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[FEBRUARY 20, 1997 VERSION]
PROPOSED FINAL PBO BILL
A BILL

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled --

Sec.1. This Act may be cited as the ________ Act of 1997.

TITLE I -- MANAGEMENT AND CHIEF OPERATING OFFICER

Sec. 2.

1. The management of [name of PBO] is vested in a Chief Operating Officer who shall be appointed by the Secretary of _________ to a [3 to 5]-year term and compensated without regard to chapters 33, 51, and 53 of title 5, United States Code. The appointment shall be made on the basis of demonstrated ability in management and without regard to political affiliation or activity. The Secretary may reappoint the Chief Operating Officer to subsequent terms so long as performance, as set forth in the annual performance agreement, is satisfactory or better. The Chief Operating Officer shall be removable---
   1. by the President; or
   2. by the Secretary, for misconduct or failure to meet performance goals set forth in the performance agreement described in subsection (b).
2. The Secretary of _______ and the Chief Operating Officer shall enter into an annual performance agreement which shall set forth measurable organization and individual goals for the Chief Operating Officer in key operational areas. The agreement shall be subject to review and renegotiation on an annual basis.
3. The Chief Operating Officer is authorized to be paid at an annual rate of basic pay not to exceed the maximum rate of basic pay for the Senior Executive Service under section 5382 of title 5, United States Code, including any applicable locality-based comparability payment that may be authorized under section 5304 (h) (2) (C) of such title 5. In addition, the Chief Operating Officer may receive a bonus in an amount up to, but not in excess of, 50 percent of such annual rate of basic pay, based upon the Secretary's evaluation of the Chief Operating Officer's performance in relation to the performance goals set forth in the performance agreement described in subsection (b). Payment of a bonus under this subsection may be made to the Chief Operating Officer only to the extent that such payment does not cause the Chief Operating Officer's total aggregate compensation in a calendar year to equal or exceed the amount of the President's salary under section 102 of title 3, United States Code.
4. The Chief Operating Officer shall prepare and submit to the Secretary and the Congress an annual management report containing such information as the Director of the Office of Management and Budget shall prescribe.

TITLE II -- PERSONNEL PROVISIONS

Sec. 3.

1. [name of PBO] shall not be subject to any ceiling relating to the number or grade of its employees.
2. 1. Any flexibilities provided by sections 4 through 6 shall be exercised in a manner consistent with the following provisions of title 5, United States Code:
      1. chapter 23, relating to merit system principles and prohibited personnel practices;
      2. provisions relating to preference eligibles;
      3. section 5307, relating to the aggregate limitation on pay; and
      4. chapter 71, relating to labor-management relations, except to the extent provided by subsection (c).
   2. The exercise of any authorities provided by sections 4 through 6 shall be subject to subsections (b) and (c) of section 1104 of title 5, United States Code, as though such authorities were delegated to [name of PBO] under subsection (a)(2) of such section 1104. [name of PBO] shall provide the Office of Personnel Management with any information the Office requires in carrying out its responsibilities under this paragraph.
3. 1. Except as provided in paragraph (2), employees within a unit to which a labor organization is accorded exclusive recognition under chapter 71 of title 5, United States Code, shall not be subject to any flexibility provided by sections 4 through 6 unless the exclusive representative and [name of PBO] have entered into a written agreement which specifically provides for the exercise of that flexibility.
   2. Notwithstanding paragraph (1)--
      1. if the exercise of any flexibility provided in sections 4 through 6 would affect employees who are in more than one bargaining unit affiliated with the same national labor organization and who are covered by more than one collective bargaining agreement, such flexibility may be exercised if there is a written agreement permitting such exercise between [name of PBO] and the national labor organization; and
      2. if the exercise of any flexibility provided in sections 4 through 6 would affect employees who are in more than one bargaining unit and whose exclusive representatives are affiliated with more than one national labor organization, such flexibility may be exercised if there is a written agreement permitting such exercise between [name of PBO] and all of such national labor organizations.
   3. The written agreements referred to in paragraphs (1) and (2) may not be imposed by the Federal Services Impasses Panel under section 7119 of title 5, United States Code.
4. 1. [name of PBO] may exercise any of the flexibilities provided by sections 4, 5(a), 5(b), and 6 without prior approval of the Office of Personnel Management.
   2. [name of PBO] may exercise the flexibilities described in section 5(c) - (e) only after a specific plan for implementation of those flexibilities is submitted to and approved by the Director of the Office of Personnel Management.
5. 1. The exercise of any flexibilities under sections 4 through 6 does not affect the authority of [name of PBO] to implement a demonstration project, subject to chapter 47 of title 5, United States Code, and as provided in paragraph (2).
   2. 1. In applying section 4701(a)(1) of such title 5 to a demonstration project referred to in paragraph (1), subparagraph (A) of such section 4701(a)(1) shall be disregarded. [ONLY PBO'S THAT ARE GOVERNMENT CORPORATIONS WILL NEED THIS PROVISION.]
      2. In applying section 4703 of such title 5 to a project described in paragraph (1)--
         1. subsection (b)(1) shall be deemed to read as follows: "(1) develop a plan for such project which describes its purpose, the employees to be covered, the project itself, its anticipated outcomes, and the method of evaluating the project;";
         2. subsection (b)(3) shall be disregarded;
         3. in subsection (b)(4) "180 days" shall be deemed to be "30 days";
         4. subsection (b)(6) shall be deemed to read as follows: "(6) provide each House of the Congress with the final version of the plan.";
         5. subsection (c)(1) shall be deemed to read as follows: "(1) subchapter V of chapter 63 or subpart G of part III of this title;"; and
         6. subsection (d) shall be disregarded.

1. [name of PBO] shall establish a performance management system which--
   1. maintains individual accountability by--
      1. establishing one or more retention standards for each employee related to the work of the employee and expressed in terms of individual performance, and communicating such retention standards to employees;
      2. making periodic determinations of whether each employee meets or does not meet the employee's established retention standards; and
      3. with respect to any employee whose performance does not meet established retention standards-- (i) in accordance with applicable provisions of law and regulation, denying any increases in basic pay, promotions, and credit for performance under section 3502 of title 5, United States Code; and (ii) taking one or more of the following actions: (I) reassignment; (II) an action under chapter 43 or chapter 75 of title 5, United States Code; or (III) any other appropriate action to resolve the performance problem; and
   2. strengthens its effectiveness by providing for--
      1. establishing goals or objectives for individual, group, or organizational performance (or any combination thereof), consistent with the annual performance agreement described in section 2(b) and [name of PBO] performance planning procedures, including those established under the Government Performance and Results Act of 1993, and communicating such goals or objectives to employees;
      2. using such goals and objectives to make performance distinctions among employees or groups of employees; and
      3. using performance assessments as a basis for granting employee awards, adjusting an employee's rate of basic pay, and other appropriate personnel actions, in accordance with applicable provisions of law and regulation. For purposes of this subparagraph, "performance assessment" means a determination of whether or not retention standards established under paragraph (1)(A) are met, and any additional performance determination made on the basis of performance goals and objectives established under subparagraph (A) of this paragraph. For purposes of title 5, United States Code, "unacceptable performance" with respect to an employee of [name of PBO] means performance of the employee which fails to meet a retention standard established under paragraph (1)(A) of this subsection.
2. (1) [name of PBO] shall establish an awards program designed to provide incentives for and recognition of organizational, group, and individual achievements by providing for granting awards to employees who, as individuals or members of a group, contribute to meeting the performance goals and objectives established under this section by such means as a superior individual or group accomplishment, a documented productivity gain, or sustained superior performance. (2) Notwithstanding section 4502(b) of title 5, United States Code, [name of PBO] may grant a cash award in an amount not exceeding $25,000, with the approval of the Chief Operating Officer.
3. (1) In applying sections 4303(b)(1)(A) and 7513(b)(1) of title 5, United States Code, to employees of [name of PBO] , "30 days'" may be deemed to be "15 days'". (2) Notwithstanding the second sentence of section 5335(c) of title 5, United States Code, an employee of [name of PBO] shall not have a right to appeal the denial of a periodic step increase under such section 5335 to the Merit Systems Protection Board.

1. (1) [name of PBO] may, subject to criteria to be prescribed by the Office of Personnel Management, establish one or more broad-banded systems covering all or any portion of its workforce. For purposes of this subsection, "broad-banded system" means a system for grouping positions for pay, job evaluation, and other purposes that is different from the system established under chapter 51 and subchapter III of chapter 53 of title 5, United States Code, as a result of combining grades and related ranges of rates of pay in one or more occupational series. The Office may require [name of PBO] to submit to the Office such information relating to its broad-banded systems as the Office may require. (2) The criteria to be prescribed by the Office of Personnel Management shall, at a minimum-- (A) ensure that the structure of any broad-banded system maintains, through linkage to the General Schedule, the principle of equal pay for substantially equal work; (B) establish the minimum and maximum number of grades that may be combined into pay bands; (C) establish requirements for adjusting the pay of an employee within a pay band; (D) establish requirements for setting the pay of a supervisory employee whose position is in a pay band or who supervises employees whose positions are in pay bands; and (E) establish requirements and methodologies for setting the pay of an employee upon conversion to a broad-banded system, initial appointment, change of position or type of appointment (including promotion, demotion, transfer, reassignment, reinstatement, placement in another pay band, or movement to a different geographic location), and movement between a broad-banded system and another pay system.
2. [name of PBO] may determine that, with respect to its employees who remain subject to chapter 51 and subchapter III of chapter 53 of title 5, United States Code, rather than being under a broad-banded system established under subsection (a), the General Schedule does not have 10 fixed rates of pay for each grade. On and after the date such a determination is made, an employee who is otherwise subject to subchapter III of chapter 53 of title 5, and who is promoted or transferred to a position in a higher grade, shall be entitled to basic pay at a rate determined under criteria prescribed by the Office of Personnel Management. In lieu of periodic step-increases under section 5335 of title 5, United States Code, such employees who meet retention standards established under section 4(a)(1)(A) shall be entitled to performance increases under criteria prescribed by the Office. A performance increase shall be equal to one-ninth of the difference between the minimum and maximum rates of pay for the applicable grade of the General Schedule. In lieu of additional step-increases under section 5336 of title 5, such employees shall be eligible for exceptional performance increases under criteria prescribed by the Office. An exceptional performance increase shall be equal to any amount up to, but not in excess of, a performance increase.
3. 1. With the approval of the Office of Personnel Management in accordance with section 3(d)(2), [name of PBO] may establish one or more alternative job evaluation systems that include any positions or groups of positions that the [name of PBO] determines, for reasons of effective administration-- (A) should not be classified under chapter 51 of title 5, United States Code, or paid under the General Schedule; (B) should not be classified or paid under subchapter IV of chapter 53 of such title 5; or (C) should not be paid under section 5376 of such title 5.
   2. (A) An alternative job evaluation system established under this subsection that includes positions described in subparagraph (A) or (B), or both, of paragraph (1) may not provide a rate of basic pay for any employee in excess of the maximum rate of pay under the General Schedule. (B) An alternative job evaluation system established under this subsection that includes positions described in subparagraph (C) of paragraph (1) may not provide a rate of basic pay for any employee in excess of the annual rate of basic pay of the Chief Operating Officer under the first sentence of section 2(c).
   3. An alternative job evaluation system established under this subsection shall be implemented in such a way as to ensure the maintenance of the principle of equal pay for substantially equal work.
4. With the approval of the Office of Personnel Management in accordance with section 3(d)(2), [name of PBO] may, with respect to employees who are covered by a broad-banded system established under subsection (a) or an alternative job evaluation system established under subsection (c), provide for variations from the provisions of subchapter VI of chapter 53 of title 5, United States Code.
5. With the approval of the Office of Personnel Management in accordance with section 3(d)(2), [name of PBO] may, with respect to its employees, provide for variations from the provisions of sections 5753 and 5754 of title 5, United States Code.

1. (1) Except as otherwise provided by this subsection, an employee of [name of PBO] may be selected for a permanent appointment in the competitive service in [name of PBO] through internal competitive promotion procedures when the following conditions are met: (A) the employee has completed, in the competitive service, 2 years of current continuous service under a term appointment or any combination of term appointments; (B) such term appointment or appointments were made under competitive procedures prescribed for permanent appointments; (C) the employee's performance under such term appointment or appointments met established retention standards; and (D) the vacancy announcement for the term appointment from which the conversion is made stated that there was a potential for subsequent conversion to a permanent appointment. (2) An appointment under this subsection may be made only to a position in the same line of work as a position to which the employee received a term appointment under competitive procedures.
2. 1. Notwithstanding subchapter I of chapter 33 of title 5, United States Code, [name of PBO] may establish category rating systems for evaluating job applicants for positions in the competitive service, under which qualified candidates are divided into two or more quality categories on the basis of relative degrees of merit, rather than assigned individual numerical ratings. Each applicant who meets the minimum qualification requirements for the position to be filled shall be assigned to an appropriate category based on an evaluation of the applicant's knowledge, skills, and abilities relative to those needed for successful performance in the job to be filled.
   2. Within each quality category established under paragraph (1), preference eligibles shall be listed ahead of individuals who are not preference eligibles. For other than scientific and professional positions at or higher than GS-9 (or equivalent), preference eligibles who have a compensable service-connected disability of 10 percent or more, and who meet the minimum qualification standards, shall be listed in the highest quality category.
   3. An appointing authority may select any applicant from the highest quality category or, if fewer than three candidates have been assigned to the highest quality category, from a merged category consisting of the highest and second highest quality categories. Notwithstanding the preceding sentence, the appointing authority may not pass over a preference eligible in the same or higher category from which selection is made, unless the requirements of section 3317(b) or 3318(b) of title 5, United States Code, as applicable, are satisfied.
3. The Chief Operating Officer of [name of PBO] may detail employees among the offices of the [name of PBO] without regard to the 120-day limitation in section 3341(b) of title 5, United States Code.
4. Notwithstanding any other provision of law or regulation, [name of PBO] may establish a probationary period under section 3321 of title 5, United States Code, of up to 3 years for positions where the [name of PBO] determines that the nature of the work is such that a shorter period is insufficient to demonstrate complete proficiency in the position.
5. Notwithstanding the preceding subsections, no provision of this section exempts [name of PBO] from-- (1) any employment priorities established under direction of the President for the placement of surplus or displaced employees; or (2) its obligations under any court order or decree relating to the employment practices of [name of PBO] or [name of PBO's parent agency].

TITLE III -- PROCUREMENT PROVISIONS

1. In General. -- Except as provided in this section, the [name of PBO] shall abide by all applicable federal procurement laws and regulation when procuring property and services.
2. Additional Authorities. -- The [name of PBO] may use any of the following authorities when procuring property or services:
   1. Two-phase selection procedures. -- The [name of PBO] may conduct a competition, which shall be considered to be a competitive procedure for purposes of this or any other Act, in which: (A) sources submit basic information, such as the offeror's qualifications, the proposed conceptual approach, costs likely to be associated with the proposed conceptual approach, past performance information, and such additional information requested by the contracting officer in the first phase; and (B) a limited number of sources are selected to participate in a competition in the second phase in accordance with section 2305 of title 10, United States Code, or with sections 303A and 303B of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253a and 253b), as applicable. Prior to the first-phase competition, a notice shall be published in accordance with section 18 of the Office of Federal Procurement Policy Act (41 U.S.C. 416) and sections 8(e), (f) and (g) of the Small Business Act (15 U.S.C. 637(e), (f), and (g)), except that, in lieu of section 18(b) of the Office of Federal Procurement Policy Act and section 8(f) of the Small Business Act, the notice need only include a general description of the scope or purpose of the procurement and any additional information the contracting officer determines is appropriate. Only those sources selected in the first-phase competition shall be eligible to compete in the second phase, which may include a single procurement or multiple procurements within the general scope for the purpose stated in the notice. The number of sources selected to compete in the second phase shall be limited to that number of sources as the contracting officer determines is appropriate and in the best interest of the government, which shall be no fewer than two.
   2. Application of Simplified Procedures to Commercial Items. -- Notwithstanding any law requiring the use of competitive procedures, whenever the [name of PBO] anticipates that commercial items will be offered, the [name of PBO] may, consistent with guidance issued by the Administrator for Federal Procurement Policy, acquire commercial items by: (A) using the special simplified procedures for purchases of commercial items set forth in the Federal Acquisition Regulation without regard to any dollar limitations or expiration date of the test of such procedures; or (B) developing alternative procedures to address particular mission needs.
   3. Exemption from Wait Period When Using Detailed Synopsis. -- Consistent with international agreements, the [name of PBO] may issue a solicitation earlier than 15 days after the date on which a notice is published by the Secretary of Commerce pursuant to section 18 of the Office of Federal Procurement Policy Act (41 U.S.C. 416) and sections 8(e), (f), and (g) of the Small Business Act (15 U.S.C. 637(e), (f), and (g)) if the notice includes a description of the item(s) to be acquired along with information necessary for the offeror to prepare an offer.
   4. Recompetitions for Continuing Requirements. -- The head of the [name of PBO] may use other than competitive procedures that achieve adequate competition when conducting an acquisition that is a recompetition for a continuing requirement, where the original contract establishes cost, schedule, and performance goals, and the head of the [name of PBO] determines that the incumbent contractor has met or exceeded these goals. Nothing in this subparagraph shall be construed as authorizing the sole source acquisition of a continuing requirement, except that the [name of PBO] may conduct a sole source acquisition of a continuing requirement if the need to do so is justified in writing by the contracting officer and approved by the COO or designee.
   5. Modular Contracting for Information Technology. -- (A) In implementing section 5202 of the Clinger-Cohen Act, the [name of PBO] 's need for an information technology system may be satisfied in successive acquisitions of modules, each of which must be useful in itself or in combination with other completed modules without the completion of subsequent modules. Modules shall be designed so that they can be enhanced or integrated with other modules. (B) After award of the initial increment, the [name of PBO] may acquire additional increments by any of the following procedures, or any other procedures authorized by law:
      1. Awarding a new contract using special simplified procedures as specified in regulations issued by the [name of PBO] .
      2. Awarding a new contract following a limited competition among at least two sources invited to participate, provided that at least one of the sources invited has previously participated in competitions for either the initial increment or any subsequent follow-on increment and is expected to be competitive based on that participation.
      3. Awarding a new contract following a limited competition among at least two sources invited to participate using special simplified procedures as specified in regulations issued by the [name of PBO] , provided that at least one of the sources invited has previously participated in competitions for either the initial increment or any subsequent follow-on increment and is expected to be competitive based on that participation.
      4. Modifying a successfully performed contract for any previously acquired increment, provided that a notice, stating the government's intent, has been widely published for not less than 30 days. The notice shall invite firms to submit information regarding why the proposed procurement is not in the government's best interest.
      5. Awarding a new contract to a contractor that has successfully performed a contract for any previously acquired increment, provided that a notice, stating the government's intent, has been widely published for not less than 30 days. The notice shall invite firms to submit information regarding why the proposed procurement is not in the government's best interest.
      (C) In awarding or modifying a contract pursuant to this subsection, no justification pursuant to section 2304(f) of title 10, United States Code, or section 303(f) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(f)) or section 8(h) of the Small Business Act (15 U.S.C. 637(h)) need be prepared and no notice pursuant to section 18 of the Office of Federal Procurement Policy Act (41 U.S.C. 416) or sections 8(e), (f), and (g) of the Small Business Act (15 U.S.C. 637 (e), (f), and (g)) need be given.
   6. Streamlined Acquisition of Services from Small Businesses. -- (A) Whenever the [name of PBO] is acquiring services, that do not meet the definition of commercial item set forth in section 4(12) of the Office of Federal Procurement Policy Act, 41 U.S.C. 403(12), the [name of PBO] may use the special simplified procedures applicable to procurements below the simplified acquisition threshold as set forth in the Federal Acquisition Regulation if --
      1. the procurement is in an amount not greater than $1,000,000;
      2. the procurement is conducted as a small business set-aside pursuant to section 15(a) of the Small Business Act (15 U.S.C. 644(a)); and
      3. supply items are expected to constitute less than 20 percent of the total value of the contract.
      (B) The authority set forth in this paragraph: (i) may not be used to make an award on a sole source basis; and (ii) does not apply to the procurement of construction.".
3. Provisions Not Affected. -- Nothing in this section shall be construed to waive civil rights or labor standards laws applicable to federal contracts.

TITLE IV - - SPECIAL PROVISIONS FOR [name of PBO]

TITLE V - - CONFORMING AMENDMENTS [IF NEEDED]

TITLE VI - - ASSESSMENT AND SUNSET PROVISIONS