Introduction: The intent of the implementation actions listed below is to preserve current flexibilities to the extent possible within the framework of the HHS Title 42 policy. These actions were considered by an NIH committee with representatives from the NIH intramural, extramural and senior administrative communities, were reviewed by the Management and Budget Workgroup, were modified and recommended by the NIH Steering Committee, and were approved by the Director, NIH.

HHS POLICY	NIH IMPLEMENTATION
Appropriate Usage Appointments will only be made when documented recruitment and retention efforts under other systems, including Title 5, Commissioned Corps, and SBRS have failed to yield candidates with critical scientific expertise.	Blanket exception approved excluding IC Directors, IC Deputy Directors, Scientific Directors, Clinical Directors, Directors of extramural programs who report directly to an IC Director, scientific program heads in the IC or OD who report to the IC or NIH Director, and Senior Investigators from the requirement that all other hiring mechanisms must be exhausted before appointments are made under Title 42 (f). Other extramural blanket exceptions will be considered if and when it can be shown that hiring under other mechanisms is not appropriate. ICs are cautioned that Title 42 should not be used as a replacement for Title 5 mechanisms when those mechanisms can be appropriately used to satisfy programmatic needs. Except for the senior scientific positions specifically identified above, appointments under Title 42 (f) remain subject to the HHS "exhaustion" requirement. When other mechanisms are "exhausted" and Title 42 (f) is used to fill positions, base pay and total compensation must be set at levels that appropriately reflect the duties, responsibilities and special expertise (if any) required of the position, and these must be thoroughly and clearly documented. On-going recruitment activities for positions that meet criteria to use Title 42 but are now subject to the "exhaustion" requirement may continue. However, no new recruitment activities may be initiated for such positions unless and until other appointment mechanisms are "exhausted.
Conversions Conversions from other pay systems to Title 42 (f) should only occur under exceptional circumstances, and only when a scientist has been appropriately peer-reviewed and determined to meet a set of specified criteria.	Director, NIH, has stated for the record that conversions of intramural scientists from Investigator (Tenure-Track) (appointed under Title 42 (g)) to tenured Senior Investigator (appointed under Title 42 (f)), and conversions of Senior Investigators employed under other appointment mechanisms to Title 42 (f), comply fully with all HHS Title 42 (f) peer-review conversion requirements. Conversions from other positions to Title 42 (f) requires establishment of a peer review process.
Pay Increases Across-the-board cost of living adjustments no longer permissible for Title 42 (f). All pay increases will be performance-based, and consistent with the employees' annual performance appraisal. Limited to one increase per year, NTE 6%. All pay increases must be fully documented and justified. Exceptions to pay increases outside the normal performance cycle and higher than 6 percent can be approved by NIH Director.	A COLA increase for Title 42 (g) was approved by the Director, NIH, effective January 9. Title 42 (f) scientists have received a memo informing them of the discontinuance of COLAs but eligibility for annual performance-related pay increase NTE 6%. Annual pay increases must be consistent with the employee's annual performance appraisal. This year, because 2004 ratings have already been completed, Title 42 (f) employees will develop a supplemental one page self-assessment of their accomplishments, which supervisors and higher officials will consider in making pay increase recommendations. (Procedures will be reassessed for future years.) IC Directors are authorized to approve annual performance-based increases for individual Title 42 (f) scientists of up to 6%, provided the IC average of all annual increases for Title 42 (f) scientists does not exceed 4%. (This is not a 4% pool of money, but rather an average of the percentage increase granted to each eligible Title 42 (f) scientist.) IC Directors are expected to be judicious in their pay decisions, to use the full range allowable (i.e., between 0-6%) and to grant pay increases in varying amounts reflective of distinctions in performance. Separate "spring" increase guidance has been developed for Title 42 (f) and (g). Guidance for (g) "spring" increases remains unchanged; only (f) changes. Title 42 (f) guidance includes examples of Intramural and non-Intramural performance factors (developed by the respective NIH communities) that can be used in making pay decisions reflective of performance distinctions. Consistent with spring increases under the Pay Model, effective date of annual increases for both Title 42 (f) and (g) will be the first pay period in April (this year, April 3). The Director, NIH, has approved a blanket exception to the HHS annual pay increase limitation and authorized IC Directors to approve quadrennial increases of greater than 6% to Senior Investigators in the intramural programs (IC Directors currently have this authority under the Pay Model). Quadrennial increases for Title 42 (f) and (g) will be made effective at the beginning of the pay period following approval in OHR. The Director, NIH, has approved an increase in the current $200,000 base pay cap up to $212,000 in order to accommodate Title 42 (f) employees receiving 6% increases. (The $212,000 cap applies only to scientists currently appointed under Title 42 (f). The current $200,000 base pay cap continues to apply to conversions and new hires.)