77380 Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

Science and Technology Reinvention 

Laboratory Personnel Management 

Demonstration Project, Department of 

Navy, Office of Naval Research 

AGENCY: Office of the Deputy Under 

Secretary of Defense (Civilian Personnel 

Policy) (DUSD (CPP)), Department of 

Defense (DoD). 

ACTION: Notice. 

SUMMARY: Section 342(b) of Public Law 

(Pub .L.) 103–337, as amended by 

section 1114 of Public Law 106–398, 

authorizes the Secretary of Defense 

(SECDEF) to conduct personnel 

management demonstration projects at 

Department of Defense (DoD) 

laboratories designated as Science and 

Technology Reinvention Laboratories 

(STRLs). Section 1107 of Public Law 

110–181, as amended by section 1109 of 

Public Law 110–417, requires the 

SECDEF to execute a process and plan 

to employ the Department’s personnel 

management demonstration project 

authorities found in section 4703 of title 

5, United States Code (U.S.C.) at the 

STRLs enumerated in section 9902(c)(2) 

of title 5 U.S.C., as redesignated in 

section 1105 of Public Law 111–84 and 

73 Federal Register (FR) 73248, to 

enhance the performance of the 

missions of the laboratories. Section 

1107 of Public Law 110–181 further 

authorizes in subsection 1107(c) that 

any flexibility available to any 

demonstration laboratory shall be 

available for use at any other laboratory 

as enumerated in section 9902(c)(2) of 

title 5 U.S.C. The Office of Naval 

Research (ONR) is listed as one of the 

designated STRLs. 

This notice announces the approval of 

the final personnel demonstration 

project plan for the ONR. This includes 

adoption of existing demonstration 

project flexibilities in other STRL 

demonstration project plans and any 

necessary modifications thereto for 

better conformance to the ONR mission 

requirements and culture. 

DATES: Implementation of this 

demonstration project will begin no 

earlier than December 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Office of Naval Research: Ms. Margaret 

J. Mitchell, Director, Human Resources 

Office, Office of Naval Research, 875 

North Randolph Street, Code 01HR, 

Arlington, VA 22203; 

Margaret.J.Mitchell@navy.mil. 

DoD: Ms. Betty A. Duffield, CPMS– 

PSSC, Suite B–200, 1400 Key 

Boulevard, Arlington, VA 22209–5144 

SUPPLEMENTARY INFORMATION: 

1. Background 

Since 1966, many 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. Pursuant to the authority 

provided in section 342(b) of Public 

Law 103–337, as amended, a number of 

DoD STRL personnel demonstration 

projects were approved. These projects 

are ‘‘generally similar in nature’’ to the 

Department of Navy’s ‘‘China Lake’’ 

Personnel Demonstration Project. The 

terminology, ‘‘generally similar in 

nature,’’ does not imply an emulation of 

various features, but rather implies a 

similar opportunity and authority to 

develop personnel flexibilities that 

significantly increase the decision 

authority of laboratory department 

heads and/or directors. 

This demonstration project involves: 

(1) Streamlined delegated examining; (2) 

noncitizen hiring; (3) expanded detail 

authority; (4) extended probationary 

period for newly hired employees; (5) 

expanded temporary promotion; (6) 

voluntary emeritus program; (7) pay 

banding; (8) contribution-based 

compensation system; (9) performancebased reduction-in-pay or removal 

actions; and (10) reduction-in-force 

(RIF) procedures. 

2. Overview 

DoD published notice in 73 FR 73248, 

December 2, 2008, that pursuant to 

subsection 1107(c) of Public Law 110– 

181 the three STRLs listed in 73 FR 

73248 not having personnel 

demonstration projects at this time may 

adopt the flexibilities of the other 

laboratories listed in subsection 

9902(c)(2), as redesignated in section 

1105 of Public Law 111–84. ONR is one 

of the three STRLs specified in this 

provision. 

Accordingly, ONR intends to build its 

demonstration project using flexibilities 

adopted from existing STRL 

demonstration projects (specifically the 

Naval Research Laboratory (NRL), 

Aviation Missile Research, Development 

and Engineering Center (AMRDEC), 

Medical Research and Materiel 

Command (MRMC), and 

Communications-Electronics Research, 

Development and Engineering Center 

(CERDEC)). Final plans for the NRL, 

AMRDEC, MRMC, CERDEC personnel 

management demonstration projects 

were published in Federal Registers as 

follows: 

• Department of the Navy: NRL—64 

FR 33970, June 24, 1999. No 

amendments have been published; 

• Department of the Army: 

AMRDEC—62 FR 34876 and 62 FR 

34906, June 27, 1997; and amendments 

and/or corrections to final plans 

published—64 FR 11074, March 8, 

1999; 64 FR 12216, March 11, 1999; 65 

FR 53142, August 31, 2000; and 67 FR 

5716, February 6, 2002; 

• Department of the Army: MRMC— 

63 FR 10439, March 3, 1998; and 

amendments and/or corrections to final 

plans published—64 FR 30377, June 7, 

1999; 64 FR 12216, March 11, 1999; 65 

FR 53142, August 31, 2000; and 67 FR 

5716, February 6, 2002; and 

• Department of the Army: CERDEC— 

66 FR 10439, October 30, 2001. 

On May 28, 2010, DoD published the 

proposed ONR demonstration project 

plan in 75 FR 30918. During the public 

comment period ending June 28, 2010, 

DoD received comments from 22 

individuals. All comments were 

carefully considered. 

The following summary addresses the 

comments received, provides responses, 

and notes resultant changes to the 

original proposed project plan. Most 

commenters addressed several topics 

which are counted separately. Thus, the 

total number of comments exceeds the 

number of individuals cited earlier. 

A. General Project Comments 

(1) Comment: Five commenters 

addressed the necessity and wisdom of 

implementing a laboratory personnel 

demonstration project at ONR 

considering the recent repeal of the DoD 

National Security Personnel System 

(NSPS), and that the implementation of 

a demonstration project similar to NSPS 

could not improve overall performance 

of an above-average organization and 

could only create controversial concerns 

for ONR’s workforce. 

Response: Government studies have 

validated the need for establishing 

different personnel systems within 

STRLs. There are currently eight 

operating STRL Personnel 

Demonstration Projects with another 

seven STRL personnel demonstration 

projects pending expected 

implementation between December 

2010 and April 2011. These seven 

STRLs were mandated to implement a 

demonstration project within eighteen 

months of enactment of NDAA for FY 

2010 (Public Law 111–84) by section 

1105 of that law. Regarding the 

similarity to NSPS, ONR’s 

demonstration project does have 

foundational similarities, but its rating 

and payout structures differ from NSPS. 


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(2) Comment: One commenter wanted 

to know what the reasons are behind 

ONR’s decision to implement a 

demonstration project. 

Response: Section 1105 of Public Law 

111–84 requires all STRLs named 

therein to implement a demonstration 

project within 18 months of the 

enactment of the law. Regardless of the 

legal mandate to implement a 

demonstration project, ONR has 

displayed a continued interest in having 

a demonstration project since 2001. 

Since that time, ONR leadership has 

believed that a personnel demonstration 

project will enable greater overall 

organizational effectiveness, enable 

ONR to sustain a quality workforce, 

improve overall employee satisfaction, 

and ultimately improve ONR’s ability to 

achieve its mission. 

(3) Comment: One commenter felt that 

the implementation of a demonstration 

project performance management 

system will be overly cumbersome, 

elaborate, and time consuming. 

Response: The performance 

management system to be carried out 

under the demonstration project will 

require more attention from employees 

and supervisors when compared to the 

General Schedule’s performance 

management system. The demonstration 

project places a greater emphasis on 

performance management by utilizing 

the concepts of cascading, line-of-sight 

goals and on-going performance 

communications. Organizations 

employing such techniques in their 

performance management systems 

experience increased productivity and 

customer satisfaction. A primary goal of 

the performance management system 

under ONR’s demonstration project is to 

facilitate a decrease in misdirected work 

activities, and as a result, provide 

meaning and distinguishing value to the 

employee’s work and contributions. 

(4) Comment: Three commenters 

questioned ONR’s decision to adopt the 

Naval Research Laboratory’s 

demonstration project, as they do not 

see a similarity between NRL’s and 

ONR’s operation, location, and 

workforce structure. 

Response: Although there are some 

important differences between work 

performed by NRL and ONR, there are 

close similarities between the 

workforces. Just like NRL, ONR has a 

highly educated and experienced 

workforce, with expertise in science, 

engineering, acquisition/contracting, 

finance, and other professional areas. 

The demonstration project programs 

that were designed to attract, motivate, 

reward, and retain the NRL workforce 

have been carefully reviewed by ONR 

management to be sure they are right for 

the ONR workforce. Where needed, 

some modifications to NRL’s programs 

have been made to better suit ONR’s 

workforce needs and culture. The 

demonstration project programs are not 

dependent on where the employees are 

physically working, but rather they 

make up a new system for the Command 

to manage and reward all employees’ 

work and contributions consistently and 

fairly. 

(5) Comment: Two commenters 

inquired about the possibility of 

conducting a pilot demonstration 

project at ONR Headquarters to test the 

demonstration project programs prior to 

implementation at the regional or global 

offices. 

Response: As established by section 

1105 of Public Law 111–84, ONR must 

implement a demonstration project 

before the end of April 2011 for all 

eligible employees, regardless of the 

location of their official duty station. 

Due to the deadline of this mandate, 

there is not sufficient time to design, 

implement, and test a small pilot before 

activating the demonstration project for 

all eligible ONR employees. 

(6) Comment: One commenter 

believed that the WIGI buy-in 

calculation is flawed for OCONUS 

employees because the formula assumes 

everyone receives locality pay. This was 

specifically in reference to paragraph 5 

on page 30217 stating that special salary 

employees will be eligible to receive full 

locality pay and OCONUS employees do 

not receive locality pay. 

Response: The determination of basic 

pay (not including locality pay or a 

special salary rate) is the foundation of 

the formula for both the WIGI buy-in 

and the recalculation of pay for an 

employee on a special salary rate. Once 

the new basic pay is determined in 

either situation, any WIGI buy-in is 

added to the new basic pay and the sum 

is multiplied by a locality pay 

percentage, if appropriate. If the new 

basic pay exceeds the maximum for the 

current pay band, the employee will be 

granted maintained pay. 

(7) Comment: One commenter asked 

how Living Quarters Allowance (LQA) 

and post allowance levels established by 

the Department of State Standardized 

Regulations (DSSR) would be 

determined under Lab Demo. 

Response: Typically, personnel 

demonstration projects determine a 

General Schedule grade equivalency 

using their conversion out of the 

demonstration project schema to 

determine entitlements to such items as 

Living Quarters Allowance, training, 

base housing, etc. The equivalent 

General Schedule grade is then used to 

compare with the entitlement 

requirements. For example, the demo 

General Schedule equivalency grade 

would be compared to the LQA matrix 

chart containing GS grades in section 

135.2 of the DSSR to determine 

comparable LQA entitlements. 

(8) Comment: One commenter asked 

how the Global offices will be supported 

when there is a large time-zone 

difference and ONR’s Human Resource 

(HR) department is not opened 24 hours 

a day. 

Response: ONR’s Global offices will 

continue to receive the same high level 

of support under the demonstration 

project as they do currently under the 

General Schedule. Based on the 

experience of other previously 

implemented personnel demonstration 

projects, ONR does not anticipate any 

issues associated with the 

demonstration project that would 

require routine around-the-clock access 

to the Headquarters HR Department. 

ONR HR will endeavor to respond to 

any concern within 24 hours on demo 

issues and make accommodations for 

their Global customers to ensure 

continued enhanced customer 

satisfaction. 

(9) Comment: One commenter noted 

that ONR has primarily adopted NRL’s 

STRL personnel demonstration project, 

and used in its FRN the language from 

NRL’s original FRN. A proposed 

amendment has since been written by 

NRL and the commenter recommended 

that ONR review NRL’s proposed 

amendment and adopt the suggested 

changes as appropriate. The commenter 

also recommended ONR review the 

minor changes that NRL made as well 

and include those where appropriate. 

Response: ONR agrees with the 

commenter and has carefully reviewed 

NRL’s amendment and list of minor 

changes. ONR has modified the FRN in 

a number of places as a result of this 

review and those changes are listed in 

the subsequent summary of substantive 

changes. 

B. CCS Appraisal Process 

(1) Comment: One commenter 

expressed concern that employees will 

be told verbally by their supervisors to 

expect a certain Overall Contribution 

Score (OCS) and payout but the actual 

payout amount received would be less 

than what the employee was led to 

expect by their supervisor. 

Response: Under ONR’s 

demonstration project, standard 

operating procedures and policies will 

be such that employees receive 

notification of their OCS and adjusted 

basic pay including locality only after a 

final decision has been rendered by the 

Pay Pool Panel. Employees are not to be 


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made aware of their initial suggested 

score provided by their supervisor or 

potential adjusted basic pay prior to the 

Pay Pool Manager’s approval of the Pay 

Pool Panel’s final decision. 

(2) Comments: Fairness: Six 

commenters stated concerns about the 

equitable application of the evaluations 

made under the Contribution-based 

Compensation System (CCS). Two 

commenters thought the system was too 

subjective and favoritism would drive 

the process. One commenter expressed 

concern that more credit would be given 

to scientific than support personnel. 

One commenter felt that the CCS system 

would only reward supervisors for 

outcomes and ultimately create a 

negative working environment for their 

subordinates. Two commenters 

discussed the need for a 360-degree 

performance evaluation plan for 

supervisors to ensure accountability for 

their performance management duties. 

Response: To promote fairness and 

reduce favoritism, the CCS process 

provides for review of employee 

assessments by a group of supervisory 

officials who are in the same pay pool. 

In the pay pool panel process, scores 

assigned by individual supervisors are 

reviewed by other supervisors in the 

same pay pool. The supervisors work to 

apply the CCS level descriptors 

consistently within their pay pool, and 

to identify and correct any 

inappropriately inflated or deflated 

scores. The pay pool manager provides 

an additional level of review and is the 

ultimate approval level. CCS contains 

various mechanisms to ensure 

employees receive proper credit under 

the generic contribution elements, 

descriptors, and discriminators. 

Contribution elements may be weighted, 

expectations and results to be achieved 

for the work assigned may be described 

in supplemental criteria, and 

discriminators may be considered either 

separately or in a more integrated 

manner for groups of employees. 

Meaningful assessment demands 

consideration of quality, value, 

customer service, and other criteria can 

be established early in the cycle and 

described in supplemental information 

to the CCS factors. Flexibility was 

deemed necessary for individual 

divisions to tailor the system to their 

special needs. Supervisors will continue 

to determine the value of employees’ 

accomplishments when assessing their 

contributions. Work valued under the 

current system will continue to be 

valued under CCS. In addition, 

supervisors and employees will be 

encouraged to communicate throughout 

the appraisal period to avoid 

misunderstandings at the end of the 

year. 

The primary benefit expected from 

Lab Demo is greater organizational 

effectiveness through increased 

supervisor and employee interaction 

leading to enhanced employee 

involvement, communication, 

understanding, satisfaction, and 

productivity. Lab Demo training, 

targeting the CCS process and goals, has 

been rolled out across the Command to 

ensure a synonymous understanding of 

performance management practices for 

both employees and supervisors, and to 

ensure that proper performance 

management techniques will occur 

under CCS. The CCS performance 

management process is designed to help 

supervisors create a performance culture 

in which the performance and 

contributions of the workforce are 

linked to the ONR mission. This in turn 

will add meaning to the employee’s job 

and contributions. 

Supervisors will be held accountable 

for their performance management 

duties under CCS. The CCS contribution 

elements and level descriptors 

specifically include expectations 

regarding performance management and 

workforce development to recognize the 

importance of this value at ONR. 

The managers/second-line supervisors 

have always been free to solicit feedback 

from subordinate employees and other 

customers to consider in assessing and 

appraising the supervisory effectiveness 

of their direct subordinates and their 

employees. This will continue to be an 

option under CCS. However, a formal 

program providing for 360-degree 

evaluations for supervisors has not 

currently been implemented. ONR has 

also provided mandatory hands-on 

training for supervisors that emphasized 

supervisory responsibilities and how to 

engage employees in the performance 

management process. In addition, 

supervisor performance will be 

evaluated as an enhancement of the 

normal pay pool process. 

(3) Comment: One commenter 

questioned the use of the CCS terms 

Overcompensated and 

Undercompensated. The commenter felt 

that both terms have a negative 

connotation and will not be received 

well by the workforce. 

Response: ONR agrees these terms 

could have a potential negative 

connotation to some employees. 

However, because ONR is adopting the 

CCS automated system from NRL where 

these terms are hosted, ONR has 

decided to adopt these terms as well in 

order to make efficient use of available 

resources. Other demos have used and 

are using these terms, including NRL 

which has not experienced any 

difficulties as a result of this 

terminology. It is important to note that 

the over- and undercompensated 

nomenclature do not reflect employees’ 

work ethic and/or the value of their 

work. 

(4) Comment: One commenter stated 

that the grouping of different General 

Schedule (GS) grades in the same pay 

band and pay pool will not incentivize 

the workforce to take on supervisory/ 

team lead positions; instead, it will 

inhibit one’s decision to take on a 

leadership role since, for example, a 

GS–14 could potentially make the same 

amount as a GS–15 without taking on 

the added leadership responsibilities. 

Response: This commenter may have 

misunderstood the purpose and intent 

behind pay banding (grouping GS 

grades into one pay band). One of the 

goals of ONR’s demonstration project is 

to provide a compensation system that 

will provide more flexibility to enable 

ONR to compensate its employees 

equitably at a rate that is commensurate 

with their levels of responsibility and 

contribution, and is more competitive 

with those found in the labor market. 

Although the General Schedule system 

did allow an organization to distinguish 

levels of performance and provide 

different levels of rewards, the 

demonstration project will provide more 

authority and flexibility for ONR to 

utilize a wider variety of recognition. By 

implementing pay banding, ONR will 

have the opportunity to provide a more 

direct link between levels of individual 

contribution and the compensation 

received. ONR will be able to 

compensate their workforce in a manner 

that is appropriate to their contribution. 

Basic pay increases will no longer be 

automatic under Lab Demo. Therefore, 

the workforce should have increased 

motivation to take on leadership and/or 

supervisory roles in order to have a 

higher contribution, thus having 

eligibility for a larger payout. In 

addition, ONR has decided to adopt a 

Supervisory Pay Adjustment and 

Differential flexibility providing even 

additional incentive for the workforce to 

take on supervisory/team lead positions. 

(5) Comment: One commenter noted 

that the Contribution Elements had not 

yet been finalized by leadership and 

still needed to be reviewed and possibly 

modified. 

Response: This commenter is correct 

and ONR’s leadership has reviewed and 

modified the Contribution Elements as 

needed. The revised Contribution 

Elements are included in this version of 

the FRN. 

(6) Comment: One commenter noted 

that OCSs against normal pay range 


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would actually not be available until 

January; therefore, any reference to 

providing them at the beginning of the 

performance assessment cycle was 

incorrect. 

Response: ONR agrees and has 

modified the FRN to reflect that OCSs 

applicable to an employee’s normal pay 

range for each appraisal period will be 

available when pay actions are effected 

in January. 

C. Compensation 

(1) Comment: Two commenters had 

questions pertaining to those 

individuals who are at the top of their 

pay band and questioned how under the 

new system those employees would 

receive any benefit; whether these 

individuals could receive additional 

compensation, and how the system 

specifically would benefit, those that 

were assigned to a pay band that hosted 

only one GS grade. 

Response: If an employee’s basic pay 

is at the top of the pay band, s/he can 

receive a pay increase that is 

commensurate with the general increase 

designated by Congress for that year. An 

employee whose basic pay is at the 

maximum of her/his pay band may 

receive recognition through a 

contribution award, Time-off Award, or 

a combination of both. For those 

employees entering into a pay band that 

hosts only a single grade, they will only 

be eligible for basic pay assigned to that 

pay band. However, the employee may 

have the opportunity to advance to a 

pay band with a higher maximum basic 

pay through a CCS promotion, if 

appropriate. 

(2) Comment: One commenter 

expressed concern over the possibility 

of the science and engineering 

professionals’ pay pool receiving 

disproportionate funding over the other 

pay pools in order to provide greater 

benefit to those in the Science and 

Engineering Career Track with greater 

bonuses and basic pay increases over 

others at ONR. 

Response: The pay pool funding 

normally will be set percentages of the 

total basic pay of all eligible employees 

in a specific pay pool. The pay pool 

funding percentages are the same for all 

pay pools. The percentage of basic pay 

allotted for basic pay increases for 

employees in the ONR pay pools will be 

the same for each pay pool, and the 

percentage of basic pay allotted for 

contribution bonuses will also be the 

same for each pay pool. For example, if 

the total basic pay of the employees in 

Pay Pool A is $1,000,000 and the total 

basic pay of the employees in Pay Pool 

B is $2,000,000, then the pay pool 

funding for performance-based 

contribution awards (using ONR’s 

historical percentage of 1.5% for 

contribution-based bonuses) would be 

$15,000 for Pay Pool A and $30,000 for 

Pay Pool B to be distributed among their 

respective members based on 

contribution. 

(3) Comment: Four commenters 

suggested for ONR to adopt a flexibility 

for Supervisory Pay Differentials and 

Adjustments to compensate supervisors 

for their additional performance 

management responsibilities and 

workload. 

Response: ONR agrees with the 

commenters and has adopted CERDEC’s 

flexibility for a Supervisory Pay 

Differential and Adjustment. 

(4) Comment: One commenter 

expressed concern that a decision could 

be made by the pay pool panel to 

decrease an employee’s compensation. 

Response: Under CCS, as with the 

General Schedule, an employee’s salary 

can only decrease as a result of an 

adverse or performance-based action. 

This requirement currently operates 

under the General Schedule and will be 

retained by the demonstration project to 

preserve an emphasis on employee 

performance and conduct under a 

contribution-based compensation 

system. The CCS rating system by itself 

does not implement any mechanism to 

decrease an employee’s basic pay. 

During the actual CCS rating process 

and pay pool panel deliberations an 

employee’s basic pay will not be 

decreased. If based on the OCS and 

current salary an employee is assessed 

to be in the Overcompensated category 

then that employee would not be 

eligible for a merit increase or 

contribution award, and may or may not 

receive a general increase. They would 

still receive locality pay. 

(5) Comment: One commenter noted 

the adjusted minimum basic rate of pay 

for the S&E Professional Level V needs 

to be adjusted to be 120% of the GS–15, 

step 1, basic pay rate for 2010, or 

$119,554. 

Response: ONR agrees and has made 

the change where applicable in the FRN. 

D. Accessions and Internal Placements 

(1) Comment: One Commenter 

expressed the need for ONR to have Lab 

Demo training required for all new 

hires. 

Response: ONR agrees and will make 

Lab Demo training mandatory for all 

new employees and new supervisors. 

(2) Comment: One commenter 

questioned if veterans’ preference still 

applied under the demonstration project 

and if ONR’s demonstration project 

complied with laws protecting veterans 

and disabled veterans. 

Response: All statutes and regulations 

covering veterans’ preference will be 

observed under all lab demonstration 

programs. 

E. Technology 

(1) Comment: One commenter 

expressed the concern that the RIF 

Support Systems (RIFSS) could not 

accommodate NRL’s need and ONR 

should reconsider if they will still use 

this system or adopt another. 

Response: ONR agrees and prior to 

committing specifically to RIFSS will 

look closely at the system’s availability 

and capacity. 

(2) Comment: One commenter pointed 

out that DCPDS is no longer a legacy 

system. 

Response: ONR agrees and the 

language in Section X.B. has been 

modified accordingly. 

(3) Comment: One commenter noted 

that ONR does not intend to use the 

COREDOC application to generate RDs. 

Response: The commenter is correct 

and ONR will be using RDWriter 

instead. The language in Section X.C. 

has been updated to reflect the correct 

tool intended to be used. 

F. Classification 

(1) Comment: Three commenters did 

not believe that some of the 

occupational series were correctly 

aligned with the proper career tracks; 

one stated that 0335, Computer Clerk 

series, was listed under both 

Administrative Support and 

Administrative Specialist and 

Professional and only belonged in the 

Administrative Support Career Track; 

the second stated that 0110, Economist 

series, should be moved to the S&E 

Professional Career Track because of the 

similarities to the education 

requirements and other social science 

professions included in that Career 

Track; and a third stated that 0802, 

Engineering Technician series, should 

not be in the Science and Engineering 

Professional Career Track but rather in 

the Administrative Specialist and 

Professional Career Track. 

Response: ONR management agrees 

with the reasoning of the first 

commenter. Therefore, occupational 

series 0335 will only be aligned with the 

Administrative Support Career Track. 

Based on the work being done, the 

qualifications required, and how other 

STRLs, such as the Air Force Research 

Laboratory, have classified 0110, ONR 

management disagrees with the second 

commenter and occupational series 

0110 will remain in the Administrative 

Specialist & Professional Career Track. 

In the case of the third commenter, ONR 

management agrees and since ONR does 


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not have a technical career track, the 

proper classification for 0802 is the 

Administrative Specialist and 

Professional Career Track. 

(2) Comment: Seven commenters felt 

that the construction of the pay band 

levels for the Administrative Specialist 

and Professional Career Track is either 

unfair or biased. One commenter 

specifically noted pay band IV in the 

Administrative Specialist and 

Professional career track sets an unfair 

barrier for those employees who are 

currently a GS–13, and in turn signals 

that their work is of less importance and 

therefore is not mixed with higher GS 

grades. Six commenters specifically 

questioned why the Administrative 

Specialists and Professionals Career 

Track does not have an Above 15 Pay 

Band the same way the S&E 

Professionals Career Track does and feel 

it unfairly elevates the importance of the 

S&E group over the Administrative 

Specialist and Professionals. 

Response: In accordance with DoD 

Instruction 1400.37, pages 73248 to 

73252 of volume 73, ONR’s 

demonstration project was modeled 

after the demonstration project 

implemented at NRL. During the initial 

review of ONR’s demonstration project, 

ONR leadership learned that any change 

to the NRL pay band structure would 

have created a year’s delay in 

implementing ONR’s demonstration 

project, due to additional approval and 

IT system modification requirements. 

Given the NDAA requirement that ONR 

be under a Lab Demo before the end of 

April 2011, an additional year to 

implement was not an option. ONR 

leadership evaluated NRL’s pay bands 

and concluded that the NRL structure 

would work with ONR’s current career 

paths and GS breakdown of the 

workforce. ONR leadership decided to 

move forward with the NRL pay band 

structure. Operational procedures and 

guidelines will address any unintended 

limitations that this structure would 

impose on the career progression of 

ONR employees. For example, there will 

be procedures for non-competitive 

promotion between bands (if in a career 

ladder position or if warranted by level 

of work and value of contributions). 

ONR made the decision to participate 

in the DoD initiative to implement an 

Above 15 Pay Band for scientific and 

engineering professionals in order to 

take advantage of an opportunity to 

correct a critical void in classification 

standards and guidance for civilian 

senior executive Scientific and 

Professional (ST) and Senior Executive 

Service (SES) positions. This void 

impacted an organization’s ability to 

advance scientific and engineering 

positions which surpass the GS–15 

classification criteria because of the 

combination of excellent scientific and/ 

or engineering expertise and 

performance of high-level science and 

technology (S&T) research and 

development work with significant 

technical supervisory and managerial 

responsibilities comprising 25 percent 

or more of the position’s time. These 

positions were not considered to be 

appropriately classified as STs because 

of the degree of supervisory and 

managerial responsibilities. Conversely, 

these positions were not appropriately 

classified as SES positions because of 

their requirement for highly specialized 

scientific or engineering expertise and 

because the positions were not at the 

level of general managerial authority 

and impact required for an SES 

position. 

(3) Comment: Two commenters 

questioned ONR’s proposed pay band 

grade composition and if it was the most 

suitable structure for ONR. One 

commenter suggested that both the S&E 

Professional and Administrative 

Specialist and Professional Career 

Tracks should be modified to have GS– 

5 through GS–13 in one pay band. 

Another commenter suggested that a 

specific position could be more easily/ 

appropriately filled if the 

Administrative Support Career Track 

pay bands were modified to include at 

least up to a GS–12 level. 

Response: As stated in the response to 

previous comments, ONR leadership 

evaluated NRL’s pay bands and 

concluded that the NRL structure would 

work with ONR’s current career paths 

and GS breakdown of the workforce. 

The different pay band structures in the 

Career Tracks support the various levels 

of duties, qualifications, and types and 

scope of work encompassed by ONR’s 

position management structure. 

Therefore, ONR management considers 

the NRL pay banding scheme 

appropriate at this time. Since many 

aspects of a demonstration project are 

experimental, modifications may be 

made from time to time as experience is 

gained, results are analyzed, and 

conclusions are reached on how the 

new system is working. 

(4) Comment: One commenter 

questioned the approval process 

designated for promotions under ONR’s 

demonstration project. The commenter 

felt that including the CNR’s approval 

for certain promotions (laid out in 

section IV.C.8) would slow down the 

promotion process and actual create a 

more inflexible system for promotions. 

Response: ONR agrees with the 

commenter’s concern and has made the 

appropriate change under section 

IV.C.8. It is not ONR’s intent to make 

the promotion process less flexible 

under the demonstration project. Thus, 

all individuals covered under the 

demonstration project who are eligible 

for a promotion will need a promotion 

nomination by their supervisor, 

endorsement from the pay pool panel, 

and final approval by the pay pool 

manager. CCS Promotions under the 

demonstration project will not need 

approval beyond the pay pool manager. 

(5) Comment: One commenter stated 

that the Career Promotion Eligibility 

clause needed to be expanded to 

include those employees who may be 

eligible for an established career ladder 

promotion to a grade encompassed in 

the next higher pay band during the first 

12 months of the demonstration project 

and as a result would advance into a 

higher pay band. 

Response: ONR agrees with the 

commenter’s point and the Career 

Promotion Eligibility clause in the FRN 

has been modified to also cover 

previously established career ladders 

which would contain a career 

promotion that would be into a higher 

pay band within the first 12 months of 

the demonstration project if 

recommended and the employee meets 

all requirements. The FRN language has 

been edited to make this clause clearer. 

G. Formatting and Language 

(1) Comment: Eight commenters made 

note of various places in the FRN where 

language was inconsistently used or 

information was not consistent; the term 

pay band should be used in places 

where the term career level was used 

instead; score ranges and basic pay 

information listed in the appendices 

was in some instances different than 

what was listed in the main part of the 

document; in various places footnotes 

do not show up in the correct place or 

are non-existent; in the normal pay 

range graph in the appendix it should 

read mid-rail and not med-rail; and 

Figure 4 is missing the word ‘review’ for 

Administrative Support Career Track 

pay band III. 

Response: ONR agrees and has made 

these appropriate changes and 

corrections to formatting and the text. 

(2) Comment: Three commenters 

noted places where language was vague 

and needed to be clarified; the language 

in section VI.A.4 was noted to be 

unclear; the language in section IV.C.2 

and 3 is unclear if there will only be one 

pay pool manager; and section VI.A.3 

the language was noted as not being 

clear if this was a prorated portion. 

Response: ONR agrees and in each of 

the sections listed above the language 

has been edited for clarification. 


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3. Demonstration Project Notice 

Changes 

The following is a summary of 

substantive changes and clarifications 

which have been made to the project 

proposal. 

A. Supplementary Information, 

Overview. Added MRMC and CERDEC 

to the list of existing STRL 

demonstration projects from which ONR 

is using flexibilities to build its 

demonstration project. 

B. III.H.2. Internal Actions. Added a 

flexibility for Supervisory Pay 

Adjustments and Supervisory Pay 

Differentials. 

C. IV.A.1.d. Fair Labor Standards Act. 

Corrected Figure 4 by including the 

word ‘review’ for Pay Band III of the 

Administrative Support career track. 

D. IV.C.4. Annual CCS Appraisal 

Process. The current FRN states that 

employees will be notified of the 

Overall Contribution Scores (OCSs) 

which correspond to each employee’s 

Normal Pay Range (NPR) at the 

beginning of the appraisal period. This 

is corrected to state that OCSs which 

correspond to each employee’s NPR will 

be available after pay adjustments have 

been processed, normally early-to-mid 

January. 

E. IV.C.4 and 5. Annual CCS 

Appraisal Process and Exceptions. 

Provision added that requires 

employees who serve less than 90 days 

during an appraisal cycle to receive a 

presumptive rating of acceptable. 

F. IV.C.4. Annual CCS Appraisal 

Process. In order to ensure compliance 

with state bar rules a provision was 

added that prohibits the pay pool panel 

from changing CCS scores on ONR 

attorneys provided by the ONR Counsel. 

G. IV.C.4 and 5. Exceptions. Clarified 

the conditions for which employees 

who would normally be exempted from 

the CCS process may still be given a 

CCS score. 

H. IV.C.8.b. Career Movements based 

on CCS. Corrected to state that it is the 

ONR Executive Director and not the 

CNR which must approve certain 

promotions. 

I. IV.C.9. Grievance Process. Modified 

to clarify the process; prevent the need 

for the ONR Executive Director from 

possibly deciding the same grievance 

twice; inform employees that the 

contents of the CCS Plans are 

nongrievable as were the contents of 

performance plans in the traditional 

performance management system; and 

ensure compliance with state bar rules. 

J. VI.A.3. WGI Buy-in. Added 

clarifying language to state that 

employees will be provided a prorated 

portion. 

K. VI.A.4. Career Promotion 

Eligibility. Modified to state that an 

exception will also be made for 

employees who become eligible for a 

career ladder promotion during the first 

12 months after conversion if their 

promotion would cause them to move to 

a higher pay band. Examples included 

providing greater clarity to the entire 

section. 

L. VI.D. New Hires. Modified to add 

that mandatory demonstration project 

training will be provided to new 

employees and new supervisors. 

M. VI.D.3. New Hires. Provided 

clarification for Federal employees who 

are on retained pay or who are receiving 

special salary rates and are moving into 

the ONR demonstration project. 

N. VI.E.1.Grade Determination. 

Clarified conversion-out rules when 

there are more than two GS grade levels 

in a career field. 

O. X. Automation. Clarified that 

DCPDS is not a legacy system, that RD 

Writer will be used instead of 

COREDOC, and that the automated tool 

RIFSS will not specifically be used. 

P. Appendix A. Updated chart based 

on the addition of the supervisory pay 

adjustment and differential flexibility, 

and added the MRMC Career Promotion 

flexibility which had mistakenly been 

left out previously. 

Q. Appendix B. Added required 

waivers for; the Supervisory Pay 

Adjustment and Differential Flexibility; 

the presumptive rating of acceptable for 

employees who serve less than 90 days, 

and the Voluntary Emeritus Program 

(which were erroneously left out 

previously). 

R. Appendix D. Corrected 0335, 

Computer Clerk series, to be listed only 

under the Administrative Support 

career track and moved the 0802 series 

to the Administrative Specialist and 

Professional Career Track. 

S. Appendix E. Science & Engineering 

Professional contribution elements were 

updated to provide additional 

clarification of the discriminators. 

T. Appendix F. Integrated pay chart 

was updated to reflect the minimum 

basic pay for S&E pay band V as 

$119,554. 

4. Access to Flexibilities of Other STRLs 

Flexibilities published in this Federal 

Register shall be available for use by the 

STRLs previously enumerated in section 

9902(c)(2) of title 5 United States Code, 

which are now designated in section 

1105 of the NDAA for FY 2010, Public 

Law 111–84, 123 Stat. 2486, October 28, 

2009, if they wish to adopt them in 

accordance with DoD Instruction 

1400.37; pages 73248 to 73252 of 

volume 73, Federal Register; and the 

fulfilling of any collective bargaining 

obligations. 

Dated: December 2, 2010. 

Patricia Toppings, 

OSD Federal Register Liaison Officer, 

Department of Defense. 

Table of Contents 

I. Executive Summary 

II. Introduction 

A. Purpose 

B. Problems with the Current System 

C. Waivers Required 

D. Expected Benefits 

E. Participating Organizations and 

Employees 

F. Project Design 

III. Accessions and Internal Placements 

A. Hiring Authority 

1. Background 

2. Delegated Examining 

B. Legal Authority 

C. Determining Employee and Applicant 

Qualifications 

D. Noncitizen Hiring 

E. Expanded Detail Authority 

F. Extended Probationary Period 

G. Definitions 

1. Basic Pay 

2. Maintained Pay 

3. Promotion 

4. Reassignment 

5. Change to Lower Pay Band 

6. Pay Adjustment 

7. Detail 

8. Highest Previous Rate 

9. Approving Manager 

H. Pay Setting Determinations Outside the 

CCS 

1. External New Hires 

2. Internal Actions 

a. Promotion. 

b. Pay Adjustment (Voluntary Change to 

Lower Pay) or Change to Lower Pay Band 

(except RIF). 

c. Pay Adjustment (Involuntary Change to 

Lower Pay) or Change to Lower Pay Band 

Due to Adverse or Performance-based 

Action. 

d. Involuntary Change to Lower Pay Band 

or Reassignment to a Career Track with 

a Lower Salary Range, Other than 

Adverse or Performance-based. 

e. RIF Action (including employees who 

are offered and accept a vacancy at a 

lower pay band or in a different career 

track). 

f. Upward Mobility or Other Formal 

Training Program Selection. 

g. Return to Limited or Light Duty From a 

Disability as a Result of Occupational 

Injury to a Position in a Lower Pay Band 

or to a Career Track With Lower Basic 

Pay Potential Than Held Prior to the 

Injury. 

h. Restoration to Duty 

i. Reassignment 

j. Student Educational Employment 

Program 

k. Hazard Pay or Pay for Duty Involving 

Physical Hardship 

l. Supervisory Pay Adjustments 

m. Supervisory Pay Differentials 

I. Priority Placement Program (PPP) 

J. Expanded Temporary Promotion 


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K. Voluntary Emeritus Program 

IV. Sustainment 

A. Position Classification 

1. Career Tracks and Pay Bands 

a. Target Pay Band 

b. Occupational Series and Position Titling 

c. Classification Standards 

d. Fair Labor Standards Act (FLSA) 

(1) Guidelines for FLSA Determinations 

(2) Nonsupervisory and Leader Positions 

(3) Supervisory Positions 

2. Requirements Document (RD) 

3. Delegation of Classification Authority 

a. Delegated Authority 

b. Position Classification Accountability 

B. Integrated Pay Schedule 

1. Annual Pay Action 

2. Overtime Pay 

3. Classification Appeals 

4. Above GS–15 Positions 

5. Distinguished Contributions Allowance 

(DCA) 

a. Eligibility 

b. Nomination 

c. Reduction or Termination of a DCA 

d. Lump-Sum DCA Payments 

e. DCA Budget Allocation 

f. Concurrent Monetary Payments 

C. Contribution-Based Compensation 

System (CCS) 

1. General 

2. CCS Process 

3. Pay Pool Annual Planning 

a. Element Weights and Applicability 

b. Supplemental Criteria 

4. Annual CCS Appraisal Process (See 

Figure 7) 

5. Exceptions 

6. Normal Pay Range (NPR)—Basic Pay 

Versus Contribution 

7. Compensation 

a. General Increases 

b. Merit Increases 

c. Locality Increases 

d. Contribution Awards 

8. Career Movement Based on CCS 

a. Advancements in Pay Band Which May 

Be Approved by the Pay Pool Manager 

b. Advancements in Pay Band Which Must 

Be Approved by the Executive Director 

c. Advancement To Pay Band V of the 

Science and Engineering (S&E) 

Professional Career Track 

d. Regression to Lower Pay Band (See 

Figure 8, ‘‘Employee A’’) 

9. CCS Grievance Procedures 

V. Separations 

A. Performance-Based Reduction-in-Pay or 

Removal Actions 

B. Reduction-in-Force (RIF) Procedures 

1. RIF Authority 

2. RIF Definitions 

a. Competition in RIF 

b. Competitive Area 

c. Competitive Level 

d. Service Computation Date (SCD) 

(1) Federal SCD 

(2) CCS Process Results 

(3) Credit From Other Rating Systems 

(4) RIF Cutoff Date 

3. Displacement Rights 

a. Displacement Process 

b. Retention Standing 

c. Vacant Positions 

d. Ineligible for Displacement Rights 

e. Change to Lower Pay Band Due to an 

Adverse or Performance-Based Action 

4. Notice Period 

5. RIF Appeals 

6. Separation Incentives 

7. Severance Pay 

8. Outplacement Assistance 

VI. Demonstration Project Transition 

A. Initial Conversion or Movement to the 

Demonstration Project 

1. Placement Into Career Tracks and Pay 

Bands 

3. WGI Buy-In 

4. Career Promotion Eligibility 

5. Conversion of Special Salary Rate 

Employees 

6. Conversion of Employees on Temporary 

Promotions 

7. Non-Competitive Movement Into the 

Demonstration Project 

B. CCS Start-Up 

C. Training 

1. Types of Training 

a. Employees 

b. Supervisors and Managers 

c. Support Personnel 

D. New Hires Into the Demonstration 

Project 

E. Conversion or Movement From 

Demonstration Project 

1. Grade Determination 

2. Pay Setting 

3. Employees in Positions Classified Above 

GS–15 

4. Determining Date of Last Equivalent 

Increase 

F. Personnel Administration 

G. Automation 

H. Experimentation and Revision 

VII. Demonstration Project Duration 

VIII. Demonstration Project Evaluation Plan 

A. Overview 

B. Evaluation Model 

IX. Demonstration Project Costs 

A. Cost Discipline 

B. Implementation Costs 

X. Automation Support 

A. General 

B. Defense Civilian Personnel Data System 

(DCPDS) 

C. Requirements Document Writer 

(RDWriter) 

D. RIF Support System (RIFSS) 

E. Contribution-Based Compensation 

System Data System (CCSDC) 

Appendix A. Summary of Demonstration 

Project Features Adopted by ONR 

Appendix B: Required Waivers to Laws and 

Regulations 

Appendix C: Definitions of Career Tracks and 

Pay Bands 

Appendix D: Table of Occupational Series 

Within Career Tracks 

Appendix E: Classification and CCS Elements 

Administrative Support 

Appendix F: Computation of the IPS and the 

NPR 

I. Executive Summary 

This project adopts with some 

modifications the STRL personnel 

management demonstration project 

designed by NRL and additional 

flexibilities from the AMRDEC, MRMC, 

and CERDEC personnel management 

demonstration projects. The modified 

design of the demonstration project 

described herein was developed by ONR 

with the participation of and review by 

the DON, the DoD, and incorporation of 

the knowledge and design of other STRL 

demonstration projects. 

The Office of Naval Research (ONR) 

coordinates, executes, and promotes the 

science and technology programs of the 

United States Navy and Marine Corps. 

ONR’s directorates balance a robust 

science and technology portfolio, 

allocating funds to meet the warfighter’s 

requirements, focusing efforts on all 

three major phases of development 

funding: Basic research, applied 

research and advanced technology 

development. ONR’s six science and 

technology departments coordinate and 

execute research in the areas of: 

1. Expeditionary Maneuver Warfare 

and Combating Terrorism 

2. Command, Control, 

Communications, Intelligence, 

Surveillance, and Reconnaissance 

3. Ocean Battlespace Sensing 

4. Sea Warfare and Weapons 

5. Warfighter Performance 

6. Naval Air Warfare and Weapons 

In order to sustain these unique 

capabilities, ONR must be able to hire, 

retain, and continually motivate 

enthusiastic, innovative, and highlyeducated scientists and engineers, 

supported by skilled business 

management and administrative 

professionals as well as a skilled 

administrative and technical support 

staff. 

The goal of the project is to enhance 

the quality and professionalism of the 

ONR workforce through improvements 

in the efficiency and effectiveness of the 

human resource system. The project 

flexibilities will strive to achieve the 

best workforce for the ONR mission, 

adjust the workforce for change, and 

improve organizational efficiency. The 

results of the project will be evaluated 

within five years of implementation. 

II. Introduction 

A. Purpose 

The purpose of the project is to 

demonstrate that the effectiveness of 

DoD STRLs can be enhanced by 

expanding opportunities available to 

employees and by allowing greater 

managerial control over personnel 

functions through a more responsive 

and flexible personnel system. Federal 

laboratories need more efficient, cost 

effective, and timely processes and 

methods to acquire and retain a highly 

creative, productive, educated, and 

trained workforce. This project, in its 

entirety, attempts to improve 

employees’ opportunities and provide 

managers, at the lowest practical level, 


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the authority, control, and flexibility 

needed to achieve the highest quality 

organization and hold them accountable 

for the proper exercise of this authority 

within the framework of an improved 

personnel management system. 

Many aspects of a demonstration 

project are experimental. Modifications 

may be made from time to time as 

experience is gained, results are 

analyzed, and conclusions are reached 

on how the system is working. The 

provisions of this project plan will not 

be modified, or extended to individuals 

or groups of employees not included in 

the project plan without the approval of 

the DUSD (CPP). The provisions of DoDI 

1400.37 are to be followed for any 

modifications, adoptions, or changes to 

this demonstration project plan. 

B. Problems With the Current System 

The current Civil Service GS system 

has existed in essentially the same form 

since the 1920’s. Work is classified into 

one of fifteen overlapping pay ranges 

that correspond with the fifteen grades. 

Basic pay is set at one of those fifteen 

grades and the ten interim steps within 

each grade. The Classification Act of 

1949 rigidly defines types of work by 

occupational series and grade, with very 

precise qualifications for each job. This 

system does not quickly or easily 

respond to new ways of designing work 

and changes in the work itself. 

The performance management model 

that has existed since the passage of the 

Civil Service Reform Act has come 

under extreme criticism. Employees 

frequently report there is inadequate 

communication of performance 

expectations and feedback on 

performance. There are perceived 

inaccuracies in performance ratings 

with general agreement that the ratings 

are inflated and often unevenly 

distributed by grade, occupation and 

geographic location. 

The need to change the current hiring 

system is essential as ONR must be able 

to recruit and retain scientific, 

engineering, acquisition support and 

other professionals and skilled 

technicians. ONR must be able to 

compete with the private sector for the 

best talent and be able to make job offers 

in a timely manner with the attendant 

bonuses and incentives to attract high 

quality employees. 

Finally, current limitations on 

training, retraining and otherwise 

developing employees make it difficult 

to correct skill imbalances and to 

prepare current employees for new lines 

of work to meet changing missions and 

emerging technologies. 

C. Waivers Required 

ONR proposes changes in the 

following broad areas to address its 

problems in human resources 

management: Accessions and internal 

placements, sustainment, and 

separations. Appendix B lists the laws, 

rules, and regulations requiring waivers 

to enable ONR to implement the 

proposed systems. All personnel laws, 

rules, and regulations not waived by 

this plan will remain in effect. Basic 

employee rights will be safeguarded and 

Merit System Principles will be 

maintained. 

D. Expected Benefits 

The primary benefit expected from 

this demonstration project is greater 

organizational effectiveness through 

increased employee satisfaction. The 

long-standing Department of the Navy 

‘‘China Lake’’ and NIST demonstration 

projects have produced impressive 

statistics on increased job satisfaction 

and quality of employees versus that for 

the Federal workforce in general. This 

project will demonstrate that a human 

resource system tailored to the mission 

and needs of the ONR workforce will 

facilitate: 

(1) Sustainment of ONR’s quality 

scientific and business management 

workforces in today’s competitive 

environment; 

(2) Improved employee satisfaction 

with pay setting and adjustment, 

recognition, and career advancement 

opportunities; 

(3) Human Resources (HR) flexibilities 

needed to staff and shape a quality 

workforce of the next 10–20 years; 

(4) Increased retention of high-level 

contributors; and 

(5) Simpler and more cost effective 

HR management processes. 

An evaluation model was developed 

for the Director, Defense, Research and 

Engineering (DDR&E) in conjunction 

with STRL service representatives and 

the OPM. The model will measure the 

effectiveness of this demonstration 

project, as modified in this plan, and 

will be used to measure the results of 

specific personnel system changes. 

E. Participating Organizations and 

Employees 

ONR is comprised of the ONR 

Headquarters in Arlington, Virginia, and 

ONR employees geographically 

dispersed at the locations shown in 

Figure 1. It should be noted that some 

sites currently have fewer than ten 

people and that the sites may change 

should ONR reorganize or realign. 

Successor organizations will continue 

coverage in the demonstration project. 

The demonstration project will cover 

approximately 450 ONR civilian 

employees under title 5, U.S.C. in the 

occupations listed in Appendix D. The 

project plan does not cover members of 

the Senior Executive Service (SES), 

Senior Level (SL), Scientific and 

Professional (ST), expert and consultant 

employees (EH), or Administratively 

Determined (AD) pay plans. However, 

SES, SL, and ST employees, after 

leaving Federal government service, 

may participate in the Voluntary 

Emeritus Program. There are no labor 

unions representing ONR employees. 


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F. Project Design 

In response to the initial authority 

granted by Congress to develop a 

demonstration project, ONR chartered a 

design team to develop the project plan. 

The team was led by a senior ONR 

manager from outside the Human 

Resources Office (HRO) and was 

responsible for developing project 

proposals. The team was composed of 

20 employees of different grade levels 

and in different occupations. There was 

a mix of managers, supervisors, and 

non-supervisors from offices throughout 

ONR. The team had the assistance of HR 

personnel from ONR and from NRL. It 

also received information and advice 

from OPM, the Office of the DUSD 

(CPP), and a number of organizations 

with on-going demonstration projects. 

Information and suggestions were 

solicited from ONR employees and 

managers through interviews, briefings, 

small-group meetings, and a suggestion 

program established specifically for the 

design effort. This plan was submitted 

to DUSD (CPP) in 2001. Work on this 

plan was postponed pending the 

outcome of several Departmental HR 

initiatives addressing new personnel 

systems. 

Following enactment of Public Law 

110–181, ONR undertook an effort to 

review and resubmit the demonstration 

project plan. Upon extensive review and 

discussion with internal and external 

stakeholders, ONR leadership decided 

to adopt existing flexibilities according 

to subsection 1107(c) of Public Law 

110–181 and DoDI 1400.37. Specifically, 

ONR proposes to adopt the NRL 

demonstration project plus additional 

flexibilities from the AMRDEC and 

MRMC demonstration projects. 

Appendix A summarizes the 

modifications proposed for each of the 

adopted project flexibilities and 

administrative procedures. 

Modifications to existing flexibilities are 

made when necessary to address ONR’s 

specific organizational, workforce, and 

approval needs; technical modifications 

to conform to changes in the law and 

governing Office of Personnel 

Management (OPM) regulations, which 

are not being waived, that were effected 

after the publication of the NRL 

personnel demonstration project plan. 

Further changes to the project plan may 

be made in response to comments 

received during the 30-day comment 

period following publication of this 

notice. 

III. Accessions and Internal Placements 

A. Hiring Authority 

1. Background 

Private industry and academia are the 

principal recruiting sources for 

scientists and engineers at ONR. It is 

extremely difficult to make timely offers 

of employment to hard-to-find scientists 

and engineers. Even when a candidate 

is identified, he or she often finds 

another job opportunity before the 

lengthy recruitment process can be 

completed. 

2. Delegated Examining 

a. Competitive service positions 

within the ONR Demonstration Project 

will be filled through Merit Staffing or 

under Delegated Examining. 

b. The ‘‘Rule of Three’’ will be 

eliminated. When there are no more 

than 15 qualified applicants and no 

preference eligibles, all eligible 

applicants are immediately referred to 

the selecting official without rating and 

ranking. Rating and ranking will be 

required only when the number of 

qualified candidates exceeds 15 or there 

is a mix of preference and 

nonpreference applicants. Statutes and 

regulations covering veterans’ 


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preference will be observed in the 

selection process and when rating and 

ranking are required. If the candidates 

are rated and ranked, a random number 

selection method using the application 

control number will be used to 

determine which applicants will be 

referred when scores are tied after the 

rating process. Veterans will be referred 

ahead of non-veterans with the same 

score. 

B. Legal Authority 

For actions taken under the auspices 

of the ONR Demonstration Project, the 

legal authority, Public Law 103–337, 

will be used. For all other actions, ONR 

will continue to use the nature of action 

codes and legal authority codes 

prescribed by OPM, DoD, or DON. 

C. Determining Employee and Applicant 

Qualifications 

Figure 2 displays the minimum 

General Schedule (GS) qualifications 

requirements for each career path and 

pay band. Special DON or DoD 

requirements not covered by the OPM 

Qualification Standards Operating 

Manual for GS Positions, such as 

Defense Acquisition Workforce 

Improvement Act (DAWIA) 

qualification requirements for 

acquisition positions, physical 

performance requirements for sea duty, 

work on board aircraft, etc., must be 

met. 

D. Noncitizen Hiring 

Where Executive Orders or other 

regulations limit hiring noncitizens, 

ONR will have the authority to approve 

the hiring of noncitizens into 

competitive service positions when 

qualified U.S. citizens are not available. 

Under the demonstration project, as 

with the current system, a noncitizen 

may be appointed only if it has been 

determined there are no qualified U.S. 

citizens. In order to make this 

determination, the position will be 

advertised extensively throughout the 

nation using paid advertisements in 


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major newspapers or scientific journals, 

etc., as well as the ‘‘normal’’ recruiting 

methods. If a noncitizen is the only 

qualified candidate for the position, the 

candidate may be appointed. The 

selection is subject to approval by the 

Department Head or Director of the 

hiring organization. The demonstration 

project constitutes a delegated 

examining agreement from OPM for the 

purposes of 5 CFR 213.3102(bb). 

E. Expanded Detail Authority 

Under the demonstration project, 

ONR’s approving manager would have 

the authority: 

(1) To effect details up to one year to 

demonstration project positions without 

the current 120-day renewal 

requirement; and 

(2) To effect details to a higher level 

position in the demonstration project up 

to one year within a 24-month period 

without competition. 

Details beyond the one-year require 

the approval of the Chief of Naval 

Research or designee and are not subject 

to the 120-day renewal requirement. 

F. Extended Probationary Period 

All current laws and regulations for 

the current probationary period are 

retained except that nonstatus 

candidates hired under the 

demonstration project in occupations 

where the nature of the work requires 

the manager to have more than one year 

to assess the employee’s job 

performance will serve a three-year 

probationary period. Employees with 

veterans’ preference will maintain their 

rights under current law and regulation. 

G. Definitions 

1. Basic Pay 

The total amount of pay received at 

the rate fixed through CCS adjustment 

for the position held by an employee 

including any merit increase but before 

any deductions and exclusive of 

additional pay of any other kind. 

2. Maintained Pay 

An employee may be entitled to 

maintain his or her rate of basic pay if 

that rate exceeds the maximum rate of 

basic pay for his or her pay band as a 

result of certain personnel actions (as 

described in this plan). An employee’s 

initial maintained pay rate is equal to 

the lesser of (1) the basic pay held by 

the employee at the time an action is 

taken which entitles the employee to 

maintain his or her pay or (2) 150 

percent of the maximum rate of basic 

pay of the pay band to which assigned. 

The employee is entitled to maintained 

pay for 2 years or until the employee’s 

basic pay is equal to or more than the 

employee’s maintained pay, whichever 

occurs first. Exceptions to the 2-year 

limit include employees on grade and 

pay retention ‘‘grandfathered’’ in upon 

initial conversion into the 

demonstration project, former special 

rate employees receiving maintained 

pay as a result of conversion into the 

project, and employees placed through 

the priority placement programs. 

Employees will receive half of the 

across-the-board GS percentage increase 

in basic pay and the full locality pay 

increase while on maintained pay. Upon 

termination of maintained pay, the 

employee’s basic pay will be adjusted 

according to the CCS appraisal process. 

If the employee’s basic pay exceeds the 

maximum basic pay of his or her pay 

band upon expiration of the 2-year 

period, the employee’s pay will not be 

reduced; the employee will be in the 

overcompensated range of basic pay 

category for CCS pay increase purposes, 

see Figure 9. 

Maintained pay shall cease to apply to 

an employee who: (1) Has a break in 

service of 1 workday or more; or (2) is 

demoted for personal cause or at the 

employee’s request. The employee’s 

maintained rate of pay is basic pay for 

purposes of locality pay (locality pay is 

basic pay for purposes of retirement, life 

insurance, premium pay, severance pay, 

advances in pay, workers’ 

compensation, and lump-sum payments 

for annual leave but not for computing 

promotion increases). Employees 

promoted while on maintained pay may 

have their basic pay (excluding locality 

pay) set up to 20 percent greater than 

the maximum basic pay for their current 

pay band or retain their ‘‘maintained 

pay,’’ whichever is greater. 

3. Promotion 

The movement of an employee to a 

higher pay band within the same career 

track or to a different career track and 

pay band in which the new pay band 

has a higher maximum basic salary rate 

than the pay band from which the 

employee is leaving. 

4. Reassignment 

The movement of an employee from 

one position to another position within 

the same pay band in the same career 

track or to a position in another career 

track and pay band in which the new 

pay band has the same maximum basic 

salary rate as the pay band from which 

the employee is leaving. 

5. Change to Lower Pay Band 

The movement of an employee to a 

lower pay band within the same career 

track or to a different career track and 

pay band in which the new pay band 

has a lower maximum basic pay range 

than the pay band from which the 

employee is leaving. 

6. Pay Adjustment 

Any increase or decrease in an 

employee’s rate of basic pay where there 

is no change in the employee’s position. 

Termination of maintained pay is also a 

pay adjustment. 

7. Detail 

The temporary assignment of an 

employee to a different demonstration 

project position for a specified period 

when the employee is expected to 

return to his or her regular duties at the 

end of the assignment. (An employee 

who is on detail is considered for pay 

and strength purposes to be 

permanently occupying his or her 

regular position.) 

8. Highest Previous Rate 

ONR will establish maximum payable 

rate rules that parallel the rules in 5 CFR 

531.202 and 531.203(c) and (d). 

9. Approving Manager 

Managers at the directorate, division 

head, division superintendent, or 

directorate-level staff offices who have 

budget allocation/execution; position 

management; position classification; 

recruitment; and staffing authorities for 

their organization. 

H. Pay Setting Determinations Outside 

the CCS 

1. External New Hires 

a. This includes reinstatements. Initial 

basic pay for new appointees into the 

demonstration project may be set at any 

point within the basic pay range for the 

career track, occupation, and pay band 

to which appointed that is consistent 

with the special qualifications of the 

individual and the unique requirements 

of the position. These special 

qualifications may be consideration of 

education, training, experience, scarcity 

of qualified applicants, labor market 

considerations, programmatic urgency, 

or any combination thereof which is 

pertinent to the position to which 

appointed. Highest previous rate may be 

used to set the pay of new appointees 

into the demonstration project. (The 

approving manager authorizes the basic 

pay.) 

b. Transfers from within DoD and 

other Federal agencies will have their 

pay set using pay setting policy for 

internal actions based on the type of pay 

action. 

c. A recruitment or relocation bonus 

may be paid using the same provisions 

available for GS employees under 5 

U.S.C. 5753. Employees placed through 


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the DoD Priority Placement Program 

(PPP), the DON Reemployment Priority 

List (RPL), or the Federal Interagency 

Career Transition Assistance Plan are 

entitled to the last earned rate if they 

have been separated. 

2. Internal Actions 

These actions cover employees within 

the demonstration project, including 

demonstration project employees who 

apply and are selected for a position 

within the project. 

a. Promotion. 

When an employee is promoted, the 

basic pay after promotion may be up to 

20 percent greater than the employee’s 

current basic pay. However, if the 

minimum rate of the new pay band is 

more than 20 percent greater than the 

employee’s current basic pay, then the 

minimum rate of the new pay band is 

the new basic pay. The employee’s basic 

pay may not exceed the basic pay range 

of the new pay band. Highest previous 

rate may be applied, if appropriate. (The 

approving manager authorizes the basic 

pay.) Note: Most target pay band 

promotions will be accomplished 

through the CCS appraisal and pay 

adjustment process (see section IV.C.8). 

b. Pay Adjustment (Voluntary Change 

to Lower Pay) or Change to Lower Pay 

Band (except RIF). 

When an employee accepts a 

voluntary change to lower pay or lower 

pay band, basic pay may be set at any 

point within the pay band to which 

appointed, except that the new basic 

pay will not exceed the employee’s 

current basic pay or the maximum basic 

pay of the pay band to which assigned, 

whichever is lower. Highest previous 

rate may be applied, if appropriate. (The 

approving manager authorizes the basic 

pay.) 

(1) Examples of Voluntary Change to 

a Lower Pay Band. An employee in an 

Administrative Specialist and 

Professional Career Track, Pay Band III, 

position may decide he or she would 

prefer a Pay Band II position in the 

Administrative Support Career Track 

because it offers a different work 

schedule or duty station. An employee 

in Pay Band IV of the Administrative 

Specialist and Professional Career Track 

who has a family member with a serious 

medical problem and wants to be 

relieved of supervisory responsibilities 

may request a change to Pay Band III. 

(2) Example of Pay Adjustment 

(Voluntary Change to Lower Pay) or 

change to a Lower Pay Band. An 

employee may accept a change to lower 

pay or to a lower pay band through a 

settlement agreement. A Research 

Physicist, who is in Pay Band III and is 

being paid near the top of Pay Band III, 

is rated unacceptable in the contribution 

element Research and Development 

(R&D) Business Management. In 

settlement of a proposal to remove this 

employee for unacceptable performance, 

an agreement is reached which reduces 

the employee’s pay to a rate near the 

beginning of Pay Band III. 

c. Pay Adjustment (Involuntary 

Change to Lower Pay) or Change to 

Lower Pay Band Due to Adverse or 

Performance-based Action. 

When an employee is changed to a 

lower pay band, or receives a change to 

lower pay due to an adverse or 

performance-based action, the 

employee’s basic pay will be reduced by 

at least 6 percent, but will be set at a rate 

within the rate range for the pay band 

to which assigned. (The approving 

manager authorizes the basic pay.) Such 

employees will be afforded appeal rights 

as provided by 5 U.S.C. 4303 or 7512. 

d. Involuntary Change to Lower Pay 

Band or Reassignment to a Career Track 

with a Lower Salary Range, Other than 

Adverse or Performance-based. 

If the change is not a result of an 

adverse or performance-based action, 

the basic pay will be preserved to the 

extent possible within the basic pay 

range of the new pay band. If the pay 

cannot be set within the rate range of 

the new pay band, it will be set at the 

maximum rate of the new pay band and 

the employee’s pay will be reduced. If 

the change is a result of a position 

reclassification resulting in the 

employee being assigned to a lower pay 

band or reassigned to a different career 

track with a lower maximum basic 

salary range, the employee is entitled to 

maintained pay if the employee’s 

current salary exceeds the maximum 

rate for the new band. 

e. RIF Action (including employees 

who are offered and accept a vacancy at 

a lower pay band or in a different career 

track). 

The employee is entitled to 

maintained pay, if the employee’s 

current salary exceeds the maximum 

rate for the new band. 

f. Upward Mobility or Other Formal 

Training Program Selection. 

The employee is entitled to 

maintained pay, if the employee’s 

current salary exceeds the maximum 

rate for the new band. 

g. Return to Limited or Light Duty 

from a Disability as a Result of 

Occupational Injury to a Position in a 

Lower Pay Band or to a Career Track 

with Lower Basic Pay Potential than 

Held Prior to the Injury. 

The employee is entitled indefinitely 

to the basic pay held prior to the injury 

and will receive full general and locality 

pay increases. If upon reemployment, an 

employee was not given the higher basic 

pay (basic pay received at the time of 

the injury), any retirement annuity or 

severance pay computation would be 

based on his or her lower basic pay 

(salary based on placement in a lower 

pay band). Even though the Department 

of Labor (DOL) would make up the 

difference between the lower basic pay 

and the higher basic pay earned at the 

time of injury, the DOL portion is not 

considered in the retirement or 

severance pay computation. 

h. Restoration to Duty. 

Employees returning from the 

uniformed services following an 

absence of more than 30 days must be 

restored as soon as possible after making 

application, but not later than 30 days 

after receipt of application. If the 

employee’s uniformed service was for 

less than 91 days the employee will be 

placed in the position that he or she 

would have attained if continuously 

employed. If not qualified for this 

position, employee will be placed in the 

position he or she left. For service of 91 

days or more, the employee may also be 

placed in a position of like seniority, 

status, and pay. In the case of an 

employee with a disability incurred in 

or aggravated during uniformed service, 

and after reasonable efforts to 

accommodate the disability is entitled 

to be placed in another position for 

which qualified that will provide the 

employee with the same seniority, 

status, and pay, or the nearest 

approximation. 

i. Reassignment. 

The basic pay normally remains the 

same. Highest previous rate may be 

applied, if appropriate. (The approving 

manager authorizes the basic pay.) 

j. Student Educational Employment 

Program. 

The Student Educational Employment 

Program consists of two components: 

the Student Temporary Employment 

Program and the Student Career 

Experience Program. Initial basic pay for 

students in either of these programs may 

be set at any point within the basic pay 

range for the career track, occupation, 

and pay band to which appointed. Basic 

pay may be increased upon return to 

duty (RTD) or conversion to temporary 

appointment, in consideration of the 

student’s additional education and 

experience at the time of the action. 

Students who work under a parallel 

work study program may have their 

basic pay increased in consideration of 

additional education and/or experience. 

Basic pay for students may be increased 

based on their CCS appraisal. (The 

approving manager authorizes the basic 

pay.) 


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k. Hazard Pay or Pay for Duty 

Involving Physical Hardship. 

Employees under the demonstration 

project will be paid hazardous duty pay 

under the provisions of 5 CFR part 550, 

subpart I. 

l. Supervisory Pay Adjustments. 

(1) Supervisory pay adjustments may 

be approved by the ONR Executive 

Director based on the recommendation 

of the Talent Management Board to 

compensate employees with supervisory 

responsibilities. Only employees in 

supervisory positions as defined by the 

OPM GS Supervisory Guide may be 

considered for the pay adjustment. 

These pay adjustments are funded 

separately from performance pay pools. 

These pay adjustments are increases to 

basic pay, ranging up to ten percent of 

that pay rate for supervisors. Pay 

adjustments are subject to the constraint 

that the adjustment may not cause the 

employee’s basic pay to exceed the pay 

band maximum basic pay. Criteria to be 

considered in determining the basic pay 

increase percentage include: 

i. Needs of the organization to attract, 

retain, and motivate high quality 

supervisors; 

ii. Budgetary constraints; 

iii. Years and quality of related 

experience; 

iv. Relevant training; 

v. Performance appraisals and 

experience as a supervisor; 

vi. Organizational level of position; 

and 

vii. Impact on the organization. 

(2) The pay adjustment will not apply 

to employees in Pay Band V of the S&E 

Professional Career Track. 

(3) After the date of conversion into 

the demonstration project, a pay 

adjustment may be considered under 

the following conditions: 

i. New hires into supervisory 

positions will have their initial rate of 

basic pay set at the supervisor’s 

discretion within the pay range of the 

applicable pay band. This rate of pay 

may include a pay adjustment 

determined by using the ranges and 

criteria outlined above. 

ii. An employee selected for a 

supervisory position that is within the 

employee’s current pay band may also 

be considered for a basic pay 

adjustment. If a supervisor is already 

authorized a basic pay adjustment and 

is subsequently selected for another 

supervisor position within the same pay 

band, then the basic pay adjustment will 

be re-determined. 

iii. Existing supervisors will be 

converted at their existing rate of basic 

pay and may be eligible for a basic pay 

adjustment upon review of the Talent 

Management Board following the 

conversion. 

(4) The supervisor pay adjustment 

will be reviewed annually, with 

possible increases or decreases based on 

the appraisal scores for the performance 

elements Cooperation & Supervision or 

Supervision & Resources Management. 

The initial dollar amount of a basic pay 

adjustment will be removed when the 

employee voluntarily leaves the 

position. The cancellation of the 

adjustment under these circumstances is 

not an adverse action and is not subject 

to appeal. If an employee is 

involuntarily removed from a nonprobationary supervisory position for 

unacceptable performance or conduct, 

the basic pay adjustment will be 

removed under adverse action 

procedures. However, if an employee is 

involuntarily removed from a nonprobationary supervisory position for 

conditions other than unacceptable 

performance or conduct, then pay 

retention will follow current law and 

regulations at 5 U.S.C. 5362 and 5363 

and 5 CFR part 536, except as waived 

or modified in section IX. 

m. Supervisory Pay Differentials. 

Supervisory pay differentials may be 

used by the ONR Executive Director to 

provide an incentive and to reward 

supervisors as defined by the OPM GS 

Supervisory Guide. Pay differentials are 

not funded from performance pay pools. 

A pay differential is a cash incentive 

that may range up to ten percent of basic 

pay for supervisors. It is paid on a payperiod basis for a specified period of 

time not to exceed (NTE) one year and 

is not included as part of the basic pay. 

Criteria to be considered in determining 

the amount of the pay differential are 

the same as those identified for 

Supervisory Pay Adjustments. The pay 

differential will not apply to employees 

in Pay Band V of the S&E Professional 

Career Track. 

The pay differential may be 

considered, either during conversion 

into or after initiation of the 

demonstration project. The differential 

must be terminated if the employee is 

removed from a supervisory position, 

regardless of cause. 

After initiation of the demonstration 

project, all personnel actions involving 

a supervisory differential will require a 

statement signed by the employee 

acknowledging that the differential may 

be terminated or reduced at the 

discretion of the ONR Executive 

Director. The termination or reduction 

of the differential is not an adverse 

action and is not subject to appeal. 

I. Priority Placement Program (PPP) 

Current PPP procedures apply to new 

hires and internal actions. 

J. Expanded Temporary Promotion 

Current regulations require that 

temporary promotions for more than 

120 days to a higher level position than 

previously held must be made 

competitively. Under the demonstration 

project, ONR would be able to effect 

temporary promotions of not more than 

one year within a 24-month period 

without competition to positions within 

the demonstration project. 

K. Voluntary Emeritus Program 

The ONR Voluntary Emeritus Program 

is similar to the Voluntary Emeritus 

Program presented in the AMRDEC 

demonstration project FRN, section 

III.D.5., page 34890. Under the ONR 

program, the CNR will have the 

authority to offer retired or separated 

individuals voluntary assignments at 

ONR. This authority will include 

individuals who have retired or 

separated from Federal service. 

Voluntary Emeritus Program 

assignments are not considered 

‘‘employment’’ by the Federal 

government (except for purposes of 

injury compensation). Thus, such 

assignments do not affect an employee’s 

entitlement to buyouts or severance 

payments based on an earlier separation 

from Federal service. The Voluntary 

Emeritus Program will ensure continued 

quality research while reducing the 

overall salary line by allowing higher 

paid individuals to accept retirement 

incentives with the opportunity to 

retain a presence in the scientific 

community. The program will be of 

most benefit during manpower 

reductions as senior employees could 

accept retirement and return to provide 

valuable on-the-job training or 

mentoring to less experienced 

employees. Voluntary service will not 

be used to replace any employee or 

interfere with career opportunities of 

employees. 

To be accepted into the emeritus 

program, a volunteer must be 

recommended by ONR managers to the 

CNR or designee. Everyone who applies 

is not entitled to a voluntary 

assignment. The approving official 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 two years. 

To ensure success and encourage 

participation, the volunteer’s Federal 

retirement pay (whether military or 


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civilian) will not be affected while 

serving in a voluntary capacity. Retired 

or separated Federal employees may 

accept an emeritus position without a 

break or mandatory waiting period. 

Volunteers will not be permitted to 

monitor contracts on behalf of the 

government or to participate on any 

contracts or solicitations where a 

conflict of interest exists. The same 

rules that currently apply to source 

selection members will apply to 

volunteers. 

An agreement will be established 

between the volunteer, the CNR or 

designee and the HRO Director. The 

agreement will be reviewed by the local 

Legal Office for ethics determinations 

under the Joint Ethics Regulation. The 

agreement must be finalized before the 

assumption of duties and shall include: 

(1) A statement that the voluntary 

assignment does not constitute an 

appointment in the civil service and is 

without compensation, and any and all 

claims against the Government (because 

of the voluntary assignment) are waived 

by the volunteer; 

(2) A statement that the volunteer will 

be considered a federal employee for the 

purpose of injury compensation; 

(3) Volunteer’s work schedule; 

(4) Length of agreement (defined by 

length of project or time defined by 

weeks, months, or years); 

(5) Support provided by the ONR 

(travel, administrative, office space, 

supplies); 

(6) A one page Statement of Duties 

and Experience; 

(7) 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 Program; 

(8) A provision allowing either party 

to void the agreement with 10 working 

days written notice; and 

(9) The level of security access 

required (any security clearance 

required by the assignment will be 

managed by the ONR while the 

volunteer is a member of the Voluntary 

Emeritus Program). 

IV. Sustainment 

A. Position Classification 

The position classification changes 

are intended to streamline and simplify 

the process of identifying and 

categorizing the work done at ONR. 

ONR will establish an Integrated Pay 

Schedule (IPS) for all demonstration 

project positions in covered 

occupations. The IPS will replace the 

current GS and extend the pay schedule 

equivalent to the basic pay range of the 

Government’s Senior Level Pay System 

to accommodate positions classified 

above the GS–15 level under a proposed 

new STRL demonstration project 

initiative being developed by DoD. 

1. Career Tracks and Pay Bands 

Within the IPS, occupations with 

similar characteristics will be grouped 

together into three career tracks. Each 

career track consists of a number of pay 

bands, representing the phases of career 

progression that are typical for the 

respective career track. The pay bands 

within each career track are shown in 

Figure 3, along with their GS 

equivalents. The equivalents are based 

on the levels of responsibility as defined 

in 5 U.S.C. 5104 and not on current 

basic pay schedules. Appendix C 

provides definitions for each of the 

career tracks and the pay bands within 

them. The career tracks and pay bands 

were developed based upon 

administrative, organizational, and 

position management considerations at 

ONR. They are designed to enhance pay 

equity and enable a more seamless 

career progression to the target pay band 

for an individual position or category of 

positions. This combination of career 

tracks and pay bands allows for 

competitive recruitment of quality 

candidates at differing rates of 

compensation within the appropriate 

career track, occupation, and pay band. 

It will also facilitate movement and 

placement based upon contribution, in 

conjunction with the CCS described in 

paragraph IV.C. Other benefits of this 

arrangement include a dual career track 

for S&E employees and greater 

competitiveness with academia and 

private industry for recruitment. 

Appendix D identifies the occupational 

series currently within each of the three 

career tracks. 

a. Target Pay Band. 

Each position will have a designated 

target pay band under the 

demonstration project. This target pay 

band will be identified as the pay band 

to which an incumbent may be 

advanced without further competition 

within a career track. These target pay 

bands will be based upon present full 

performance levels. Target pay bands 

may vary based upon occupation or 

career track. Employees’ basic pay will 


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be capped at the target pay band until 

other appropriate conditions (e.g., 

competition, position management 

approval, increase in or acquisition of 

higher level duties, and approval of an 

accretion of duties promotion) have 

been met, and the employee has been 

promoted into the next higher level. 

b. Occupational Series and Position 

Titling. 

Presently, ONR positions are 

identified by occupational groups and 

series of classes in accordance with 

OPM position classification standards. 

Under the demonstration project, ONR 

will continue to use occupational series 

designators consistent with those 

currently authorized by OPM to identify 

positions. This will facilitate related 

personnel management requirements, 

such as movement into and out of the 

demonstration project. Other 

occupational series may be added or 

deleted as needed to support the 

demonstration project. Interdisciplinary 

positions will be accommodated within 

the system based upon the 

qualifications of the individual hired. 

Titling practices consistent with those 

established by OPM classification 

standards will be used to determine the 

official title. Such practice will facilitate 

other personnel management 

requirements, such as the following: 

Movement into and out of the 

demonstration project, reduction in 

force, external reporting requirements, 

and recruitment. CCS pay band 

descriptors and Requirements 

Document (RD) (see paragraph IV.A.2) 

information will be used for specific 

career track, pay band, and titling 

determinations. 

c. Classification Standards. 

Under the proposed demonstration 

project, the number of classification 

standards would be reduced to three 

(see Figure 3.) Each standard would 

align with one of the three career tracks 

and would cover all positions within 

that career track. Each career track has 

two or three elements that are 

considered in both classifying a position 

and in judging an individual’s 

contributions for pay setting purposes. 

Each element has generic descriptors for 

every pay band. These descriptors 

explain the type of work, degree of 

responsibility, and scope of 

contributions that need to be ultimately 

accomplished to reach the highest basic 

pay potential within each pay band. 

(See Appendix E.) To classify a position, 

a manager would select the pay band 

which is most indicative overall of the 

type of duties to be performed and the 

contributions needed. For example: A 

supervisor needs a secretarial position 

for a branch. In reading the elements 

and descriptors for the Administrative 

Support Career Track, the supervisor 

determines that the Pay Band II 

descriptors illustrate the type of work 

and contributions needed. Therefore, 

the position would be classified as a 

Secretary, Pay Band II. 

d. Fair Labor Standards Act (FLSA). 

Demonstration project positions will 

be covered under the FLSA and 5 CFR 

part 551. Determination of their status 

(exempt or nonexempt) will be made 

based on the criteria contained in 5 CFR 

part 551. The status of each new 

position under the demonstration 

project will be determined using 

computer assisted analysis as part of an 

automated process for preparing the RD. 

Those positions for which the computer 

is unable to make the final FLSA 

determination will be ‘‘flagged’’ for 

referral to a human resources specialist 

for determination. 

(1) Guidelines for FLSA 

Determinations. 

i. Supervisory Information: Provided 

through an automated system in a 

checklist format; results of this checklist 

have an impact on FLSA determination. 

ii. FLSA Information: Provided 

through an automated system in a 

checklist format; results of this checklist 

in conjunction with the supervisory 

information provide a basis for the 

FLSA determination. 

iii. If required, the section entitled 

‘‘Purpose of Position’’ will be used to 

assist in FLSA determination. 

iv. RD’s requiring additional review 

before being finalized will be forwarded 

to a human resources specialist to 

review the FLSA determination. 

(2) Nonsupervisory and Leader 

Positions. 

Figure 4 shows the exempt or 

nonexempt status applicable to 

nonsupervisory and leader positions in 

the indicated career track and pay band. 

In those cases where ‘‘Review’’ is 

indicated, the FLSA status must be 

determined based on the specific duties 

and responsibilities of the subject 

position. 


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(3) Supervisory Positions. 

FLSA determination for supervisory 

positions must be made based on the 

duties and responsibilities of the 

particular position involved. As a rule, 

if a position requires supervision of 

employees who are exempt under FLSA, 

the supervisory position is likely to be 

exempt also. 

2. Requirements Document (RD) 

An RD will replace the Optional Form 

8 and position description used under 

the current classification system. The 

RD will be prepared by managers using 

a menu-driven, automated system. The 

automated system will enable managers 

to classify and establish many positions 

without intervention by a human 

resources specialist. The abbreviated RD 

will combine the position information, 

staffing requirements, and contribution 

expectations into a 1- or 2-page 

document. 

3. Delegation of Classification Authority 

Classification authority will be 

delegated to managers as a means of 

increasing managerial effectiveness and 

expediting the classification function. 

This will be accomplished as follows: 

a. Delegated Authority. 

i. The Chief of Naval Research will 

delegate classification authority to the 

Human Resources Office (HRO) 

Director. The HRO Director may further 

delegate authority to Department Heads 

and Directors of the immediate 

organization of the position being 

classified. 

ii. The classification approval must be 

at least one level above the first-level 

supervisor of the position. 

iii. First-line supervisors at any level 

will provide classification 

recommendations. 

iv. HRO support will be available for 

guidance and recommendations 

concerning the classification process. 

(Any dispute over the proper 

classification between a manager and 

the HRO will be resolved by the CNR or 

designee.) 

b. Position Classification 

Accountability. 

Those to whom authority is delegated 

are accountable to the CNR. The CNR is 

accountable to the CO. Those with 

delegated authority are expected to 

comply with demonstration project 

guidelines on classification and position 

management, observe the principle of 

equal pay for equal work, and ensure 

that RD’s are current. First-line 

supervisors will develop positions using 

the automated system. All positions 

must be approved through the proper 

chain of command. 

B. Integrated Pay Schedule 

Under the demonstration project, an 

IPS will be established which will cover 

all demonstration project positions at 

ONR. This IPS, which does not include 

locality pay, will initially extend from 

the basic pay for GS–1, step 1 to the 

basic pay for GS–15, step 10. The 

adjusted basic pay cap, which does 

include locality pay, is Executive Level 

IV, currently $155,500. The salary range 

for the S&E pay band V pay band is 

expected to be established under the 

new STRL demonstration project 

initiative being developed for positions 

classified above GS–15. 

1. Annual Pay Action 

ONR will eliminate separate pay 

actions for within-grade increases, 

general and locality pay increases, 

performance awards, quality step 

increases, and most career promotions, 

and replace them with a single annual 

pay action (including either permanent 

or bonus pay or both) linked to the CCS. 

This will eliminate the paperwork and 

processing associated with multiple pay 

actions which average three per 

employee per year. 

2. Overtime Pay 

Overtime will be paid in accordance 

with 5 CFR part 550, subpart A. All 

nonexempt employees will be paid 

overtime based upon their ‘‘hourly 

regular rate of pay,’’ as defined in 

existing regulation (5 CFR part 551). 

3. Classification Appeals 

An employee may appeal the 

occupational series, title, career track, or 

pay band of his or her position at any 

time. An employee must formally raise 

the area of concern to supervisors in the 

immediate chain of command, either 

verbally or in writing. If an employee is 

not satisfied with the supervisory 

response, he or she may then appeal to 

the DoD appellate level. If an employee 

is not satisfied with the DoD response, 

he or she may then appeal to the OPM 

only after DoD has rendered a decision 

under the provisions of this 

demonstration project. Since OPM does 

not accept classification appeals on 

positions which exceed the equivalent 

of a GS–15 level, appeal decisions 

involving Pay Band V for Advanced 

Research Scientists and Engineers 

(ARSAE) will be rendered by DoD and 

will be final. Appellate decisions from 

OPM are final and binding on all 

administrative, certifying, payroll, 

disbursing, and accounting officials of 

the Government. Time periods for case 

processing under 5 CFR subpart F, 

sections 511.603, 511.604, and 511.605 

apply. 

An employee may not appeal the 

accuracy of the RD, the demonstration 

project classification criteria, or the paysetting criteria; the propriety of a basic 

pay schedule; the assignment of 

occupational series to the occupational 

family; or matters grievable under an 

administrative or negotiated grievance 

procedure or an alternative dispute 

resolution procedure. 

The evaluation of classification 

appeals under this demonstration 

project is based upon the demonstration 

project classification criteria. Case files 

will be forwarded for adjudication 

through the HRO and will include 

copies of appropriate demonstration 

project criteria. 

4. Above GS–15 Positions 

The pay banding plan for the 

Scientific and Engineering occupational 

family includes a pay band V to provide 

the ability to accommodate positions 

with duties and responsibilities that 

exceed the General Schedule GS–15 

classification criteria. This pay band is 

based on the Above GS–15 Position 

concept found in other STRL personnel 

management demonstration projects 

that was created to solve a critical 

classification problem. The STRLs have 

positions warranting classification 

above GS–15 because of their technical 

expertise requirements including 

inherent supervisory and managerial 

responsibilities. However, these 

positions are not considered to be 

appropriately classified as Scientific 

and Professional Positions (STs) because 

of the degree of supervision and level of 

managerial responsibilities. Neither are 

these positions appropriately classified 

as Senior Executive Service (SES) 

positions because of their requirement 

for advanced specialized scientific or 

engineering expertise and because the 

positions are not at the level of general 

managerial authority and impact 

required for an SES position. 

The original Above GS–15 Position 

concept was to be tested for a five-year 

period. The number of trial positions 

was set at 40 with periodic reviews to 

determine appropriate position 

requirements. The Above GS–15 

Position concept is currently being 

evaluated by DoD management for its 

effectiveness; continued applicability to 

the current STRL scientific, engineering 

and technology workforce needs; and 

appropriate allocation of billets based 

on mission requirements. The degree to 

which the laboratory plans to 

participate in this concept and develop 

classification, compensation and 

performance management policy, 

guidance, and implementation 


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processes will be based on the final 

outcome of the DoD evaluation. 

5. Distinguished Contributions 

Allowance (DCA) 

The DCA is a temporary monetary 

allowance up to 25 percent of basic pay 

(which, when added to an employee’s 

rate of basic pay, may not exceed the 

rate of basic pay for Executive Level IV) 

paid on either a bi-weekly basis 

(concurrent with normal pay days) or as 

a lump sum following completion of a 

designated contribution period(s), or 

combination of these, at the discretion 

of ONR. It is not basic pay for any 

purpose, i.e., retirement, life insurance, 

severance pay, promotion, or any other 

payment or benefit calculated as a 

percentage of basic pay. The DCA will 

be available to certain employees at the 

top of their target pay bands, whose 

present contributions are worthy of 

scores found at a higher pay band, 

whose level of contribution is expected 

to continue at the higher pay band for 

at least 1 year, and current market 

conditions require additional 

compensation. 

Assignment of the DCA rather than a 

change to a higher pay band will 

generally be appropriate for such 

employees under the following 

circumstances: Employees have reached 

the top of their target pay bands and (1) 

when it is not certain that the higher 

level contributions will continue 

indefinitely (e.g., a special project 

expected to be of 1- up to 5-year 

duration), or (2) when no further 

promotion or compensation 

opportunities are available or externally 

imposed limits (such as high-grade 

restrictions) make changes to higher pay 

bands unavailable, and in either 

situation, current market conditions 

compensate similar contributions at a 

greater rate in like positions in private 

industry and academia and there is a 

history of significant recruitment and 

retention difficulties associated with 

such positions. 

a. Eligibility. 

(1) Employees in Pay Bands III and IV 

of the S&E Professional Career Track 

and those in Pay Bands III, IV, and V of 

the Administrative Specialist and 

Professional Career Track are eligible for 

the DCA if they have reached the top 

CCS score for their target pay band with 

recommendations for a higher Overall 

Contribution Score (OCS) for their 

contributions; they have reached the 

maximum rate of basic pay available for 

their target pay band; there are 

externally imposed limits to higher pay 

bands or the higher level contributions 

are not expected to last indefinitely; and 

market conditions require greater 

compensation for these contributions. 

(2) Employees may receive a DCA for 

up to three years. The DCA 

authorization will be reviewed and 

reauthorized as necessary, but at least 

annually at the time of the CCS 

appraisal through nomination by the 

pay pool manager and approval by the 

CNR. Employees in the S&E Professional 

Career Track may receive an extension 

of up to two additional years (for a total 

of five years). The DCA extension 

authorization will be reviewed and 

reauthorized as necessary, but at least 

on an annual basis at the time of the 

CCS appraisal through nomination by 

the pay pool manager and approval by 

the CNR. 

(3) Monetary payment may be up to 

25 percent of basic pay. 

(4) Nominees would be required to 

sign a memorandum of understanding 

or a statement indicating they 

understand that the DCA is a temporary 

allowance; it is not a part of basic pay 

for any purpose; it would be subject to 

review at any time, but at least on an 

annual basis, and the reduction or 

termination of the DCA is not 

appealable or grievable. 

b. Nomination. 

In connection with the annual CCS 

appraisal process, pay pool managers 

may nominate eligible employees who 

meet the criteria for the DCA. Packages 

containing the recommended amount 

and method of payment of the DCA and 

a justification for the allowance will be 

forwarded through the supervisory 

chain to the CNR. Details regarding this 

process will be addressed in standard 

operating procedures. These details will 

include time frames for nomination and 

consideration, payout scheme, 

justification content and format, budget 

authority, guidelines for selecting 

employees for the allowance and for 

determining the appropriate amount, 

and documentation required by the 

employee acknowledging he or she 

understands the criteria and temporary 

nature of the DCA. 

c. Reduction or Termination of a DCA. 

(1) A DCA may be reduced or 

terminated at any time the ONR deems 

appropriate (e.g., when the special 

project upon which the DCA was based 

ends; if performance or contributions 

decrease significantly; or if labor market 

conditions change, etc.). The reduction 

or termination of a DCA is not 

appealable or grievable. 

(2) If an employee voluntarily 

separates from ONR before the 

expiration of the DCA, an employee may 

be denied DCA payment. Authority to 

establish conditions and/or penalties 

will be spelled out in the written 

authorization of an individual’s DCA. 

d. Lump-Sum DCA Payments. 

(1) When ONR chooses to pay part or 

all of an employee’s DCA as a lump sum 

payable at the end of a designated 

period, the employee will accrue 

entitlement to a growing lump-sum 

balance each pay period. The percentage 

rate established for the lump-sum DCA 

will be multiplied by the employee’s 

biweekly amount of basic pay to 

determine the lump sum accrual for any 

pay period. This lump-sum percentage 

rate is included in applying the 25- 

percent limitation. 

(2) If an employee covered under a 

lump-sum DCA authorization separates, 

or the DCA is terminated (see paragraph 

c), before the end of that designated 

period, the employee may be entitled to 

payment of the accrued and unpaid 

balance under the conditions 

established by ONR. ONR may establish 

conditions governing lump-sum 

payments (including penalties in cases 

such as voluntary separation or 

separation for personal cause) in general 

plan policies or in the individual 

employee’s DCA authorization. 

e. DCA Budget Allocation. 

The CNR may establish a total DCA 

budget allocation that is never greater 

than 10 percent of the basic salaries of 

the employees currently at the cap in 

the S&E Professional Career Track, Pay 

Bands III and IV, and the Administrative 

Specialist and Professional Career 

Track, Pay Bands III, IV, and V. 

f. Concurrent Monetary Payments. 

Employees eligible for a DCA may be 

authorized to receive a DCA and a 

retention allowance at the same time, up 

to a combined total of 25 percent of 

basic pay. A merit increase which raises 

an employee’s pay to the top rate for his 

or her target pay band (thus making the 

employee eligible for the DCA) may be 

granted concurrent with the DCA. 

Receipt of the DCA does not preclude an 

employee from being granted any award 

(including a contribution award) for 

which he or she is otherwise eligible. 

C. Contribution-Based Compensation 

System (CCS) 

1. General 

The purpose of the CCS is to provide 

an effective means for evaluating and 

compensating the ONR workforce. It 

provides management, at the lowest 

practical level, the authority, control, 

and flexibility needed to develop a 

highly competent, motivated, and 

productive workforce. CCS will promote 

increased fairness and consistency in 

the appraisal process, facilitate natural 

career progression for employees, and 


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provide an understandable basis for 

career progression by linking 

contribution to basic pay 

determinations. 

CCS combines performance appraisal 

and job classification into one annual 

process. At the end of each CCS 

appraisal period, basic pay adjustment 

decisions are made based on each 

employee’s actual contribution to the 

organization’s mission during the 

period. A separate function of the 

process includes comparison of 

performance in contribution elements to 

acceptable standards to identify 

unacceptable performance that may 

warrant corrective action in accordance 

with 5 CFR part 432. Supervisory 

officials determine scores to reflect each 

employee’s contribution, considering 

both how well and at what level the 

employee is performing. Often the two 

considerations are inseparable. For 

example, an employee whose written 

documents need to be returned for 

rework more often than those of his or 

her peers also likely requires a closer 

level of oversight, an important factor 

when considering level of pay. 

The performance planning and rating 

portions of the demonstration project’s 

appraisal process constitute a 

performance appraisal program which 

complies with 5 CFR part 430 and the 

DoD Performance Management System, 

except where waivers have been 

approved. Performance-related actions 

initiated prior to implementation of the 

demonstration project (under DON 

performance management regulations) 

shall continue to be processed in 

accordance with the provisions of the 

appropriate system. 

2. CCS Process 

CCS measures employee contributions 

by breaking down the jobs in each 

career track using a common set of 

‘‘elements.’’ The elements for each career 

track shown in Figure 5 and described 

in detail in Appendix E have been 

initially identified for evaluating the 

contributions of ONR personnel covered 

by this initiative. They are designed to 

capture the highest level of the primary 

content of the jobs in each pay band of 

each career track. Within specific 

parameters, elements may be weighted 

or even determined to be not applicable 

for certain categories of positions. All 

elements applicable to the position are 

critical as defined by 5 CFR part 430. 

For each element, ‘‘Discriminators’’ 

and ‘‘Descriptors’’ are provided to assist 

in distinguishing low to high 

contributions. The discriminators (two 

to four for each element) break down 

aspects of work to be measured within 

the element. The descriptors (one for 

each pay band for each discriminator) 

define the expected level of contribution 

at the top of the related pay band for 

that element. 

Scores currently range between 0 and 

92; specific relationships between 

scores and pay bands are different for 

each career track. (See Figure 6.) Basic 

pay adjustments are based on a 

comparison of the employee’s level of 

contribution to the normal pay range for 

that contribution and the employee’s 

present rate of basic pay. 


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Supervisors and pay pool panels 

determine an employee’s contribution 

level for each element considering the 

discriminators as appropriate to the 

position. A contribution score, available 

to that level, is assigned accordingly. 

For example, a scientist whose 

contribution in the Technical Problem 

Solving element for S&E Professionals is 

determined to be at Pay Band II may be 

assigned a score of 18 to 47. Eighteen 

reflects the lowest level of 

responsibility, exercise of independent 

judgment, and scope of contribution; 

and 47 reflects the highest. For Pay 

Band III contributions, a value of 44 to 

66 may be assigned. Each higher pay 

band equates to a higher range of values 

with the total points available to S&E 

Professionals to be determined based on 

the salary range for pay band V under 

the proposed DoD above GS–15 position 

initiative. Each element is judged 

separately and level of work may vary 

for different elements. The scores for 

each element are then averaged to 

determine the Overall Contribution 

Score (OCS). 

The CCS process will be carried out 

within pay pools made up of combined 

ONR organizations. The organizations in 

each pay pool will be combined based 

on criteria such as similarity of work 

and chain of command. To facilitate 

equity and consistency, element weights 

and applicability and CCS score 

adjustments are determined by a pay 

pool panel, rather than by individual 

supervisors. Basic pay adjustments, 

contribution awards, and DCA’s may be 

recommended by the pay pool panel or 

by individual supervisors. Pay pool 

panels will consist of Department heads 

and Directors, or other individuals who 

are familiar with the organization’s 

work and the contributions of its 

employees. The Executive Director, or 

designee, will function as the pay pool 

manager, with final authority to decide 

weights, scores, basic pay adjustments, 

and awards. 

3. Pay Pool Annual Planning 

Prior to the beginning of each annual 

appraisal period, the pay pool manager 

and panel will review pay pool-wide 

expectations in the areas described 

below. 

a. Element Weights and Applicability. 

As written, all elements are weighted 

equally. If the pay pool manager and 

panels decide that some elements are 

more important than others or that some 

do not apply at all to the effective 

accomplishment of the organization’s 

mission, they may establish element 

weights including a weight of zero 

which renders the element not 

applicable. Element weights are not 

intended for application to individual 

employees. Instead, they may be 

established only for subcategories of 


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positions, not to exceed a maximum of 

five subcategories in each career track. 

Subcategories for S&E Professionals 

might be: Supervisor, Program Manager, 

and Support S&E. Subcategories should 

include a minimum of five positions, 

when possible. Weights must be 

consistent within the subcategory. 

b. Supplemental Criteria. 

The CCS Pay Band descriptors are 

designed to be general so that they may 

be applied to all employees in the career 

track. Supervisors and pay pool panels 

may establish supplemental criteria to 

further inform employees of expected 

contributions. This may include (but is 

not limited to) examples of 

contributions which reflect work at each 

level for each element, taskings, 

objectives, and/or standards. 

4. Annual CCS Appraisal Process (See 

Figure 7.) 

The ONR appraisal period will 

normally be one year, with a minimum 

appraisal period of 90 days. Employees 

who serve less than 90 days during an 

appraisal cycle will receive a 

presumptive performance rating of 

acceptable. At the beginning of the 

appraisal period, or upon an employee’s 

arrival at ONR or into a new position, 

the following information will be 

communicated to employees so that 

they are informed of the basis on which 

their performance and contributions 

will be assessed: their career track and 

pay band; applicable elements, 

descriptors and discriminators; element 

weights; any established supplemental 

criteria and basic acceptable 

performance standards. OCS’s, which 

correspond to each employee’s NPR (see 

section IV.C.6), will be available after 

pay adjustments have been processed, 

normally early-to-mid January. All 

employees will be provided this 

information; however, employees in 

some situations may not receive CCS 

scores. These situations are described in 

section IV.C.5, Exceptions. The 

communication of information 

described by this paragraph constitutes 

performance planning as required by 5 

CFR 430.206(b). 

Supervisor and employee discussion 

of organizational objectives, specific 

work assignments, and individual 

performance expectations (as needed), 

should be conducted on an ongoing 

basis. Either the supervisor or the 

employee may request a formal review 

during the appraisal period; otherwise, 

a documented review is required only at 

the end of the appraisal period. 

At the end of the appraisal period, 

employees will provide input describing 

their contributions by preparing a 

Yearly Accomplishment Report (YAR). 

Pay pool managers may exempt groups 

of positions from the requirement to 

submit YARs; in cases where YARs are 

not required, employees may submit 

them at their own discretion. Standard 

operating procedures will provide 

guidance for pay pools and employees 

on the content and format of YARs, and 

on other types of information about 

employee contributions which should 

be developed and considered by 


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supervisors. This will include 

procedures for capturing contribution 

information regarding employees who 

serve on details, who change positions 

during the appraisal period, who are 

new to ONR, and other such 

circumstances. 

Supervisors will review the 

employee’s YAR and other available 

information about the employee’s 

contributions during the appraisal 

period and determine an initial CCS 

score for each element considering the 

discriminators as appropriate to the 

position. In addition, supervisors will 

determine whether the employee’s 

performance was acceptable or 

unacceptable in each element when 

compared against the basic acceptable 

performance standards. The rating of the 

elements (all that are applicable are 

designated critical as defined by 5 CFR 

part 430) will serve as the basis for 

assignment of a summary level of 

Acceptable or Unacceptable. If any 

element is rated unacceptable, the 

summary level will be Unacceptable; 

otherwise the summary level will be 

Acceptable. Unacceptable ratings must 

be reviewed and approved by a higher 

level than the first-level supervisor. 

If an employee changes positions 

during the last 90 days of the appraisal 

period, the losing supervisor will 

conduct a performance rating (i.e., rate 

each element Acceptable or 

Unacceptable and determine the 

summary level) at the time the 

employee moves to the new position. 

This will serve as the employee’s rating 

of record. For employees who report to 

ONR during the last 90 days of the 

appraisal period, any close-out rating of 

Acceptable (or its equivalent) or better 

from another Government agency will 

serve as the employee’s rating of record 

(the employee will be rated Acceptable). 

The determination of CCS scores and 

application of related pay adjustments 

for such employees is set forth in 

section IV.C.5, ‘‘Exceptions.’’ 

The pay pool panel will meet to 

compare scores, make appropriate 

adjustments, and determine the final 

OCS for each employee. Final approval 

of CCS scores and element and 

summary ratings will rest with the pay 

pool manager (unless higher level 

approval is requested or deemed 

necessary). To avoid conflict with state 

bar rules, the pay pool panel may not 

alter the CCS element scores or the 

Overall Contribution Score that ONR 

Counsel assigns to an attorney; however, 

the pay pool panel may make 

independent judgments, such as pay 

adjustments, after considering that 

score. Supervisors will communicate 

the element scores, ratings, summary 

level, and OCS to each employee, and 

discuss the results and plans for 

continuing growth. Employees rated 

Unacceptable will be provided 

assistance to improve their performance 

(see paragraph V.A.). The CCS process 

will be facilitated by an automated 

system, the Contribution-based 

Compensation System Data System 

(CCSDS). During the appraisal process, 

all scores and supervisory comments 

will be entered into the CCSDS. The 

CCSDS will provide supervisors, pay 

pool panel members, and pay pool 

managers with background information 

(e.g., YARS, employees’ prior year 

scores and current basic pay) and 

spreadsheets to assist them in 

comparing contributions and 

determining scores. Records of 

employee appraisals will be maintained 

in the CCSDS, and the system will be 

able to produce a hard copy document 

for each employee which reflects his or 

her final approved score. 

5. Exceptions 

All employees who have worked 90 

days or more by the end of the appraisal 

period will receive a performance rating 

of record. Those employees who have 

performed less than 90 days will receive 

a presumptive performance rating of 

Acceptable. However, in certain 

situations ONR does not consider the 

actual determination of CCS scores to be 

necessary. In other situations, it may not 

be feasible to determine a meaningful 

CCS score. Therefore, the determination 

of CCS scores will not be required for 

the following types of employees: (a) 

Employees on intermittent work 

schedules; (b) Those on temporary 

appointments of one year or less; (c) 

Those who work less than six months in 

an appraisal period (e.g., on extended 

absence due to illness); (d) Those on 

long-term training for all or much of the 

appraisal period; (e) Employees who 

have reported to ONR or to a new 

position during the 90 days prior to the 

end of the appraisal period; and (f) 

Student Educational Employment 

Program employees. 

If supervisors believe that the nature 

of such an employee’s contributions 

provide a meaningful basis to determine 

a CCS score, they may appraise 

employees in the categories listed 

above, provided that the employee has 

worked at least 90 days in an ONR 

position by the time the pay pool 

manager forwards final decisions. The 

employee will be retroactively assessed 

as of 30 September. 

Those employees mentioned above 

who are not appraised under CCS will 

not be eligible for merit increases or 

contribution awards. (This will affect 

the calculation of service credit for RIF 

(see section V.C.)). All employees listed 

above will be given full general and 

locality increases (as described in 

sections IV.C.7.a, ‘‘General Increases,’’ 

and IV.C.7.c, ‘‘Locality Increases’’). All 

employees are eligible for awards under 

ONR’s Incentive Awards Program, such 

as ‘‘On-the-Spot’’ and Special Act 

Awards, as appropriate. 

6. Normal Pay Range (NPR)—Basic Pay 

Versus Contribution 

The CCS assumes a relationship 

between the assessed contribution of the 

employee and a normal range of pay. 

For all possible contribution scores 

available to employees, the NPR spans 

a basic pay range of 12 percent. 

Employees who are compensated below 

the NPR for their assessed score are 

considered ‘‘undercompensated,’’ while 

employees compensated above the NPR 

are considered ‘‘overcompensated.’’ 

The lower boundary of the NPR is 

initially established by fixing the basic 

pay equivalent to GS–1, step 1, (without 

locality pay), with a CCS score of zero. 

The upper boundary is fixed at the basic 

pay equivalent to GS–15, step 10, 

(without locality pay), with a CCS score 

of 80. The distance between these upper 

and lower boundaries for a given overall 

contribution score is 12 percent of basic 

pay for all available CCS scores. Using 

these constraints, the interval between 

scores is approximately 2.37 percent 

through the entire range of pay. The 

lines will be extended using the same 

interval so that the upper boundary of 

the normal range of basic pay 

accommodates the basic pay needed for 

the S&E Professional career track pay 

band V. (The actual end point will vary 

depending on any pay adjustment 

factors, e.g., general increase.) The 

formula used to derive the NPR may be 

adjusted in future years of the 

demonstration project. See Appendix F 

for further details regarding the 

formulation of the NPR. 

Each year the boundaries for the NPR 

plus the minimum and maximum rate of 

basic pay for each pay band will be 

adjusted by the amount of the acrossthe-board GS percentage increase 

granted to the Federal workforce. At the 

end of each annual appraisal period, 

employees’ contribution scores will be 

determined by the CCS process 

described above, then their overall 

contribution scores and current rates of 

basic pay will be plotted as a point on 

a graph along with the NPR. The 

position of the point relative to the NPR 

gives a relative measure of the degree of 

over- or undercompensation of the 

employee, as shown in Figure 8. Points 

which fall below the NPR indicate 


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undercompensation; points which fall above the NPR indicate 

overcompensation. 

7. Compensation 

Presently, employee pay is 

established, adjusted, and/or augmented 

in a variety of ways, including general 

pay increases, locality pay increases, 

special rate adjustments, within-grade 

increases (WGI’s), quality step increases 

(QSI’s), performance awards, and 

promotions. Multiple pay changes in 

any given year (averaging three per 

employee) are costly to process and do 

not consider comprehensively the 

employee’s contributions to the 

organization. Under the demonstration 

project, ONR will distribute the budget 

authority from the sources listed above 

into four pay categories: (1) General 

increase, (2) locality increase, (3) merit 

increase, and (4) contribution awards. 

From these pay categories, a single 

annual pay action would be authorized 

based primarily on employees’ 

contributions. Competitive promotions 

will still be processed under a separate 

pay action; most career promotions will 

be processed under the CCS. 

In general, the goal of CCS is to pay 

in a manner consistent with employee 

contribution or, in other words, migrate 

employees’ basic pay closer to the NPR. 

One result may be a wider distribution 

of pay among employees for a given 

level of duties. 

After the CCS appraisal process has 

been completed and the employees’ 

standing relative to the NPR has been 

determined, the pay pool manager, in 

consultation with the pay pool panel or 

other pay pool supervisory and staff 

officials, will determine the appropriate 

basic pay change and contribution 

award, if appropriate, for each 

employee. Standard operating 

procedures will provide guidance, 

including market salary reference data, 

to assist pay pool managers in making 

pay determinations. In most cases, the 

pay pool manager will approve basic 

pay changes and awards. In some cases, 

however, approval of a higher level 

official will be required. Figure 9 

summarizes the eligibility criteria and 

applicable limits for each pay category. 


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The CCSDS will calculate each 

employee’s OCS and his or her standing 

in relation to the NPR. The system will 

provide a framework to assist pay pool 

officials in selecting and implementing 

a payout scheme. It will alert 

management to certain formal limits in 

granting pay increases; e.g., an 

employee may not receive a permanent 

increase above the maximum rate of 

basic pay for his or her pay band until 

a corresponding level change has been 

effected. Once basic pay and award 

decisions have been finalized and 

approved, the CCSDS will prepare the 

data file for processing the pay actions, 

and maintain a consolidated record of 

CCS pay actions for all ONR 

demonstration project employees. 

a. General Increases. General increase 

budget authority will be available to pay 

pools as a straight percentage of 

employee salaries, as derived under 5 

U.S.C. 5303 or similar authority. Pay 

pool panels or managers may reduce or 

deny general pay increases for 

employees whose contributions are in 

the overcompensated category. (See 

Figure 9.) Such reduction or denial may 

not place an employee in the 

undercompensated category. An 

employee receiving maintained pay 

(except one receiving maintained pay 

for an occupational injury who receives 

a full general pay increase) will receive 

half of the across-the-board GS 

percentage increase in basic pay until 

the employee’s basic pay is within the 

basic pay range assigned for their 

current position or for two years, 

whichever is less. ONR employees on 

pay retention at the time of 

demonstration project implementation 

or as a result of placement through the 

DON RPL, DoD PPP or the Federal 

Interagency Career Transition 

Assistance Plan will receive half of the 

across-the-board GS percentage increase 

until the employee’s maintained pay is 

exceeded by the maximum rate for the 

employee’s pay band or the maintained 

pay is ended due to a promotion. 

General increase authority not expended 

is available to either the merit increase 

or contribution award pay categories or 

both. 

b. Merit Increases. 

Merit increases will be calculated 

after the determination of employees’ 

general increases. Merit increases may 

be granted to employees whose 

contribution places them in the 

‘‘normal’’ or ‘‘undercompensated’’ 

categories. (See Figure 9.) In general, the 

higher the range in which the employee 

is contributing compared to his or her 

basic pay, the higher the merit increase 

should be. However, the following 

limitations apply: A merit increase may 

not place any employee’s basic pay (1) 

in the ‘‘overcompensated’’ category (as 

established by the NPR for the 

upcoming year, which has been 

adjusted by the amount of the new 

general increase); (2) in excess of 

established basic pay caps; (3) in excess 

of the maximum rate of basic pay for the 

individual’s pay band (unless the 

employee is being concurrently 

advanced to the higher pay band); or (4) 

above any outside-imposed dollar limit. 

Merit increases for employees in the 

NPR will be limited to six percent of 

basic pay, not to exceed the upper limit 

of the NPR for the employee’s score. In 

addition, merit increases for employees 

in the undercompensated range may not 

exceed six percent above the lower rail 

of the NPR, or 20 percent of basic pay 

without CNR or designee approval. 

The size of ONR’s continuing pay 

fund is based on 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 pay 

bands); (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. ONR will 

periodically review or will review every 

two to three years its continuing pay 

fund to determine if any adjustments are 

necessary. 

The amount of budget authority 

available to each pay pool will be 

determined annually by the CNR. 

Factors to be considered by the CNR in 

determining annual budget authority 

may include market salaries, mission 

priorities, and organizational growth. 

Because statistical variations will occur 

in year-to-year personnel growth, any 

unexpended merit increase authorities 

may be transferred to the Contribution 

Awards category. 

c. Locality Increases. 

All employees will be entitled to the 

locality pay increase authorized by law 

and regulation for their official duty 

station and/or position. 

d. Contribution Awards. 

Authority to pay contribution awards 

(lump-sum payments recognizing 

significant contributions) will be 

initially available to pay pools as a 

straight 1.5 percent of employees’ basic 

pay (similar to the amount currently 

available for performance awards). The 

percentage rate may be adjusted in 


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future years of the demonstration 

project. In addition, unexpended 

general increase and merit increase 

budget authorities may be used to 

augment the award category. 

Contribution awards may be granted to 

those employees whose contributions 

place them in the ‘‘normal’’ or 

‘‘undercompensated’’ category, and to 

employees in the ‘‘overcompensated’’ 

category who are on maintained pay. 

Standard operating procedures will 

provide guidance to pay pool managers 

in establishing and applying criteria to 

determine significant contributions 

which warrant awards. An award 

exceeding $10,000 requires CNR 

approval. (See Figure 9.) Pay pools may 

also grant time-off as a contribution 

award, in lieu of or in addition to cash. 

8. Career Movement Based on CCS 

Movement through the pay bands will 

be determined by contribution and basic 

pay at the time of the annual CCS 

appraisal process. 

The ONR demonstration project is an 

integrated system that links level of 

work to be accomplished (as defined by 

a career track and pay band) with 

individual achievement of that work (as 

defined by an OCS) to establish the rate 

of appropriate compensation (as defined 

by the career track pay schedule), and 

to determine progression through the 

career track. This section addresses only 

changes in level which relate directly to 

the CCS determination. 

When an employee’s OCS falls within 

three scores of the top score available to 

his or her current pay band, supervisors 

should consider whether it is 

appropriate to advance the employee to 

the next higher pay band (refer to 

IV.A.1.a for other criteria). If progression 

to the next higher level is deemed 

warranted, supporting documentation 

would be included with the CCS 

appraisal and forwarded through the 

appropriate channels for approval. If 

advancement is not considered 

appropriate at this time, the employee 

would remain in his or her current pay 

band. Future basic pay raises would be 

capped by the top of the employee’s 

current pay band unless the employee 

progresses to the next higher pay band 

through a CCS-related promotion, an 

accretion of duties promotion, or a 

competitive promotion. 

a. Advancements in Pay Band Which 

May be Approved by the Pay Pool 

Manager. 

Advancements to all pay bands except 

Pay Band V of the S&E Professional 

Career Track may be approved by the 

pay pool manager. 

b. Advancements in Pay Band Which 

Must be Approved by the Executive 

Director. 

Advancement to (1) pay bands outside 

target pay bands or established position 

management criteria; (2) Pay Band IV 

and V of the S&E Professional Career 

Track; and (3) Pay Bands IV and V of the 

Administrative Specialist and 

Professional Career Track require 

approval by the Executive Director or 

his or her designee. Details regarding 

the process for nomination and 

consideration, format, selection criteria, 

and other aspects of this process will be 

addressed in the standard operating 

procedures. 

c. Advancement to Pay Band V of the 

Science and Engineering (S&E) 

Professional Career Track. 

Vacancies in this pay band will be 

filled in accordance with guidance 

issued by DoD. 

d. Regression to Lower Pay Band. (See 

Figure 8, ‘‘Employee A’’). 

If an employee is contributing less 

than expected for the level at which he 

or she is being paid, the individual may 

regress into a lower pay band through 

reduction or denial of general increases 

and ineligibility for merit increases. 

(This is possible because the NPR plus 

the minimum and maximum pay rates 

for each pay band will be adjusted 

upwards each year by the across-theboard GS percentage increase in basic 

pay.) If the employee’s basic pay 

regresses to a point below the pay 

overlap area between his or her current 

pay band and the next lower pay band, 

it will no longer be appropriate to 

designate him or her as being in the 

higher level. Therefore, the employee 

will be formally changed to the lower 

pay band. The employee will be 

informed of this change in writing, but 

procedural and appeal rights provided 

by 5 U.S.C. 4303 and 7512 (and related 

OPM regulations) will not apply (except 

in the case of employees who have 

veterans’ preference). ONR is providing 

for waivers of the statute and 

regulations for such actions. Further, 

because a change to lower pay band 

under such circumstances is not 

discretionary, the change may not be 

grieved under ONR’s administrative 

grievance procedures. 

9. CCS Grievance Procedures 

An employee may grieve the appraisal 

received under CCS using procedures 

specifically designed for CCS appraisals. 

Under these procedures, the employee’s 

grievance will first be considered by the 

pay pool panel, which will recommend 

a decision to the pay pool manager. Any 

panel member’s grievance will be 

considered by the pay pool manager, 

without reference to the panel. If the 

employee is not satisfied with the pay 

pool manager’s decision, he/she may 

file a formal grievance under the 

provisions of the ONR’s formal 

grievance procedures, unless the 

employee’s pay pool manager is the 

CNR, in which case the first-step 

decision will be final. A CCS grievance 

from an ONR attorney will be handled 

in accordance with the Office of General 

Counsel’s grievance procedures after 

ONR Counsel and the pay pool panel 

recommend a resolution. 

The following are not grievable: Pay 

actions resulting from CCS (receipt, 

non-receipt or amount of general 

increase, merit increase, DCA, or 

contribution award); reductions in pay 

band without reduction in pay due to 

regression (see section IV.C.8.d); 

contents of CCS Plans, (element 

weights, descriptors/discriminators, 

performance standards and 

supplemental criteria); or any action for 

which another appeal or complaint 

process exists. 

V. Separations 

A. Performance-based Reduction-in-Pay 

or Removal Actions 

This section applies to reduction in 

pay or removal of demonstration project 

employees based solely on unacceptable 

performance. Adverse action procedures 

under 5 CFR part 752 remain 

unchanged. 

When a supervisor determines during 

or at the end of the appraisal period that 

the employee is not completing work 

assignments satisfactorily, the 

supervisor must make a determination 

as to whether the employee is 

performing unacceptably in one or more 

of the contribution elements. All CCS 

elements applicable to the employee’s 

position are critical as defined by 5 CFR 

part 430. 

Unacceptable performance 

determinations must be made by 

comparing the employee’s performance 

to the acceptable performance standards 

established for elements. At any time 

during or at the end of the appraisal 

period that an employee’s performance 

is determined to be unacceptable in one 

or more contribution elements, the 

employee will be provided assistance in 

improving his or her performance. This 

will normally include clarifying (or 

further clarifying) the meaning of terms 

used in the acceptable performance 

standards (e.g., ‘‘timely’’ ‘‘thorough 

research,’’ and ‘‘overall high quality’’) as 

they relate to the employee’s specific 

responsibilities and assignments. An 

employee whose performance is 

unacceptable after he or she has been 


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given a reasonable opportunity to 

improve may be removed or reduced in 

grade or pay band, in accordance with 

the provisions of 5 U.S.C. 4303 and 

related OPM regulations. Employees 

may also be removed or reduced in 

grade or pay band based on 

unacceptable performance under the 

provisions of 5 U.S.C. 7512. All 

procedural and appeal rights set forth in 

the applicable statute and related OPM 

regulations will be afforded to 

demonstration project employees 

removed or reduced in grade or pay 

band for unacceptable performance. 

B. Reduction-in-Force (RIF) Procedures 

1. RIF Authority 

Under the demonstration project, 

ONR would be delegated authority to 

approve RIF as defined in Secretary of 

the Navy Instruction 12351.5F and the 

use of separation pay incentives. 

2. RIF Definitions 

a. Competition in RIF. 

When positions are abolished, 

employees are released from their 

retention levels in inverse order of their 

retention standing, beginning with the 

employee having the lowest standing. If 

an employee is reached for release from 

a retention level, he/she could have a 

right to be assigned to another position 

within their same career track and pay 

band or they could have a right to 

retreat to a position previously held. 

b. Competitive Area. 

A separate competitive area will be 

established by geographic location for 

all personnel included in the 

demonstration project. 

c. Competitive Level. 

Positions in the same occupational 

pay band, which are similar enough in 

duties and qualifications that employees 

can perform the duties and 

responsibilities including the selective 

placement factor, if any, of any other 

position in the competitive level upon 

assignment to it, without any loss of 

productivity beyond what is normally 

expected. 

d. Service Computation Date (SCD). 

The employee’s basic Federal SCD 

would be adjusted for CCS results 

credit. 

(1). Federal SCD. 

An employee’s basic Federal SCD may 

be credited with up to 20 years credit 

based on the results of the CCS process. 

The CCS RIF Assessment Category 

would be used to determine the number 

of RIF years credited. The CCS RIF 

Assessment Category is the combination 

of the employee’s standing under the 

CCS relative to the NPR and any merit 

increase, DCA, contribution award or 

promotion. Figure 10 shows the RIF 

years available for each CCS RIF 

Assessment Category [proposed 

revisions to the RIF Assessment 

Category are depicted]. 

(2). CCS Process Results. 

If an employee has fewer than three 

CCS process results, the value (RIF years 

available) of the actual number of 

process results on record will be 

divided by the number of actual process 

results on record. In cases where an 

employee has no actual CCS process 

results, the employee will be given the 

additional RIF CCS process results 

credit for the most common, or ‘‘modal’’ 

ONR demonstration project CCS RIF 

Assessment Category for the most recent 

CCS appraisal period. 

(3). Credit from Other Rating Systems. 

Employees who have been rated 

under different patterns of summary 

rating levels will receive RIF appraisal 

credit as follows: 

—If there are any ratings to be 

credited for the RIF given under a rating 

system which includes one or more 

levels above fully successful (Level 3), 

employees will receive credit as follows: 

12 years for Level 3, 16 years for Level 

4, or 20 years for Level 5; or 

—If an employee comes from a system 

with no levels above Fully Successful 

(Level 3), they will receive credit based 

on the demonstration project’s modal 

CCS RIF assessment category. 

(4). RIF Cutoff Date. 

To provide adequate time to properly 

determine employee retention standing, 

the cutoff date for use of new CCS 


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process results is set at 30 days prior to 

the date of issuance of RIF notices. 

3. Displacement Rights 

a. Displacement Process. 

Once the position to be abolished has 

been identified, the incumbent of that 

position may displace another employee 

within the incumbent’s current career 

track and pay band when the incumbent 

has a higher retention standing and is 

fully qualified for the position occupied 

by an employee with a lower standing. 

If there are no displacement rights 

within the incumbent’s current career 

track and pay band, the incumbent may 

exercise his or her displacement rights 

to any position previously held in the 

next lower pay band, regardless of 

career track, when the position is held 

by an employee with a lower retention 

standing. In the case of all preference 

eligibles, they may displace up to the 

equivalent of three grades or intervals 

below the highest equivalent grade of 

their current pay band in the same or a 

different career track regardless of 

whether they previously held the 

position provided they are fully 

qualified for the position and the 

position is occupied by an employee 

with a lower retention standing. 

Preference eligibles with a compensable 

service connected disability of 30 

percent or more may displace an 

additional two GS grades or intervals 

(total of five grades) below the highest 

equivalent grade of their current pay 

band provided they have previously 

held the position and the position is 

occupied by an employee in the same 

subgroup with a later RIF service 

computation date. 

b. Retention Standing. 

Retention is based on tenure, veteran 

preference, length of service, and CCS 

process results. Competing employees 

are listed on a retention register in the 

following order: Tenure I (career 

employees), Tenure II (careerconditional employees), and Tenure III 

(contingent employees). Each tenure 

group has three subgroups (30% or 

higher compensable veterans, other 

veterans, and non-veterans) and 

employees appear on the retention 

register in that order. Within each 

subgroup, employees are in order of 

years of service adjusted to include CCS 

process results. 

c. Vacant Positions. 

Assignment may be made to any 

available vacant position including 

those with promotion potential in the 

competitive area. 

d. Ineligible for Displacement Rights. 

Employees who have been notified in 

writing that their performance is 

considered to be unacceptable are 

ineligible for displacement rights. 

e. Change to Lower Pay Band due to 

an Adverse or Performance-based 

Action. 

An employee who has received a 

written decision to change him or her to 

a lower pay band level due to an 

adverse or performance-based action 

will compete from the position to which 

he or she will be or has been demoted. 

4. Notice Period 

The notice period and procedures in 

5 CFR subpart H, section 351.801 will 

be followed. 

5. RIF Appeals 

Under the demonstration project, 

employees affected by a RIF action, 

other than a reassignment, maintain 

their right to appeal to the Merit 

Systems Protection Board if they feel the 

reason for the RIF is not valid or if they 

think the process or procedures were 

not properly applied. 

6. Separation Incentives 

ONR will have delegated authority to 

approve separation incentives and will 

use the current calculation methodology 

of a lump sum payment equal to an 

employee’s severance pay calculation or 

$25,000, whichever is less. 

7. Severance Pay 

Employees will be covered by the 

severance pay rules in 5 CFR part 550, 

subpart G, except that ONR will 

establish rules for determining a 

‘‘reasonable offer’’ according to the 

provisions of 5 CFR 536.104. 

8. Outplacement Assistance 

All outplacement assistance currently 

available would be continued under the 

demonstration project. 

VI. Demonstration Project Transition 

A. Initial Conversion or Movement to 

the Demonstration Project 

1. Placement Into Career Tracks and Pay 

Bands 

Conversion or movement of GS 

employees into the demonstration 

project will be into the career track and 

pay band which corresponds to the 

employee’s current GS grade and basic 

pay. If conversion into the 

demonstration project is accompanied 

by a simultaneous change in the 

geographic location of the employee’s 

duty station, the employee’s overall GS 

pay entitlements (including locality 

rate) in the new area will be determined 

before converting the employee’s pay to 

the demonstration project pay system. 

Employees will be assured of placement 

within the new system without loss in 

total pay. Once under the demonstration 

project, employee progression through 

the career tracks and pay bands up to 

their target pay band is dependent upon 

contribution score, not upon previous 

methods (e.g., WGI’s, QSI’s, or career 

promotions as previously defined). 

ONR proposes the addition of 

language to clarify procedures for noncompetitive placements into the 

demonstration project. Specifically, 

employees who enter the demonstration 

project after initial implementation by 

lateral transfer, reassignment, or 

realignment will be subject to the same 

pay conversion rules. 

2. Conversion of Retained Grade and 

Pay Employees 

ONR’s workforce will be grouped into 

career tracks and associated pay band 

with designated pay ranges rather than 

the traditional grade and step. 

Therefore, grade and pay retention will 

be eliminated. ONR will grant 

‘‘maintained pay’’ (as defined in section 

III.G.2, ‘‘Maintained Pay’’), which is 

related to the current meaning of 

‘‘retained pay’’ but does not provide for 

indefinite retention of pay except in 

certain situations. Employees’ currently 

on grade or pay retention will be 

immediately placed on maintained pay 

at their current rate of basic pay if this 

rate exceeds the maximum rate for their 

pay band and ‘‘grandfathered’’ in the 

appropriate pay band. Employees on 

grade retention will be placed in the pay 

band encompassing the grade of their 

current position. Employees will receive 

half of the across-the-board GS 

percentage increase in basic pay and the 

full locality pay increase until their 

basic pay is within the appropriate basic 

pay range for their current position 

without time limitation. 

3. WGI Buy-In 

The participation of all covered ONR 

employees in the demonstration project 

is mandatory. However, acceptance of 

the system by ONR employees is 

essential to the success of the 

demonstration project. Therefore, on the 

date that employees are converted to the 

project pay plans, they will be given a 

prorated permanent increase in pay 

equal to the earned (time spent in step) 

portion of their next WGI based on the 

value of the WGI at the time of 

conversion so that they will not feel 

they are losing a pay entitlement 

accrued under the GS system. 

Employees will not be eligible for this 

basic pay increase if their current rating 

of record is unacceptable at the time of 

conversion. There will be no prorated 

payment for employees who are at step 

10 or receiving a retained rate at the 


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time of conversion into the 

demonstration project. 

4. Career Promotion Eligibility 

ONR proposes to adopt MRMC’s 

provisions for compensating employees 

who would have become eligible for 

career promotions during the first 12 

months of the demonstration project but 

for conversion to the demonstration 

project pay bands. Employees who 

qualify under this provision will receive 

pay increases for noncompetitive 

promotion equivalents when the grade 

level of the promotion is encompassed 

within the same pay band or another, 

the employee’s performance warrants 

the promotion, and the promotion 

would have otherwise occurred during 

that period. Employees who receive an 

in-level promotion at the time of 

conversion will not receive a WGI BuyIn equivalent as defined above. For 

example if a GS–11 employee converts 

in to the demonstration project at a Pay 

Band III within the Administrative 

Specialists and Professional Career 

Track and would have become eligible 

for promotion to GS–12 within the next 

12 months, that employee will receive a 

pay increase equivalent to the GS–12 

but still remain in Pay Band III. 

During the first 12 months of the 

demonstration project an exception will 

also be made for employees whose 

target career promotion would place 

them in a different pay band from their 

initial pay band level at conversion. If 

the employee’s performance warrants it 

and the promotion would have occurred 

otherwise except for the demonstration 

project, the non-competitive target 

career promotion can happen outside 

the CCS process. For example if an 

employee’s career ladder position has a 

full performance level of GS–13 and the 

employee is a GS–12 at conversion, the 

employee would initially convert in to 

the demonstration project at a Pay Band 

III but may be eligible for a noncompetitive promotion into Pay Band IV 

within the first 12 months of the 

demonstration project if all 

requirements are met and the promotion 

is recommended by their supervisor. 

5. Conversion of Special Salary Rate 

Employees 

Employees who are in positions 

covered by a special salary rate prior to 

entering the demonstration project will 

no longer be considered special salary 

rate employees under the demonstration 

project. These employees will, therefore, 

be eligible for full locality pay. The 

adjusted salaries of these employees 

will not change. Rather, the employees 

will receive a new basic rate of pay 

computed by dividing their basic 

adjusted pay (higher of special salary 

rate or 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 will 

not apply to the conversion process as 

there will be no change in total salary. 

However, if an employee’s new basic 

pay rate after conversion to the 

demonstration project pay schedule 

exceeds the maximum basic pay 

authorized for the pay band, the 

employee will be granted maintained 

pay under paragraph III.G.2 until the 

employee’s salary is within the range of 

the pay band. For example, an 

Electronics Engineer, GS–855–9, step 5, 

is paid $59,568 per annum in 

accordance with special GS salary rates 

as of January 2010 per Table Number: 

0422. The employee is located in the 

locality area of Washington-Baltimore, 

DC-MD-VA-WV. Under the 

demonstration project, the computation 

of the engineer’s new basic rate of pay 

with a full locality adjustment and WGI 

buy-in is computed as follows: 

a. Basic adjusted pay divided by 

locality pay factor = new basic rate of 

pay. 

b. New basic rate of pay multiplied by 

the full locality adjustment for current 

area = full locality adjustment amount 

for special rate employees. 

c. New basic rate of pay + WGI buyin amount × locality pay factor = 

demonstration special rate for 

conversion. 

6. Conversion of Employees on 

Temporary Promotions 

Employees who are on temporary 

promotions at the time of conversion 

will be returned to their grade and step 

of record prior to conversion. These 

employees will be converted to a pay 

band following the procedures 

described in Section IV.A.1. After 

conversion, the temporary promotion 

may be reinstated for the remainder of 

the original 120-day timeframe. If the 

grade of the temporary position is 

associated with a higher pay band, the 

employee will be temporarily placed in 

the appropriate higher band while on 

the temporary promotion, following the 

procedures described in Section 

II.A.5.b.i. After the temporary 

promotion has ended, the employee will 

be returned to the salary and pay band 

established upon conversion, following 

the procedures described in Section 

II.A.5.b.iv. 

7. Non-Competitive Movement Into the 

Demonstration Project 

Employees who enter the 

demonstration project after initial 

implementation by lateral transfer, 

reassignment, or realignment will be 

subject to the same pay conversion rules 

and will, therefore, be eligible for full 

locality pay. Specifically, adjustments to 

the employee’s basic pay for a step 

increase or a non-competitive career 

ladder promotion will be computed as 

a prorated share of the current value of 

the step or promotion increase based 

upon the number of full weeks an 

employee has completed toward the 

next higher step or grade at the time the 

employee moves into the project. 

B. CCS Start-Up 

ONR expects to place employees on 

CCS elements, descriptors, 

discriminators, and standards around 

October 2010 with conversion to 

demonstration project pay plans before 

the end of April 2011. The CCS process 

will be used to appraise ONR employees 

at the end of the 2010–2011 cycle which 

would occur on September 30, 2011. 

ONR expects the first CCS payout to 

occur at the beginning of the first full 

pay period in January 2012. 

C. Training 

An extensive training program is 

planned for everyone in the 

demonstration project including the 

supervisors, managers, and 

administrative staff. Training will be 

tailored, as discussed below, to fit the 

requirements of every employee 

included in the demonstration project 

and will address employee concerns 

and as well as the benefits to employees. 

In addition, leadership training will be 

provided, as needed, to managers and 

supervisors as the new system places 

more responsibility and decision 

making authority on them. ONR training 

personnel will provide local 

coordination and facilities, 

supplemented by contractor support as 

needed. Training will be provided at the 

appropriate stage of the implementation 

process. 

1. Types of Training 

Training packages will be developed 

to encompass all aspects of the project 

and validated prior to training the 

workforce. Specifically, training 

packages will be developed for the 

following groups of employees: 

a. Employees. 

ONR demonstration project 

employees will be provided an overview 

of the demonstration project and 

employee processes and 

responsibilities. 

b. Supervisors and Managers. 

Supervisors and managers under the 

demonstration project will be provided 

training in supervisory and managerial 


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processes and responsibilities under the 

demonstration project. 

c. Support Personnel. 

Administrative support personnel, 

HRO personnel, financial management 

personnel, and Management 

Information Systems Staff will be 

provided training on administrative 

processes and responsibilities under the 

demonstration project. 

D. New Hires Into the Demonstration 

Project 

The following steps will be followed 

to place employees (new hires) entering 

the system: 

1. The career track and pay band will 

be determined based upon the 

employee’s education and experience in 

relation to the duties and 

responsibilities of the position in which 

he or she is being placed, consistent 

with OPM qualification standards. 

2. Basic pay will be set based upon 

available labor market considerations 

relative to special qualifications 

requirements, scarcity of qualified 

candidates, programmatic urgency, and 

education and experience of the new 

candidate. 

3. Employees placed through the DOD 

Reemployment Priority List (RPL), or 

DOD Priority Placement Program (PPP), 

or the Interagency Career Transition 

Assistance Plan (ICTAP) who are 

eligible for maintained pay will receive 

one half of the across-the-board GS 

percentage increase in basic pay and the 

full locality pay increase until the 

employee’s basic pay is within the basic 

pay range of the career track and pay 

band to which assigned. Federal 

employees on retained pay and Federal 

employees on special salary rates hired 

into the Demonstration Project by 

promotion or reassignment are eligible 

for maintained pay and will receive one 

half of the across-the-board GS 

percentage increase in basic pay and the 

full locality pay increase until the 

employee’s basic pay is within the basic 

pay range of the career track and pay 

band to which assigned. Employees are 

eligible for maintained pay as long as 

there is no break in service and if the 

employee’s rate of pay exceeds the 

maximum rate of his or her pay band. 

4. New employees will be provided 

training and an overview of the 

demonstration project outlining the CCS 

process and their responsibilities. If the 

employee is a manager, training will 

also include supervisory and managerial 

responsibilities under the 

demonstration project. 

E. Conversion or Movement From 

Demonstration Project 

In the event the demonstration project 

is terminated or employees leave the 

demonstration project through 

promotion, change to lower grade, 

reassignment or transfer, conversion 

back to the GS system may be necessary. 

The converted GS grade and GS rate of 

pay must be determined before 

movement or conversion out of the 

demonstration project and any 

accompanying geographic movement, 

promotion, or other simultaneous 

action. An employee will not be 

converted at a level which is lower than 

the GS grade held immediately prior to 

entering the demonstration project; 

unless, since that time, the employee 

has undergone a reduction in pay band. 

The converted GS grade and rate will 

become the employee’s actual GS grade 

and rate after leaving the demonstration 

project and will be used to determine 

the pay action and GS pay 

administration rules for employees who 

leave the project to accept a position in 

the traditional Civil Service system. The 

following procedures will be used to 

convert the employee’s demonstration 

project pay band to a GS equivalent 

grade and the employee’s demonstration 

project rate of pay to the GS equivalent 

rate of pay. 

1. Grade Determination 

Employees will be converted to a GS 

grade based on a comparison of the 

employee’s current adjusted rate of 

basic pay to the highest GS applicable 

rate range considering only those grade 

levels that are included in the 

employee’s current pay band. The 

highest GS applicable rate range 

includes GS basic rates, locality rates, 

and special salary rates. An employee in 

a pay band corresponding to a single GS 

grade is converted to that grade. An 

employee in a pay band corresponding 

to two or more grades is converted to 

one of those grades using the following 

procedures identified in a–f below: 

a. Identify the highest GS grade 

within the current pay band that 

accommodates the employee’s adjusted 

rate of basic pay (including any locality 

payment). 

b. If the employee’s adjusted rate of 

basic pay equals or exceeds the 

applicable step 4 rate of the identified 

highest GS grade, the employee is 

converted to that grade. 

c. If the employee’s adjusted rate of 

basic pay is lower than the applicable 

step 4 of the highest grade and there are 

only two GS grades in the pay band, the 

employee is converted to the next lower 

grade. If there are more than two GS 

grades in the pay band, this process is 

used for each successively lower grade 

in the pay band until a grade is found 

in which the employee’s adjusted rate of 

basic pay equals or exceeds the 

applicable step 4 of the grade. If the step 

4 cannot be matched at any of the GS 

grades, the employee will be converted 

to the lowest GS grade in the pay band. 

d. If under the above-described ‘‘step 

4’’ rule, the employee’s adjusted project 

rate exceeds the maximum rate of the 

grade assigned but fits in the rate range 

for the next higher applicable grade (i.e., 

between step 1 and step 4), then the 

employee shall be converted to the next 

higher applicable grade. 

e. For two-grade interval occupations, 

conversion should not be made to an 

intervening (even) grade level below 

GS–11. 

f. Employees in Level IV of the 

Administrative Specialist and 

Professional Career Track will convert 

to the GS–13 level. 

2. Pay Setting 

Pay conversion will be done before 

any geographic movement or other payrelated action that coincides with the 

employee’s movement or conversion out 

of the demonstration project. The 

employee’s pay within the converted GS 

grade is set by converting the 

employee’s demonstration project rate 

of pay to a GS rate of pay as follows: 

a. The employee’s demonstration 

project adjusted rate of pay (including 

locality) is converted to a rate on the 

highest applicable adjusted rate range 

for the converted GS grade. For 

example, if the highest applicable GS 

rate range for the employee is a special 

salary rate range, the applicable special 

rate salary table is used to convert the 

employee’s pay. 

b. When converting an employee’s 

pay, if the rate of pay falls between two 

steps of the conversion grade, the rate 

must be set at the higher step. 

c. Employees whose basic pay 

exceeds the maximum basic pay of the 

highest GS grade for their pay band will 

be converted to the highest grade and 

step in their pay band. Upon 

conversion, the maximum basic pay will 

be at the step 10 level with no provision 

for retained pay. 

3. Employees in Positions Classified 

Above GS–15 

Conversion and pay retention 

instructions for employees and 

positions in Pay Band V of the S&E 

Professional Career Track will be 

contingent on guidance provided by 

DoD. 


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4. Determining Date of Last Equivalent 

Increase 

The last equivalent increase will be 

the date the employee received a CCS 

pay increase, was eligible to receive a 

CCS pay increase, or received a 

promotion, whichever occurred last. 

F. Personnel Administration 

All personnel laws, regulations, and 

guidelines not waived by this plan will 

remain in effect. Basic employee rights 

will be safeguarded and Merit System 

Principles will be maintained. Servicing 

CPACs will continue to process 

personnel-related actions and provide 

consultative and other appropriate 

services. 

G. Automation 

ONR will continue to use the Defense 

Civilian Personnel Data System 

(DCPDS) for the processing of 

personnel-related data. Payroll servicing 

will continue from the respective 

payroll offices. 

An automated tool will be used to 

support computation of performance 

related pay increases and awards and 

other personnel processes and systems 

associated with this project. 

H. Experimentation and Revision 

Many aspects of a demonstration 

project are experimental. Modifications 

may be made from time to time as 

experience is gained, results are 

analyzed, and conclusions are reached 

on how the new system is working. 

DoDI 1400.37, July 28, 2009, provides 

instructions for adopting other STRL 

flexibilities, making minor changes to 

an existing demonstration project, and 

requesting new initiatives. 

VII. Demonstration Project Duration 

Section 342 of the National Defense 

Authorization Act for Fiscal Year 1995 

(Public Law 103–337) does not require 

a mandatory expiration date for this 

demonstration project. The project 

evaluation plan addresses how each 

intervention will be comprehensively 

evaluated. Major changes and 

modifications to the interventions may 

be made using the procedures in DoDI 

1400.37, if formal evaluation data 

warrant a change. At the 5-year point, 

the entire demonstration will be 

examined for either: (a) Permanent 

implementation, (b) modification and 

another test period, or (c) termination of 

the project. 

VIII. Demonstration Project Evaluation 

Plan 

Consistent with guidance from OSD, 

ONR proposes following the same 

evaluation plan as is being used by NRL 

and the other STRL Demonstration 

Projects. Accordingly, standard 

language for Evaluation Plan, 

Evaluation, and Method of Data 

Collection (sections V.B., V.C, and V.D., 

respectively) provided by OSD is used 

in this document to describe ONR’s 

plans and procedures for the 

demonstration project evaluation. The 

use of parallel evaluation methodologies 

will facilitate comparisons across 

demonstration projects to derive higherorder conclusions about the benefits, 

challenges, and overall effectiveness of 

these programs. 

A. Overview 

Chapter 47 of title 5 U.S.C. requires 

that an evaluation be performed to 

measure the effectiveness of the 

proposed laboratory demonstration 

project, and its impact on improving 

public management. A comprehensive 

evaluation plan for the entire laboratory 

demonstration program, originally 

covering 24 DoD laboratories, was 

developed by a joint OPM/DoD 

Evaluation Committee in 1995. This 

plan was submitted to the Office of 

Defense Research & Engineering and 

was subsequently approved. The main 

purpose of the evaluation is to 

determine whether the waivers granted 

result in a more effective personnel 

system and improvements in ultimate 

outcomes (i.e., laboratory effectiveness, 

mission accomplishment, and customer 

satisfaction). 

B. Evaluation Model 

Appendix G shows an intervention 

model for the evaluation of the 

demonstration project. The model is 

designated to evaluate two levels of 

organizational performance: 

Intermediate and ultimate outcomes. 

The intermediate outcomes are defined 

as the results from specific personnel 

system changes and the associated 

waivers of law and regulation expected 

to improve human resource (HR) 

management (i.e., cost, quality, 

timeliness). The ultimate outcomes are 

determined through improved 

organizational performance, mission 

accomplishment, and customer 

satisfaction. Although it is not possible 

to establish a direct causal link between 

changes in the HR management system 

and organizational effectiveness, it is 

hypothesized that the new HR system 

will contribute to improved 

organizational effectiveness. 

Organizational performance measures 

established by the organization will be 

used to evaluate the impact of a new HR 

system on the ultimate outcomes. The 

evaluation of the new HR system for any 

given organization will take into 

account the influence of three factors on 

organizational performance: Context, 

degree of implementation, and support 

of implementation. The context factor 

refers to the impact which intervening 

variables (i.e., downsizing, changes in 

mission, or the economy) can have on 

the effectiveness of the program. The 

degree of implementation considers the 

extent to which the: 

(1) HR changes are given a fair trial 

period; 

(2) Changes are implemented; and 

(3) Changes conform to the HR 

interventions as planned. 

The support of implementation factor 

accounts for the impact that factors such 

as training, internal regulations and 

automated support systems have on the 

support available for program 

implementation. The support for 

program implementation factor can also 

be affected by the personal 

characteristics (e.g., attitudes) of 

individuals who are implementing the 

program. 

The degree to which the project is 

implemented and operated will be 

tracked to ensure that the evaluation 

results reflect the project as it was 

intended. Data will be collected to 

measure changes in both intermediate 

and ultimate outcomes, as well as any 

unintended outcomes, which may 

happen as a result of any organizational 

change. In addition, the evaluation will 

track the impact of the project and its 

interventions on veterans and other 

protected groups, the Merit Systems 

Principles, and the Prohibited Personnel 

Practices. Additional measures may be 

added to the model in the event that 

changes or modifications are made to 

the demonstration plan. 

The intervention model at Appendix 

D will be used to measure the 

effectiveness of the personnel system 

interventions implemented. The 

intervention model specifies each 

personnel system change or 

‘‘intervention’’ that will be measured 

and shows: 

(1) The expected effects of the 

intervention, 

(2) The corresponding measures, and 

(3) The data sources for obtaining the 

measures. 

Although the model makes predictions 

about the outcomes of specific 

interventions, causal attributions about 

the full impact of specific interventions 

will not always be possible for several 

reasons. For example, many of the 

initiatives are expected to interact with 

each other and contribute to the same 

outcomes. In addition, the impact of 

changes in the HR system may be 

mitigated by context variables (e.g., the 


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job market, legislation, and internal 

support systems) or support factors (e.g., 

training and automation support 

systems). 

C. Evaluation 

A modified quasi-experimental design 

will be used for the evaluation of the 

STRL Personnel Demonstration 

Program. Because most of the eligible 

laboratories are participating in the 

program, a 5 U.S.C. comparison group 

will be compiled from the Civilian 

Personnel Data File (CPDF). This 

comparison group will consist of 

workforce data from Government-wide 

research organizations in civilian 

Federal agencies with missions and job 

series matching those in the DoD 

laboratories. This comparison group 

will be used primarily in the analysis of 

pay banding costs and turnover rates. 

D. Method of Data Collection 

Data from several sources will be used 

in the evaluation. Information from 

existing management information 

systems and from personnel office 

records will be supplemented with 

perceptual survey data from employees 

to assess the effectiveness and 

perception of the project. The multiple 

sources of data collection will provide 

a more complete picture as to how the 

interventions are working. The 

information gathered from one source 

will serve to validate information 

obtained through another source. In so 

doing, the confidence of overall findings 

will be strengthened as the different 

collection methods substantiate each 

other. 

Both quantitative and qualitative data 

will be used when evaluating outcomes. 

The following data will be collected: 

(1) Workforce data; 

(2) Personnel office data; 

(3) Employee attitude surveys; 

(4) Focus group data; 

(5) Local site historian logs and 

implementation information; 

(6) Customer satisfaction surveys; and 

(7) Core measures of organizational 

performance. 

The evaluation effort will consist of 

two phases, formative and summative 

evaluation, covering at least five years to 

permit inter- and intra-organizational 

estimates of effectiveness. The formative 

evaluation phase will include baseline 

data collection and analysis, 

implementation evaluation, and interim 

assessments. The formal reports and 

interim assessments will provide 

information on the accuracy of project 

operation, and current information on 

impact of the project on veterans and 

protected groups, Merit System 

Principles, and Prohibited Personnel 

Practices. The summative evaluation 

will focus on an overall assessment of 

project outcomes after five years. The 

final report will provide information on 

how well the HR system changes 

achieved the desired goals, which 

interventions were most effective, and 

whether the results can be generalized 

to other Federal installations. 

IX. Demonstration Project Costs 

A. Cost Discipline 

An objective of the demonstration 

project is to ensure in-house cost 

discipline. A baseline will be 

established at the start of the project and 

labor expenditures will be tracked 

yearly. Implementation costs (including 

project development, automation costs, 

step buy-in costs, and evaluation costs) 

are considered one-time costs and will 

not be included in the cost discipline. 

The CNR or designee will track 

personnel cost changes and recommend 

adjustments if required to achieve the 

objective of cost discipline. 

B. Implementation Costs 

Current cost estimates associated with 

implementing the ONR demonstration 

project are shown in Figure 11. These 

include automation of systems such as 

the CCSDS, training, and project 

evaluation. The automation and training 

costs are startup costs. Transition costs 

are one-time costs. Costs for project 

evaluation will be ongoing for at least 

five years. 

X. Automation Support 

A. General 

One of the major goals of the 

demonstration project is to streamline 

the personnel processes to increase cost 

effectiveness. Automation must play an 

integral role in achieving that goal. 

Without the necessary automation to 

support the interventions proposed for 

the demonstration project, optimal cost 

benefit cannot be realized. In addition, 

adequate information to support 

decision-making must be available to 

managers if line management is to 

assume greater authority and 

responsibility for human resources 

management. 

Automation to support the 

demonstration project is required at two 

distinct levels. At the DON and DoD 

level, automation support [in the form 

of changes to the DCPDS] is required to 

facilitate processing and reporting of 

demonstration project personnel 

actions. At the ONR level, automation 

support (in the form of local processing 

applications) is required to facilitate 

management processes and decisionmaking. 

B. Defense Civilian Personnel Data 

System (DCPDS) 

ONR will continue to use the Defense 

Civilian Personnel Data System 

(DCPDS) for the processing of 

personnel-related data. Efforts have 

been made to minimize changes to 

DCPDS; and, therefore, the resources 

required to make the necessary changes. 

The following is a compendium of the 

proposed DCPDS modifications. The 

detailed specifications for required 

changes to DCPDS will be provided in 

the System Change Request (SCR), Form 

804. 


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C. Requirements Document Writer 

(RDWriter) 

The RDWriter application is a DoD 

system which will require modification 

to accommodate the interventions in 

this demonstration project. Specifically, 

there will be an RD that will replace the 

position description in the basic 

application; career tracks and pay bands 

will replace GS grades; and a CCS 

Assessment Summary that will replace 

performance elements. 

D. RIF Support System (RIFSS) 

ONR expects to adopt an existing RIF 

support system or pursue automation of 

the RIF process, as appropriate. Under 

the demonstration project, RIF rules will 

be modified to increase the credit for 

contributions and limit the rounds of 

competition. The AutoRIF application, 

developed by DoD, could be used if it 

were modified to accommodate these 

process changes. 

E. Contribution-based Compensation 

System Data System (CCSDC) 

This automated system is required as 

an internal control and as a mechanism 

to equate contribution scores to 

appropriate rates of basic pay. This 

system will allow pay pool managers to 

develop a spreadsheet that will assist 

them in determining an appropriate 

merit increase or contribution award or 

both based on the overall contribution 

score for each individual. It will also be 

used as an internal control to ensure 

that the permanent and nonpermanent 

money allotted to each pay pool is not 

exceeded. It will further allow pay pool 

managers to visualize the effects of 

giving large basic pay increases or 

awards to high contributors, and the 

effects of withholding either the general 

or merit increase or both of those who 

are low contributors, or in the 

overcompensated range. 

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Appendix B: Required Waivers to Laws 

and Regulations 

In adopting flexibilities without changes 

from other STRL Demonstration Projects, 

ONR also adopts the associated waivers as 

published in the Federal Register Notices of 

the applicable organizations. Additional 

waivers, specified below, are required to 

enact ONR’s proposed modifications to 

adopted flexibilities. 


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Appendix C: Definitions of Career 

Tracks and Pay Bands 

ONR’s pay band definitions may be 

modified as experience is gained through 

their application in classification actions and 

performance appraisal. 


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Appendix D: Table of Occupational 

Series Within Career Tracks 

Definitions for ONR’s three career tracks 

are provided below along with the 

breakdown of their respective series. Some 

series may appear in two career tracks 

depending on the purpose of the position. 

The breakdown of occupational series 

reflects only those occupations that currently 

exist in ONR. Additional series may be added 

as a result of changes in mission 

requirements or OPM-recognized 

occupations. These additional series will be 

placed in the appropriate career track 

consistent with the definitions provided 

below. 


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Appendix E: Classification and CCS 

Elements 

The CCS Summaries shown in this 

appendix are draft templates intended to 

provide an understanding of the information 

covered by the CCS process. Under the 

demonstration project, the summaries will be 

generated by the CCSDS. They may be 

changed during the project to require 

additional information, to make them easier 

to use, or for other reasons. 

The contents of the CCS elements, 

descriptors, discriminators, and basic 

acceptable standards may similarly be 

changed during the life of the demonstration 

project. 


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Appendix F: Computation of the IPS 

and the NPR 

The ONR demonstration project will use an 

IPS which links basic pay to contribution 

scores determined by the CCS process. The 

area where basic pay and level of 

contribution are assumed to be properly 

related is called the NPR. An employee 

whose CCS score and rate of basic pay plot 

within the NPR is considered to be 

contributing at a level consistent with pay. 

Employees whose pay plots below the NPR 

for their assessed score are considered 

‘‘undercompensated,’’ while employees 

whose score and pay plot above the NPR are 

considered ‘‘overcompensated.’’ 

The purpose of this scoring and pay 

structure is to spread the full range of basic 

pay provided by the GS, between GS–1, step 

1, and GS–15, step 10, into 80 intervals 

(scores and pay above those points are 

related using the same parameters). Each 

interval is a fixed percentage of the pay 

associated with the previous point. 

For each possible contribution score 

available to employees, the NPR spans a 

basic pay range of 12 percent. The lower 

boundary (or ‘‘rail’’) is established by fixing 

the basic pay equivalent to GS–1, step 1, with 

a CCS score of zero. The upper boundary is 

fixed at the basic pay equivalent to GS–15, 

step 10, with a CCS score of 80. The distance 

between these upper and lower rails for a 

given overall contribution score is then 

computed to ensure the range of 12 percent 

of basic pay is maintained for each available 

CCS score. The middle rail of the NPR is 

computed as 6 percent above the lower rail. 

This point is used in connection with certain 

limits established for pay increases (see 

section IV.C.7). 

From the above considerations, five 

variables, or inputs, were identified. They are 

as follows: 

1. Variable A: GS–1, step 1 (lowest salary) 

2. Variable B: GS–15, step 10 (highest 

salary) 

3. Variable C: Current C-values 

4. Variable M: 6 percent (middle rail 

computation above the low rail) 

5. Variable H: 12 percent (high rail 

computation above low rail) 

Other variables are as follows: 

1. Variable N: Number of C-value steps at 

GS–15, step 10 

2. Variable P (step increase): Salary value 

for each C-value equal to 1 + percentage 

increase 

From these variables, the following 

formula definitions were developed: 

Low rail = A*(P·

C) 

Mid rail = (1+M)*A*(P·

C) 

High rail = (1+H)*A*(P·

C) 

Where P = (B/(A*(1+H)))·(1/N) 

As an example, a result of the above 

computation, using the 2010 GS Salary Table, 

P (step increase) equals 1.023664623. 

Attachment (1) is a complete list of CCS pay 

band scores and basic pay ranges. 

Attachment (2) contains graphic 

representations of these tables for each career 

track. Once the C-values (0–80) are 

determined, the CCS pay bands and scores 

are extended at the same percentage 

increments as were computed for the step 

increase above. These C-values are extended 

to encompass the equivalent of ES–4 effective 

January 2010. In the example, SES Level ES– 

4 is equal to basic pay of $155,500 and is 

encompassed by the C-value 89 ($142,734 to 

$159,862). 


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[FR Doc. 2010–30876 Filed 12–9–10; 8:45 am] 

BILLING CODE 5001–06–C 


srobinson on DSKHWCL6B1PROD with NOTICES2EN10DE10.141</GPH>