[Material Transmitted:]{.underline}

HHS Instruction 351-1, Reduction in Force, dated January 29, 2009.

[Material Superseded:]{.underline}

HHS Instruction 351-1, Reduction in Force, dated October 25, 1995.

[Background:]{.underline}

The purpose of this instruction is to update current policy consistent
with changes in Office of Personnel management (OPM) regulations and
guidance; clarify roles and responsibilities; and promulgate
Departmental policy on discretionary provisions.

This issuance is effective immediately. Implementation of this issuance
must be carried out in accordance with applicable laws, regulations,
bargaining agreements, and Departmental policy.

Antonia T. Harris

Deputy Assistant Secretary

for Human Resources

INSTRUCTION 351-1

**SUBJECT: REDUCTION IN FORCE (RIF)**

351-1-00 Purpose and Authority

351-1-10 Coverage and Exclusions

351-1-20 References

351-1-30 Definitions

351-1-40 Roles and Responsibilities

351-1-50 Alternatives to RIF

351-1-60 Discretionary Options

351-1-70 Competitive Areas

351-1-80 Competitive Levels

351-1-90 Crediting Performance

351-1-100 Reduction in Force in the Indian Health Service

351-1-110 Priority Placement Assistance

351-1-120 Appeal Rights and Corrective Actions

351-1-130 Records

Exhibit 351-1-A Guide to Crediting Performance

**351-1-00 PURPOSE AND AUTHORITY**

This Instruction sets forth the Department\'s policies and procedures on
reduction in force (RIF). The Instruction supplements 5 CFR Part 351 and
Office of Personnel Management (OPM) guidance on RIF and other
downsizing initiatives. The Instruction must be used in conjunction with
references (A) through (K) (See section 351-1-20), pertinent Merit
System Protection Board (MSPB) and other third party decisions, and
collective bargaining agreements.

Specifically, this Instruction addresses Departmental policy and
procedures for releasing competing employees from their competitive
levels by furlough for more than 30 consecutive days or 22 workdays if
done on a discontinuous basis, but not more than 1 year; separation,
demotion, or reassignment requiring displacement, when the release is
required because of lack of work; shortage of funds; insufficient
personnel ceiling; reorganization; the exercise of reemployment or
restoration rights; or reclassification of an employee's position due to
erosion of duties when such action will take effect after the Department
or OPDIV has formally announced a RIF in the competitive area, and the
RIF will become effective within 180 days.

Consistent with OPM, HHS, and applicable collective bargaining
agreements, employees shall be released based on their tenure of
employment, veteran preference, length of service, and performance. The
Department will ensure that all available options are used to minimize
the adverse impact of RIF on employees.

**351-1-10 COVERAGE AND EXCLUSIONS**

A. Coverage

The provisions of this Instruction apply to Department of Health and
Human Services (HHS) employees in the competitive and excepted services.

B. Exclusions

This Instruction does not apply to employees of the U.S. Public Health
Service (PHS) Commissioned Corps, the Senior Executive Service (SES), an
employee whose appointment is required by Congress to be confirmed by,
or made with the advice and consent of the Senate, or positions located
in foreign countries that are filled by non-U.S. citizens.

Note: Operating Divisions (OPDIVs) must satisfy their bargaining
obligations under Title 5 United States Code (USC), Chapter 71.
Accordingly, unions must receive advance notice of changes, and the
impact of changes generally must be negotiated prior to implementation.
Where changes conflict with existing negotiated agreements, the
agreement takes precedence over this Instruction for covered employees.

**351-1-20 REFERENCES**

A.  5 USC § § 3501 - 3504 (Employment and Retention)

B.  Public Law 93-638 (1979 - Indian Self-Determination Act)

C.  Public Law 96-135 (1979 - Reassignment of non-Indians within the
    Indian Health Service)

D.  5 CFR 213.3101 (Excepted Appointment Authority for persons entitled
    to Indian preference (OPM No. 213.3116(B)(8))

E.  5 CFR 302 (Reemployment Priority for Excepted Service Employees)

F.  5 CFR 330 (Reemployment Priority for Competitive Service Employees
    and Career Transition Assistance Programs)

G.  5 CFR 351 (RIF regulations)

H.  5 CFR 752 (Adverse Actions)

I.  5 CFR 550 (Severance Pay)

J. HHS Instruction 430-1 (Performance Management Appraisal Program)

K. HHS Instruction 330-2 (Career Transition and Assistance Program)

**351-1-30 DEFINITIONS**

A.  [Assignment rights]{.underline}. The rights granted to an eligible
    competitive service employee in group I or II, when he or she is
    released from a competitive level to displace a lower retention
    standing employee in a lower tenure group and is no more than three
    grade intervals or equivalent below the position from which the
    employee was released (bumping); or to displace a lower retention
    standing employee in the same tenure group and subgroup and is no
    more than three grade intervals or equivalent below the position
    from which the employee was released, except for a preference
    eligible with a 30 percent or more service connected disability for
    which the limit is five (5) grades or intervals or equivalent
    (retreating).

B.  [Competing employee]{.underline}. An employee in tenure group I, II,
    or III.

C.  [Competitive area]{.underline}. An organizational unit or
    subdivision of the Department in a defined geographic area(s) in
    which eligible employees compete in a RIF.

D.  [Competitive level]{.underline}. The level established by HHS which
    consists of all positions in a competitive area which are in the
    same grade (or occupational level) and classification series, and
    which are similar enough in duties, qualification requirements, pay
    schedules, and working conditions so that the Department may
    reassign the incumbent of one position to any of the other positions
    in the level without undue disruption. Separate competitive levels
    must be established for: Positions of supervisors and managers
    because of difference in duties and responsibilities; competitive
    and excepted service positions; positions in different pay
    schedules, work schedules, and trainee status.

E.  [Days]{.underline}. Calendar days unless indicated otherwise.

F.  [Function]{.underline}. All or a clearly identifiable segment of an
    agency's mission (including all integral parts of that mission),
    regardless of how it is performed.

G.  [Furlough]{.underline}. The placement of an employee in a temporary
    nonduty and nonpay status for more than 30 consecutive calendar
    days, or more than 22 workdays if done on a discontinuous basis, but
    not more than 1 year.

H.  [Local commuting area]{.underline}. The geographic area that usually
    constitutes one area for employment purposes; any population center
    and surrounding localities in which people live and can be
    reasonably expected to travel back and forth daily to their place of
    employment, generally within a 50-mile radius.

I.  [Modal rating]{.underline}. The summary rating level assigned most
    frequently among the actual ratings of record that are: (1) assigned
    under the summary level pattern that applies to the employee's
    position of record on the date of the RIF; (2) given within the same
    competitive area of the employee; and (3) on record for the most
    recently completed appraisal period prior to the date of issuance of
    the RIF notices or the cutoff date for including any new ratings in
    the record.

J.  [Operating Human Resources Organizations (OHROs)]{.underline}:
    Includes the Atlanta Human Resources Center, Baltimore Human
    Resources Center, Rockville Human Resources Center, National
    Institutes of Health (NIH), Indian Health Service (IHS).

K.  [Rating of record]{.underline}. The performance rating prepared at
    the end of an appraisal period for the performance of assigned
    duties over the entire period, and the assignment of a summary level
    rating.

L.  [Reemployment Priority List (RPL)]{.underline}. The mechanism used
    to give reemployment consideration to former competitive and
    excepted service employees separated by reduction in force (RIF) or
    fully recovered from a compensable injury after more than 1 year.

M.  [Retention Register]{.underline}. The ranking of employees in the
    competitive level after the agency applies the four retention
    factors of tenure of employment (i.e., type of appointment);
    Veterans\' preference; total creditable Federal civilian and
    uniformed service; and performance ratings.

N.  [Retention Standing]{.underline}. The order that employees appear on
    a retention register on the basis of their tenure of employment,
    veteran preference, length of service, and performance in descending
    order by tenure group I, group II, group III, and within each group
    by veteran preference categorized as subgroup AD, subgroup A, and
    subgroup B; and within each subgroup by years of service adjusted by
    credit for performance, beginning with the earliest service date.

O.  [Tenure Groups]{.underline}. Competing employees are placed in
    groups for retention purposes. The groups are defined as group I, II
    and III and within each group by veteran preference categorized as
    subgroup AD, subgroup A, subgroup B; and within each subgroup by
    years of service as augmented by credit for performance under 5 CFR
    351.504. Group I includes each career employee who is not serving a
    probationary period or otherwise covered. Group II includes career
    conditional and employees serving a probationary period and others
    as determined by OPM regulations. Group III includes all employees
    serving indefinite appointments, temporary appointments pending
    establishment of a register, status quo appointments, term
    appointments, and any other non-status non-temporary appointments
    which meet the definition of provisional appointments in 5 CFR
    316.401 and 316.403.

P.  [Transfer of function]{.underline}. The transfer of the performance
    of a continuing function from one competitive area and its addition
    to one or more other competitive areas, except when the function
    involved is virtually identical to the functions already being
    performed in the other competitive area(s) affected; or the movement
    of the competitive area in which the function is performed to
    another commuting area.

Q.  [Undue disruption]{.underline}. A degree of interruption that would
    prevent the completion of required work by the employee 90 days
    (allowable limits of time, quality, and other demands) after the
    employee has been placed in a different position under this
    Instruction.

**351-1-40 ROLES AND RESPONSIBILITIES**

A.  The Deputy Assistant Secretary for Human Resources (DASHR), Office
    of Human Resources (OHR), shall oversee the development,
    implementation, and administration of policies and procedures for
    reduction in force, reorganizations, and related matters and is
    responsible for:

    1.  Approving all requests to the Office of Personnel Management
        (OPM) for approval of Voluntary Early Retirement Authority
        (VERA) and/or Voluntary Separation Incentive Payments (VSIP) in
        order to minimize the impact of a downsizing and/or reshaping.

    2.  Approving any waivers or exceptions to this Instruction.

    3.  Authorizing the OHROs to conduct reviews of reorganizations,
        reductions in force, and other downsizing initiatives as needed.

B. OPDIV Heads are responsible for:

1.  Authorizing and approving furloughs and RIFs, and revising
    competitive areas in their organizations with written notification
    to the OHR, DASHR. However, OPDIVs must examine the feasibility of
    all available options before determining that a RIF is unavoidable
    and necessary.

2.  Determining the categories, the numbers and kinds of positions
    needed to support the mission, where they are located, when they
    will be filled, abolished or vacated, and when there is a surplus of
    employees in a particular line of work.

3.  Continually assessing workforce requirements consistent with the
    Department's strategic plan and human capital goals.

4.  Defining competitive areas in conjunction with the OHRO and
    notifying OHR in writing prior to establishment of any new
    competitive area(s). In addition, when an OPDIV wishes to change a
    competitive area prior to 90 days of the effective date of a RIF,
    the respective OPDIV must submit the request through OHR to OPM for
    approval.

5.  Developing restructuring plans which include descriptions of the
    modified organization, along with an identification of the surplus
    positions. When a surplus of employees exist, ensuring that all
    available alternatives are explored prior to advising OHR of the
    need to conduct a RIF.

6.  Allocating funds and resources to conduct the RIF or reshaping
    initiative, to include designating funds for training and retraining
    staff as appropriate, career transition assistance, facilities,
    equipment, materials, and other expenses.

7.  Consulting with the OHRO as early in the process as possible to
    fully develop options and strategies for conducting the downsizing
    or reshaping initiative. Notifying OHR in writing as early as
    possible when a RIF is planned and before the RIF is announced.

8.  According appropriate organizations and recognized labor
    organizations advance notice, consultation and bargaining rights to
    which they are entitled, including those contained in agreements.
    Establishing and maintaining a forum during the RIF process for
    continuing dialogue on negotiable RIF subjects.

9.  With advice and assistance from the OHRO, developing a
    communications plan for disseminating information, and communicating
    with employees, unions and other stakeholders on a regular basis.

10. Supporting the RPL, Career Transition Assistance Plan (CTAP), and
    other mechanisms available to maximize placement opportunities for
    affected employees.

11. Submitting written requests with pertinent justification for
    approval of VERA and/or VSIP through the OHR for endorsement to OPM
    for approval.

12. Requesting OHR approval of RIFs when 50 or more employees in a
    competitive area will receive separation notices.

13. Ensuring, with advice and assistance from the OHRO, that written
    notification is concurrently issued to the following organizations
    when 50 or more employees within a competitive area receive specific
    notices of separation: The Federal or state entity that is charged
    with carrying out rapid response activities under Title I of the
    Workforce Investment Act of 1998; the chief elected official of the
    local commuting area where the separations will occur; and OPM.

C. The OHROs are responsible for:

1.  Advising top management of the HR implications involving all phases
    of planning, analyzing, and determining whether a RIF is
    unavoidable.

2.  Preparing written requests for approval of VERA and/or VSIP approval
    through OHR to OPM along with pertinent documentation to support the
    request(s).

3.  Assessing their internal ability to conduct a RIF or major reshaping
    initiative including an assessment of personnel records and data
    systems used to conduct a RIF or knowledge of HR staff in conducting
    a RIF.

4.  Developing competitive levels for each competitive area under the
    serviced OPDIV's jurisdiction.

5.  Working with management in developing a restructuring plan that
    identifies the new organizational requirements, placement options,
    skills imbalances, training and retraining options, and a
    communications strategy.

6.  Developing, assisting or conducting briefings on the RIF or
    reshaping initiative for supervisors and managers, employees, labor
    organizations, management organizations, and other stakeholders as
    required or appropriate (e.g. OMB, Congress, OPM).

7.  Counseling employees who are adversely affected regarding their
    entitlements and benefits to help lessen the impact of actions being
    contemplated or taken.

8.  Taking reasonable steps to assist each employee designated for
    separation from the Department's rolls to secure a satisfactory
    position elsewhere. This includes use of vacant positions which are
    funded and intended to be filled.

9.  In consultation with OPDIV hiring manager(s), waiving qualifications
    in order to place surplus or displaced employees into vacant
    positions, when available information indicates that the employee
    will be able to successfully perform the duties of the vacant
    position.

10. Consulting with recognized labor organizations on negotiable
    subjects to secure cooperation on planned actions and agreement on
    negotiable issues.

11. Ensuring that personnel records of employees impacted by the RIF are
    accurate and that employees are provided the opportunity to review
    their records and retention registers that affect them.

12. Assigning dedicated HR staff to conduct the mechanics of the RIF and
    provide attendant support to management and employees during this
    process.

13. Ensuring that employees are advised of the full benefits of the RPL,
    Department of Labor training and retraining opportunities, and the
    Department's Career Transition Assistance Plan as soon as it is
    known that a RIF is probable. Such actions may forestall the
    necessity of a RIF or reduce its severity.

14. Preparing reports on VERA/VSIP, RIF, and any other actions
    associated with downsizing or reshaping authorized under this
    Instruction for submission to the OHR and/or OPM as required.

D. Supervisors and managers are responsible for:

1.  Taking ownership of the reshaping or RIF initiative by explaining
    the reasons for the action, explaining what actions will be taken to
    assist affected employees, and keeping employees informed of any
    changes on a regular and recurring basis.

2.  Ensuring that employees are informed at the earliest possible time
    that they will or may be affected by the RIF process.

3.  In conjunction with the HR staff, answering employees' questions
    about the RIF process.

4.  Ensuring that employees receive annual performance ratings at the
    end of the appraisal cycle, or a summary rating if the employee or
    supervisor leaves his or her position prior to the end of the
    appraisal cycle.

5.  Encouraging employees to verify that information in their OPF is
    correct and current.

6.  Ensuring that position descriptions of employees in their
    organization are current.

7.  Encouraging employees to apply for priority placement benefits and
    to adhere to RPL, CTAP and ITCAP requirements for priority selection
    eligibility.

8.  Excusing employees, subject to mission requirements, to take
    advantage of career transition assistance available in order to
    maximize placement opportunities.

E. Employees are responsible for:

1.  Attending an orientation session on eligibility for the RPL, career
    transition, and other benefits available to affected employees.

2.  Submitting a timely application for placement on the RPL for
    priority selection consideration.

3.  Using the career transition assistance facilities, resources, and
    opportunities that are made available.

4.  Applying for vacancies in the commuting area and exploring other
    employment options.

5.  Taking advantage of training and retraining opportunities offered by
    the OPDIV, HR staff, and the Department of Labor through the
    appropriate state employment office.

**351-1-50 ALTERNATIVES TO RIF**

Prior to announcing a major reorganization, transfer of function, or
reduction in force that will adversely impact a significant segment of
an OPDIV's workforce, top level management should consider the following
alternatives to RIF and determine that the options are impracticable,
infeasible, or do not address the circumstance(s) sufficiently to
warrant implementation:

A.  Hiring freezes using internal placements to fill vacancies, with or
    without exceptions to fill from outside sources only for rare or
    exceptional qualifications requirements.

B.  Requesting voluntary early retirement authorization (VERA) and/or
    voluntary separation incentives (VSIP) to reduce the number of
    employees on the rolls.

C.  Furloughing employees for a specified number of continuous or
    discontinuous basis to reduce payroll costs for salaries.

D.  Hiring temporary or term employees when the workload requirements
    are unpredictable or are expected to last for a short period of
    time.

E.  Arranging details within and outside the OPDIV and or Department to
    fill critical shortfalls on a time limited basis. (Details outside
    the Department must be made on a reimbursable basis.)

F.  Reducing the span of control of supervisors to employees.

G.  Reassigning surplus employees to continuing positions or retraining
    surplus employees for new or different jobs.

H.  Establishing and implementing an aggressive placement assistance
    program using internal and external Federal, state and local
    government resources, including the Department of Labor and private
    industry.

**351-1-60 DISCRETIONARY OPTIONS**

A.  Records Update. To provide adequate time to determine retention
    standing during a RIF or related action, OHROs shall establish a
    cut-off date for employees to submit updated personnel information
    for inclusion in their electronic Official Personnel Files (e-OPF).
    OHROs shall ensure that the cut-off date is widely publicized at
    least 30 days prior to the deadline for receipt of information.

B.  Filling Vacancies. Vacant positions will be used to satisfy RIF
    assignment rights to the extent practicable.

C.  Waiver of Qualifications. Qualifications may be waived to place an
    employee in a vacant position provided the employee meets minimum
    educational requirements and has the capacity to perform the duties
    and responsibilities of the position.

D.  Exceptions to Order of Release. In addition to the mandatory
    exceptions to the order of release (i.e. Armed Forces restoration
    rights; use of annual leave under 5 USC Chapter 63 to reach initial
    eligibility for retirement and/or to establish initial eligibility
    to continue health benefits coverage into retirement), the following
    discretionary exceptions may be authorized by the head of the OHRO:

    1.  Sick leave. An employee on approved sick leave that has made
        application for disability retirement as of the effective date
        of the RIF may be temporarily retained until the date his or her
        sick leave has been exhausted.

    2.  Annual leave. An employee who is not covered by leave under 5
        USC Chapter 63 may use annual leave under another Federal leave
        system to reach initial eligibility for retirement and/or to
        establish initial eligibility to continue health benefits
        coverage into retirement.

    3.  Continuing exceptions. An exception may be made to retain an
        employee on duties that cannot be assumed by another employee
        with higher retention standing without undue disruption to the
        mission.

    4.  Other exceptions. OHROs must submit a written request with
        appropriate documentation to the OHR for approval of other
        exceptions on an individual basis.

E. Assignment Rights.

1.  Competing employees in tenure groups I and II will not be permitted
    to displace employees with lower retention standing in the same
    subgroup, unless an exception is authorized by the DASHR or
    applicable negotiated agreement.

2.  Competing employees in the excepted service will not be afforded
    assignment rights outside of their competitive levels.

3.  Temporary employees and reemployed annuitants are employed at the
    will of the agency and as such do not have any assignment rights.

4.  When all positions within a competitive area are being abolished
    within 180 days, employees may be released by group order without
    regard to subgroup order, except when mandatory or discretionary
    exceptions are applicable to the order of release.

F. Transfer of Function

1.  OPM regulations do not prescribe a notice period for informing
    employees about a transfer of function. However, it is the policy of
    this Department that when a transfer of function involves the
    movement of employees to another commuting area, employees will be
    notified at least 30 calendar days in advance of the proposed
    effective date of the transfer and must be given at least 15
    calendar days to respond.

2.  No prior approval is required to effect personnel actions resulting
    from transfers of function. However, when the transfers involve the
    movement of employees to other commuting areas, the DASHR must be
    informed in writing before affected employees are notified of the
    decision to transfer their function.

3.  OHROs shall canvass employees in writing to determine whether the
    employee wishes to transfer with the function when the function is
    transferring to a different commuting area. An employee may change
    his or her mind on an initial acceptance of an offer to transfer,
    but may not rescind an initial rejection of an offer to transfer
    with the function.

4.  When a RIF is being conducted concurrently with a TOF in the same
    commuting area, an employee who declines to transfer with his or her
    function may be allowed to compete in the RIF subject to approval of
    the OHRO Director.

G. Tie Breaking Procedures. The following procedures will be applied to
break ties

when two or more employees have identical retention standing.

1.  If an automated system(s) is used to run the RIF, the tie breaking
    system that is built into the system to break ties will be used
    (i.e. random selection based on Social Security Number).

2.  If a manual system is used to run the RIF, ties will be broken the
    following methods respectively.

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a.  Length of service with the Department of Health and Human Services
    (HHS).

b.  Length of service in present grade.

c.  Random selection based on last digit of social security number.

H. Trainee status. The following positions are formally designated as
trainee or

developmental positions for the purpose of establishing separate
competitive

levels:

1\. Emerging Leaders Program. Employees may be appointed to grades GS-9
or GS-11.

2\. SES Candidate Development Program. Employees are appointed to grade
GS-15.

1.  Presidential Management Fellows Program. Employees are appointed at
    the GS-9 or 11 level.

2.  Specific OPDIV formal training programs, e.g. NIH Career
    Opportunities Program.

3.  Federal Career Intern Program. Employees may be appointed to grades
    GS-5, GS-7 or GS-9.

**351-1-70 HHS COMPETITIVE AREAS**

A.  Competitive Areas. Separate competitive areas are established for
    the following organizations in each commuting area: (Note: For
    purposes of this instruction, Washington and Baltimore are
    considered separate commuting areas.)

    1.  Office of the Secretary (excluding the Office of the Inspector
        General)

    2.  Office of the Inspector General

    3.  Administration for Children and Families

    4.  Administration on Aging

    5.  Centers for Disease Control and Prevention

    6.  Centers for Medicare and Medicaid

    7.  Food and Drug Administration

    8.  Health Resources and Services Administration

    9.  Agency for Health Care Research and Quality

    10. Indian Health Service

    11. National Institutes of Health

    12. Substance Abuse and Mental Health Services Administration

    13. The Program Support Center

B.  Each OHRO must define the activities or installations in each
    commuting area under its jurisdiction and make the information
    available for inspection by the OHR, regulatory agents, or other
    appropriate personnel having a need to know.

C.  OHR must be notified in writing immediately upon the establishment
    of new competitive areas.

D.  When a competitive area will be in effect less than 90 days prior to
    the effective date of a RIF, a description of such competitive area
    must be forwarded through OHR to the OPM for approval.

**351-1-80 HHS COMPETITIVE LEVELS**

A.  OHROs shall establish and implement a plan for assigning a
    competitive level to all positions at the time of classification.

B.  Competitive level determinations should be reviewed whenever there
    is a change in classification or change to the position description
    (i.e. duties, responsibilities, qualifications, etc.) that changes
    the competitive level assigned.

C.  OHROs shall ensure that competitive levels are accurate prior to
    conducting a RIF.

D.  Competitive level codes shall be documented on the OF-8 of the
    position description (PDs) and any system, manual or automated
    system used to maintain PDs.

E.  Competitive levels must be defined to document the basis for
    competitive level determinations.

F.  Narrative justification for competitive level determinations must be
    developed and recorded when:

    1.  There are positions in the same series and grade with similar
        duties and qualification requirements that are on different PDs
        are assigned to the same CL.

    2.  Positions in the same series and grade that are assigned to
        different CLs.

**351-1-90 CREDITING PERFORMANCE**

A.  Performance Credit. The Department will comply with the following
    requirements in crediting performance to establish an employee's
    service computation date (SCD) for retention standing during a
    reduction in force.

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1.  Ratings of record shall be used as the basis for granting additional
    retention service credit in a RIF.

2.  Ratings of record and summary level patterns are used as defined in
    Exhibit A of this Instruction.

3.  A performance summary rating of record is defined as one that is
    assigned at the end of the appraisal period that was signed,
    approved, and issued to the employee by an appropriate management
    official or a rating of record assigned following completion of a
    performance improvement period.

4.  Additional service credit shall be based on an employee's three (3)
    most recent ratings of record within a four (4) year period of time
    within and outside the Department in accordance with Exhibit A.

5.  An employee who has received one but fewer than three (3) previous
    ratings of record during the 4-year period shall receive credit for
    the sum of each rating of record received divided by the number of
    actual ratings of record received (fractional rating rounded to the
    next higher whole number).

6.  An employee who did not receive any ratings of record during the
    4-year period shall receive performance credit based on the modal
    rating as indicated below:

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(a) Assigned for the summary level that applies to the affected
    employee's position.

(b) Given within the employee's competitive level.

(c) On record for the most recently completed appraisal period prior to
    the cutoff date for receipt of any new ratings prior to issuance of
    a RIF notice.

B. Cut-off Date for Receipt of New Ratings of Record.

1.  In order to provide sufficient time to compute additional service
    credit for performance, all ratings of record must be received by
    the OHRO, at least 30 days prior to the issuance of RIF notices.
    Appraisals received after the cut-off date will not be used to
    determine retention standing.

2.  The three (3) most recent performance ratings of record within the
    4-year period ending on the cut-off date for receipt of ratings of
    record will be used for performance credit.

**351-1-100 REDUCTION IN FORCE IN THE INDIAN HEALTH SERVICE**

A.  When a RIF is conducted in the Indian Health Service (IHS),
    retention registers for employees in the competitive service are
    merged with those for employees appointed under the Schedule A, 5
    CFR § 213.3116(b)(8) authority. Retention registers for employees
    appointed under other authorities are kept separate.

B.  On the merged registers, employees entitled to Indian preference are
    placed ahead of other employees in a particular subgroup.

C.  Non-Indians may bump Indians in lower subgroups without prior
    approval. However, the placement of a non-Indian in a vacant
    position requires prior ASAM approval under the provisions of Public
    Law 96-135.

D.  When determining whether an employee may displace another employee
    by retreat, Indian employees are placed above non-Indian employees
    in the same subgroup. Thus, a non-Indian employee may not displace
    an Indian employee in the same subgroup.

**351-1-110 PRIORITY PLACEMENT ASSISTANCE**

A.  OHROs shall ensure that employees who will or are expected to be
    adversely impacted by a RIF, TOF or other downsizing initiative are
    advised of all the benefits to which they are entitled in accordance
    with OPM, Departmental and applicable collective bargaining
    agreements.

B.  OHROs in conjunction with authorized management officials shall
    issue Certifications of Expected Separation (See HHS Reemployment
    Priority List (RPL) Instruction) or specific RIF notice as soon as
    possible in order to enable the employee to register on the RPL and
    to receive priority selection consideration, training and retraining
    under the Workforce Investment Act of 1998 administered by the
    Department of Labor.

C.  Employees shall be counseled on HHS' Career Transition Assistance
    Program (CTAP) and Interagency Transition Assistance Program (ICTAP)
    and advised of vacancies in their commuting area in addition to
    assistance in finding continuing employment in other Federal, state,
    local and private industry.

D.  Preference eligible veterans from restricted positions (i.e.
    custodians, elevator operators, guards, and messengers) who have
    been displaced as a result of A-76 contracting out must be provided
    placement assistance in accordance with 5 CFR 330, Subpart D. Non
    preference eligibles that will or have been adversely impacted by
    outsourcing or other A-76 initiatives shall be provided placement
    assistance consistent with OPM regulations and applicable collecting
    bargaining agreements.

E.  Employees shall be provided a description of benefits that they are
    entitled to as a result of involuntary separation and individual
    counseling on options that are applicable to them to include, but
    are not limited, to the following: Discontinued retirement,
    voluntary early retirement and/or separation incentive payments if
    authorized, optional/disability retirement, health and life
    insurance benefits, sick leave and annual leave lump sum benefits,
    JTPA training benefits, severance pay, unemployment insurance, grade
    and pay retention, reemployment priority, repromotion eligibility,
    and priority placement consideration. (See HHS Instruction 330-2,
    Career Transition and Assistance Program)

**351-1-120 APPEALS AND CORRECTIVE ACTION**

A.  Right to Appeal to MSPB. An employee who has been furloughed for
    more than 30 days, separated, or demoted by a reduction in force
    action has the right to appeal to the Merit Systems Protection Board
    (MSPB) if he or she believes the Department did not properly follow
    the RIF regulations. The appeal must be filed during the 30-day
    period beginning the day after the effective date of the RIF action.
    OHROs will advise affected employees of their appeal rights to MSPB
    when the specific RIF notice is issued.

B.  Right to Grieve. An employee who is in a bargaining unit covered by
    a negotiated grievance procedure that does not exclude RIF must use
    the negotiated grievance procedure and may not appeal the RIF action
    to MSPB unless the employee alleges the action was based on
    discrimination. The time limits for filing a grievance under a
    negotiated grievance are outlined in the collective bargaining
    agreement.

C.  When it is decided that an action under this Instruction was
    unjustified or unwarranted and an individual is restored to the
    former grade or rate of pay held or to an intermediate grade or rate
    of pay, the restoration shall be made retroactively effective to the
    date of the improper action.

**351-1-130 RECORDS**

A.  OHROs are responsible for maintaining correct personnel records that
    are used to determine retention standing under this Instruction.

B.  Employees who have received a specific RIF notice, their
    representatives, and an authorized OPM or HHS official are entitled
    to inspect the retention register and related records.

C.  OHROs shall retain all retention registers and records pertaining to
    a RIF for at least one (1) year after the date a specific RIF notice
    is issued unless a third party dispute has not been resolved. In
    such a case, the records will be retained until the appeal/dispute
    has been adjudicated.

**EXHIBIT 351-1-A GUIDE TO CREDITING PERFORMANCE**

+-----------------------------------------------------------------------+
| +------------+-------------------------+-------------------------+    |
| | **Multiple |                         |                         |    |
| | Patterns   |                         |                         |    |
| | of Summary |                         |                         |    |
| | Levels**   |                         |                         |    |
| +============+=========================+=========================+    |
| | **Rating   | **Rating Pattern**      | **Years of Service      |    |
| | levels**   |                         | for**                   |    |
| |            |                         |                         |    |
| |            |                         | **Retention Credit**    |    |
| +------------+-------------------------+-------------------------+    |
| |            | **[Pattern              |                         |    |
| |            | A]{.underline}**        |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 3          | Pass                    | 16                      |    |
| +------------+-------------------------+-------------------------+    |
| | 1          | Fail                    | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| |            |                         |                         |    |
| +------------+-------------------------+-------------------------+    |
| |            | **[Pattern              |                         |    |
| |            | B]{.underline}**        |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 5          | Outstanding             | 20                      |    |
| +------------+-------------------------+-------------------------+    |
| | 3          | Fully Successful        | 12                      |    |
| +------------+-------------------------+-------------------------+    |
| | 1          | Unacceptable            | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| |            |                         |                         |    |
| +------------+-------------------------+-------------------------+    |
| |            | **[Pattern              |                         |    |
| |            | C]{.underline}**        |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 4          | Exceeds Fully           | 16                      |    |
| |            | Successful              |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 3          | Fully Successful        | 12                      |    |
| +------------+-------------------------+-------------------------+    |
| | 1          | Unacceptable            | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| |            |                         |                         |    |
| +------------+-------------------------+-------------------------+    |
| |            | **[Pattern              |                         |    |
| |            | D]{.underline}**        |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 3          | Fully Successful        | 16                      |    |
| +------------+-------------------------+-------------------------+    |
| | 2          | Minimally Successful    | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| | 1          | Unacceptable            | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| |            |                         |                         |    |
| +------------+-------------------------+-------------------------+    |
| |            | **[Pattern              |                         |    |
| |            | E]{.underline}**        |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 5          | Outstanding             | 20                      |    |
| +------------+-------------------------+-------------------------+    |
| | 4          | Exceeds Fully           | 16                      |    |
| |            | Successful              |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 3          | Fully Successful        | 12                      |    |
| +------------+-------------------------+-------------------------+    |
| | 1          | Unacceptable            | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| |            |                         |                         |    |
| +------------+-------------------------+-------------------------+    |
| |            | **[Pattern              |                         |    |
| |            | F]{.underline} (HHS     |                         |    |
| |            | employees)**            |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 5          | Outstanding             | 20                      |    |
| +------------+-------------------------+-------------------------+    |
| | 4          | Fully Successful        | 12                      |    |
| +------------+-------------------------+-------------------------+    |
| | 3          | Minimally Successful    | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| | 1          | Unacceptable            | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| |            |                         |                         |    |
| +------------+-------------------------+-------------------------+    |
| |            | **[Pattern              |                         |    |
| |            | G]{.underline}**        |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 4          | Exceeds Fully           | 16                      |    |
| |            | Successful              |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 3          | Fully Successful        | 12                      |    |
| +------------+-------------------------+-------------------------+    |
| | 2          | Minimally Successful    | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| | 1          | Unacceptable            | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| |            |                         |                         |    |
| +------------+-------------------------+-------------------------+    |
+-----------------------------------------------------------------------+
| +------------+-------------------------+-------------------------+    |
| | ** **      | **Pattern H**           |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 5          | Outstanding             | 20                      |    |
| +------------+-------------------------+-------------------------+    |
| | 4          | Exceeds                 | 16                      |    |
| |            |                         |                         |    |
| |            | Fully                   |                         |    |
| |            | Successful/Exceeded     |                         |    |
| +------------+-------------------------+-------------------------+    |
| | 3          | Fully Successful/Met    | 12                      |    |
| +------------+-------------------------+-------------------------+    |
| | 2          | Minimally Successful    | 0                       |    |
| +------------+-------------------------+-------------------------+    |
| | 1          | Unacceptable/Not Met    | 0                       |    |
| +------------+-------------------------+-------------------------+    |
+-----------------------------------------------------------------------+