CONTRIBUTION!

AcqDemo and upcoming improvements significantly empower acquisition organizations and their teams to focus on contributing to successful execution of the acquisition mission.

by Mr. Jerold A. Lee

The most significant changes to the Department of Defense Civilian Acquisition Workforce Personnel Demonstration Project (AcqDemo) since its inception will be coming in 2018. “These additions and improvements in AcqDemo are the result of a deliberative (over two years) process undertaken by the AcqDemo office in collaboration with participating organizations in all of the services,” said René Thomas-Rizzo, director of Human Capital Initiatives in the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics (OUSD(AT&L)). For those who are participating in AcqDemo, the new provisions will be welcome news. For organizations considering joining AcqDemo, the new provisions may just close the deal.

“These changes position AcqDemo for the future and for growth,” Thomas-Rizzo said.

The proposed changes, which are being finalized within DOD, are wide-ranging. They affect everything from reducing the number of “contribution factors” in the Contribution-Based Compensation and Appraisal System (CCAS) from six to three, to new direct-hire authorities, which include an internship program.

ACQDEMO 101
Created by the National Defense Authorization Act (NDAA) for the 1996 fiscal year, designed in 1998 and implemented with the publication of the Federal Register notice on Jan. 8, 1999, AcqDemo has been updated several times over the years. But those amendments were minor compared with those anticipated for FY18.

AcqDemo is an acquisition-based alternative human resource (HR) management pay and personnel system that provides managers and organizations with increased flexibility in recruitment, staffing, classification, performance management, compensation and employee development. The purpose of the project is to enhance the quality, professionalism and management of the DOD acquisition workforce through improvements in the efficiency, effectiveness and agility of the human resource management system. AcqDemo not only provides a system that retains, recognizes and rewards employees for their contributions, but also supports their personal and professional growth as acquisition specialists and professionals.

In addition, the demonstration project provides managers, at the lowest practical level, the authority, control and flexibility they need to achieve effective workforce management, quality acquisition processes and superior products.

Part of retention and motivation is, of course, compensation, and AcqDemo ties compensation of the workforce directly to individuals’ contributions to their organization’s mission. This is in stark contrast to the General Schedule (GS) system, which compensates employees more on the basis of longevity and performance. For those employees in defense acquisition organizations participating in AcqDemo, the system is more beneficial than the General Schedule in large part because of the flexibility to compensate employees based on the value of their contributions to the mission.

“The General Schedule is very rigid in terms of [career] progression,” said Sandra Brock, deputy director of the Army AcqDemo Program, which manages the Army’s implementation and sustainment of AcqDemo. “Salary increases in the General Schedule are given for performance (quality step increases) and longevity. By virtue of longevity, every year—or two years or three years, depending on your step in the General Schedule—you get a step increase as long as you’re doing well,” said Brock. And when a GS employee is at the top step of the grade, there is no available step increase. That is not the case with AcqDemo, because of its salary “broadbands,” each of which is a grouping of grades. The AcqDemo broadbands increase the maximum salary, as shown in a comparison of the 2017 GS and the AcqDemo pay tables. (See Figure 1.)

The General Schedule has 15 grades, GS-1 to GS-15, with 10 salary “steps” in each. Progression from one GS grade to the next, with each grade progression requiring a “promotion,” can depend on a lot of variables. For example, a job may be classified as a GS-6 slot, based on its position description, and the organization can’t just change the job to GS-7. Contrast that to AcqDemo, which uses position requirement documents instead of position descriptions. Instead of hundreds of different position labels, AcqDemo has three career paths; instead of 15 pay grades, it has three or four broadband levels in each career path.

The greatest flexibility of AcqDemo is in the broader pay bands. If that same GS-6 were in the NK II broadband, for example, the manager could increase compensation based on an employee’s contribution results through the CCAS pay pool panel process.

The flexibility of AcqDemo is also in the ability to shape the workforce to meet “required skills and knowledge,” as the original Federal Register notice in 1999 noted. “The current personnel system [GS] is unable to adapt the workforce rapidly to changing needs. This demonstration project provides more flexibility to shape workforce capability and size as needed,” Brock said.

The system provides for three types of appointments: permanent; temporary limited, not to exceed two years; and modified term, up to five years with the possibility for a one-year extension for a total of six years.

A CONTRIBUTION-BASED SYSTEM
Contribution-based compensation starts with the premise that pay should be based on an employee’s contributions to the organization’s mission. So the measurement isn’t only whether the employee accomplished specific tasks. Rather, it’s about what the individual’s efforts contributed to the mission.

“For the AcqDemo community,” Brock said, “it’s how well did you contribute to the mission of the organization? Then, based on that and the value of the position, are you appropriately compensated?”

For participating AcqDemo organizations, perhaps the most significant upcoming change is streamlining the contribution factors from six to three. (See Figure 2.) The contribution factors are the criteria that employees and supervisors use to enumerate and evaluate annual contributions.

In a significant change in authority, the FY17 NDAA moved AcqDemo from under the auspices of the U.S. Office of Personnel Management (OPM) to the secretary of defense. The significance of that, said Steve Edsall, AcqDemo deputy program manager, is that “along with authority and accountability, it provides DOD more flexibility to implement improvements to AcqDemo.”

AcqDemo Program Manager Scott Wortman agreed. “It’s significant because, rather than having to go through DOD and then OPM, now the secretary of defense has the authority to make the changes. However, we’ve shared with and leveraged OPM expertise.”

The upcoming changes have been reviewed by OPM. “OPM’s input was helpful and incorporated,” Edsall said.

In addition to the major change from six to three factors, there are many other improvements and new features. The most significant anticipated changes are in the categories of recruitment and staffing, pay administration and employee development.

RECRUITMENT AND STAFFING
Direct-hire authorities—Hiring managers in participating organizations will have the option of making on-the-spot tentative job offers to candidates at recruiting events when using a noncompetitive or direct hiring authority. That includes on-the-spot offers to qualified candidates who have a degree required by OPM or DOD standards covering acquisition positions, or qualified candidates in direct support of acquisition positions in a critical acquisition career field.

Direct-hire authorities also include hiring veteran candidates for acquisition positions in a critical acquisition career field in the business and technical management professional career path or the technical management support path.

Additionally, hiring managers will have authority to make direct-hire appointments of acquisition student interns. Managers can offer intern positions to recent graduates in a critical career field. Managers also will be able to offer acquisition intern appointments to undergraduates who have not yet completed their studies in a field directly linked to an acquisition position’s requirements for one of the critical career fields.

“We call this our version of the Pathways [federal hiring] program,” Wortman said, “which we think will provide improved benefit for the acquisition community.” He added that this major improvement will enable participating organizations to “make direct offers and bring [candidates] in, and put them into a program to advance them in their careers.”

“Direct-hire authority doesn’t apply to the administrative support career path, which accounts for only 2 percent of the AcqDemo workforce,” Wortman said.

Scholastic achievement appointment—
This modification of the existing scholastic achievement appointment makes it available to a wider range of candidates.

Rule of many—When there are 25 or fewer candidates for a position, the hiring manager, who knows the subject matter better than HR personnel, will have the option of reviewing all the candidates to find the skills needed. “It gets the pool of candidates to the supervisor much faster, and then the supervisor has complete control of identifying the best candidates,” Wortman said.

Voluntary Emeritus Program—This, too, expands an existing part of AcqDemo, opening it up to military and civilian retirees who supported the acquisition workforce but were not in positions that fell under the Defense Acquisition Workforce Improvement Act.

Expanded supervisory and managerial probationary periods—This expanded requirement provides adequate probationary periods for current managers with significant responsibility for major programs. “It gives the organization—and the manager—more time to assess that the candidate can do the job,” Wortman said. If the increased level of responsibility doesn’t work out, the organization can move the new manager back to the previous supervisory or nonsupervisory role.

Reduction in force—In the event of a reduction in force (RIF), Wortman said, “we are moving from a longevity-based system of determining our RIF list to using performance as a primary factor.” Although performance has been part of AcqDemo from the beginning, it has never been measured the way that contributions have. This provision changes that, adding a different dimension, and makes CCAS compliant with 10 U.S. Code, Section 1597(f).

Expanded detail and temporary promotion authority—This enables managers to fill open positions at a higher level of responsibility with existing employees beyond the current 120-day limit, to as much as one year within a 24-month period. For example, if an employee’s supervisor is on extended leave, that employee in a lower broadband level may be temporarily promoted to a higher level of responsibility, with a higher salary, for six months. At the end of that period, if circumstances require it, that employee could again be temporarily promoted for another six months within the 24-month period.

PAY ADMINISTRATION
Compensation strategy—Participating organizations will have to look at their compensation strategy deliberately, based on “how the market is doing locally, the value of the position to the organization,” Wortman said. “We have cost controls now, but this expectation is adding a level of increased compensation strategy to what we’re doing. It’s really trying to bring more discipline to the program.”

Promotions—This provision clarifies whether a move from the GS to an AcqDemo position constitutes a promotion or a reassignment (lateral move). For the purposes of AcqDemo, a permanent or temporary promotion action occurs when a non-AcqDemo federal employee or an AcqDemo employee is selected under competitive or merit promotion procedures for an AcqDemo position in a broadband level with a referenced GS grade or level of work in a higher broadband level than would be appropriate for the federal employee’s current GS grade or the AcqDemo employee’s current broadband level, or a previously held position on a permanent basis in the competitive service.

Accelerated compensation for developmental positions (ACDP)—This new provision enables managers to accelerate compensation based on contribution and performance. “It gives managers flexibility at two points during the year. For example, at the midpoint of the appraisal cycle,” Edsall said, “the manager can say [to the employee], ‘OK, we think you’re ready to move to a higher level of contribution,’ because we are a contribution-based system. At that point, they [the manager] can approve a pay raise—up to 10 percent for each midpoint or annual appraisal—within the broadband levels of the developmental position.”

So, at two points each year, employees are evaluated for their progress, and a manager is able to give pay raises commensurate with the employee’s level of contribution. In addition, ACDP employees are eligible for the CCAS rating and CCAS payouts (both salary increase and award). This can be used in conjunction with the direct-hire intern program, which makes it much more flexible than Pathways.

Supervisory and team lead cash differentials—“This is a big one,” Edsall said. Local commanders can use the differentials as an additional tool to incentivize and compensate supervisors and team leaders as defined by the OPM General Schedule Supervisory Guide or Leader Grade Evaluation Guide in such situations where salary inequities exist between the supervisor’s and nonsupervisory subordinates’ basic pay; when supervisory or team leader positions are extremely difficult to fill; or when the organizational level and scope, difficulty and value of position warrant additional compensation.

Based on their needs, organizations can offer incentives to candidates for team lead or supervisory positions with a 5 or 10 percent pay boost above their current salary, depending on their role. “That’s [calculated] off the base pay,” Wortman said, adding, “The provision is essentially intended for highly technical professional people who could assume a supervisory role, but who might not consider taking on a managerial role with all the extra responsibilities but no extra pay.” This cash differential is not permanent and will be reviewed annually as part of the pay pool panel review process.

Special act awards of $25,000—The acquisition executives for each of the services have the option under this provision to give “special act” awards to employees of participating AcqDemo organizations of not more than $25,000, an increase over the current $10,000 limit. “If you’re in acquisition and you jump a big hurdle or solve a major enterprise problem, it gives the acquisition executive of the service the ability to say, ‘This person really just saved the day or saved millions of dollars,’ ” and reward them commensurately, Edsall said.

“Very high score”—This new provision provides scores in the NH, NJ and NK career paths above the current maximum of 100, 83 and 61, respectively, to a very high score of 115, 95 and 70, so that managers have more flexibility in rewarding contributions. It provides increments for NH of 105, 110 and 115; for NJ of 87, 91 and 95; and for NK of 64, 67 and 70. (See Figure 3.)

Performance assessment—Although performance has always been a part of AcqDemo, its design has been contribution-focused. Incorporating a separate performance assessment adds another dimension to employee appraisals for a fuller picture. The same criteria used for evaluating contribution will be used to measure performance.

EMPLOYEE DEVELOPMENT
Sabbaticals—This provision expands the existing sabbatical provision, which is open to all eligible employees with seven years of federal civilian service, to require a post-sabbatical service requirement that is three times the length of the sabbatical. For example, if an employee takes a six-month sabbatical, the individual has a service obligation of 18 months.

Student intern relocation incentive—This incentive gives local commanders or their designees the option to approve relocation incentives for new student interns and to student interns whose work site is in a different location than their college or university or their permanent residence. “Let’s say, for example, there is a student in college in California pursuing an engineering degree, and it’s a very competitive area for technical talent. If you want to attract them to take a student internship on the East Coast, this relocation incentive will help many decide ‘yes.’ This will not only help with attracting top talent for student internships, but also increase our chances with a follow-up top talent hire after graduation,” Wortman said. Edsall added, “Students typically don’t have much money. So if you tell a student you want them to intern with you but then tell them they have to pay their own way, it’s not likely that they’re going to take the job.”

CONCLUSION
Significant improvements to the Civilian Acquisition Workforce Personnel Demonstration Project are projected to be implemented in 2018. The design improvements are the result of extensive collaboration among OUSD(AT&L) Human Capital Initiatives, the AcqDemo Program Office and organizations participating in AcqDemo across DOD.

The last step in finalizing the improvements is the upcoming Federal Register notice process, which will give the public an opportunity to provide input on the changes.

Improvements include streamlining of contribution factors from six to three, providing new direct-hire authorities, adding supervisory and team leader cash differentials, simplifying classification standards, providing accelerated compensation for developmental positions, increasing the amounts for special act monetary awards, expanded detail and temporary promotion periods, and more.

Planned streamlining improvements and new features will enhance the value of AcqDemo to organizations and their team members as they contribute to successfully execute the acquisition mission.

For more information, contact the Army AcqDemo Program Office at 703-805-4512 (DSN 655). For more information on Army AcqDemo training, contact Sandra Brock at sandra.j.brock.civ@mail.mil.

MR. JEROLD A. LEE, a retired Army lieutenant colonel, is director of the Army AcqDemo Program, Fort Belvoir, Virginia. He holds an M.S. in administration from Central Michigan University and a B.S. in business administration from the University of San Francisco.

CONTRIBUTORS:
Mr. Scott Wortman, DOD AcqDemo program manager, and Ms. Sandra Brock, Army AcqDemo deputy program director.

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Army AcqDemo Roadshow

The Army AcqDemo Program Office plans to train the acquisition workforce on Federal Register changes via an educational tour that will run from this October through March 2018. The Army AcqDemo team will offer training at regional locations where large populations of the participating Army AcqDemo organizations reside. Details will be available in late summer from command-level pay pool administrators or by contacting Sandra Brock at sandra.j.brock.civ@mail.mil.

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This article is published in the July-September 2017 issue of Army AL&T Magazine.

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