That doesn't sound right. Are you sure they aren't just saying they want to see your most recent performance evaluation from your current job?
The only other thing I can think of is if you are moving from one similar agency to another. I think there are some issues with certain agencies that have similar mandates poaching employees. So if it is a lateral move, they can't offer you a higher step level; they can only offer you the current salary you are getting. So maybe they want you to technically leave the agency, so then those issues don't apply.
That's all just based on some things I've read on forums (not stuff I know for certain).
I still wouldn't go for it. I wouldn't put in notice unless I had a firm written offer and a start date. You never know what could happen.