United States General Accounting Office

GAO Testimony

Before the Committee on Commerce, Science, and

Transportation, U.S. Senate

For Release on Delivery

Expected at

9:30 a.m., EST

Wednesday

Oct. 29, 1997

NATIONAL OCEANIC AND

ATMOSPHERIC

ADMINISTRATION

Issues on the Civilianization of

the Commissioned Corps

Statement by L. Nye Stevens

Director, Federal Management and Workforce Issues

General Government Division

GAO/T-GGD-98-22

Summary 

National Oceanic and Atmospheric

Administration: Issues on the Civilianization

of the Commissioned Corps

The National Oceanic and Atmospheric Administration (NOAA) Corps is a

uniformed service whose officers carry out a variety of navigational and

scientific functions and whose members are covered by a military-like

compensation system. In October 1996, GAO issued a report on the results

of its limited review of (1) issues concerning the NOAA Corps as a

uniformed service with military-like pay, allowances, and benefits and

(2) what would be the comparative cost of using civilian employees, rather

than uniformed officers, to carry out the NOAA Corps’ functions.

GAO reported the following:

• In the 1800s, the Coast and Geodetic Survey—the organization that

eventually became NOAA—relied on personnel from the Departments of the

Army and Navy to augment its civilian complement that was charged with

surveying the then uncharted U.S. shoreline. By the outbreak of World War

I, both departments had withdrawn their detailed personnel. However,

ships and men qualified to operate them were needed immediately for the

war effort. It was then that Congress passed legislation authorizing the

president to transfer the Coast and Geodetic Survey’s ships and men to the

Navy and War Departments for the duration of the war and to give military

rank to those Survey field officers who served in the military. In 1920, the

Joint Service Pay Act extended the Navy’s pay, allowances, and retirement

system to members of the Survey who held Navy ranks.

• NOAA Corps officers receive virtually the same pay and benefits as military

personnel. However, the Corps carries out civilian rather than military

functions. Although NOAA describes the essential functions of the Corps to

be deck officers aboard NOAA ships and a mobile cadre of professionals

who can be assigned wherever needed, often in hazardous conditions,

civilian employees in other agencies are often assigned to similar duties.

Further, the Corps is not subject to the Uniform Code of Military Justice,

which underlies military personnel management, and the Department of

Defense’s war mobilization plans did not envision a role for the Corps.

• Using the estimate of a contractor hired by NOAA to determine the

comparative costs of using civilian employees rather than Corps officers to

carry out NOAA Corps functions, and GAO’s adjustment for a more complete

comparison, GAO estimated that the cost to the government would have

been about $661,000 lower from July 1994 through June 1995 if civilian

employees had carried out the Corps’ work. GAO’s estimate compared two

alternative ways of staffing the existing NOAA Corps functions and did not

factor in the costs of transitioning to civilian staff. No transition plan

existed at the time of GAO’s review, and the details of such a plan could

materially affect such costs.

Page 1 GAO/T-GGD-98-22
Statement 

National Oceanic and Atmospheric

Administration: Issues on the Civilianization

of the Commissioned Corps

Madam Chairwoman and Members of the Committee:

I am pleased to be here today to discuss a report that we completed last

year on the National Oceanic and Atmospheric Administration’s (NOAA)

Commissioned Corps.1

 The NOAA Corps is a uniformed service whose

officers carry out a variety of navigational and scientific functions, such as

charting and oceanographic research, and whose members are covered by

a military-like compensation system. Our report, prepared at the request of

Representatives Lamar Smith and John Kasich, was issued in October 1996

and provided information on (1) issues concerning the NOAA Corps as a

uniformed service with military-like pay, allowances, and benefits and

(2) what the costs would be if federal civilian employees carried out the

Corps’ functions.

As these objectives suggest, ours was a limited review. Generally, we

developed information on why the NOAA Corps exists and what the Corps

officers’ duties are; how the Corps is similar to and different from the

military services; and what would be the comparative costs of using

civilian employees versus uniformed officers to carry out the Corps’

functions. As described later in this statement, our review did not include

an examination of Corps functions or restructuring or any potential

savings related thereto. Also, our cost estimate was developed, in part, on

the basis of a cost comparison done by Arthur Andersen LLP. Like its cost

estimate, our estimate compared two alternative ways of staffing the

existing NOAA Corps function and did not factor in the costs of

transitioning to civilian staffing.

Background The organization that became NOAA was established in 1807 and became

known officially as the Coast Survey in 1836. The Coast Survey dispatched

technical and scientific teams to survey the uncharted U.S. shoreline and

relied on the Departments of the Army and Navy to supply personnel to

augment the organization’s civilian employees. After the Civil War, the

Army withdrew from the Coast Survey’s work. The Navy withdrew during

the Spanish-American War, leaving the work to be done solely by the

employees of the newly named Coast and Geodetic Survey.

At the outbreak of World War I, when ships and men who were qualified to

operate the ships were needed immediately to augment the military forces,

Congress passed legislation authorizing the president to: (1) transfer the

1

Federal Personnel: Issues on the Need for NOAA’s Commissioned Corps (GAO/GGD-97-10, Oct. 31,

1996).

Page 2 GAO/T-GGD-98-22
Statement 

National Oceanic and Atmospheric

Administration: Issues on the Civilianization

of the Commissioned Corps

Coast and Geodetic Survey’s ships and men to the Navy and War

Departments for the duration of the war and (2) officially to give military

rank to Survey field officers when these officers were serving in the Army

or Navy. The Joint Service Pay Act of 1920 extended the Navy’s pay,

allowances, and retirement system to members of the Coast and Geodetic

Survey who held ranks equivalent to Navy officers. In 1965, the Coast and

Geodetic Survey became the Environmental Science Services

Administration, and, in 1970, it became part of the newly formed NOAA.

Currently, NOAA has both civilian employees and CORPS officers.

NOAA Corps’

Similarities to and

Differences From the

Military Services

The NOAA Corps carries out civilian functions, rather than military

functions. NOAA Corps officers operate and manage NOAA’s research and

survey ships that collect the data needed to support fishery management

plans, oceanographic and climate research, and hydrographic surveys.

NOAA Corps officers also fly and manage NOAA’s aircraft that are used to

penetrate hurricanes for research and to carry out surveys for forecasting

floods and mapping changing U.S. shorelines. They are assigned to work in

all offices of NOAA.

2

 According to Corps officials, NOAA Corps officers can

expect to serve one-third of their careers in each of the following work

categories: (1) sea duty; (2) shore duty that involves responsibilities in

marine centers, vessel support, geodetic surveys, or aircraft operations;

and (3) shore duty that involves management and technical support

throughout NOAA. Although NOAA Corps officers who serve at sea have few

civilian employee counterparts at NOAA, other agencies use federal civilian

employees or contractors to carry out duties similar to the functions NOAA

assigns to the Corps.

Corps officials said that the essential functions of the uniformed Corps are

to serve as deck officers aboard NOAA ships and to be a mobile cadre of

professionals who can be assigned with little notice to any location and

function where their services are necessary, often in hazardous or harsh

conditions. We found that some Corps assignments are of this nature, but

civilian employees in other agencies are often assigned to duties similar to

those of the Corps. For example, the Environmental Protection Agency

(EPA), the National Transportation Safety Board, and the Federal

Emergency Management Agency use civilian employees to respond

quickly to disasters and other emergency situations. Moreover, we found

that EPA and the Navy used ships operated by civilian employees or

2

NOAA is composed of five line offices—(1) the National Marine Fisheries Service; (2) the Office of

Oceanic and Atmospheric Research; (3) the National Weather Service; (4) the National Ocean Service;

and (5) the National Environmental Satellite, Data, and Information Service—and the Office of the

Administrator.

Page 3 GAO/T-GGD-98-22
Statement 

National Oceanic and Atmospheric

Administration: Issues on the Civilianization

of the Commissioned Corps

contractors in conducting their oceanic research. Also, NOAA ships have

been operated on occasion by Wage Marine (civilian) deck officers, and

NOAA officials termed this approach successful.3

Although NOAA Corps officers perform civilian functions, they receive

virtually the same pay and benefits as members of the military. Corps

members’ entitlement to military ranks and military-like compensation,

including eligibility for retirement at any age after 20 years of service, was

an outgrowth of their temporary service with the armed forces during

World Wars I and II. The NOAA Corps has not been incorporated into the

armed forces since World War II, and we were told that the Department of

Defense’s (DOD) war mobilization plans envisioned no role for the Corps in

the future.

In a 1984 report,4 DOD provided a detailed discussion of the criteria and

principles used to justify the military compensation system. According to

this report, the main purpose of the military compensation system is to

ensure the readiness and sustainability of the armed forces. The NOAA

Corps is not considered an armed service, and Corps officers are not

subject to the Uniform Code of Military Justice, which underlies how

military personnel are managed.5

 Accordingly, NOAA cannot press criminal

charges or pass sentence against an officer who disobeys orders, and

Corps officers can quit the Corps without legal sanctions.

Comparative Cost of

Using Civilian

Employees or Corps

Officers

NOAA contracted with Arthur Andersen LLP to determine the comparative

costs of using civilian employees rather than Corps officers to carry out

the Corps’ functions. The contractor’s report was issued August 30, 1995.6

We examined the contractor’s approach and methodology and generally

found them to be similar to those we would have used. Thus, other than

making an adjustment we believed was necessary for a more complete

comparison, we accepted the contractor’s estimates of the comparative

3

A Wage Marine is an employee paid under the prevailing rate pay system in the excepted service who

serves as a master or mate on NOAA ships. A prevailing rate employee generally is an individual

employed in a recognized skilled mechanical trade or craft. The excepted service consists of civil

service positions that are neither part of the competitive service nor the Senior Executive Service.

4

The Fifth Quadrennial Review of Military Compensation, Department of Defense, January 1984.

5

Under a 1917 statute, the president can incorporate the NOAA Corps into the military service in the

event of a national emergency. Since all military personnel are subject to the Uniform Code of Military

Justice, Corps officers, after being incorporated into the military, would be subject to the code. This

situation has not occurred since World War II.

6

National Oceanic and Atmospheric Administration Commissioned Officer Corps: Comparison of

NOAA Corps versus Federal Employees, Arthur Andersen LLP, August 30, 1995.

Page 4 GAO/T-GGD-98-22
Statement 

National Oceanic and Atmospheric

Administration: Issues on the Civilianization

of the Commissioned Corps

costs of using Corps officers and civilian employees. On the basis of the

contractor’s report and the adjustment that we made, we estimated that

the cost to the government would have been about $661,000 lower during

July 1994 through June 1995, if civilian employees had been used.7

The contractor’s report concluded that if civilians rather than Corps

officers had been used to carry out the Corps’ functions in the year ending

June 30, 1995, costs would have been $573,000 higher. This estimate was

based on actual costs incurred during the year ending June 30, 1995, and

on a Corps strength of 384 officers. However, the report did not include in

its comparison the federal income tax advantage that Corps officers

receive from their housing and subsistence allowances. Like members of

the military, NOAA Corps officers pay no federal income taxes on these

allowances.8

 The “cost” to the government arising from this tax advantage

comes in the form of a loss to the U.S. Treasury of the federal income

taxes that otherwise would have been paid if the allowances were taxable.

Federal civilian employees receive no such tax advantage; they must pay

their living expenses from their fully taxable salaries.

According to its report, Arthur Andersen LLP did not include the Corps

members’ tax advantage as a cost of maintaining the Corps because it did

not represent “costs incurred by the Federal Government.” However,

because the tax advantage represents a revenue loss to the government

and is of considerable monetary value to Corps members, we believe that

it should be included in any cost comparison. Since NOAA Corps officers

receive the same base pay and housing and subsistence allowances as

military officers at the same ranks, we used the DOD’s tax advantage

estimates to determine the tax advantage afforded to Corps members. We

estimated that the annual tax advantage associated with the housing and

subsistence allowance amounts used in the Arthur Andersen LLP study

would be $1,234,000 a year. Adjusting the Arthur Andersen LLP study

results by the estimated tax advantage amount results in a total

government cost for the Corps of $30,942,000 for the year, compared with

the estimated $30,281,000 cost of using civilian employees—a difference of

$661,000.

7

The actual net cost reduction would vary, depending on various factors, including the method by

which any changes are implemented, the applicability of 1994 costs to future years, and the accuracy

of the underlying assumptions concerning Corps and civilian personnel costs.

8

A major component of military and Corps compensation is termed “Regular Military Compensation.”

This component includes basic pay, nontaxable housing and subsistence allowances, and the tax

advantage accorded to members through the nontaxable allowances.

Page 5 GAO/T-GGD-98-22
Statement 

National Oceanic and Atmospheric

Administration: Issues on the Civilianization

of the Commissioned Corps

In presenting our cost comparison figure, I would like to emphasize that

this was a 1-year cost comparison prepared in 1996. It was based on a

Corps staff of 384 and used the pay rates and benefit costs that existed at

the time. Since then, the Corps staff has been reduced to about 270 and

pay rates and benefit costs also have changed. As a result, it is likely that

any estimated cost savings based on a comparison of the use of civilian

employees rather than Corps officers made today would be different.

Further, if a decision were made to civilianize the NOAA Corps, whether

there would be any actual cost reductions would depend, in part, on the

manner in which a transition to civilian employment would be carried out,

including the period over which the transition would occur and what

retirement benefits or credits for service would be given. We did not

estimate transition costs because no transition plan existed and the details

of such a plan could materially affect such costs. In addition, we did not

examine whether NOAA Corps functions or the number of persons used to

accomplish those functions were necessary or could be changed as a

result of civilianization. Thus, the report did not address issues such as

whether civilianization of the Corps could present opportunities for

possible savings through restructuring or consolidating NOAA operations.

Neither did the report examine the possibility of contracting with private

companies, rather than using civilian employees, to carry out the Corps’

current functions.

This concludes my prepared statement. I would be pleased to answer any

questions the Committee may have.

(410224) Page 6 GAO/T-GGD-98-22
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100