II. Professional, Technical, and Administrative Career Path: Encompasses all OPMrecognized professional occupations, except GS [[Page 72779]]
0800 engineers and GS1300 scientists, requiring positive education requirements, and all other subjectmatter, business, and
administrative occupations characterized by a traditional twograde interval pattern of grade progression. All positions encompassed within this career path are subdivided into the following pay bands:

III. Technician and Administrative Support Career Path: Encompassing technician, secretarial, assistant, and clerical occupations, and similar positions characterized by a traditional one grade interval pattern of grade progression. All positions encompassed within this career path are subdivided into the following pay bands:

IV. Nuclear Materials Couriers Career Path: Encompassing all positions classified into the GS084 job series, subdivided into the following pay bands:

V. Future Leaders Career Path: Encompassing the positions of all interns enrolled in NNSA's 2year Future Leaders Program, in various engineering, scientific, professional, technical, and administrative occupations. All positions encompassed within this career path are subdivided into the following pay bands:

The arguments in favor of readjusting NNSA's original payband proposals were several. (The only pay bands not altered from the original are those associated with career path III.) The readjustment in the Engineering and Scientific Career Path not only better reflects the preeminent work done in NNSA by engineers and scientists, but is more consistent with the actual promotional patterns found in the demographics of the workforce. Most General Schedule engineers and scientists in NNSA are either at GS14, or GS15, with development patterns that often see GS14 positions advance to GS15 levels of work. Such advancement occurs traditionally under both competitive and noncompetitive promotional procedures, when such traditional job factors as Guidelines, Complexity, Scope and Effect, and others, have evolved under the weight of natural employee growth and maturation to the highest levels creditable (e.g., levels 25, 35, 46, and so on) under respective engineering and scientific standards and guides. In an agency with highly technical national security missions and oneofa kind nuclear weapons, nonproliferation, and naval reactor propulsion programs, it is not surprising to find engineering and scientific positions expanding in scope and responsibility due to recognizable increases in technical job expertise and project authority, which so often accrue to such positions over time. Out of 364 GS engineers and scientists, there are 147 GS14 and 148 GS15 positions that are graded in almost every case, including many classified supervisors, on their paramount nonsupervisory work assignments.

Similarly, agency program managers, agreeing with many of the comments received on this subject, questioned the validity and effectiveness of the separate singlegrade ``bands'' at the GS13, 14, and 15 levels previously proposed for the now reconstituted Professional, Technical, and Administrative Career Path. As NNSA looked at the actual distributions of professional, subjectmatter, and administrative positions that would be covered within this broad career path, as well as relevant employee promotional patterns, NNSA realized that this path's payband structure also required adjusting. The new payband patterns in this career path are more consistent with the demographics of the actual workforce today; the majority of positions found in this career path are graded at GS13 and GS14, about 640 encumbered positions at this writing. Combining GS13 and 14 into band III therefore makes better sense to NNSA than the original proposal did, given the relationship between these two grades among the many occupations covered by the career path. Generally, the main difference in NNSA between GS13 and GS14 in actual classification practice is that the Supervisory Controls and Guidelines factors are credited one level higher at GS14, the two factors most readily influenced by the greater freedom from supervision and guidelines that invariably comes to a position through seasoning, through greater maturity of judgment, and through a derivatively more confident and authoritative incumbent performance. Combining these two grades into a single pay band, covering the majority of employees serving in positions in this important career path, shifts the focus of employee pay advancement from position classification and merit promotion criteria to performancebased criteria, one of the chief goals of this
demonstration project. This shift in preeminence from classification and promotion criteria to performance also occurs, of course, in the examples of other pay bands in other occupational career paths, and serves in the aggregate to underscore how paybanding intrinsically enhances the potential effectiveness of a performancebased pay system.

A review of actual promotional patterns supports combining GS13 and 14 into one pay band. Of the 328 GS14 employees serving in occupations that will be covered by the Professional, Technical, and Administrative Career Path, 80 were promoted from NNSA GS13 positions in the same occupational series and line of work.

With respect to the Nuclear Materials Couriers Career Path, NNSA's Office of Human Capital Management Programs worked diligently with the top managers from the Office Secure Transportation, the NNSA organization in which the couriers are assigned, to arrive at a pay band pattern that better met both management's mission needs and employee advancement expectations. In developing pay bands for the new Future Leaders Career Path, the Future Leaders Program Manager was heavily consulted.
(5) Comparisons With NNSA Excepted Service System Pay Bands

Comments: Many commenters questioned why NNSA proposed pay bands for General Schedule engineering and scientific positions that did not correspond to the pay band structure in NNSA's own excepted service system, pointing out, in their opinions, that the work was identical.

Response: To understand the different pay band structures between General Schedule and NNSA's excepted service system engineering and scientific positions, the fundamental distinction between these two systems must be understood. While it is true that many current excepted service system engineers and scientists are former General Schedule engineers and scientists, and that both General
[[Page 72780]]
Schedule and excepted service system employees can currently be found working in the same facilities and offices, what needs to be kept in mind when comparing the two systems is the very nature of the authorities through which respective employees are appointed and paid. The NNSA Act (P.L. 10665, as amended) gives the Administrator the authority to appoint employees to scientific and engineering positions and to pay them without regard to title 5, United States Code, when the Administrator deems it necessary to accomplish his statutory responsibilities. By design, these positions are established in unusual occupational circumstances (either extreme difficulty of work, or extreme difficulty in recruitment), and do not represent the engineering and scientific work common to many occupational settings in NNSA. Furthermore, excepted service system employees in concept have been held to a higher performance threshold (as befitting a performancebased pay system) than their General Schedule counterparts, which NNSA believes has resulted in an overall improvement in excellence and mission accomplishmentthe reason NNSA now seeks to expand the applicability of payforperformance. At the same time, these excepted service system employees do not possess traditional civil service entitlements, such as ``career status,'' or certain protections having to do with reduction in force and other employment mattersa key design difference between the two systems. Although it is true that NNSA could request that OPM approve pay rates exceeding those traditionally associated with GS grades under the authority of the demonstration project, as discussed in subsection C above, NNSA is not now prepared to undertake systematic occupational market studies to validate the need for enhanced pay rates or to develop NNSAonly position classification criteria and standards.

(b) Excepted Service

Comments: There were other comments comparing the demonstration project to NNSA's existing excepted service system, aside from concerns relating to proposed pay bands and pay rates. A number of commenters expressed the view that NNSA's current General Schedule employees be permitted the opportunity to volunteer for the demonstration project, just as General Schedule engineers and scientists had the opportunity to volunteer to enter the NNSA excepted service system at the time of its inception a few years ago. Similarly, others suggested that NNSA provide an opportunity for current excepted service employees to volunteer for the demonstration project, and in essence, volunteer out of the excepted service system. There were various reasons given for this latter suggestion. The absence of ``career status'' (and the resulting inability to apply for many of NNSA's promotional opportunities), and the absence of ``secondround'' RIF protections, were mentioned. Also, some excepted service employees feel topped out in terms of pay potential.

Response: Providing an opportunity to volunteer in or out of the demonstration project, or the excepted service system for that matter, is not tenable today. Because NNSA is experimenting with a paybanding and payforperformance system that, were it to be successful, would replace entire segments of the General Schedule workforce, allowing employees to volunteer to participate in the demonstration project would be unwieldy to manage, impractical to administer, and, more compelling, not in the best interest of efficient Government. Furthermore, NNSA intends to continue to make full use of its unique excepted service employment authority in those circumstances and for those purposes that the NNSA Act envisions. From a practical standpoint, excepted service employees who have not previously competed for competitive appointment and who do not already have career status will have to apply for demonstration project positions through an appropriate appointing authority.

(c) Pay and Pay Pools

Comments: This was the other topical issue receiving many comments. The most frequent pay comment, by far, had to do with the issue of annual comparability pay increases, locality pay, and the effects of performance on these annual pay events. NNSA had proposed one pay pool from which general pay adjustments and performancebased pay increases were to have been funded and paid out all at one time, and many commenters felt the plan was unclear in describing the
interrelationships among these pay events. Other comments concerned (1) the effects of budgetary constraints on the amounts and timing of payouts; (2) the apparent lack of paysetting guidelines with respect to hiring new employees and promoting existing employees; (3) the apparent lack of a financial incentive for an NNSA employee to be reassigned to another NNSA job or location to fill a critical need; (4) the pay implications of supervisory incompetence, caprice, or favoritism in appraising employee performance; and (5) the effect of pay banding on premium pay for overtime work for the courier workforce, the payment of night differential for work performed beyond the first 40hour tour of duty, and other pay matters relating to the unique irregular work schedules of the couriers.

Response: NNSA agrees that the original proposal was not as clearly presented as it should have been, and furthermore, has reconsidered certain mechanical features of its pay provisions, making several changes to the plan accordingly. NNSA will establish two pay pools, one from which to fund annual general pay adjustments and the second from which to fund performancebased payouts. Each pay pool will have its own payout schedule, though in close proximity to the end of the calendar year and to each other. In conjunction with establishment of two pay pools, NNSA is increasing the maximum number of shares for performance payouts, from 3 shares to 4. NNSA is also changing the share distribution pattern (number of shares linked to performance level) from 3210 to 43210. An employee with a Significantly Exceeds Expectation (level ``5'' performance under NNSA's performance management program) may receive 3 or 4 shares, an employee with a Fully Meets Expectations (level ``3'' performance under NNSA's performance management program) rating and no critical element rate at the Needs Improvement level may receive 1 or 2 shares, and all other employees receive 0 shares. As under the original proposal, any increased locality pay or staffing supplement percentages will be applied on top of eligible employees' adjusted base rates outside of the pay pool process.

Furthermore, NNSA will provide a limited flexibility to increase an employee's pay upon accepting an intrapay band reassignment. These changes, along with NNSA's paysetting guidelines, will be described in detail in NNSA's Demonstration Project Policies and Procedures Manual, which shall be published in accompaniment to this project plan. The paysetting guidelines will ensure that the use of demonstration project pay flexibilities will be judicious and appropriate. NNSA's administration of the demonstration project will be under OPM's continuous oversight, with rigorous evaluations of paysetting and other project provisions and applications. Supervisors will be afforded extensive training to ensure they have the competence to make fair [[Page 72781]]
and valid employee appraisals, and they will be held accountable for doing so during their own performance appraisals. As for the courier workforce, pay banding will have no effect whatsoever on their tours of duty, their administrative work schedules, or on their eligibility under current law and regulation to receive premium pay, night differentials, and other pay benefits and incentives.

(d) Position Classification

Comments: Several commenters wondered how upholding the use of OPM's traditional position classification criteria and standards will lend itself to streamlining the ``cumbersome, laborintensive, and difficult to comprehend'' system, as the project plan calls it. They imply that part of the problem with the present system is just these criteria and standards, and they don't see how NNSA will be able to reduce documentation requirements, eliminate use of the Factor Evaluation System format (which typically increases the length of position descriptions threefold), or reduce traditional procedural steps. Others wondered how NNSA's paybanding system would safeguard equal pay for equal work when a selecting official will be free to set pay for a new appointee anywhere in a band. Some noted that current employees might be penalized in comparison to a new hire's potential for a pay increase, as pay increases for internal promotees are limited to 8 percent, and this limitation may actually offer an employee less money than customarily received when moving from one GS grade to the next during a conventional promotion. Others were concerned about the effect on an employee's existing promotion potential in a traditional careerladder position when converting to a paybanded position, when that potential falls outside the band of the position to which the employee converts. One person asked what impact there would be on the conversion to pay banding of a position currently graded outside the proposed maximum band range of a given career path. Others were concerned about the right of employees to appeal their placement into a career path and pay band.

Response: The comments in this topical area, while more process oriented than comments in other topical areas, underscore the need to clarify just how position classification works in a paybanding environment. The comments, especially those about career ladders and equal pay for equal work, warrant more discussion.

In general, OPM's position classification standards and guides remain the single most concise and valuable analytical tools with respect to defining occupations and evaluating assignments of white collar work, not only in the Federal sector, but in general. They remain models for other levels of Government, and even private industry, to emulate in developing their own local jobevaluation schemes. OPM's standards and guides do not in themselves contribute to the classification system's breakdown and inefficiency. Rather, it is the towering emphasis today on compensation as a tool for attracting and retaining the best talent in a hypercompetitive labor market that has hammered the rigid gradebound classification system into a contorted and broken program. All the hammering has brought resistance, inertia, and resignation among managers and classifiers alike. Pay banding, in bundling several grades and pay rates together into one band when appropriate, will go a long way to lift the deadly onus off the classification program. But this is only the start of the classification program's streamlining. There will be a number of genuine and potentially significant opportunities under the demonstration project to simplify the administration of the classification program. Not delegating classification authority to managers, as most other demonstration projects and alternative personnel systems have done, is a significant simplification. Job analysis is no less sophisticated than are most other technical disciplines in the modern workplace. Efficient classification practice requires substantial training and years of seasoning. NNSA believes that it makes far better sense not to expend countless resources and endless hours trying to train and encourage supervisors to become seasoned classifiers, but rather, to hone their skills as leaders of the men and women they supervise and to retain classification authority and skills in the personnel office. Furthermore, there is nothing in OPM's existing doctrines and requirements that will not permit the simplification of position description formats or the synopsizing of traditional evaluation documents. Add pay banding to the flexibility that already exists, and there is a significant opportunity to streamline. Pay banding can group two or more levels of traditional work and associated pay rates into one pay band when appropriate, thereby compressing expanses of work and pay rates into fewer classification units and easing attendant classification practices and protocols, with less documentation, particularly when future automation comes on line.

It is true that successful streamlining doesn't happen by itself and won't happen overnight. NNSA has considerable design and development work to do in building an effective paybanding classification system, but not having to develop its own classification standards and guides will contract NNSA's design and development challenges immeasurably. This system will be built around demonstration project career paths and will feature two unique concepts, the ``core pay band descriptor'' and the ``core position description.'' A descriptor is a generic benchmark description used to illustrate the ranges of complementary work levels within a pay band. The assignment of a specific position to a particular pay band will be made on the basis of a core pay band descriptor. Core pay band descriptors will be based on the OPM job family standard and functional classification guide that most directly corresponds to the work encompassed within an occupational series. A core position description is simply an abbreviated benchmark description of a common set of core duties and responsibilities typical of large numbers of positions within each career path and pay band across NNSA's various organizational and functional settings. NNSA will publish its paybanding classification policies in its companion document to this project plan, NNSA's Demonstration Project Policies and Procedures Manual, and will supplement these policies with handbook guidance as needed. This guidance will more fully describe NNSA's streamlined paybanding classification system and will better describe the simplified position description concept with samples. Briefings tailored to managers, employees, and the personnel staff, respectively, will also be developed to accompany the development of the system and application of NNSA's classification policies.

The compressed occupational construct of a pay band renders concerns about undermining the civil service system's classification principles unfounded, as several gradations of work are possible within a given pay band. In essence, pay banding assumes that different employees in the same career path, job series, and pay band of a properly classified position can operate at differing levelswithin reasondue to variations in incumbent maturity (seasoning), and performance. In this circumstance, equal pay for substantially equal work is not compromised, even though one
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employee may be earning higher pay than another employee in the same pay band. In a fundamental respect, this is really no different than the disparities in pay that occur between employees in the same properly classified GS13 position where one employee is earning a GS 13, step 2, rate and another is earning a GS13, step 9, rate.

The 8 percent limitation on a pay increase as a result of internal promotion is a standardized policy that will apply in most situations. Most other paybanding systems set similar controls on pay increases. NNSA considered a higher percentage, and even considered a range of percentages, from lower to higher, but decided on the fixed 8 percent minimum increase to mitigate the opportunity for disparate employee treatment at such an important career event. While NNSA expects most internal promotion actions to adhere to this standard, like most rules, there will be the flexibility to allow an exception, with proper justification, and highermanagement approval. This flexibility will be described in detail in the staffing and pay policies that will be published in accompaniment to this project plan.

There will continue to be ``career ladders'' under NNSA's pay banding system, though instead of grade intervals, there will be band intervals. A ``laddered'' position is simply a position advertised during recruitment at a certain level of full performance that is filled through selection and appointment at a lower pay band. NNSA is developing staffing policies that will ``grandfather'' employees who at the time of conversion to the appropriate pay band have not reached their promotion potential. These employees will be eligible for an in band pay increase similar to a promotion increase under the General Schedule system until they reach their full promotion potential. ``Full promotion potential'' is a traditional position classification and personnel staffing concept that will continue to have validity under NNSA's demonstration project, and it means the highest grade, or pay band, of a careerladder position for which an incumbent previously competed under the Government's merit system principles and an agency's merit promotion plan. Once an NNSA employee who converted to pay banding under this demonstration project receives an inband pay increase or a promotion that takes him or her to a pay level equivalent to the highest GS grade in the formerly applicable career ladder, the employee will be considered to have reached the full performance level, and the grandfather provision will cease to apply. Future inband pay increases for such an employee would then be based solely on performance, consistent with all other demonstration project employees. Of course, just as a GS employee is not guaranteed a careerladder promotion without the supervisor's certification, the promotions and special grandfathered inband increases for demonstration project employees will not be guaranteed, and they will be issued new performance plans with each pay increase. Only current NNSA employees who convert at the inception of pay banding will be afforded the benefit of having their career ladders grandfathered. The specific terms and conditions of this benefit will be published in the policies and procedures manual that will implement this project plan.

As NNSA prepares to implement the demonstration project, NNSA is reviewing current position classification outcomes, and potential discrepancies and inconsistencies, with the intent to correct any that are found prior to implementation to assure a smooth conversion process.

Under the demonstration project, employees retain their traditional position classification appeal rights. A classification appeal is a formal request by an employee in writing for a review of the official job series, pay band, or pay system, of the employee's current position to correct what the employee believes is an erroneous classification. Any employee in a position covered by chapter 51 of 5 U.S.C., and by NNSA's Demonstration Project, can file a classification appeal. (e) Staffing

Comments: Most of the 17 staffing comments crossed over into other topical areas already treated, such as the structure of relative pay bands across career paths, and the impact of employee conversion to pay banding on preexisting promotion potential as a result of having successfully competed for a careerladder position. Other comments concerned such issues as paysetting and band and grade assignment upon converting to a paybanding position from a GS position, and vice versa, upon converting back to GS from pay banding. Many commenters pointed out that the language in the February 28 Federal Register notice pertaining to such practical staffing and pay matters was vague. One person expressed concern at the quality of applicants under pay banding, should candidates only need to meet the minimum qualification requirements associated with the lowest grade level in a multigraded band, and believed that the candidate screening process would suffer as a result.

Response: It is understandable that many commenters found NNSA's proposed project plan vague and unclear in parts. NNSA's demonstration project plan, in both its proposed and final incarnations, is designed to mainly answer the ``what'' of a matter, not the ``how.'' This is why there have been many references in these responses, as well as throughout the text of the project plan, to a policies and procedures manual. But this response is not to dodge the issues. Most of the comments received during the public comment period have been invaluable in guiding NNSA's development of its companion policies and procedures. By design, a demonstration project is an experiment. Frankly, there is more than one way to execute and effect almost any feature of this experiment, and though modeling previous successful experiments and viable alternative personnel systems can be extremely useful, there are still mechanical subtleties and finer points of interpretation in matters of pay banding, staffing, and pay that NNSA must come to terms with. Having said this, it can be said after the past 6 months of rigorous development and refinement, that NNSA has gained competence and sureness about how to effectively execute the innumerable features and applications of this project. With respect to questions about conversion, NNSA GS employees will be converted to the career path and pay band that is equivalent to their current job series and grade, irrespective of preexisting promotion potential, as discussed in the preceding subsection. In no case will an employee lose pay upon conversion; in fact, at conversion, most employees will receive an increase in pay reflecting the prorated value of their next scheduled withingrade increase (WIGI) based on the amount of time they have served in their respective waiting period.

The project plan gives NNSA authority to establish the rules governing paysetting for employees who convert out of the
demonstration project and move to a GS position. Those technical conversionout rules will be provided in NNSA's manual of implementing policies and procedures and will be forwarded to other Federal agencies should an NNSA paybanded employee move to a GS position in another agency. In general, demonstration project employees moving to a GS position will be converted to a GSequivalent grade and rate before they leave the demonstration
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project and thus will be treated as GS employees under GS paysetting rules.

NNSA is also developing staffing guidelines to aid managers, selecting officials, and personnel office staff on processes to use in evaluating candidate qualifications, and to identify the more qualified candidates from among applicants. We expect that this will take time as we train staff, develop operating procedures, and evaluate their effectiveness. This will be true of most other operational features and applications of the project. It will be some time following project implementation and employee conversion before NNSA is proficient in most demonstration project matters, though NNSA is taking great pains and care to ensure that startup and transition are implemented as smoothly as possible.

(f) Performance Management

Comments: Most of the several comments received on performance management concerned the adaptability of NNSA's existing performance management program to the demonstration project. There were concerns expressed about the timing of implementationtoo soonabout the readiness of NNSA's supervisors to fulfill their responsibilities to appraise their subordinates fairlynot readyabout the subjectivity of NNSA's fourlevel rating schemecan't make distinctionsand so on. A labor union suggested ways to improve NNSA's appraisal program.

Response: The project is scheduled to be implemented on March 16, 2008. Once implementation occurs, there will be complete instructions on what to expect, and how to proceed, midway through the rating year as it will be. As NNSA prepares to implement the demonstration project, agency management holds many of the same reservations as did commenters. When NNSA was established seven years ago as a separately organized agency within DOE, NNSA inherited a variety of then existing performance management programs, between headquarters and a multitude of field offices. Four appraisal cycles ago, NNSA consolidated and standardized all GS and equivalent appraisal programs into one. At the onset of each new rating year since then, NNSA has made changes in its program based on the lessons learned from the previous rating cycle. As NNSA's program has evolved from year to year, it has been necessary to conduct focus groups and supervisory training. This upcoming year, during the transition to the demonstration project, will be no exception. And NNSA thinks this is a good thing. It is doubtful there would ever be an ideal time to embark on such a project. NNSA believes waiting for such a time will be a precious opportunity lost. By design, the demonstration project is an experiment. Many things are supposed and anticipated, but few things are known for sure in advance. They need to be tried and tested. This NNSA intends to do, realizing that it is likely that there will continue to be a need for improvements in design and execution for the next several years to come, not only concerning the existing performance management program, but to the demonstration project as a whole.

(g) Reduction in Force

Comments: There were several questions concerning the mechanics of reduction in force (RIF) under the demonstration project, and the impact on employee RIF entitlements. One person asked whether demonstration project employees and excepted service employees would compete together in a RIF. Another asked whether employee protections would be lessened under the demonstration project. A third person asked specifically whether there would be ``bumping'' rights.

Responses: Not only will there be bumping rights for demonstration project employees, but all other traditional employee protections are retained under the demonstration project. There is only one substantive change from traditional rules, having to do with a further subdivision of an NNSA competitive area by career path. Currently in NNSA, the decision to undertake RIF is made by the Administrator, respective Site Office Managers, the Service Center Director, and the heads of the Naval Reactors Offices in Pittsburgh, PA, and Schenectady, NY. Consequently, each of these management officials is considered to be the head of a competitive area for RIF purposes. (The Administrator has actually delegated the authority to take and direct personnel actions to these officials, while retaining this authority for all headquarters components, except Naval Reactors, which has a unique dual reporting arrangement with the Secretaries of Energy and Navy.) What this means from a practical management standpoint is that Site Offices, the Service Center, and the Pittsburgh and Schenectady Naval Reactors Offices are considered to be under separate administration for RIF purposes, while the Administrator remains the head of the headquarters competitive area. The existing competitive area standard in NNSA under current Federal regulation, and DOE policy, is ``a subdivision of the agency under separate administration within the local commuting area [5CFR351.402].'' The concept of ``local commuting area'' further defines the competitive area standard. Regulations permit agencies to subdivide competitive areas according to commuting area, the geographic proximity within which normal patterns of applicant recruitment and worker commutation can be expected to occur, even when the management official with the authority to take and direct personnel actions is located elsewhere. This is what NNSA does currently, and this part won't change under the demonstration project. Therefore, employees in one NNSA competitive area would not now compete with employees in another competitive area, nor would employees in different commuting areas within the same competitive area compete with each other. Under the demonstration project, NNSA will institute one additional competitive area subdivision, by career path, so that the employees in one career path would not compete with employees in another career path in a given RIF. NNSA's nondemonstration project employees, such as bargaining unit employees at headquarters, or all excepted service employees, are not affected by this competitive area change. They continue to be subject to traditional RIF rules, and applicable collective bargaining agreements, and would not compete with demonstration project employees in a given RIF.

(h) Employee Relations

Comments: The several comments in this topical area concerned whether employees have the right of appeal, or to grieve, their performance ratings, and whether employees whose ratings are less than Fully Meets Expectations will have an opportunity to improve.

Response: The demonstration project has no direct bearing on NNSA's performance management program, though the program continues to be refined based on lessons learned from previous rating cycles. Under NNSA's performance management policies, employees whose ratings are less than Fully Meets Expectations are provided structured opportunities to improve their performance. An employee who is dissatisfied with an official rating can request a reconsideration, under NNSA's policies and procedures.

(i) Employee Equity

Comments: Commenters generally felt that the demonstration project will actually produce contrary results. Instead of encouraging workers to
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higher levels of excellence, it will actually discourage workers who benefit now from the employment stability that the traditional civil service system provides. They suggested that the net effect of basing pay increases on performance will allow for faster pay progression in the shortterm, with the ultimate effect of increasing salary costs to such a degree that there won't be sufficient funds to properly reward employees in the future. Two persons agreed with basing pay increases on performance, but had concerns about the equity of the process, and disagreed that performance pay increases should be combined with the annual comparability pay adjustment.

Response: NNSA shares some of these same concerns, and views these concerns as challenges. Perhaps the biggest challenge the agency faces is earning and keeping the trust of its employees during this time of profound change, while ensuring that the demonstration project is not perceived as a disincentive. Perhaps the next biggest challenge is ensuring that supervisors are properly trained in their key responsibilities under the demonstration project, and that they are held accountable when they don't uphold these responsibilities. And two other significant challenges are ensuring that there are adequate cost controls in place, and that ample funds are appropriated to support meaningful levels of performancebased pay increases. NNSA does not minimize the significance of these challenges, but does not shrink from them either.

As already discussed, NNSA is establishing two pay pools, and will administer annual pay adjustments and performancebased pay increases separately.

(j) Management Accountability

Comments: A uniform thread runs through the many comments submitted on management accountability. Commenters expressed disbelief that managers will be held accountable for not rendering objective and fair performance ratings, and some said they have yet to see measures put in place, or actions taken, to assure accountability. One person wanted to know how OPM will oversee accountability and conduct ongoing evaluations.

Response: Chapter 47 of title 5 requires an evaluation of the results of each demonstration project and its impact on improving public management. This project plan has been revised to include additional details about the project evaluation. In addition, NNSA will be held to scrutiny under DOE's human capital management accountability regimen. Aside from these layers of oversight, NNSA is dedicated to changing the management culture. One of the Administrator's highest goals is to make NNSA an Employer of Choice. NNSA will encourage openness between managers and employees, will provide extensive training to supervisors, will institute a regimen of employee communications, and will hold supervisors accountable through the performance management process. Supervisors, like everyone else in NNSA, will be held to higher standards.

(k) Other

Comments: The comments in this category did not fall neatly under any other topic, and mainly reflected employee anxiety, or asked extremely processoriented questions that will be responded to via other media. A general concern in various comments was the desire for more specificity. In some cases, NNSA has made changes that provide more specific information. (See section 4, ``Changes to Demonstration Project Plan.'')

Two specific comments warrant NNSA's response: a letter from a labor organization, and a thoughtful comment about the merit system principles.

Response: The labor organization offered an extensive critique of recent payforperformance initiatives in Government, and then offered suggestions concerning NNSA's proposal. NNSA shares the union's deep concern for the welfare of affected employees, and for advancing the public's interest in protecting nuclear security. NNSA will consider all suggestions for improving the demonstration project, and for making it a success. Should NNSA decide to apply the demonstration project to its bargaining unit employees in the future, it will honor its collective bargaining obligations.

One person expressed concern that NNSA and OPM were not giving due adherence to the statutory merit system principles [5 U.S.C. 2301]. We disagree. As explained earlier, NNSA is relying on OPM's position classification criteria and standards and is adhering to the classification principle in 5 U.S.C. 5101(1) of ``equal pay for substantially equal work,'' which is akin to the merit principle in 5 U.S.C. 2301(b)(3) of ``equal pay should be provided for work of equal value.'' NNSA has a profound regard for the merit system principles and has taken great pains in the design of this project to safeguard these principles. We note that the merit principle in 5 U.S.C. 2301(b)(3) also states that ``appropriate incentives and recognition should be provided for excellence in performance.'' Thus, the performancebased pay features of this demonstration project support this merit principle.

4. Changes to Demonstration Project Plan

What follows is a list enumerating the substantive changes to NNSA's demonstration project, and major textual changes to the plan. The page numbers referenced are those found in the February 28, 2007, Federal Register Notice. Some of the changes have been described in the preceding responses to specific comments. Other changes provide additional detail, provide clarification, or correct technical problems.
(1) Page 9038: The Table of Content is revised to reflect the addition of three new sections, III.A. 3., ``Position Classification Appeals,'' III.D., ``Supervisory Bonuses'', and VII., ``Project Modification.''
(2) Page 9039: The ``executive summary'' is rewritten to reflect NNSA's final project goals.
(3) Page 9040: NNSA has decided to create separate pay pools for comparability adjustments and performance payouts.
(4) Page 9041: August 2006 data is superseded with August 2007 data in the table, ``Covered Employees by Occupational Series and Grade.'' (5) Page 9042: The design principles are rewritten to eliminate illdefined and inadequately developed principles.
(6) Page 9043: Career path and pay band structures are revised, consistent with the NNSA's response herein under the ``pay band structures'' subsection.
(7) Page 9043: A new section III.A.3., ``Position Classification Appeals,'' is added.
(8) Page 9044: The pay increase preclusion for maximum rate employees who receive less than an SEE performance rating is modified to permit a 50 percent increase.
(9) Page 9044: A locality rate cap 5 percent higher than the statutory pay cap is provided for toprated performers in the upper range extension.
(10) Page 9044: The section ``rate of basic pay upon promotion'' is clarified.
(11) Page 9044: The date of performancebased pay adjustment is changed to ``the first day of the last full pay period in each calendar year.''
(12) Page 9044: The pay retention provisions in the section ``other pay administration provisions'' are modified to provide 100 percent of the annual comparability pay adjustment for up to
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2 years for employees who are reduced in band through no fault of their own.
(13) Page 9045: NNSA clarifies that it may request that OPM establish a new staffing supplement for a category of NNSA employees. (14) Page 9045: The performancerating reconsideration process is to be referenced, rather than stipulated, in the plan.
(15) Page 9046: There are to be two pay pools.
(16) Page 9046: The share distribution pattern (linked to levels of performance) is revised to take into account the effect of the establishment of separate pay pools for comparability adjustmen

FOR FURTHER INFORMATION CONTACT National Nuclear Security Administration: Rosa Benavidez, Demonstration Project Leader, (202586 1622), Office of Human Capital Management Programs, 1000 Independence Ave., SW., Washington, DC 20585. U.S.

Office of Personnel Management: Patsy Stevens, Systems Innovation Group Manager, U.S. Office of Personnel Management, (202) 6061574, 1900 E Street, NW., Room 7456, Washington, DC 20415.