Personnel Demonstration Project at the Army Futures Command Science and Technology Reinvention Laboratory (STRL), 62801-62832 [2022-22470]

Agencies

• DEPARTMENT OF DEFENSE
• Office of the Secretary

[Federal Register Volume 87, Number 199 (Monday, October 17, 2022)]
[Notices]
[Pages 62801-62832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22470]



[[Page 62801]]

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DEPARTMENT OF DEFENSE

Office of the Secretary

[Docket ID: DoD-2022-OS-0117]


Personnel Demonstration Project at the Army Futures Command 
Science and Technology Reinvention Laboratory (STRL)

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

ACTION: Notice of proposal to adopt a STRL personnel management 
demonstration project plan and additional flexibilities.

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SUMMARY: This serves as notice of the proposed adoption of STRL 
personnel demonstration project flexibilities by an STRL comprised of 
certain organizations within the U.S. Army Futures Command (AFC), known 
collectively as the AFC STRL. The organizations comprising the AFC STRL 
are: the U.S. Army Futures Command Headquarters and Headquarters 
Components (AFC HHC); the Futures and Concepts Center (FCC); Cross 
Functional Teams (CFTs); The Research and Analysis Center (TRAC); the 
Combat Capabilities Development Command (CCDC) Headquarters (also known 
as DEVCOM Headquarters); and the DEVCOM Analysis Center (DAC). The AFC 
STRL proposes to adopt, with some modifications, personnel 
demonstration project flexibilities implemented by the Combat 
Capabilities Development Command (CCDC) Army Research Laboratory (ARL); 
CCDC Command, Control, Communications, Computers, Cyber, Intelligence, 
Surveillance, and Reconnaissance Center (C5ISR); the Army Research 
Institute for the Behavioral and Social Sciences (ARI); the CCDC 
Armament Center (AC); the Technical Center (TC), U.S. Army Space and 
Missile Defense Command (USASMDC); and the Joint Warfare Analysis 
Center (JWAC). Most flexibilities and administrative procedures are 
adopted without changes. However, modifications were made when 
necessary to address specific management and workforce needs. In 
addition, changes were made based on current law, best practices, and 
administrative guidance.

DATES: This proposal may not be implemented until a 30-day comment 
period is provided, comments addressed, and a final Federal Register 
notice published. To be considered, written comments must be submitted 
on or before November 16, 2022.

ADDRESSES: You may submit comments, identified by docket number and 
title, by any of the following methods:
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions for submitting comments.
    Mail: Department of Defense, Office of the Assistant to the 
Secretary of Defense for Privacy, Civil Liberties, and Transparency, 
Regulatory Directorate, 4800 Mark Center Drive, Attn: Mailbox 24, Suite 
08D09, Alexandria, VA 22350-1700.
    Instructions: All submissions must include the agency name, docket 
number and title for this Federal Register document. The general policy 
for comments and other submissions from members of the public is to 
make these submissions available for public viewing on the internet at 
https://www.regulations.gov as they are received without change, 
including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT:  AFC STRL: Marlowe Richmond, 
(512) 726-4397, [email protected].
     Office of Under Secretary of Defense (Research and 
Engineering), DoD Laboratories, Federally Funded Research and 
Development Centers and University Affiliated Research Center Office: 
Dr. James B. Petro, (571) 286-6265, [email protected].

SUPPLEMENTARY INFORMATION: As authorized by 10 United States Code 
(U.S.C.) 4121, the Secretary of Defense may carry out personnel 
demonstration projects at Department of Defense laboratories designated 
as DoD STRL. On May 13, 2021, certain elements of Army Futures Command 
(AFC) were designated as a single Science and Technology Reinvention 
Laboratory (STRL), known as the AFC STRL. The AFC STRL will administer 
a single personnel demonstration project, hereinafter referred to as 
the ``Modernization Personnel Demonstration Project'' or ``Mod Demo,'' 
for these AFC organizations: the AFC Headquarters and Headquarters 
Components, the Futures and Concepts Center, Cross-Functional Teams 
(CFTs), the Research and Analysis Center, and the U.S. Army Combat 
Capabilities Development Command (DEVCOM) Headquarters offices. In 
addition, the DEVCOM Data and Analysis Center (DAC), which is partially 
aligned with the Army Research Laboratory STRL, will be realigned, in 
its entirety, as part of the AFC STRL. The remaining organizations 
within AFC will continue to operate as independent STRLs under their 
own personnel demonstration project authorities.
    Through the USD(R&E), the Secretary exercises the authorities 
granted to the Office of Personnel Management (OPM) under 5 U.S.C. 4703 
to conduct personnel demonstration projects at DoD laboratories 
designated as STRLs. All STRLs authorized pursuant to 10 U.S.C. 4121 
may use the provisions described in this FRN. STRLs implementing these 
flexibilities must have an approved personnel demonstration project 
plan published in an FRN and must fulfill any collective bargaining 
obligations. Each STRL will establish internal operating procedures 
(IOPs) as appropriate.

1. Background

    Many studies have been conducted since 1966 on the workforce 
quality of the laboratories and associated personnel. Most of the 
studies recommended improvements in civilian personnel policy, 
organization, and management. Pursuant to the authority provided in 10 
U.S.C. 4121, several DoD STRL personnel demonstration projects have 
been implemented. 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, it implies a 
similar opportunity and authority to develop personnel flexibilities 
that significantly increase the decision authority of laboratory 
commanders and/or directors.
    With the assistance of other DoD STRLs, to include the independent 
STRLs within AFC, and experts from across DoD, the AFC STRL operational 
planning team conducted a thorough review of STRL personnel practices, 
laws, regulations, and guidance to identify potential flexibilities 
that would allow the AFC STRL to create a contemporary, flexible 
personnel management system to attract, motivate, train, and retain a 
top-performing science, technology, and modernization workforce. In 
addition to existing flexibilities available to all DoD STRL, new 
flexibilities and modifications are being proposed for MoD Demo 
following study and analysis by the AFC STRL operational planning team.
    Although the organizations comprising the AFC STRL are components 
of the umbrella AFC organization that is responsible for modernizing 
the Army, the varied composition of the AFC STRL modernization 
workforce, including headquarters personnel, analysts,

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integrators, technology and concept creators, and traditional Science & 
Technology (S&T) innovators, requires significant personnel management 
flexibility. As a result, the proposed AFC STRL Mod Demo plan 
incorporates multiple IOPs, decentralized lines of authority, and new 
flexibilities adapted from other STRL demonstration projects.
    The AFC STRL Mod Demo plan includes:
    (1) Changes to appointment authorities, hiring rules, and 
qualification standards;
    (2) Changes to pay setting rules and regulations;
    (3) Pay banding and simplified job classification;
    (4) Science, Technology, Engineering, and Mathematics (STEM) 
Student Employment Program (SSEP) and Accelerated Intern Compensation;
    (5) Sabbaticals;
    (6) Substitution for the Defense Performance Management and 
Appraisal Program (DPMAP);
    (7) Academic degree, certificate, and critical skills training;
    (8) Senior Scientific Technical Manager (SSTM) positions;
    (9) Changes to workforce shaping rules, such as Reduction-in-Force 
(RIF), Voluntary Early Retirement Authority (VERA), and Voluntary 
Separation Incentive Program (VSIP);
    (10) Voluntary Emeritus and Expert Program;
    (11) Improved incentives; and
    (12) Extended Probationary Periods.
    Many aspects of a demonstration project are experimental. 
Modifications may be made from time to time as experience is gained, 
results analyzed, and conclusions reached on how the system is working, 
in accordance with the provisions of Department of Defense Instruction 
(DoDI) 3201.05, ``Management of Science and Technology Reinvention 
Laboratory Personnel Demonstration Projects'' (available at https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/320105p.PDF?ver=e_ePssSOULpXxcH2PcRhwA%3d%3d).

2. Overview

    The AFC STRL will adopt flexibilities implemented by the following 
STRL Personnel Demonstration Project plans: CCDC AC, 76 FR 3744, 
January 20, 2011; ARI, 85 FR 76038, November 27, 2020; CCDC ARL, 63 FR 
10680, March 4, 1998; CCDC C5ISR, 66 FR 54872, October 30, 2001; JWAC, 
85 FR 29414, May 15, 2020; and USASMDC-TC, 85 FR 3339, January 21, 
2020.
    Adoption of STRL personnel demonstration project flexibilities will 
enable the AFC STRL to achieve the best workforce for its modernization 
mission, adjust the workforce for change, improve workforce quality, 
and allow the AFC STRL to acquire and retain an enthusiastic, 
innovative, and highly educated and trained workforce for Army 
modernization. The purpose of the project is to demonstrate that the 
effectiveness of DoD organizations can be enhanced by allowing greater 
managerial control over personnel functions and, at the same time, 
expand the opportunities available to employees through a more 
responsive and flexible personnel system. Additionally, because AFC 
STRL component organizations are geographically dispersed to highly 
competitive recruitment areas, implementation of the AFC STRL Mod Demo 
is essential to competitively hire and retain a highly qualified 
workforce.

3. Access to Flexibilities of Other STRLs

    Flexibilities published in this FRN will be available for use by 
DoD laboratories designated as STRLs pursuant to 10 U.S.C. 4121, 
including any newly designated STRLs, if they wish to adopt them in 
accordance with DoDI 3201.05, and after the fulfillment of any 
collective bargaining obligations.

Table of Contents

I. Executive Summary
II. Introduction
    A. Purpose
    B. Problems With the Present System
    C. Changes Required/Expected Benefits
    D. Participating Organizations
    E. Participating Employees and Union Representation
    F. Project Design
    G. Personnel Management Board (PMB)
    H. Organizational Structure and Design
    I. Funding Levels
III. Personnel System Changes
    A. Levels of Authority and Responsibility
    B. Pay Banding
    C. Classification
    D. Pay-for-Performance Management System
    E. Hiring and Appointment Authorities
    F. Volunteer Emeritus and Expert Program (VEP)
    G. Internal Placement
    H. Pay Setting
    I. Employee Development
    J. VERA and VSIP
IV. Conversion
    A. Conversion Into the Demonstration Project
    B. Conversion or Movement From a Project Position to a General 
Schedule Position
V. Implementation Training
VI. Project Maintenance and Changes
VII. Evaluation Plan
    A. Overview
    B. Evaluation Model
    C. Method of Data Collection
VIII. Demonstration Project Costs
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: Occupational Series by Career Path
    Appendix B: List of Local Unions

I. Executive Summary

    AFC leads a continuous transformation of Army modernization in 
order to provide future warfighters with the concepts, capabilities, 
and organizational structures they need to dominate a future 
battlefield. AFC is the newest Army Command, established in 2018 when 
the Army consolidated many of its laboratories, concepts development 
centers, and innovation elements under one command structure.
    Although the organizations comprising the AFC STRL share the same 
overarching modernization mission, their specific alignments, 
structures, and workforces differ dramatically. The organizations 
include two large headquarters elements, two analysis centers, multiple 
cross functional teams, and two concepts and capabilities development 
organizations. They all share the urgent need for a high-quality, 
contemporary, flexible personnel management system to attract, 
motivate, train, and retain a top-performing science, technology, and 
modernization workforce.
    The goal of the AFC STRL Mod Demo is to make AFC STRL a premier 
employer with growth opportunities, competitive pay, and management 
flexibilities to take care of both employees and the mission. The AFC 
STRL Mod Demo features pay banding, performance-based compensation, 
flexible hiring, and a modern approach to career progression and 
assignments.

II. Introduction

A. Purpose

    The purpose of STRL personnel demonstration projects is to 
demonstrate that the effectiveness of DoD STRLs can be enhanced by 
expanding opportunities available to employees and by allowing greater 
managerial control over personnel functions through a more responsive 
and flexible personnel system. A top-tier workforce is essential to the 
AFC STRL's efforts towards achieving technological innovation and 
modernization for the Army. AFC STRL needs a contemporary, flexible 
personnel management system to attract, motivate, train, and retain a 
top-performing science, technology, and modernization workforce. The 
goal of this project is to ensure AFC STRL remains a premiere employer 
with growth opportunities, appropriate pay,

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and management flexibility to take care of both employees and the 
mission.
    While many aspects of a demonstration project were once considered 
experimental, many have been implemented in various DoD laboratories 
for several years, to include other STRLs within AFC. Modifications to 
the initial project plans have been made based on the implementation 
experience of these laboratories, best practices, and formative 
evaluation efforts. Additional modifications may be needed from time to 
time, as additional experience is gained and based on evaluations of 
how the system is working to meet the goals and objectives of the 
personnel demonstration project.

B. Problems With the Present System

    The current Civil Service General Schedule (GS) system has 15 
grades with 10 levels each and involves lengthy, narrative, individual 
position descriptions, which must be classified by complex Title 5 
classification standards. Base pay is set at one of those fifteen 
grades and the ten interim steps within each grade. The Classification 
Act of 1949 rigidly defines types of work by occupational series and 
grade, with very precise qualifications for each job. This system does 
not quickly or easily respond to new ways of designing work and changes 
in the work itself. Changes to the classification and pay system would 
enable greater management control to create new types of jobs that 
respond to the fast-changing world of modernization work in which AFC 
STRL is engaged.
    In addition to classification issues, the GS system's approach to 
career flexibility, progression, and changing work assignments is 
rigid, slow, and designed for industrial-era employees who entered 
Civil Service and remained until retirement. Modern employees expect 
careers that include frequent company changes, new challenges, and 
work-life balance fluctuations that do not require staying with a 
single employer. Allowing employees to move in and out of Civil Service 
while minimizing career impact would give AFC STRL access to an 
additional pool of scientists, engineers, and technical personnel, even 
when they have changing life circumstances. It would also increase 
information exchange between AFC STRL and industry.
    The speed with which new science, technology, and engineering 
concepts emerge demands the ability to quickly re-shape work 
assignments, re-train employees, and maximize the potential of the 
existing workforce. Internal reassignments and promotions under the GS 
system are also rigid, and limitations on training further hamper 
efforts to respond to the rapid changes in the modernization mission.

C. Changes Required/Expected Benefits

    The primary benefit expected from this demonstration project is 
greater organizational effectiveness through increased employee 
satisfaction. The long-standing Department of the Navy ``China Lake'' 
and subsequent demonstration projects have produced impressive 
statistics on increased job satisfaction and quality of employees 
versus that of the Federal workforce in general. Similar results have 
been demonstrated in more recent STRL demonstration projects and other 
alternative personnel systems implemented in the DoD and other 
agencies.
    This project will demonstrate that a human resource system tailored 
to the mission and needs of the modernization workforce will 
facilitate:
    (1) Increased quality in the workforce;
    (2) More effective, efficient, and adaptable organizational 
systems;
    (3) Improved timeliness of key personnel processes;
    (4) Increased retention of excellent performers;
    (5) Increased success in recruitment of personnel with critical 
skills;
    (6) Increased information exchange between AFC STRL and industry;
    (7) Increased permeability between Civil Service and industry; and
    (8) Increased workforce satisfaction and engagement.

D. Participating Organizations

    AFC STRL currently has employees located in twenty-one states and 
several countries. Just over half are spread across Aberdeen Proving 
Ground (Maryland), Austin (Texas), and White Sands Missile Range (New 
Mexico), with most of the remaining employees in Kansas, Virginia, 
Oklahoma, Georgia, Missouri, Alabama, Michigan, and other parts of 
Texas.
    AFC STRL is a comprised of multiple AFC organizations; the 
remaining AFC organizations are covered by independent STRL personnel 
demonstration projects. The AFC STRL is comprised of the organizations 
listed below (hereinafter referred to as ``AFC STRL organizations,'' 
and their components.
    (1) AFC Headquarters and Headquarters Components (AFC HHC), which 
includes AFC Headquarters (HQ), AFC Support Battalion (AFCSB), Software 
Factory (SWF), Artificial Intelligence Integration Center (AI2C), Army 
Applications Lab (AAL), and Acquisition & Systems (A&S) Directorate.
    (2) AFC Cross Functional Teams (AFC CFTs), which includes Long 
Range Precision Fires (LRPF CFT); Next Generation Combat Vehicle (NGCV 
CFT); Future Vertical Lift (FVL CFT); Network (NW CFT); Assured 
Positioning, Navigation and Timing/Space (APNT/S CFT); Air and Missile 
Defense (AMD CFT); Soldier Lethality (SL CFT); and Synthetic Training 
Environment (STE CFT).
    (3) The Research and Analysis Center (TRAC).
    (4) Futures and Concepts Center (FCC), which includes Joint 
Modernization Command (JMC) and the Capability Development Integration 
Directorates (CDIDs).
    (5) Combat Capabilities Development Command (CCDC) Headquarters 
(also known as DEVCOM Headquarters).
    (6) The DEVCOM Analysis Center (DAC).

E. Participating Employees and Union Representation

    This demonstration project will cover civilian employees appointed 
under title 5 U.S.C. in the occupations listed in appendix A. 
Additional employees and other occupations may be added after 
implementation of the project. The project plan does not cover members 
of the Senior Executive Service (SES), Senior Level (SL) employees, 
Scientific and Professional (ST) employees, Federal Wage System (FWS) 
employees, and employees presently covered by the Defense Civilian 
Intelligence Personnel System (DCIPS) or Physicians and Dentists Pay 
Plan (PDPP).
    Department of the Army (DA), Army Command centrally funded, local 
interns, and Pathways Program employees may be converted to the 
demonstration project if assigned to an AFC STRL organization. 
Additional guidance will be included in the Mod Demo Internal Operating 
Procedures (IOPs).
    Sixteen local and/or national unions, from American Federation of 
Government Employees (AFGE), Laborer's International Union of North 
America (LIUNA), National Federation of Federal Employees (NFFE), 
National Association of Government Employees (NAGE), and National 
Association of Independent Labor (NAIL), cover approximately 30% of 
employees in the AFC STRL. A full list of the local unions is provided 
at appendix B. AFC STRL organizations will continue to fulfill their 
obligations to consult and/or negotiate with all labor organizations in 
accordance with title 5 U.S.C. 4703(f) and 7117 for bargaining unit 
participation.

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F. Project Design

    The AFC Commanding General (CG)/AFC STRL Director leveraged the 
knowledge of experienced and tenured STRL leaders within the greater 
AFC organization to finalize the AFC STRL Mod Demo project plan. In 
consultation with members of the Laboratory Quality Enhancement Program 
Personnel Subpanel (LQEP-P), other DoD laboratories, Army G1, Army 
Civilian Human Resources Agency (CHRA), and a host of other 
knowledgeable agencies and personnel, the AFC STRL operational planning 
team conducted a comprehensive review of personnel flexibilities used 
in existing DoD laboratories and other government agencies. It also 
analyzed organizational needs and considered innovative personnel 
practices used outside of the federal government to develop proposed 
flexibilities for the AFC STRL Mod Demo.
    AFC STRL employed an executive Board of Directors comprised of 
leaders from across the AFC STRL to accommodate the differing needs of 
AFC STRL organizations, and a Council of Champions led by the AFC CG/
AFC STRL Director to ensure all proposals support AFC STRL's strategic 
needs. Collaboration and oversight by Army and DoD ensured alignment 
with Departmental goals.
    The resulting project design for Mod Demo will be overseen by the 
AFC CG/AFC STRL Director. It will be implemented through six 
organization-specific Internal Operating Procedures (IOPs) and a single 
Mod Demo Personnel Management Board (PMB). Each of the AFC STRL 
organizations listed in Paragraph D will have its own IOP. Authority to 
draft, modify, implement, negotiate, and approve each IOP shall rest 
with these organizations. A review of these Mod Demo IOPs will be 
completed by the servicing legal office prior to approval.
    Any responsibilities and authorities normally associated with STRL 
Directors that are not specifically defined in this Notice shall be as 
defined under applicable U.S. OPM operating rules and regulations. 
Additional information on delegated authorities and the project 
structure are included in Section III.

G. Personnel Management Board (PMB)

    AFC STRL will create a Mod Demo PMB to oversee and monitor the fair 
and equitable implementation of the provisions of the demonstration 
project, to include establishment of internal controls and 
accountability. The board will consist of the AFC Executive Deputy 
Commanding General (EDCG), as PMB Chair, and officials from the AFC 
STRL organizations listed in Paragraph D. The AFC EDCG may delegate 
membership, add, remove, or change the membership of the PMB, in 
accordance with the evolution of the AFC STRL Mod Demo. The PMB may 
also include experts in Human Resources, Resource Management, or other 
relevant areas, as appointed by the AFC EDCG.
    Based on guidance and consistent interaction with the AFC EDCG, the 
board will execute the following:
    (1) Oversee the implementation guidance and procedures in all 
aspects of the Mod Demo program in accordance with the direction given 
by the AFC CG/AFC STRL Director;
    (2) Issue top-level guidelines for AFC STRL organizations to 
establish and implement pay pools;
    (3) Review pay pool results for equity and conformance, on an 
annual basis;
    (4) Resolve administrative pay pool disputes that are not resolved 
through other means;
    (5) Establish guidelines for the use of retention counter-offers;
    (6) Review and approve the assignment of new occupational series to 
a pay band, if necessary;
    (7) Establish guidelines for exceptions to base pay increases, such 
as Extraordinary Achievement Rewards and Distinguished Contribution 
Allowances;
    (8) Establish guidelines for the Voluntary Emeritus/Expert Program;
    (9) Modify the Standard Performance Elements, as needed;
    (10) Establish guidelines for the use of Subject Matter Expert 
Qualifications for exceptional experience;
    (11) Approve any Performance-Based Rules created and administered 
by AFC STRL organizations, prior to their implementation;
    (12) Assess the need for changes to demonstration project 
procedures and policies and provide leadership for efforts to modify 
this Notice;
    (13) Promote collaboration and best practices within Mod Demo;
    (14) Review Mod Demo IOPs for equity and conformance;
    (15) Track personnel cost changes and recommend adjustments, if 
required;
    (16) Conduct formative evaluations of the project, including those 
directed by DoD.
    In executing these duties and responsibilities, the board will keep 
in close contact and consultation with the AFC EDCG to ensure policies 
and procedures are executed consistently throughout Mod Demo and are 
aligned with AFC STRL strategic objectives.

H. Organizational Structure and Design

    To optimize the effectiveness and efficiency of the AFC STRL during 
the adoption of the new personnel demonstration system, the AFC STRL 
may review and realign the organization structure to best meet mission 
needs and requirements. Realignment may include removing limitations in 
terms of supervisory ratios consistent with 10 U.S.C. 4121, and the 
alignment and organization of the workforce required to accomplish the 
mission of the AFC STRL.
    In general, the AFC CG/AFC STRL Director will manage the STRL's 
workforce strength, structure, positions, and compensation without 
regard to any limitation on appointments, positions, or funding in a 
manner consistent with the budget available in accordance with 10 
U.S.C. 4091.

I. Funding Levels

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

III. Personnel System Changes

A. Levels of Authority and Responsibility

    Due to the unique structural design of this demonstration project, 
certain responsibilities that are typically reserved for STRL lab 
directors are assigned to other AFC STRL officials. Such designations 
are referenced throughout this notice using the definitions in this 
section. No responsibilities, authorities, or delegations in this 
notice are intended to replace or override command authorities.
    Definitions. The following terminology is used throughout this 
notice to refer to management and other officials in the AFC STRL.
    (1) AFC STRL Director. This term refers to the AFC CG.
    (2) AFC STRL organization approval authority. This term refers to 
the following positions in their respective organizations: AFC EDCG for 
AFC HQ; AFC Principal Deputy CG for CFT; FCC CG for FCC; Director, TRAC 
for TRAC; DEVCOM CG for DEVCOM HQ; and Director, DAC for DAC.
    (3) PMB Member. This term refers to a member of the PMB, as defined 
in Section II.G. of this Notice.
    (4) Pay Pool Manager. This term refers to the individual who 
approves the total

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performance ratings, reviews the ratings of employees within the pay 
pool for consistency and fairness, resolves any rating issues, and 
makes final decisions on ratings and payouts.
    (5) Pay Pool Panel/Reconciliation Board. This term refers to the 
group of supervisors/managers who reconcile ratings and payouts for the 
employees in each pay pool.

B. Pay Banding

    The design of the AFC STRL Mod Demo pay band system takes advantage 
of the exhaustive studies performed by DA and DoD of pay band systems 
currently practiced in the Federal sector, to include those practiced 
by the Navy's ``China Lake'' experiment and the National Institute of 
Standards and Technology (NIST). The pay band system will replace the 
current GS structure. Currently, the fifteen grades of the GS are used 
to classify positions and, therefore, to set pay. The GS covers most 
civilian white-collar Federal employees in professional, technical, 
administrative, and clerical positions. Changes in this rigid structure 
are required to allow flexibility in hiring, developing, retaining, and 
motivating the workforce.
1. Career Paths and Pay Bands
    Occupations with similar characteristics will be grouped together 
into one of three career paths with pay bands designed to facilitate 
pay progression. Each career path will be composed of pay bands 
corresponding to recognized advancement and career progression expected 
within the occupations. Each career path will be divided into three to 
five pay bands with each pay band covering the same pay range now 
covered by one or more GS grades. The upper and lower pay rate for base 
pay of each pay band is defined by the minimum and maximum GS rate for 
the grade as indicated in Figure 1, except for Level V of the Science & 
Engineering career path. Comparison to the GS grades was used in 
setting the upper and lower base pay dollar limits of the pay bands. 
However, once employees are moved into the demonstration project, GS 
grades will no longer apply.
    The occupational series listed in appendix A served as guidelines 
in the development of the following three career paths:
Figure 1
[GRAPHIC] [TIFF OMITTED] TN17OC22.000

    Science and Engineering (S&E) (Pay Plan DB): This career path 
includes technical professional positions, such as engineers, 
physicists, chemists, mathematicians, operations research analysts, and 
computer scientists. Information Technology (IT) specialists 
(occupational series 2210) who contribute to highly-technical and/or 
scientific programs that reside in the research, development, or 
engineering domains, using offensive, and defensive cyber competencies 
will also be included in this career path. All other IT specialists 
will be included in the Business and Technical (B&T) career path. 
Specific course work or educational degrees are required for these 
occupations (except cyber-IT). Five pay bands have been established for 
the S&E career path:
    a. Pay Band I is a student trainee track covering GS-1, step 1 
through GS-4, step 10.
    b. Pay Band II is a developmental track covering GS-5, step 1 
through GS-11, step 10.
    c. * Pay Band III includes GS-12, step 1 through GS-14, step 10.
    d. * Pay Band IV includes GS-14, step 1 through GS-15, step 10.
    e. Pay Band V covers Senior Scientific Technical Manager (SSTM) 
positions which are described in further detail in paragraph 2 of this 
section.
    * Pay Bands III and IV overlap at the end and start points. These 
two pay bands have been designed following a feature used by the Navy's 
``China Lake'' project. Prior to implementation, personnel decisions 
regarding the overlap will be defined in Mod Demo IOPs in accordance 
with the PMB-approved classification guidance.
    Business & Technical (B&T) (Pay Plan DE): This career path includes 
such positions as computer specialist, equipment specialist, quality 
assurance specialist, telecommunications specialist, engineering and 
electronics technicians, procurement coordinators, finance, accounting, 
administrative computing, and management analyst. Employees in these 
positions may or may not require specific course work or educational 
degrees. Four pay bands have been established for the B&T career path:
    a. Pay Band I is a student trainee track covering GS-1, step 1 
through GS-4, step 10.
    b. Pay Band II includes GS-5, step 1 through GS-11, step 10.
    c. * Pay Band III includes GS-12, step 1 through GS-14, step 10.
    d. * Pay Band IV includes GS-14, step 1 through GS-15, step 10.
    * Pay Bands III and IV overlap at the end and start points. These 
two levels have been designed following a feature used by the Navy's 
``China Lake'' project. Prior to implementation, personnel decisions 
regarding the overlap will be defined in the Mod Demo IOPs in 
accordance with the PMB-approved classification guidance.
    Support (Pay Plan DK): This career path consists of clerical and 
assistant positions for which specific course work or educational 
degrees are not required. Clerical work usually involves the processing 
and maintaining of records. Assistant work requires knowledge of 
methods and procedures within a specific administrative area.
    a. Pay Band I includes entry-level positions covering GS-1, step 1 
through GS-4, step 10.
    b. Pay Band II includes full-performance positions covering GS-5, 
step 1 through GS-8, step 10.
    c. Pay Band III includes senior technicians/assistants/secretaries 
covering GS-9, step 1 through GS-10, step 10.

[[Page 62806]]

2. Senior Scientific Technical Managers (SSTM)
    AFC STRL Mod Demo will include a category of SSTM positions, as 
directed by 10 U.S.C. 4091 and described in 79 FR 43722. S&E Pay Band V 
will apply exclusively to positions designated as SSTMs.
    The SSTM program will be managed and administered by the AFC EDCG 
unless delegated in writing to an AFC STRL organization approval 
authority. These SSTM positions are managed separately from the Senior 
Executive Service (SES), Scientific and Professional Positions (STs), 
and Senior-Level (SL) positions. The primary functions of SSTM 
positions are (a) to engage in research and development in the 
physical, biological, medical, or engineering sciences, or another 
field closely related to the mission of such STRL; and (b) to carry out 
technical supervisory responsibilities. The number of such positions is 
limited in accordance with 10 U.S.C. 4091. 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 capability.
    Positions may be filled: (a) On a temporary, term, or permanent 
basis utilizing appropriate internal and/or external competitive 
recruitment procedures; (b) through accretion-of-duties promotions; or 
(c) using a direct hire authority. Positions may also be filled 
temporarily using non-competitive procedures (e.g., detail and 
temporary promotions). The AFC CG has the discretion to select the 
recruitment and staffing method most appropriate based on the 
specialized position requirements and available candidate pool. 
However, the recruitment and staffing methodology must include: (a) An 
internal process which incorporates an impartial, rigorous, and 
demanding assessment of candidates to evaluate the breadth of their 
technical expertise; (b) an external recruitment process; (c) creation 
of panels to assist in filling positions; or (d) other comparable 
recruitment and/or staffing mechanisms.
    Panels will be created to assist in the review of candidates for 
SSTM positions. Panel members typically will be SES members, ST 
employees, and those employees designated as SSTMs. In addition, 
General Officers and recognized technical experts from outside AFC STRL 
may serve, as appropriate. The panel will apply criteria developed 
largely from the OPM Research Grade Evaluation Guide for positions 
exceeding the GS-15 level and other OPM guidance related to positions 
exceeding the GS-15 level. The purpose of the panel is to ensure 
impartiality and a rigorous and demanding review.
3. Position Control Points
    If the classification of a position does not warrant unconstrained 
salary progression throughout the entire pay band, control points may 
be appropriate and may be established in accordance with Mod Demo IOPs. 
If used, control points will be documented on the classified position 
description. Increasing an employee's salary beyond a control point, if 
established or used, will require review of both the position and 
performance of the employee. Advancement across a control point may not 
occur without approval of the AFC STRL organization approval authority, 
unless further delegated in the applicable IOP. Additional guidance 
will be included in the AFC STRL organization-specific IOP.

C. Classification

1. Occupational Series
    The present GS classification system has over 400 occupational 
series, which are divided into 23 occupational groupings. AFC STRL 
currently has positions in 84 occupational series as indicated in 
appendix A. Additional occupational series may be added to the AFC STRL 
Mod Demo, as needed.
2. Classification Standards and Position Description
    AFC STRL will utilize OPM classification standards for the 
identification of proper series and occupational titles of positions 
within the demonstration project. The grading criteria in those 
standards will be used as a framework to develop new, simplified, and 
equitable standards for the purpose of pay band determinations. The 
objective is to include in the position description 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. The classification standard for each career 
path and pay band will serve as an important component to update 
existing position descriptions, which will include position-specific 
information, and provide data element information pertinent to the job. 
The computer-assisted process will produce information necessary for 
position descriptions. The new descriptions will be easier to prepare, 
minimize the amount of writing time, and make the position description 
a more useful and accurate tool for other personnel management 
functions.
    Specialty work and/or competency codes with corresponding narrative 
descriptions will be used in position descriptions to further 
differentiate types of work and the competencies required for positions 
within a career path and pay band. Each code represents a 
specialization or type of work within the occupation.
3. Fair Labor Standard Act
    Fair Labor Standards Act (FLSA) exemption and non-exemption 
determinations will be consistent with criteria found in 5 CFR part 
551. All employees are covered by the FLSA unless their position meets 
the criteria for exemption. The duties and responsibilities outlined in 
the classification standards for each pay band will be compared to the 
FLSA criteria. Generally, the FLSA status can be matched to career path 
and pay band as indicated in Figure 2. For example, positions 
classified in pay band I of the S&E career path are typically 
nonexempt, meaning they are covered by the overtime entitlements 
prescribed by the FLSA. An exception to this guideline includes 
supervisors/managers at pay band I or II whose primary duties meet the 
definitions outlined in the OPM GS Supervisory Guide. Therefore, 
supervisors/managers in any of the career paths who meet the foregoing 
criteria generally are exempt from the FLSA. The AFC STRL 
classification authorities will make the determinations on a case-by-
case basis by comparing assigned duties and responsibilities to the 
classification standards for each career path and the 5 CFR part 551 
FLSA criteria. Additionally, the advice and assistance of the servicing 
personnel office will be obtained in making determinations. The 
position descriptions will not be the sole basis for the determination. 
Basis for exemption will be documented and attached to each position 
description. Exemption criteria will be narrowly construed and applied 
only to those employees who clearly meet the spirit of the exemption. 
Changes will be documented and provided to the servicing personnel 
office.
Figure 2

[[Page 62807]]

[GRAPHIC] [TIFF OMITTED] TN17OC22.001


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

4. Classification Authority
    The AFC STRL organizations will have classification authority and 
may, in turn, delegate this authority in writing to appropriate levels. 
Any individual with delegated classification authority must complete 
required training. Position descriptions will be developed to assist in 
exercising delegated position classification authority.
    Classification authorities will identify the career path, job 
series, functional code, specialty work and/or competency code, pay 
band, and other critical information. Human Resources professionals 
will provide ongoing consultation and guidance to managers and 
supervisors throughout the classification process. These decisions will 
be documented in the position description.
5. Classification Appeal
    Classification appeals under this demonstration project will be 
processed using the following procedures: An employee may appeal the 
determination of career path, occupational series, position title, and 
pay band of the position at any time. An employee must formally raise 
the area of concern to supervisors in the immediate chain of command, 
in writing. If the employee is not satisfied with the supervisory 
response, the employee may then appeal to the AFC STRL organization PMB 
representative. An appeal may then be made to the AFC EDCG. If the 
employee is not satisfied with the AFC EDCG's response to the appeal, a 
final appeal may then be made to the DoD appellate level. The appeal 
process will be defined in each Mod Demo IOP. Classification appeals 
are not accepted on positions which exceed the equivalent of a GS-15 
level. Time periods for cases processed under 5 CFR part 511 apply.
    The evaluation of classification appeals under this demonstration 
project are based upon the demonstration project classification 
criteria. Case files will be forwarded for action through the servicing 
personnel office and will include copies of appropriate demonstration 
project criteria.

D. Pay-for-Performance Management System (PFP)

1. Overview
    The purpose of the PFP system is to provide an effective, 
efficient, and flexible method for assessing, compensating, and 
managing the AFC STRL modernization workforce. It is essential for the 
development of a high performing workforce and to provide management at 
the lowest practical level, the authority, control, and flexibility 
needed to achieve a quality organization and meet mission requirements. 
PFP allows for more employee involvement in the assessment process, 
strives to increase communication between supervisor and employee, 
promotes a clear accountability of performance, facilitates employee 
career progression, and provides an understandable and rational basis 
for salary changes by linking pay and performance.
    The PFP system uses annual performance payouts that are based on 
the employee's total performance score rather than within-grade 
increases, quality step increases, and performance awards. The normal 
rating period will be one year. The minimum rating period will be 90 
days. PFP payouts can be in the form of increases to base pay and/or 
bonuses that are not added to base salary but rather are given as a 
lump sum payment. Other awards, such as special acts and time-off 
awards, will be administered separately from the PFP payouts.
    The AFC STRL Mod Demo PFP system may be modified by the PMB, if 
necessary, as more experience is gained under the project. Each AFC 
STRL organization will publish the details of its PFP system rules and 
available funding limits in its IOP and/or annual PFP guidance.
2. Performance Elements
    Performance elements define common performance characteristics that 
will be used to evaluate the employee's success in accomplishing 
performance objectives. The use of common characteristics for scoring 
purposes helps to ensure comparable scores are assigned while 
accommodating diverse individual objectives. The PFP system will 
utilize those performance elements as described in this FRN. AFC STRL 
organizations can determine which elements are critical. A critical 
performance element is defined as an attribute of job performance that 
is of sufficient importance that performance below the minimally 
acceptable level requires remedial action and may be the basis for 
removing an employee from their position. Each of the performance 
elements will be assigned a two-digit weight between 0 and 1 rounding 
two significant digits, which reflects its importance in accomplishing 
an individual's performance objectives. A minimum weight is set for 
each performance element. The sum of the weights for all the elements 
must equal 1.0. Rules for setting weights will be defined in Mod Demo 
IOPs.
    A single set of performance elements will be used for evaluating 
the annual performance of all AFC STRL personnel covered by this Mod 
Demo plan. This set of performance elements may evolve over time, based 
on experience gained during each rating cycle. This evolution is 
essential to capture the critical characteristics the organization 
encourages in its workforce toward meeting individual and 
organizational objectives. This is particularly true in an environment 
where technology and work processes are changing at an increasingly 
rapid pace. The PMB may adjust the elements annually.
    The initial set of performance elements and basic definitions for 
the AFC STRL Mod Demo are listed below. On an annual basis, AFC STRL

[[Page 62808]]

organizations will select at least four elements based on mission 
requirements. Additionally, the Supervision/EEO element is mandatory, 
and may be updated as needed, for all employees whose assigned duties 
which meet the definition of Supervisor, outlined in the OPM GS 
Supervisory Guide. AFC STRL organizations will publish more specific 
element definitions and benchmark performance standards that describe 
performance associated with each score level in their IOPs.
    (1) Technical Competence--The extent to which an employee 
demonstrates the technical knowledge, skills, abilities and initiative 
to produce the quality and quantity of work as defined in individual 
performance objectives and assigned tasks.
    (2) Mission Impact--The extent to which an employee demonstrates 
individual performance against strategic goals and initiatives as 
defined in individual performance objectives and assigned tasks.
    (3) Customer Satisfaction--The extent to which an employee delivers 
high levels of service to internal and external customers/stakeholders. 
Maintains quality customer/stakeholder relationship(s).
    (4) Management of Time and Resources--The extent to which an 
employee demonstrates ability to manage time and resources.
    (5) Teamwork--The extent to which an employee encourages and 
facilitates cooperation, collaboration, pride, trust, and group 
identity; fosters commitment and esprit-de-corps; works with others to 
achieve goals.
    (6) Communication--The extent to which an employee demonstrates 
ability to communicate orally and in writing to achieve mutual 
understanding or desired results.
    (7) Management/Leadership--The extent to which an employee 
influences, motivates, and challenges others; adapts leadership styles 
to a variety of situations.
    (8) Supervision/EEO--The extent to which a supervisor: (1) Ensures 
compliance with applicable laws, regulations and policies including 
Merit System Principles and Prohibited Personnel Practices; (2) 
Attracts and retains a high-caliber workforce and acts in a responsible 
and timely manner on all steps in the recruitment and hiring process; 
(3) Provides opportunities for orientation and tools for enabling 
employees to successfully perform during the probationary period and 
beyond; (4) Completes all performance management tasks in a timely 
manner including clearly communicating performance expectations 
throughout the appraisal period, holding employees accountable, making 
meaningful distinctions in performance and rewarding excellent 
performance, promoting employee development and training, and promptly 
addressing performance and conduct issues; (5) Ensures that EEO 
principles are adhered to throughout the organization and promptly 
addresses allegations of discrimination, harassment, and retaliation; 
and (6) Upholds high standards of integrity and ethical behavior, 
including: ensuring appropriate internal controls to prevent fraud, 
waste or abuse; safeguarding assigned property/resources; maintaining a 
safe work environment and promptly addressing allegations of 
noncompliance; and supporting the Whistleblower Protection Program by 
responding constructively to employees who make protected disclosure 
under 5 U.S.C. 2302(b)(8), taking responsible and appropriate actions 
to resolve any such disclosure, and creating an environment in which 
employees feel comfortable making such disclosures.
3. Performance Objectives
    Performance objectives define a target level of activity, expressed 
as a tangible, measurable objective, against which actual achievement 
can be compared. These objectives will specifically identify what is 
expected of the employee during the rating period and will typically 
consist of three to ten results-oriented statements. The employee and 
the supervisor will jointly develop the employee's performance 
objectives at the beginning of the rating period. If there is a 
disagreement between the employee and supervisor concerning these 
performance objectives, the employee's supervisor will render the final 
decision on the disagreement after fully considering the employee's 
comments. Objectives are to be reflective of the employee's duties/
responsibilities and pay band along with the mission/organizational 
goals and priorities. Objectives will be reviewed annually and revised 
upon changes in salary reflecting increased responsibilities 
commensurate with salary increases. Performance objectives are intended 
to define an individual's specific responsibilities and expected 
accomplishments. In contrast, performance elements will identify common 
performance characteristics, against which the accomplishment of 
objectives will be measured. As a part of this demonstration project, 
training focused on overall organizational objectives, and the 
development of performance objectives will be held for both supervisors 
and employees. Performance objectives may be jointly modified, changed, 
or deleted as appropriate during the rating cycle. Generally, 
performance 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.
4. Performance Feedback and Formal Ratings
    The most effective means of communication is person-to-person 
discussion between supervisors and employees of requirements, 
performance goals, and desired results. Employees and supervisors alike 
are expected to actively participate in these discussions for optimum 
clarity regarding expectations and identify potential obstacles to 
meeting goals. In addition, employees should explain (to the extent 
possible) what they need from their supervisor to support goal 
accomplishment. The timing of these discussions will vary based on the 
nature of work performed but will occur at least at the mid-point and 
end of the rating period. The supervisor and employee will discuss job 
performance and accomplishments in relation to the performance 
objectives and elements. 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 cases where work is 
accomplished by a team, team discussions regarding goals and 
expectations may be appropriate.
    The employee will provide a written list of accomplishments to the 
supervisor at both the mid-point and end of the rating period. An 
employee may elect to provide self-ratings on the performance elements 
and/or solicit input from team members, customers, peers, supervisors 
in other units, subordinates, and other sources which will permit the 
supervisor to fully evaluate accomplishments during the rating period.
    At the end of the rating period, following a review of the 
employee's accomplishments, the supervisor will rate each of the 
performance elements by assigning a score between 0 and 50. Benchmark 
performance standards will be developed by the AFC STRL organization to 
describe the level of performance associated with a score. Supervisors 
will use the benchmark performance standards to determine appropriate 
ratings for each performance element. These scores will

[[Page 62809]]

not be discussed with the employee or considered final until all scores 
are reconciled and approved by the designated Pay Pool Manager. The 
element scores will then be multiplied by the element-weighting factor 
to determine the weighted score expressed to two decimal points. The 
weighted scores for each element will then be totaled to determine each 
employee's overall appraisal score and rounded to a whole number as 
follows: if the digit to the right of the decimal is between five and 
nine, it should be rounded to the next higher whole number; if the 
digit to the right of the decimal is between one and four, it should be 
dropped.
    A total score of 10 or below will result in a Level 1 rating of 
record. A score of 10 or below in a single element will also result in 
a Level 1 rating of record with zero shares and no general pay increase 
(GPI), and requires the employee be placed on a Performance Improvement 
Plan (PIP). A new rating of record will be issued if the employee's 
performance improves to an acceptable level at the conclusion of the 
PIP.
5. Unacceptable Performance
    Informal feedback is an effective way to provide clarity to the 
employee and in-the-moment coaching. Additionally, informal discussions 
serve several purposes. For example, such discussions provide feedback 
for a specific job, set and reset goals, reinforce good habits, and 
discuss areas for improvement. Informal employee performance 
discussions will be a continuous process so that corrective action, to 
include placing an employee on a PIP, may be taken at any time during 
the rating cycle. Whenever a supervisor recognizes an employee's 
performance on one or more performance elements is unacceptable, the 
supervisor should immediately inform the employee. Efforts will be made 
to identify the possible reasons for the unacceptable performance.
    If the employee continues to perform at an unacceptable level or 
has received a Level 1 Rating of Record, written notification outlining 
the unacceptable performance will be provided to the employee. At this 
point an opportunity to improve will be structured in a PIP. The 
supervisor will identify the actions that need to be corrected or 
improved, outline required time frames (no less than 30 days) to 
demonstrate such improvement, and provide the employee with any 
available assistance as appropriate. Progress will be monitored during 
the PIP, and all counseling sessions will be documented.
    If the employee's performance is acceptable at the conclusion of 
the PIP, no further action is necessary. If a PIP ends prior to the end 
of the annual performance cycle and the employee's performance improves 
to an acceptable level, the employee is appraised again at the end of 
the annual performance cycle.
    If the employee fails to improve during the PIP, the employee will 
be given written notice of proposed action. This action can include 
removal from the Federal service, placement in a lower pay band with a 
corresponding reduction in pay (demotion), reduction in pay within the 
same pay band, or change in position or career path. For the most part, 
employees with a Level 1 rating of record will not be permitted to 
remain at their current salary and may be reduced in pay band.

    Note:  Nothing in this subsection will preclude action under 5 
U.S.C. chapter 75, when appropriate.

    All relevant documentation concerning a reduction in pay or removal 
based on unacceptable performance will be preserved and made available 
for review by the affected employee or a designated representative. As 
a minimum, the record will consist of a copy of the notice of proposed 
personnel action, the employee's written reply, if provided, or a 
written summary when the employee makes an oral reply. Additionally, 
the record will contain the written notice of decision and the reasons 
therefore along with any supporting material (including documentation 
regarding the opportunity afforded the employee to demonstrate improved 
performance).
    If the employee's performance deteriorates to an unacceptable 
level, in any element, within two years from the beginning of a PIP, 
follow-on actions may be initiated with no additional opportunity to 
improve. If an employee's performance is at an acceptable level for two 
years from the beginning of the PIP and performance once again declines 
to an unacceptable level, the employee will be given an additional 
opportunity to improve before management proposes follow-on actions.
    Additional details will be outlined in Mod Demo IOPs.
6. Reconciliation Process
    At the end of the rating cycle and following the initial scoring of 
each employee by the supervisor, a panel of rating officials and 
supervisors, known as the pay pool panel, will meet in a structured 
review and reconciliation process managed by the Pay Pool Manager. In 
this step, each employee's performance objectives, accomplishments, 
preliminary scores and/or shares, and pay are discussed. Through 
discussion and consensus building, consistent and equitable ratings 
and/or shares are reached. There will not be a prescribed distribution 
of total scores. IOPs will further define this process.
7. Pay Pools
    Employees within the AFC STRL Mod Demo will be placed into pay 
pools. Pay pools are combinations of organizational elements (e.g., 
Directorates, Divisions, Branches, and Offices) that are defined for 
the purpose of determining performance payouts under the PFP system. 
The guidelines in the next paragraph are provided for determining pay 
pools. These guidelines will normally be followed. However, an AFC STRL 
Mod Demo pay pool manager may deviate from the guidelines if there is a 
compelling need to do so, and the rationale is documented in writing.
    The AFC STRL organizations will establish pay pools within their 
respective organizations. 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. Supervisory personnel will be placed in a pay pool 
separate from subordinate non-supervisory personnel. Neither the Pay 
Pool Manager nor supervisors within a pay pool will recommend or set 
their own individual pay. Decisions regarding the amount of the 
performance payout are based on the established formal payout 
calculations.
    Annual pay pool limits for base pay increases and bonuses, also 
referred to as payout factors, will be established by the AFC STRL 
organizations. Funds for performance payouts are divided into two 
components: base pay increases and bonuses. The funds used for base pay 
increases are those that would have been available from GS within-grade 
increases, quality step increases, and promotions. This amount will be 
defined based on historical data and set at no less than two percent of 
total adjusted base pay and no more than the maximum set by the AFC 
STRL organization. The funds available to be used for awards are funded 
separately within the constraints of the organization's overall award 
budget. This amount will be defined based on historical data and set at 
no less than one percent of total adjusted base pay and no more than 
the maximum set by the AFC STRL organization. The sum of these two 
factors is referred to as the

[[Page 62810]]

Pay Pool Payout Factor and is determined by the AFC STRL organization 
within the above constraints. The PMB will annually review the pay pool 
funding formulas used by AFC STRL organizations and recommend 
adjustments to ensure cost discipline over the life of the 
demonstration project. AFC STRL organizations may reallocate the amount 
of funds assigned to each pay pool as necessary to ensure equity and to 
meet unusual circumstances.
8. Performance Payout Determination
    Employee's Rating of Record levels will be determined by the Score 
Ranges as shown in Figure 3 below. The Rating of Record levels follow 
the Summary level rating patterns associated with 5 CFR 430.208, 
Pattern H. Mod Demo IOPs may designate descriptive titles for Level 1 
through Level 5 ratings of record. The score ranges will be used as a 
guide to determine the number of shares the employee is assigned in the 
pay pool process. An employee will receive a performance payout as a 
percentage of the employee's salary at the end of the rating cycle, 
based on the number of shares assigned. AFC STRL organizations will use 
one of two methods for converting scores to shares. Score ranges and 
share option changes must be approved by the Mod Demo PMB. IOPs must 
state which method the AFC STRL organization will use, and Mod Demo 
employees will receive specific training covering this topic.
[GRAPHIC] [TIFF OMITTED] TN17OC22.002

Option A. Discrete Shares
    Share values will be assigned between 0 and 4 using any increment 
of shares for a given Score Range as shown in Figure 4. The pay pool 
panel will determine the shares based on the employee's score range. 
When selecting the share value, the pay pool panel may consider any of 
the following: the employee's salary relative to other employees in the 
same range, the employee's performance above and beyond expectations, 
the supervisor's recommendation, and how close the employee is to the 
top of their pay band. AFC STRL organizations will provide written 
notice to the workforce at the start of the rating cycle concerning the 
basis of the share assignment.
[GRAPHIC] [TIFF OMITTED] TN17OC22.003

Option B. Fractional Shares
    Shares will be awarded as decimal numbers, rounded to the nearest 
tenth, based on the employee's score. Fractional shares will be awarded 
for scores that fall in between these scores, in accordance with Figure 
5. For example, a score of 38 will equate to 1.8 shares, and a score of 
44 will equate to 2.4 shares.
[GRAPHIC] [TIFF OMITTED] TN17OC22.004


[[Page 62811]]


    Regardless of whether Option A or Option B is implemented, the 
value of a share cannot be exactly determined until the rating and 
reconciliation process is completed and all scores are finalized. The 
formula that computes the value of each share is based on (1) the 
payout factors, (2) the employee's pay, and (3) the number of shares 
awarded to each employee in the pay pool. This formula, shown in Figure 
6, assures that each employee within the pool receives a share amount 
equitable to all others in the same pool who are at the same rate of 
basic pay and receive the same score and shares. The exact Pay Pool 
Payout Factor will be determined by the AFC Mod STRL organization, in 
accordance with paragraph 7 above.
[GRAPHIC] [TIFF OMITTED] TN17OC22.005


Where:

F = Pay Pool Payout Factor, determined by AFC STRL.

    Pay Pool Managers are accountable for staying within pay pool 
funding limits. The Pay Pool Manager makes final decisions on pay 
increases and/or bonuses to individuals based on rater recommendation, 
the final score, the pay pool funds available, and the employee's 
salary at the end of the rating cycle.
    In addition, the designated pay pool manager may nominate employees 
for Extraordinary Achievement Recognition. Such recognition grants a 
base pay increase and/or bonus to an employee that is higher than the 
one generated by the compensation formula for that employee. The funds 
available for an Extraordinary Achievement Recognition are separately 
funded within the constraints of the organization's budget.
9. Base Pay Increases and Bonuses
    An employee's shares will be paid out as a base pay increase, a 
bonus, or a combination. To continue to provide performance incentives 
while also ensuring cost discipline, base pay increases may be limited 
or capped. Certain employees will not be able to receive base pay 
increases due to base pay caps. Base pay is capped when an employee 
reaches the maximum rate of pay in an assigned pay band or when a 
performance-based rule applies (see paragraph 10 below). Employees 
affected by base pay caps and those receiving retained pay will receive 
the entire performance payout in the form of a bonus.
    If the AFC STRL organization deems it appropriate, the Pay Pool 
Manager may re-allocate a portion (up to the maximum possible amount) 
of the unexpended base pay funds for capped employees to uncapped 
employees. Any dollar increase in an employee's projected base pay 
increase will be offset, dollar for dollar, by an accompanying 
reduction in the employee's projected bonus payment. Thus, the 
employee's total performance payout is unchanged.
    PFP bonuses and salary increases must be effective within 120 days 
of the end of the appraisal cycle.
10. Performance-Based Rules
    As a compensation management tool, AFC STRL organizations may 
establish performance-based rules to manage pay progression by career 
path, pay band, geographic location, or any other grouping. If 
established, such performance-based rules must be approved by the PMB 
and published to the workforce prior to implementation. In addition, 
the process for obtaining an exception to such rules must be documented 
in the IOP. Once established, performance-based rules may be used in 
the pay pool process to manage performance salary increases. Examples 
of performance-based rules include rules similar to a Mid-Point Rule. 
For example, to provide added performance incentives as an employee 
progresses through a pay band, a mid-point rule may be used to 
determine base pay increases. The mid-point rule dictates that any 
employee must receive a score of 30 or higher for their base pay to 
cross the salary midpoint of their pay band. Also, once an employee's 
base pay exceeds the salary midpoint of their pay band, the employee 
must receive a score of 30 or higher to receive any additional base pay 
increases. Any amount of an employee's performance payout, not paid in 
the form of a base pay increase because of the mid-point rule, would be 
paid as a bonus. This rule effectively raises the standard of 
performance expected of an employee once the salary midpoint of a pay 
band is crossed. This rule would apply to all employees in every career 
path and pay band.
11. Awards
    To provide additional flexibility in motivating and rewarding 
individuals and groups, some portion of the performance award budget 
may be reserved for special acts and other categories as they occur. 
Awards may include, but are not limited to special acts, patents, 
suggestions, on-the-spot, and time-off. The funds available to be used 
for awards are separately funded within the constraints of the 
organization's overall award budget.
    While not directly linked to the PFP system, this additional 
flexibility is important to encourage outstanding accomplishments and 
innovation in accomplishing the diverse modernization missions of the 
AFC STRL organizations participating in Mod Demo. Additionally, to 
foster and encourage teamwork among its employees, organizations may 
give group awards.
12. General Pay Increase (GPI)
    All employees will receive a GPI, except as described below.
    Employees, who are on a PIP and/or receive a Level 1 rating of 
record at the time pay determinations are made, may be denied 
performance payouts or the GPI. Such employees will not receive RIF 
service credit until such time as their performance improves to the 
satisfactory level and remains so for at least 90 days. When the 
employee has performed at an acceptable level for at least 90 days, the 
GPI will not be retroactive but will be granted at the beginning of the 
next pay period after the supervisor authorizes its payment.
    These actions may result in a base salary that is identified in a 
lower pay band. This occurs because the minimum

[[Page 62812]]

rate of basic pay in a pay band increases as the result of the GPI (5 
U.S.C. 5303). This situation (a reduction in pay band with no reduction 
in pay) will not be considered an adverse action, nor will pay band 
retention provisions apply.
    After 90 days of acceptable performance, the employee is granted 
GPI and the employee will be returned to their previous pay band.
13. Grievances and Disciplinary Actions
    An employee may grieve the performance rating/score or shares 
received under the PFP system. Non-bargaining unit employees, and 
bargaining unit employees covered by a negotiated grievance procedure 
that does not permit grievances over performance ratings, must file 
under administrative grievance procedures when choosing to pursue a 
grievance. Whereas, bargaining unit employees whose negotiated 
grievance procedures cover performance-rating grievances must file 
under those negotiated procedures when choosing to pursue a grievance.
    Except where specifically waived or modified in this plan, adverse 
action procedures under 5 CFR part 752, remain unchanged.

E. Hiring and Appointment Authorities

    Competitive service positions will be filled through Merit 
Staffing, direct-hire authority, Delegated Examining, or other non-
competitive hiring authorities. Direct-hire authority will be exercised 
in accordance with the requirements of the delegation of authority.
1. Qualifications
    A candidate's basic qualifications will be determined using OPM's 
Qualification Standards Handbook for General Schedule Positions. 
Candidates must meet the minimum standards for entry into the pay band, 
unless waived by other flexibilities within the STRL. For example, if 
the pay band includes positions in grades GS-5 and GS-7, the candidate 
must meet the qualifications for positions at the GS-5 level. 
Specialized experience/education requirements will be determined based 
on whether a position to be filled is at the lower or higher end of the 
pay band. Selective placement factors can be established in accordance 
with the OPM Qualification Handbook, when judged to be critical to 
successful job performance. These factors will be communicated to all 
candidates for position vacancies and must be met for basic 
eligibility.
2. Delegated Examining
    Under Delegated Examining when there are no more than 15 qualified 
applicants and no preference eligible, all eligible applicants are 
immediately referred to the selecting official without rating and 
ranking. Rating and ranking may occur when the number of qualified 
candidates exceeds 15 or there is a mix of preference and non-
preference applicants. Category rating may be used to provide for a 
more streamlined and responsive hiring system to increase the number of 
eligible candidates referred to selecting officials. This provides for 
the grouping of eligible candidates into quality categories and the 
elimination of consideration according to the ``rule of three.'' This 
includes the coordination of recruitment and public notices, the 
administration of the examining process, the administration of 
veterans' preference, the certification of candidates, and selection 
and appointment consistent with merit principles.
    Statutes and regulations covering veterans' preference will be 
observed in the selection process when rating and ranking are required. 
Veterans with preference will be referred ahead of non-veterans with 
the same score/category.
3. Direct Hire
    AFC STRL will use the direct hire authorities authorized by 10 
U.S.C. 4091, and published in 79 FR 43722 and 82 FR 29280; and the 
direct hire authorities published in 85 FR 78829, as appropriate, to 
appoint the following:
    a. Candidates with advanced degrees to scientific and engineering 
positions;
    b. Candidates with bachelor's degrees to scientific and engineering 
positions;
    c. Veteran candidates to scientific, technical, engineering, and 
mathematics positions (STEM), including technicians;
    d. Student candidates enrolled in a program of instruction leading 
to a bachelors or advanced degree in a STEM discipline; and
    e. Candidates for any position: (i) involving 51 percent or more of 
time in direct support of the STRL mission; (ii) identified by the STRL 
as hard to fill; (iii) having a history of high turnover; or (iv) 
requiring a unique, laboratory-related skillset.
    Direct hire appointments may be made on a permanent, term or 
temporary basis. Requirements for how positions qualify for this usage 
of direct hire authorities will be documented in IOPs.
    In addition, other direct hire authorities, documented in FRNs and 
available to all DoD STRL laboratories, may be utilized, once requested 
and adopted, as appropriate.
4. Legal Authority
    For actions taken under the auspices of the demonstration project, 
the first legal authority code (LAC)/legal authority Z2U will be used. 
The second LAC/legal authority may identify the authority utilized 
(e.g., Direct Hires). The nature of action codes and legal authority 
codes prescribed by OPM, DoD, or DA will be used.
5. Hiring Demonstrated Exceptional Talent for S&E Positions
    As provided by OPM General Schedule Qualification Standards, 
paragraph 4.g., in the ``Application of Qualification Standards'' 
section, ``Educational and Training Provisions or Requirements'' 
subsection, AFC STRL may consider an S&E position candidate's 
demonstrated exceptional experience or a combination of experience and 
education in lieu of OPM individual occupational qualification 
requirements. The AFC STRL may use one subject matter expert (SME), 
instead of a panel of at least two, to conduct a comprehensive 
evaluation of an applicant's entire background, with full consideration 
given to both education and experience, to determine a candidate's 
qualifications. In addition, the unique nature of AFC STRL 
interdisciplinary positions allows for an AFC STRL manager with direct 
knowledge of the mission and position requirements, regardless of his 
or her occupational series or military occupation code, to serve as a 
SME to represent the needs of the organization.
    Demonstrated exceptional experience is defined as experience that 
reflects significant accomplishment directly applicable to the position 
to be filled. This is evidenced through a substantial record of 
experience, achievement, and/or publications that demonstrate expertise 
in an appropriate professional/scientific field. A written analysis by 
the SME will document the candidate's experience, achievements, and 
publications used for qualification determination.
    Documentation justifying the employee's qualifications will be 
placed in the employee's electronic official personnel file (e-OPF) to 
ensure the employee is considered qualifying for the specific 
occupational series in the future.
6. Official Transcripts
    The requirement to have official transcripts prior to establishing 
an entrance-on-duty (EOD) is waived. AFC

[[Page 62813]]

STRL servicing personnel offices may use unofficial transcripts or a 
letter from a registrar or dean to make qualification determinations, 
thus eliminating several days or weeks from the current hiring 
timeline. Official transcripts must be received within 30 calendar days 
after EOD.
    Once unofficial transcripts or a letter from a registrar or dean is 
received, the servicing personnel office will review qualifications and 
begin the onboarding process. Applicants will be asked to request and 
submit official transcripts to the servicing personnel office, but an 
EOD may be established prior to receipt. Applicants will sign a 
statement of understanding (SOU) as part of their pre-employment 
paperwork. The SOU will include language stipulating that if official 
transcripts are not provided or fail to show proof that individuals 
meet the qualification requirements, individuals may be subject to 
adverse actions up to and including removal, as determined by specific 
circumstances by applicable regulations. The SOU will regulate the 
applicants who do not have the degrees required for the positions or 
who may have been dishonest during the hiring process, lowering risk 
for the Command.
    The SOU will be maintained in the employee's e-OPF. Once official 
transcripts have been received by the servicing personnel office, they 
will be verified in the personnel system and uploaded into the 
employee's e-OPF.
7. Use of Alternative Method to Announcing Position Vacancies
    AFC STRL will have authority to determine whether to utilize 
USAJobs public notice flyers or some other type of recruitment measure 
to announce vacancies for AFC STRL positions covered by Mod Demo. 
Applications may be submitted directly to the servicing personnel 
office. Candidates may apply through the link or email address found in 
the job announcement. Postings may be limited to internal Government 
employees or open to both internal Government employees and external 
U.S. citizen candidates. All candidates will be asked to submit 
supporting documentation to include a resume and official or unofficial 
transcripts. Flyers will include the following: (a) open/close dates, 
(b) compensation, (c) appointment type and work schedule, (d) duty 
location, (e) duties, (f) position information, (g) conditions of 
employment, (h) qualification requirements, (i) education requirements, 
(j) how candidates will be evaluated, (k) benefits, (l) how to apply, 
(m) an equal employment opportunity statement, and (n) any additional 
information determined necessary by the lab.
    If utilizing USAJobs flyers, positions may be filled through direct 
hire authorities on a temporary, term, or permanent basis or through 
reassignment.
8. Security Eligibility
    AFC STRL has the authority to appoint individuals to Critical-
Sensitive (CS) and Special-Sensitive positions prior to a final 
favorable eligibility determination at the Top Secret/SCI level. 
Processes and pre-employment waiver requirements for CS positions will 
be applied in these situations. For the purposes of STRLs, an emergency 
or national interest that necessitates an appointment prior to the 
completion of the investigation and adjudication process includes a 
lab's inability to meet mission requirements. Each applicant's Standard 
Form 86, ``Questionnaire for National Security Positions,'' 
fingerprints, and prescreening questionnaire will be reviewed, and a 
favorable pre-screening eligibility determination will be made prior to 
any individual being given a final job offer and EOD. Also, each lab 
will provide the written documentation needed to support a waiver 
decision to the appointing authority, who will document the reason for 
the appointment, and ensure the justification is sufficient before a 
final offer of employment is made.
    The individual will perform duties and occupy a location permitted 
by their current security eligibility (interim or final), but not 
higher than Top Secret. The applicant will be required to sign a 
statement of understanding that documents that the pre-appointment 
decision was made based on limited information and that continued 
employment depends upon the completion of a personnel security 
investigation (tier 3 or 5) and favorable adjudication of the full 
investigative results.
9. Term Appointments
a. Flexible Length and Renewable Term Technical Appointments (FLRTTA)
    1. AFC STRL organizations may use the Flexible Length and Renewable 
Term Technical Appointments (FLRTTA) workforce shaping tool to appoint 
qualified candidates who are not currently Department of Defense 
civilian employees, or are currently DoD term employees, into any 
scientific, technical engineering, and mathematic 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 in Mod Demo IOPs.
    2. Use of the FLRTTA authority must be consistent with merit system 
principles.
    3. Current DoD employees who are not DoD term employees may not be 
appointed to positions under this authority.
    4. Initial appointments must be more than one year, but not to 
exceed six years in duration.
    5. Individuals appointed under this authority may be eligible for 
noncompetitive conversion to a permanent appointment if the job 
opportunity announcement clearly stated the possibility of being made 
permanent.
    6. Positions may be filled utilizing noncompetitive hiring 
authorities. Positions appointed noncompetitively will not be eligible 
for conversion or extension. This is not a hiring authority and STRLs 
must compete or use a direct hire or other non-competitive hiring 
authority to appoint candidates under this appointment authority.
    7. Unless otherwise eligible for a noncompetitive hiring authority, 
positions filled under this authority must be competed. Job opportunity 
announcements must clearly identify the type of appointment and the 
expected duration of initial appointment (up to six years). A statement 
will be included in the announcement that the position may be extended, 
without limit, in up to six-year increments, to enable extensions 
beyond the initial term of appointment. Furthermore, the position can 
be made permanent without further competition.
    8. Appointees will be afforded equal eligibility for employee 
programs and benefits comparable to those provided to similar employees 
on permanent appointments within the AFC STRL, to include opportunities 
for professional development and eligibility for award programs.
    9. Appointees will be afforded the opportunity to apply for 
vacancies that are otherwise limited to ``status'' candidates. 
Appointees applying to other Federal service positions utilizing this 
authority must submit a copy of their Flexible Length and Renewable 
Term Technical appointment SF-50, Notification of Personnel Action, 
which will contain a remark identifying this provision, with their 
application/resume for the vacancy to which they are applying. The SF-
50 will serve as notification to the servicing Human Resources Office 
for the vacancy that

[[Page 62814]]

the individual is eligible for consideration as a status candidate.
    10. Promotions. Individuals appointed under this hiring authority 
may be promoted while serving on a term appointment, provided they meet 
the qualifications and eligibility requirements for the higher level to 
which they will be promoted.
    11. Extension of appointments. The appointment of an individual 
appointed to a term appointment under this authority may be extended, 
without limit, in up to six-year increments. A recruitment notice must 
be posted through an internal or external source and must have 
identified the opportunity for an extension beyond the initial term of 
appointment. Extensions will be documented via a personnel action using 
nature of action code 765/Extension of Term Appt NTE and the same legal 
authority code used for the appointment that is being extended.
    12. Expiration. Term appointments expire upon the not-to-exceed 
date, unless extended.
    13. Probationary/Trial Period. The trial period specified in this 
FRN will apply to individuals appointed under the Flexible Length and 
Renewable Term Appointment.
    14. Tenure. For those appointed under the Flexible Length and 
Renewable Term Technical Appointment authority or converted from a term 
or modified term to a Flexible Length and Renewable Term Technical 
Appointment and later converted to a career or career-conditional 
appointment, the time spent on both appointments will count toward 
career tenure.
    15. Documenting Personnel Actions. Personnel actions for qualified 
candidates are documented citing the first legal authority code (LAC)/
legal authority as Z2U, if appointed to a broad-banded position. A 
remark for the personnel action will be created to state the 
appointment is designated as a ``status'' appointment for the purposes 
of eligibility for applying for positions in the federal service.
b. Flexible Length and Renewable Term Appointments for Support 
Positions (FLRTA)
    1. AFC STRL organizations are authorized to use FLRTA to appoint 
qualified candidates, whose positions involve 51 percent or more of 
time spent in direct support of STRL activities, 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 in Mod Demo IOPs. The FLRTTA provisions described 
above also apply to appointments made under this authority.
    2. Term appointments, for the purposes of this authority, are non-
status appointments to a position in the competitive service for a 
specified period of more than one year; however, incumbents may compete 
as ``status candidates'' for the purpose of eligibility for positions 
in the Federal service.
    3. Qualified candidates are defined as individuals who meet the 
minimum qualification standards for the position as published in the 
OPM Qualification Standard or Mod Demo qualification standards specific 
to the position to be filled.
10. Extended Probationary or Trial Period
    At the discretion of the AFC STRL organizations, the probationary 
period for DoD employees may be extended to three years for all newly 
hired permanent career-conditional employees, and trial periods for 
term appointments may also be extended to three years, as documented in 
Mod Demo IOPs. The purpose of extending the probationary period is to 
allow supervisors adequate time to fully evaluate an employee's ability 
to complete cycles of work and to fully assess an employee's 
contribution and conduct. The probationary period will apply to 
employees as stated in 5 CFR part 315.
    Aside from extending the time period, all other features of the 
current probationary or trial period are retained to include the 
requirements for determining creditable service as described in 5 CFR 
315.802 (c), and the potential to remove an employee without providing 
the full substantive and procedural rights afforded a non-probationary 
employee when the employee fails to demonstrate proper conduct, 
competency, and/or adequate contribution during the extended 
probationary period. When terminating probationary or trial employees, 
AFC STRL organizations will provide employees with written notification 
of the reasons for their separation and effective date of the action.
    Probationary employees may be terminated when they fail to 
demonstrate proper conduct, technical competency, and/or acceptable 
performance for continued employment, and for conditions arising before 
employment.
11. Supervisory Probationary Periods
    Supervisory probationary periods will be consistent with 5 CFR part 
315, subpart I. Existing Federal employees who are competitively 
selected or reassigned to a supervisory position will be required to 
complete a supervisory probationary period for initial appointment to a 
supervisory position. At the discretion of the AFC STRL organizations, 
the probationary period for supervisory employees may be up to two 
years. Additional requirements will be outlined in Mod Demo IOPs.
12. Reemployment of Annuitants
    AFC STRL will use the authorities provided by 5 U.S.C. 9902(g) to 
appoint reemployed annuitants, as appropriate. In addition, AFC STRL 
organizations may determine the salary of an annuitant reemployed under 
this authority, 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 reemployment.
    a. AFC STRL organizations will apply the authority to appoint 
annuitants in accordance with this FRN and DoDI 1400.25-V300, except as 
stated above. Use of the authority must be consistent with merit system 
principles.
    b. Documenting Personnel Actions. For actions taken under the 
auspices of the demonstration project, the first legal authority code 
(LAC)/legal authority Z2U. The second LAC/legal authority may identify 
the authority utilized (e.g., Direct Hires). The nature of action codes 
and legal authority codes prescribed by OPM, DoD, or DA will be used.
    c. AFC STRL organizations will publish implementing guidance and 
procedures on the use of this reemployed annuitant flexibility in Mod 
Demo IOPs.
    d. Annuitants retired under 5 U.S.C. 8336(d)(1) or 8414(b)(1)(A) 
who are reemployed will retain the rights provided in accordance with 5 
U.S.C. 9902(g)(2)(A).
13. Student Loan Repayment
    AFC STRL may provide student loan repayment options authorized in 
85 FR 78829 that are in line with current tuition costs and may be 
adjusted based on inflation without higher level approval. This 
authority provides the AFC STRL the ability to repay all, or part of, 
an outstanding qualifying student loan or loans previously taken out by 
a current AFC STRL employee or a candidate to whom an offer of 
employment has been made. The amount of student loan repayment benefits 
provided by an AFC STRL organization is subject to both of the 
following limits:
    a. Up to $25,000 per employee per calendar year.

[[Page 62815]]

    b. Up to $125,000 per employee.
    The USD(R&E) may increase these amounts when deemed necessary to 
stay competitive with private industry and academia. Eligibilities, 
conditions, qualifying student loans, and required service agreements 
remain the same as found in 5 CFR part 537. Loan payments made by an 
AFC STRL organization under this part do not exempt an employee from 
his or her responsibility and/or liability for any loan(s) the 
individual has taken out. The employee is responsible for any income 
tax obligations resulting from the student loan repayment benefit.

F. Volunteer Emeritus and Expert Program (VEP)

    AFC STRL will have the authority to offer voluntary assignments to 
former Federal employees who have retired or separated from the Federal 
service and U.S. citizens who are retired, separated, or on sabbatical 
from private or public sector organizations. Volunteer emeritus 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. Volunteer experts will bring commercial sector or public 
sector knowledge and experience into AFC STRL. Volunteers will not be 
used to replace any government personnel or interfere with their career 
opportunities. Volunteers may not be used to replace or substitute for 
work performed by government personnel occupying positions required to 
perform the AFC STRL's mission. Volunteer assignments are not 
considered ``employment'' by the Federal government (except as 
indicated below).
    To be accepted as a volunteer, an individual must be a U.S. citizen 
and must be recommended by an AFC STRL manager to the AFC STRL 
organization approval authority. No one is entitled to participate in 
the program, and an application to the program does not guarantee 
acceptance into the program or assignment at AFC STRL. AFC STRL 
organizations must clearly document the decision process and decision 
rationale for each volunteer applicant (regardless of whether the 
applicant is accepted or rejected from the program) and must retain 
this documentation throughout the assignment (for accepted applicants), 
or for two years (for rejected applicants). Volunteer participants will 
not be permitted to perform any inherently governmental function or to 
participate in any contracts or solicitations for which the participant 
has a conflict of interest. Volunteer participants are not permitted to 
participate in contract source selections, nor are they permitted to 
have access to contractor bid or proposal information or source 
selection information, or to data or information that is protected by 
the Trade Secrets Act (18 U.S.C. 1905) without a written agreement 
between the volunteer and the owner of the data or information.
    To ensure success and encourage participation, the volunteer 
Emeritus' 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.
    An agreement will be established between the volunteer and the AFC 
STRL organization. The agreement will be reviewed by the servicing 
legal office. The agreement must be finalized before the assumption of 
duties and will include:
    (1) A statement that the voluntary assignment does not constitute 
an appointment in the civil service and is without compensation, and 
any and all claims against the Government (because of the voluntary 
assignment) are waived by the volunteer;
    (2) A statement that the volunteer will be considered a federal 
employee solely for the purpose of:
     18 U.S.C. 201, 203, 205, 207, 208, 209, 603, 606, 607, 
643, 654, 1905, and 1913;
     31 U.S.C. 1343, 1344, and 1349(b);
     5 U.S.C. chapters 73 and 81;
     The Ethics in Government Act of 1978;
     41 U.S.C. chapter 21;
     28 U.S.C. chapter 171 (tort claims procedure), and any 
other Federal tort liability statute;
     5 U.S.C. 552a (records maintained on individuals)
    (3) The volunteer's work schedule;
    (4) The length of the agreement (defined by length of project or 
time defined by weeks, months, or years);
    (5) The support to be provided by the AFC STRL organization 
(travel, administrative, office space, supplies);
    (6) The volunteer's duties;
    (7) A provision allowing either party to void the agreement with at 
least two working days' written notice;
    (8) 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 VEP;
    (9) The level of security access required (any security clearance 
required by the assignment will be managed by the AFC STRL organization 
while the participant is a member of the VEP);
    (10) A provision that any written products prepared for publication 
that are related to VEP participation will be submitted to the AFC STRL 
organization for review and must be approved prior to publication;
    (11) A statement that the volunteer accepts accountability for loss 
or damage to Government property occasioned by the volunteer's 
negligence or willful action;
    (12) A statement that the activities of the volunteer on the 
premises will conform to the regulations and requirements of the 
organization;
    (13) 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 or any non-Federal entities. Volunteers 
will handle all non-public information in a manner that reduces the 
possibility of improper disclosure;
    (14) A statement that the volunteer agrees to disclose any 
inventions made in the course of work performed for AFC STRL. AFC STRL 
will have the option to obtain title to any such invention on behalf of 
the U.S. Government. Should the AFC CG elect not to take title, AFC 
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;
    (15) A statement that the volunteer must complete either a 
Confidential or Public Financial Disclosure Report, whichever applies; 
a disqualification statement prohibiting the volunteer from working on 
matters related to his or her former employer; and ethics training in 
accordance with Office of Government Ethics regulations prior to 
implementation of the written agreement; and
    (16) A statement that the volunteer must receive post-government 
employment advice from a DoD ethics counselor at the conclusion of 
program participation. Volunteers are deemed Federal employees for 
purposes of post-government employment restrictions.
    A written Memorandum of Agreement (MOA) between the AFC STRL 
organization and the volunteer is required and must include all items 
above, regardless of format used. The use and wording of the MOA will 
be provided in the IOPs of the AFC STRL organizations.

[[Page 62816]]

G. Internal Placement

1. Promotion
    A promotion is the movement of an employee to a higher pay band in 
the same career path or to another career path, wherein the pay band in 
the new career path has a higher maximum base pay than the pay band 
from which the employee is moving. Positions with known promotion 
potential to a specific pay band within a career path will be 
identified when they are filled. Movement from one career path to 
another will depend upon individual competencies, qualifications, and 
the needs of the organization. Salary progression within a pay band is 
not considered a promotion and not subject to the provisions of this 
section. Except as specified below, promotions will be processed under 
competitive procedures in accordance with Merit System Principles and 
requirements of the local merit promotion plan.
    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 may not have a Level 1 rating of record. If an employee does 
not have a current performance rating, the employee will be treated the 
same as an employee with a Level 2 rating of record as long as there is 
no documented evidence of unacceptable performance.
2. Reassignment
    A reassignment is the movement of an employee from one position to 
a different position within the same career path and pay band or to 
another career path and pay band wherein the pay band in the new career 
path has the same maximum base pay. The employee must meet the 
qualification requirements for the career path and pay band.
3. Placement in a Lower Pay Band or Grade
    An employee may be placed in a lower pay band within the same 
career path or placement into a pay band in a different career path 
with a lower maximum base pay. This change may be voluntary based on a 
request from the employee or involuntary, for cause (performance or 
conduct) or for reasons other than cause (e.g., erosion of duties, 
reclassification of duties to a lower pay band, placement actions 
resulting from RIF procedures). Involuntary actions will be executed 
using the applicable adverse action procedures in 5 U.S.C. chapter 43 
or chapter 75.
4. Simplified Assignment Process
    Today's environment of remote work and fluctuating budgets, 
workforce and workload requires that the organization have maximum 
flexibility to assign duties and responsibilities to individuals. Pay 
banding can be used to address this need, as it enables the 
organization to have maximum flexibility to assign an employee with no 
change in base pay, within broad descriptions, consistent with the 
needs of the organization and the individual's qualifications, and 
level. Subsequent assignments to projects, tasks, or functions anywhere 
within the organization requiring the same level, area of expertise, 
and qualifications would not constitute an assignment outside the scope 
or coverage of the current position description. For instance, a 
Research Psychologist could be assigned to any project, task, or 
function requiring similar expertise. Likewise, a manager/supervisor 
could be assigned to manage any similar function or organization 
consistent with that individual's qualifications. This flexibility 
allows broader latitude in assignments and further streamlines the 
administrative process and system. Execution of such actions may 
require fulfilling labor obligations, where applicable.
5. Details and Expanded Temporary Promotions
    Employees may be detailed to a position at the same or similar 
level (position in a pay band with the same maximum salary). 
Additionally, employees may be temporarily promoted to a position in a 
pay band with a higher maximum salary. Details and temporary promotions 
may be competitive or non-competitive under the AFC STRL Mod Demo and 
up to one year, with the option to extend for two years. Employees 
selected non-competitively for details and temporary promotions may 
only serve in those assignments for a total of two years out of every 
thirty months. A detail may be affected without a change in pay or may 
result in a base pay increase when the detail significantly increases 
the complexity, responsibility, authority, or for other compelling 
reasons. Such an increase is subject to the specific guidelines 
established by AFC STRL organizations as published in their IOP's. 
Details and temporary promotions may be determined by a competitive or 
a non-competitive process.
6. Exceptions to Competitive Procedures for Assignment to a Position
    The following actions are excepted from competitive procedures:
    a. Re-promotion to a position which is in the same pay band or GS 
equivalent and career path as the employee previously held on a 
permanent basis within the competitive service.
    b. Promotion, reassignment, change to lower pay band, transfer, or 
reinstatement to a position having promotion potential no greater than 
the potential of a position an employee currently holds or previously 
held on a permanent basis in the competitive service.
    c. A position change permitted by RIF procedures.
    d. Promotion without current competition when the employee was 
appointed through competitive procedures to a position with a 
documented career ladder.
    e. A temporary promotion, or detail to a position in a higher pay 
band, of two years or less.
    f. A promotion due to the reclassification of positions based on 
accretion (addition) of duties.
    g. A promotion resulting from the correction of an initial 
classification error or the issuance of a new classification standard.
    h. Consideration of a candidate who did not receive proper 
consideration in a competitive promotion action.

H. Pay Setting

1. General
    Pay administration policies will be established by the AFC STRL 
organizations. These policies will be exempt from Army Regulations or 
local pay fixing policies. Employees whose performance is acceptable 
will receive the full annual GPI and the full locality pay. AFC STRL 
organizations shall have delegated authority to make full use of 
recruitment, retention, and relocation payments as currently provided 
for by OPM.
2. Pay and Compensation Ceilings
    A demonstration project employee's total monetary compensation paid 
in a calendar year may not exceed the base pay of Level I of the 
Executive Schedule consistent with 5 U.S.C. 5307 and 5 CFR part 530 
subpart B, except employees placed in an SSTM position. In addition, 
each pay band will have its own pay ceiling, just as grades do in the 
GS system. Base pay rates for the various pay bands will be directly 
tied to the GS rates, except as noted for S&E Level V (SSTMs). Other 
than where a retained rate applies, base pay will be

[[Page 62817]]

limited to the maximum base pay payable for each pay band.
    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.
3. Pay Setting for Appointment
    For initial appointments to Federal service, the individual's pay 
may be set at the lowest base pay in the pay band or anywhere within 
the pay band consistent with the special qualifications of the 
individual, specific organizational requirements, the unique 
requirements of the position, or other compelling reasons. These 
special qualifications may be in the form of education, training, 
experience or any combination thereof that is pertinent to the position 
in which the employee is being placed. Guidance on pay setting for new 
hires will be documented in IOPs.
4. Pay Setting for Promotion
    The minimum base pay increase upon promotion will be six percent or 
the minimum base pay rate of the new pay band, whichever is greater. 
The maximum amount of a pay increase for a promotion may be up to the 
top of the pay band consistent with the special qualifications of the 
individual, specific organizational requirements, the unique 
requirements of the position, or other compelling reason. Additional 
criteria will be specified in the IOPs. For employees assigned to 
occupational categories and geographic areas covered by special rates, 
the minimum base pay is the minimum rate in the pay band or the 
corresponding special rate or locality rate, whichever is greater. For 
employees covered by a staffing supplement as described in paragraph 
III.G.9 below, the demonstration staffing supplement adjusted pay is 
considered base pay for promotion calculations.
    When a temporary promotion is terminated, the employee's pay 
entitlements will be re-determined based on the employee's position of 
record, with appropriate adjustments to reflect pay events during the 
temporary promotion, subject to the specific policies and rules 
established in Mod Demo IOPs. In no case may those adjustments increase 
the base pay for the position of record beyond the applicable pay range 
maximum base pay rate.
5. Pay Setting for Reassignment
    A reassignment may be made without a change in the employee's base 
pay. However, up to ten percent base pay increase may be granted where 
a reassignment significantly increases the complexity, responsibility, 
authority, or for other compelling reasons subject to the specific 
guidelines established in Mod Demo IOPs. In no case may those 
adjustments increase the base pay for the position of record beyond the 
applicable pay range maximum base pay rate.
6. Pay Setting for Change to Lower Pay Band
    Employees subject to an involuntarily change to lower pay band for 
cause (performance or conduct) or voluntary change to lower pay band 
(request or selection to new position) are not entitled to pay 
retention and may receive a decrease in base pay. Employees subject to 
an involuntary change to a lower pay band for reasons other than cause 
(e.g., erosion of duties, reclassification of duties to a lower pay 
band, or placement actions resulting from RIF procedures) may be 
entitled to pay and grade retention in accordance with the provisions 
of 5 U.S.C. 5363 and 5 CFR part 536, except as waived or modified in 
Section IX of this plan.
7. Supervisory and Team Leader Pay Adjustments
    Supervisory and team leader pay adjustments may be approved based 
on the rules established in Mod Demo IOPs, to compensate employees with 
supervisory or team leader responsibilities. Supervisory and team 
leader pay adjustments are a tool that may be implemented at the 
discretion of the AFC STRL organization and are not to be considered an 
employee entitlement due solely to his/her position as a supervisor or 
team leader. Only employees in supervisory or team leader positions as 
defined by the OPM GS Supervisory Guide or GS Leader Grade Evaluation 
Guide may be considered for the pay adjustment. Pay adjustments are 
increases to base pay, ranging up to 10 percent of that pay rate for 
supervisors and for team leaders, and are subject to the constraint 
that the adjustment may not cause the employee's base pay to exceed the 
maximum of the pay band. Pay adjustments are funded separately from 
performance pay pools.
    A supervisory/team leader pay adjustment may be considered under 
the following conditions:
    a. New supervisory/team leaders will have their initial rate of 
base pay for new supervisory/team leader positions set within the pay 
range of the applicable pay band and rules established by the AFC STRL 
organization. Request for initial rate of pay will be made to the 
delegated authorizing official. This rate of pay may include a pay 
adjustment determined by using the ranges and criteria outlined in the 
AFC STRL organization IOP.
    b. A career employee selected for a supervisory/team leader 
position may also be considered for a base pay adjustment. If a 
supervisor/team leader is already receiving a base pay adjustment and 
is subsequently selected for another supervisor/team leader position, 
then the base pay adjustment will be re-determined. After conversion 
into the demonstration project, a career employee selected for a 
supervisory/team leader position may be considered for a pay adjustment 
into the same or substantially similar position, supervisors/team 
leaders will be converted at their existing base rate of pay and will 
not be eligible for a base pay adjustment.
    c. The supervisory/team leader pay adjustment will be reviewed 
annually, or more often as needed, and may be increased or decreased by 
a portion or by the entire amount of the supervisory/team leader pay 
adjustment based upon the employee's performance appraisal score. If 
the entire portion of the supervisory/team leader pay adjustment is to 
be decreased, the initial dollar amount of the supervisory/team leader 
pay adjustment will be removed. A decrease to the supervisory/team 
leader pay adjustment as a result of the annual review or when an 
employee voluntarily leaves a position is not an adverse action and is 
not subject to appeal.
    All personnel actions involving a supervisory/team leader pay 
adjustment will require a statement signed by the employee 
acknowledging that the pay adjustment may be terminated or reduced at 
the discretion of the organization or will cease when an employee 
leaves a supervisory position. The cancellation of the adjustment is 
not an adverse action and is not appealable.
8. Supervisory/Team Leader Pay Differentials
    Supervisory and team leader pay differentials may be used to 
provide an incentive and reward supervisors and team leaders. 
Supervisory and team leader pay differentials are a tool that may be 
implemented at the discretion of the AFC STRL organization and are not 
entitlements due to employees based on their position. A pay 
differential is a cash incentive that may range up to 10 percent of 
base pay for supervisors and for team leaders. It is paid on a pay 
period basis with a specified not-to-

[[Page 62818]]

exceed (NTE) of one year or less and is not included as part of the 
base pay. Criteria to be considered in determining the amount of the 
pay differential will be identified in the AFC organization IOP. Pay 
differentials are not funded from performance pay pools.
    For SSTM personnel, this incentive may range up to five percent of 
base pay (excluding locality pay). The SSTM supervisory pay 
differential is paid on a pay period basis with a specified not-to-
exceed date up to one year and may be renewed as appropriate.
    The supervisory pay differential may be considered, either during 
conversion into or after initiation of the AFC STRL Mod Demo. The 
differential must be terminated if the employee is removed from a 
supervisory position, regardless of cause, or no longer meets 
established eligibility criteria.
    All personnel actions involving a supervisory/team leader 
differential will require a statement signed by the employee 
acknowledging that the differential may be terminated or reduced at the 
discretion of the organization. The termination or reduction of the 
supervisory differential is not considered an adverse action under 5 
U.S.C. chapter 75 and is not subject to appeal with the Merit Systems 
Protection Board.
9. Staffing Supplements
    Employees assigned to occupational categories and geographic areas 
covered by special rates will be entitled to a staffing supplement if 
the maximum adjusted rate for the banded GS grades to which assigned is 
a special rate that exceeds the maximum GS locality rate for the banded 
grades. The staffing supplement is added to the base pay, much like 
locality rates are added to base pay. For employees being converted 
into the demonstration project, total pay immediately after conversion 
will be the same as immediately before, but a portion of the total pay 
will be in the form of a staffing supplement. Adverse action and pay 
retention provisions will not apply to the conversion process, as there 
will be no change in total salary. Specific provisions will be 
described in Mod Demo IOPs.
10. Distinguished Contribution Allowance (DCA)
    The DCA may be used by AFC STRL organizations to provide an 
increased capability to recognize and incentivize employees who are:
    (a) Consistently extremely high-level performers, and
    (b) Paid at the top of their pay band level.
    Eligibility for DCA is open to employees in all career paths. A 
DCA, when added to an employee's pay (to include locality pay and any 
supervisory differential), may not exceed the rate of basic pay for 
Executive Level I. DCA is paid on either a bi-weekly basis or as a lump 
sum following completion of a designated performance period, or 
combination of these. DCA is not an entitlement and is used at the 
discretion of AFC STRL organization to reward and retain high 
performing employees. DCA is not base pay for any purpose, such as 
retirement, life insurance, severance pay, promotion, or any other 
payment or benefit calculated as a percentage of base pay. Employees 
may receive a DCA for up to five years but not more than 10 cumulative 
years over an employee's entire career. The DCA will be reviewed on an 
annual basis for continuation or termination. Further details will be 
published in Mod Demo IOPs.
11. Accelerated Compensation for Developmental Positions (ACDP)
    AFC STRL Mod Demo approving authorities may authorize an increase 
to basic pay for employees participating in training programs, 
internships, or other developmental capacities. ACDP will be used to 
recognize development of job-related competencies.
    The use of ACDP is limited to employees in pay bands I and II in 
the B&T and S&E career paths. Additional guidance will be published in 
IOPs.
12. Supplemental Pay
    AFC STRL organizations may establish supplemental pay rates to be 
paid bi-weekly, as other pay, for those positions which warrant higher 
compensation than that provided by the established pay band salary 
ranges, STRL staffing supplements or differentials, or other 
recruitment or retention authorities. AFC STRL organizations may 
establish supplemental pay rates by occupational series, specialty, 
competency, pay band level, and/or geographical area. In establishing 
such rates, AFC STRL organizations may consider: rates of pay offered 
by non-Federal or other alternative pay system employers that are 
considerably higher than rates payable by the AFC STRL organization; 
the remoteness of the area or location involved; the undesirability of 
the working conditions or nature of the work involved; evidence that 
the position is of such a specialized nature that very few candidates 
exist; numbers of employees who have voluntarily left positions; 
evidence to support a conclusion that recruitment or retention problems 
likely will develop (if such problems do not already exist) or will 
worsen; consideration of use of other pay flexibilities as well as the 
use of non-pay solutions; or any other circumstances the AFC STRL 
organization considers appropriate. Documentation of the determination 
will be maintained by the AFC STRL organization.
    This supplemental pay is in addition to any other pay, such as 
locality-based comparability payments authorized under 5 U.S.C. 5304 
and may result in compensation above Level IV of the Executive Schedule 
but may not exceed Level I of the Executive Schedule.
    The AFC STRL organizations have an ongoing responsibility to 
evaluate the need for continuing payment of the supplemental pay and 
shall terminate or reduce the amount if conditions warrant. Conditions 
to be considered are: changes in labor-market factors; the need for the 
services or skills of the employee has reduced to a level that makes it 
unnecessary to continue payment at the current level; or budgetary 
considerations make it difficult to continue payment at the current 
level. The reduction or termination of the payment is not considered an 
adverse action and may not be appealed or grieved. The applicant or 
employee will sign a statement of understanding outlining that the 
supplement may be reduced or terminated at any time based on conditions 
as determined by the AFC STRL organization. The documentation of the 
determination will be maintained by the AFC STRL organization.
13. Retention Counteroffers
    The AFC STRL organizations may offer a retention counteroffer to 
retain high performing employees in scientific, technical, or 
administrative positions who present evidence of an alternative 
employment opportunity (Federal or non-federal organizations) with 
higher compensation. Such employees may be provided increased base pay 
(up to the ceiling of the pay band) and/or a one-time cash payment that 
does not exceed 50 percent of one year of base pay. This flexibility 
addresses the expected benefits described in paragraph II.C, 
particularly ``increased retention of high-quality employees.'' 
Retention allowances, either in the form of a base pay increase and/or 
a bonus, count toward the Executive Level I aggregate limitation on pay 
consistent with 5 U.S.C. 5307, and 5 CFR part 530, subpart B. Further 
details will be published in Mod Demo IOPs.

[[Page 62819]]

I. Employee Development

1. Training for Degrees
    Degree training is an essential component of an organization that 
requires continuous acquisition of advanced and specialized knowledge. 
Degree training in the academic environment of laboratories is also a 
critical tool for recruiting and retaining employees with critical 
skills. Constraints under current law and regulation limit degree 
payment to shortage occupations. In addition, current government-wide 
regulations authorize payment for degrees based only on recruitment or 
retention needs. Degree payment is currently not permitted for non-
shortage occupations involving critical skills.
    AFC STRL organizations may expand the authority to provide degree 
training for purposes of meeting critical skill requirements, to ensure 
continuous acquisition of advanced and specialized knowledge essential 
to the organization, or to recruit and retain personnel critical to the 
present and future requirements of the organization. It is expected 
that the degree payment authority will be used primarily for attainment 
of advanced degrees. AFC STRL organizations will document guidelines 
and rules for using this authority in Mod Demo IOPs.
2. Sabbaticals
    AFC Mod STRL organizations may grant paid sabbaticals to career 
employees to permit them to engage in study or uncompensated work 
experience that will contribute to their development and effectiveness. 
Each sabbatical should benefit AFC as well as increase the employee's 
individual effectiveness. Examples are: advanced academic teaching, 
study, or research; self-directed (independent) or guided study; and 
on-the-job work experience with a public, private, or nonprofit 
organization. Each recipient of a sabbatical must sign a continued 
service agreement and agree to serve a period equal to at least three 
times the length of the sabbatical. AFC STRL organizations will 
document guidelines and rules for using this authority in their IOPs.

J. Voluntary Early Retirement Authority (VERA) and Voluntary Separation 
Incentive Pay (VSIP)

    AFC STRL will use the authorities provided by 5 U.S.C. 9902(f) to 
offer VERA and VSIP, as appropriate. The AFC CG may:
    (1) Approve the use of voluntary early retirement and separation 
pay incentives;
    (2) Determine which categories of employees should be offered such 
incentives; and
    (3) Determine the amount of voluntary separation incentive 
payments.
    AFC STRL organization IOPs will contain procedures to validate and 
document that payment of an incentive to an employee is fully warranted 
and will judiciously ensure that eligibility factors specified in DoDI 
1400.25, Volume 1702, ``DoD Civilian Personnel Management System: 
Voluntary Separation Programs,'' other than those waived in this FRN, 
are applied.
    Before authorizing the use of VERA and VSIP incentives, the AFC CG 
must determine that the use of such incentives is necessary to shape 
the laboratory workforce to better fulfill mission requirements and 
achieve the optimum workforce balance. If the laboratory workforce is 
being downsized, incentives may be used to minimize the need for 
involuntary separations under RIF procedures. In this downsizing 
scenario, early retirement and/or separation incentive pay may be 
offered to surplus employees who would otherwise be separated through 
RIF or to non-surplus employees whose positions could then be used to 
avert the involuntary RIF separation of surplus employees.
    VERA and VSIP incentives 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. Restructuring incentives are helpful in situations 
such as correcting an imbalance of skills or for delayering an 
organization.
    AFC STRL organizations will administer VERA and VSIP incentives in 
accordance with DoD Instruction 1400.25, Volume 1702, with the 
following exceptions to Enclosure 3, ``Guidance and Procedures:''
    (1) Par. 2.a.(6)(b) is waived to the extent that AFC STRL 
organizations may utilize the vacancy to correct a skills mismatch 
without restructuring the position.
    (2) Par. 2.a.(7) is waived to the extent that AFC STRL 
organizations may offer VSIP in an amount set by the AFC CG annually, 
without regard to the amount of severance pay employees would receive 
under 5 U.S.C. 5595(c) if the employees were entitled to severance pay. 
AFC STRL organizations will document their rationale for determining 
payment amounts.
    (3) Par. 2.b.(3)(d) is waived to the extent that a waiver is not 
required for employees occupying positions defined as ``hard to fill.
    (4) Par. 2.c. is waived to the extent that AFC STRL organization 
approval authorities may approve voluntary separation incentives for 
Senior Scientific Technical Managers (SSTMs). The SSTM position need 
not be abolished and may be restructured to meet mission requirements
    (5) Par. 2.g.(1) is waived to the extent that the AFC STRL 
organizations may pay up to an amount approved by the AFC CG for VSIP 
from appropriations or accounts available for such purposes to avoid an 
involuntary separation or to effect a restructuring action.
    AFC STRL organizations will establish implementing guidance and 
procedures in their IOPs.

IV. Conversion

A. Conversion into the Demonstration Project

    Conversion from current GS grade and pay into the new pay band 
system will be accomplished during implementation of the demonstration 
project. Initial entry into the demonstration project will be 
accomplished through a full employee-protection approach that ensures 
each employee an initial place in the appropriate career path and pay 
band without loss of pay on conversion.
    Employees are placed in a career path (i.e., DB, DE, DK) based upon 
their occupational series and in a pay band that includes their current 
grade. The GS-14 grade occurs in two pay bands of the S&E and B&T 
career paths, which are pay band III and pay band IV. The placement of 
GS-14 employees will be decided upon a review of each position's duties 
and responsibilities. Placement of a GS-14 into pay band III, however, 
is not placement in a lower-graded position. Additional guidance will 
be included in Mod Demo IOPs and conversion operations will be overseen 
by the PMB. Under the GS pay structure, employees progress through 
their assigned grade in step increments. Since this system is being 
replaced under the demonstration project, employees will be awarded 
that portion of the next higher step they have completed up until the 
effective date of conversion.
    Rules Governing Within Grade Increases (WGIs) will continue in 
effect until conversion. Adjustments to the employee's base salary for 
WGI equity will be computed as of the effective date of conversion. WGI 
equity will be acknowledged by increasing base pay by a prorated share 
based upon the number of full weeks an employee has completed toward 
the next higher step.

[[Page 62820]]

Payment will equal the value of the employee's next WGI multiplied by 
the proportion of the waiting period completed (weeks completed in 
waiting period/weeks in the waiting period) at the time of conversion. 
Employees at step 10, or receiving retained rates, on the day of 
implementation will not be eligible for WGI equity adjustments since 
they are already at or above the top of the step scale. Employees 
serving on retained grade will receive WGI equity adjustments provided 
they are not at step 10 or receiving a retained rate.
    Employees serving under temporary and term appointments will be 
converted and may continue their temporary and term appointments up to 
their established, current NTE date. Extensions of temporary 
appointments after conversion may be extended based on original 
appointment and Temporary and Term guidance identified in this FRN.
    Employees on a PIP will remain in their current system until the 
conclusion of the PIP and a decision is rendered.
    Conversion rules will apply to employees who did not convert 
initially or who are in positions that are involuntarily reassigned to 
the AFC STRL Mod Demo. If conversion into the demonstration project is 
accompanied by a geographic move, the employee's GS pay entitlements in 
the new geographic area must be determined before performing the pay 
conversion.
    Grade and pay retention entitlements are eliminated at the time of 
conversion in the demonstration project. An employee on grade retention 
will be converted to the career path and pay band based on the 
employee's assigned position, not the retained grade. The employee's 
basic pay and adjusted basic pay while on grade retention status will 
be used in setting appropriate pay upon conversion and in determining 
the amount of any WGI equity adjustment. An employee's adjusted basic 
pay will not be reduced upon conversion.
    Initial probationary period. Employees who have completed an 
initial probationary period prior to conversion will not be required to 
serve a new or extended initial probationary period. Employees who are 
serving an initial probationary period upon conversion from GS will 
serve the time remaining on their initial probationary period.
    Supervisory probationary period. Employees who have completed a 
supervisory probationary period prior to conversion will not be 
required to serve a new or extended supervisory probationary period 
while in their current position. Employees who are serving a 
supervisory probationary period upon conversion will serve the time 
remaining on their supervisory probationary period.

B. Conversion or Movement From a Project Position to a General Schedule 
Position

    If a demonstration project employee is moving to a GS position not 
under the demonstration project, or if the project ends and each 
project employee must be converted back to the GS system, the following 
procedures will be used to convert the employee's project career path 
and pay band to a GS-equivalent grade and the employee's project rate 
of pay to GS equivalent rate of pay.
    The converted GS grade and GS rate of pay must be determined before 
movement or conversion out of the demonstration project and any 
accompanying geographic movement, promotion, or other simultaneous 
action. For conversions upon termination of the project and for lateral 
reassignments, the converted GS grade and rate will become the 
employee's actual GS grade and rate after leaving the demonstration 
project (before any other action). For employee movement from within 
DoD (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 in effect 
immediately before the employee left the demonstration project.
1. Grade Setting Provisions
    An employee in a pay band corresponding to a single GS grade is 
converted to that grade. An employee in a pay band corresponding to two 
or more grades is converted to one of those grades according to the 
following rules:
    a. The employee's adjusted rate of basic pay under the 
demonstration project (including any locality payment or staffing 
supplement) is compared with step four rates on 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, or (3) the 
appropriate special rate schedule for the employee's occupational 
series, as applicable.) If the series is a two-grade interval series, 
odd-numbered grades are considered below GS-11.
    b. If the employee's adjusted project rate equals or exceeds the 
applicable step four rate of the highest GS grade in the band, the 
employee is converted to that grade.
    c. If the employee's adjusted project rate is lower than the 
applicable step four rate of the highest grade, the adjusted rate is 
compared with the step four rate of the second highest grade in the 
employee's pay band. If the employee's adjusted rate equals or exceeds 
step four rate of the second highest grade, the employee is converted 
to that grade.
    d. This process is repeated for each successively lower grade in 
the pay band until a grade is found in which the employee's adjusted 
project rate equals or exceeds the applicable step four rate of the 
grade. The employee is then converted at that grade. If the employee's 
adjusted rate is below the step four rate of the lowest grade in the 
pay band, the employee is converted to the lowest grade.
    e. Exception: An employee will not be converted to a lower grade 
than the grade held by the employee immediately preceding a conversion, 
lateral reassignment, or transfer from within DoD into the project, 
unless since that time the employee has undergone a reduction in pay 
band or accepted a lower pay band position.
    If an employee is retaining a rate under the demonstration project, 
the employee's GS-equivalent grade is the highest grade encompassed in 
his or her pay band.
2. Equivalent Increase Determinations
    Service under the AFC STRL Mod Demo is creditable for WGI purposes 
upon conversion back to the GS pay system. Performance pay increases 
(including a zero increase) under the demonstration project are 
equivalent increases for the purpose of determining the commencement of 
a WGI waiting period under 5 CFR 531.405(b).
3. Termination of Coverage Under the Demonstration Project Pay Plans
    In the event employees' coverage under the AFC STRL Mod Demo pay 
plan is terminated, employees move with their position to another 
system applicable to AFC 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.
    All personnel laws, regulations, and guidelines not waived by this 
plan will

[[Page 62821]]

remain in effect. Basic employee rights will be safeguarded, and Merit 
System Principles will be maintained.
4. S&E Level V Employees
    S&E Pay Band V Employees: An employee in Level V of the S&E 
occupational family will convert out of the demonstration project at 
the GS-15 level. Procedures will be documented in IOPs to ensure that 
employees entering Level V understand that if they leave the 
demonstration project and their adjusted base pay under the 
demonstration project exceeds the highest applicable GS-15, step 10 
rate, there is no entitlement to retained pay. However, consistent with 
79 FR 43722, July 28, 2014, pay retention may be provided, under 
criteria established by Mod Demo IOPs, to SSTM members who are 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 level within the STRL. Pay retention may also be 
provided under such criteria when an SES or ST employee is placed in a 
SSTM position as a result of reduction in force or other management 
action. SSTM positions not entitled to pay retention above the GS-15, 
step 10 rate will be deemed to be the rate for GS-15, step 10. For 
those Level V employees paid below the adjusted GS-15, step 10 rate, 
the converted rates will be set in accordance with the grade setting 
provisions.

V. Implementation Training

    Critical to the success of the demonstration project is the 
training developed to promote understanding of the broad concepts and 
finer details needed to implement and successfully execute Mod Demo. 
Training will be tailored to address employee concerns and to encourage 
comprehensive understanding of the demonstration project. Training will 
be required both prior to implementation and at various times during 
the life of the demonstration project.
    A training program will begin prior to implementation and will 
include modules tailored for employees, supervisors, 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) Career paths and pay banding
(4) The PFP system
(5) Defining performance objectives
(6) How to assign weights to performance elements
(7) Assessing performance and giving feedback
(8) New position descriptions
(9) Demonstration project administration and formal evaluation.
    Various types of training are being considered, including videos, 
video-teleconference tutorials, and train-the-trainer concepts. To the 
extent possible, materials developed by other STRLs will be utilized 
when appropriate to reduce implementation cost and to maintain 
consistency in application of similar procedures across laboratories.

VI. Project Maintenance and Changes

    Many aspects of a Demonstration Project are experimental. Minor 
modifications to Mod Demo may be made from time to time as experience 
is gained, results are analyzed, and conclusions are reached on how the 
system is working. Flexibilities published in this Federal Register 
Notice shall be available for use by all STRLs, if they wish to adopt 
them.

VII. Evaluation Plan

A. Overview

    Title 5 U.S.C. chapter 47 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 STRL demonstration program, originally covering 24 DoD 
laboratories, was developed by a joint OPM/DoD Evaluation Committee in 
1995. This plan was submitted to the then-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, in 
conducting the evaluation, AFC 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. Evaluation Model

    An evaluation model for the AFC STRL Mod Demo will identify 
elements critical to an evaluation of the effectiveness of the 
flexibilities. However, the main focus of the evaluation will be on 
intermediate outcomes, i.e., the results of specific personnel system 
changes which are expected to improve human resources management. The 
ultimate outcomes are defined as improved organizational effectiveness, 
mission accomplishment, and AFC customer satisfaction.

C. Method of Data Collection

    Data from a variety of different sources will be used in the 
evaluation. Information from existing management information systems 
supplemented with perceptual survey data from employees will be used to 
assess variables related to effectiveness. Multiple methods provide 
more than one perspective on how the AFC STRL Mod Demo is working. 
Information gathered through one method will be used to validate 
information gathered through another. Confidence in the findings will 
increase as they are substantiated by the different collection methods. 
The following types of qualitative and/or quantitative data may be 
collected as part of the evaluation: (1) Workforce data; (2) personnel 
office data; (3) employee attitudes and feedback using surveys, 
structured interviews, and focus groups; (4) local activity histories; 
and/or, (5) core measures of laboratory effectiveness.

VIII. Demonstration Project Costs

A. Cost Discipline

    An objective of the demonstration project is to ensure in-house 
cost discipline. A baseline will be established at the start of the 
project and labor expenditures will be tracked yearly. Implementation 
costs (including project development, automation costs, step buy-in 
costs, and evaluation costs) are considered one-time costs and will not 
be included in the cost discipline. The Personnel Management Board will 
track personnel cost changes and recommend adjustments if required to 
achieve the objective of cost discipline.

B. Developmental Costs

    Costs associated with the development of the personnel 
demonstration project include software automation, training, and 
project evaluation. All funding will be provided through the 
organization's budget. The projected annual expenses are summarized in 
Figure 7. Project evaluation costs are not expected to continue beyond 
the first five years unless the results warrant further evaluation. 
Additional cost may be

[[Page 62822]]

incurred as a part of the implementation and operation of the project.
[GRAPHIC] [TIFF OMITTED] TN17OC22.006

IX. Required Waivers to Laws and Regulations

    The following waivers and adaptations of certain title 5 U.S.C. and 
title 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 adopting or 
incorporating any law or 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 and Expert 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.
    Chapter 31, section 3132: The Senior Executive Service: Definitions 
and exclusions. Waived as necessary to allow for the Level V SSTM 
authority of the S&E pay band.
    Chapter 33, subchapter I: Examination, Certification, and 
Appointment. Waived except for sections 3302, 3321, and 3328 to the 
extent necessary to allow direct hire authority for qualified 
candidates whose positions involve 51 percent or more of time spent in 
direct support of STRL activities, are identified by AFC STRL 
organizations as hard to fill, have a history of high turnover, or 
require unique, laboratory-related skillsets; and to the extent 
necessary to allow employees appointed on flexible-length and 
renewable-term appointments to apply for Federal positions as status 
candidates.
    Chapter 33, section 3308: Competitive Service; Examinations; 
Educational Requirements Prohibited; Exceptions. Waived to the extent 
necessary to allow the qualification determination as described in 85 
FR 78829 and this FRN.
    Chapter 33, section 3317(a): Competitive Service; certification 
from registers. Waived insofar as ``rule of three'' is eliminated under 
the demonstration projects.
    Chapter 33, section 3318(a): Competitive Service, selection from 
certificate. Waived to the extent necessary to eliminate the 
requirement for selection using the ``Rule of Three'' and other 
limitations on recruitment list.
    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 
three years.
    Chapter 33, section 3324-3325: Appointments to Scientific and 
Professional Positions. Waived in its entirety to fully allow for 
positions above GS-15 and allow SSTMs.
    Chapter 33, section 3341: 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): Related to voluntary separation 
incentive payments. Waived to the extent necessary to utilize the 
authorities authorized in this FRN.
    Chapter 41, section 4107(a)(1), (2), (b)(1), and (3): Pay for 
Degrees. Waived to the extent required to allow AFC to pay for all 
courses related to a degree program approved by the AFC STRL 
organizations.
    Chapter 41, section 4108(a)-(c): Employee agreements; service after 
training. Waived to the extent necessary to require the employee to 
continue in the service of AFC for the period of the required service 
and to the extent necessary to permit the AFC STRL to waive in whole or 
in part a right of recovery.
    Chapter 43, section 4301-4305: Related to performance appraisal. 
These sections are waived to the extent necessary to allow provisions 
of the performance management system as described in this FRN.
    Chapter 51, section 5101-5112: Classification. Waived as necessary 
to allow for the demonstration project pay banding system.
    Chapter 53, section 5301-5307: Related to Pay Comparability System, 
Special Pay Authority, 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. Waived in its entirety to allow for staffing 
supplements.
    Chapter 53, section 5331-5336: General Schedule Pay Rates. Waived 
in its entirety to allow for the demonstration project's pay banding 
system and pay provisions.
    Chapter 53, section 5361-5366: Grade and pay retention. Waived to 
the extent necessary to allow pay retention provisions described in 
this FR notice and to allow SSTMs to receive pay retention as described 
in 79 FR 43722.
    Chapter 53, section 5379(a)(1)(A) and (b)(2): Student Loan 
Repayment. Waived to the extent necessary to define agency as STRL and 
to allow provisions of the student loan repayment authority as 
described in this FRN.
    Chapter 55, section 5545(d): Hazardous duty differential. Waived to 
the extent necessary to allow demonstration project employees to be 
treated as GS employees. This waiver does not apply to employees in 
Level V of the S&E pay band.
    Chapter 57, section 5753-5755: Recruitment and relocation, bonuses, 
retention allowances, and supervisory differentials. Waived to the 
extent necessary to allow: (a) employees and positions under the 
demonstration project to be treated as employees and

[[Page 62823]]

positions under the GS, (b) employees in Level V of the S&E pay band to 
be treated as ST and/or GS employees as appropriate, (c) previsions of 
the retention counteroffer and incentives as described in this FRN, and 
(d) to allow SSTMs to receive supervisory pay differentials as 
described in 79 FR 43722.
    Chapter 75, section 7501(1), 7511(a)(1)(A)(ii), and 
7511(a)(1)(C)(ii): Adverse actions-definitions. Waived to the extent 
necessary to allow for up to a three-year probationary period and to 
permit termination during the extended probationary period without 
using adverse action procedures for those employees serving a 
probationary period under an initial appointment except for those with 
veterans' preference. Waived to the extent necessary to allow for two-
year supervisory probationary periods and to permit re-assignment of 
supervisors during the probationary period without adverse action 
procedures for those employees serving in a supervisory probationary 
period.
    Chapter 75, section 7512(3): Adverse actions. Waived to the extent 
necessary to replace ``grade'' with ``pay band.''
    Chapter 75, section 7512(4): Adverse actions. Waived to the extent 
necessary to provide that adverse action provisions do not apply to (1) 
reductions in pay due to the removal of a supervisory or team leader 
pay adjustment/differential upon voluntary movement to a non-
supervisory or non-team leader position or (2) decreases in the amount 
of a supervisory or team leader pay adjustment/differential during the 
annual review process.
    Chapter 99, section 9902(f): Related to Voluntary Separation 
Incentive Payments. Waived to the extent necessary to utilize the 
authorities in this FRN.

B. Waivers to Title 5, Code of Federal Regulations

    Part 212, section 212.301: Competitive Status Defined. Waived to 
the extent necessary to allow individuals on flexible-length and 
renewable term appointments to be considered status candidates as 
defined in this FRN.
    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, 82 FR 29280, and 85 FR 78829; 
direct hire authority for qualified candidates whose positions involve 
51 percent or more of time spent in direct support of STRL activities, 
are identified by the STRLs as hard to fill, have a history of high 
turnover, or require unique, laboratory-related skillsets.
    Part 300, section 300.601-300.605: Time-in-Grade Restrictions. 
Waived to eliminate time-in-grade restrictions in the demonstration 
project.
    Part 315, section 315.201(b): Waived to the extent necessary to 
allow Flexible Length and Renewable Term Technical Appointments to be 
considered non-temporary employment for the purposes of determining 
creditable service toward career tenure.
    Part 315, section 315.801(a), 315.801(b)(1), (c), and (e), and 
315.802 (a) and (b): Probationary period and length of probationary 
period. Waived to the extent necessary to (1) allow for up to a three-
year probationary period and to permit termination during the extended 
probationary period without using adverse action procedures for those 
employees serving a probationary period under an initial appointment 
except for those with veterans' preference and (2) to the extent 
necessary to allow for supervisory probationary periods to permit 
reassignment during the supervisory probationary period without using 
adverse action procedures for employees serving a probationary period.
    Part 315, section 315.803(b): Agency Action during probationary 
period (general). Waived to allow for termination during an extended 
probationary period without using adverse action procedures under 
subpart D of 5 U.S.C. part 752.
    Part 315, section 315.804: Termination of probationers for 
unsatisfactory performance or conduct. Waived to the extent necessary 
to reduce a supervisor who fails to successfully complete a supervisory 
probationary period to a lower grade/pay band.
    Part 315, section 315.805: Termination of Probationers for 
Conditions Arising before Appointment. Waived to the extent necessary 
to permit termination during the extended probationary period without 
using adverse procedures.
    Part 315, section 315.901-315.909: Statutory requirement. Waived to 
the extent necessary to
    (1) Replace ``grade'' with ``pay band;''
    (2) Establish a two-year supervisory probationary period; and
    (3) Allow the movement of a newly hired supervisor who fails to 
meet requirements to a lower grade/pay band.
    Part 316, section 316.301, 316.303, and 316.304: Term employment. 
Waived to the extent necessary to allow modified term appointments and 
FLRTTA as described in this FRN. Waived to the extent necessary to 
allow Flexible Length and Renewable Term Technical Appointments to 
count toward competitive status. Waived to allow a two-year trial 
period under the Flexible Length and Renewable Term Technical 
Appointment.
    Part 330, section 330.103-330.105: Requirement to Notify OPM and 
Requirements for Vacancy Announcements. Waived to the extent necessary 
to allow the STRL to publish competitive announcements outside of 
USAJobs. Waived to the extent necessary to allow an STRL to determine 
information to be published in a USAjobs flyer.
    Part 332 and 335: Related to competitive examination and agency 
promotion programs. Waived to the extent necessary to:
    (1) Allow employees appointed on a Flexible Length and Renewable 
Term Technical Appointment to apply for federal positions as status 
candidates;
    (2) Allow no rating and ranking when there are 15 or fewer 
qualified applicants and no preference eligible candidates;
    (3) Allow the hiring and appointment authorities as described in 
this FRN;
    (4) Eliminate the ``rule of three'' requirement or other procedures 
to limit recruitment lists; and
    (5) To extend the length of details and temporary promotions 
without requiring competitive procedures as described in 85 FR 78829 
and this FRN.
    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 337, section 337.101(a): Rating applicants. Waived to the 
extent necessary to allow referral without rating when there are 15 or 
fewer qualified candidates and no qualified preference eligible 
candidates.
    Part 338, section 338.301: Competitive Service Appointment. Waived 
to the extent necessary to allow demonstrated exceptional experience or 
a combination of experience and education in lieu of meeting OPM 
individual occupational qualification requirements for S&E positions as 
described in 85 FR 78829 and this FRN.
    Part 340, Subparts A-C: Other than full-time career employment. 
These subparts are waived to the extent necessary to allow a Voluntary 
Emeritus Corps and Voluntary Expert Program.
    Part 351, Subparts B, D, E, F, and G: Waived to the extent 
necessary to allow the provisions of RIF.

[[Page 62824]]

    Part 359, section 359.705: Related to SES Pay. Waived to allow 
demonstration project rules governing pay retention to apply to a 
former SES or ST placed on an SSTM position or Level IV position.
    Part 410, section 410.308(a-e): Training to obtain an academic 
degree. Waived to the extent necessary to allow provisions described in 
this FRN.
    Part 410, section 410.309: Agreements to Continue in Service. 
Waived to the extent necessary to allow the AFC STRL organizations 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 GS, prevailing rate, 
and certain other employees. Waived to the extent necessary to be 
consistent with the demonstration project's pay-for-performance system.
    Part 432, section 432.102-432.106: Performance based reduction in 
grade and removal actions. Waived to the extent necessary to allow 
provisions described in the FRN.
    Part 511: Classification under the general schedule. Waived to the 
extent necessary to allow classification provisions outlined in this FR 
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 appeals to be decided by the AFC 
EDCG. If the employee is not satisfied with the AFC EDCG's response to 
the appeal, he/she may then 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, if 
applicable.
    Part 531, Subparts B, D, and E: Determining the Rate of Basic Pay. 
Waived to the extent necessary to allow for pay setting and pay-for-
performance under the provisions of the demonstration project. Within-
Grade Increases and Quality Step Increases. Waived in its entirety.
    Part 531, Subpart F: Locality-based comparability payments. Waived 
to the extent necessary to allow (1) demonstration project employees, 
except employees in Level V of the S&E pay band, to be treated as GS 
employees; and (2) base rates of pay under the demonstration project to 
be treated as scheduled annual rates of pay.
    Part 531, section 531.604: Determining an Employee's Locality Rate. 
Waived to the extent required to allow for routine or permanent 
telework employees to receive the higher of locality rates based on 
either their official worksite as documented on the SF 50 or the 
official duty site for AFC where the employee is employed from.
    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 reductions in pay due solely to the 
removal of a supervisory pay adjustment upon voluntarily leaving a 
supervisory position;
    (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 record of ``Level 1;''
    (5) provide that an employee on pay retention whose rating of 
record is ``Level 1'' 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) ensure that for employees of Pay Band V in the S&E career path, 
pay retention provisions are modified so that no rate established under 
these provisions may exceed the rate of base pay for GS-15, step 10 
(i.e., there is no entitlement to retained rate); and
    (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. This waiver applies to 
ST employees only if they move to a GS-equivalent position within the 
demonstration project under conditions that trigger entitlement to pay 
retention.
    Part 536, section 536.306(a): Limitation on retained rates. Waived 
to the extent necessary to allow SSTMs to receive pay retention as 
described in 79 FR 43727.
    Part 537: Repayment of Student Loans. Waived to the extent 
necessary to define agency as STRL and to allow provisions of the 
student loan repayment authority.
    Part 550, section 550.902: Definitions. Waived to the extent 
necessary to allow demonstration project employees to be treated as GS 
employees. This waiver does not apply to employees in Level V of the 
S&E pay band.
    Part 575, Subparts A-D: Recruitment incentives, relocation 
incentives, retention incentives, and supervisory differentials. Waived 
to the extent necessary to allow
    (1) Employees and positions under the demonstration project covered 
by pay banding to be treated as employees and positions under the GS 
system,
    (2) To allow SSTMs to receive supervisory pay differentials as 
described in 73 FR 43727, and
    (3) To allow the Director to pay an offer up to 50 percent of basic 
pay of either a base pay and/or a cash payment to retain quality 
employees; and to the extent necessary to allow SSTMs to receive 
supervisory pay differentials. Criteria for retention determination and 
preparing written service agreements will be as prescribed in 5 U.S.C. 
5754 and as waived herein.
    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, section 752.101, 752.201, 752.301, and 752.401: Principal 
statutory requirements and coverage. Waived to the extent necessary to
    (1) Allow for up to a three-year probationary period;
    (2) Permit termination during the extended probationary period 
without using adverse action procedures for those employees serving a 
probationary period under an initial appointment except for those with 
veterans' preference;
    (3) Allow for supervisory probationary periods and to permit 
reassignment during the supervisory probationary period without use of 
adverse action procedures for those employees serving a probationary 
period under a supervisory probationary period;
    (4) Replace ``grade'' with ``pay band;'' and
    (5) Provide that a reduction in pay band is not an adverse action 
if it results from the employee's rate of base pay being exceeded by 
the minimum rate of base pay for that pay band. Waived to the extent 
necessary to provide that adverse action provisions do not apply to (1) 
conversions from GS special rates to demonstration project pay, as long 
as total pay is not reduced, and (2) reductions in pay due to the 
removal of a supervisory or team leader pay adjustment/differential 
upon voluntary movement to a non-supervisory or non-team leader 
position or decreases in the amount of a supervisory or team leader pay 
adjustment based on the annual review.
    Part 1400, section 1400.202(a)(2): Waivers and Exceptions to Pre-
appointment Investigative Requirements.

[[Page 62825]]

    (1) To the extent necessary, waive the pre-employment investigative 
requirements thereby enabling STRLs to make a final job offer and 
establish an EOD prior to a favorable eligibility determination at the 
Top Secret/SCI level.
    (2) For positions designated as Top Secret/Special-Sensitive and 
Critical-Sensitive, apply the same waiver requirements for pre-
appointment investigations IAW 5 CFR 1400.202(a)(2)(ii) for Critical-
Sensitive positions with the following changes:
    (a) An emergency or a national interest necessitating a pre-
employment investigation waiver would include an STRL's inability to 
meet mission requirements.
    (b) An agency or agency head would be defined as an STRL to allow 
for the provisions regarding security eligibility as described in 85 FR 
78829.
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    Dated: October 12, 2022.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2022-22470 Filed 10-14-22; 8:45 am]
BILLING CODE 5001-06-C