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GAO commented on the proposed Federal Pay Reform Act of 1987, which would establish a: (1) 13-member Federal Compensation Board to design, implement, and oversee 5 to 10 demonstration projects for alternative pay and personnel systems, modification of the pay-setting process, and expansion of agency authority to set rates and approve allowances and expenses for certain retiring federal employees; and (2) 3-member Commission on Federal Pay Management to ensure the orderly conduct and evaluation of the projects. GAO noted that the legislation: (1) allows inadequate time for project implementation; (2) recommends an older, less accurate methodology for making pay comparisons, when updated approaches are available; (3) ensures that the gap between private sector and federal pay will not widen; (4) appropriately endorses further testing of alternative personnel systems; and (5) appropriately grants more authority to agency heads for setting special rates and paying new allowances, which will permit more timely action on such staffing problems as recruitment and retention.

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