Differential. Waived to the extent necessary to treat 
demonstration project employees covered by broad banding as GS 
employees.
    Part 575, Subparts A, B, C, and D: Recruitment Bonuses, Relocation 
Bonuses, Retention Allowances, and Supervisory Differentials. Waived 
only to the extent necessary to allow:
    (1) Employees and positions under the demonstration project covered 
by broad banding to be treated as employees and positions under the GS;
    (2) Relocation incentives to new employees in the student 
educational employment program whose worksite is in a different 
geographic location than that of the college enrolled;
    (3) SSTMs to receive supervisory pay differentials as described in 
this FRN and 79 FR 43726; and
    (4) To allow provisions of the retention counteroffer and 
incentives as described in this FRN.
    Part 591, Subpart B: Cost-of-Living Allowances and Post 
Differential-Non Foreign Areas. Waived to the extent necessary to allow 
demonstration project employees covered by broad banding to be treated 
as employees under the GS.
    Part 752, sections 752.201, 752.301 and 752.401: Principal 
Statutory Requirements and Coverage. Waived to the extent necessary to:
    (1) Exclude reductions in pay band not accompanied by a reduction 
in pay;
    (2) Replace ``grade'' with ``pay band;''
    (3) The extent necessary to exclude conversions from a GS special 
rate to demonstration project pay that do not result in a reduction in 
the employee's total rate of pay; and
    (4) The extent necessary to provide that adverse action provisions 
do not apply to: (a) Conversions from GS special rates to demonstration 
project pay; (b) reallocations of demonstration project pay rates 
within special rate extensions to locality adjusted pay rates due to 
promotions or general or locality pay increases, as long as the 
employee's total rate of pay is not reduced; and (c) reductions in base 
pay due solely to the operation of the pay setting rules for geographic 
movement within the demonstration project.
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    Dated: March 9, 2021.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2021-05172 Filed 3-11-21; 8:45 am]
BILLING CODE 5001-06-C