April 8, 2003

The following identifies our proposal for processing the recently authorized retroactive 1% locality pay increase for prior pay periods. This proposal applies to General Schedule employees serviced by the Defense Civilian Pay System (DCPS). As the personnel actions are received, they will be processed during the nightly personnel interface update process. This process will update the existing January 12, 2003 record for each employee to be reflective of the new locality amount. This same process also identifies the employee requires retroactive processing for prior pay periods.

For Federal Wage System employees (FWS), we will process all their increases, including the retroactive prior pay periods, the pay period received from personnel. At this time, we anticipate receiving these personnel transactions on or about April 14, 2003, to be included in pay processing for pay period ending April 19, 2003.

We have completed testing the time and resources required to safely process all General Schedule employees through the DCPS automated retro process, without adversely impacting normal biweekly payroll processing. General Schedule employees affected by the retro portion of this 1% increase will require processing over the course of 2 pay periods. Therefore, approximately 50% of the employees by database, for each pay period has been identified for processing. In order to control the number of employees processed through retro, specific Agencies and Major Commands within those Agencies have been selected for processing each pay period. All employees within the Major Commands selected will be processed during the specified pay period, provided DCPS has received and successfully processed the employees personnel action. At this time, we anticipate receiving personnel transactions for General Schedule employees on or about April 28, 2003, during pay period ending May 3, 2003.

The following 4 databases (ZKE, ZFA, ZFR and ZL0), will be processed in total for both the current and prior pay periods, during the initial pay period the personnel actions are received, tentatively May 3, 2003. Due to the relatively small size of these databases, they can be completed during the first pay period. By reducing the number of databases requiring special manual intervention, risk to the overall project is minimized. The number of affected employees is identified in parenthesis.

Note: We anticipate few, if any employees to be affected.

Note: We anticipate few, if any employees to be affected.

The prior pay periods retroactive increases for the remaining databases will be processed according to the following schedule.

Agency – Army

Major Command – Corps of Engineers (34,667)

Major Command – National Guard Units (28,116)

Major Command – Army Medical Command (26,513)

Major Command – Army Training and Doctrine Command (17,969)

Other Agency employees within this database (2)

All other Army Major Commands

Agency – Air Force

Major Command – Air Force Material Command (56,277)

Major command – Air National Guard Units (24,100)

Other Agency employees within this database (5,710)

All other Air Force Major Commands

Agency – Navy

Major Command – Naval Sea Systems Command (27,148)

Major Command – Naval Air Systems Command (26,084)

Major Command – U S Atlantic Fleet (12,881)

Major Command – U S Marine Corps (12,847)

Other Agency employees within this database (146)

All other Navy Major Commands

Agency – Department of Defense

Office of the Secretary of Defense (1,484)

Joint Staff (190)

Defense Information Systems Agency (5,772)

Defense Security Cooperation Agency (274)

U S Court APLS Armed Forces (51)

American Forces Information Service (252)

Defense Contract Audit Agency (4,112)

Defense Security Service (2,605)

Defense Advanced Research Projects (174)

Defense Education Activity (6,140)

Washington Headquarters Service (1,115)

Office of Economics Adjustment (28)

Defense Legal Services Agency (148)

DoD Inspector General (1,214)

Ballistic Missile Organization (544)

Technology Security Administration (131)

Defense Human Resources Activity (693)

Defense POW/Missing Personnel Office (66)

TRICARE Management Activity (280)

Defense Threat Reduction Agency (882)

Defense Contract Management Agency (10,711)

Pentagon Force Agency (472)

Other Agency employees within this database (2,729)

All other Defense Agencies

Defense Logistics Agency (21,850)

Defense Commissary Agency (13,905)

Defense Finance and Accounting Service (14,172).