[Federal Register: November 27, 1996 (Volume 61, Number 230)]
[Notices]
[Page 60399-60424]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27no96-155]

[[Page 60399]]

_______________________________________________________________________

Part V

Office of Personnel Management

_______________________________________________________________________

Laboratory Personnel Management Demonstration Project; Department of
the Air Force; Notice

[[Page 60400]]

OFFICE OF PERSONNEL MANAGEMENT

Laboratory Personnel Management Demonstration Project; Department
of the Air Force

AGENCY: Office of Personnel Management.

ACTION: Notice of approval of a demonstration project final plan.

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

SUMMARY: Title VI of the Civil Service Reform Act, 5 U.S.C. 4703,
authorizes the Office of Personnel Management (OPM) to conduct
demonstration projects that experiment with new and different personnel
management concepts to determine whether such changes in personnel
policy or procedures would result in improved Federal personnel
management.
    Public Law 103-337, October 5, 1994, permits the Department of
Defense (DoD), with the approval of OPM, to carry out personnel
demonstration projects generally similar to the China Lake
demonstration project at DoD Science and Technology (S&T) reinvention
laboratories. The Air Force is proposing one demonstration project to
cover its four S&T reinvention laboratories: Armstrong, Phillips, Rome,
and Wright.

DATES: The demonstration project will be implemented March 2, 1997.

FOR FURTHER INFORMATION CONTACT:

AF  Wendy B. Campbell, HQ AFMC/ST, 4375 Chidlaw Road, Suite 6, Wright-
Patterson Air Force Base, OH 45433-5006, 513-257-1910.
OPM  Fidelma A. Donahue, U.S. Office of Personnel Management, 1900 E
Street, NW, Room 7460, Washington, DC 20415, 202-606-1138.

Supplementary Information:

1. Background

    Since 1966, at least 19 studies of Department of Defense (DoD)
laboratories have been conducted on laboratory quality and personnel.
Almost all of these studies have recommended improvements in civilian
personnel policy, organization, and management. The proposed project
involves simplified job classifications, pay banding, and a
contribution-based compensation system.

2. Overview

    The 69 total comments received, both written and verbal, were a
valuable source of input for the Air Force Laboratory Personnel
Demonstration. They have been seriously considered and noted. Most
changes to the demonstration project are based on these public
comments. The majority of the changes are in the area of the
Contribution-based Compensation System (CCS). Several other sections of
the plan have been clarified and expanded, where necessary, to address
missing or unclear information. A few editorial changes were also made.

3. Summary of Comments

    Nineteen speakers commented on the Federal Register notice at the 4
public hearings and 50 letters were received. The following is a
summary of these written and oral comments by topical area and a
response to each.

(1) High Grade Controls

    Comments. Commentors expressed dissatisfaction with today's high
grade restrictions and questioned why the demonstration did not remove
these controls. Senior managers and employees alike believe that with
high grade controls the demonstration project cannot adequately and
competitively compensate the best people, a major goal of the project.
In addition, the ``seamless'' movement envisioned in the Contribution-
based Compensation System (CCS) will not occur between level II and
level III and employees felt disadvantaged by this.
    Response. Due to defense drawdowns in conjunction with high grade
controls, promotions from the GS-13 to the GS-14 grades in all the
laboratories have been severely restricted. All DoD S&T reinvention
laboratory demonstration projects requested the elimination of high
grade controls. High grade controls, however, are not under OPM
demonstration authority. After project implementation, the Air Force
will evaluate the impact of high grade controls on the overall
effectiveness of the demonstration project and will seek relief as
appropriate. Regarding the treatment of level II employees under CCS,
the demonstration employees have the opportunity to be better
compensated, even under high grade control, through project procedures
not available in the traditional system. Under the current performance
management system, GS-13s with superior or excellent ratings are
typically given performance awards ranging from 1-2% and may or may not
get step increases. Under the demonstration, their CCS score may
warrant amounts of ``I'' money larger than the old performance award
money, while still enabling them to participate in the laboratory
awards program.

(2) Management Issues

    Comments. Those employees who commented were greatly concerned that
the demonstration gives more authority and responsibility to laboratory
supervisors and managers. With the feeling that many supervisors
currently do not properly execute supervisory responsibilities or
utilize the power and tools provided under the current management
system, these employees fear a new system that gives supervisors
additional authority over their career and pay. They claim supervisors
who do nothing about poor performance are not being evaluated
themselves on whether they are ``good'' supervisors or managers, even
though supervision is a significant part of their job. Employees also
believe upper level management does not really know what goes on in
their organizations. Commentors state that military supervisors
exacerbate this problem due to a perceived lack of interest in civilian
issues and rapid military tour rotation. Managers are thought to be the
key to the success of this demonstration and a ``magnifying lens''
should be on them. Therefore, several commentors recommend that
employees evaluate their supervisors to attempt to bring more attention
to this issue.
    Response. The demonstration project includes, as part of the CCS
annual cycle, a mid-year feedback that will emphasize employee
professional qualities and development. As a result of the public
comments received, the mid-year feedback will now include a supervisory
feedback session for all levels of supervisors, military and civilian
alike, where the supervisor's skills and abilities as a supervisor will
be assessed. Employee input will be an integral part of this
assessment. In addition, Air Force laboratory directors/commanders are
committed to assisting in solutions to these issues and anticipate,
before the first CCS assessment cycle in October 1997, to provide, as a
first step, additional supervisory skills and management training for
all supervisors.

(3) Contribution-Based Compensation System

    Several subtopics were discussed relating to CCS.
(a) Level IV Ceiling
    Comments. Commentors identified that the highest level IV employee
must average 4.9 on every factor to remain ``on the line''. They
claimed, as no scores are available above 4.9, that nothing can be done
to offset a potentially lower score received in one of the factors.
Thus, any score lower than 4.9 would prevent them from achieving the
necessary average of 4.9. Commentors mentioned a lack of

[[Page 60401]]

opportunity for level IV employees at the top of the broadband level to
fall below the rails. They believe this would disadvantage them during
a RIF.
    Response. Due to comments received, the CCS has been amended to add
a factor score of 5.9 for contributions which represent ``higher than
level IV'' contributions. Any 5.9 score must be justified and
documented by the supervisor. Receipt of this score, however, does not
result in an increased CCS payout beyond that associated with a score
of 4.9.
    Because of the upper pay limit imposed on broadband level IV and
the slope of the SPL, employees at the top salaries of that level have
no opportunity to score below the lower rail. Therefore, three
categories of additional service credit will be defined for RIF
purposes within broadband level IV: (1) Employees with CCS assessments
on or below the SPL (a G6DX equal to or greater than 0.00), (2) those
with CCS assessments above the SPL but on or below the upper rail (a
<greek-D>X equal to or greater than -0.30 and less than 0.00), and (3)
those with CCS assessments above the upper rail (a <greek-D>X less than
-0.30).
(b) Derivation of the Standard Pay Line (SPL)
    Comments. Some commentors performed their own calculations on the
SPL. They criticized the ``least squares error fit'' derivation and
objected to a linear equation for the SPL. One individual also
commented that a statistical pooling error had been made. Several
commentors believe some groups (upper level GS-13s) would enter the
system overcompensated, while others (GS-15s) would enter being
undercompensated.
    Response. The SPL mathematics have been revalidated and the
methodology for the derivation of the line upheld. Whereas the entire
GS schedule is to be fit as a single population set rather than by
``pools'' of individual grades, a statistical pooling error did not
occur. No employee enters the system either overcompensated or
undercompensated because such a determination is not possible until an
actual CCS assessment is given, the first occurring in October 1997. It
is their CCS scores that place employees above, within, or below the
rails--not the calculation of the SPL. Until October 1997, there is
merely a correlation between today's salary and an expected CCS score.
Figure 1 has been simplified.
(c) Payout
    Comments. Some commentors expressed concerns over managers having
control over a pay pool in which the manager is a member. They
expressed concern that CCS would create competition for limited pay
pool funds and destroy team work. In addition, employees were
interested in how they would be informed of changes in ``I'' and what
would keep it from going to zero.
    Response. The demonstration project does not permit managers to
control their own CCS assessment scores or to set their own pay. The
``I'' value, initially set at 2.4%, is subject to change, but not to
elimination. Within the demonstration, as a minimum, the ``I'' money
will be equal to step and promotion dollars under the General Schedule.
This is thought to be adequate to fund CCS for its intended purpose
while not creating an atmosphere of adverse competition. Changes in
``I'' will be publicized by the laboratory well in advance of the CCS
assessment period for which it will become effective.
(d) Factors and Job Opportunity
    Comments. Most commentors discussing the six CCS factors believe
these will make everyone a ``Jack/Jill of all trades and master of
none.'' They claim employees will be unable to contribute across all
six factors at the necessary levels. Some employees believe they should
not be evaluated on factors on which they have not been previously
evaluated, e.g., business development and/or technology transition/
transfer. Comments indicated that their contribution opportunity is
dictated by their work assignments, claiming they are not allowed to
participate in activities which would contribute to each of the six CCS
factors. Realizing that contributions may have to span larger areas of
work in the future, they express concern at today's way of assigning
tasks. Visibility of work is also an issue. Some employees believe high
dollar or high visibility programs are associated with high
contributions, and they resent the perceived lack of opportunity.
    Response. Broader work will be required under the demonstration
project. Managers will be aware that all employees need to have
contribution opportunities in each of the factors under which they are
assessed. This will be stressed during management orientation and
training sessions for the demonstration project.
(e) Weights
    Comments. Comments generally supported factor weights as they
preserve some ``specialist'' culture, but disagree with the stated
intention of bringing all weights to one in future years. One
individual thought all weights should be set at one because weights
other than one may reward the less productive person who chooses not to
emphasize work in a low weighted area.
    Response. Each laboratory will set its own CCS weights. Each will
also review and modify them annually. Laboratories may choose equal
weighting schemes or they may adopt a more ``specialized'' profile.
Such flexibility is a key to the demonstration project and in keeping
with the demonstration's spirit of allowing differences between
laboratories which can be evaluated to provide more effective
management.
(f) CCS Score Disclosure and CCS Assessment Under Special Circumstances
    Comments. Employees' comments revealed a lack of information in the
project proposal on how CCS data will be provided back to them. They
want to know how they will be able to judge both their relative
standing in the pay pool at assessment time and their career
progression measured against their peers, particularly since promotions
are not the same as in the General Schedule system. Comments also
indicated that employees did not know how they would be assessed if
they were on extended sick leave, Long-Term Full-Time training, or
under other special circumstances.
    Response. The public comments revealed that these topics were not
covered in sufficient detail in the previous version. Additional
information has been added to this plan to explain these features.

(4) Reduction-in-Force (RIF)

    The FY97 Authorization Act, signed September 23, 1996, included
wording which affects the external hiring and reduction-in-force
provisions of the Air Force demonstration project; the Air Force has
opted to exclude these two sections of their original proposal from
their initial implementation. The CCS assessment score will be used as
additional service credit during reduction-in-force.

(5) Trial Period

    Comments. Several commentors requested that a trial demonstration
project period be run parallel to the current system in order to ``work
out'' any difficulty with the new system.
    Response. Demonstration authority is the authority to experiment
with personnel system changes. During the last two years, significant
project design and development by teams of laboratory

[[Page 60402]]

employees have produced a sound system for implementation. With yearly
formative evaluations and the ability to make major changes based on
that evaluation, the demonstration can, and will, be altered in future
years to ensure a final system that works well into the future.

(6) Project Evaluation and Human Use

    Comments. Some commentors did not find enough material in the
project evaluation section to understand how each demonstration
initiative was going to be measured. Specifically, they inquired as to
how they would know if CCS was working as a system. In addition, a
comment was received asking if the demonstration project had fulfilled
its requirements to protect human subjects by obtaining necessary
waivers regarding human experimentation.
    Response. Both the external evaluation, planned and conducted by
OPM, and the internal evaluation, planned and conducted by the Air
Force, are comprehensive in nature and more detailed than practical for
publication in the Federal Register. This plan ensures employees and
interested parties that a comprehensive evaluation will be conducted,
but it cannot detail all the proposed measures for each initiative, the
hypotheses, or show the data collection instruments. This is available
in a project evaluation plan. That plan and, once underway, the results
from the project evaluation will be available upon request from the
addresses listed under FOR FURTHER INFORMATION CONTACT in this
document. Regarding human use, investigation revealed that 32 CFR
219.102 (e) ``Protection of Human Subjects'' specifically excludes
research activities regulated by a federal agency from the requirements
relating to human experimentation where the regulating agency has a
broader responsibility to regulate, such as pay and classification by
OPM. As such, personnel demonstrations under OPM are not subject to
these authorities.

(7) Armstrong Laboratory Program 8 Employees

    Comments. Several employees commented that their positions were not
research oriented and should be excluded from the demonstration
project. These employees believe their work is a clinical diagnostic
service and does not lend itself well to assessment under the six
factors of CCS.
    Response. During the development process, several steps were taken
to determine whether or not CCS should apply to Program 8 employees at
Armstrong Laboratory. The development team for classification and CCS
included a supervisor from the Program 8 area for the express purpose
of ensuring that the factor levels adequately portrayed contributions
available to these employees. Additionally, position descriptions for
these employees were reviewed and determined to include research and
development activities. However, due to the public comments received, a
review of the existing classification of employees assigned to Program
8 at Armstrong Laboratory will be completed prior to implementation.
Once the accuracy of their classification has been verified, a separate
determination on inclusion or exclusion from the demonstration project
will be made on a case by case basis.

4. Demonstration Project System Changes

    The following directs a reader to the substantive changes and
clarifications to the project plan. The page numbers below refer to the
pages of the proposed plan, published in the Federal Register on May
15, 1996.
    (1) On pages 24624 and 24625, the FY97 Authorization Act included
wording which affects the external hiring provisions of the
demonstration project; categorical hiring procedures proposed in the
original proposal have been excluded. In addition, provisions for
contingent appointments have been clarified to state that these
appointments are competitive; are limited to 4 years; and include most
benefits.
    (2) On pages 24625 and 24639, the definition of ``current'' GS/GM
grade for purposes of conversion into the demonstration has been
clarified as being the official permanent GS/GM grade of record.
    (3) On pages 24631 and 24633, a factor assessment score of 5.9 has
been added for those employees who have demonstrated contributions
exceeding the maximum of level IV. The maximum total CCS score,
however, remains at 4.9.
    (4) On pages 24631 and 24632, the provisions for a midyear feedback
have been extended to include an assessment, from both employees and
higher level management, of supervisory qualities and skills for all
supervisors, military and civilian.
    (5) On pages 24631 and 24632, the section headed ``The `Standard
Pay Line' (SPL)'' has been clarified to more explicitly state the
constraints of the broadband system, analyses and selection of a linear
equation for the SPL, and derivation of the equation. An explicit
statement has been added that employees will not have CCS scores until
after the first CCS assessment process which occurs in October 1997.
    (6) On page 24633, provisions for reporting CCS data and providing
employee feedback on their relative standing within the pay pool have
been adopted.
    (7) On page 24633, processes for providing annual CCS scores for
employees under special circumstances have been stated.
    (8) On page 24634, provisions for the equitable treatment of
employees affected by high grade restrictions have been clarified in
the section headed ``Salary Adjustment Guidelines.''
    (9) On page 24635, the ``E-Zones'' have been expanded to + and
-0.25 CCS to capture the full range of the broadband level salaries.
    (10) On page 24637, an explanation that the procedures for
contribution-based reduction in pay or removal actions, similar to
those established under the traditional civil service system, has been
added.
    (11) On page 24637, provisions for local Staff Judge Advocate
review of Voluntary Emeritus Corps agreements have been adopted.
    (12) On page 24638, the FY97 Authorization Act included wording
which affects the reduction-in-force provisions of the demonstration
project. The new RIF procedures proposed in the original proposal have
been excluded. Provisions for using the CCS assessment rating to credit
additional service under RIF have been added.
    (13) On pages 24639 through 24641, the section ``Evaluation Plan''
has been replaced with a clearer, more concise statement. A formal
evaluation plan, which is not practical for publication in the Federal
Register, will be made available to employees upon request.
    (14) On page 24641, the section ``Cost Neutrality'' has been
replaced with a section on out year project costs to better describe
the strategy for evaluating project costs.

    Dated: November 22, 1996.

Office of Personnel Management
James B. King,
Director.

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
    F. Project Design
III. Personnel System Changes
    A. Hiring and Appointment Authorities

[[Page 60403]]

    B. Broadbanding
    C. Classification
    D. Contribution-based Compensation System
    E. Contribution-based Reduction in Pay or Removal Actions
    F. Voluntary Emeritus Corps
    G. Revised Reduction-In-Force (RIF) Procedures
IV. Training
V. Conversion
VI. Project Duration
VII. Evaluation Plan
VIII. Demonstration Project Costs
IX. Required Waivers to Law and Regulation

I. Executive Summary

    The project was designed by the Department of the Air Force with
participation of and review by the Department of Defense (DoD) and the
Office of Personnel Management (OPM). The purpose of the project is to
achieve the best workforce for the laboratory mission, adjust the
workforce for change, and improve workforce quality. The project
framework addresses all aspects of the human resources life cycle
model. There are three major areas of change: (a) Laboratory-controlled
rapid hiring; (b) a contribution-based compensation system; and (c) a
streamlined removal process.
    Initially, the project will cover only Scientists and Engineers
(S&Es) assigned to the laboratories. A decision point has been
programmed for the end of the second year of the demonstration project
to determine whether or not to expand coverage to other occupational
groups within the laboratory. In the event of expansion to non-S&E
employees, full approval of the expansion plan will be obtained by AF,
DOD, and OPM.
    Cost neutrality is a basic requirement of the project. Extensive
evaluation of the project will be performed by both OPM and Air Force.
The Air Force has programmed a decision point 5 years into the project
for continuance, modification, or rejection of the demonstration
initiatives.

II. Introduction

A. Purpose

    The purpose of the project is to demonstrate that the effectiveness
of Department of Defense (DOD) laboratories can be enhanced by allowing
greater managerial control over personnel functions and, at the same
time, expanding the opportunities available to employees through a more
responsive and flexible personnel system. The quality of DOD
laboratories, their people, and products has been under intense
scrutiny in recent years. The perceived deterioration of quality is
believed to be due, in substantial part, to the erosion of control
which line managers have over their human resources. This demonstration
project, in its entirety, attempts to provide managers, at the lowest
practical level, the authority, control, and flexibility needed to
achieve quality laboratories and quality products.

B. Problems with the Present System

    Air Force laboratory products contribute to the readiness of U.S.
forces. To do this, laboratories must employ enthusiastic, innovative,
highly educated scientists and engineers to meet their mission. They
must be able to compete with the private sector for the best talent and
be able to make job offers in a timely manner with the attendant
bonuses and incentives to attract topnotch researchers. Today, industry
laboratories can make an offer of employment and two counteroffers to a
promising new hire before the government can get the first offer on the
table. When filling vacancies internally, managers are forced into
employee choices based not on research expertise, but on career program
membership or special placement programs. Currently, positions are
described using a cumbersome classification system that is overly
complex and specialized. This hampers a manager's ability to shape the
workforce and match positions with employees so as to maximize their
productivity and effectiveness. Managers must be given local control of
positions and their classification to move both their employees and
vacancies freely within their organization to other lines of research
when business or technology demands. These issues work together to
hamper supervisors in all areas of human resource management. Hiring
restrictions and overly complex job classifications, coupled with poor
tools for rewarding and motivating employees and a system that does not
assist managers in removing poor performers builds stagnation in the
workforce and wastes valuable time.

C. Changes Required/Expected Benefits

    This project is expected to demonstrate that a human resource
system tailored to the mission and needs of the laboratory will result
in: (a) Increased quality in the science and engineering workforce and
the laboratory products they produce; (b) increased timeliness of key
personnel processes; (c) trended workforce data that reveals increased
retention of ``excellent contributors'' and separation rates of ``poor
contributors''; and (d) increased satisfaction with the laboratory and
its products by those Air Force and DOD customers they service.
    The Air Force demonstration program builds on the successful
features of demonstration projects at China Lake and the National
Institute of Standards and Technology (NIST). These demonstration
projects have produced impressive statistics on job satisfaction for
their employees versus that for the federal workforce in general.
Therefore, in addition to the expected benefits mentioned above, it is
anticipated that the Air Force demonstration project will result in
more satisfied employees as a consequence of the demonstration's pay
equity, classification accuracy, and fairness of performance
management. A full range of measures will be collected during project
evaluation (section VII).

D. Participating Organizations

    The four Air Force Materiel Command (AFMC) laboratory directors/
commanders are located as follows:

Armstrong Laboratory--Brooks AFB, Texas
Phillips Laboratory--Kirtland AFB, New Mexico
Rome Laboratory--Rome, New York
Wright Laboratory--Wright-Patterson AFB, Ohio

    Scientists and Engineers (S&Es) assigned to the laboratories work
at the locations shown in Table 1.

               Table 1.--S&E Duty Locations by Laboratory
                           [As of 31 Dec. 95]
------------------------------------------------------------------------
           Laboratory                      Duty Location            S&Es
------------------------------------------------------------------------
Armstrong......................  Aberdeen Proving Ground, MD.....      3
                                 Brooks AFB, TX..................    167
                                 San Diego, CA...................      1
                                 Tyndall AFB, FL.................     27
                                 Williams AFB, AZ................     14
                                 Wright-Patterson AFB, OH........     97
Phillips.......................  Edwards AFB, CA.................    120
                                 Hanscom AFB, MA.................    188
                                 Kirtland AFB, NM................    246
                                 Malabar, FL.....................      1
                                 Maui Island, HI.................      1
                                 Sunspot, NM.....................      5
Rome...........................  Rome, NY........................    424
                                 Hanscom AFB, MA.................     82
Wright.........................  Eglin AFB, FL...................    177
                                 Kelly AFB, TX...................      5
                                 McClellan AFB, CA...............     10
                                 Robins AFB, GA..................      4
                                 Tyndall AFB, FL.................     12
                                 Wright-Patterson AFB, OH........   1207
------------------------------------------------------------------------

E. Participating Employees

    In determining the scope of the demonstration project, primary
considerations were given to the

[[Page 60404]]

number and diversity of occupations within the laboratories and the
need for adequate development and testing of the Contribution-based
Compensation System (CCS). Additionally, current DoD human resource
management design goals and priorities for the entire civilian
workforce were considered. While the intent of this project is to
provide the laboratory directors/commanders with increased control and
accountability for their total workforce, the decision was made to
initially restrict development efforts to General Schedule (GS/GM)
positions within the scientific and engineering specialties. Research
Medical Officers (GS-0602) have been excluded from the project because
of special pay provisions for their occupation which exceed the upper
limits of the broadband. The series to be included in the project are
identified in Table 2.

    Table 2.--Series Included in the Air Force Demonstration Proposal
                            [As of 31 Dec 95]
------------------------------------------------------------------------

------------------------------------------------------------------------
0180........................  Psychology.
0190........................  General Anthropology.
0401........................  General Biological Science.
0403........................  Microbiology.
0413........................  Physiology.
0414........................  Entomology.
0415........................  Toxicology.
0665........................  Speech Pathology & Audiology.
0701........................  Veterinary Medical Science.
0801........................  General Engineering.
0803........................  Safety Engineering.
0804........................  Fire Protection Engineering.
0806........................  Materials Engineering.
0808........................  Architecture.
0810........................  Civil Engineering.
0819........................  Environmental Engineering.
0830........................  Mechanical Engineering.
0840........................  Nuclear Engineering.
0850........................  Electrical Engineering.
0854........................  Computer Engineering.
0855........................  Electronics Engineering.
0858........................  Biomedical Engineering.
0861........................  Aerospace Engineering.
0892........................  Ceramic Engineering.
0893........................  Chemical Engineering.
0896........................  Industrial Engineering.
1301........................  General Physical Science.
1306........................  Health Physics.
1310........................  Physics.
1313........................  Geophysics.
1320........................  Chemistry.
1321........................  Metallurgy.
1330........................  Astronomy & Space Science.
1340........................  Meteorology.
1370........................  Cartography.
1515........................  Operations Research.
1520........................  Mathematics.
1529........................  Mathematical Statistician.
1530........................  Statistician.
1550........................  Computer Science.
------------------------------------------------------------------------

    Other positions may be phased in during the course of the project.
A decision point for expanded employee coverage has been programmed for
the end of the second year of the demonstration project. In the event
of expansion to non-S&E employees, full approval of the expansion plan
will be obtained by AF, DoD, and OPM.
    Current demographics and union representation for the S&E positions
are shown in Table 3.

           Table 3.--S&E Demographics and Union Representation
                           [As of 31 Dec. 95]
------------------------------------------------------------------------

------------------------------------------------------------------------
GS/GM 13 and above............................................      1965
GS-12 and below...............................................       826
                                                               ---------
    Total.....................................................      2791
Occupational Series...........................................        40
Duty Location.................................................        17
Veterans......................................................    19.78%
Union Representation
  NFFE
    Eglin AFB, Florida........................................       145
    Hanscom AFB, Massachusetts................................       233
    Tyndall AFB, Florida......................................        33
  IFPTE
    McClellan AFB, California.................................         9
------------------------------------------------------------------------

    Of the 2,791 scientists and engineers assigned to the laboratories,
420 are represented by labor unions. Employees at Hanscom AFB,
Massachusetts, are represented by the National Federation of Federal
Employees (NFFE) Local 1384. Employees at Eglin AFB, Florida, are
represented by NFFE Local 1940. Employees at Tyndall AFB, Florida, are
represented by NFFE Local 1113. Employees at McClellan AFB, California,
are represented by the International Federation of Professional and
Technical Engineers (IFPTE) Local 330. Union representatives have been
separately notified about the project. The Air Force is proceeding to
fulfill its obligation to consult or negotiate with the unions, as
appropriate, in accordance with 5 U.S.C. 4703(f).

F. Project Design

    In August 1994, a special action ``tiger team'' was formed by the
Director of Science and Technology for Air Force Materiel Command in
response to the proposed DoD legislation allowing reinvention
laboratories to conduct personnel demonstrations. The team was
chartered to take full opportunity of this legislation and try to
develop solutions that would solve many of the laboratory personnel
issues that have been so prevalent and well documented. The team
composition included current managers from the four Air Force
laboratories, retired and current laboratory directors, and subject
matter experts from civilian personnel and manpower. This team
developed 27 initiatives which together represented sweeping changes in
the entire spectrum of human resource management for the laboratories.
Several initiatives were designed to assist the laboratories in hiring
and placing the best people to fulfill mission requirements. Others
focused on developing, motivating, and equitably compensating employees
based on their contribution to the mission. Initiatives to effectively
manage workforce turnover and maintain organizational excellence were
also developed. These 27 initiatives were endorsed and accepted in
total by the laboratory directors/commanders.
    After the authorizing legislation passed, a project office with
four employees was established in September 1994. Under the guidance of
the Director of Science and Technology, the office was charged with
further developing the demonstration concept and bringing it to
implementation. As a first task, the project office asked the four
laboratories and the civilian personnel offices that service them for
volunteers to staff six Integrated Product Teams (IPTs). Sixty civilian
managers and employees from all laboratories in most geographic
locations and from appropriate base level personnel offices came
together and have worked for 9 months to develop the detailed concept
and implementation for each initiative.
    After thorough study, the original 27 initiatives were reduced to
20. Seven of the original initiatives appear herein. The remainder are
subject to either DoD or Air Force regulation, and waivers are being
sought at those levels.

III. Personnel System Changes

A. Hiring and Appointment Authorities

1. Hiring Authority
    A candidate's basic eligibility will be determined using OPM's
``Qualification Standards Handbook For General Schedule Positions.''
Broadband level I minimum eligibility requirements will be the GS-07
qualifications. Broadband level II minimum eligibility requirements
will be the GS-12 qualifications. Broadband levels III and IV are
single-grade broadband levels and will mirror the minimum
qualifications for the respective General Schedule grades of 14 and 15.
Selective placement factors may be established in accordance with OPM's
Qualification Handbook when judged to be critical to successful job
performance. These factors will be communicated to all candidates for
particular position vacancies and must be met for basic eligibility.

[[Page 60405]]

2. Appointment Authority
    Under the demonstration project, there will be two appointment
options: Regular career and contingent. The career-conditional
appointment authority will not be used under the demonstration project.
Regular career appointments will continue to use existing authorities
and entitlements, and employees will serve a probationary period.
Contingent appointments will use the existing term appointment
authority which includes a limit of 4 years and most benefits. This
contingent appointment will be competitive and is designed to attract
high quality new scientists and engineers and post-doctoral students
who may wish to choose an Air Force laboratory experience for a few
years, accruing some portable retirement and receiving benefits during
this tenure.
3. Extended Probationary Period
    A new employee needs to demonstrate adequate contribution during
all cycles of a research effort for a laboratory manager to render a
thorough evaluation. The current 1 year probationary period will be
extended to 3 years for all newly hired regular career employees. The
purpose of extending the probationary period is to allow supervisors an
adequate period of time to fully evaluate an employee's contribution
and conduct.
    Aside from extending the time period, all other features of the
current probationary period are retained including the potential to
remove an employee without providing the full substantive and
procedural rights afforded a non-probationary employee. Any employee
appointed prior to the implementation date will not be affected. The 3
year probation will apply to non-status hires. That is, it will apply
only to new hires or those who do not have reemployment or
reinstatement rights. Air Force Palace Knight and Senior Knight
appointments must complete 3 years of directly supervised employment in
the laboratory to complete the probationary period (i.e., time spent at
school does not count toward fulfilling the probationary period
requirement).
    Probationary employees will be terminated when the employee fails
to demonstrate proper conduct, technical competency, and/or adequate
contribution for continued employment. When a laboratory decides to
terminate an employee serving a probationary period because their work
contribution or conduct during this period fails to demonstrate their
fitness or qualifications for continued employment, it shall terminate
their services by written notification of the reasons for separation
and the effective date of the action. The information in the notice as
to why the employee is being terminated shall, as a minimum, consist of
the laboratory's conclusions as to the inadequacies of their
contribution or conduct.

B. Broadbanding

    The broadbanding system will replace the current General Schedule
(GS) structure. Currently, the 15 grades of the General Schedule are
used to classify positions and, therefore, to set pay. The General
Schedule covers all white collar work--administrative, technical,
clerical, and professional. This system will initially cover only
scientific and engineering (S&E) positions in the Air Force
laboratories. Scientific and Professional (ST) and Senior Executive
Service (SES) employees are not covered.
    The broadband levels are designed to facilitate pay progression and
to allow for more competitive recruitment of quality candidates at
differing rates within the appropriate broadband level(s). Competitive
promotions will be less frequent and movement through the broadband
levels will be a more seamless process than today's procedure. Like the
previous broadband systems used at China Lake and the National
Institute of Standards and Technology (NIST), advancement within the
system is contingent on merit.
    There will be four broadband levels in the demonstration project,
labeled I, II, III, and IV. They will include the current grades of GS-
7 through GS/GM-15. These are the grades in which the S&E employees in
the Air Force laboratories are found. Broadband level I includes the
current GS-7 through GS-11; level II, GS-12 and GS/GM-13; level III,
GS/GM-14; and level IV, GS/GM-15. Comparison to the GS grades was
useful in setting the upper and lower dollar limits of the broadband;
however, once the employees are moved into the demonstration project,
General Schedule grades will no longer apply.
    The titles associated with each broadband level are as follows:

------------------------------------------------------------------------
             Level                               Title(s)
------------------------------------------------------------------------
I..............................  Associate (Electronics Engineer,
                                  Chemist, etc.).
II.............................  Title of Appropriate Series (Physicist,
                                  Biologist, etc.) or Supervisory
                                  (Nuclear Engineer, etc.).
III............................  Senior (Mathematician, Computer
                                  Scientist, etc.) or Supervisory Senior
                                  (Physical Scientist, etc.).
IV.............................  Principal (Microbiologist,
                                  Psychologist, etc.) or Supervisory
                                  Principal (Aerospace Engineer, etc.).
------------------------------------------------------------------------

    Generally, employees will be converted into the broadband level
which includes their permanent GS/GM grade of record. Each employee is
assured an initial place in the system without loss of pay. As the
rates of the General Schedule are increased due to general pay
increases, the minimum and maximum rates of the four broadband levels
will also move up. Individual employees receive pay increases based on
their assessments under the Contribution-based Compensation System.
Since pay progression through the levels depends on merit, there will
be no scheduled Within-Grade Increases (WGIs) for employees once the
broadbanding system is in place. Special Salary Rates will no longer be
applicable to demonstration project employees. All employees will be
eligible for the future locality pay increases of their geographical
area.
    Newly hired personnel entering the system will be employed at a
level consistent with the expected contribution of the position and
individual basic qualifications for the level, as determined by rating
against qualification standards. Salaries of individual candidates will
be based on academic qualifications and experience. In addition to the
flexibilities available under the broadbanding system, the authorities
for retention, recruitment, and relocation payments granted under the
Federal Employees' Pay Comparability Act of 1990 (FEPCA) can also be
used.
    Employees who leave the Air Force broadbanding system to accept
federal employment in the traditional Civil Service system will have
their pay set by the gaining activity. Where a broadband level includes
a single GS grade, the employees are considered to have attained the
grade commensurate with the broadband level they are leaving. Where
broadband levels include multiple grades, employees are considered to
have progressed to the next higher grade within that broadband level
when they have been in the level for 1 year and their salary equals or
exceeds the minimum salary of the higher grade. For employees who are
entitled to a special rate upon return to the General Schedule, the
demonstration project locality rate must equal or exceed the minimum
special rate of the higher grade. Refer to section V for information
concerning

[[Page 60406]]

conversion to and from the demonstration project.
    The use of broadbanding provides a stronger link between pay and
contribution to the mission of the laboratory. It is simpler, less time
consuming, and less costly to maintain. In addition, such a system is
more easily understood by managers and employees, is easily delegated
to managers, coincides with recognized career paths, and complements
the other personnel management aspects of the demonstration project.

C. Classification

1. Occupational Series
    The present General Schedule classification system has 434
occupational series which are divided into 22 groups. The Air Force
laboratories currently have scientific and engineering (S&E) positions
in 40 series which fall into 7 groups. The occupational series, which
frequently provide well-recognized disciplines with which employees
wish to be identified, will be maintained. This will facilitate
movement of personnel into and out of the demonstration project. Other
scientific and engineering series may be added to the project as the
need for new professional skills emerges within the laboratory
environment.
2. Classification Standards
    The present system of OPM classification standards will be used for
the identification of proper series and occupational titles of
positions within the demonstration project. References in the position
classification standards to grade criteria will not be used as part of
the demonstration project. Rather, the CCS broadband level descriptors
will be used for the purpose of broadband level determination. Under
the demonstration project, each broadband level is represented by a set
of level descriptors. Based on a yearly assessment of the employee's
level of contribution to the organization in relation to these
descriptors, the broadband level and salary are reviewed and
appropriately adjusted. This eliminates the need for the use of grading
criteria in OPM classification standards.
    The broadband level descriptors are:

Level I Descriptors

    Technical Problem Solving: Conducts in-house technical
activities and/or may provide contract technical direction with
guidance from supervisor or higher level scientist or engineer.
Works closely with peers in collectively solving problems of
moderate complexity involving: limited variables, precedents
established in related projects, and minor adaptations to well-
established methods and techniques. Recognized within own
organization for technical ability in assigned areas.
    Communications/Reporting: Provides data and written analysis for
input to scientific papers, journal articles, and reports and/or
assists in preparing contractual documents and/or reviews technical
reports; work is acknowledged in team publications. Effectively
presents technical results of own studies, tasks, or contract
results. Material is presented either orally or in writing, within
own organization or to limited external contacts. Conducts these
activities under the guidance of a supervisor and/or team leader.
    Corporate Resource Management: May coordinate elements of in-
house work units or assist in managing a scientific or support
contract. Uses personal and assigned resources efficiently under the
guidance of a supervisor or team leader. As an understanding of
organizational activities, policies, and objectives is gained,
participates in team planning.
    Technology Transition/Technology Transfer: Participates as a
team member in demonstrating technology and in interacting with
internal/external customers. With guidance, contributes to technical
content of partnerships for technology transition and/or transfer
(Advanced Technology Demonstrations, Memorandums of Understanding,
Joint Director of Labs/Project Reliance, Cooperative Research and
Development Agreements, and other dual-use vehicles). Seeks out and
uses relevant outside technologies in assigned projects.
    R&D Business Development: As a team member, communicates with
customers to understand customer requirements. By maintaining
currency in area of expertise, contributes as a team member to new
program development. May technically participate in writing
proposals to establish new business opportunities.
    Cooperation and Supervision: Contributes to all aspects of
teams' responsibilities. May technically guide or mentor less
experienced personnel on limited aspects of scientific or
engineering efforts. Receives close guidance from supervisor and/or
higher level scientist or engineer. Performs duties in a
professional, responsive, and cooperative manner in accordance with
established policies and procedures.

Level II Descriptors

    Technical Problem Solving: Conducts in-house technical
activities and/or provides contract technical direction to programs
of moderate size and complexity with minimal oversight. Contributes
technical ideas and conceives and defines solutions to technical
problems of moderate size or complexity. Recognized internally and
externally by peers, both in governmental and industrial activities,
for technical expertise.
    Communications/Reporting: Writes or is a major contributing
author on scientific papers, journal articles, or reports and/or
prepares contract documents and reviews reports pertaining to area
of technical expertise. May assist in filing innovation disclosures,
inventions, and patents. Effectively prepares and presents own and/
or team technical results. Communicates work to varied laboratory,
scientific, industry, and other government audiences. May prepare
and present presentations on critical program for use at higher
levels with some guidance.
    Corporate Resource Management: Manages all aspects of
technically complex in-house work units or one or more contractual
efforts in assigned program area. Effectively plans and controls all
assigned resources. Makes and meets time and budget estimates on
assigned projects or takes appropriate corrective action.
Participates in organizational or strategic planning at team level,
taking cognizance of complementary projects elsewhere to ensure
optimal use of resources.
    Technology Transition/Technology Transfer: Develops
demonstrations and interacts independently with internal/external
customers. As a team member, implements partnerships for transition
and/or transfer of technology (Advanced Technology Demonstrations,
Memorandums of Understanding, Joint Director of Labs/Project
Reliance, Cooperative Research and Development Agreements, and other
dual-use vehicles). Evaluates and incorporates appropriate outside
technology in individual or team activities.
    R&D Business Development: Initiates meetings and interactions
with customers to understand customer needs. Generates key ideas for
program development based on understanding of technology and
customer needs. Demonstrates expertise to internal/external
customers. Contributes technically to proposal preparation and
marketing to establish new business opportunities.
    Cooperation and Supervision: Contributes as a technical task or
team leader; is sought out for expertise by peers; and participates
in mentoring of team members. May guide on a daily basis, technical,
programmatic, and administrative efforts of individuals or team
members. May recommend selection or may select staff and/or team
members. Assists in the development and training of individuals or
team members. May participate in position and performance
management. Receives general guidance in terms of policies, program
objectives, and/or funding issues from supervisor and/or higher
level scientist or engineer. Discusses novel concepts and
significant departures from previous practices with supervisor or
team leader.

Level III Descriptors

    Technical Problem Solving: Conducts and/or directs technical
activities and/or assists higher levels on challenging and
innovative projects or technical program development with only broad
guidance. Develops solutions to diverse, complex problems involving
various functional areas and disciplines. Conducts and/or directs
large programs in technically complex areas. Recognized within the
laboratory, service, DoD, industry, and academia for technical
expertise and has established a professional reputation in national
technical community.
    Communications/Reporting: Lead author on major scientific
papers, refereed journal articles, and reports and/or prepares and
reviews contract documents and reviews reports of others pertaining
to overall program. May document or file inventions, patents, and
innovation disclosures relevant

[[Page 60407]]

to subject area. Prepares and presents technical and/or financial
and programmatic briefings and documentation for team, organization,
or technical area. Prepares and delivers presentations for major
projects and technology areas to scientific and/or government
audiences. Reviews oral presentation of others. Communication and
reporting functions conducted with minimal higher level oversight.
    Corporate Resource Management: Defines program strategy and
resource allocations for in-house and/or contractual programs. For
assigned technical areas, conducts program planning, coordination,
and/or documentation (master plans, roadmaps, Joint Director of
Labs/Reliance, etc.). Advocates to laboratory and/or higher
headquarters on budgetary and programmatic issues for resources.
Based on knowledge of analytical and evaluative methods and
techniques, participates in strategic planning at branch and/or
division level. Considers and consults on technical programs of
other organizations working in the field to ensure optimal use of
resources.
    Technology Transition/Technology Transfer: Develops customer
base and expands opportunities for technology transition and
transfer. Leads or serves as a key technical member of teams
implementing partnerships for transition or transfer of technology
(Advanced Technology Demonstrations, Memorandums of Understanding,
Joint Director of Labs/Project Reliance, Cooperative Research and
Development Agreements, and other dual-use vehicles). Ensures
incorporation of outside technology within laboratory programs.
    R&D Business Development: Works to establish customer alliances
and translates customer needs to programs in a particular technical
area. Develops feasible research strategies and/or business
strategies for new technical activities. Seeks joint program
coalitions with other agencies and funding opportunities from
outside organizations. Pursues near-term business opportunities
through proposals.
    Cooperation and Supervision: Is sought out for consultation and
mentors team members. Guides the research, technical and/or
programmatic, and administrative efforts of individuals or teams
with accountability for focus and quality. Recommends selection or
selects staff and/or team members. Supports development and training
of subordinates and/or team members. Participates in position and
performance management. Receives only broad policy and
administrative guidance from supervisor, such as initiation and
curtailment of programs.

Level IV Descriptors

    Technical Problem Solving: Independently defines, leads, and
manages the most challenging, innovative, and complex technical
activities/programs consistent with general guidance or
independently directs overall R&D program. Conceives and develops
creative solutions to the most complex problems requiring highly
specialized areas of technical expertise. Recognized within the
laboratory, service, DoD, and other agencies for broad technical
area expertise and has established a professional reputation in
national and international technical communities.
    Communications/Reporting: Lead or sole author on scientific
papers, refereed journal articles, reports, or review articles which
are recognized as major advances or resolutions in the technical
area and/or reviews and approves reporting of all technical products
of mission area. May exploit innovations which normally lead to
inventions, disclosures, and patents. Prepares and presents
technical and/or financial and programmatic briefings and
documentation for breadth of programs at or above own level. As
subject matter expert, prepares and delivers invited or contributed
presentations, papers at national or international conferences on
technical area, or gives policy level briefings. Singularly
responsible for overall quality and timeliness of technical/
scientific/ programmatic reports and presentations of group and
self.
    Corporate Resource Management: Defines technology area strategy
and resource allocations for in-house and contractual programs. For
multiple technical areas, conducts overall program planning and
coordination, and/or program documentation (master plans, roadmaps,
Joint Director of Labs/Project Reliance, etc.). Advocates to
command, service, and agency levels on budgetary and programmatic
issues for resources. Utilizing advanced analytical and evaluative
methods and techniques, leads strategic planning and prioritization
processes. Develops strategy to leverage resources from other
agencies and ensures equitable distribution and appropriate use of
internal resources.
    Technology Transition/Technology Transfer: Organizes, leads, and
markets overall technology transition and transfer activities for
organization at senior management levels. Leads in formulation and
oversight of Advanced Technology Demonstrations, Memorandums of
Understanding, Joint Director of Labs/Project Reliance, Cooperative
Research and Development Agreements, and other dual-use vehicles.
Creates an environment that encourages widespread exploitation of
both national and international technologies.
    R&D Business Development: Works with the senior management level
to stimulate development of customer alliances for several technical
areas. Generates strategic research and/or business objectives for
core technical areas. Recognizes warfighting trends, relates
business opportunities, and convinces laboratory management to
develop and/or acquire expertise and commit funds. Secures business
opportunities supporting long-term mission relevancy through
targeted proposals and processes.
    Cooperation and Supervision: Establishes team charters and
develops future team leaders and supervisors. Leads and manages all
aspects of subordinates' or team members' efforts with complete
accountability for mission and programmatic success. Recommends
selection or selects staff, team leaders, and team members; fosters
development and training of supervisory and non-supervisory
individuals. Directs or recommends position and performance
management. Works within the framework of agency policies, mission
objectives, and time and funding limitations.
3. Classification Authority
    Laboratory directors/commanders will have delegated classification
authority and may, in turn, redelegate this authority no lower than two
management levels below the director/commander. Classification
approval, however, must be exercised at least one management level
above the first level supervisor of the employee or position under
review. Supervisors at the lower levels will provide classification
recommendations. Personnel specialists will provide on-going
consultation and guidance to managers and supervisors throughout the
classification process.
4. Statement of Duties and Experience (SDE)
    Under the demonstration project's classification system, the
automated Statement of Duties and Experience (SDE) will replace the
current AF Form 1378, Civilian Personnel Position Description. The SDE
will include a description of job-specific information, reference the
CCS broadband level descriptors for the assigned broadband level, and
provide data element information pertinent to the job. Laboratory
supervisors will follow a computer assisted process to produce the SDE.
The objectives in developing the new SDE are to: (a) Simplify the
descriptions and the preparation process through automation, (b) make
the SDE specific to the employee, and (c) make the SDE a more useful
tool for other functions of personnel management, e.g., recruiting,
reduction-in-force, assessment of contribution, and employee
development.
5. Skill Codes
    The Air Force presently uses skill code sets within the Defense
Civilian Personnel Data System (DCPDS) as a means to reflect duties of
current positions and employees' previous experiences. Each code
represents a specialization within the occupation. Specializations are
those described in classification or qualification standards and those
agreed upon by functional managers and personnel specialists to be
important to staffing patterns and career paths. These codes are used
to refer candidates for employment with the Air Force, placement of
current employees into other positions, and selection for training
under competitive procedures. To facilitate the movement of personnel
into and out of the demonstration project, the Air Force system of
skills coding will continue to

[[Page 60408]]

be used. Laboratory supervisors will select appropriate skill code sets
to describe the work of each employee through the automated SDE
process.
6. Classification Process
    The SDE is accomplished by completion of the following steps
utilizing an automated system:
    (a) The supervisor enters, by typing free-form, the organizational
location, SDE number, and the employee's name. From the menu, the
supervisor selects the appropriate occupational series and title, the
level descriptors corresponding to the broadband level that is most
commensurate with an employee's anticipated level of contribution, the
CCS job category, the functional classification code, and the
supervisory level. The supervisor then fills in the blanks in a
standard statement relating to the level of certification and
functional area for the Acquisition Professional Development Program
(APDP).
    (b) The supervisor creates a brief description of job-specific
information by typing free-form at the appropriate point. From a menu,
the supervisor will choose statements pertaining to physical
requirements; knowledges, skills, and abilities required to perform the
work; and special licenses or certifications needed (other than APDP).
Based on the supervisory level code selected above, the system will
produce mandatory statements pertaining to affirmative employment,
safety, and security programs. The system will also produce a statement
pertaining to positive education requirements, or their equivalencies,
based on the occupational series selected.
    (c) The supervisor selects up to three skill code sets from the
listing provided which are appropriate to the job. From the menu, the
supervisor also selects the position sensitivity; Fair Labor Standards
Act (FLSA) status; drug testing requirements; emergency essential and
key position information; the career program to which the position
belongs; the bargaining unit status code; the contribution factor
weights which apply to the job category previously selected; and other
relevant position description elements. This information, along with
the supervisory level and the competitive level code, constitutes the
SDE addendum. These data elements will be maintained as a separate page
of the SDE (i.e., an addendum) as this information can change
frequently. By maintaining this information as an addendum, the need to
create and classify a new SDE each time one of these elements must be
updated is alleviated.
    (d) The supervisor accomplishes the SDE with a recommended
classification, then signs and dates the document. The SDE is sent to
the individual in the organization with delegated classification
authority for approval and classification, which is indicated by that
person signing and dating the SDE.
    The computer assisted system will incorporate definitions for the
CCS job categories, supervisory levels, all S&E occupational series, as
well as their corresponding skill code sets and the functional
classification codes. The functional classification codes are those
currently found in OPM's ``Introduction to the Classification
Standards'' which define certain kinds of activities, e.g., research,
development, test and evaluation, etc. The FLSA status selection must
be in accordance with OPM guidance. Throughout the above process,
manpower analysts and personnel specialists will be available to advise
laboratory management.

D. Contribution-based Compensation System

1. Overview
    The purpose of the Contribution-based Compensation System (CCS) is
to provide an effective, efficient, and flexible method for assessing,
compensating, and managing the laboratory S&E workforce. It is
essential for the development of a highly productive workforce and to
provide management, at the lowest practical level, the authority,
control, and flexibility needed to achieve quality laboratories and
quality products. CCS allows for more employee involvement in the
assessment process, increases communication between supervisor and
employee, promotes a clear accountability of contribution, facilitates
employee career progression, provides an understandable basis for
salary changes, and delinks awards from the annual assessment process.
Funds previously allocated for performance-based awards will be
reserved for distribution under a separate laboratory awards program.
    CCS is a contribution-based assessment system that goes beyond a
performance- based rating system. That is, it measures the employee's
contribution to the organization rather than how well the employee
performed a job as defined by a performance plan; one which may
represent a lower level of responsibility and expectation based on the
employee's previous performance. CCS promotes proactive salary
adjustment decisions to be made on the basis of an individual's overall
contribution to the organization.
    Contribution is measured by factors, each of which is relevant to
the success of a Research and Development (R&D) laboratory. Six factors
have been developed for evaluating the yearly contribution of S&E
personnel covered by this initiative: Technical Problem Solving,
Communications/Reporting, Corporate Resource Management, Technology
Transition/Technology Transfer, R&D Business Development, and
Cooperation and Supervision.
    Each factor has four levels of increasing contribution
corresponding to the four broadband levels. These factors use the same
descriptors as those presented under classification (section III C).
Under classification, for example, only level I descriptors are applied
for each of the six factors for a level I employee. For the CCS
assessment process, the six factors are presented with all four levels
of contribution to better assist supervisor assessment. Therefore, for
classification, the factors are sorted first by level and then by
factor as shown in section III C 2. For the CCS assessment process, the
level descriptors are sorted first by factor and then by level as shown
below.

                                      Factor 1.--Technical Problem Solving
----------------------------------------------------------------------------------------------------------------
         Level                                 Descriptor                                 Key elements
----------------------------------------------------------------------------------------------------------------
I......................  Conducts in-house technical activities and/or may      Scope of Project/Level of
                          provide contract technical direction with guidance     Impact.
                          from supervisor or higher level scientist or
                          engineer.
                         Works closely with peers in collectively solving       Technical Complexity/Creativity.
                          problems of moderate complexity involving: limited
                          variables, precedents established in related
                          projects, and minor adaptations to well-established
                          methods and techniques.
                         Recognized within own organization for technical       Recognition.
                          ability in assigned areas.
II.....................  Conducts in-house technical activities and/or          Scope of Project/Level of
                          provides contract technical direction to programs of   Impact.
                          moderate size and complexity with minimal oversight.

[[Page 60409]]

                         Contributes technical ideas and conceives and defines  Technical Complexity/Creativity
                          solutions to technical problems of moderate size or
                          complexity.
                         Recognized internally and externally by peers, both    Recognition.
                          in governmental and industrial activities, for
                          technical expertise.
III....................  Conducts and/or directs technical activities and/or    Scope of Project/Level of
                          assists higher levels on challenging and innovative    Impact.
                          projects or technical program development with only
                          broad guidance.
                         Develops solutions to diverse, complex problems        Technical Complexity/Creativity.
                          involving various functional areas and disciplines.
                          Conducts and/or directs large programs in
                          technically complex areas.
                         Recognized within the laboratory, service, DoD,        Recognition.
                          industry, and academia for technical expertise and
                          has established a professional reputation in
                          national technical community.
IV.....................  Independently defines, leads, and manages the most     Scope of Project/Level of
                          challenging, innovative, and complex technical         Impact.
                          activities/programs consistent with general guidance
                          or independently directs overall R&D program.
                         Conceives and develops creative solutions to the most  Technical Complexity/Creativity.
                          complex problems requiring highly specialized areas
                          of technical expertise.
                         Recognized within the laboratory, service, DoD, and    Recognition.
                          other agencies for broad technical area expertise
                          and has established a professional reputation in
                          national and international technical communities.
----------------------------------------------------------------------------------------------------------------

                   Factor 2.--Communications/Reporting
------------------------------------------------------------------------
 Level                   Descriptor                     Key elements
------------------------------------------------------------------------
I......  Provides data and written analysis for     Written and Oral.
          input to scientific papers, journal
          articles, and reports and/or assists in
          preparing contractual documents and/or
          reviews technical reports; work is
          acknowledged in team publications.
         Effectively presents technical results of  Breadth of
          own studies, tasks, or contract results.   Responsibility.
         Material is presented either orally or in  Level/Diversity of
          writing, within own organization or to     Audiences.
          limited external contacts.
         Conducts these activities under the        Oversight Required.
          guidance of a supervisor and/or team
          leader.
II.....  Writes or is a major contributing author   Written and Oral.
          on scientific papers, journal articles,
          or reports and/or prepares contract
          documents and reviews reports pertaining
          to area of technical expertise. May
          assist in filing innovation disclosures,
          inventions, and patents.
         Effectively prepares and presents own and/ Breadth of
          or team technical results..                Responsibility.
         Communicates work to varied laboratory,    Level/Diversity of
          scientific, industry, and other            Audiences.
          government audiences.
         May prepare and present presentations on   Oversight Required.
          critical program for use at higher
          levels with some guidance.
III....  Lead author on major scientific papers,    Written and Oral.
          refereed journal articles, and reports
          and/or prepares and reviews contract
          documents and reviews reports of others
          pertaining to overall program. May
          document or file inventions, patents,
          and innovation disclosures relevant to
          subject area.
         Prepares and presents technical and/or     Breadth of
          financial and programmatic briefings and   Responsibility.
          documentation for team, organization, or
          technical area.
         Prepares and delivers presentations for    Level/Diversity of
          major projects and technology areas to     Audiences.
          scientific and/or government audiences.
         Reviews oral presentation of others.       Oversight Required.
          Communication and reporting functions
          conducted with minimal higher level
          oversight.
IV.....  Lead or sole author on scientific papers,  Written and Oral.
          refereed journal articles, reports, or
          review articles which are recognized as
          major advances or resolutions in the
          technical area and/or reviews and
          approves reporting of all technical
          products of mission area. May exploit
          innovations which normally lead to
          inventions, disclosures, and patents.
         Prepares and presents technical and/or     Breadth of
          financial and programmatic briefings and   Responsibility.
          documentation for breadth of programs at
          or above own level.
         As subject matter expert, prepares and     Level/Diversity of
          delivers invited or contributed            Audiences.
          presentations, papers at national or
          international conferences on technical
          area, or gives policy level briefings.
         Singularly responsible for overall         Oversight Required.
          quality and timeliness of technical/
          scientific/programmatic reports and
          presentations of group and self.
------------------------------------------------------------------------

                Factor 3.--Corporate Resource Management
------------------------------------------------------------------------
 Level                   Descriptor                     Key elements
------------------------------------------------------------------------
I......  May coordinate elements of in-house work   In-House/Contract
          units or assist in managing a scientific   Managing.
          or support contract.
         Uses personal and assigned resources       Size and Complexity.
          efficiently under the guidance of a
          supervisor or team leader.

[[Page 60410]]

         As an understanding of organizational      Make/Buy/Rely.
          activities, policies, and objectives is
          gained, participates in team planning.
II.....  Manages all aspects of technically         In-House/Contract
          complex in-house work units or one or      Managing.
          more contractual efforts in assigned
          program area.
         Effectively plans and controls all         Size and Complexity.
          assigned resources. Makes and meets time
          and budget estimates on assigned
          projects or takes appropriate corrective
          action.
         Participates in organizational or          Make/Buy/Rely
          strategic planning at team level, taking
          cognizance of complementary projects
          elsewhere to ensure optimal use of
          resources.
III....  Defines program strategy and resource      In-House/Contract
          allocations for in-house and/or            Managing.
          contractual programs.
         For assigned technical areas, conducts     Size and Complexity.
          program planning, coordination, and/or
          documentation (master plans, roadmaps,
          Joint Director of Labs/Reliance, etc.).
          Advocates to laboratory and/or higher
          headquarters on budgetary and
          programmatic issues for resources.
         Based on knowledge of analytical and       Make/Buy/Rely.
          evaluative methods and techniques,
          participates in strategic planning at
          branch and/or division level. Considers
          and consults on technical programs of
          other organizations working in the field
          to ensure optimal use of resources.
IV.....  Defines technology area strategy and       In-House/Contract
          resource allocations for in-house and      Managing.
          contractual programs.
         For multiple technical areas, conducts     Size and Complexity.
          overall program planning and
          coordination, and/or program
          documentation (master plans, roadmaps,
          Joint Director of Labs/Project Reliance,
          etc.). Advocates to command, service,
          and agency levels on budgetary and
          programmatic issues for resources.
         Utilizing advanced analytical and          Make/Buy/Rely.
          evaluative methods and techniques, leads
          strategic planning and prioritization
          processes. Develops strategy to leverage
          resources from other agencies and
          ensures equitable distribution and
          appropriate use of internal resources.
------------------------------------------------------------------------

          Factor 4.--Technology Transition/Technology Transfer
------------------------------------------------------------------------
 Level                   Descriptor                     Key elements
------------------------------------------------------------------------
I......  Participates as a team member in           Customer Interaction
          demonstrating technology and in            Level.
          interacting with internal/external
          customers.
         With guidance, contributes to technical    Partnership/Level of
          content of partnerships for technology     Independence.
          transition and/or transfer (Advanced
          Technology Demonstrations, Memorandums
          of Understanding, Joint Director of Labs/
          Project Reliance, Cooperative Research
          and Development Agreements, and other
          dual-use vehicles).
         Seeks out and uses relevant outside        Leveraging Outside
          technologies in assigned projects.         Technology.
II.....  Develops demonstrations and interacts      Customer Interaction
          independently with internal/external       Level.
          customers.
         As a team member, implements partnerships  Partnership/Level of
          for transition and/or transfer of          Independence.
          technology (Advanced Technology
          Demonstrations, Memorandums of
          Understanding, Joint Director of Labs/
          Project Reliance, Cooperative Research
          and Development Agreements, and other
          dual-use vehicles).
         Evaluates and incorporates appropriate     Leveraging Outside
          outside technology in individual or team   Technology.
          activities.
III....  Develops customer base and expands         Customer Interaction
          opportunities for technology transition    Level.
          and transfer.
         Leads or serves as a key technical member  Partnership/Level of
          of teams implementing partnerships for     Independence.
          transition or transfer of technology
          (Advanced Technology Demonstrations,
          Memorandums of Understanding, Joint
          Director of Labs/Project Reliance,
          Cooperative Research and Development
          Agreements, and other dual-use vehicles).
         Ensures incorporation of outside           Leveraging Outside
          technology within laboratory programs.     Technology.
IV.....  Organizes, leads, and markets overall      Customer Interaction
          technology transition and transfer         Level.
          activities for organization at senior
          management levels.
         Leads in formulation and oversight of      Partnership/Level of
          Advanced Technology Demonstrations,        Independence.
          Memorandums of Understanding, Joint
          Director of Labs/Project Reliance,
          Cooperative Research and Development
          Agreements, and other dual-use vehicles.
         Creates an environment that encourages     Leveraging Outside
          widespread exploitation of both national   Technology.
          and international technologies.
------------------------------------------------------------------------

                   Factor 5.--R&D Business Development
------------------------------------------------------------------------
 Level                   Descriptor                     Key elements
------------------------------------------------------------------------
I......  As a team member, communicates with        Customer Interaction
          customers to understand customer           Level.
          requirements.
         By maintaining currency in area of         Knowledge and Level
          expertise, contributes as a team member    of Planning.
          to new program development.
         May technically participate in writing     Knowledge of Market/
          proposals to establish new business        Success in Getting
          opportunities.                             Funds.

[[Page 60411]]

II.....  Initiates meetings and interactions with   Customer Interaction
          customers to understand customer needs.    Level.
         Generates key ideas for program            Knowledge and Level
          development based on understanding of      of Planning.
          technology and customer needs.
          Demonstrates expertise to internal/
          external customers.
         Contributes technically to proposal        Knowledge of Market/
          preparation and marketing to establish     Success in Getting
          new business opportunities.                Funds.
III....  Works to establish customer alliances and  Customer Interaction
          translates customer needs to programs in   Level.
          a particular technical area.
         Develops feasible research strategies and/ Knowledge and Level
          or business strategies for new technical   of Planning.
          activities.
         Seeks joint program coalitions with other  Knowledge of Market/
          agencies and funding opportunities from    Success in Getting
          outside organizations. Pursues near-term   Funds.
          business opportunities through proposals.
IV.....  Works with the senior management level to  Customer Interaction
          stimulate development of customer          Level.
          alliances for several technical areas.
         Generates strategic research and/or        Knowledge and Level
          business objectives for core technical     of Planning.
          areas. Recognizes war-fighting trends,
          relates business opportunities, and
          convinces laboratory management to
          develop and/or acquire expertise and
          commit funds.
         Secures business opportunities supporting  Knowledge of Market/
          long-term mission relevancy through        Success in Getting
          targeted proposals and processes.          Funds.
------------------------------------------------------------------------

                 Factor 6.--Cooperation and Supervision
------------------------------------------------------------------------
 Level                   Descriptor                     Key elements
------------------------------------------------------------------------
I......  Contributes to all aspects of teams'       Team Role.
          responsibilities.
         May technically guide or mentor less       Breadth of
          experienced personnel on limited aspects   Influence.
          of scientific or engineering efforts.
         Receives close guidance from supervisor    Supervision and
          and/or higher level scientist or           Guidance Received.
          engineer. Performs duties in a
          professional, responsive, and
          cooperative manner in accordance with
          established policies and procedures.
II.....  Contributes as a technical task or team    Team Role.
          leader; is sought out for expertise by
          peers; and participates in mentoring of
          team members.
         May guide on a daily basis, technical,     Breadth of
          programmatic, and administrative efforts   Influence.
          of individuals or team members.
         May recommend selection or may select      Supervision and
          staff and/or team members. Assists in      Subordinate
          the development and training of            Development.
          individuals or team members. May
          participate in position and performance
          management.
         Receives general guidance in terms of      Supervision and
          policies, program objectives, and/or       Guidance Received.
          funding issues from supervisor and/or
          higher level scientist or engineer.
          Discusses novel concepts and significant
          departures from previous practices with
          supervisor or team leader.
III....  Is sought out for consultation and         Team Role.
          mentors team members.
         Guides the research, technical and/or      Breadth of
          programmatic, and administrative efforts   Influence.
          of individuals or teams with
          accountability for focus and quality.
         Recommends selection or selects staff and/ Supervision and
          or team members. Supports development      Subordinate
          and training of subordinates and/or team   Development.
          members. Participates in position and
          performance management.
         Receives only broad policy and             Supervision and
          administrative guidance from supervisor,   Guidance Received.
          such as initiation and curtailment of
          programs.
IV.....  Establishes team charters and develops     Team Role.
          future team leaders and supervisors.
         Leads and manages all aspects of           Breadth of
          subordinates' or team members' efforts     Influence.
          with complete accountability for mission
          and programmatic success.
         Recommends selection or selects staff,     Supervision and
          team leaders, and team members; fosters    Subordinate
          development and training of supervisory    Development.
          and non-supervisory individuals. Directs
          or recommends position and performance
          management.
         Works within the framework of agency       Supervision and
          policies, mission objectives, and time     Guidance Received.
          and funding limitations.
------------------------------------------------------------------------

    The assessment process (section III D 3) begins with employee input
which provides an opportunity to state the accomplishments and level of
contribution perceived. To determine the employee's yearly
contribution, the six factors will then be assessed by the immediate
supervisor. For each factor, the supervisor places the employee's
contribution at a particular level. If the contribution level for a
factor is at the lowest level of level I, a score of 1.0 is assigned.
Higher levels of contribution are assigned scores increasing in 0.1
increments up to 4.9. A factor score of 0.0 can be assigned if the
employee's contribution does not demonstrate a minimum level I
contribution. Likewise, a factor score of 5.9 can be assigned if the
employee's contribution exceeds the maximum level IV contribution.
Under CCS, immediate supervisors will work with other supervisors in a
group setting to render final scores. Weights may be applied to the six
factors for different job categories of S&Es (section III D 7). CCS
will also incorporate a midyear feedback session that will address
employees' professional qualities including, for supervisors,
supervisory qualities and skills. The supervisory feedback will include
input from both

[[Page 60412]]

employees and higher level management.
    Employees within organizations are placed into pay pools (section
III D 4). Salary adjustments, i.e., decisions to give or withhold
salary increases, (section III D 5) are based on the relationship
between contribution scores and present salaries. The maximum available
pay rate under this demonstration project will be the rate for GS-15/
Step-10. Decisions for broadband movement (section III D 6) are also
based on this relationship.
    Salary increase dollars to fund the pay pool are based on funds
available from general pay increases, step increases, and promotions.
Pay pool dollars are not transferable between pay pools. No changes
will be made to locality pay under the demonstration project.
2. The ``Standard Pay Line'' (SPL)
    A mathematical relationship between assessed contribution and
compensation must be defined in order to have a Contribution-based
Compensation System. Various mathematical relationships between each
CCS score and the appropriate corresponding salary rate were examined
and analyzed given the following systemic constraints. First, CCS
necessitates that the relationship be described by a single equation
that yields a reasonable correlation between salaries in the broadband
levels and those of the corresponding GS grade(s). Second, neither the
equation nor its derivative(s) can exhibit singularities within or
between levels. That is, the equation must be continuous, smooth, and
well-defined across the four broadband levels. Third, the relationship
may not yield disincentives or inequities between employees or groups
of employees; it must demonstrate equitable (i.e., consistent) growth
at each CCS score. Mathematical analysis demonstrated that the most
reasonable relationship is a straight line--``the standard pay line''
(SPL).
    Derivation of the SPL was based on distributing the General
Schedule grades and steps across the corresponding broadband levels and
plotting these against the GS salaries. Although the data are not
continuous, there is a linear trend. Each of these data points was
weighted by the actual calendar year 1995 (CY95) population data for
the demonstration laboratories. Using a ``least squares error fit''
analysis, the best straight line fit to this weighted data was computed
and is illustrated in Figure 1.

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[[Page 60413]]

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BILLING CODE 6325-01-C
    Equation of the Standard Pay Line (without locality) for CY95

COMPENSATION=$13,572 +$15,415  x CCS SCORE.

    The SPL defined in Figure 1 is tied to the basic GS pay scale for
CY95. The SPL for CY96 was calculated from the SPL for CY95 and the
general increase (G) given to GS employees in January 1996. The
equation for the CY96 SPL is: COMPENSATION = $13,843 + $15,723  x  CCS
SCORE. The CY97 SPL will be the CY96 SPL increased by the ``G'' for
CY97. Continuing this calculation of SPL will maintain the same
relationships between the basic GS pay-scale and the SPL in the
demonstration project. Locality salary adjustments are not included in
the SPL.
    Although a correlation with the GS system was used in the
derivation of the SPL, employees will enter the demonstration project
without a loss of pay (as detailed later in the ``Conversion to the
Demonstration Project'' section) and without a CCS score. The first CCS
score will result from the first annual CCS assessment process in
October 1997. Until then, no employee is either undercompensated or
overcompensated. Employees, however, may determine their expected
contribution level by locating the intersection of their salary with
the SPL. Rails were constructed at + and - 0.3 CCS around the SPL. The
area encompassed by the rails denotes the acceptable contribution and
compensation relationship. Future CCS assessments will likely alter an
employee's position relative to these rails.
3. The CCS Assessment Process
    The annual assessment cycle begins on October 1 and ends on
September 30 of the following year. At the beginning of the annual
assessment period, the broadband level descriptors and weights (section
III D 7) will be provided to employees so that they know the basis on
which their contribution will be assessed. A midyear review, in the
March to April time frame, will be conducted for all S&Es, both
supervisory and non-supervisory employees. At this time, the employee's
professional qualities will be discussed as well as future professional
development and career opportunities. Additionally, this midyear review
will include feedback of supervisory qualities and skills for all
supervisors, military and civilian. The supervisor

[[Page 60414]]

conducting the feedback session with subordinate supervisors will
solicit employee input on the supervisor's qualities and skills. This
enables supervisors to receive feedback from higher level management as
well as from those they supervise for the purpose of future
professional development. To highlight its importance, all feedback
sessions will be certified as completed by the supervisor conducting
the feedback session.
    At the end of the annual assessment period, employees will
summarize their contributions in each factor for their immediate
supervisor. The supervisor will determine initial CCS scores using the
employee input and the supervisor's assessment of the overall
contribution to the laboratory mission. For each factor, the supervisor
places the employee's contribution at a particular level (I, II, III,
or IV). If the contribution for a factor is at the lowest end of a
level, a score of 1.0, 2.0, 3.0, or 4.0 is assigned. Greater
contributions in each level are assigned scores increasing in 0.1
increments up to 1.9, 2.9, 3.9, or 4.9. A factor score of 0.0 can be
assigned if the employee does not demonstrate a minimum level I
contribution. Likewise, a factor score of 5.9 can be assigned if the
employee demonstrates a contribution that exceeds the maximum for level
IV. Supervisors must document adequate justification for each proposed
factor score of either 0.0 or 5.9.
    Factor scores are then averaged to give a total CCS score. The
broadband is well defined for total CCS scores from 1.0 to 4.9.
Differing degrees of ``exceeded'' or ``failed'' contributions,
reflective of total CCS scores outside this range, have no impact on
CCS payouts. The maximum compensation for the broadband is the GS-15/
Step-10 salary and equates to a total CCS score of just below 4.9.
Therefore, when the average of CCS factor scores exceed 4.9, the total
CCS score will be set to 4.9 with the individual identified to upper
management as having exceeded the maximum contribution defined by the
broadband. Employees with a total CCS score below 1.0 are automatically
deemed to be above the upper rail for purposes of CCS assessment and
associated salary adjustments.
    The immediate supervisors (for instance, branch chiefs) and the
next level supervisors (for instance, division chiefs) for a pay pool
then meet as a group to review and discuss all proposed employee
assessments and adjust individual CCS scores, if necessary. Giving
authority to the group of managers to make minor score adjustments
ensures that contributions will have been assessed and measured
similarly for all employees. Once the scores have been finalized, the
results and any training and/or career development needs will be
discussed with the individual employees. The employee will also be
given a statistical correlation (e.g., quartile, etc.) pertaining to
their relative standing within the pay pool.
    When S&E employees are newly hired or transferred into the
demonstration, their contribution score is presumed to be at the
location of the intersection of their salary with the SPL. If on
October 1, the employee has served under CCS for less than 6 months,
the supervisor will wait for the subsequent annual cycle to assess the
employee. The first CCS assessment must be rendered within 18 months
after entering the demonstration project.
    When an employee cannot be evaluated readily by the normal CCS
assessment process due to special circumstances that take the
individual away from normal duties or duty station (e.g., long-term
full-time training, active military duty, extended sick leave, leave
without pay, etc.), the supervisor will document the special
circumstances on the assessment form. The supervisor will then assess
the employee using one of the following options:
    (a) Recertify the employee's last contribution assessment; or
    (b) Assign an assessment which places the employee on the SPL at
the employee's current salary.
    Pay adjustments will be made on the basis of this CCS assessment
and the employee's current salary. Pay adjustments are subject to a few
payout rules discussed in section III D 5. Final pay determinations
will be made at a management level above the group of supervisors who
rendered final CCS assessments. CCS scores, however, cannot be changed
by managerial levels above the original group of supervisors. Decisions
for any broadband level changes (section III D 6) will be submitted to
at least one level of management higher than the group of supervisors
(for instance, directorate chief) for approval. Pay adjustments and
broadband level changes will then be documented by SF-50, Notification
of Personnel Action. For historical and analytical purposes, the
effective date of CCS assessments; actual assessment scores; SPL
coordinate scores prior to salary adjustments; actual salary increases;
amounts contributed to the pay pool; individual <greek-D>Xs; and
applicable ``bonus'' amounts will be maintained for each demonstration
project employee.
4. Pay Pools
    Pay pool structure is under the authority of the laboratory
directors/commanders. The following minimal guidelines, however, will
apply: (a) A pay pool is based on the organizational structure and
should include a range of S&E salaries and contribution levels; (b) a
pay pool must be large enough to constitute a reasonable statistical
sample, i.e., 35 or more; (c) a pay pool must be large enough to
encompass a second level of supervision since the CCS process uses a
group of supervisors in the pay pool to determine assessments and
recommend salary adjustments; (d) the pay pool manager (for instance, a
division chief or directorate chief) holds yearly pay adjustment
authority; and (e) neither the pay pool manager nor supervisors within
the pay pool will recommend or set their own individual pay. Pay pool
managers' pay determinations, however, may still be subject to higher
management review.
    The amount of money available for salary increases within a pay
pool is determined by the general increase (G) and money that would
have been available for step increases and promotions (I). The latter
will be set at 2.4% upon implementing the demonstration project and is
considered adjustable to ensure cost neutrality over the life of the
demonstration project. The dollars derived from ``G'' and ``I'' to be
included in the pay pool will be computed based on the salaries of
employees in the pay pool as of September 30 each year.
5. Salary Adjustment Guidelines
    After the initial assignment into the CCS system, employees' yearly
contributions will be determined by the CCS process described above,
and their CCS scores versus their current salaries will be plotted on a
graph along with the SPL (see Figure 2). The position of those points
relative to the SPL gives a relative measure (<greek-D>Y) of the degree
of overcompensation or undercompensation for the employees. This
permits all employees within a pay pool to be rank-ordered by
<greek-D>Y, from the most undercompensated employee to the most
overcompensated.

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[[Page 60415]]

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BILLING CODE 6325-01-C

[[Page 60416]]

    In general, those employees who fall below the SPL (indicating
undercompensation, for example, employee X in Figure 2) should expect
to receive greater salary increases than those who fall above the line
(indicating overcompensation, for example, employee Z). Over time,
people will migrate closer to the standard pay line and receive a
salary appropriate to their level of contribution. The following are
more specific guidelines: (a) Those who fall above the upper rail (for
example, employee Z) will be given an increase ranging from zero to a
maximum of ``G''; (b) Those who fall within the rails (for example,
employee Y) will be given a minimum of ``G''; and (c) Those who fall
below the lower rail (for example, employee X) will be given at least
their base pay times ``G'' plus the percentage of funds set aside for
step increases and promotions which will no longer take place (I).
Should an employee's CCS assessment fall on either rail, it will be
considered to be within the rails.
    Employees whose CCS score would result in awarding of ``I'' money
such that the salary exceeds the maximum salary for broadband level II
would be eligible for one of the following: movement into level III if
a high grade allocation exists (section III D 6), or salary adjustment
to the maximum salary in level II and a ``bonus'' payout of the
additional ``I'' funds warranted by the assessment.
    Initially, the value of ``I'' will be 2.4%; the percentage,
however, may be changed to ensure cost neutrality in future years. Each
pay pool manager will set the necessary guidelines for the gradation of
pay adjustments in the pay pool within these general rules. Decisions
made will be standard and consistent within the pay pool, be fair and
equitable to all stakeholders, maintain cost neutrality over the
project life, and be subject to review. The maximum available pay rate
under this demonstration project will be the rate for GS-15/Step-10.
6. Movement Between Broadband Levels
    It is the intent of the demonstration project to have S&E career
growth be accomplished through unrestricted movement through the
broadband levels. Movement through the broadband levels will be
determined by contribution and salary following the CCS payout
calculation. Resulting changes in broadband levels are not accompanied
by traditional promotion dollars, but rather, they will be documented
as a change in title, change in broadband level, and reaccomplishment
of a Statement of Duties and Experience (SDE) (section III C 6). The
terms Promotion and Demotion will not be used in connection with the
CCS process. Rather, these terms will be reserved for competitive
placement and adverse actions.
    Broadband levels are derived from an initial grouping of one or
more GS grades. Salary overlap between adjacent levels is desirable for
broadband level movement. It is more convenient, however, to redefine
these overlaps (that is, the top and bottom salary ranges of the
broadband levels which produce the overlaps) in terms of the SPL.
Specifically, the salary overlap between two levels is defined by the
salaries at - to + 0.25 CCS around the whole number score defining the
boundary between the contribution levels. For example, the maximum
salary for level II would be that salary from the SPL corresponding to
a CCS score of 3.25. Likewise, the minimum salary for level III would
be the salary from the SPL corresponding to a CCS score of 2.75. This
definition provides a salary overlap between broadband levels that is
consistent and similar to salary overlaps in the GS schedule.
    Figure 3 shows the salary overlap areas between broadband
contribution levels. These salary overlap areas are divided into three
zones designated as CL (consideration for change to lower level), CH
(consideration for change to higher level), and E (eligible for change
to higher or lower level). All the E zones have the same width, 0.5
CCS, and height. The E zone is described as the box formed by the
intersection of the integer + and - 0.25 CCS lines and the SPL.

BILLING CODE 6325-01-P

[[Page 60417]]

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BILLING CODE 6325-01-C

[[Page 60418]]

    The E zones serve to stabilize the movement between adjacent
broadband levels. This allows for annual fluctuations in contribution
scores for people near the top or bottom of a level, without creating
the need for repeated changes of their titles. An employee whose
contribution score falls within an E zone is eligible for a change in
broadband level (with the associated title change), but one should not
be given unless the supervisor has a compelling reason to advance or
reduce the employee's level. Under normal circumstances, pay
adjustments under CCS will follow contribution scores. Those who
consistently achieve increased contribution assessments will progress
through their broadband level and will find their salary climbing into
the corresponding CH zone. Once the employee's CCS score is
demonstrated to be consistently within the CH zone, the employee should
be moved to the higher broadband level unless the supervisor has a
compelling reason not to request the change. Conversely, regression
through the broadband levels works the same way in the opposite
direction. Those who consistently receive decreasing contribution
assessments will regress through their broadband level and would not
have been receiving any salary adjustments greater than ``G''. They
will find that the CL zone at the bottom of their current broadband
level will catch up with their current salary. Once the employee's CCS
score is demonstrated to be consistently within the CL zone, the
employee should be moved to the lower broadband level unless the
supervisor has a compelling reason not to request the change.
Compelling reasons for retaining broadband levels in the presence of
consistent assessments in the CH or CL range must be documented in
writing and provided to the employee. If an employee moves totally
above the CH zone or below the CL zone, the employee will be changed in
broadband level without supervisory action.
    At the present time, high grade controls within the agency restrict
movement between broadband level II and broadband level III. Until the
high grade controls are lifted, demonstration project employees will
not be able to advance from broadband level II to broadband level III
unless a high grade authorization is available. To accommodate this,
level II employees whose salary adjustment would place them above the
CH zone for level II in organizations where high grade authorizations
are unavailable will receive permanent adjustments to basic salary up
to an amount equivalent to the top of broadband level II. Any
additional amount granted under CCS will be paid as a ``bonus'' payment
from pay pool funds and not permanently increase base salary. This
pattern of payout will continue until high grade authorizations become
available.
    Movement under CCS happens once a year. Under the demonstration
project, managers are provided greater flexibility in assigning duties
by moving employees between positions within their broadband level. If,
throughout the year, there are vacancies at higher levels (typically
supervisory positions), employees may be considered for promotion to
those positions according to the demonstration project competitive
selection procedures approved by the Air Force. Demonstration project
employees selected for positions at a higher broadband level will
receive the salary corresponding to the minimum of the new broadband
level or their existing salary, whichever is greater. Under the
approved competitive selection procedures, the selecting official may
consider candidates from any source based on viable and supportable job
related merit-based methodology. Similarly, if there is sufficient
cause, an employee may be demoted to a lower level position according
to the contribution-based reduction in pay or removal procedures
discussed in section III E or the existing procedures related to
disciplinary actions.
7. Weights
    Employees under the demonstration project will be assigned to one
of five job categories:
    (a) Supervisor & Manager, primary function is to supervise other
employees and/or to direct the work of an organization or
organizational segment;
    (b) Plans & Programs S&E, primary function is to formulate plans
and policies to further the organizational mission;
    (c) Program Manager, primary function is to run/direct research and
development (R&D) programs;
    (d) Support S&E, primary function is to support the research
efforts of the laboratory; and
    (e) Bench-Level S&E, primary function is to perform R&D within the
mission focus of the laboratory.
    Laboratory directors/commanders will have the authority to
determine if varying weights should be applied to the six CCS factors
based on these job categories. As an example, Technical Problem Solving
may be more heavily weighted for Bench-Level S&Es than the factor of
Technology Transition/Technology Transfer.
    The authority to use weights and the authority to set weights may
be delegated below the laboratory director/commander, but weights must
be the same for all employees in a particular job category in a pay
pool. This ensures that a fair comparison of employees is made, without
having the weights tailored to specific individuals. The overall CCS
score is determined by multiplying the score for each factor by the
weight, adding the results, and then dividing by the sum of the
weights.
    This demonstration project, in part, is predicated on the belief
that the continued success and viability of the laboratories depends on
all employees seeking to contribute in each of the areas defined by the
six factors. Making all employees accountable for all factors shifts
organizational values in new directions. For this reason, no factor can
be given a weight of zero. Laboratory directors/commanders should
annually review the weightings for the various job categories to see if
they can be increased toward a weighting of 1.0 to encourage and allow
employees to raise their CCS contribution assessment by contributing in
a broader range of activities. Contribution in all six factors is
important to ensure both the overall success of DoD laboratories and
individual S&E career growth. Hence, the weights should be reviewed
frequently, and an effort made to move away from them in later years of
the demonstration project.
    Other guidelines for setting weights for the six factors are: (a)
Weights may be assigned any value, in increments of 0.1, from 0.1 to
1.0; (b) At least three factors must have a weight of 1.0; and (c) No
more than one factor can have a weight of less than 0.5. For all six
factors, therefore, the weights must sum from 4.1 to 6.0.
8. Voluntary Pay Reduction and Pay Raise Declination
    A provision exists today for an employee to request a change to
lower grade. If that request is totally the employee's choice, then the
employee's salary is lowered accordingly. Although the rationale behind
such a voluntary request varies, under CCS a voluntary request for a
pay reduction or a voluntary declination of a pay raise would
effectively put an overcompensated employee's pay closer to or below
the standard pay line. Since an objective of CCS is to properly
compensate employees for their contribution, the granting of such
requests is consistent with this goal. Under normal circumstances, all

[[Page 60419]]

employees should be encouraged to advance their careers through
increasing contribution rather than trying to be undercompensated at a
fixed level of contribution.
    To handle these special circumstances, employees must submit a
request for voluntary pay reduction or pay raise declination during the
30-day period immediately following the annual payout, and show reasons
for the request. All actions will be appropriately documented.
9. Implementation Schedule
    The 1996 employee annual appraisal will be done according to Air
Force performance plan rules in effect at the time of the 1996 close-
out. The 1997 appraisal cycle will also begin, but it is not
anticipated to be completed due to the implementation schedule of this
demonstration project. The first assessment cycle under CCS will
commence the day the demonstration project is implemented and run
through September 30, 1997. The first CCS payout will be given in the
traditional first full pay period in calendar year 1998.
10. CCS Grievance Procedures
    An employee may grieve the assessment received under CCS.
Nonbargaining unit employees, and bargaining unit employees covered by
a negotiated grievance procedure which does not permit grievances over
performance ratings, must file assessment grievances under
administrative grievance procedures. Bargaining unit employees, whose
negotiated grievance procedures cover performance rating grievances,
must file assessment grievances under those negotiated procedures.
11. Using the CCS Assessment Score as Additional Service Credit During
Reduction-in-Force
    For broadband levels I through III, CCS assessment scores below the
lower rail (a <greek-D>X greater than +0.30) will equate to 20
additional years of service. Scores within the rails but on or below
the SPL (a <greek-D>X equal to or greater than 0.00 and less than or
equal to +0.30) will equate to 16 years of service. Scores within the
rails but above the SPL (a <greek-D>X equal to or greater than -0.30
and less than 0.00) will be credited with 12 years of service. No
additional years of service will be given for assessment scores above
the upper rail (a <greek-D>X less than -0.30).
    Because of the upper pay limit imposed on broadband level IV and
the slope of the SPL, employees at the top salaries of that level have
no opportunity to score below the lower rail. Therefore, three
categories of additional service credit will be defined for RIF
purposes within broadband level IV: (1) Employees with CCS assessments
on or below the SPL (a <greek-D>X equal to or greater than 0.00), (2)
those with CCS assessments above the SPL but on or below the upper rail
(a <greek-D>X equal to or greater than -0.30 and less than 0.00), and
(3) those with CCS assessments above the upper rail (a <greek-D>X less
than -0.30). For broadband level IV, CCS assessment scores on or below
the SPL (a <greek-D>X equal to or greater than 0.00) will equate to 20
years of service. Scores above the SPL but on or below the upper rail
(a <greek-D>X equal to or greater than -0.30 and less than 0.00) will
be credited with 12 years of service. No additional years of service
will be given for assessment scores above the upper rail (a <greek-D>X
less than -0.30).

E. Contribution-based Reduction in Pay or Removal Actions

    CCS is a contribution-based assessment system that goes beyond a
performance-based rating system. Contribution is measured against six
factors each having four levels of increasing contribution
corresponding to the four broadband levels. This section applies to
reduction in pay or removal of demonstration project employees based
solely on inadequate contribution. The following procedures are similar
to and replace those established in 5 CFR 432 pertaining to
performance-based reduction in grade and removal actions. Adverse
action procedures under 5 CFR 752 remain unchanged.
    When an employee's contribution plots in the area above the upper
rail of the SPL (section III D 3) the employee is considered to be in
the Automatic Attention Zone (AAZ). In this case, the supervisor has
two options. The first is to take no action but to document this
decision in a memorandum for record. A copy of this memorandum will be
provided to the employee and to higher levels of management. The second
option is to inform the employee, in writing, that unless the
contribution increases to, and is sustained at, a higher level, the
employee may be reduced in pay or removed.
    These provisions also apply to an employee whose contribution
deteriorates during the year. In such instances, the group of
supervisors who meet during the CCS assessment process may reconvene
any time during the year to review the circumstances warranting the
recommendation to take further action on the employee.
    The supervisor will afford the employee a reasonable opportunity (a
minimum of 60 days) to demonstrate increased contribution commensurate
with the duties and responsibilities of the employee's position. As
part of the employee's opportunity to demonstrate increased
contribution, the laboratory will offer assistance to the employee.
    Once an employee has been afforded a reasonable opportunity to
demonstrate increased contribution, but fails to do so, the laboratory
may propose a reduction in pay or removal action. If the employee's
contribution increases to a higher level and is again determined to
deteriorate in any area within 2 years from the beginning of the
opportunity period, the laboratory may initiate reduction in pay or
removal with no additional opportunity to improve. If an employee has
contributed appropriately for 2 years from the beginning of an
opportunity period and the employee's overall contribution once again
declines, the laboratory will afford the employee an additional
opportunity to demonstrate increased contribution before determining
whether or not to propose a reduction in pay or removal.
    An employee whose reduction in pay or removal is proposed is
entitled to a 30 day advance notice of the proposed action that
identifies specific instances of inadequate contribution by the
employee on which the action is based. The laboratory may extend this
advance notice for a period not to exceed an additional 30 days. The
laboratory will afford the employee a reasonable time to answer the
laboratory's notice of proposed action orally and/or in writing.
    A decision to reduce in pay or remove an employee for inadequate
contribution may be based only on those instances of inadequate
contribution that occurred during the 2 year period ending on the date
of issuance of the advance notice of proposed action. The laboratory
will issue written notice of its decision to the employee at or before
the time the action will be effective. Such notice will specify the
instances of inadequate contribution by the employee on which the
action is based and will inform the employee of any applicable appeal
or grievance rights as specified in 5 CFR 432.106.
    The laboratory will preserve all relevant documentation concerning
a reduction in pay or removal which is based on inadequate contribution
and make it available for review by the affected employee or designated
representative. At a minimum, the laboratory's records will consist of
a copy of the notice of proposed action; the written answer of the
employee or

[[Page 60420]]

a summary thereof when the employee makes an oral reply; and the
written notice of decision and the reasons therefor, along with any
supporting material including documentation regarding the opportunity
afforded the employee to demonstrate increased contribution.
    When the action is not taken because of contribution improvement by
the employee during the notice period, the employee is not reduced in
pay or removed, and the employee's contribution continues to be deemed
adequate for 2 years from the date of the advanced written notice, any
entry or other notation of the proposed action will be removed from all
laboratory records relating to the employee.

F. Voluntary Emeritus Corps

    Under the demonstration project, laboratory directors/commanders
will have the authority to offer retired or separated employees
voluntary assignments in the laboratories. This authority will include
employees who have retired or separated from Federal service, including
those who have accepted a buy-out. The voluntary emeritus corps will
ensure continued quality research while reducing the overall salary
line by allowing higher paid employees to accept retirement incentives
with the opportunity to retain a presence in the scientific community.
The program will be of most benefit during manpower reductions as
senior S&Es could accept retirement and return to provide valuable on-
the-job training or mentoring to less experienced employees.
    To be accepted into the emeritus corps, a volunteer must be
recommended by laboratory managers to the laboratory director/
commander. Everyone who applies is not entitled to a voluntary
assignment. The laboratory director/commander must clearly document the
decision process for each applicant (whether accepted or rejected) and
retain the documentation throughout the assignment. Documentation of
rejections will be maintained for 2 years.
    To encourage participation, the volunteer's federal retirement pay
(whether military or civilian) will not be affected while serving in a
voluntary capacity.
    Volunteers will not be permitted to monitor contracts on behalf of
the government or to participate on any contracts or solicitations
where a conflict of interest exists.
    An agreement will be established between the volunteer, the
laboratory director/commander, and the Civilian Personnel Flight. The
agreement will be reviewed by the local Staff Judge Advocate
representative responsible for ethics determinations under the Joint
Ethics Regulation. The agreement must be finalized in advance and shall
include as a minimum:
    (a) A statement that the voluntary assignment does not constitute
an appointment in the civil service and is without compensation,
    (b) The volunteer waives any and all claims against the Government
because of the voluntary assignment except for purposes of on-the-job
injury compensation as provided in 5 U.S.C. 8101(1)(B),
    (c) Volunteer's work schedule,
    (d) Length of agreement (defined by length of project or time
defined by weeks, months, or years),
    (e) Support provided by the laboratory (travel, administrative,
office space, supplies),
    (f) A one page SDE,
    (g) 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 member of the voluntary emeritus
corps,
    (h) A provision allowing either party to void the agreement with 10
working days written notice, and
    (i) The level of security access required (any security clearance
required by the assignment will be managed by the laboratory while the
volunteer is a member of the emeritus corps).

G. Revised Reduction-In-Force (RIF) Procedures

    A separate competitive area will be established by geographic
location for all laboratory personnel included in the demonstration
project.
    Each laboratory shall establish competitive levels consisting of
all positions in a competitive area which are in the same broadband
level and occupational family and which are similar enough that the
incumbent of one position could succeed in the new position without any
loss of productivity beyond that normally expected in the orientation
of any new, but fully qualified, employee. The laboratory directors/
commanders, or their designees, will observe and participate with the
appropriate Civilian Personnel representative in all placement actions.

IV. Training

    An extensive training program is planned for support personnel and
every employee in the demonstration project including managers,
supervisors, and S&Es. Training will be tailored to fit the
requirements of every employee included and will fully address employee
concerns to ensure that everyone has a comprehensive understanding of
the program and to emphasize the benefits to employees. Additional
supervisory training will be provided to all managers and supervisors
as the new system places more responsibility and decision making
authority on their shoulders.
    Using an existing task order contract through Armstrong Laboratory,
the training packages will be developed to encompass all aspects of the
project and validated prior to training the workforce. Specifically,
training is being developed for the following groups of employees:
    (a) Laboratory S&Es included in the demonstration,
    (b) Civilian and military supervisors and managers, and
    (c) Administrative support and civilian personnel office personnel
who must understand laboratory operations under the demonstration
project.
    Training requirements will vary from an overview of the new system;
to a more detailed package for laboratory S&Es; to very specific
instructions for both civilian and military supervisors, managers, and
others who provide personnel and payroll support.
    Base level training personnel will provide local training
management, facilities, and support to laboratory directors/commanders.
Contract training personnel will be utilized where organic capabilities
are not available or not economically feasible. The training will
begin, and be completed, within the 90 days prior to implementation.

V. Conversion

A. Conversion to the Demonstration Project

    Initial entry into the demonstration project for covered employees
will be accomplished through a full employee protection approach that
ensures each employee an initial place in the appropriate broadband
level without loss of pay. An automatic conversion from the permanent
GS/GM grade and step of record into the new broadband system will be
accomplished. Special Salary Rates will no longer be applicable to
demonstration project employees. All employees will be eligible for the
future locality pay increases of their geographical areas. Employees on
Special Salary Rates at the time of conversion will receive a new basic
pay rate computed by dividing their highest adjusted basic pay (i.e.,
special pay rate or, if higher, the

[[Page 60421]]

locality rate) by the locality pay factor for their area. A full
locality adjustment will then be added to the new basic pay rate.
Adverse action and pay retention provisions will not apply to the
conversion process as there will be no change in total salary.
Employees who enter the demonstration project later by lateral
reassignment or transfer will be subject to parallel pay conversion
rules.

B. Conversion Back to the Former System

    In the event the project ends, a conversion back to the former
(regular) Federal civil service system will be required. All employees
in a broadband level corresponding to a single General Schedule (GS)
grade will be converted to that grade. Employees in a multiple grade
broadband level will be considered to have attained the next higher
grade when they have been in the level at least 1 year and their salary
equals or exceeds the minimum salary of the higher grade. For employees
who are entitled to a special rate upon return to the General Schedule,
the demonstration project locality rate must equal or exceed the
minimum special rate of the higher grade. To set GS pay upon
conversion, an employee's demonstration project locality rate would be
converted (prior to leaving the project) to the highest General
Schedule rate range (i.e., locality rate range or special rate range)
applicable to the employee. If the employee's rate falls between the
fixed rates for the applicable range, it will be raised to the next
higher rate. The employee's GS basic rate (excluding special rates or
locality payments) would then be derived based on the grade and step
associated with this converted rate. Employees who leave the
demonstration project and return to the General Schedule pay system via
reassignment, promotion, demotion, or transfer are subject to parallel
pay conversion rules to determine the converted GS rates under the
demonstration project to be used in applying GS pay administration
rules (e.g., promotion rule or maximum payable rate rule) in setting
pay at the gaining agency.

VI. Project Duration

    Public Law 103-337 removed any mandatory expiration date for this
demonstration project. The project evaluation plan adequately addresses
how each intervention will be comprehensively evaluated for at least
the first 5 years of the demonstration project. Major changes and
modifications to the interventions can be made through announcement in
the Federal Register and would be made if formative evaluation data
warranted. At the 5 year point, the entire demonstration project will
be reexamined for either: (a) Permanent implementation, (b) change and
another 3-5 year test period, or (c) expiration.

VII. Evaluation Plan

    Authorizing legislation mandates evaluation of the demonstration
project to assess the merits of project outcomes and to evaluate the
feasibility of applications to other federal organizations. The overall
evaluation consists of two components--external and internal
evaluation. The external evaluation for the four Air Force laboratories
is part of a larger effort involving evaluation of demonstration
projects in a total of 24 reinvention laboratories in three military
services. External evaluation will be overseen by the Office of Merit
Systems Oversight and Effectiveness, OPM, and the Director Defense
Research and Engineering (DDR&E) and Civilian Personnel Policy (CPP),
DoD. OPM's Personnel Resources and Development Center (DPRC) will serve
in the role of external evaluator to ensure the integrity of the
evaluation process, outcomes, and interpretation of results. The
internal evaluation will be accomplished by the staff of the Air Force
laboratories.
    The main purpose of the evaluation is to determine the
effectiveness of the personnel system changes to be undertaken by the
laboratories. To the extent possible, cause-and-effect relationships
between the changes and personnel system effectiveness criteria will be
established. The evaluation approach uses an intervention impact model
which specifies each personnel system change as an intervention, the
expected effects of each intervention, the corresponding measures, and
the data sources for obtaining the measures. Table 4 presents an
example of the intervention impact model.

                                 Table 4.--Intervention Impact Evaluation Model
----------------------------------------------------------------------------------------------------------------
           Interventions                 Expected effects                Measures               Data sources
----------------------------------------------------------------------------------------------------------------
1. Compensation
a. Broadbanding...................  A. Increased                1. Perceived flexibility..  Attitude survey.
                                     organizational
                                     flexibility.
                                    B. Reduced administrative   1. Actual/perceived time    Personnel office
                                     work load, paperwork        savings.                    data, PME results,
                                     reduction.                                              attitude survey.
                                    C. Advanced in-hire rates.  1. Starting salaries of     Work force data.
                                                                 banded vs nonbanded
                                                                 employees.
                                    D. More gradual pay         1. Progression of new       Work force data.
                                     progression at entry        hires over time by band,
                                     levels.                     career path.
                                    E. Increased pay potential  1. Mean salaries by band,   Work force data.
                                                                 career path, demographics.
                                    F. Higher average salaries  1. Total payroll cost.....  Work force data.
                                    G. Increased satisfaction   1. Employee perceptions of  Attitude survey.
                                     with advancement.           advancement.
                                    H. Increased pay            1. Pay satisfaction,        Attitude survey.
                                     satisfaction.               internal/external equity.
                                    I. Improved recruitment...  1. Offer/acceptance ratios  Personnel office
                                                                                             data.
                                                                2. Percent declinations...  Personnel office
                                                                                             data.
                                    J. No change in high grade  1. Number/percentage of     Work force data.
                                     (GS-14+) distribution.      employees at high grade
                                                                 salaries pre/post banding.
2. Contribution/Performance
 Management and Assessment

[[Page 60422]]

a. Cash awards/bonuses............  A. Reward/motivate          1. Amount and number of     Work force data.
                                     contribution/performance.   awards by career path,
                                                                 demographics performance.
                                                                2. Perceived motivational   Attitude survey.
                                                                 power.
                                                                3. Perceived fairness of    Attitude survey.
                                                                 awards.
b. Contribution-based pay           A. Increased pay-           1. Pay-contribution         Work force data.
 progression.                        contribution link.          correlations.
                                                                2. Perceived pay-           Attitude survey.
                                                                 contribution link.
                                                                3. Perceived fairness of    Attitude survey.
                                                                 ratings.
                                                                4. Satisfaction with        Attitude survey.
                                                                 ratings.
                                                                5. Employee trust in        Attitude survey.
                                                                 supervisors.
                                    B. Improved contribution/   1. Adequacy of              Attitude survey.
                                     performance feedback.       contribution/performance
                                                                 feedback.
                                    C. Increased retention of   1. Turnover by              Work force data.
                                     high contributors.          contribution assessment.
                                    D. Increased turnover of    1. Turnover by              Work force data.
                                     low contributors.           contribution assessment.
----------------------------------------------------------------------------------------------------------------

    The specific measures to be collected using the different methods
are determined from the goals and objectives stated for each
intervention. Both quantitative and qualitative measures will be
obtained. Most of the potential measures can be grouped around three
major effectiveness criteria: speed, cost, and quality. Collectively,
the outcomes of the interventions are hypothesized to lead to
laboratory personnel management improvements, as reflected by
timeliness, cost-effectiveness, and quality.
    A quasi-experimental design with pre- and post-implementation
comparisons will be employed. Baseline measures are being taken prior
to project implementation. Then, repeated measurements will be taken
post-implementation to allow longitudinal comparisons by intervention
within and across the four Air Force laboratories. Additional features
of the design call for comparisons of Air Force results to those for
the other 20 service laboratories that are expected to be part of the
demonstration program, as well as to those for the original Navy
demonstration project conducted at China Lake and San Diego. Further
comparisons for pay purposes will be conducted with a composite
comparison group covering similar occupations and job series to be
constructed from OPM's Central Personnel Data File.
    The effectiveness of each intervention and the project as a whole
in meeting stated objectives will be addressed using a multi-method
approach. Some methods will be unobtrusive in that they do not require
reactions or inputs from employees or managers. These methods include
analysis of archival workforce data and personnel office data, review
of logs maintained by site historians documenting contextual events,
and assessment of external economic and legislative changes. Other
methods such as periodic attitude surveys, structured interviews, and
focus groups will be used to assess the perceptions of laboratory
managers, supervisors, scientists, and engineers regarding the
personnel system changes and the performance of their organizations in
general.
    In addition to the intervention impact model, a general context
model will be used to determine the effects of potential intervening
variables, e.g., downsizing, regionalization of the personnel function,
and the state of the economy in general. Potential unintended outcomes
will also be monitored, and an attempt will be made by the external
evaluation team to link the outcomes of project interventions to
organizational effectiveness.
    The evaluation effort will consist of two main phases: formative
and summative evaluation covering 5 years. The formative evaluation
phase will include baseline data collection and analyses,
implementation evaluation, and interim assessments.
    Periodic reports and annual summaries will be prepared to document
the findings. The summative evaluation phase will focus on an overall
assessment of project outcomes after 5 years.

VIII. Demonstration Project Costs

A. Step Buy-Ins

    Under the current 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 implementation. As under the current system, supervisors will be
able to withhold these partial step increases if the employee's
performance has fallen below fully successful.
    Rules governing Within-Grade Increases (WGI) under the current Air
Force performance plan will continue in effect until the implementation
date. Adjustments to the employees base salary for WGI equity will be
computed effective the date of implementation to coincide with the
beginning of the first formal CCS assessment cycle. WGI equity will be
acknowledged by increasing base salaries by a prorated share based upon
the number of days an employee has completed towards the next higher
step. Employees at step 10 on the date of implementation will not be
eligible for WGI equity adjustments since they are already at the top
of the step scale.
    The 1996 annual appraisal will be closed on the normal close-out
date of June 30, 1996. The first formal CCS assessment cycle will begin
on the effective date of implementation of the demonstration project
and will end on September 30, 1997. The general increase to employee's
base pay in January 1997 will be handled under existing procedures. The
first CCS pay adjustments will be made during the first full pay period
of CY98. Future CCS pay adjustments will be effective the beginning of
the first full pay period of subsequent calendar years.

B. Out Year Project Costs

    The overall demonstration cost strategy will be to balance project
costs with benefits of the demonstration project to bring about the
projected improvements to the Air Force laboratories. The project
evaluation results will be used to ensure that out year project costs
remain neutral over the life of the project. A baseline will be
established at the start of the project and

[[Page 60423]]

salary expenditures will be tracked yearly. Implementation costs,
including the step buy-in costs detailed above, will not be included in
the cost evaluations. In addition, simulations and models will be run
to estimate future workforce and cost trends.
    The amount of the ``I'' value in the out years will be determined
as part of the yearly project evaluation process, starting with a
review of the prior year's data by the Air Force Laboratory
Demonstration Project Executive Steering Committee. The ``I'' value
determination will be based on a balancing of appropriate factors,
including the following: (1) Historical spending for within-grade
increases, quality step increases, and in-level career promotions (with
dynamic adjustments to account for changes in law or in staffing
factors--e.g., average starting salaries and the distribution of
employees among job categories and broadband levels); (2) labor market
conditions and the need to recruit and retain a skilled workforce to
meet the business needs of the organization; and (3) the fiscal
condition of the organization. Given the implications of base pay
increases on long-term pay and benefit costs, the ``I'' value will be
determined after cost analysis with documentation of the mission-driven
rationale for the amount. As part of the evaluation of the project by
AF, DoD, and OPM, the base pay costs (including average salaries) under
the demonstration project will be tracked and compared to the base pay
costs under similar demonstration projects and under a simulation model
that replicates General Schedule spending. These evaluations will
balance costs incurred against benefits gained so that both fiscal
responsibility and project success are given appropriate weight.

C. Personnel Policy Boards

    Each laboratory shall establish a Personnel Policy Board for the
demonstration project that will consist of the senior civilian in each
directorate within the laboratory and be chaired by the laboratory
executive director. The board is tasked with the following:
    (a) Overseeing the civilian pay budget,
    (b) Addressing issues associated with two separate pay systems (CCS
and GS) during the first phase of the demonstration,
    (c) Determining the composition of the CCS pay pools in accordance
with the established guidelines,
    (d) Reviewing operation of the laboratory CCS pay pools,
    (e) Providing guidance to pay pool managers,
    (f) Administering funds to CCS pay pool managers,
    (g) Integrating CCS with the free-market model,
    (h) Reviewing hiring and promotion salaries, and
    (i) Monitoring award pool distribution by organization and by S&E
versus non-S&E.
    Should the laboratory elect not to establish a Personnel Policy
Board, the charter of an existing group within each laboratory must be
modified to include the duties detailed above.

D. Developmental Costs

    Costs associated with the development of the demonstration system
include software automation, simulation, training, and project
evaluation. All funding will be provided through the Air Force Science
and Technology budget. The projected annual expenses for each area is
summarized in Table 5. Project evaluation costs will continue for at
least the first 5 years and may continue beyond.

                                     Table 5--Projected Developmental Costs
                                               [Then Year Dollars]
----------------------------------------------------------------------------------------------------------------
                                                                  FY95      FY96      FY97      FY98      FY99
----------------------------------------------------------------------------------------------------------------
Training......................................................     $170K     $120K  ........  ........  ........
Project Evaluation............................................       20K      192K      280K      280K      280K
Automation/Simulation.........................................  ........      150K      240K      125K       75K
Data Systems..................................................  ........      260K  ........  ........  ........
    Totals....................................................      190K      722K      520K      405K      355K
----------------------------------------------------------------------------------------------------------------

IX. Required Waivers to Law and Regulation*

A. Waivers to Title 5, United States Code

    Chapter 31, Section 3111: Acceptance of volunteer service.
---------------------------------------------------------------------------

    * Waiver required only to the extent that the project conflicts
with pertinent provision of law and regulation.
---------------------------------------------------------------------------

    Chapter 43, Sections 4301-4305: Related to performance appraisal.
    Chapter 51, Sections 5101-5102 and Sections 5104-5107: Related to
classification standards and grading.
    Chapter 53, Sections 5301; 5302 (8) and (9); 5303-5305; 5331-5336;
and 5361-5366: Related to special pay; pay rates and systems; grade and
pay retention (Sections 5301, 5302 (8) and (9), and 5304 are waived
only to the extent necessary to allow demonstration project employees
to be treated as General Schedule employees and to allow basic rates of
pay under the demonstration project to be treated as scheduled rates of
basic pay).
    Chapter 55, Section 5545 (d): Related to hazardous duty premium pay
(only to the extent necessary to allow demonstration project employees
to be treated as General Schedule employees).
    Chapter 57, Sections 5753, 5754, and 5755: Related to recruitment,
relocation, and retention payments; supervisory differential (only to
the extent necessary to allow employees and positions under the
demonstration project to be treated as employees and positions under
the General Schedule).
    Chapter 75, Sections 7512 (3): Related to adverse action (but only
to the extent necessary to exclude reductions in broadband level not
accompanied by a reduction in pay) and 7512 (4): Related to adverse
action (but only to the extent necessary to exclude conversions from a
General Schedule special rate to demonstration project pay that do not
result in a reduction in the employee's total rate of pay).

B. Waivers to Title 5, Code of Federal Regulations

    Part 300, Sections 300.601 through 300.605: Time-in-grade
restrictions.
    Part 308, Sections 308.101 through 308.103: Volunteer service.
    Part 315, Sections 315.801 and 315.802: Probationary period.
    Part 334, Section 334.102 : Temporary assignment of employees
outside agency.
    Part 340: Other than full-time career employment.
    Part 430, Subpart A and Subpart B: Performance management;
performance appraisal.
    Part 432, Sections 432.103 through 432.105: Performance-based
reduction-in-grade and removal actions.

[[Page 60424]]

    Part 511, Subpart A, Subpart B, and Subpart F, sections 511.601
through 511.612: Classification within the General Schedule.
    Part 530, Subpart C: Special salary rates.
    Part 531, Subpart B, Subpart D, Subpart E, and Subpart F:
Determining rate of pay; within-grade increases; quality step
increases; locality payments (only to the extent necessary to allow
demonstration project employees to be treated as General Schedule
employees and to allow basic rates of pay under the demonstration
project to be treated as scheduled rates of basic pay).
    Part 536, Subpart A, Subpart B, and Subpart C: Grade and pay
retention.
    Part 550, Sections 550.703: Severance Pay, definition of
``reasonable offer'' (by replacing ``two grade or pay levels'' with
``one broadband level'' and ``grade or pay level'' with ``broadband
level'') and 550.902: Hazard Pay, definition of ``employee'' (only to
the extent necessary to allow demonstration project employees to be
treated as General Schedule employees).
    Part 575, Sections 575.102 (a)(1), 575.202 (a)(1), 575.302 (a)(1),
and Subpart D: Recruitment and relocation bonuses; retention
allowances; supervisory differentials (only to the extent necessary to
allow employees and positions under the demonstration project to be
treated as employees and positions under the General Schedule
positions).
    Part 752, Sections 752.401 (a)(3): Reduction in grade and pay (but
only to the extent necessary to exclude reductions in broadband level
not accompanied by a reduction in pay) and 752.401 (a)(4) (but only to
the extent necessary to exclude conversions from a General Schedule
special rate to demonstration project pay that do not result in a
reduction in the employee's total rate of pay).

[FR Doc. 96-30303 Filed 11-27-96; 8:45 am]
BILLING CODE 6325-01-P