**NOT FOR PUBLICATION**

> **UNTIL RELEASED BY THE**

**COMMISSION**

**STATEMENT OF**

**FORCE MASTER CHIEF DAVID R. PENNINGTON, U. S. NAVY**

**FORCE MASTER CHIEF OF THE NAVY RESERVE**

**BEFORE THE**

**COMMISSION ON NATIONAL GUARD AND RESERVES**

**June 15, 2006**

# NOT FOR PUBLICATION 

# UNTIL RELEASED BY THE

**COMMISSION**

**[Introduction]{.underline}**

Chairman Punaro and distinguished members of this committee, thank you
for the unique opportunity as a Senior Enlisted Leader to appear before
you today. I humbly represent the amazing Citizen/Sailors of our Navy
Reserve Force and I wish to go on record and say how proud I am of these
great Americans, their families and the employers who support them.

The men and women of the Navy Reserve are truly "operational" and
engaged as they perform critical missions and sustain combat readiness
in thousands hundreds of locations around the world. Winning the Global
War on Terror is the Navy's number one priority and the determination to
be relevant in this fight of the future is evidenced by the historical,
revolutionary transformation from a blue water force to one that is more
agile and jointly engaged. The Navy Reserve has been a key element in
this strategy and we are no longer a force in waiting. The Reserve
Component (RC) is at the tip of the spear fighting the Global War on
Terror and I am very privileged to be able to tell our story.

**[Zero Based Review (ZBR) and Active Reserve Integration
(ARI)]{.underline}**

The foundation of change since 9/11 in the Navy with regards to Enlisted
Manpower has been the Zero Based Review (ZBR). The ZBR initiative was
launched in 2004 and has revolutionized the manpower requirements
process in the Navy. The process is continual as we validate operational
reserve requirements by systematically reviewing gaps in Active
Component (AC) capabilities and subsequently determining whether each
capability should be aligned, divested, or filled by the RC. Navy and
joint mission requirements are then prioritized, followed by a thorough
analysis of RC manpower available to meet those requirements. RC billets
are then placed in various AC units where the requirement for surge
capabilities and operational support is predictable and periodic.

The result is a "Total Force" equation and it has facilitated Active
Reserve Integration (ARI) with capabilities-based mission requirements
which promote "One Navy". Many examples point to how ZBR has
successfully facilitated ARI. The newly established Navy Expeditionary
Combat Command is one such example. Fleet Replacement Units (FRU) are
also directly integrated with active aviation commands providing fully
qualified and experienced reserve Sailors using like equipment and
configurations which significantly reduce training costs. I could go on
and on with one illustration after another of how the Navy's RC is fully
integrated in all areas of the 21 joint capability enterprises; however,
I will summarize with one more excellent example and relate it back to
the Global War on Terror. In CENTCOM 50 percent of the Navy individual
augmentee (IA) requirement is being met by RC Sailors which is truly an
awesome statistic and a real testimony.

The Total Force consists of active and reserve military, civil service,
and contractors and it will deliver a more responsive workforce with new
skills and improved integrated training. The Total Force will be better
prepared to meet the challenges of the Long War.

**[Force Shaping]{.underline}**

I mention ZBR and ARI because of the significant impact on training and
readiness they had on the Reserve. This transformation from a strategic
reserve to an operational reserve and the aggressive alignment of the
AC/RC in the Navy has driven a new level of focus and attention on who
we recruit, in which skill sets. Who we advance and who we retain.
Shaping the Force, is hard work but it is long overdue and vital to a
relevant, ready, responsive force. Congress passed legislation in the
2006 National Defense Authorization Act that provided force-shaping
tools, such as the flexibility to transfer funds from Reserve Annual
Training (AT) accounts to Reserve Active Duty (AD) accounts, which
enable our Sailors to spend more time at their supported operational
commands and more time fighting the war on terror. Many other changes
need to be put in place to assist as we continue momentum towards a
Total Force. For example, there are seasons (if you will) of a Sailor
for life and the career progression which begins with recruiting and/or
affiliation.

**[Recruiting]{.underline}**

It is important to note here that yet another major ARI initiative in
the Navy was the total integration of the AC/RC Recruiting Command
nation-wide in 2005. In my travels speaking with our "One Navy"
Recruiting team I continually hear a consistent, common message and that
is the need for a common pay and personnel system that provides for
seamless transition from AC to RC. This is essential to the success of
our "Continuum of Service" and "Sailor for Life" programs. The Defense
Integrated Manpower and Human Resource System (DIMHRS) is expected to be
that system and I understand an assessment is currently underway to
determine the best course of action and implementation. I submit the
sooner the better as this demand signal spans many other aspects of the
manpower strategy to include pay, orders, travel and over-all
administrative readiness. An alternative is the Marine Corps Total Force
System (MCTFS), which provides an off-the-shelf solution.

We had a welcomed bright spot in May with the best recruiting month in
the past 12 months, finishing with 955 accessions (609 Prior Service and
346 Non-prior Service Basic) against a final goal of 1053 (90.7
percent). However, FY 2006 Navy Reserve enlisted recruiting continues to
be challenging with 5,774 recruits attained out of a goal of 6,809 (84
percent) as of May 31, 2006. There are several contributing factors to
the reduced pool of eligible candidates. Civilian unemployment rates
remain low. Public opinion influencers, such as friends and family, are
less likely to recommend military service as a career. The diminished
numbers of potential recruits who are fit and motivated to become
involved in the war naturally migrate to the Army and Marine Corps. Navy
Reserve accessions are drawn from multiple sources but the trained and
experienced Navy veteran remains the primary focus. Additionally, strong
retention of AC Sailors and the Force Shaping "fit to fill" requirements
in the RC (although necessary) do not aid in the recruiting effort. Many
of the RC requirements are so operationally aligned with the AC that
Sailors opting to separate from Active Duty are quickly mobilized upon
joining the Reserves. Recent policy defers mobilization for 1 year if
affiliation in the Navy Reserve is initiated within 6 months after
separation from active duty.

To address Navy Reserve recruiting challenges we are increasing the
amount of enlistment bonuses for both prior service and non-prior
service accessions. Congress raised that legislative cap to \$20K for
the non-prior service program and \$15K for the prior service program.
Additionally, Congress authorized the lump sum payment of Reserve
Affiliation Bonuses, enhanced high-priority unit assignment pay, and
authorized increases in the amount of the Reserve Montgomery G.I. Bill.

**[Retention]{.underline}**

I have always felt that one key aspect of staying with any organization
is the potential for upward mobility. The opportunity to advance. The
initial impact of the ZBR definitely affected advancement opportunity in
the Navy Reserve simply because skill sets and pay grade structures in
those rating pyramids did not align with total force requirements. After
stabilizing and institutionalizing Force Shaping initiatives advancement
opportunity is on the rise. For example, overall advancement to E6
increased from 6 percent in five consecutive cycles to 15%. E5
advancement grew from 17 percent to 30 percent. The point here is some
ratings are still over manned but incentives to "change rate" are in
place and result in the right person in the right place at the right
time with the right training at the right cost.

Another crucial aspect of retention is meaningful work. I feel we need
to get our hands around why our Sailors are leaving the Navy. I don't
have metrics to support my theory; however, in my view the people who
are staying are the ones who are engaged and feel like they are
contributing. On any given day 15,000 RC Sailors are providing support
to the Fleet. This year we have provided over 15,000 man-years of
support to the Fleet, which is equivalent to two Carrier Strike Groups.
You are aware of the more than 5,000 mobilized serving in critical
capacities such as Customs Inspectors, Cargo Handlers, SeaBees, and
Corpsmen. I stand in awe when I witness these modern day heroes
volunteer over and over again because they believe in what they are
doing and they believe they are making a difference for freedom and
democracy around the world.

I have listened to our Sailors indicate a strong desire to "flex drill"
at their AC supported commands and I have noted their frustration as
they haggle with the multiple types of orders and the funding process
for these various types of orders. I feel this proves my point on why
our members stay or go and we need to streamline the system and make
support to the fleet more seamless.

The Navy's Reserve Component is uniquely positioned and trained to carry
out the homeland security mission. Immediately following Katrina, RC
crewed fixed-wing relief missions delivered approximately 2.5 million
pounds of water, MREs, and emergency equipment to New Orleans. Navy
Reserve Construction Battalions returned power and other necessary
functions to storm ravaged towns and RC crewed helicopters evacuated
over 6,000 people from disaster areas. I can tell you that these Sailors
are still around and they are ready to step up and do it again when
called upon.

One final note on the discussion of Retention is the importance of
appropriate compensation. I haven't met a single Sailor who is looking
to get rich as they put on the cloth of our country, but when they have
to pay out of their own pocket to come to work -- we have a problem. The
Base Realignment and Closure (BRAC) process has led to consolidating
Navy Reserve Centers into larger, more centralized Navy Operational
Support Centers on military bases, while maintaining presence in all 50
states and reducing excess capacity by 99 percent. Consolidation of
smaller facilities provides a better return on investment of precious
RPN and OM&NR funding with better utilization of administration and
staff support. It does require our Sailors to travel greater distances
in many cases and when you add on the requirements stated above to
perform work at AC supported commands it is not uncommon for our
Selected Reserves to barely break even on a drill and many consistently
go in the hole.

**[Family Readiness]{.underline}**

A popular saying is you recruit a Sailor but retain a family. I truly
believe that is the case and as I leave the discussion of Retention and
transition in to Readiness, I'm excited to report that the Navy Reserve
has made several major steps in support of our families. We established
a Navy Reserve Force Family Readiness Coordinator position and hired a
Navy civilian to coordinate programs and administer training of
ombudsmen across the country. We are on track to certify over 100
ombudsmen this year. Operational Support Centers are required to conduct
family days and emphasize pre-mobilization preparation in addition to
maintaining "touch programs" for families of mobilized Sailors. Military
One Source is a vital tool that is being used by our family members with
a documented usage increase of 42 percent. We have had much discussion
on the Senior Enlisted Advisory Panel for the Assistant Secretary of
Defense for Reserve Affairs regarding the family members of our service
members and we believe combining resources and orchestrating "Joint"
family programs and support networks is critical.

**[Medical Readiness]{.underline}**

Navy Reserve continues to be a DoD leader in percentage of personnel who
are Fully Medically Ready (FMR). In October 2004, Navy Reserve reported
44 percent FMR personnel. With an ongoing emphasis on Medical Readiness
Report System (MRRS) utilization by all commands we showed a dramatic
improvement in January of this year with an increase to 73 percent FMR
per DoD standards.

**[Physical Readiness]{.underline}**

Navy Reserve is actively involved in creating a Total Force solution to
address physical readiness and foster a "culture of fitness". Recent
policy outlines administrative separation criteria and authority on July
1 of this year for anyone who has failed three consecutive Physical
Readiness Tests. This obviously affects retention; however, we must have
a Force that is healthy and physically able to meet the demands of war.
The Secretary of the Navy's "Health and Productivity Management" group
is addressing the impact of a fit force on work productivity. Navy
Reserve is working with the Bureau of Navy Personnel to revise the
Physical Readiness Information Management System (PRIMS) and more
accurately capture fitness testing data. I believe we need to press on
and eventually include Physical Readiness Testing as a measurement in
performance multiples for advancement.

**[Administrative Readiness]{.underline}**

Data integrity is crucial specifically as it relates to Mobilization and
the "fall out" in Mobilization processing. The Navy Reserve has attacked
this head on and tracks administrative readiness with the "Type
Commander (TYCOM) Readiness Management System -- Navy Reserve Readiness
Module" (TRMS-NRRM). Leadership can now utilize accurate data for all
categories and elements to quickly determine readiness information for
individuals, units, activities, regions and any other desired capability
breakout. We have to get this right and it remains at the top of our
priority list. A good news story is the successful implementation of the
Navy and Marine Corps Manpower Processing System (NNCMPS). This data
system provides a single source mechanism to receive requirements from
the Combatant Commanders for mobilization, source those requirements and
generate orders. Recent metrics show over 95 percent of mobilized
Sailors receive 30 days or more notification.

**[Summary]{.underline}**

In closing, I want to say again what an honor it is for me to represent
the more than 70,000 SELRES and FTS Sailors in the Navy Reserve. Our
Sailors are operational, they are integrated, and since the events of
9/11 and in the midst of uncertainty, change and transformation they
have never performed better. The Total Force structure is deepening as
we change a culture with continued education and commitment to the call
to be ready.

One of the major "take-away" messages for the Navy Reserve, and I
believe all services, is the need for one pay and personnel management
system. I see this as vital in our Sailor for Life initiatives. There
have been great strides made in the compensation package for our Reserve
Force. In my mind TRICARE for Life has been the single most beneficial
incentive in recent years. Other helpful incentives include aligning RC
benefits with AC benefits such as Basic Allowance for Housing (BAH) and
Montgomery G.I. Bill (MGIB).

I will add that we need to address the issue of orders and more
specifically the funding of these various types of orders with an
emphasis on travel reimbursement incentives. I see this as one piece of
the Retention/Attrition story. Nearly one third of the men and women
surveyed indicate they leave the Reserves due to employment conflict. In
my discussions these stories are usually related to changes in civilian
jobs and in most cases they involve geographic relocation. Unfortunately
the move in the civilian life highlights the inflexibility of relocation
and/or assignment in the military life. Combining drills and "chunking"
blocks of time doing meaningful work with the Total Force and funding
the travel is at the root of the solution.

Our Sailors and families of the Navy Reserve sacrifice daily to bring
their knowledge, skills and abilities to bear and they have rightly
earned the respect and admiration of the nation. On behalf of these
brave men and women of the United States Navy Reserve, I thank you for
your continued support.