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Model Performance-Based Organization (PBO) Bill
Short Explanation

Background:

• The Model PBO Bill was drafted by National Performance Review, Office of Management and Budget, Office of Personnel Management, Office of Federal Procurement Policy based on the lessons learned from the experiences of the past year, and, particularly, from the candidate PBOs.

• The St. Lawrence Seaway legislation provided the initial template for this bill but the personnel and procurement parts were expanded.

• The bill was circulated to the Cabinet and selected small agencies for comments on January 21, 1997. Each of the national offices of the major federal unions also received a copy of the bill for comment. Congressional oversight committees were also briefed.

• "Proposed Final PBO Bill" issued February 20, 1997.

Structure:

• Title I addresses the management of the Performance-Based Organization (PBO) and the Chief Operating Officer (COO) who leads the PBO. All PBO legislation will contain this part of Model PBO bill.

• Title II addresses the personnel systems that performance based organization may use. A PBO may select not to use all the flexibilities provided.

• Title III addresses the procurement flexibilities. A PBO may select not to use all of the flexibilities provided.

• Title IV addresses the unique requirements of each individual PBO.

• Title V addresses conforming amendments if needed.

• Title VI addresses the assessment and sunset provision.

Title I: Management and Chief Operating Officer (COO)

• Sec.2 (a) -- Appointment, renewal, and removal of the Chief Operating Officer (COO)
  
  • Selected by the Secretary
  • Fixed term. PBO is to select length of term - 3 to 5 years
  • May be reappointed to subsequent terms if performance is satisfactory or better
  • Removal by the President, or the Secretary for misconduct or failure to meet performance goals.

• Sec.2 (b) -- Performance agreement
  • Annual performance agreement between the Secretary and the COO
  • Measurable organization and individual goals in key operational areas.

• Sec. 2 (c) - Pay and incentives/compensation based on performance
  • Base pay is up to SES-6
  • Incentive bonus is up to a 50 percent of base pay
  • President's salary is the cap for total annual compensation. ($200,000 per year)

• Sec. 2 (d) - Annual management report
  • COO to submit a report to Secretary and Congress
  • Annual report
  • Director, OMB, to prescribe what the report contains.

Title II: Personnel Flexibilities

• Sec. 3. General provisions.
  1. No ceilings on the number or grade of personnel.
  2. ["The Untouchable"] No exercise or implementation of any flexibilities established under the authority of this section shall interfere with or fail to comply with OPM oversight provisions under chapter 11, the merit system principles, whistleblower protections, veterans preference, Governmentwide retirement and benefits provisions, the total aggregate compensation limitation at 5 U.S.C. 5307, or the labor-management relations requirements under chapter 71.
  3. Labor relations, collective bargaining, and employee consultation obligations to be met consistent with demonstration project provisions; includes feature to facilitate multiple unit implementation.
  4. No approval required for many flexibilities; OPM approval required for exercise of certain flexibilities. [see annotations below]
  5. Authority to be a chapter 47 demo project available as needed now or in the future to support further flexibilities such as improved dispute resolution, alternative reduction-in-force (RIF) approaches (leaving veterans preference intact), fast-track promotions, alternative leave systems (except for Family and Medical Leave), using streamlined time line and notifications, plus various limits lifted, including the bar on corporations and on waiver of leave provisions for other than family and medical leave.

• Sec. 4. Performance management.
  1. Performance management programs
     
  2. Performance incentive flexibilities
     
  3. Poor performance flexibilities
     

• Sec. 5. Classification and pay flexibilities.
  1. Broadbanding authority subject to OPM criteria
  2. "Stepless" General Schedule with performance increases and exceptional performance increases subject to OPM criteria
  3. Alternative job evaluation systems
  4. Grade and pay retention flexibilities if broadbanded or under an alternative job evaluation system
  5. Recruitment/relocation bonus and retention allowance flexibilities

• Sec. 6. Staffing flexibilities.
  1. Noncompetitive conversion of certain term appointees
  2. Alternative ranking procedure
  3. Exemption from time limit on details
  4. Extended probationary period
  5. Must comply with placement/surplus employee requirements and court orders/decrees

Title III: Procurement Flexibilities

o Sec.7 (a) PBO are subject to all applicable federal procurement laws and regulation when procuring property and services.

o Sec. 7 (b) contains additional authorities for PBOs:

1. Two-phase selection procedures -- allows PBOs, after reviewing a limited amount of information, to select a small number of competing suppliers. The PBOs and these suppliers, together, will work and negotiate to identify the best fit between on-going needs and commercial capabilities. Also, permits PBOs to perform repetitive purchasing among qualified sources.
2. Application of simplified procedures to commercial items -- removes the dollar limitation for the acquisition of commercial items and makes permanent the authorities provided in the Clinger-Cohen Act that simplify the source selection of commercially-available goods and services.
3. Flexible wait periods and deadlines for submission of offers --gives relief from the required wait periods when using a detailed synopsis for any type of product or service.
4. Modular contracting -- builds upon the provisions in the Clinger-Cohen Act enabling the more efficient acquisition of major information technology systems through incremental contracting techniques.
5. Streamlined acquisition of services from small businesses -- authorizes the use of simplified procedures for the acquisition of services (excluding construction) up to $1,000,000 when conducted as a small business set-aside.

o Sec. 7 (c) requires the head of the PBO, in consultation with the Administrator for Federal Procurement Policy, to issue implementing guidance for the additional authorities granted in Sec. 7 (b).

o Sec. 7 (d) states that PBOs can contract for other agencies if approved in advance by the senior procurement official of the ordering agency.

o Sec.7 (e) states that civil rights or labor standards laws applicable to federal contracts still apply.

Title IV addresses the unique requirements of each individual PBO.

Title V addresses conforming amendments if needed.

Title VI addresses the assessment and sunset provision.