55160 Federal Register / Vol. 75, No. 174 / Thursday, September 9, 2010 / Notices 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

Science and Technology Reinvention 

Laboratory (STRL) Personnel 

Management Demonstration Project, 

Department of the Navy (DON), Naval 

Air System Command (NAVAIR), Naval 

Air Warfare Center, Weapons Division 

(NAWCWD) and Naval Air Warfare 

Center, Aircraft Division (NAWCAD) 

AGENCY: Office of the Deputy Under 

Secretary of Defense (Civilian Personnel 

Policy), (DUSD (CPP)), Department of 

Defense (DoD). 

ACTION: Notice of proposal to design and 

implement a personnel management 

demonstration project. 

SUMMARY: Section 342(b) of the National 

Defense Authorization Act (NDAA) for 

Fiscal Year (FY) 1995, Public Law (Pub. 

L.) 103–337 (10 U.S.C. 2358 note), as 

amended by section 1109 of NDAA for 

FY 2000, Public Law 106–65, and 

section 1114 of NDAA for FY 2001, 

Public Law 106–398, authorizes the 

Secretary of Defense to conduct 

personnel demonstration projects at 

DoD laboratories designated as Science 

and Technology Reinvention 

Laboratories (STRLs). The above-cited 

legislation authorizes DoD to conduct 

demonstration projects to determine 

whether a specified change in personnel 

management policies or procedures 

would result in improved Federal 

personnel management. Section 1105 of 

the NDAA for FY 2010, Public Law 111– 

84, 123 Stat. 2486, October 28, 2009, 

designates additional DoD laboratories 

as STRLs for the purpose of designing 

and implementing personnel 

management demonstration projects for 

conversion of employees from the 

personnel system which applied on 

October 28, 2009. The NAWCWD and 

the NAWCAD are listed in subsection 

1105(a) of NDAA for FY 2010 as two of 

the newly designated STRLs. These two 

STRLs will be the participants in the 

demonstration project proposal 

described in this Federal Register 

Notice (FRN). 

DATES: The NAWCWD and NAWCAD 

demonstration project proposal may not 

be implemented until a 30-day comment 

period is provided, comments 

addressed, and a final Federal Register 

notice published. To be considered, 

written comments must be submitted on 

or before October 12, 2010. 

Implementation of this demonstration 

project, once approved, will begin no 

earlier than February 1, 2011 and no 

later than April 28, 2011. 

ADDRESSES: Send comments on or 

before the comment due date by mail to 

Ms. Betty A. Duffield, CPMS–PSSC, 

Suite B–200, 1400 Key Boulevard, 

Arlington, VA 22209–5144; by fax to 

(703) 696–5462; or by e-mail to 

Betty.Duffield@cpms.osd.mil. 

FOR FURTHER INFORMATION CONTACT: 

NAVAIR: Mr. Richard Cracraft, Naval 

Air Warfare Center, Weapons Division 

(NAWCWD), Code 730000D, 1 

Administration Circle, Building 00464, 

China Lake, CA 93555–6100. 

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 commanders 

and/or directors. The STRL Personnel 

Management Demonstration Projects 

involve broad-banded pay systems and 

simplified classification; compensation 

linked to performance, including 

contribution-based pay; recruitment and 

staffing changes; and enhanced training 

and development including critical 

skills training, Voluntary Emeritus 

Corps, and sabbaticals. 

This demonstration project involves: 

(1) Two appointment authorities 

(permanent and modified term); (2) 

extended probationary period for newly 

hired employees; (3) pay banding; (4) 

streamlined delegated examining; (5) 

modified reduction-in-force (RIF) 

procedures; (6) simplified job 

classification; (7) a mission aligned 

objectives and compensation based 

appraisal system; (8) market based 

starting salaries; (9) academic degree 

and certificate training; (10) sabbaticals; 

and (11) a Voluntary Emeritus Corps. 

2. Overview 

The covered organizations 

transitioned to the National Security 

Personnel System (NSPS) late in 2008. 

Subsequently, section 1113 of NDAA for 

FY 2010, Public Law 111–84,123 Stat. 

2486, required all employees to exit 

NSPS by no later than January 1, 2012. 

Another section of NDAA for FY 2010, 

section 1105, identifies NAWCAD and 

NAWCWD as STRLs and requires them 

to convert to an STRL demonstration 

project within 18 months of enactment 

of NDAA for FY 2010. This FRN 

provides notice of the proposal to 

design and implement an STRL 

demonstration project plan for the 

covered organizations. 

3. 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: September 1, 2010. 

Mitchell S. Bryman, 

Alternate OSD Federal Register Liaison 

Officer, Department of Defense. 

Table of Contents 

I. Executive Summary 

II. Introduction 

A. Purpose 

B. Problems With the Present System 

C. Changes Required/Expected Benefits 

D. Participating Organizations 

E. Participating Employees and Union 

Representation 

F. Project Design 

G. Personnel Management Board 

III. Personnel System Changes 

A. Pay Banding 

1. Occupational Families 

2. Pay Band Design 

3. Above GS–15 Positions 

B. Classification 

1. Occupational Series 

2. Classification Standards and Position 

Descriptions 

3. Fair Labor Standards Act 

4. Classification Authority 

5. Classification Appeals 

C. Mission Aligned Objectives and 

Compensation 

1. Overview 

2. Individual Mission Objectives (IMO) 

3. Rating Benchmarks 

4. Performance Feedback and Formal 

Ratings 

5. Pay Pools 

6. Performance Payout Determination 

7. Base Pay Increases and Bonuses 


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8. Extraordinary Achievement Allowance 

(EAA) 

9. Pay Growth Within a Pay Band 

10. Awards 

11. General Pay Increase 

12. Requests for Reconsideration 

13. Adverse Actions 

D. Hiring Authority 

1. Qualifications 

2. Delegated Examining 

3. Distinguished Scholastic Achievement 

Appointment Authority (DSAA) for 

Scientific and Engineering Positions 

4. Legal Authority 

5. Expanded Term Appointments 

6. Extended Probationary Period 

7. Termination of Probationary Employees 

8. Supervisory Probationary Periods 

9. Volunteer Emeritus Corps 

10. Direct Hire Authority for Scientists and 

Engineers With Advanced Degrees for 

Scientific and Engineering Positions 

11. Non-Citizen Hiring 

E. Internal Placement 

1. Employees Hired From Outside the 

NAWC STRL 

2. Promotion 

3. Reassignment 

4. Demotion or Placement in a Lower Pay 

Band 

5. Simplified Assignment Process 

6. Details and Temporary Promotions 

7. Exceptions to Competitive Procedures 

F. Pay Administration 

1. General 

2. Locality Pay 

3. Pay and Compensation Ceilings 

4. Pay Setting for Appointment 

5. Pay Setting for Promotion 

6. Pay Setting for Reassignment 

7. Pay Setting for Demotion or Placement 

in a Lower Pay Band 

8. Staffing Supplements 

9. Educational Pay Adjustment 

10. Developmental Promotions 

11. Pay Retention 

G. Employee Development 

1. Expanded Developmental Opportunity 

Program 

H. Reduction-in-Force (RIF) Procedures 

1. Competitive Areas 

2. Assignment Rights 

3. Crediting Performance in RIF 

IV. Implementation Training 

V. Movement Into and Out of the 

Demonstration Project 

A. Conversion From NSPS to the 

Demonstration Project 

1. Placement Into Demonstration Project 

Pay Plans and Pay Bands 

2. Pay Upon Conversion 

3. Fair Labor Standards Act (FLSA) Status 

4. Transition Equity 

5. Converting Employees on NSPS Term 

and Temporary Appointments 

6. Probationary Periods 

B. Conversion From Other Personnel 

Systems 

C. Movement Out of the NAVAIR STRL 

Demonstration Project 

1. Termination of Coverage Under the 

NAVAIR STRL Demonstration Project 

Pay Plans 

2. Determining a GS-Equivalent Grade and 

GS-Equivalent Rate of Pay for Pay Setting 

Purposes When a NAVAIR Employee’s 

Coverage by a Demonstration Project Pay 

Plan Terminates or the Employee 

Voluntarily Exits the NAVAIR STRL 

Demonstration Project 

3. Supervision and Management Pay Band 

VI Employees 

4. Employees With Pay Retention 

5. Within-Grade Increase—Equivalent 

Increase Determinations 

D. Personnel Administration 

E. Automation Support 

1. General 

2. Defense Civilian Personnel Data System 

(DCPDS) 

F. Experimentation and Revision 

VI. Project Duration 

VII. Evaluation Plan 

A. Overview 

B. Evaluation Model 

C. Evaluation 

D. Method of Data Collection 

VIII. Demonstration Project Costs 

A. Cost Discipline 

B. Developmental Costs 

IX. Required Waivers to Law and Regulation 

A. Waivers to Title 5, U.S.C. 

B. Waivers to Title 5, CFR 

Appendix A: NAWCAD and NAWCWD Duty 

Locations 

Appendix B: Occupational Series by 

Occupational Family 

Appendix C: Intervention Model 

Appendix D: Individual Pay Band Level 

Rating Benchmarks Examples 

Appendix E: Career Stage Rating Benchmarks 

Examples 

I. Executive Summary 

NAWCAD is an organization within 

NAVAIR dedicated to maintaining a 

center of excellence for fixed- and 

rotary-wing aircraft and their propulsion 

systems, avionics systems, training 

systems, take-off and landing systems, 

and associated support and equipment 

including air traffic control and 

communications and ship/shore/air 

operations. NAWCAD has three primary 

locations: Patuxent River, MD; 

Lakehurst, NJ; and Orlando, FL. These 

facilities support research, 

development, test, evaluation, 

engineering, and fleet support of Navy 

and Marine Corps air vehicle systems 

and trainers. NAWCAD is a world 

leader in Naval aviation whose products 

and services include: Aircraft, avionics, 

air-launched weapons, electronic 

warfare systems, cruise missiles, 

unmanned aerial vehicles, launch and 

arresting gear, training equipment and 

facilities, and all other equipment 

related to Navy and Marine Corps air 

power. The mission of the NAWCAD is 

to be the Navy’s principal research, 

development/test, evaluation, 

engineering, and fleet support activity 

for naval aircraft, engines, avionics, 

aircraft support systems, and ship/ 

shore/air operations. NAWCAD is the 

steward of the ranges, test facilities, 

laboratories, and aircraft necessary to 

support the Fleet’s acquisition 

requirements. 

NAWCWD is an organization within 

NAVAIR dedicated to maintaining a 

center of excellence in weapons 

development for the DON. NAWCWD 

has two locations: China Lake, CA 

hosting the land test range and Point 

Mugu, CA hosting the sea test range. 

NAWCWD is a world leader in 

Research, Development, Acquisition, 

Test, and Evaluation (RDA, T&E) of 

guided missiles, advanced weapons and 

systems, complex software integration 

on tactical aircraft, energetic materials, 

and subsystems. It is also a Center of 

Excellence for weapons and armaments 

and live-fire survivability testing. The 

mission of the NAWCWD is to provide 

Navy and Marine Corps warriors with 

effective, affordable, integrated warfare 

systems, and lifecycle support to ensure 

battlespace dominance. The NAWCWD 

is the steward of the ranges, test 

facilities, and laboratories necessary to 

support the Fleet’s acquisition 

requirements. 

The goal of this demonstration project 

is to enhance and sustain the quality 

and professionalism of the covered 

organizations’ workforces through 

improvements in the efficiency and 

effectiveness of the human resource 

system. The project interventions will 

strive to achieve the best workforce for 

the mission, adjust the workforce for 

change, and improve workforce 

satisfaction. This demonstration project 

is built on the concepts, and uses much 

of the same language, as the other STRL 

demonstration projects already in place 

in DoD and is guided by 25 years of 

experience in operating the Navy’s 

‘‘China Lake,’’ demonstration project. 

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, 

the authority, control, and flexibility 

needed to achieve the highest quality 


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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 ODUSD(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 Present System 

The current Civil Service General 

Schedule (GS) system has existed in 

essentially the same form since 1949. 

Work is classified into one of fifteen 

overlapping pay ranges that correspond 

with the fifteen grades. Base pay is set 

at one of those fifteen grades and the ten 

interim steps within each grade. The 

Classification Act of 1949 rigidly 

defines types of work by occupational 

series and grade, with very precise 

qualifications for each job. This system 

does not quickly or easily respond to 

new ways of designing work and 

changes in the work itself. 

The performance management model 

that has existed since the passage of the 

Civil Service Reform Act in 1980 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 present reduction-in-force (RIF) 

process is unresponsive to requirements 

for work force restructuring and requires 

enhancement to provide better retention 

of the highest performing employees 

with mission appropriate skills. 

The need to change the current hiring 

system is essential as the covered 

organizations must be able to recruit 

and retain scientific, engineering, 

acquisition, skilled technical, and other 

professional, administrative, and 

support employees. The covered 

organizations 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. 

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. Changes Required/Expected Benefits 

1. The primary benefit expected from 

this demonstration project is greater 

organizational effectiveness through 

increased employee satisfaction. The 

Department of the Navy ‘‘China Lake’’ 

and NIST demonstration projects 

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 covered organizations’ 

workforce will facilitate increased: 

a. Quality in the workforce and 

resultant products, 

b. Timeliness of key personnel 

processes, 

c. Retention of ‘‘excellent performers,’’ 

d. Success in recruitment of personnel 

with critical skills, 

e. Management authority and 

accountability, 

f. Satisfaction of customers, and 

g. Workforce satisfaction with the 

personnel management system. 

2. An evaluation model was 

developed for the Director of Defense, 

Research and Engineering (DDR&E) in 

conjunction with STRLs, service 

representatives, and the Office of 

Personnel Management (OPM). The 

model, as modified in this plan, will 

measure the effectiveness of this 

demonstration project and will be used 

to measure the results of specific 

personnel system changes. 

D. Participating Organizations 

NAWCAD and NAWCWD are 

organizations within the NAVAIR and 

are composed of five business units 

located at five diverse major geographic 

locations. The locations are: Lakehurst, 

NJ, Patuxent River, MD; Orlando, FL; 

China Lake, CA; and Pt. Mugu, CA. 

Additionally there are employees in a 

variety of other geographic locations 

shown in Appendix A. It should be 

noted that sites with fewer than 10 

people may change. Successor 

organizations will continue coverage in 

the demonstration project. 

E. Participating Employees and Union 

Representation 

This demonstration project will cover 

approximately 8,400 NAWCAD and 

NAWCWD civilian employees under 

title 5 U.S.C. in the occupations listed 

in Appendix B. The project plan does 

not cover members of the Senior 

Executive Service (SES), Scientific and 

Professional (ST) employees, Federal 

Wage System (FWS) employees, 

employees presently covered by the 

Defense Civilian Intelligence Personnel 

System (DCIPS), or DON centrally 

funded interns. 

The details and provisions covered 

under this Personnel Management 

Demonstration Project do not apply to 

any bargaining unit within NAWCAD or 

NAWCWD until a mutual agreement is 

reached between the STRL organization 

and the applicable exclusive 

representative. This demonstration 

project will not cover any bargaining 

unit members at implementation. If 

there is interest on the part of any of 

NAWCAD’s or NAWCWD’s bargaining 

units at any of their sites in 

participating in the NAWCAD or 

NAWCWD STRL demonstration project, 

negotiations would begin after 

publication of this Federal Register 

notice. The covered STRL organizations 

will fulfill their obligation to consult 

and/or negotiate with all labor 

organizations in accordance with 5 

U.S.C. 4703(f) and 7117, as applicable. 

F. Project Design 

An overarching objective in the 

project design has been the 

development of a personnel system that 

provides a maximum opportunity for 

adaptability to meet the variety of 

requirements of organizations engaged 

in missions ranging from RDA, T&E of 

guided missiles, advanced weapons and 

systems, complex software integration 

on tactical aircraft, energetic materials 

and subsystems to fixed- and rotarywing aircraft and their propulsion 

systems, avionics systems, training 

systems, take-off and landing systems, 

associated support and equipment 

including air traffic control and 

communications, and ship/shore/air 

operations. This demonstration project 

is built upon the successes of the many 

demonstration projects that have 

preceded it and adapts many of the 

provisions and features that have been 

shown to be successful in these other 

STRL demonstration projects to the 

NAWCAD and NAWCWD organizations. 

G. Personnel Management Board 

1. The covered organizations will 

create a Personnel Management Board to 

oversee and monitor the fair, equitable, 

and consistent implementation of the 

provisions of the demonstration project 

to include establishment of internal 

controls and accountability. Members of 

the board are senior leaders appointed 

by the Executive Directors of the 

covered organizations. As needed, ad 


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hoc members will serve in an advisory 

capacity to the Board. 

2. The board will execute the 

following: 

a. Establish policies and issue 

guidance on the composition of pay 

pools in accordance with the guidelines 

of this proposal and internal 

procedures; 

b. Review operation of pay pools and 

provide guidance to Pay Pool Managers; 

c. Oversee disputes in pay pool 

issues; 

d. Establish policies and issue 

guidance on the formulation and 

execution of the civilian pay budget; 

e. Establish policies and issue 

guidance on the awards pools; 

f. Establish policies and issue 

guidance on hiring and promotion base 

pay as well as exceptions to pay-forperformance base pay increases; 

g. Establish policies and issue 

guidance on classification review and 

oversight, monitoring and adjusting 

classification practices and deciding 

board classification issues; 

h. Approve major changes in position 

structure; 

i. Address issues associated with 

multiple pay systems during the 

demonstration project; 

j. Establish policies and issue 

guidance on and approve Standard 

Performance Elements and Benchmarks; 

k. Assess the need for changes to 

demonstration project procedures and 

policies; 

l. Ensure in-house budget discipline; 

m. Establish policies and issue 

guidance for workforce staffing and 

budget plans; 

n. Develop policies and procedures 

for administering Developmental 

Opportunity Programs; 

o. Ensure that all employees are 

treated in a fair and equitable manner in 

accordance with the policies, 

regulations and guidelines covering this 

demonstration project; and, 

p. Monitor the evaluation of the 

project. 

III. Personnel System Changes 

A. Pay Banding 

The design of the pay banding system 

has the benefit of being preceded by 

exhaustive studies of pay banding 

systems currently practiced in the 

Federal sector. The pay banding system 

will replace both the current NSPS and 

GS structure. The flexibilities in this 

pay banding section are similar in 

nature to the authority granted to: The 

Naval Ocean Systems Center, San Diego, 

California 92152 and the Naval 

Weapons Center, China Lake, California 

93555, 45 FR 26504, April 18, 1980. 

1. Occupational Families 

Occupations with similar 

characteristics will be grouped together 

into one of five occupational families 

with pay band levels designed to 

facilitate pay progression. Progression 

through the band depends on individual 

achievement, contribution to the 

mission goals, and accomplishment of 

higher level, broader scope, more 

difficult work assignments. Each 

occupational family will be composed 

of pay bands corresponding to 

recognized advancement and career 

progression expected within the 

occupations. These pay bands will 

replace individual grades and will not 

be the same for each occupational 

family. Each occupational family will be 

divided into three to six pay bands with 

each pay band covering the same base 

pay range that would be covered by one 

or more GS grades. Employees track into 

an occupational family based on their 

current series as provided in Appendix 

B. Note that where the current series 

does not exist outside of NSPS the 

employee will be placed in the 

appropriate OPM series before being 

placed into an STRL occupational 

family. Upon conversion into the 

demonstration project each employee is 

assured an initial placement in the 

STRL demonstration project without a 

loss in pay. The upper and lower pay 

rate for base pay of each band is defined 

by the GS rate for the grade and step as 

indicated in Figure 1 except for Pay 

Band V of the Engineering and Science 

occupational family. Comparison to the 

GS grades and NSPS pay bands was 

used in setting the upper and lower base 

pay dollar limits of the pay band levels. 

However, once employees are moved 

into the demonstration project, GS 

grades and NSPS pay bands will no 

longer apply. The current occupations 

have been examined, and their 

characteristics and distribution have 

served as guidelines in the development 

of the following five occupational 

families: 

a. Scientific and Engineering (S&E) 

(Pay Plan DP): This occupational family 

includes technical professional 

positions, such as engineers, physicists, 

chemists, mathematicians, operations 

research analysts, and computer 

scientists. Specific course work or 

educational degrees are required for 

these occupations. Four bands have 

been established for the S&E 

occupational family: 

(1) Band I is a student trainee 

developmental track covering GS–1, 

step 1, through GS–4, step 10. 

(2) Band II is a developmental track 

covering GS–5, step 1, through GS–11, 

step 10. 

(3) Band III is a full-performance 

technical track covering GS–12, step 1, 

through GS–13, step 10. 

(4) Band IV includes senior technical 

positions covering GS–14, step 1, 

through GS–15, step 10. 

b. S&E Technician (Pay Plan DT): This 

occupational family includes technician 

positions, such as engineering 

technicians, electronics technicians, 

physical science technicians, 

mathematic technicians, and geodetic 

technicians. These occupations require 

practical technical expertise in scientific 

or engineering support but specific 

course work or educational degrees are 

not required for these occupations. Four 

bands have been established for the S&E 

Technician occupational family: 

(1) Band I is an entry level trainee 

developmental track covering GS–1, 

step 1, through GS–4, step 10. 

(2) Band II is a developmental/full 

performance track covering GS–5, step 

1, through GS–9, step 10. 

(3) Band III is a full-performance 

technical track covering GS–10, step 1 

through GS–11, step 10. 

(4) Band IV includes senior technical 

covering GS–12, step 1, through GS–13, 

step 10. 

c. Technical Specialist (Pay Plan DS): 

This occupational family includes such 

positions as logistics management 

specialists, equipment specialists, 

computer specialists, and 

telecommunications specialists. 

Employees in these positions may or 

may not require specific course work or 

educational degrees. Five bands have 

been established for this occupational 

family: 

(1) Band I is a student trainee 

developmental track covering GS–1, 

step 1, through GS–4, step 10. 

(2) Band II is a developmental/full 

performance track covering GS–5, step 

1, through GS–9, step 10. 

(3) Band III is a full performance track 

covering GS–10, step 1, through GS–11, 

step 10. 

(4) Band IV is a senior specialist track 

covering GS–12, step 1, through GS–13, 

step 10. 

(5) Band V is an expert specialist track 

covering GS–14, step 1, through GS–15, 

step 10. 

d. Business Professional & Program 

Management (Pay Plan DA): This 

occupational family includes such 

positions as program managers, program 

acquisition specialists, budget officers, 

financial managers, accountants, 

administrative officers, human 

resources specialists, and management 

analysts. Employees in these positions 


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may or may not require specific course 

work or educational degrees. Five bands 

have been established for this 

occupational family: 

(1) Band I is a student trainee 

developmental track covering GS–1, 

step 1, through GS–4, step 10. 

(2) Band II is a developmental/full 

performance track covering GS–5, step 

1, through GS–9, step 10. 

(3) Band III is a full performance track 

covering GS–10, step 1, through GS–11, 

step 10. 

(4) Band IV is a senior specialist track 

covering GS–12, step 1, through GS–13, 

step 10. 

(5) Band V is an expert specialist track 

covering GS–14, step 1, through GS–15, 

step 10. 

e. Administrative Support (Pay Plan 

DG): This occupational family is 

composed of positions for which 

specific course work or an educational 

degree is not required. Clerical work 

usually involves the processing and 

maintenance of records. Assistant work 

requires knowledge of methods and 

procedures within a specific 

administrative area. This family 

includes such positions as secretaries, 

office managers, office automation 

clerks, security technician, safety 

technician, library technician and 

budget/program/computer assistants. 

Six bands have been established for this 

occupational family: 

(1) Band I includes entry-level/ 

developmental positions covering GS–1, 

step 1, through GS–3, step 10. 

(2) Band II* includes developmental 

and low-range full-performance 

positions covering GS–4, step 1, through 

GS–5, step 10. 

(3) Band III* includes mid-range fullperformance technicians/assistants/ 

secretaries covering GS–5, step 1, 

through GS–6, step 10. 

(4) Band IV* includes high-range fullperformance technicians/assistants/ 

secretaries covering GS–6, step 1, 

through GS–7, step 10. 

(5) Band V includes senior 

technicians/assistants/secretaries 

covering GS–8, step 1, through GS–9, 

step 10. 

(6) Band VI includes expert 

technicians/assistants/secretaries 

covering GS–10, step 1, through GS–11, 

step 10. 

* Band III overlaps with band II and 

IV. These bands replicate a feature used 

by the Navy’s ‘‘China Lake’’ project. 

f. The Supervision and Management 

pay band includes all employees 

performing supervisory functions. This 

pay band is not applicable to team 

leaders. To be classified to these pay 

bands the supervisor must perform the 

full range of supervisory duties. To meet 

the full range of supervisory duties the 

supervisor must perform 3 of the first 4, 

and a total of 6 or more of the following: 

(1) Plan work and prepare 

performance plans covering work to be 

accomplished by subordinates, set and 

adjust short-term priorities, and prepare 

schedules for completion of work; 

(2) Assign work to subordinates based 

on priorities, selective consideration of 

the difficulty and requirements of 

assignments, and the capabilities of 

employees; 

(3) Evaluate work performance of 

subordinates and recommend official 

performance ratings; 

(4) Give advice, counsel, or 

instruction to employees on both work 

and administrative matters; 

(5) Interview candidates for positions 

in the unit; recommend appointment, 

promotion, or reassignment to such 

positions; 

(6) Hear and resolve complaints from 

employees, referring group grievances 

and more serious unresolved complaints 

to a higher level supervisor or manager; 

(7) Effect minor disciplinary 

measures, such as warnings and 

reprimands, recommending other action 

in more serious cases; 

(8) Identify developmental and 

training needs of employees, providing 

or arranging for needed development 

and training; 

(9) Find ways to improve production 

or increase the quality of the work 

directed; 

(10) Make appropriate distinctions in 

levels of performance while equitably 

applying performance standards. 

A supervisory position cannot be 

established on the basis of only one 

subordinate position. These pay bands 

can include any series. 

(1) Band II is a supervision and 

management track covering GS–6, step 

1, through GS–8, step 10. 

(2) Band III is a supervision and 

management track covering GS–9, step 

1, through GS–11, step 10. 

(3) Band IV is a supervision and 

management track covering GS–12, step 

1, through GS–14, step 10. 

(4) Band V is a supervision and 

management track covering GS–14, step 

1, through GS–15, step 10. 

(5) Band VI is reserved for those S&E 

professional positions classified above 

GS–15. 

* Band IV overlaps with band V. 

These bands replicate a feature used by 

the NAVSEA Warfare Centers’ STRL 

demonstration project. 

2. Pay Band Design 

The demonstration project pay bands 

for the occupational families and how 

they relate to the current GS and NSPS 

framework are shown in Figure 1. 

BILLING CODE 5001–06–P 


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BILLING CODE 5001–06–C 

3. Above GS–15 Positions 

The pay banding plan for the 

Supervision and Management 

occupational family includes a pay band 

VI to provide the ability to 

accommodate positions having duties 

and responsibilities that exceed the 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 

processes will be based on the final 

outcome of the DoD evaluation. 

Additional guidance will be included in 

NAWCAD/NAWCWD internal 

issuances. 

B. Classification 

The flexibilities in this Classification 

section are similar in nature to the 

authority granted to the Naval Ocean 

Systems Center, San Diego, California 

92152 and the Naval Weapons Center, 

China Lake, California 93555, 45 FR 

26504, April 18, 1980. 

1. Occupational Series 

The present GS classification system 

has over 400 occupational series, which 

are divided into 23 occupational 

groupings. The covered organizations 

currently have positions in 

approximately 132 occupational series 

that fall into 21 occupational groupings. 

All positions listed in Appendix B will 

be in the classification structure. 

Provisions will be made for including 

other occupations in response to 

changing missions. 

2. Classification Standards and Position 

Descriptions 

The present system of OPM 

classification standards will be used for 

the identification of proper series and 

occupational titles of positions within 

the demonstration project. Current OPM 

position classification standards will 

not be used to grade positions in this 

project. However, the grading criteria in 

those standards will be used as a 

framework to develop new and 

simplified standards for the purpose of 

pay band determinations. The objective 

is to record the essential criteria for each 

pay band within each occupational 

family by stating the characteristics of 

the work, the responsibilities of the 

position, and the competencies 

required. New position descriptions will 

replace the current job descriptions. The 

classification standard for each pay 

band will serve as an important 

component in the new position 

description, which will also include 

position-specific information, and 

provide selective placement factors and 

other data element information 

pertinent to the job. 

Specialty area codes (SAC) written as 

narrative descriptions and assigned a 

specific identification code may be used 

to further differentiate types of work 

and the competencies required for 

particular positions within an 

occupational family and pay band. Each 


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code represents a specialization or type 

of work within the occupation. 

3. Fair Labor Standards Act 

Fair Labor Standards Act (FLSA) 

exemption and non-exemption 

determinations will be consistent with 

criteria found in 5 CFR part 551. All 

employees are covered by the FLSA 

unless they meet the criteria for 

exemption. The duties and 

responsibilities outlined in the 

classification standards for each pay 

band will be compared to the FLSA 

criteria. As a general rule, the FLSA 

status can be matched to occupational 

family and pay band as indicated in 

Figure 2. For example, positions 

classified in Pay Band I of the S&E 

occupational family are typically 

nonexempt, meaning they are covered 

by the overtime entitlements prescribed 

by the FLSA. An exception to this 

guideline includes supervisors/ 

managers whose primary duty meets the 

definitions outlined in the OPM GS 

Supervisory Guide. Therefore, 

supervisors/managers in any of the pay 

bands who meet the foregoing criteria 

are exempt from the FLSA. Supervisors 

with classification authority will make 

the determinations on a case-by-case 

basis by comparing assigned duties and 

responsibilities to the classification 

standards for each pay band and the 5 

CFR part 551 FLSA criteria. 

Additionally, the advice and assistance 

of the servicing Human Resources Office 

(HRO) and the servicing Human 

Resources Service Center (HRSC) can be 

obtained in making determinations. The 

benchmark position descriptions will 

not be the sole basis for the 

determination; the actual duties 

performed are the controlling criteria. 

Exemption criteria will be narrowly 

construed and applied only to those 

employees who clearly meet the spirit of 

the exemption. 

BILLING CODE 5001–06–P 

BILLING CODE 5001–06–C 

N—Non-Exempt from FLSA; E—Exempt 

from FLSA; N/E—Exemption status 

determined on a case-by-case basis. 

Note: Although typical exemption status 

under the various pay bands is shown in the 

above table, actual FLSA exemption 

determinations are made on a case-by-case 

basis. 

4. Classification Authority 

The covered organizations’ Executive 

Directors will have delegated 

classification authority for all pay bands 

with the exception of Supervision and 

Management band VI and may, in turn, 

re-delegate this authority to appropriate 

levels. Classification authority for 

Science and Engineering band V will be 

consistent with DoD guidance. Position 

descriptions will be developed to assist 

managers in exercising delegated 

position classification authority. 

Managers will identify the occupational 

family, job series, functional code, 

specialty work code, pay band level, 

and the appropriate acquisition codes. 

Human resources specialists will 

provide ongoing consultation and 

guidance to managers and supervisors 

throughout the classification process. 

These decisions will be documented on 

the position description. 

5. Classification Appeals 

Classification appeals under this 

demonstration project will be processed 

using the following procedures: An 

employee may appeal the determination 

of occupational family, occupational 

series, position title, and pay band of 

his/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 the employee is not satisfied 

with the supervisory response, he/she 

may then appeal to the Executive 

Director of his/her organization. If the 

employee is not satisfied with the 

Executive Director’s response, he/she 

may then appeal to the DoD appellate 

level. Appeal decisions rendered by 

DoD will be final and binding on all 

administrative, certifying, payroll, 

disbursing, and accounting officials of 

the government. Classification appeals 

are not accepted on positions which 

exceed the equivalent of a GS–15 level. 

Additional guidance will be included in 

the NAWCAD/NAWCWD internal 

issuances. 

An employee may not appeal the 

accuracy of the position description, the 

demonstration project classification 

criteria, or the pay-setting criteria; the 

assignment of occupational series to the 

occupational family; the propriety of a 

pay schedule; or matters covered by an 

administrative or negotiated grievance 

procedure, or an alternative dispute 

resolution procedure. 

The evaluations of classification 

appeals under this demonstration 

project are based upon the 

demonstration project classification 

criteria. Case files will be forwarded for 

adjudication through the HRO/HRSC 

providing personnel service and will 

include copies of appropriate 

demonstration project criteria. 

C. Mission Aligned Objectives and 

Compensation 

1. Overview 

The purpose of mission aligned 

objectives and compensation is to 

directly link the work of the employee 

to the mission of the organization and 

provide a mechanism for recognizing 


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the impact of the employee’s 

accomplishments and contributions to 

help achieve that mission. It also 

provides an effective, efficient, and 

flexible method for assessing, 

compensating, and managing the 

covered organization’s workforce. It is 

essential for the development of a 

highly productive workforce and to 

provide management at the lowest 

practical level, the authority, control, 

and flexibility needed to achieve a 

quality organization and meet mission 

requirements. Mission aligned 

objectives and compensation allows for 

more employee involvement in the 

assessment process, strives to increase 

communication between supervisor and 

employee, promotes a clear 

accountability of performance, 

facilitates employee career progression, 

and provides an understandable and 

rational basis for pay changes by linking 

mission directly to both annual 

evaluations and compensation 

outcomes. 

The mission aligned objectives and 

compensation system uses annual 

payouts that are based on the 

employee’s accomplishments and 

contributions to mission 

accomplishment rather than withingrade increases, quality step increases, 

promotions from one grade to another 

where both grades are now in the same 

pay band (i.e., there are no within-band 

promotions), and performance awards. 

In addition to objectives, other factors 

that can be considered in determining 

overall payout include organizational 

performance, team performance, or a 

combination of individual performance, 

contribution, and/or compensation. If 

elements other than the employee’s 

individual accomplishments and 

contributions against their objectives 

and their compensation will be taken 

into consideration, this must be a part 

of the written performance plan. The 

employee must be advised of the 

applicability of these factors within the 

same time requirements as the 

individual mission objectives. The 

normal rating period will be one year. 

Objectives, representing joint efforts of 

employees and their supervisors, must 

be in place within 30 days from the 

beginning of each rating period and the 

minimum rating period will be 90 days. 

First-time hires into demonstration 

project positions must have plans in 

place within 30 days of the effective 

date of their entry into the 

demonstration project and current 

demonstration project employees who 

change positions during the 

performance year should have their 

plans updated with new objectives no 

later than 30 days after assignment to 

the new position. Mission aligned 

compensation and rewards payouts can 

be in the form of increases to base pay 

and/or in the form of bonuses that are 

not added to base pay but rather are 

given as a lump sum cash bonus. Other 

awards such as special acts, time-off 

awards, etc., will be retained separately 

from the pay-for-performance payouts. 

Employees who do not meet the 90 

day minimum requirement will be 

ineligible for a normal rating and will be 

given a presumptive rating. They may 

receive only the general pay increase 

and they may also receive title 5 cash 

awards if appropriate. 

The system will have the flexibility to 

be modified, if necessary, as more 

experience is gained under the project. 

The flexibilities in this Mission Aligned 

Objectives and Compensation section 

are similar in nature to the authority 

granted to: (1) The Naval Ocean Systems 

Center, San Diego, California 92152 and 

the Naval Weapons Center, China Lake, 

California 93555, 45 FR 26504, April 18, 

1980, and (2) the Army Research 

Laboratory (ARL), 65 FR 3500, January 

21, 2000. 

2. Individual Mission Objectives (IMO) 

Individual mission objectives will be 

directly related to achieving the mission 

of the employee’s organization. They 

define a target level of activity, 

expressed as a tangible, measurable 

objective, against which actual 

achievement can be compared. These 

objectives will specifically identify what 

is expected of the employee during the 

rating period and will typically consist 

of three to ten results-oriented 

statements. It is expected that these 

objectives will also incorporate 

important behavioral practices such as 

teamwork and cooperation where they 

are key to successful accomplishment of 

the assignment. A Supervision/EEO 

objective is mandatory for all managers/ 

supervisors. The employee and his/her 

supervisor will jointly develop the 

employee’s individual mission 

objectives at the beginning of the rating 

period. These are to be reflective of the 

employee’s duties/responsibilities, pay 

band and pay level in the band as well 

as the mission/organizational goals and 

priorities. Objectives will be reviewed 

annually and revised upon changes in 

pay reflecting increased responsibilities 

commensurate with pay increases. Use 

of generic one-size-fits-all objectives 

will be avoided, as individual mission 

objectives are to define an individual’s 

specific responsibilities and expected 

accomplishments for the performance 

year. In contrast, rating benchmarks as 

described in the next paragraph will 

identify characteristics, against which 

the accomplishment of objectives will 

be measured. As a part of this 

demonstration project, training focused 

on overall organizational objectives and 

the development of individual mission 

objectives will be held for both 

supervisors and employees. 

Individual mission objectives may be 

jointly modified, changed or deleted as 

appropriate during the rating cycle. As 

a general rule, objectives should only be 

changed when circumstances outside 

the employee’s control prevent or 

hamper the accomplishment of the 

original objectives. It is also appropriate 

to change objectives when mission or 

workload shifts occur. 

All objectives are critical. A critical 

mission objective is defined as an 

attribute of job performance that is of 

sufficient importance that achievement 

below the minimally acceptable level 

requires remedial action and may be the 

basis for removing an employee from 

his/her position. Non-critical objectives 

will not be used. Each of the objectives 

may be assigned a weight, which 

reflects its importance in accomplishing 

an individual’s mission objectives. The 

minimum weight assigned may not be 

less than 10%. The sum of the weights 

for all of the elements must equal 100. 

At the beginning of the rating period, 

higher level managers will review the 

objectives and weights assigned to 

employees within the pay pool, to verify 

consistency and appropriateness. 

3. Rating Benchmarks 

Rating benchmarks define 

characteristics that will be used to 

evaluate the employee’s success in 

accomplishing his/her individual 

mission objectives. The use of 

characteristics for scoring purposes 

helps to ensure comparable scores are 

assigned while accommodating diverse 

individual objectives. A single set of 

rating benchmarks for each band or 

rating benchmarks by career stage may 

be used for evaluating the annual 

performance of all NAWCAD and 

NAWCWD personnel covered by this 

plan. An example of each type of 

benchmark is shown at Appendices D 

and E. The set of benchmarks used may 

evolve over time, based on experience 

gained during each rating cycle. This 

evolution is essential to capture the 

critical characteristics the organization 

encourages in its workforce toward 

meeting individual and organizational 

objectives. This is particularly true in an 

environment where technology and 

work processes are changing at an 

increasingly rapid pace. The Personnel 

Management Board will annually 

review the set of benchmarks and set 


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them for the entire organization before 

the beginning of the rating period. 

4. Performance Feedback and Formal 

Ratings 

The most effective means of 

communication is person-to-person 

discussion between supervisors and 

employees of requirements, 

performance goals, and desired results. 

Employees and supervisors alike are 

expected to actively participate in these 

discussions for optimum clarity 

regarding expectations and identify 

potential obstacles to meeting goals. In 

addition, employees should explain (to 

the extent possible) what they need 

from their supervisor to support goal 

accomplishment. The timing of these 

discussions will vary based on the 

nature of work performed, but will 

occur at least at the mid-point and end 

of the rating period. The supervisor and 

employee will discuss job performance 

and accomplishments in relation to the 

expectations in the mission aligned 

objectives. At least one review, normally 

the mid-point review, will be 

documented as a formal progress 

review. More frequent, task specific 

discussions may be appropriate in some 

organizations. In cases where work is 

accomplished by a team, team 

discussions regarding goals and 

expectations will be appropriate. The 

employee will provide a statement of 

his/her accomplishments to the 

supervisor at both the mid-point and 

end of the rating period. 

At the end of the rating period, 

following a review of the employee’s 

accomplishments, the supervisor will 

rate each of the individual mission 

objectives. Benchmark performance 

standards will be developed that 

describe the level of performance 

associated with a score. Using these 

benchmarks, the supervisor decides 

where the achievements and 

contributions of the employee most 

closely match the benchmarks and 

assigns an appropriate score. It should 

be noted that these scores are not 

discussed with the employee or 

considered final until all scores are 

reconciled and approved by the Pay 

Pool Manager. The rating scores will 

then be multiplied by the objectiveweighting factor to determine the 

weighted score expressed to two 

decimal points. The weighted scores for 

each objective will then be totaled to 

determine the employee’s overall 

appraisal score and rounded to a whole 

number as follows: If the first two digits 

to the right of the decimal are .51 or 

higher, it will be rounded to the next 

higher whole number; if the first two 

digits to the right of the decimal are .50 

or lower, then the decimal value is 

truncated. 

The covered STRL organizations will 

use a five-level rating methodology with 

associated payout point ranges in which 

level five signifies the highest level of 

performance. The rater will prepare and 

recommend the rating, number of 

payout points, and the distribution of 

the payout between base pay increase 

and bonus, as applicable, for each 

employee. These recommendations will 

then be reviewed by the pay pool panel 

to ensure equitable rating criteria and 

methodologies have been applied to all 

pay pool employees. The final 

determination of the rating, number of 

payout points, and payout distribution 

will be a function of the pay pool panel 

process and will be approved by the Pay 

Pool Manager. The criteria used to 

determine the number and distribution 

of payout points to assign an employee 

may include assessment of the 

employee’s contribution towards 

achieving the mission, the employee’s 

type and level of work, the employee’s 

current compensation and the criticality 

of their contribution to mission success, 

consideration of specific achievements, 

or other job-related significant 

accomplishments or contributions. The 

proposed rating and payout point 

schema is: 

Rating Description Payout 

points 

5 Exceptional .................. 5, 6 

4 Exceeds Mission Expectations.3, 4 

3 Mission Success ......... 0, 1, 2 

2 Partial Mission Success.0 

1 Unacceptable .............. 0 

Employees with a total score of two or 

above will receive the equivalent of the 

GS January general pay increase (GPI). 

Employees with a total score of one will 

not receive the January GPI. A rating of 

one or below will result in a rating of 

Unacceptable, and the employee will 

not receive the January GPI and will 

require administrative action to address 

the performance deficiency. A score of 

one or below on a single objective will 

also result in a rating of Unacceptable. 

Employees in receipt of a Letter of 

Warning of Unacceptable Performance 

at the end of the performance year will 

have their rating deferred until the end 

of the improvement period. At the end 

of the improvement period, the 

supervisor will assign a final rating and 

submit it to the pay pool panel for 

consideration. 

5. Pay Pools 

Following the initial scoring of each 

employee by the rater, the rating 

officials in an organizational unit, along 

with their next level of supervision, will 

review and compare recommended 

ratings to ensure consistency and equity 

of the ratings. In this step, each 

employee’s individual mission 

objectives, accomplishments, 

preliminary scores and pay are 

compared. Through discussion and 

consensus building, consistent and 

equitable ratings are reached. Managers 

will not prescribe a distribution of 

ratings. The Pay Pool Manager will then 

chair a final review with the rating 

officials who report directly to him or 

her to validate these ratings and resolve 

any scoring issues. If consensus cannot 

be reached in this process, the Pay Pool 

Manager makes all final decisions. After 

this reconciliation process is complete, 

ratings are finalized. Payouts proceed 

according to each employee’s final 

rating and payout distribution. Upon 

approval of this plan, implementing 

procedures and regulations will provide 

details on this process to employees and 

supervisors. 

The covered organizations’ employees 

will be placed into pay pools. Neither 

the Pay Pool Manager, supervisors, or 

pay pool panel members within a pay 

pool will in any way recommend or 

participate in setting their own rating or 

individual payout except for the normal 

employee self-assessment process. Pay 

pools are combinations of organizational 

units (e.g., level 3 competencies 

(divisions), level 4 competencies 

(branches), and level 5 competencies 

(sections)), functional categories or 

other groupings of employees that are 

defined for the purpose of determining 

payouts under the mission aligned 

objectives and compensation system. 

The guidelines in the next paragraph are 

provided for determining pay pools. 

These guidelines will normally be 

followed. However, the Executive 

Directors of the covered organizations 

may deviate from the guidelines if there 

is a compelling need to do so. 

The Executive Directors of the 

covered organizations will establish pay 

pools. Typically, pay pools will have 

between 35 and 300 employees. A pay 

pool should be large enough to 

encompass a reasonable distribution of 

ratings but not so large as to 

compromise rating consistency. Large 

pay pools may use sub pay pools 

subordinate to the pay pool due to the 

size of the pay pool population, the 

complexity of the mission, or other 

similar criteria. Pay pool panel members 

will not serve on pay pools where their 


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own ratings and payouts are 

determined. Supervisors and nonsupervisors may be placed in separate 

pay pools. Decisions regarding the 

amount and distribution of the payouts 

are based on the employee’s most recent 

rating of record for the performance 

year, the criteria listed in section III.C.4 

above, the type and nature of the 

funding available to the pay pool, and 

the number of payout points assigned by 

the pay pool. Additional guidance on 

pay pool design and composition will 

be included in NAWCAD/NAWCWD 

internal issuances. 

Funds within a pay pool available for 

performance payouts are calculated 

from anticipated pay increases under 

the existing system and divided into 

two components, base pay and bonus. 

The funds within a pay pool used for 

base pay increases are those that would 

have been available from within-grade 

increases, quality step increases and 

promotions under the GS system 

(excluding the costs of promotions still 

provided under the pay banding 

system). This amount will initially be 

defined based on historical data and 

will initially be set at no less than 2.4% 

of total base pay annually. The funds 

available to be used for bonus payouts 

are funded separately within the 

constraints of the organization’s overall 

award budget. This amount will initially 

be defined based on historical data and 

will initially be set at no less than one 

percent of total base pay annually. As 

changes in the demographics of the 

workforce or other exigencies occur, 

adjustments may be made to these two 

factors. The sum of these two factors is 

referred to as the pay pool percentage 

factor. The Personnel Management 

Board will annually review the pay pool 

funding and recommend adjustments to 

the Executive Directors to ensure cost 

discipline over the life of the 

demonstration project. Cost discipline is 

assured within each pay pool by 

limiting the total base pay increase to 

the funds allocated by the Personnel 

Management Board. 

6. Performance Payout Determination 

The payout an employee will receive 

is based on the total performance rating 

from the mission aligned objectives and 

compensation assessment process. An 

employee will receive a payout as a 

percentage of base pay. This percentage 

is based on the number of payout points 

that equates to their final appraisal 

score. 

The value of a payout point cannot be 

exactly determined until the rating and 

reconciliation process is completed and 

all scores are finalized. The payout 

point value is expressed as a percentage. 

The formula that computes the value of 

each payout point uses base pay rates 

and is based on: 

a. The sum of the base pay of all the 

employees in the pay pool times the pay 

pool percentage factor; 

b. The employee’s base pay; 

c. The number of payout points 

awarded to each employee in the pay 

pool; and 

d. The total number of payout points 

awarded in the pay pool. 

This formula assures that each 

employee within the pool receives a 

payout point amount equal to all others 

in the same pool who are at the same 

rate of base pay and receiving the same 

score. The formula is shown in Figure 

3. 

BILLING CODE 5001–06–P 

BILLING CODE 5001–06–C 

An individual payout is calculated by 

first multiplying the payout points 

earned by the payout point value and 

multiplying that product by base pay. 

An adjustment is then made to account 

for locality pay or staffing supplement. 

A Pay Pool Manager is accountable for 

staying within pay pool limits and final 

decisions on base pay increases and/or 

bonuses to individuals based on rater 

recommendations, the final score, the 

pay pool funds available, and the 

employee’s base pay. 

7. Base Pay Increases and Bonuses 

The amount of money available for 

the performance payouts is divided into 

two components, base pay increases and 

bonuses. The base pay and bonus funds 

are based on the pay pool funding 

formula established annually. Once the 

individual performance amounts have 

been determined, the next step is to 

determine what portion of each payout 

will be in the form of a base pay 

increase as opposed to a bonus 

payment. The payouts made to 

employees from the pay pool may be a 

mix of base pay and bonus, such that all 

of the allocated funds are disbursed. To 

continue to provide performance 

incentives while also ensuring cost 

discipline, base pay increases may be 

limited or capped. Certain employees 

will not be able to receive the projected 

base pay increase due to base pay caps. 

Base pay is capped when an employee 

reaches the maximum rate of base pay 

in an assigned pay band or when a 

control point applies (see below). Also, 

for employees receiving retained rates 

above the applicable pay band 

maximum, the entire performance 

payout will be in the form of a bonus 

payment. 

When capped, the total payout an 

employee receives will be in the form of 

a bonus versus the combination of base 

pay and bonus. Bonuses are cash 

payments and are not part of the base 

pay for any purpose (e.g., lump sum 

payments of annual leave on separation, 

life insurance, and retirement). The 

maximum base pay rate under this 

demonstration project will be the 

unadjusted base pay rate of GS–15, Step 

10, except for employees in Pay Band VI 

of the Supervision and Management 

career path. 

8. Extraordinary Achievement 

Allowance (EAA) 

a. NAWCAD and NAWCWD will 

employ an Extraordinary Achievement 

Allowance designed to optimize 

organizational effectiveness. An EAA is 

defined as a temporary monetary 

allowance up to 25 percent of base pay, 

which, when added to an employee’s 

rate of base pay, may not exceed the rate 

of basic pay for Executive Level IV. It is 

paid on either a bi-weekly basis 

concurrent with normal pay days or as 

a lump sum following completion of a 

designated contribution period, or 

combination of these, at the discretion 

of the Executive Director/Commanding 

Officer of the appropriate Naval Air 

Warfare Center. It is not base pay for any 

purpose, e.g., retirement, life insurance, 

severance pay, promotion, or any other 

payment or benefit calculated as a 

percentage of base pay. The EAA will be 

available to certain employees whose 

present contributions are worthy of a 

higher career level and whose level of 


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achievement is expected to continue at 

the higher career level for at least one 

year. 

b. Award of the EAA will generally be 

appropriate under the following 

circumstances: (1) Employees have 

reached the top of their target career 

levels, (2) when it is not certain that the 

higher level contributions will continue 

indefinitely (e.g., a special project 

expected to be of one to five-year 

duration), (3) when no further 

promotion or base pay opportunities are 

available, or externally imposed limits 

make changes to higher career levels 

unavailable, and (4) when the approval 

time required to effect the action will 

unreasonably delay appropriate 

compensation for the employee’s 

achievements but in all situations, when 

current market conditions compensate 

similar contributions at a greater rate in 

private industry and academia than the 

organization is able to do under normal 

compensation conditions. 

c. To be eligible for EAA, employees 

must meet the criteria below: 

(1) Employees in the S&E, Technical, 

Business Professional and Program 

Management career tracks are eligible 

for the EAA if their contribution to the 

organization is deemed worthy, as 

determined by the appropriate NAWC 

Executive Director/Commander. 

(2) Employees may receive an EAA for 

up to five years. The EAA authorization 

will be reviewed and reauthorized as 

necessary, but at least annually at the 

time of the Mission Aligned Objectives 

and Compensation System appraisal 

through nomination by the Pay Pool 

Manager and approval by the 

appropriate Executive Director/ 

Commander. 

(3) Monetary payment may be up to 

25 percent of base pay. 

(4) Nominees are required to sign a 

statement indicating they understand 

that the EAA is a temporary allowance; 

it is not a part of base pay for any 

purpose; it is subject to review at any 

time, but at least on an annual basis, 

and the reduction or termination of the 

EAA is neither appealable nor grievable. 

All other details regarding 

nomination, termination, reduction, 

allocation, and budget determination 

will be stipulated by internal business 

rules, policies, or procedures 

established by the Personnel 

Management Board. 

9. Pay Growth Within a Pay Band 

As a compensation management tool 

the Personnel Management Board may 

establish pay ranges appropriate for a 

group or class of positions within a pay 

band or pay bands. Advancement of pay 

beyond the assigned pay range will 

generally require approval above the 

Pay Pool Manager prior to finalizing the 

pay pool decisions. The request must 

demonstrate that the complexity and 

responsibility of the position have 

substantially changed and the duties of 

the position are expected to continue at 

this level in the future thus warranting 

assignment of the position to a higher 

pay range. Control points may apply in 

every occupational family and pay 

band. Additional guidance will be 

included in NAWCAD/NAWCWD 

internal issuances. 

10. Awards 

To provide additional flexibility in 

motivating and rewarding individuals 

and groups, some portion of the 

performance award budget will be 

reserved for special acts and other 

categories as they occur. Awards may 

include, but are not limited to, special 

acts, patents, invention awards, 

suggestions, on-the-spot, and time-off. 

The funds available to be used for 

traditional title 5 U.S.C. awards are 

separately funded within the constraints 

of the organization’s budget. 

While not directly linked to the 

Mission Aligned Objectives and 

Compensation system, this additional 

flexibility is important to encourage 

outstanding accomplishments and 

innovation in achieving the diverse 

mission of the covered organizations. 

Additionally, to foster and encourage 

teamwork among its employees, 

organizations may give group awards. 

Thus, a team leader may recommend 

and a supervisor may allocate a sum of 

money to a team for outstanding 

performance. 

The NAWCAD and NAWCWD 

Commanders will have the authority to 

grant special act awards to covered 

employees of up to $25,000 IAW the 

criteria of SECNAVINST 12451.3. This 

authority may be delegated to the 

Executive Directors of the covered 

organizations. 

11. General Pay Increase 

Employees who receive an 

unacceptable rating of record will not 

receive performance payouts or any 

portion of the general pay increase and 

as a result will ‘‘migrate’’ downward in 

the pay band. This occurs because the 

rate of base pay in a pay band increases 

as the result of the general pay increase 

(5 U.S.C. 5303). If their performance 

rating continues as Unacceptable, 

employees who reach the bottom of the 

overlapping pay scales (they remain 

identified in the higher classification 

level as long they are covered in that 

range) will cross the line into the next 

lower classification level without 

specific adverse or performance-based 

action. This migration is necessary for 

an employee whose performance over a 

period of time has been deficient 

enough to merit the employee’s 

placement in lower level duties/ 

responsibilities where new 

opportunities for acceptable 

performance exist. Clearly the employee 

who has experienced several 

performance evaluations and who, in 

each case, has been given a year to 

demonstrate improvement has been 

provided equal or better ‘‘due process’’ 

than the obviously unsatisfactory 

employee who is accorded immediate 

adverse or performance-based action 

procedures and downgraded or removed 

after the required 30-day notice period. 

Further, it should be noted that in these 

instances the employee’s pay will 

remain constant, the downward 

migration results from the need to 

comply with statutory pay levels. 

Adverse or performance-based action 

procedures will cover demotion 

between levels or removal where 

performance is clearly so unsatisfactory 

as to preclude retention in the current 

pay band or as an employee. 

12. Requests for Reconsideration 

An employee may request 

reconsideration of the rating-of-record 

received under the mission aligned 

objectives and compensation system. A 

rating of record or job objective rating 

may be reconsidered by request of an 

employee only through the process 

specified in this subpart and 

implementing issuances. This process 

will be the sole and exclusive agency 

administrative process for employees to 

request reconsideration of a rating of 

record. Consistent with this part, Pay 

Pool Managers will make the decision 

on reconsiderations of rating of record. 

Pay Pool Managers’ decisions are final. 

A payout point assignment 

determination, payout distribution 

determination, or any other payout 

matter will not be subject to the 

reconsideration process or any other 

agency administrative grievance system. 

In the event a reconsideration or 

negotiated grievance decision results in 

an adjusted rating of record the revised 

rating will be referred to the Pay Pool 

Manager for recalculation of the 

employee’s performance payout amount 

and distribution. Any adjustment to 

base pay will be retroactive to the 

effective date of the performance 

payout. Base pay adjustments will be 

based on the payout point range 

appropriate for the adjusted rating of 

record. Payout point values for the 

adjusted rating of record will reflect the 

payout point value paid to other 


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members across the pay pool for that 

rating cycle. Decisions made through 

the reconsideration process or a 

negotiated grievance procedure will not 

result in recalculation of the payout 

made to other employees in the pay 

pool. 

13. Adverse Actions 

Except where specifically waived or 

modified in this plan, adverse action 

procedures under 5 CFR part 752 

remain unchanged. 

D. Hiring Authority 

Competitive service positions will be 

filled through Merit Staffing, direct-hire 

authority, or Delegated Examining. 

1. Qualifications 

The qualifications required for 

placement into a position in a pay band 

within an occupational family will be 

determined using the OPM ‘‘Operating 

Manual: Qualifications Standards for 

General Schedule Positions.’’ Since the 

pay bands are anchored to the GS grade 

levels, the minimum qualification 

requirements for a position will be the 

requirements corresponding to the 

lowest GS grade incorporated into that 

pay band. For example, for a position in 

the S&E occupational family Pay Band 

II, individuals must meet the basic 

requirements for a GS–5 as specified in 

the OPM ‘‘Qualification Standard for 

Professional and Scientific Positions.’’ 

Selective factors may be established 

for a position in accordance with the 

OPM’s ‘‘Operating Manual: 

Qualifications Standards for General 

Schedule Positions,’’ when determined 

to be critical to successful job 

performance. These factors will become 

part of the minimum requirements for 

the position, and applicants must meet 

them in order to be eligible. If used, 

selective factors will be stated as part of 

the qualification requirements in 

vacancy announcements and recruiting 

bulletins. 

2. Delegated Examining 

NAWCAD and NAWCWD propose to 

demonstrate a streamlined examining 

process for both permanent and nonpermanent positions. This authority will 

be supported by the applicable servicing 

Human Resource Offices and Human 

Resources Service Centers in accordance 

with the Department of Navy’s common 

business processes, systems, and tools. 

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 non-preference 

applicants. Statutes and regulations 

covering veterans’ 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 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. Additional guidance on 

operating processes will be included in 

NAWCAD/NAWCWD internal 

issuances. 

3. Distinguished Scholastic 

Achievement Appointment Authority 

(DSAA) for Scientific and Engineering 

Positions 

The covered organizations will use 

the Distinguished Scholastic 

Achievement Appointment Authority. 

The DSAA uses an alternative 

examining process, which provides the 

authority to appoint individuals with 

undergraduate or graduate degrees 

through the doctoral level to 

professional positions up to the 

equivalent of GS–12 (DP–03 or DS–04). 

This enables the covered organizations 

to respond quickly to hiring needs for 

eminently qualified candidates 

possessing distinguished scholastic 

achievements. Candidates may be 

appointed provided they meet the 

minimum standards for the position as 

published in OPM’s ‘‘Operating Manual: 

Qualifications Standards for General 

Schedule Positions’’ and the candidate 

has a cumulative grade point average of 

3.5 (on a 4.0 scale) or better in their field 

of study (or other equivalent score) or 

are within the top 10 percent of a 

university’s major school of graduate 

studies for professional occupations, 

etc. 

4. Legal Authority 

For actions taken under the auspices 

of the demonstration project, the legal 

authority, Public Law 103–337, as 

amended, will be used. For all other 

actions, the nature of action codes and 

legal authority codes prescribed by 

OPM, DoD, or DON will continue to be 

used. 

5. Expanded Term Appointments 

NAWCAD and NAWCWD conduct a 

variety of projects that range from three 

to six years. The current four-year 

limitation on term appointments, as 

described in 5 CFR part 316, often forces 

the termination of term employees prior 

to completion of projects they were 

hired to support. This disrupts the 

research and development process and 

affects the organization’s ability to 

accomplish the mission and serve its 

customers. Under the demonstration 

project, the covered organizations will 

have authority to hire individuals under 

a modified term appointment for a 

period of more than one year but not 

more than five years when the need for 

an employee’s services is not 

permanent. These appointments may be 

extended one additional year, for a total 

of 6 years. The Executive Directors are 

authorized to extend term 

appointments. Employees hired under 

the modified term appointment 

authority are in a non-permanent status, 

but may be eligible for conversion to 

career-conditional or career 

appointments in the competitive 

service. To be converted, the employee 

must have (1) been selected for the term 

position under competitive procedures, 

with the announcement specifically 

stating that the individual(s) selected for 

the term position may be eligible for 

conversion to a career-conditional or 

career appointment at a later date; (2) 

served a minimum of two years of 

continuous service in the term position; 

and (3) be performing at the acceptable 

level of performance with a current 

rating of record of Mission Success or 

higher. 

6. Extended Probationary Period 

The purpose of extending the 

probationary period and trial period is 

to allow supervisors an adequate period 

of time to fully evaluate an employee’s 

ability to complete a cycle of work and 

to fully assess an employee’s 

contribution and conduct. 

a. Competitive Service 

NAWCAD and NAWCWD will 

implement an extended initial 

probationary period for competitive 

service employees. The one-year 

probationary period will be extended to 

three years for newly appointed careerconditional, career employees and the 

one-year trial period will be extended to 

three years for newly appointed term 

employees to positions classified to 

series in the Science and Engineering, 

Business and Program Management, and 

Technical Specialist occupational 

families. For employees in positions 

classified to series in the S&E 

Technician and Administrative Support 

occupational families the one-year 

probationary period will be extended to 

two years for newly appointed careerconditional, career employees and the 

one-year trial period will be extended to 

two years for newly appointed term 

employees. The term newly appointed 

includes conversion to new 


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appointments, including conversions 

from term appointments and the 

excepted service, for this purpose. 

Employees who have completed an 

initial probationary or trial period prior 

to their conversion into the NAWC 

STRL will not be required to serve a 

new or extended initial probationary or 

trial period. Employees who are serving 

an initial probationary or trial period 

upon conversion into the NAWC’s STRL 

will serve the time remaining on their 

initial probationary period or trial and 

may have their initial probationary or 

trial period extended in accordance 

with the demonstration project 

regulation and implementing issuances. 

If a probationary or trial employee’s 

performance is determined to be 

Mission Success or higher and the 

supervisor expects that the Mission 

Success or higher performance will 

continue into the future, the supervisor 

has the option of ending the 

probationary or trial period at an earlier 

date, but not before the employee has 

completed one year of continuous 

service. If the probationary or trial 

period is terminated before the end of 

the two- or three-year period, the 

immediate supervisor will provide 

written reasons for his/her decision to 

the next level of supervision for 

concurrence prior to implementing the 

action. 

Aside from extending the time period 

for all newly appointed careerconditional, career and term employees 

all other features of the initial 

probationary period as defined in 5 CFR 

part 315 and trial period as described in 

5 CFR part 316 are retained including 

the potential to remove an employee 

without providing the full substantive 

and procedural rights afforded a nonprobationary employee. 

b. Excepted Service 

NAWCAD and NAWCWD will 

implement an extended initial trial 

period for excepted service employees 

who are appointed on a permanent or 

conditional basis or who are given a 

time-limited appointment lasting three 

or more years. The trial period will be 

three years for newly appointed 

excepted service employees to positions 

classified to series in the Science and 

Engineering, Business and Program 

Management, and Technical Specialist 

occupational families. For employees in 

positions classified to series in the S&E 

Technician and Administrative Support 

occupational families the trial period 

will be extended to two years for newly 

appointed excepted service employees. 

The term newly appointed includes 

conversion to new appointments for this 

purpose. 

Employees who have completed an 

initial trial period prior to their 

conversion into the NAWC STRL will 

not be required to serve a new or 

extended initial trial period. Employees 

who are serving an initial trial period 

upon conversion into the NAWC’s STRL 

will serve the time remaining on their 

initial trial period and may have their 

initial trial period extended in 

accordance with the demonstration 

project regulation and implementing 

issuances. 

If a trial employee’s performance is 

determined to be Mission Success or 

higher and the supervisor expects that 

the Mission Success or higher 

performance will continue into the 

future, prior to the end of the two- or 

three-year trial period, a supervisor has 

the option of ending the trial period at 

an earlier date, but not before the 

employee has completed one year of 

continuous service. If the trial period is 

terminated before the end of the two- or 

three-year period, the immediate 

supervisor will provide written reasons 

for his/her decision to the next level of 

supervision for concurrence prior to 

implementing the action. 

7. Termination of Probationary 

Employees 

Probationary employees may be 

terminated when they fail to 

demonstrate proper conduct, technical 

competency, and/or acceptable 

performance for continued employment, 

and for conditions arising before 

employment. When a supervisor 

decides to terminate an employee 

during the probationary period because 

his/her work performance or conduct is 

unacceptable, the supervisor shall 

terminate the employee’s services by 

written notification stating the reasons 

for termination and the effective date of 

the action. The information in the notice 

shall, at a minimum, consist of the 

supervisor’s conclusions as to the 

inadequacies of the employee’s 

performance or conduct, or those 

conditions arising before employment 

that support the termination. 

8. Supervisory Probationary Periods 

NAWCAD and NAWCWD will 

implement an extended supervisory 

probationary period. The probationary 

period for new supervisors will be two 

years. Except for the increased length, 

supervisory probationary periods will 

be made consistent with 5 CFR part 315. 

Employees who have successfully 

completed an initial probationary 

period for supervisory positions will not 

be required to complete an additional 

two-year probationary period for initial 

appointment to a supervisory position. 

Employees who are serving an initial 

supervisory probationary period upon 

conversion into the NAWC’s STRL will 

serve the time remaining on their initial 

supervisory probationary period and 

may have their supervisory probationary 

period extended in accordance with the 

demonstration project regulation and 

implementing issuances. If, during this 

probationary period, the decision is 

made to return the employee to a nonsupervisory position for reasons related 

to supervisory performance and/or 

conduct, the employee will be returned 

to a comparable position of no lower 

base pay than the position from which 

promoted or reassigned immediately 

prior to the supervisory assignment. 

9. Volunteer Emeritus Corps 

a. NAWCAD and NAWCWD will 

implement a Voluntary Emeritus 

Program. Under the demonstration 

project, the Executive Directors of the 

covered organizations will have the 

authority to offer retired or separated 

employees voluntary positions. This 

authority may be delegated only to 

members of the Senior Executive 

Service (SES). Voluntary Emeritus Corps 

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. To be accepted into the 

Volunteer Emeritus Corps, a volunteer 

must be recommended by a NAWCAD 

or NAWCWD manager to the NAWCAD 

or NAWCWD Executive Director or an 

SES member to whom this authority has 

been delegated. Not everyone who 

applies is entitled to an emeritus 

position. The responsible official will 

document acceptance or rejection of the 

applicant. For acceptance, 

documentation must be retained 

throughout the assignment. For 

rejection, documentation will be 

maintained for two years. 

b. To ensure success and encourage 

participation, the volunteer’s Federal 

retirement pay (whether military or 

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. 

Voluntary Emeritus Corps 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 volunteers may be required 

to submit a financial disclosure form 

annually. The same rules that currently 

apply to source selection members will 


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apply to volunteers. An agreement will 

be established among the volunteer, the 

responsible official, and the servicing 

HRO. 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 is 

without compensation, and the 

volunteer waives any claims against the 

Government based on the voluntary 

assignment; 

(2) A statement that the volunteer will 

be considered a Federal employee only 

for the purpose of injury compensation; 

(3) The 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 

organization (travel, administrative 

support, office space, and supplies); 

(6) A statement of duties; 

(7) A statement providing that 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 

volunteer; 

(8) A provision allowing either party 

to void the agreement with two working 

days written notice; 

(9) The level of security access 

required by the volunteer (any security 

clearance required by the position will 

be managed by the employing 

organization); 

(10) A provision that any 

publication(s) resulting from his/her 

work will be submitted to the NAWCAD 

or NAWCWD Executive Director for 

review and approval; 

(11) A statement that he/she accepts 

accountability for loss or damage to 

Government property occasioned by 

his/her negligence or willful action; 

(12) A statement that his/her activities 

on the premises will conform to the 

regulations and requirements of the 

organization; 

(13) A statement that he/she will not 

release any sensitive or proprietary 

information without the written 

approval of the employing organization 

and further agrees to execute additional 

non-disclosure agreements as 

appropriate, if required, by the nature of 

the anticipated services; and, 

(14) A statement that he/she agrees to 

disclose any inventions made in the 

course of work performed at the 

NAWCAD or NAWCWD. The NAWCAD 

or NAWCWD Executive Director has the 

option to obtain title to any such 

invention on behalf of the U.S. 

Government. Should the NAWCAD or 

NAWCWD Executive Director elect not 

to take title, the NAWCAD or NAWCWD 

shall, at a minimum, retain a nonexclusive, irrevocable, paid-up, royaltyfree license to practice or have practiced 

the invention worldwide on behalf of 

the U.S. Government. Exceptions to the 

provisions in this procedure may be 

granted by the NAWCAD or NAWCWD 

Executive Director on a case-by-case 

basis. 

10. Direct Hire Authority for Scientists 

and Engineers With Advanced Degrees 

for Scientific and Engineering Positions 

a. Background 

The NAWCAD and NAWCWD 

Laboratories have an urgent need for 

direct hire authority to appoint qualified 

candidates possessing an advanced 

degree to permanent and temporary 

scientific and engineering positions. 

The market is extremely competitive 

with industry and academia for the 

small supply of highly-qualified and 

security clearable candidates with a 

Masters Degree or PhD in science or 

engineering. There are 35,000 scientists 

and engineers employed in the DoD 

laboratories; 27% hold Masters Degrees, 

while 10% are in possession of a PhD 

The NAWCAD and NAWCWD 

Laboratories jointly employ 5974 

scientists and engineers; 29% holding 

Masters Degrees, while 4% are in 

possession of a PhD Over the next five 

years, the NAWCAD and NAWCWD 

Laboratories plan to hire approximately 

2,240 of the country’s best and brightest 

scientists and engineers (S&Es) just to 

keep pace with attrition. This number 

does not include the impact that several 

actions such as the Base Realignment 

and Closure of weapons and armament 

work to China Lake, California that will 

result in need to hire additional 

scientists and engineers above normal 

attrition levels. Statistics indicate that 

the available pool of advanced degree, 

clearable candidates is substantially 

diminished by the number of non-U.S. 

citizens granted degrees by U.S. 

institutions. For instance, in 2006, 20% 

of Masters Degrees in science and over 

35% of PhDs in science were awarded 

to temporary residents. 

It is expected that this hiring 

authority, together with streamlined 

recruitment processes, will be very 

effective in hiring candidates possessing 

a PhD and accelerating the hiring 

process. For instance, under a similar 

authority found in the NDAA for FY 

2009, section 1108 (Pub. L. 110–417), 

October 28, 2009, one STRL had fifteen 

PhD selectees in 2009 for the sixteen 

vacancies for which they were using 

this hiring authority. Another STRL, 

using this expedited hiring authority in 

calendar year 2009, made thirty firm 

hiring offers in an average of thirteen 

days from receipt of paper work in the 

Human Resources Office. Of these thirty 

selectees, twenty-three possessed PhDs. 

This authority will be administered 

by the servicing Human Resources 

Office and Human Resources Service 

Center in accordance with the 

Department of Navy’s common business 

processes, systems and tools and 

consistent with veterans’ preference and 

merit principles. Use of this appointing 

authority must comply with ’veterans’ 

preference and merit systems principles 

when recruiting and appointing 

candidates with advanced degrees to 

covered occupations. Qualified 

candidates possessing an advanced 

degree may be appointed to both 

competitive and excepted service 

without regard to the provisions of 

subchapter 1 of chapter 33 of title 5, 

United States Code, other than sections 

3303, 3321, and 3328 of such title. 

The hiring threshold for this authority 

shall be consistent with DoD policy and 

legislative language as expressed in any 

National Defense Authorization Act 

addressing such. 

When completing the personnel 

action, the following will be given as the 

authority for the Career-Conditional, 

Career, Term, Temporary, or special 

demonstration project appointment 

authority: Section 1108, NDAA for FY 

09. Evaluation of this hiring authority 

will include information and data on its 

use such as numerical limitation, hires 

made, declinations, how many veterans 

hired, declinations, difficulties 

encountered, and/or recognized 

efficiencies. 

b. Definitions 

(1) Scientific and engineering 

positions are defined as all professional 

positions in scientific and engineering 

occupations (with a positive education 

requirement) utilized by the laboratory. 

(2) An advanced degree is a Master’s 

or higher degree from an accredited 

college or university in a field of 

scientific or engineering study directly 

related to the duties of the position to 

be filled. 

(3) Qualified candidates are defined 

as candidates who: 

(a) Meet the minimum standards for 

the position as published in OPM’s 

operating manual, ‘‘Qualification 

Standards for General Schedule 

Positions,’’ or the laboratory’s 

demonstration project qualification 

standards specific to the position to be 

filled; 

(b) Possess an advanced degree; and 

(c) Meet any selective factors. 

(4) The term ‘‘employee’’ is defined by 

Section 2105 of title 5, U.S.C. 


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11. Non-Citizen Hiring 

Where Executive Orders or other 

regulations limit hiring non-citizens to 

the excepted service, both NAWCAD 

and NAWCWD will have the authority 

to approve the hiring of non-citizens 

into competitive service positions when 

qualified U.S. citizens are not available, 

and the candidate meets all applicable 

immigration and security requirements. 

If a non-citizen candidate is the only 

qualified candidate for the position, the 

candidate may be appointed. The 

selection is subject to approval by the 

NAWCAD and NAWCWD Executive 

Director/Commanding Officer or 

approving manager, as delegated by the 

appropriate Center Executive Director/ 

Commanding Officer. This authority 

may only be delegated to members of 

the Senior Executive Service (SES). 

E. Internal Placement 

1. Employees Hired From Outside the 

NAWC STRL 

Employees entering into the NAWC 

from non-STRL pay systems or from 

other Federal activities not as the result 

of a mass organizational conversion will 

be moved into the demonstration project 

in the career path and at the level and 

pay consistent with the duties and 

responsibilities of the STRL position 

and individual qualifications. 

When an employee is permanently 

placed (except by conversion under 

section V.A or by promotion under 

section II.E.2) in an STRL position from 

a GS or FWS position through a 

management-directed action (except for 

actions taken for misconduct or 

unacceptable performance), including a 

management directed reassignment or 

realignment, or any placement as a 

result of a reduction in force (RIF), or 

placement via the Priority Placement 

Program (PPP), Reemployment Priority 

List (RPL), or Interagency Career 

Transition Assistance Plan (ICTAP), the 

employee will receive a WGI 

adjustment. The WGI adjustment is 

calculated based on the number of 

calendar days between the effective date 

of the employee’s last equivalent 

increase and the date of conversion into 

NSPS, regardless of the number of days 

in a non-pay status (if any). The 

maximum adjustment may not exceed a 

full WGI. 

An employee who enters into an 

STRL position from a GS or FWS 

position through an employee-initiated 

reassignment, promotion, or change to 

lower grade may, at the discretion of the 

authorized management official, also 

receive a WGI adjustment equivalent 

increase as described in the paragraph 

above. The decision to grant this 

increase will be reviewed and approved 

by an official who is at a higher level 

than the official who made the initial 

decision. 

In either case, this increase occurs 

before any other discretionary 

reassignment increases provided under 

the STRL, may not cause the employee’s 

base salary to exceed the maximum rate 

of the assigned pay band, and is in 

addition to any other discretionary 

reassignment increase the employee 

may be eligible to receive. 

2. Promotion 

A promotion is the movement of an 

employee to a higher pay band in the 

same occupational family or to a higher 

pay band in a different occupational 

family. It also includes movement of an 

employee currently covered by a nondemonstration project personnel system 

to a demonstration project position in a 

pay band with a higher level of work. 

Positions with known promotion 

potential to a specific band within an 

occupational family will be identified 

when they are filled. Not all positions 

in an occupational family will have 

promotion potential to the same band. 

Movement from one occupational 

family to another will depend upon 

individual competencies, qualifications 

and the needs of the organization. 

Supervisors may consider promoting 

qualified employees at any time, since 

promotions are not directly tied to the 

mission aligned objectives and 

compensation system. Progression 

within a pay band is based upon 

performance base pay increases; as 

such, these actions are not considered 

promotions and are not subject to the 

provisions of this section. Promotions 

will follow Merit System Principles and 

basic Federal merit promotion policy 

that provides for competitive and noncompetitive promotions. 

To be promoted competitively or noncompetitively from one band to the 

next, an employee must meet the 

minimum qualifications for the job and 

have a current rating of record of 

Mission Success or better or equivalent 

under a different performance appraisal 

system. If an employee does not have a 

current performance rating, the 

employee will be treated the same as an 

employee with a rating of record of 

Mission Success as long as there is no 

documented evidence of less than 

acceptable performance. 

Higher pay band or higher level of 

work means a pay band designated to be 

a higher level of work than an 

employee’s currently assigned band, 

based on the demonstration 

classification structure and career 

progression patterns, either within or 

across varying pay schedules and career 

groups, regardless of the specific 

earning potential of the band. When 

moving from a non-demonstration 

position to a demonstration position, 

the band of the demonstration position 

is determined to be at a higher level of 

work than the grade or level of the nondemonstration position based on 

application of the demonstration 

classification structure and career 

progression patterns. Additional 

guidance will be included in NAWCAD/ 

NAWCWD internal issuances. 

3. Reassignment 

A reassignment occurs when an 

employee moves, voluntarily or 

involuntarily, to a different position or 

set of duties within his/her pay band or 

to a position in a comparable pay band, 

or from a non-demonstration project 

position to a demonstration project 

position at a comparable level of work, 

on either a temporary or permanent 

basis. The employee must meet the 

qualifications requirements for the 

occupational family and pay band. 

When an employee is reassigned either 

within his/her current pay band or to a 

comparable pay band, an authorized 

management official will set pay at an 

amount no less than the employee’s 

current base pay. 

Comparable pay band or comparable 

level of work means pay bands with the 

equivalent level of work, based on the 

demonstration classification structure 

and career progression patterns, within 

and across varying pay schedules and 

career groups, regardless of the specific 

earning potential of the bands. When 

moving from a non-demonstration 

position to a demonstration position, 

the band of the demonstration position 

is determined to be at a comparable 

level of work to the grade or level of the 

non-demonstration position based on 

application of the demonstration 

classification structure and career 

progression patterns. Additional 

guidance will be included in NAWCAD/ 

NAWCWD internal issuances. 

4. Demotion or Placement in a Lower 

Pay Band 

A demotion is the placement of an 

employee into a lower pay band or 

movement from a non-demonstration 

project position to a demonstration 

project position at a lower level of work. 

Demotions may be for cause 

(performance or conduct) or for reasons 

other than cause (e.g., erosion of duties, 

reclassification of duties to a lower pay 

band, application under competitive 

announcements, at the employee’s 

request, or placement actions resulting 

from RIF procedures). 


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Lower pay band or lower level of 

work means a pay band designated to be 

a lower level of work than an 

employee’s currently assigned band, 

based on the demonstration 

classification structure and career 

progression patterns, either within or 

across varying pay schedules and career 

groups, regardless of the specific 

earning potential of the band. When 

moving from a non-demonstration 

position to a demonstration position, 

the band of the demonstration position 

is determined to be at a lower level of 

work than the grade or level of the nondemonstration position based on 

application of the demonstration 

classification structure and career 

progression patterns. Additional 

guidance will be included in NAWCAD/ 

NAWCWD internal issuances. 

5. Simplified Assignment Process 

Today’s environment of downsizing 

and workforce fluctuations mandates 

that the organization have maximum 

flexibility to assign duties and 

responsibilities to individuals. Pay 

banding can be used to address this 

need, as it enables the organization to 

have maximum flexibility to assign an 

employee with or without a change in 

base pay, within broad descriptions, 

consistent with the needs of the 

organization and the individual’s 

qualifications and level. Subsequent 

assignments to projects, tasks, or 

functions anywhere within the 

organization requiring the same level, 

area of expertise, and qualifications 

would not constitute an assignment 

outside the scope or coverage of the 

current position description. For 

instance, a technical expert could be 

assigned to any project, task, or function 

requiring similar technical expertise. 

Likewise, a manager could be assigned 

to manage any similar function or 

organization consistent with that 

individual’s qualifications. This 

flexibility allows broader latitude in 

assignments and further streamlines the 

administrative process and system. 

6. Details and Temporary Promotions 

NAWCAD and NAWCWD will 

implement an Expanded Detail and 

Temporary Promotion Authority 

providing the authority to (1) to effect 

details up to one year to specified 

positions at the same or similar level; 

and (2) to effect details or temporary 

promotions to a higher pay band 

position up to one year within a 24- 

month period without competition. The 

specifics of these authorities will be 

stipulated by local business rules, 

policies, or procedures as organizational 

experience dictates. 

7. Exceptions to Competitive Procedures 

The following actions are exceptions 

to competitive procedures: 

a. Re-promotion to a position which is 

in the same pay band or GS equivalent 

and occupational family as the 

employee previously held on a 

permanent basis within the competitive 

service. 

b. Promotion, reassignment, 

demotion, transfer or reinstatement to a 

position having promotion potential no 

greater than the potential of a position 

an employee currently holds or 

previously held on a permanent basis in 

the competitive service. 

c. A position change permitted by 

reduction-in-force procedures. 

d. Promotion without current 

competition when the employee was 

appointed through competitive 

procedures to a position with a 

documented target level. 

e. A temporary promotion, or detail to 

a position in a higher pay band, up to 

one year in a 24-month period. 

f. A promotion due to the 

reclassification of positions based on 

accretion (addition) of duties. 

g. A promotion resulting from the 

correction of an initial classification 

error or the issuance of a new 

classification standard. 

h. Consideration of a candidate who 

did not receive proper consideration in 

a competitive promotion action. 

Additional guidance will be included 

in NAWCAD/NAWCWD internal 

issuances. 

F. Pay Administration 

1. General 

Pay administration policies will be 

established by the Personnel 

Management Board. These policies will 

be exempt from DON pay setting 

policies, but will conform to basic 

governmental pay setting policy except 

for flexibilities contained herein. 

Employees whose performance is 

acceptable will receive the full annual 

general pay increase and the full locality 

pay. The covered organizations may 

make full use of recruitment, retention 

and relocation incentive payments as 

provided for by OPM. Pay retention will 

follow current law and regulations at 5 

U.S.C. 5362, 5363, and 5 CFR part 536, 

except as described in this regulation 

and waived or modified in section IX, 

the waiver section of this plan. Pay band 

retention will not be used in this 

demonstration project. 

2. Locality Pay 

Employees with a performance rating 

of Partial Mission Success or better will 

be entitled to the locality pay authorized 

for their official duty station in 

accordance with 5 CFR part 531 subpart 

F. Employees with a performance rating 

of Unacceptable will be entitled to only 

the locality pay increase; they cannot 

receive any other pay increase or award. 

In addition, the locality-adjusted pay of 

any employee may not exceed the rate 

for Executive Level IV. Geographic 

movement within the demonstration 

project will result in the employee’s 

locality pay being recomputed using the 

newly applicable locality pay 

percentage, which may result in a 

higher or lower locality pay and, thus, 

a higher or lower adjusted base pay. 

3. Pay and Compensation Ceilings 

An employee’s total monetary 

compensation paid in a calendar year 

may not exceed the base pay of Level I 

of the Executive Schedule consistent 

with 5 U.S.C. 5307 and 5 CFR part 530 

subpart B. In addition, each pay band 

will have its own pay ceiling, just as 

grades do in the GS. Base pay rates for 

the various pay bands will be directly 

keyed to the GS rates, except for the Pay 

Band VI of the Supervision and 

Management occupational family. Other 

than where a retained rate applies, base 

pay will be limited to the maximum 

base pay payable for each pay band. 

4. Pay Setting for Appointment 

Employees whose appointment to a 

demonstration project position is their 

initial appointment to the Federal 

service may have pay set at the lowest 

base pay in the band or anywhere 

within the band consistent with the 

special qualifications of the individual 

and the unique requirements of the 

position. These special qualifications 

may be in the form of education, 

training, experience or any combination 

thereof that is pertinent to the position 

in which the employee is being placed. 

Both national and local labor market 

conditions and pay rates may also be 

taken into consideration to ensure that 

the Warfare Centers are able to compete 

for the talent, skills, abilities, and 

competencies needed to enable them to 

remain on the cutting edge of science 

and technology. Guidance on pay 

setting for new hires will be established 

by the Personnel Management Board. 

Highest Previous Rate (HPR) will be 

considered in placement actions 

authorized under rules similar to the 

HPR rules in 5 CFR 531.221. Use of HPR 

will be at the supervisor’s discretion, 

but if used, HPR is subject to policies 

established by the Personnel 

Management Board. 


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5. Pay Setting for Promotion 

The minimum base pay increase upon 

promotion to a higher pay band will be 

6% or the minimum base pay rate of the 

new pay band, whichever is greater. The 

maximum amount of the pay increase 

may not exceed 20%, or other such 

amount as established by the Personnel 

Management Board. The maximum base 

pay increase for promotion may be 

exceeded when necessary to allow for 

the minimum base pay increase. For 

employees covered by a staffing 

supplement, the demonstration 

extended base pay is considered base 

pay for promotion calculations. When a 

temporary promotion is terminated, the 

employee’s pay entitlements will be redetermined based on the employee’s 

position of record, with appropriate 

adjustments to reflect pay events during 

the temporary promotion, subject to the 

specific policies and rules established 

by the Personnel Management Board. 

The Personnel Management Board may 

establish additional pay setting policies 

for promotions, including increasing the 

promotion amount beyond 20% with 

the approval of the NAWCAD and 

NAWCWD Commanders or Executive 

Directors. In no case may those 

adjustments increase the base pay for 

the position of record beyond the 

applicable maximum base pay for the 

pay band. 

6. Pay Setting for Reassignment 

a. Covered organizations may choose 

to adopt the flexibility to pay an 

increase in base pay upon reassignment. 

If adopted, such an increase will be 

subject to the specific guidelines 

established by the Personnel 

Management Board and will not exceed 

5% as a cost containment measure. A 

reassignment may be effected without a 

change in base pay. Employees may be 

eligible for an increase to base salary 

upon temporary or permanent 

reassignment as described in section 

III.E.3. A decision to increase an 

employee’s pay under this section will 

be based upon clear Personnel 

Management Board business rules that 

will define criteria necessary to justify 

a pay increase. Examples of criteria may 

include, but are not limited to, one or 

more of the following factors: 

(1) A determination that an 

employee’s responsibilities will 

significantly increase; 

(2) Critical mission or business 

requirements; 

(3) Need to advance multi-functional 

competencies; 

(4) Labor market conditions, e.g., 

availability of candidates and labor 

market rates; 

(5) Reassignment from a 

nonsupervisory to a supervisory 

position; 

(6) Employee’s past and anticipated 

performance and contribution; 

(7) Physical location of position; 

(8) Specialized skills, knowledge, or 

education possessed by the employee in 

relation to those required by the 

position; and 

(9) Base pay of other employees in the 

organization performing similar work. 

b. When an employee is reassigned 

within his/her current pay band or to a 

comparable pay band, an authorized 

management official will set pay at an 

amount no less than the employee’s 

current base pay and may increase the 

employee’s current base pay by up to 

and including 5%. If the employee’s 

current base pay exceeds the maximum 

of the new pay band, no increase can be 

provided. There is no limit to the 

number of times an employee can be 

reassigned, but local business rules will 

be established to monitor and control all 

cases that receive reassignment base pay 

changes to ensure fairness and 

consistency across the workforce. 

Reassignment base pay thresholds may 

be modified by internal business rules, 

policies, or procedures as organizational 

experience dictates. 

7. Pay Setting for Demotion or 

Placement in a Lower Pay Band 

Employees demoted for cause 

(performance or conduct) are not 

entitled to pay retention and will 

receive a minimum of a 5% decrease in 

base pay or the minimum rate of the 

lower pay band whichever is greater. 

Employees demoted for reasons other 

than cause (e.g., erosion of duties, 

reclassification of duties to a lower pay 

band, application under competitive 

announcements, at the employee’s 

request, or placement actions resulting 

from RIF procedures) may be entitled to 

pay retention in accordance with the 

provisions of 5 U.S.C. 5363 and 5 CFR 

part 536, except as waived or modified 

in sections III.F.11 and IX of this plan. 

Employees, who receive an 

unacceptable rating, do not receive 

performance payouts or the general pay 

increase. This action may result in base 

pay that is identified in a lower pay 

band. This occurs because the minimum 

rate of base pay in a pay band increases 

as the result of the general pay increase 

(5 U.S.C. 5303) while the employee’s 

pay does not change. The employee will 

be placed in the lower pay band and 

their salary will remain unchanged. 

This situation (a reduction-in-band level 

with no reduction in pay as a result of 

an unacceptable rating) will not be 

considered an adverse performance 

based action. 

8. Staffing Supplements 

At the time of conversion or OPM 

approval of a new SSR that would be 

applicable to covered employees, the 

NAWCAD and NAWCWD may 

incorporate the use of special salary 

rates (SSR) in demonstration project pay 

ranges. Currently there are no NSPS 

Targeted Local Market Supplements in 

use by NAWCAD or NAWCWD so no 

employees converting from NSPS will 

be affected if staffing supplements are 

not implemented at conversion. If 

staffing supplements are adopted, either 

at the time of conversion or later, 

NAWCAD and NAWCWD will 

implement them via an extension to the 

demonstration pay ranges and a 

supplement to a covered employee’s 

salary. Employees assigned to 

occupational categories and geographic 

areas where GS SSRs apply may be 

entitled to a staffing supplement if the 

maximum adjusted base pay rate for the 

demonstration band to which the 

employee is assigned is exceeded by a 

GS special rate for the employee’s 

occupational category and geographic 

area. The Personnel Management Board 

may establish additional policies and 

provide guidance on the use and 

application of the staffing supplement 

including provisions for in band 

adjustments and limiting application of 

this feature to fewer occupations than 

covered by the GS SSR. An extension to 

the demonstration pay ranges will be 

used to extend the maximum salary of 

the pay band for those occupations for 

which a staffing supplement is 

approved. The increase of an 

employee’s base pay into this extension 

will be determined by the annual 

performance assessment and payout, 

there is no automatic entitlement to a 

staffing supplement. Only if an 

employee’s annual assessment and 

associated payout would cause their 

base pay to fall within the area of the 

staffing supplement extension to the pay 

range for the pay band would they be 

paid at this level. 

The extension to the pay range will be 

the maximum special salary rate for the 

banded grades. An employee’s base pay 

is increased by the standard locality 

increase until the base pay exceeds the 

maximum GS basic pay for the banded 

grades. If the employee’s base pay will 

exceed the maximum GS basic pay for 

the banded grades then the staffing 

supplement will be applied when 

authorized. The staffing supplement 

percent will be set equal to the locality 

percent and the staffing supplement and 


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payout is calculated as shown in the 

following example. 

BILLING CODE 5001–06–P 

BILLING CODE 5001–06–C 

If the pay scale extension is 

discontinued or reduced either because 

the GS SSR has been discontinued or 

reduced, for NAWC budgetary 

constraints or other NAWC managerial 

decisions, the employees receiving a 

staffing supplement will receive 

retained pay. There will be no change in 

the adjusted base pay when placed on 

pay retention. 

9. Educational Pay Adjustment 

NAWCAD and NAWCWD will 

establish an educational base pay 

adjustment which is separate from the 

incentive pay process and may not 

cause the employee’s pay to exceed the 

maximum base pay rate of his or her 

assigned pay band. An educational pay 

adjustment is defined as an increase in 

an employee’s base pay by other than 

the incentive pay process within the 

employee’s current band level to an 

amount which does not exceed the top 

of the band. The educational pay 

adjustment may be used to adjust the 

pay of individuals who have acquired a 

level of mission-related education that 

would otherwise make the employee 

qualified for an appointment at a higher 

level and would be used in lieu of a new 

appointment. For example, this 

authority may be used to adjust the pay 

of graduate level Student Career 

Experience Program (SCEP) students or 

employees who have obtained an 

advanced degree, e.g., a PhD in a field 

related to the work of their position or 

the mission of their organization. An 

employee may receive an educational 

base pay adjustment or a reassignment 

base pay increase but not both at the 

same time. 

10. Developmental Promotions 

NAWCAD and NAWCWD will 

employ developmental promotions to 

achieve compensation growth 

commensurate to an employee’s 

progression while in developmental 

assignments. A developmental 

promotion is an increase to base pay 

that may be provided to employees 

participating in NAWCAD and 

NAWCWD training programs or in other 

developmental capacities as determined 

by Personnel Management Board policy. 

Developmental promotions recognize 

growth and development in the 

acquisition of job related competencies 

combined with successful performance 

of job objectives. The use of 

developmental promotions is limited to 

(1) employees in a developmental pay 

band of a non-supervisory pay schedule 

and who are in developmental or trainee 

level positions; and (2) employees in 

positions which are assigned to a 

Student Career Experience Program 

(SCEP). 

Standards by which developmental 

promotion increases are provided and 

criteria by which additional base pay 

increases will be determined will be 

established and documented in internal 

business rules, policies, or procedures. 

The amount of the developmental 


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promotion increase generally will not 

exceed 20 percent of an employee’s base 

pay. The decision to grant a 

developmental promotion exceeding 20 

percent of an employee’s base pay must 

be made on a case-by-case basis and 

approved by the appropriate Executive 

Director/Commanding Officer or their 

delegate as established by internal 

business rules, policies, or procedures. 

This authority may be delegated only to 

members of the Senior Executive 

Service (SES). The amount of the 

developmental promotion increase may 

not cause the employee’s base pay to 

exceed the top of the employee’s pay 

band or that set by internal business 

rule, policy, or procedure. To qualify for 

a developmental promotion, an 

employee must have a rating of record 

of Mission Success or better. A 

developmental promotion may be 

awarded to an employee who does not 

have a rating of record if an authorizing 

official conducts a performance 

assessment and determines that the 

employee is performing at the Mission 

Success level or better. This 

performance assessment does not 

constitute a rating of record. If an 

employee has a current performance 

rating below Mission Success and the 

supervisor believes the employee’s 

performance has improved to the 

Mission Success level or better, the 

employee has demonstrated this 

improved performance for 90 days or 

more and it is expected that this level 

of performance will continue, the 

supervisor may conduct a performance 

assessment and forward it to the Pay 

Pool Manager for approval. If the Pay 

Pool Manager concurs with the 

supervisor’s assessment, then the 

employee may be given a developmental 

promotion. There is no entitlement to an 

additional assessment beyond the 

annual assessment; this decision is 

totally at managerial discretion. If an 

additional assessment is made, it is not 

a rating of record and there will be no 

retroactive pay changes associated with 

it. 

A developmental promotion increase 

may not be granted unless an employee 

is in a pay and duty status under the 

NAWCAD/NAWCWD STRL 

demonstration project on the effective 

date of the increase. 

11. Pay Retention 

Pay retention will follow current law 

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

and 5 CFR part 536, except as waived 

or modified in the Staffing Supplements 

section and section IX of this plan. Pay 

band (grade) retention does not apply 

under this demonstration project. The 

NACWAD or NAWCWD Executive 

Director may also grant pay retention to 

employees who meet general eligibility 

requirements, but do not have specific 

entitlement by law, provided they are 

not specifically excluded. 

G. Employee Development 

1. Expanded Developmental 

Opportunity Program 

The Expanded Developmental 

Opportunity Program will be available 

to all demonstration project employees. 

Expanded developmental opportunities 

complement existing developmental 

opportunities such as long-term 

training, rotational job assignments, and 

developmental assignments to DON/ 

DoD, and self-directed study via 

correspondence courses and local 

colleges and universities. Each 

developmental opportunity must result 

in a product, service, report, or study 

that will benefit the NAWCAD or 

NAWCWD or customer organization as 

well as increase the employee’s 

individual effectiveness. The 

developmental opportunity period will 

not result in loss of (or reduction) in 

base pay, leave to which the employee 

is otherwise entitled, or credit for 

service time. The positions of 

employees on expanded developmental 

opportunities may be back-filled (i.e., 

with temporarily assigned, detailed, or 

promoted employees or with term 

employees). However, that position or 

its equivalent must be made available to 

the employee upon return from the 

developmental period. The Personnel 

Management Board will provide written 

guidance for employees on application 

procedures and develop a process that 

will be used to review and evaluate 

applicants for development 

opportunities. 

a. Sabbaticals 

The Executive Directors of the 

covered organizations have the 

authority to grant paid or unpaid 

sabbaticals to all career employees. The 

purpose of a sabbatical will be to permit 

an employee to engage in study or 

uncompensated work experience that 

will benefit the organization and 

contribute to the employee’s 

development and effectiveness. Each 

sabbatical must result in a product, 

service, report, or study that will benefit 

the NAWCAD or NAWCWD mission as 

well as increase the employee’s 

individual effectiveness. Various 

learning or developmental experiences 

may be considered, such as advanced 

academic teaching; research; selfdirected or guided study; and on-the-job 

work experience. 

One paid sabbatical of up to twelve 

months in duration or one unpaid 

sabbatical of up to six months in a 

calendar year may be granted to an 

employee in any seven-year period. 

Employees will be eligible to request a 

sabbatical after completion of seven 

years of Federal service. Employees 

approved for a paid sabbatical must sign 

a service obligation agreement to 

continue in service in the covered 

organizations for a period of three times 

the length of the sabbatical. If an 

employee voluntarily leaves the covered 

organizations before the service 

obligation is completed, he/she is liable 

for repayment of expenses incurred by 

the covered organizations that are 

associated with training during the 

sabbatical. Expenses do not include 

salary costs. The Executive Directors of 

the covered organizations have the 

authority to waive this requirement. 

Criteria for such waivers will be 

addressed in the operating procedures. 

Specific procedures will be developed 

for processing sabbatical applications 

upon implementation of the 

demonstration project. 

b. Critical Skills Training (Training for 

Degrees) 

The Executive Directors of the 

covered organizations have the 

authority to approve academic degree 

training consistent with 5 U.S.C. 4107. 

Training is an essential component of an 

organization that requires continuous 

acquisition of advanced and specialized 

knowledge. Degree training is also a 

critical tool for recruiting and retaining 

employees with or acquiring critical 

skills. Academic degree training will 

ensure continuous acquisition of 

advanced specialized knowledge 

essential to the organization and ability 

to recruit and retain personnel critical to 

the present and future requirements of 

the organization. Degree or certificate 

payment may not be authorized where 

it would result in a tax liability for the 

employee without the employee’s 

express and written consent. Any 

variance from this policy must be 

rigorously determined and documented. 

Guidelines will be developed to ensure 

competitive approval of degree or 

certificate payment and that those 

decisions are fully documented. 

Employees approved for degree training 

must sign a service obligation agreement 

to continue in service in the covered 

organizations for a period of three times 

the length of the training period. If an 

employee voluntarily leaves the 

NAWCAD or NAWCWD before the 

service obligation is completed, he/she 

is liable for repayment of expenses 

incurred by the covered organizations 


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related to the critical skills training. 

Expenses do not include salary costs. 

The Executive Directors of the covered 

organizations have the authority to 

waive this requirement. Criteria for such 

waivers will be addressed in the STRL 

internal operating procedures. 

H. Reduction-in-Force (RIF) Procedures 

RIF procedures will be used when an 

employee faces separation or 

downgrading due to lack of work, 

shortage of funds, reorganization, 

insufficient personnel ceiling, the 

exercise of re-employment or restoration 

rights, or furlough for more than 30 

calendar days or more than 22 

discontinuous days. The procedures in 

5 CFR part 351 will generally be 

followed with some modifications 

pertaining to the competitive areas, 

assignment rights, the addition of a 

performance sub-group and grade/pay 

band retention. Modified term 

appointment employees are in Tenure 

Group III for RIF purposes. RIF 

procedures are not required when 

separating these employees when their 

appointments expire. 

1. Competitive Areas 

Separate RIF competitive areas for 

demonstration and non-demonstration 

project employees will be established at 

each geographic location. Within the 

demonstration project separate 

competitive areas will be established for 

each demonstration occupational 

family. Demonstration supervisors will 

be placed in the competitive area for 

their occupational family but in separate 

competitive levels within that career 

field. Bumps and retreats will occur 

only within the same competitive area 

and only to positions for which the 

employee meets all qualification 

standards including medical and/or 

physical qualifications. 

Within each competitive area, 

competitive levels will be established 

based on the occupational family, pay 

band, series and SAC so that positions 

are similar enough in duties and 

qualifications that employees can 

perform the duties and responsibilities 

of any other position in the competitive 

level upon assignment to it, without any 

loss of productivity beyond what is 

normally expected. For S&E competitive 

levels the Warfare Centers may also 

choose to use the OPM classification 

functional code as a defining element. 

2. Assignment Rights 

An employee may displace another 

employee by bump or retreat to one pay 

band below the employee’s existing pay 

band. A preference eligible with a 

compensable service-connected 

disability of 30 percent or more may 

retreat to positions two pay bands below 

his/her current band. 

3. Crediting Performance in RIF 

Reductions in force are accomplished 

using the existing procedures with the 

retention factors of: Tenure, veterans’ 

preference, performance, and length of 

service, in that order. The performance 

subgroup will be based on the most 

recent three ratings of record during the 

preceding four years. There will be three 

groupings within the performance 

subgroup: Mission Superior (H), 

Mission Success (S) and Mission 

Deficiency (L). The most recent ratings 

of records will be combined to 

determine the performance subgroup. 

The High subgroup will include those 

employees who have consistently 

demonstrated superior performance. 

The Mission Success subgroup will 

include the next level of demonstrated 

performance and the Mission Deficiency 

subgroup will include those who have 

failed to achieve expected levels of 

performance for one or more years. 

Additional guidance on determining 

performance subgroups will be included 

in NAWCAD/NAWCWD internal 

issuances. 

Employees who have been rated 

under different patterns of summary 

rating levels and have at least the 

equivalent of a rating of record of three 

will receive RIF appraisal credit for the 

non-demonstration performance ratings 

equivalent to Mission Success based on 

the demonstration project’s modal score 

for the employee’s competitive area. If 

the employee received less than the 

equivalent of Mission Success, then that 

rating will be compared to the 

demonstration project one or two rating 

and best fit chosen. Additional guidance 

on ratings equivalency will be included 

in NAWCAD/NAWCWD internal 

issuances. 

In some cases, an employee may not 

have three ratings of record. If an 

employee has fewer than three annual 

ratings of record, then for each missing 

rating, RIF appraisal credit will be based 

on the demonstration project’s modal 

score for the most recently completed 

appraisal period on record for the 

employee’s competitive area. For an 

employee who has no ratings of record, 

all credit will be based on the repeated 

use of a single modal rating from the 

most recently completed appraisal 

period on record for the employee’s 

competitive area. 

An employee who has received a 

written decision that his/her 

performance is unacceptable has no 

bump or retreat rights. An employee 

who has been demoted for unacceptable 

performance, and as of the date of the 

issuance of the RIF notice has not 

received a performance rating in the 

position to which demoted, will receive 

the same credit granted for a Level 3 

rating of record. An employee with a 

current unacceptable rating of record 

has assignment rights only to a position 

held by another employee who has an 

unacceptable rating of record. 

IV. Implementation Training 

Critical to the success of the 

demonstration project is the training 

developed to promote understanding of 

the broad concepts and finer details 

needed to implement and successfully 

execute this project. A new pay banding 

schema and performance management 

system both represent significant 

cultural change to the organization. 

Training will be tailored to address 

employee concerns and encourage 

comprehensive understanding of the 

demonstration project. Training will be 

required both prior to implementation 

and at various times during the life of 

the demonstration project. A training 

program will begin prior to 

implementation and will include 

modules tailored for employees, 

supervisors, senior managers, and 

administrative staff. Typical modules 

are: 

1. An overview of the demonstration 

project personnel system; 

2. How employees are converted into 

and out of the system; 

3. Pay banding; 

4. The mission aligned objectives and 

compensation system; 

5. Defining mission aligned 

performance objectives; 

6. How weights may be used with the 

mission aligned performance objectives; 

7. Assessing performance—giving 

feedback; 

8. New position descriptions; and 

9. Demonstration project 

administration and formal evaluation. 

Various types of training are being 

considered including videos, on-line 

tutorials, and train-the-trainer concepts. 

V. Movement Into and Out of the 

Demonstration Project 

A. Conversion From NSPS to the 

Demonstration Project 

1. Placement Into Demonstration Project 

Pay Plans and Pay Bands 

The employee’s NSPS occupational 

series, pay plan, pay band, and 

supervisory code will be considered 

upon converting into the demonstration 

project as follows: 

a. Determine the appropriate 

demonstration project pay plan. 

Employees will be converted into a pay 


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plan based on the occupational series of 

their position. There is a separate pay 

plan for supervisors; conversion to that 

pay plan will be without regard to the 

occupational series. In cases where the 

employee is assigned to a NSPS-unique 

occupational series, a corresponding 

OPM occupational series must be 

identified using OPM GS classification 

standards and guidance to determine 

the proper demonstration project pay 

plan. 

b. Determine the appropriate pay 

band. The appropriate pay band will be 

determined by establishing the 

corresponding demonstration project 

pay band for the employee’s NSPS 

position using demonstration project 

pay band definitions, classification 

standards and guidance. Once the 

demonstration project pay band has 

been determined, the employee’s 

position will be placed in the 

demonstration project pay band. In 

cases where a demonstration project pay 

band overlaps more than one NSPS pay 

band, placement will be made using 

demonstration project pay band 

definitions and classification criteria to 

determine the appropriate pay band in 

which to place the position. 

2. Pay Upon Conversion 

Conversion from NSPS into the 

demonstration project will be 

accomplished with full employee pay 

protection. Adverse action provisions 

will not apply to the conversion action. 

In accordance with section 1113(c)(1) of 

NDAA 2010, which prohibits a loss of 

or decrease in pay upon transition from 

NSPS, employees converting to the 

demonstration project will retain the 

adjusted salary (as defined in 5 CFR 

9901.304) from their NSPS permanent 

position at the time the position 

converts. Upon conversion, the retained 

NSPS adjusted salary may not exceed 

Level IV of the Executive Schedule plus 

5 percent. If the employee’s base pay 

exceeds the maximum rate for his or her 

assigned demonstration project pay 

band, the employee will be placed on 

indefinite pay retention until an event, 

as described in 5 CFR 536.308, results 

in a loss of eligibility for or termination 

of pay retention. Increases to the 

retained rate after conversion will be in 

accordance with applicable regulations; 

however, for any NSPS employee whose 

retained rate exceeds EX–IV upon 

conversion, any adjustment to the 

retained rate in accordance with 

applicable pay retention regulations 

may not cause the employee’s adjusted 

pay to exceed EX–IV plus 5 percent. 

NAWCAD and NAWCWD do not have 

any employees who are covered by an 

NSPS targeted local market supplement 

(TLMS), but if such coverage occurs 

between the date of this FRN and 

conversion to the demonstration project 

such employees will no longer be 

covered by a TLMS. Instead they may 

receive a locality or similar supplement 

(e.g., a staffing supplement), or pay 

retention, if applicable. The adjusted 

base pay will not change upon 

conversion. 

Once converted, employees may 

receive other adjustments and/or 

differentials, as applicable, as described 

in this regulation or an implementing 

issuance. 

3. Fair Labor Standards Act (FLSA) 

Status 

Since FLSA provisions were not 

waived under NSPS and duties do not 

change upon conversion to the 

demonstration project, the FLSA status 

determination will remain the same 

upon conversion. Employees will be 

converted to the demonstration project 

with the same FLSA status they had 

under NSPS. 

4. Transition Equity 

During the first 12 months following 

conversion to the demonstration project, 

management may approve certain 

adjustments within the pay band for pay 

equity reasons stemming from 

conversion. For example, if an employee 

would have been otherwise promoted 

but demonstration project pay band 

placement no longer merits promotion, 

a pay equity adjustment may be 

authorized provided the adjustment 

does not cause the employee’s base pay 

to exceed the maximum rate of his or 

her assigned pay band and the 

employee’s performance warrants an 

adjustment. The decision to grant a pay 

equity adjustment is at the sole 

discretion of management and is not 

subject to employee appeal procedures. 

During the first 18 months following 

conversion, management may approve 

promotions of less than 6% or increases 

in base pay of not more than 20% 

provided the adjustment does not cause 

the employee’s base pay to exceed the 

maximum rate of his or her assigned pay 

band. The employee’s performance must 

warrant an adjustment and these actions 

will be limited to those necessary to 

mitigate compensation inequities that 

are directly related to the transition/ 

conversion from NSPS to the 

demonstration project. For instance, 

inappropriate ‘‘leap-frogging’’ of more 

senior employees by more junior 

employees when the inversion of 

compensation levels are not warranted 

by performance or mission 

accomplishment outcomes. The 

Personnel Management Board will 

establish policy and guidance for this 

provision and this guidance will be 

included in NAWCAD/NAWCWD 

internal issuances. 

5. Converting Employees on NSPS Term 

and Temporary Appointments 

a. Employees serving under term 

appointments at the time of conversion 

to the demonstration project will be 

converted to a modified term 

appointment provided they were hired 

for their current positions under 

competitive procedures. These 

employees will be eligible for 

conversion to career or careerconditional appointments in the 

competitive service provided they: 

(1) Have served two years of 

continuous service in the term position; 

(2) were selected for the term position 

under competitive procedures; and 

(3) are performing at a NSPS Valued 

Performer, demonstration Mission 

Success, or equivalent level under 

another system. Additional guidance 

will be included in NAWCAD/ 

NAWCWD internal conversion 

issuances. 

Converted term employees who do 

not meet these criteria may continue on 

their term appointment up to the not-toexceed date established under NSPS. 

Extensions of term appointments for 

employees who do not meet the above 

criteria may be granted after conversion 

in accordance with the provision of this 

regulation. 

b. Employees serving under 

temporary appointments under NSPS 

when their organization converts to the 

demonstration project will be converted 

and may continue on their temporary 

appointment up to the not-to-exceed 

date established under NSPS. 

Extensions of temporary appointments 

after conversion may be granted in 

accordance with 5 CFR 213.104 for 

excepted service employees and 5 CFR 

part 316, subpart D, for competitive 

service employees. 

6. Probationary Periods 

a. Initial probationary period. 

Employees who have completed an 

initial probationary period prior to 

conversion from NSPS will not be 

required to serve a new or extended 

initial probationary period. Employees 

who are serving an initial probationary 

period upon conversion from NSPS will 

serve the time remaining on their initial 

probationary period and may have their 

initial probationary period extended in 

accordance with the demonstration 

project regulation and implementing 

issuances. 

b. Supervisory probationary period. 

NSPS employees who have completed a 


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supervisory probationary period prior to 

conversion from NSPS will not be 

required to serve a new or extended 

supervisory probationary period. NSPS 

employees who are serving a 

supervisory probationary period upon 

conversion from NSPS will serve the 

time remaining on their supervisory 

probationary period and may have their 

supervisory probationary period 

extended in accordance with the 

demonstration project regulation and 

implementing issuances. 

B. Conversion From Other Personnel 

Systems 

Employees who enter this 

demonstration project from other 

personnel systems (e.g., Defense 

Civilian Intelligence Personnel System, 

DoD Civilian Acquisition Workforce 

Demonstration Project, or other STRLs) 

due to a reorganization, mandatory 

conversion, Base Closure and 

Realignment Commission decision, or 

other directed action will be converted 

into the NAVAIR STRL demonstration 

project via movement of their positions 

using an appropriate Nature of Action 

Code. Employees’ positions will be 

classified based upon the position 

classification criteria and pay band 

definitions under the laboratory 

demonstration project rules and their 

pay, upon conversion, maintained 

under applicable pay setting rules. 

C. Movement Out of the NAVAIR STRL 

Demonstration Project 

1. Termination of Coverage Under the 

NAVAIR STRL Demonstration Project 

Pay Plans 

In the event employees’ coverage 

under the NAVAIR STRL demonstration 

project pay plans is terminated, 

employees move with their 

demonstration project positions to 

another system applicable to NAVAIR 

STRL employees. The grade of their 

demonstration project position in the 

new system will be based upon the 

position classification criteria of the 

gaining system. Employees when 

converted to their positions classified 

under the new system will be eligible 

for pay retention under 5 CFR part 536, 

if applicable. 

2. Determining a GS-Equivalent Grade 

and GS-Equivalent Rate of Pay for Pay 

Setting Purposes When a NAVAIR 

Employee’s Coverage by a 

Demonstration Project Pay Plan 

Terminates or the Employee Voluntarily 

Exits the NAVAIR STRL Demonstration 

Project 

a. If a demonstration project employee 

is moving to a GS or other pay system 

position, the following procedures will 

be used to translate the employee’s 

project pay band to a GS-equivalent 

grade and the employee’s project base 

pay to the GS-equivalent rate of pay for 

pay setting purposes. The equivalent GS 

grade and GS rate of pay must be 

determined before movement out of the 

demonstration project and any 

accompanying geographic movement, 

promotion, or other simultaneous 

action. For lateral reassignments, the 

equivalent GS grade and rate will 

become the employee’s converted GS 

grade and rate after leaving the 

demonstration project (before any other 

action). For transfers, promotions, and 

other actions, the converted GS grade 

and rate will be used in applying any 

GS pay administration rules applicable 

in connection with the employee’s 

movement out of the project (e.g., 

promotion rules, highest previous rate 

rules, pay retention rules), as if the GS 

converted grade and rate were actually 

in effect immediately before the 

employee left the demonstration project. 

b. Equivalent GS-Grade-Setting 

Provisions 

An employee in a pay band 

corresponding to a single GS grade is 

provided that grade as the GSequivalent grade. An employee in a pay 

band corresponding to two or more 

grades is determined to have a GSequivalent grade corresponding to one 

of those grades according to the 

following rules: 

(1) The employee’s adjusted base pay 

under the demonstration project 

(including any locality payment or 

staffing supplement) is compared with 

step 4 rates in the highest applicable GS 

rate range. For this purpose, a GS rate 

range includes a rate in: 

(a) The GS base schedule; 

(b) the locality rate schedule for the 

locality pay area in which the position 

is located; or 

(c) the appropriate special rate 

schedule for the employee’s 

occupational series, as applicable. 

If the series is a two-grade interval 

series, only odd-numbered grades are 

considered below GS–11. 

(2) If the employee’s adjusted base 

pay under the demonstration project 

equals or exceeds the applicable step 4 

adjusted base pay rate of the highest GS 

grade in the band, the employee is 

converted to that grade. 

(3) If the employee’s adjusted base 

pay under the demonstration project is 

lower than the applicable step 4 

adjusted base pay rate of the highest 

grade, the adjusted base pay under the 

demonstration project is compared with 

the step 4 adjusted base pay rate of the 

second highest grade in the employee’s 

pay band. If the employee’s adjusted 

base pay under the demonstration 

project equals or exceeds the step 4 

adjusted base pay rate of the second 

highest grade, the employee is 

converted to that grade. 

(4) This process is repeated for each 

successively lower grade in the band 

until a grade is found in which the 

employee’s adjusted base pay under the 

demonstration project rate equals or 

exceeds the applicable step 4 adjusted 

base pay rate of the grade. The employee 

is then converted at that grade. If the 

employee’s adjusted base pay is below 

the step 4 adjusted base pay rate of the 

lowest grade in the band, the employee 

is converted to the lowest grade. 

(5) Exception: An employee will not 

be provided a lower grade than the 

grade held by the employee 

immediately preceding a conversion, 

lateral reassignment, or lateral transfer 

into the project, unless since that time 

the employee has either undergone a 

reduction in band or a reduction within 

the same pay band due to unacceptable 

performance. 

c. Equivalent GS-Rate-of-Pay-Setting 

Provisions 

An employee’s pay within the 

converted GS grade is set by converting 

the employee’s demonstration project 

rates of pay to GS rates of pay in 

accordance with the following rules: 

(1) The pay conversion is done before 

any geographic movement or other payrelated action that coincides with the 

employee’s movement or conversion out 

of the demonstration project. 

(2) An employee’s adjusted base pay 

under the demonstration project (i.e., 

including any locality payment or 

staffing supplement) is converted to a 

GS adjusted base pay rate on the highest 

applicable GS rate range for the 

converted GS grade. For this purpose, a 

GS rate range includes a rate range in: 

(a) The GS base schedule, 

(b) an applicable locality rate 

schedule, or 

(c) an applicable special rate 

schedule. 

(3) If the highest applicable GS rate 

range is a locality pay rate range, the 

employee’s adjusted base pay under the 

demonstration project is converted to a 

GS locality rate of pay. If this rate falls 

between two steps in the localityadjusted schedule, the rate must be set 

at the higher step. The converted GS 

unadjusted rate of base pay would be 

the GS base rate corresponding to the 

converted GS locality rate (i.e., same 

step position). 


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(4) If the highest applicable GS rate 

range is a special rate range, the 

employee’s adjusted base pay under the 

demonstration project is converted to a 

special rate. If this rate falls between 

two steps in the special rate schedule, 

the rate must be set at the higher step. 

The converted GS unadjusted rate of 

base pay will be the GS rate 

corresponding to the converted special 

rate (i.e., same step position). 

(d) Employees with Pay Retention: If 

an employee is receiving a retained rate 

under the demonstration project, the 

employee’s GS-equivalent grade is the 

highest grade encompassed in his or her 

pay band level. Demonstration project 

operating procedures will outline the 

methodology for determining the GSequivalent pay rate for an employee 

retaining a rate under the demonstration 

project. 

3. Supervision and Management Pay 

Band VI Employees 

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 nature 

and extent of the conversion out of the 

demonstration project process for 

employees in these positions will be 

determined by the final DoD guidance. 

Additional guidance may be included in 

NAWCAD/NAWCWD internal 

issuances. 

4. Employees With Pay Retention 

If an employee is receiving a retained 

rate under the demonstration project, 

the employee’s GS-equivalent grade is 

the highest grade encompassed in his or 

her pay band level. Demonstration 

project operating procedures will 

outline the methodology for 

determining the GS-equivalent pay rate 

for an employee retaining a rate under 

the demonstration project. 

5. Within-Grade Increase—Equivalent 

Increase Determinations 

Service under the demonstration 

project is creditable for within-grade 

increase purposes upon conversion back 

to the GS pay system. Performance pay 

increases (including a zero increase) 

under the demonstration project are 

equivalent increases for the purpose of 

determining the commencement of a 

within-grade increase waiting period 

under 5 CFR 531.405(b). 

D. 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 

HRSCs will continue to process 

personnel-related actions and provide 

other appropriate services. 

E. Automation Support 

1. 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 

decisionmaking must be available to 

managers if line management is to 

assume greater authority and 

responsibility for human resources 

management. Automation to support the 

demonstration project is required at the 

DON and DoD level, (in the form of 

changes to the Defense Civilian 

Personnel Data System) to facilitate 

processing and reporting of 

demonstration project personnel 

actions, and may be ultimately required 

by the Naval Air Warfare Centers to 

assist in processing of a variety of 

personnel-related actions in order to 

facilitate management processes and 

decisionmaking. 

2. Defense Civilian Personnel Data 

System (DCPDS) 

DCPDS is the Department of Defense’s 

authoritative personnel data system and 

program of record and, as such, will be 

the system of choice for the STRL labs. 

F. 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. 

VI. Project Duration 

Public Law 103–337 removed any 

mandatory expiration date for this 

demonstration. The covered 

organizations, DON and DoD will 

ensure this project is evaluated for the 

first five years after implementation in 

accordance with 5 U.S.C. 4703. 

Modifications to the original evaluation 

plan or any new evaluation will ensure 

the project is evaluated for its 

effectiveness, its impact on mission, and 

any potential adverse impact on any 

employee groups. Major changes and 

modifications to the interventions 

would be made if formative evaluation 

data warranted and will be published in 

the Federal Register to the extent 

required. At the five-year point, the 

demonstration will be reexamined for 

permanent implementation, 

modification and additional testing, or 

termination of the entire demonstration 

project. 

VII. Evaluation Plan 

A. Overview 

Chapter 47 of 5 U.S.C. requires that an 

evaluation be performed to measure the 

effectiveness of the demonstration 

project and its impact on improving 

public management. A comprehensive 

evaluation plan for the entire 

demonstration program, originally 

covering 24 DoD laboratories, was 

developed by a joint OPM/DoD 

Evaluation Committee in 1995. This 

plan was submitted to the Office of 

Defense Research & Engineering and 

was subsequently approved. The main 

purpose of the evaluation is to 

determine whether the waivers granted 

result in a more effective personnel 

system and improvements in ultimate 

outcomes (i.e., organizational 

effectiveness, mission accomplishment, 

and customer satisfaction). 

B. Evaluation Model 

Appendix C 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, 


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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 

C 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 

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 title 5 U.S.C. comparison 

group will be compiled from the Central 

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. 

VIII. Demonstration Project Costs 

A. Cost Discipline 

An objective of the demonstration 

project is to ensure in-house cost 

discipline. A baseline will be 

established at the start of the project and 

salary expenditures will be tracked 

yearly. Implementation costs (including 

project development, automation costs, 

and evaluation costs) are considered 

one-time costs and will not be included 

in the cost discipline. The Personnel 

Management Board will track personnel 

cost changes and recommend 

adjustments if required to achieve the 

objective of cost discipline. 

B. Developmental Costs 

Costs associated with the 

development of the personnel 

demonstration project include software 

automation, training, and project 

evaluation. All funding will be provided 

through the organization’s budget. The 

projected annual expenses are 

summarized in Table 1. Project 

evaluation costs are not expected to 

continue beyond the first five years 

unless the results warrant further 

evaluation. 

BILLING CODE 5001–06–P 


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BILLING CODE 5001–06–C 

IX. Required Waivers to Law and 

Regulation 

Public Law 106–398 gave the DoD the 

authority to experiment with several 

personnel management innovations. In 

addition to the authorities granted by 

the law, the following are waivers of law 

and regulation that will be necessary for 

implementation of the demonstration 

project. In due course, additional laws 

and regulations may be identified for 

waiver request. The following waivers 

and adaptations of certain title 5 U.S.C. 

and title 5 CFR provisions are required 

only to the extent that these statutory 

provisions limit or are inconsistent with 

the actions contemplated under this 

demonstration project. Nothing in this 

plan is intended to preclude the 

demonstration project from adopting or 

incorporating any law or regulation 

enacted, adopted, or amended after the 

effective date of this demonstration 

project. 

A. Waivers to Title 5, U.S.C. 

Chapter 5, section 552a: Records. 

Waive to the extent required to clarify 

that volunteers under the Voluntary 

Emeritus Corps are considered 

employees of the Federal Government 

for purposes of this section. 

Chapter 31, section 3111: Acceptance 

of volunteer service. Waive to allow for 

a Volunteer Emeritus Corps in addition 

to student volunteers. 

Chapter 33, subchapter I— 

Examination, Certification, and 

Appointment: Waived except for 

sections 3302, 3321, and 3328 to allow 

for direct hire authority for scientists 

and engineers with advanced degrees 

for professional positions. 

Chapter 33, section 3317(a): 

Competitive service, certification from 

register (in so far as ‘‘rule of three’’ is 

eliminated under the demonstration 

project). 

Chapter 33, subchapter 1, Section 

3318(a): Competitive Service, Selection 

from Certificate. Waived in its entirety 

to eliminate the requirement for 

selection using the ‘‘rule of three.’’ 

Veterans’ preference provisions remain 

unchanged. 

Chapter 33, section 3321: Competitive 

Service; Probationary Period. This 

section waived to the extent necessary 

to replace grade with ‘‘pay band level 

and allow probationary periods of up to 

3 years. 

Chapter 33, section 3341: Details. 

Waived as necessary to extend the time 

limits for details. 

Chapter 35, section 3502: Waived to 

the extent to allow for performance 

retention subgroups and 3502(c) waived 

in its entirety. 

Chapter 41, section 4108(a)–(c): 

Waived to the extent necessary to 

require the employee to continue in the 

service of the covered organizations for 

the period of the required service and to 

the extent necessary to permit the 

Executive Director of the covered 

organizations, to waive in whole or in 

part a right of recovery. 

Chapter 43, section 4302: Waived to 

the extent necessary to substitute ‘‘pay 

band’’ for ‘‘grade.’’ 

Chapter 43, section 4303: Waived to 

the extent necessary to (1) substitute 

‘‘pay band’’ for ‘‘grade’’ and (2) provide 

that moving to a lower pay band as a 

result of not receiving the general pay 

increase because of poor performance is 

not an action covered by the provisions 

of sections 4303(a)–(d). 

Chapter 43, section 4304(b)(1) and (3): 

Responsibilities of the OPM. Waived in 

its entirety to remove the 

responsibilities of the OPM with respect 

to the performance appraisal system. 

Chapter 45, section 4502: Limitation 

of cash awards to $10K. Waived to allow 

NAWCAD and NAWCWD Commanders 

to approve awards up to $25K. 

Chapter 51 Classification, section 

5101—5112: Purpose; Definitions, 

application; Determination of 

applicability; Basis for grading 

positions; Standards for classification of 

positions; Basis for classifying positions; 

Classification of positions; Classification 

of positions above GS–15 ; Review of 

classification of positions, Revocation 

and restoration of authority to classify 

positions, and general authority of the 

Office of Personnel Management:— 

Waived to the extent that white collar 

employees will be covered by pay 

banding and to the extent that 

classification appeals will be decided by 

the NAWC Executive Director with final 

appeal to the Department of Defense. 

Chapter 53, sections 5301, 5302(1), (8) 

and (9), 5303, and 5304: Pay 

Comparability System. Waived to the 

extent necessary to allow (1) 

demonstration project employees to be 

treated as GS employees, (2) basic rates 

of pay under the demonstration project 

to be treated as scheduled rates of pay, 

and (3) the demonstration project pay 

system to be adjusted by the GS annual 

adjustments to pay schedules. 

Chapter 53, section 5305: Special Pay 

Authority. Waived to the extent 

necessary to allow for use of a staffing 

supplement in lieu of the special pay 

authority. 

Chapter 53, sections 5331–5336: GS 

Pay Rates. Waived in its entirety to 

allow for the demonstration project’s 

pay banding system and pay provisions. 

Chapter 53, sections 5361–5366: 

Grade and Pay Retention. Waived to the 

extent necessary to: (1) Replace ‘‘grade’’ 

with ‘‘pay band’’; (2) allow 

demonstration project employees to be 

treated as GS employees; (3) provide 

that an employee on pay retention 

whose rating of record is ‘‘Unacceptable’’ 

is not entitled to 50 percent of the 

amount of the increase in the maximum 

rate of base pay payable for the pay 

band of the employee’s position; (4) 

provide that pay retention does not 

apply to reduction in base pay due 

solely to the reallocation of 

demonstration project pay rates in the 

implementation of a staffing 

supplement; (5) allow no provision of 

grade or pay band retention under this 

demonstration project and (6) allow 

demonstration project employees 

receiving a staffing supplement to retain 

the adjusted base pay if the staffing 

supplement is discontinued or reduced. 

This waiver applies to ST employees 

only if they move to a GS-equivalent 

position within the demonstration 

project under conditions that trigger 

entitlement to pay retention. 

Chapter 55, section 5542(a)(1)–(2): 

Overtime rates; computation. Waived to 

the extent necessary to provide that the 


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GS–10 minimum special rate (if any) for 

the special rate category to which a 

project employee belongs is deemed to 

be the ‘‘applicable special rate’’ in 

applying the pay cap provisions in 5 

U.S.C. 5542. 

Chapter 55, section 5545(d): 

Hazardous duty differential. Waived to 

the extent necessary to allow 

demonstration project employees to be 

treated as GS employees. 

Chapter 55, section 5547(a)–(b): 

Limitation on premium pay. Waived to 

the extent necessary to provide that the 

GS–15 maximum special rate (if any) for 

the special rate category to which a 

project employee belongs is deemed to 

be the ‘‘applicable special rate’’ in 

applying the pay cap provisions in 5 

U.S.C. 5547. 

Chapter 57, section 5753, 5754, and 

5755: Recruitment and relocation, 

bonuses, incentives, and supervisory 

differentials. Waived to the extent 

necessary to allow employees and 

positions under the demonstration 

project to be treated as employees and 

positions under the GS. 

Chapter 59, section 5941: Allowances 

based on living costs and conditions of 

environment; employees stationed 

outside continental U.S. or Alaska. 

Waived to the extent necessary to 

provide that cost-of-living allowances 

paid to employees under the 

demonstration project are paid in 

accordance with regulations prescribed 

by the President (as delegated to OPM). 

Chapter 75, sections 7501(1), 

7511(a)(1)(A)(ii), and 7511(a)(1)(C)(ii): 

Adverse Actions—Definitions. Waived 

to the extent necessary to allow for up 

to a three-year probationary period and 

to permit termination during the 

extended probationary period without 

using adverse action procedures for 

those employees serving a probationary 

period under an initial appointment 

except for those with veterans’ 

preference. 

Chapter 75, section 7512(3): Adverse 

actions. Waived to the extent necessary 

to replace ‘‘grade’’ with ‘‘pay band.’’ 

Chapter 75, section 7512(4): Adverse 

actions. Waived to the extent necessary 

to provide that adverse action 

provisions do not apply to (1) 

conversions from GS special rates or 

NSPS Targeted Local Market 

Supplements to demonstration project 

pay, as long as total pay is not reduced 

and (2) reductions in pay due to the 

removal of a supervisory or team leader 

pay adjustment upon voluntary 

movement to a non-supervisory or nonteam leader position. 

B. Waivers to Title 5, CFR 

Part 293, subpart D: Personnel 

Records. Employee Performance File 

System Records. Waived to the extent 

necessary to be consistent with the 

demonstration project’s mission aligned 

objectives and compensation system 

and to allow definition and 

establishment of its automated system of 

records and retention requirements. 

Part 300, sections 300.601 through 

300.605: Time-in-Grade restrictions. 

Waived to eliminate time-in-grade 

restrictions in the demonstration 

project. 

Part 308, sections 308.101 through 

308.103: Volunteer service. Waived to 

allow for a Voluntary Emeritus Corps in 

addition to student volunteers. 

Part 315, section 315.801(a), 

315.801(b)(1), (c), and (e), and 

315.802(a) and (b)(1): Probationary 

period and Length of probationary 

period. Waived to the extent necessary 

to allow for up to a three-year 

probationary period and to permit 

termination during the extended 

probationary period without using 

adverse action procedures for those 

employees serving a probationary 

period under an initial appointment 

except for those with veterans’ 

preference. 

Part 315, section 315.901: Statutory 

requirement. Waived to the extent 

necessary to replace ‘‘grade’’ with ‘‘pay 

band.’’ 

Part 315, section 315.905: Length of 

the probationary period. Waived to the 

extent necessary to allow for a two-year 

supervisory/managerial probationary 

period. 

Part 316, section 316.301: Purpose 

and duration. Waived to the extent 

necessary to allow for term 

appointments for more than 4 years. 

Part 316, section 316.303: Tenure of 

term employees. Waived to the extent 

necessary to allow term employees to 

acquire competitive status. 

Part 316, section 316.304: Trial 

Period. Waived to the extent necessary 

to allow for up to a three year trial 

period. 

Part 332, section 332.402: ‘‘Rule of 

three’’ will not be used in the 

demonstration project. When there are 

no more than 15 qualified applicants 

and no preference eligible, all eligible 

applicants are referred to the selection 

official without rating or rankings. 

Statutes and regulations covering 

veterans’ preference are observed in the 

selection process and when rating and 

ranking are required. 

Part 332, section 332.404: Order of 

selection from certificates. Waived to 

the extent necessary to eliminate the 

requirement for selection using the ‘‘rule 

of three.’’ 

Part 335, section 335.103: Agency 

promotion programs. Waived to the 

extent necessary to extend the length of 

details and temporary promotions 

without requiring competitive 

procedures. 

Part 337, section 337.101(a): Rating 

applicants. Waived to the extent 

necessary to allow referral without 

rating when there are 15 or fewer 

qualified candidates and no qualified 

preference eligibles. 

Part 340, subpart A, subpart B, and 

subpart C: Other than Full-Time Career 

Employment. These subparts are waived 

to the extent necessary to allow a 

Volunteer Emeritus Corps. 

Part 351, section 351.401: 

Determining retention standing. Waived 

to the extent necessary to allow use of 

performance subgroups in determining 

retention standing. 

Part 351, section 351.402(b): 

Competitive area. Waived to the extent 

necessary to allow separate competitive 

areas for demonstration and nondemonstration project employees and to 

allow separate competitive areas for 

each demonstration occupational 

family. 

Part 351, section 351.403: 

Competitive level. Waived to the extent 

necessary to replace ‘‘grade’’ with ‘‘pay 

band’’ and to allow use of demonstration 

project criteria, such as specialty area 

code, to be used in the definition of 

competitive levels. 

Part 351, section 351.501: Order of 

retention—competitive service. Waived 

as necessary to allow use of 

performance subgroups in determining 

retention standing and allow no 

additional years of service based on 

performance. 

Part 351, section 351.502: Order of 

retention—excepted service. Waived as 

necessary to allow use of performance 

subgroups in determining retention 

standing and allow no additional years 

of service based on performance. 

Part 351, section 351.504: Credit for 

performance. Waived as necessary to 

allow for use of performance subgroups 

rather than adding years of service 

based on performance. 

Part 351, section 351.701: Assignment 

involving displacement. Waived to the 

extent that bump and retreat rights are 

limited to one pay band with the 

exception of 30 percent preference 

eligibles who are limited to two bands 

(or equivalent of five grades), and to 

limit the assignment rights of employees 

with an unacceptable current rating of 

record to a position held by another 

employee with an unacceptable rating of 

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Part 410, section 410.309: Agreements 

to continue in service. Waived to the 

extent necessary to allow the Executive 

Directors of the covered organizations to 

determine requirements related to 

continued service agreements. 

Part 430, subpart B: Performance 

Appraisal for GS, Prevailing Rate, and 

Certain Other Employees. Waived to the 

extent necessary to be consistent with 

the demonstration project’s mission 

aligned objectives and compensation 

system. 

Part 430, section 430.208(a)(1) and 

(2): Rating Performance. Waived to 

allow presumptive ratings for new 

employees hired 90 days or less before 

the end of the appraisal cycle or for 

other situations not providing adequate 

time for an appraisal. 

Part 432, Performance based 

reduction-in-grade and removal actions: 

Modified to the extent that an employee 

may be removed, reduced in pay band 

level with a reduction in pay, reduced 

in pay without a reduction in pay band 

level and reduced in pay band level 

without a reduction in pay based on 

unacceptable performance. Also, 

modified to delete reference to critical 

element. For employees who are 

reduced in pay band level without a 

reduction in pay, Sections 432.105 and 

432.106(a) do not apply. 

Part 432, section 432.102: Coverage. 

Waived to the extent that the term 

‘‘grade’’ is replaced with ‘‘pay band.’’ 

Part 432, section 432.104: Addressing 

unacceptable performance. References 

to ‘‘critical elements’’ are deleted as all 

elements are critical and adding that the 

employee may be ‘‘reduced in pay band 

level, or pay, or removed’’ if 

performance does not improve to an 

acceptable level during a reasonable 

opportunity period. 

Part 432, section 432.105(a)(2): 

Proposing and taking action based on 

unacceptable performance: Waive ‘‘If an 

employee has performed acceptably for 

1 year’’ to allow for ‘‘within two years 

from the beginning of a PIP.’’ 

Part 451, subpart A, section 

451.103(c)(2): Waived with respect to 

performance awards under the NAVAIR 

Extraordinary Achievement Allowance 

and demo incentive awards authority. 

Part 451, subpart A, section 451.106 

and 451.107: Waived to allow the 

NAWCAD and NAWCWD Commanders 

authority to grant special act awards to 

covered employees of up to $25,000. 

Part 511, subpart A, subpart B, and 

subpart F: Classification within the 

General Schedule. Waived in its 

entirety. 

Part 530, subpart C: Special Rate 

Schedules for Recruitment and 

Retention. Waived in its entirety to 

allow for staffing supplements. 

Part 531, subpart B.: Determining Rate 

of Basic Pay. Waived to the extent 

necessary to allow for pay setting, 

including educational pay adjustments 

and pay for performance under the 

provisions of the demonstration project. 

Part 531, subparts D and E: WithinGrade Increases, and Quality Step 

Increases. Waived in its entirety. 

Part 531, subpart F: Locality-Based 

Comparability Payments. Waived to the 

extent necessary to allow (1) 

demonstration project employees, 

except employees in Pay Band V of the 

S&E occupational family, to be treated 

as GS employees and (2) base rates of 

pay under the demonstration project to 

be treated as scheduled annual rates of 

pay. 

Part 536: Grade and Pay Retention. 

Waived to the extent necessary to (1) 

replace ‘‘grade’’ with ‘‘pay band;’’ (2) 

provide that pay retention provisions do 

not apply to conversions from GS 

special rates to demonstration project 

pay, as long as total pay is not reduced, 

and to movement from a supervisory 

position to a non-supervisory position, 

as long as total pay is not reduced; (3) 

allow demonstration project employees 

to be treated as GS employees; (4) 

provide that pay retention provisions do 

not apply to movements to a lower pay 

band as a result of not receiving the 

general increase due to an annual 

performance rating of ‘‘Unacceptable;’’ 

(5) provide that an employee on pay 

retention whose rating of record is 

‘‘Unacceptable’’ is not entitled to 50 

percent of the amount of the increase in 

the maximum rate of base pay payable 

for the pay band of the employee’s 

position; (6) allow no provision of grade 

or pay band retention under this 

demonstration project; (7) provide that 

pay retention does not apply to 

reduction in base pay due solely to the 

reallocation of demonstration project 

pay rates in the implementation of a 

staffing supplement and (8) allow 

demonstration project employees 

receiving a staffing supplement to retain 

the adjusted base pay if the staffing 

supplement is discontinued or reduced. 

This waiver applies to ST employees 

only if they move to a GS equivalent 

position within the demonstration 

project under conditions that trigger 

entitlement to pay retention. 

Part 550, sections 550.105 and 

550.106: Bi-weekly and annual 

maximum earnings limitations. Waived 

to the extent necessary to provide that 

the GS–15 maximum special rate (if 

any) for the special rate category to 

which a project employee belongs is 

deemed to be the ‘‘applicable special 

rate’’ in applying the pay cap provisions 

in 5 U.S.C. 5547. 

Part 550, section 550.703: Definitions. 

Waived to the extent necessary to 

modify the definition of ‘‘reasonable 

offer’’ by replacing ‘‘two grade or pay 

levels’’ with ‘‘one band level’’ and ‘‘grade 

or pay level’’ with ‘‘band level.’’ 

Part 550, section 550.902: Definitions. 

Waived to the extent necessary to allow 

demonstration project employees to be 

treated as GS employees. This waiver 

does not apply to employees in Pay 

Band V of the S&E occupational family. 

Part 575, subparts A, B, C, and D: 

Recruitment Incentives, Relocation 

Incentives, Retention Incentives. 

Waived to the extent necessary to allow 

employees and positions under the 

demonstration project covered by pay 

banding to be treated as employees and 

positions under the GS. 

Part 591, subpart B: Cost-of-Living 

Allowance and Post Differential—Nonforeign Areas. Waived to the extent 

necessary to allow (1) demonstration 

project employees to be treated as 

employees under the GS and (2) 

employees in Band V of the S&E 

occupational family to be treated as ST 

employees for the purposes of these 

provisions. 

Part 752, sections 752.101, 752.201, 

752.301 and 752.401: Principal statutory 

requirements and Coverage. Waived to 

the extent necessary to allow for up to 

a three-year probationary period and to 

permit termination during the extended 

probationary period without using 

adverse action procedures for those 

employees serving a probationary 

period under an initial appointment 

except for those with veterans’ 

preference. 

Part 752, section 752.401: Coverage. 

Waived to the extent necessary to 

replace ‘‘grade’’ with ‘‘pay band,’’ and to 

provide that a reduction in pay band 

level is not an adverse action if it results 

from the employee’s rate of base pay 

being exceeded by the minimum rate of 

base pay for his/her pay band. 

Part 752, section 752.401(a)(4): 

Coverage. Waived to the extent 

necessary to provide that adverse action 

provisions do not apply to (1) 

conversions from GS special rates or 

NSPS Targeted Local Market 

Supplements to demonstration project 

pay, as long as total pay is not reduced 

and (2) movement from a supervisory 

pay band to a non-supervisory pay band 

as long as total pay is not reduced. 

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BILLING CODE 5001–06–C 

Appendix D: Individual Pay Band Level 

Rating Benchmarks Examples 

These are examples for illustration 

purposes only, the actual benchmarks may be 

different from what is shown here. These are 

an example showing a benchmark for each 

pay band level in an occupational family: 

Scientific and Engineering (S&E) (Pay Plan 

DP) 

Example Rating Benchmarks 

Band II 

Level 3: 

• With guidance, effectively achieved the 

stated objective. 

• With guidance, organized and prioritized 

own tasks to deliver the objective, adjusting 

work plans and overcoming obstacles as 

necessary. 

• Demonstrated high standards of personal 

and professional conduct and represented the 

organization or work unit effectively. 

Level 5 

Additions at the Level 5: 

• Contributed results beyond what was 

expected; results were far superior in quality, 

quantity, timeliness and/or impact to the 

stated objective. 

• Exhibited the highest standards of 

professionalism. 

Band III 

Level 3: 

• Effectively achieved the stated objective, 

anticipating and overcoming significant 

obstacles. Adapts established methods and 

procedures when needed. 

• Results were technically sound, accurate, 

thorough, documented, and met applicable 

authorities, standards, policies, procedures 

and guidelines. 

• Planned, organized prioritized, and 

scheduled own work activities to deliver the 

objective in a timely and effective manner, 

making adjustments to respond to changing 

situations and anticipating and overcoming 

difficult obstacles as necessary. 

• Demonstrated high standards of personal 

and professional conduct and represented the 

organization or work unit effectively. 

Level 5 

Additions at the Level 5: 

• Contributed results beyond what was 

expected; results were far superior in quality, 

quantity, and/or impact to the stated 

objective to what would be expected at this 

level. 

• Exhibited the highest standards of 

professionalism. 

Appendix E: Career Stage Rating 

Benchmarks Examples 

These are examples for illustration 

purposes only, the actual benchmarks may be 

different from what is shown here. These are 

an example showing benchmarks by career 

stage, which may cover multiple pay band 

levels in multiple occupational families: 

Example Rating Benchmarks 

Career Stage: Journey. 

Objective Rating: 1. 

Performance Standard: 

• Failed to achieve all or part of the stated 

critical element; or 

• Failed to provide products that were 

sound, accurate, thorough and documented, 

and regularly failed to meet applicable 

authorities, standards, policies, procedures 

and guidelines; or 

• Failed to plan, organize, prioritize, and 

schedule own work activities to deliver the 

critical element in a timely and effective 

manner. Relied on others to frequently assist 

with or redo work assignments; or 

• Demonstrated poor cooperation or 

inability to work with others. 

Career Stage: Journey. 

Objective Rating: 3. 

Performance Standard: 

• Effectively accomplished the stated 

critical element by achieving results that 


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were technically sound, accurate, thorough, 

and documented and met applicable 

authorities, standards, policies, procedures 

and guidelines. 

• Planned, organized, prioritized and 

scheduled own work activities to deliver the 

critical element in a timely and effective 

manner, making adjustments to respond to 

changing situations as necessary. 

• Demonstrated high standards of 

teamwork and cooperation. 

Career Stage: Journey. 

Objective Rating: 5. 

Performance Standard: (Measured in 

addition to the above) 

• Achieved outcomes and results that are 

far superior in quality, quantity, timeliness 

and/or impact to what would ordinarily be 

expected at this level. 

• Accomplishments and outcomes were of 

such magnitude that they contributed to the 

organization exceeding its mission goals and 

objectives for the year. 

• Persisted in overcoming obstacles and 

put forth extra effort to accomplish difficult 

assignments. 

• Represented the organization or work 

unit effectively through model team 

cooperation. 

[FR Doc. 2010–22172 Filed 9–8–10; 8:45 am] 

BILLING CODE 5001–06–P 


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