**NOT FOR PUBLICATION**

**UNTIL RELEASED BY THE**

**COMMISSION ON THE NATIONAL**

**GUARD AND RESERVES**

**STATEMENT OF**

VICE ADMIRAL JOHN G. COTTON, U. S. NAVY

**CHIEF OF NAVY RESERVE**

**BEFORE THE\
**

COMMISSION ON THE NATIONAL GUARD AND RESERVES

**ON**

**NATIONAL GUARD AND RESERVE COMPONENT PROGRAMS**

###### 

####### July 19, 2006

**NOT FOR PUBLICATION**

**UNTIL RELEASED BY THE**

**COMMISSION ON THE NATIONAL**

**GUARD AND RESERVES**

**I. Introduction**

Chairman Punaro, distinguished members of the commission, thank you for
the opportunity to speak today about the Navy and its Navy Reserve.

Our Navy Reserve continues its transformation to better support combat
and combat service support missions throughout the world. Navy
Reservists are no longer solely a strategic force waiting for the call
to mobilize in a war between nation-states. They are operational and
forward, fighting the Global War on Terror (GWOT) as Seabees in Iraq,
civil affairs Sailors in Afghanistan, customs inspectors in Kuwait,
logistical aircrew and Joint Task Force staff in the Horn of Africa, and
as relief workers in disaster recovery operations in the United States
and around the world.

Congress has been very supportive of the Navy Reserve. Congress passed
legislation in the 2006 National Defense Authorization Act that provided
force-shaping tools allowing the Navy to best distribute Sailors within
the Total Force, such as authorizing the flexibility to transfer funds
from Reserve Annual Training (AT) accounts to Reserve Active Duty (AD)
accounts. Congress also supported adding an additional \$10M for the
Non-Prior Service Boot Camp program (Full Accession Program).  This
additional funding allowed us to kick-start the program in FY06.  Navy
is increasing funding for this program in FY07.

Reserve Component (RC) Sailors are serving selflessly and are fully
integrated throughout the Department of Defense, with our coalition
partners and with every civil support agency. Our Sailors and their
families continue to earn our respect and gratitude for their service
and their many sacrifices. As part of the All Volunteer Force, they
REserve again and again, freely giving of their skills and capabilities
to enhance the Total Force team. On behalf of these brave men and women
and their families, thank you for devoting your time and expertise to
this commission as you help strengthen our nation's defense.

**[Single Manpower Resource Sponsor]{.underline}.** Navy is taking a
Total Force approach to delivering the workforce of the 21^st^ century.
The Total Navy consists of active and reserve military, civil service,
and contractors. The Total Navy will deliver a more responsive workforce
with new skills, improved integrated training and will be better
prepared to meet the challenges of the Long War. As the Chief of Naval
Personnel testified before Congress, the Navy is concentrating this
effort in a single resource sponsor: the Manpower, Personnel, Training
and Education (MPT&E) enterprise. Our Navy Reserve is an integral part
of the MPT&E and is working closely with the Chief of Naval Personnel to
best leverage all Navy resources to produce the greatest warfighting
capabilities possible.

Our "One Navy" goal is to be better aligned to determine the future
force (capabilities, number, size and mix) based on Department of
Defense and Department of Navy strategic guidance and operational needs.
Specifically, the new MPT&E domain will deliver:

-   *A Workforce Responsive to The Joint Mission*: Derived from the
    needs of Joint Warfighters.

-   *A Total Force*: Providing a flexible mix of manpower options to
    meet warfighting needs while managing risk.

-   *Cost Effectiveness*: Delivering the best Navy workforce value
    within fiscal constraints and realities.

**[Strategy for Our People]{.underline}.** To accomplish the optimal
distribution of trained Sailors throughout the Total Force, the MPT&E is
developing a "Strategy for Our People." This strategy will provide the
guidance to assess, train, distribute and develop our manpower to become
a mission-focused Total Force that meets the warfighting requirements of
the Navy.

Each Navy Reservist fills a crucial role in the Total Navy, providing
skill sets and capabilities gained in both military service and civilian
life. For example, a Sailor who learned to operate heavy equipment on
active duty, and who is currently employed as a foreman in the
construction industry, brings both military and civilian skill sets to
his unit or individual augmentee assignment.

Additionally, RC Sailors can perform the same mission while training at
home as they do when deployed. For instance, harbor patrol Sailors use
the same core skill sets training in Portland, Boston, Charleston and
Jacksonville harbors as they use in Ash Shuaybah, Kuwait. Sailors also
use these skill sets when acting as first responders within the United
States. While Hurricane Katrina was still crossing Louisiana and
Mississippi, Navy Reserve Seabees were driving their personal vehicles
in the eye of the hurricane to provide search and rescue capabilities
followed by their traditional "can do" reconstruction efforts. After a
tornado hit Evansville, Indiana, at night, the local Navy Operational
Support Center served as a communications and emergency triage
headquarters, and Sailors immediately responded with search and rescue
teams, saving lives.

**[Continuum of Service]{.underline}.** Our Active Component (AC) and RC
Sailors receive valuable experience and training throughout their
careers, and our vision for the future is to create a "Continuum of
Service" system that enables an easy transition between statuses. We are
building a personnel system in which Sailors can move between AC and RC
based on the needs of the service and availability of the member to
support existing requirements. To make these transitions seamless, the
Navy will develop smooth "on ramp" and "off ramp" opportunities. Sailors
will serve on active duty for a period of time, then train and work in
the Reserve Force and, with minimal administrative effort, return to
active duty. The Navy will offer experienced Sailors the ability to
transition between statuses when convenient, while incentivizing rate
changes and service assignments at the right time and place, all in a
"Continuum of Service" throughout their careers. All Reservists, Full
Time Support (FTS), Selected Reserve (SELRES) and even our important
Individual Ready Reserve (IRR) members, will benefit from increased
opportunities to serve and REserve.

**II. Changing Demand Signals -- New and Non-Traditional Missions**

Navy Sailors continue to support the GWOT in Southwest Asia, around the
world and at home. Almost 5,000 RC Sailors are currently mobilized and
serving in various capability areas such as Navy Coastal Warfare,
Seabees, Intelligence, cargo airlift, cargo handlers, customs
inspectors, civil affairs, port security, medical (including doctors,
nurses and hospital corpsmen), and on the staff of every Combatant
Commander (COCOM).

**[Operational Support]{.underline}.** Mobilization alone does not
reflect the total contribution of the Navy's Reserve. On any given day,
an additional 15,000 RC Sailors are providing support to the Fleet,
serving in a variety of capabilities, from flight instructor duties to
counter narcotics operations, from standing watch with the Chief of
Naval Operations staff to relief support for Hurricane's Katrina, Rita
and Wilma.

To define the Total Force requirements and maximize operational support,
Commander, Fleet Forces Command (CFFC) commenced a continuous Reserve
Zero-Based Review (RZBR) process in 2004. Navy and joint mission
requirements were prioritized, followed by a thorough analysis of RC
manpower available to meet those requirements. The ZBR continues to
facilitate Active Reserve Integration (ARI), placing RC billets in
various AC units where the requirement for surge capabilities and
operational support is predictable and periodic. This capabilities-based
review also enabled the Fleet to develop mission requirements that were
inclusive and dependent upon skill sets and capabilities resident within
its aligned RC.

The Navy supports 21 joint capability areas, built on the foundations of
Sea Strike, Sea Shield, Sea Basing and FORCEnet, and the Navy RC is
fully integrated in all enterprises. Excellent examples of ARI are
highlighted in CENTCOM, where 50 percent of the Navy individual
augmentee (IA) requirement is being met by RC Sailors. Operational
Health Support Unit (OHSU) Dallas deployed with 460 medical and dental
specialists for 11 months, during which the unit maintained health
clinics in Iraq and hospitals in Kuwait. These Sailors relieved an Army
unit, set up their medical capabilities in the Army Camp, and provided
integrated joint health care to all services.

Navy's newly established Navy Expeditionary Combat Command (NECC)
integrates the RC expeditionary and combat service support capabilities
into one Total Force command. The Naval Construction Force has 139 units
comprised of AC and RC Sailors, and Naval Coastal Warfare continues to
rebalance active and reserve personnel to meet COCOM requirements.

Fleet Response Units (FRU) are directly integrated with AC aviation
units. FRU Sailors maintain and operate the same equipment as Fleet
personnel, supporting the Fleet Response Plan (FRP) by providing
experienced personnel who are qualified and ready to rapidly surge to
deployed Fleet units. This ARI initiative reduces training costs by
having all Sailors maintain and operate the same equipment. No longer
are the Active and Reserve Components using different configurations for
different missions.

Another ARI initiative is the Squadron Augmentation Unit (SAU), which
provides experienced maintenance personnel and qualified flight
instructors to Fleet Replacement Squadrons (FRS) and Training Commands.
Experienced RC technicians and aviators instruct both AC and RC Sailors
to maintain and fly current Fleet aircraft at every FRS.

**[The Reserve Order Process]{.underline}.** One constraint to these
initiatives is the reserve order processes. The current system has
multiple types of Reserve orders: Inactive Duty for Training (IDT),
Inactive Duty for Training-Travel (IDTT), Annual Training (AT), Active
Duty for Training (ADT), and Active Duty for Special Work (ADSW).

In addition to multiple types of orders, the funding process for these
various types of orders can be equally complex. Navy is currently
evaluating process options that will streamline the system and make
support to the fleet more seamless. In fact, efforts such as the August
2005 conversion of Navy Reserve Order Writing System to ADSW order
writing have already improved the situation for Sailors and the fleet by
allowing the same order writing system to be used for both ADT/AT and
ADSW. Additionally, the Navy Reserve is also addressing these issues by
emphasizing and increasing ADSW usage, which is simply "work" funding
for operational support to the Fleet, rather than the previous way of
doing business with training orders for work. The baseline data call of
required work was initiated in 2005 with an implementation goal of
accurately funded ADSW accounting lines in FY08. COCOMs continue to
review operational support requirements and the appropriate level of
funding for the GWOT and surge operations. Emphasizing ADSW will be a
significant evolution in the Navy\'s effort to integrate its Reserve
Force capabilities by aligning funding sources and accurately resourcing
the accounts responsible for Navy Reserve operational support.

**III. Size and Shape of the Force**

The total number of Navy Reservists, both SELRES and FTS, is requested
to be 71,300 for Fiscal year 2007. The ongoing ZBR and effective ARI
continue to optimally integrate the capabilities of the Total Force,
which optimizes the force mix of AC and RC Sailors needed to support the
Fleet while still providing effective surge operational support.

**[Common AC/RC Pay System]{.underline}.** A common pay and personnel
system that provides for a seamless transition from AC to RC is
essential to the success of our "Continuum of Service" and "Sailor for
Life" programs. Ideally, manpower transactions will someday be
accomplished on a laptop with a mouse click, and data will be shared
through a common data repository with all DoD enterprises. Navy fully
supports the vision of an integrated set of processes and tools to
manage all pay and personnel needs for the individual, and provide
necessary levels of personnel visibility to support joint warfighter
requirements. The processes and tools should provide the ability for a
clean financial audit of personnel costs and support accurate, agile
decision making at all levels of the Department of Defense through a
common system and standardized data structure.

######## IV. Recruiting

**[Accessions]{.underline}.** Navy Reserve accessions are drawn from
multiple sources, but we are increasingly focused on the trained and
experienced Navy veteran. Our leadership is constantly emphasizing a
"Continuum of Service" and "Sailor for Life" themes that enable Sailors
to more easily transition between components. The entire Total Force
chain of command is committed to changing the culture of service and
REservice by continually educating AC Sailors about the benefits of
continued service as members of any of the Reserve Components.

**[National Call to Service]{.underline}.** About one third of the Navy
Reserve accessions are non-prior service. A relatively new accession
source for non-prior service Sailors is the National Call to Service
(NCS), with contracts that include both AC and RC service as part of a
recruit's initial military obligation. Congress first authorized this
program in NDAA 2003. The NCS program is enjoying considerable success,
and is helping to mitigate some of the prior-service shortages in
ratings that are critical to the prosecution of the GWOT. Under this
program, a recruit enlists for an active duty commitment of 15 months
after training. At the end of the commitment, the individual can be
extended on active duty or commit to two years of drilling in the
Selected Reserve. Navy has been particularly aggressive in recruiting
Masters at Arms and Hospital Corpsmen for this program, and the first
recruits are completing their AC service and will begin drilling in the
Navy Reserve this year. Navy's success in attracting recruits for this
program is steadily growing. We assessed 998 recruits in 13 ratings in
FY04, and 1,866 recruits in 23 ratings in FY05. Navy has a goal of 2,166
NCS recruits in 44 different ratings this year, and will continue this
successful program in FY07.

**[New Accession Training]{.underline}.** Formerly called the Non-Prior
Service -- Basic (NPS-B) program, New Accession Training combines Navy
boot camp with an "Apprenticeship" school and produces an immediately
mobilizable Selected Reservist. It can include an increased bonus of up
to \$20,000, and the Navy is reporting recruiting success in the first 2
months since its implementation. The Navy anticipates much lower
attrition rates with this form of accessions than with previous
non-prior service accession programs, which required significant
follow-on training and that did not produce a \"full up round\" Sailor.
New Accession Training Reservists are committed to six years of service.

**[Attrition]{.underline}.** Attrition and recruiting are a crucial part
of maintaining the Total Force. Fortunately, the GWOT is not having an
appreciable affect on attrition. Navy Reserve attrition is currently 27
percent and has remained at approximately the same level for the past
five years. The Navy is working to improve its understanding of why
Sailors choose to leave the Reserve Force and how to better retain
trained and ready Sailors.

**[Enlisted Recruiting]{.underline}.** FY06 Navy Reserve enlisted
recruiting continues to be challenging, with [6,744]{.underline}
recruits attained out of a goal of 11,180 as of [June 30]{.underline},
2006. Although the Navy Recruiting Command has focused every Active and
Reserve recruiter on the RC mission, it only accessed 85% of the FY05 RC
enlisted goal, recruiting 9,788 against a target of 11,491. Navy
attributes the recruiting shortfalls to several causes, including the
continued strong retention of AC Sailors. The GWOT has caused an
increase in the number of recruits needed by the Army and Marine Corps,
with competitive bonuses offered by all services. Civilian unemployment
rates remain low, and public opinion influencers, such as friends and
family, are less likely to recommend military service as a career.

To address Navy Reserve recruiting challenges and to promote continued
success in recruiting the active force, Navy is increasing the amount of
enlistment bonuses for both prior service and non-prior service Reserve
accessions. Congress combined the non-prior service enlistment and prior
service affiliation bonus into a single accession authority payable as a
lump sum with a maximum cap of \$20,000. The Reserve re-enlistment of
\$15,000 has also been authorized as a lump sum payment. These programs
will enhance the attractiveness of service in the Reserve for those
currently in our targeted ratings.

Other measures being taken to address the Reserve recruiting shortfall
include implementation of expanded authorities provided by Congress in
NDAA 2006. These include authority to pay Reserve Affiliation Bonuses in
lump sum, enhanced high-priority unit assignment pay, and increases in
the amount of the Reserve Montgomery G.I. Bill. Navy is also applying
force-shaping tools to attract non-rated Reserve Sailors to undermanned
ratings. We are also providing incentives for veterans to retrain into
high demand skillsets when they reenlist in the Navy Reserve.

**[Officer Recruiting]{.underline}.** Reserve Officer recruiting
continues to fall short. The primary market for RC officers is Navy
veterans and, as in enlisted recruiting, high retention of AC officers
reduces the pool of available candidates. Reserve Medical Officer
Programs are especially hard hit in today's environment, with multiple
factors affecting recruiting, including competing civilian salaries,
larger number of non-traditional students with a decreased propensity
toward military service, and long tours of duty overseas (6-18 months)
that increase the risk of losing civilian practices while deployed. We
are looking at limiting overseas tours to 90 days to attract and recruit
RC medical professionals to contribute to the GWOT.

######## V. Readiness

In addition to having the right Sailor assigned to the right billet, all
Sailors must be ready to answer the call to serve. They must be
medically, physically, and administratively ready to deploy. Every
Commander is held accountable for their unit's overall readiness, which
includes all facets of individual Sailor readiness. Readiness is
reviewed bi-weekly at Regional Commander VTCs with the Commander Navy
Reserve Forces Command, and during annual Fitness Report reviews.

**[Medical Readiness]{.underline}.** Navy Reserve is a leader in medical
readiness. In 2002, the Navy Reserve developed the Medical Readiness
Reporting System (MRRS) as a comprehensive tracking system for
Individual Medical Readiness (IMR). MRRS, a web-based application with a
central aggregating database, links with existing authoritative data
systems to reduce data input requirements and improve data accuracy.
MRRS gives headquarters staffs and leadership a real-time view of force
medical readiness, and received the 2005 DoN CIO IM/IT Excellence Award
for Innovation. It is being adopted throughout the Department of the
Navy to give Commanders the web-based tool they need to more effectively
and efficiently measure and predict IMR.

Navy Reserve continues to be a DoD leader in percent of personnel who
are Fully Medically Ready (FMR). In October 2004, Navy Reserve reported
44 percent FMR personnel and, with an ongoing emphasis on MRRS
utilization by all commands, showed a dramatic improvement in January
2006 to 73 percent FMR per DoD IMR standards.

**[Physical Readiness]{.underline}.** Navy Reserve is actively
participating in Total Force solutions to address physical readiness.
The CNO's "Fitness Board of Advisors" is exploring methodologies for
changing the culture of fitness in the Navy to ensure a ready, fighting
force. The Secretary of the Navy's "Health and Productivity Management"
group is addressing the impact of a fit force on work productivity. Many
participants are members of both groups in order to facilitate the
exchange of good ideas. Further, Navy Reserve is working with BUPERS to
revise the Physical Readiness Information Management System (PRIMS) to
more accurately capture fitness testing data.

**[Administrative Readiness]{.underline}.** Navy Reserve tracks
administrative readiness with the "Type Commander (TYCOM) Readiness
Management System -- Navy Reserve Readiness Module" (TRMS-NRRM), which
provides a scalable view of readiness for the entire Force. This Navy
Reserve developed system has served as the prototype for the "Defense
Readiness Reporting System" (DRRS), and links to many DoD systems. Navy
Reserve leaders have utilized accurate data for all categories and
elements since the first data call in 2003, and can quickly determine
readiness information for individuals, units, activities, regions, and
any other desired capability breakouts.

######## VI. Transformation

Navy Reserve continues to lead DoD RC transformation. Through the Base
Realignment and Closure (BRAC) process, Navy Reserve Centers (NRC) are
consolidating into larger, more centralized Navy Operational Support
Centers (NOSC) 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 (ROI) of
precious RPN and OM&NR funding, with better utilization of
administration and staff support for SELRES, while aligning with Navy
Regional Commanders instead of separate RC Regions. Whenever possible,
our RC Sailors have indicated a strong desire to "flex drill" at their
AC supported commands, which achieves a greater level of readiness and
operational support, as well as Total Force integration.

######## VII. Summary

###### 

Our Navy Reserve is evolving from a dispersed strategic force of the
Cold War to an adaptive and responsive operational force that will be
required to meet the surge requirements for future asymmetric threats.
Change of this magnitude is not easy and challenges both AC and RC
leadership to rapidly become more integrated while thoroughly
communicating the vision to the Total Force. We greatly appreciate the
full support of Congress and the Commission on National Guard and
Reserves as we implement initiatives that will better align AC and RC
personnel and equipment, providing additional resources to recapitalize
the Navy of the future.

The future success of our Navy and the Nation requires dominance of the
maritime domain, and will be dependent upon a Reserve Force that is
ready, relevant and responsive. Our Navy Reserve is busy transforming
its processes, becoming more integrated with both Navy and joint forces,
and is more ready than ever for any tasking. We are providing global
operational support, and our RC Sailors have and will continue to answer
the call to "be ready" to support the Combatant Commanders and prevail
in the Long War.