Demonstration Projects

What is a Demonstration Project?

A demonstration project provides a means for testing and introducing beneficial change in Governmentwide human resources management systems.  A Federal agency obtains the authority from the Office of Personnel Management to waive existing Federal human resources management law and regulations in title 5, United States Code, and title 5, Code of Federal Regulations, to propose, develop, test, and evaluate interventions for its own human resources management system that shape the future of Federal human resources management.  No waivers of law are permitted in areas of employee leave, employee benefits, equal employment opportunity, political activity, merit system principles, or other prohibited personnel practices.   However, examples of laws and regulations that may be waived under title 5 include:

• qualification requirements, recruitment, and appointment to positions;
• classification and compensation;
• assignment, reassignment, or promotions;
• disciplinary actions;
• providing incentives;
• establishing hours of work;
• involving employees and labor organizations in personnel decisions; and
• reducing overall agency staff and grade levels.

Legal requirements for the scope of demonstration projects are that:

• the length of the project be no more than 5 years (with some extension permitted);
• there be no more than 5,000 employees per project;
• OPM oversee no more than 10 active demonstration projects at one time;
• there be consultation and negotiation with affected employees and unions;
• the agency submit a formal project plan;
• Congress and employees be notified; and
• an evaluation be done.

While demonstration projects address organizational needs and problems in human resources management, they are not needed or designed to fit and fix all management problems in every Federal agency.  There are other mechanisms available that allow agencies to introduce innovations and flexibilities.  A prospective agency should first determine what its organizational needs and problems are based on its mission and strategic plan. Then, the agency can determine the best path to achieve desired changes to its human resources management system—through existing flexibilities, demonstration projects, or, in some cases, legislation.   Before you decide which path to take, we suggest that you refer the HR Flexibilities and Authorities Handbook,  our Federal Hiring Flexibilities Resource Center website and our Resource Guides.  These resources have been designed to illustrate the many options that are available to Federal agencies under title 5.