MILITARY 

COMPENSATION

Additional Actions Are 

Needed to Better 

Manage Special and 

Incentive Pay 

Programs

Report to the Committee on Armed 

Services, U.S. Senate

February 2017

GAO-17-39

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-39, a report to the 

Committee on Armed Services, U.S. Senate

February 2017

MILITARY COMPENSATION

Additional Actions Are Needed to Better Manage 

Special and Incentive Pay Programs

What GAO Found

The Department of Defense’s (DOD) special and incentive (S&I) pay obligations 

for active duty servicemembers decreased from fiscal years 2005 through 2015 

from $5.8 billion to $3.4 billion (about 42 percent) in constant 2015 dollars (see 

fig.). DOD officials attributed the decrease to a combination of reduced overseas 

contingency operations, a reduced annual average strength of the force, and a 

favorable recruiting climate. DOD does not collect and report complete S&I 

obligation data for the reserve components because, according to officials, there 

is no requirement to do so and the services would likely need to make changes 

to their financial and personnel systems to separately track the obligations. 

However, according to officials, DOD has not explored cost-effective approaches 

to collect and report this information, which would better position the department 

to know the full cost of its S&I pay programs. 

Active Duty Personnel Special and Incentive Pay Program Obligations and Total Active Duty 

Average Strengths, Fiscal Years 2005 - 2015

The military services largely applied key principles of effective human capital 

management in the design of their S&I pay programs for nuclear propulsion, 

aviation, and cybersecurity occupations. However, the application of these key 

principles varied by service and occupation. Only the Navy’s S&I pay programs 

for nuclear propulsion and aviation fully addressed all seven principles; programs 

for other occupations and services generally exhibited a mixture of full and partial 

application. GAO found that, according to officials, DOD and the services had not 

taken steps to fully ensure consistent application of the principles. For example, 

DOD has not reviewed the extent to which its S&I pay programs have 

incorporated principles of effective human capital management and used 

resources efficiently. DOD also has not established related measures to ensure 

efficient use of resources. Without such measures, DOD and the services 

generally assess the effectiveness of S&I pay programs by the extent to which 

they achieve desired staffing targets. However, this approach does not ensure 

that S&I pay programs are using resources in the most efficient manner, as DOD 

guidance requires. Until DOD reviews the extent to which S&I pay programs 

have incorporated human capital management principles and used resources 

efficiently—and develops related measures for efficient use of resources—DOD 

and the services may lack assurance that S&I pay programs are effective and 

that resources are optimized for the greatest return on investment. 

View GAO-17-39. For more information, 

contact Brenda S. Farrell at (202) 512-3604 or 

farrellb@gao.gov.

Why GAO Did This Study

DOD uses S&I pay programs to 

compensate and incentivize 

servicemembers for occupations that 

are dangerous, less desirable, or 

require special skills. Senate Report 

114-49 included a provision for GAO to 

review the effectiveness of DOD's S&I 

pay programs. This report assesses (1) 

trends in DOD obligations for S&I pay 

programs for fiscal years 2005 through 

2015 and the extent to which DOD 

reports such obligations departmentwide; and (2) the extent to which the 

military services applied key principles 

of effective human capital 

management in the design of S&I pay 

programs for selected high-skill 

occupations for fiscal years 2010 

through 2015. 

GAO analyzed DOD S&I pay 

obligations for fiscal years 2005 

through 2015; reviewed a 

nongeneralizable sample of S&I pay 

programs for nuclear propulsion, 

aviation, and cybersecurity 

occupations, chosen based on their 

pay programs’ attributes; compared

DOD and service policies and 

documents with key principles of 

effective human capital management; 

and interviewed DOD officials.

What GAO Recommends

GAO is making five recommendations, 

including that DOD explore reporting 

reserve S&I pay program data, review 

the incorporation of human capital 

management principles and use of 

resources, and develop related 

measures. DOD concurred with three 

recommendations and partially 

concurred with two. GAO continues to 

believe that actions to fully address 

these two recommendations are 

needed, as discussed in the report.
Page i GAO-17-39 Special and Incentive Pay

Letter 1

Background 5

Obligations for Special and Incentive Pays for Active Duty 

Personnel Have Decreased since Fiscal Year 2005, but DOD 

Does Not Report Comparable Data for Reserve Component 

Personnel 9

The Military Services Varied in Their Application of Key Principles 

of Effective Human Capital Management in S&I Pay Programs 

for Selected Occupations and Have Not Taken Steps to Fully 

Ensure Effectiveness in Program Design 17

Conclusions 27

Recommendations for Executive Action 28

Agency Comments and Our Evaluation 28

Appendix I DOD’s Progress in Consolidating Special and Incentive Pays 31

Appendix II Case Study on Nuclear Propulsion Pays 35

Appendix III Case Study on Aviation Pays 47

Appendix IV Case Study on Cyber Workforce Pays 57

Appendix V Objectives, Scope, and Methodology 70

Appendix VI Comments from the Department of Defense 77

Appendix VII GAO Contact and Staff Acknowledgments 80

Related GAO Products 81

Contents
Page ii GAO-17-39 Special and Incentive Pay

Tables

Table 1: Special and Incentive Pay Programs Used for Select 

Occupations, Fiscal Years 2010 – 2015 6

Table 2: GAO Analysis of DOD Special and Incentive Pays 

Consolidation Status 32

Table 3: Special and Incentive Pays Available to Officers in the 

Navy’s Nuclear Propulsion Occupation 37

Table 4: Special and Incentive Pays Available to Enlisted 

Personnel in the Navy’s Nuclear Propulsion Occupation 39

Table 5: Special and Incentive Pays Provided to Pilots, Fiscal 

Years 2010 – 2015 50

Table 6: Active Duty Aviation Continuation Pay Contract Amounts 53

Table 7: Special and Incentive Pays Provided to Retain Cyber 

Personnel, Fiscal Years 2010–2015 60

Table 8: Comparison of Services’ Use of Selective Reenlistment 

Bonuses Offered for a 4-Year Contract for Selected 

Cyber-Related Career Fields, Fiscal Years 2010–2015 61

Table 9: Special Duty Assignment Pay and Assignment Incentive 

Pay Offered to Army Cybersecurity Personnel in Army 

Cyber Command, Fiscal Year 2015 63

Table 10: Average Per-Person Rate of Selective Reenlistment 

Bonuses for Cyber-Related Career Fields/Ratings by 

Service, Fiscal Years 2010–2015 68

Figures

Figure 1: Active Duty Personnel Special and Incentive Pay 

Obligations and Total Active Duty Average Strengths, 

Fiscal Years 2005 - 2015 10

Figure 2: Obligated Amounts for Special and Incentive Pays and 

Bonuses Provided to Active Duty Personnel by Special 

and Incentive Pay Category, Fiscal Years 2005 - 2015 12

Figure 3: Assessment of Military Service Special and Incentive 

Pay Programs for Selected Occupations against Key 

Principles of Effective Human Capital Management 18

Figure 4: DOD’s Timeline for Implementing Consolidation of 

Special and Incentive Pays into Eight Categories 32

Figure 5: Sailors in the Navy’s Nuclear Propulsion Program 

Operate and Maintain the Nuclear Reactors That Power 

Aircraft Carriers and Submarines 35
Page iii GAO-17-39 Special and Incentive Pay

Figure 6: Average Annual Obligations for Navy’s S&I Pays for 

Nuclear Personnel and for Other Active Duty Personnel 

and Activities, Fiscal Years 2010 - 2015 42

Figure 7: Annual Obligations for and Recipients of the Navy’s 

Nuclear Officer Incentive Pay Program, Including—

Nuclear Officer Continuation Pay, Nuclear Career Annual 

Incentive Bonus, and Nuclear Career Accession Bonus, 

Fiscal Years 2010 - 2015 43

Figure 8: Annual Obligations for and Recipients of the Navy’s 

Selective Reenlistment Bonus for Nuclear Personnel, 

Fiscal Years 2010 - 2015 44

Figure 9: Annual Obligations for and Recipients of the Navy’s 

Special Duty Assignment Pay for Nuclear Personnel, 

Fiscal Years 2010 - 2015 45

Figure 10: Annual Obligations for and Recipients of the Navy’s 

Enlisted Supervisor Retention Pay for Nuclear Personnel, 

Fiscal Years 2010 - 2015 46

Figure 11: Examples of Military Pilots 47

Figure 12: Total Funds Obligated for Aviation Career Incentive 

Pay by Service, Fiscal Years 2010 – 2015 52

Figure 13: Total Obligations for Aviation Continuation Pay, Fiscal 

Years 2010 – 2015 54

Figure 14: Sailors Assigned to the Navy Cyber Defense 

Operations Command 57

Figure 15: Number of Selective Reenlistment Bonus Recipients 

and Total Dollars Obligated on Selective Reenlistment 

Bonuses for Career Fields Identified to Include 

Cybersecurity Army Personnel, Fiscal Years 2010–2015 65

Figure 16: Number of Selective Reenlistment Bonus Recipients 

and Total Dollars Obligated on Selective Reenlistment 

Bonuses for Career Fields Identified to Include 

Cybersecurity Navy Personnel, Fiscal Years 2010–2015 66

Figure 17: Number of Selective Reenlistment Bonus Recipients 

and Total Dollars Obligated on Selective Reenlistment 

Bonuses for Career Fields Identified to Include 

Cybersecurity Enlisted Marine Corps Personnel, Fiscal 

Years 2010–2015 67
Page iv GAO-17-39 Special and Incentive Pay

Abbreviations

ACIP Aviation Career Incentive Pay

AIB Annual Incentive Bonus

AIP Assignment Incentive Pay

ACP Aviation Continuation Pay

COPAY Nuclear Officer Continuation Pay

DOD Department of Defense

ESRP Enlisted Supervisor Retention Pay

NCAB Nuclear Career Accession Bonus

NOAB Nuclear Officer Accession Bonus

NOIP Nuclear Officer Incentive Pay

QRMC Quadrennial Review of Military Compensation 

RPA Remotely Piloted Aircraft

S&I Special and Incentive

SDAP Special Duty Assignment Pay

SDIP Sea Duty Incentive Pay

SSIP Submarine Support Incentive Pay

SRB Selective Reenlistment Bonus

U.S.C. United States Code

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Page 1 GAO-17-39 Special and Incentive Pay

441 G St. N.W.

Washington, DC 20548

February 3, 2017

The Honorable John McCain

Chairman

The Honorable Jack Reed

Ranking Member

Committee on Armed Services

United States Senate

The Department of Defense (DOD) uses special and incentive (S&I) pay 

programs as tools in its compensation system to help ensure that military 

pay is sufficient to field a high-quality, all-volunteer force, including those 

in hard-to-fill or critical specialties.1 Collectively, these pay programs aim 

to help DOD compensate and incentivize servicemembers for 

occupations that are dangerous, are less desirable, or require special 

skills and training for which higher compensation is available in the 

civilian labor market. In fiscal year 2015, DOD obligated more than $3.4 

billion for S&I pays, representing about 3.3 percent of its budget for active 

duty cash compensation.

Cash compensation, which includes S&I pays and basic pay, is part of a 

comprehensive compensation package that the department provides to 

military personnel, which also includes noncash benefits such as health 

care and deferred compensation such as retirement pensions. In its 

budget request for fiscal year 2017, DOD noted that it must sustain a 

robust pay and benefits package to retain the best warfighters to execute 

the national defense strategy.2 However, DOD also noted the department 

must ensure that its military personnel compensation requirements—

which comprise about one-third of the current military budget—do not 

crowd out investments in the readiness and modernization portions of the 

budget. In fiscal year 2008 Congress authorized a consolidation of the 

existing 60 S&I pay authorities (legacy authorities) into 8 authorities 

(consolidated authorities) based on broad categories of personnel and 

 1 We use the term “special and incentive pays” to refer to special pays, incentive pays, 

and bonuses authorized in chapter 5 of Title 37 of the U.S. Code.

2 DOD, Office of the Undersecretary of Defense Chief Financial Officer, Defense Budget 

Overview: United States Department of Defense Fiscal Year 2017 Budget Request (Feb. 

2016). 

Letter
Page 2 GAO-17-39 Special and Incentive Pay

activities.3 DOD is in the process of implementing the consolidated 

authorities by revising existing pay programs in conformance with the new 

authorities. Implementation of this change must be complete by January 

28, 2018. For additional information on the status of DOD’s 

implementation efforts, see appendix I.

We have issued multiple products and made many recommendations 

related to DOD’s efforts to effectively manage its military personnel 

compensation incentives. Our March 2011 report on duplication and 

opportunities for cost savings in government programs found that DOD 

and Congress have expanded military pay and benefits using a 

piecemeal approach rather than a total compensation approach that could 

help to balance the appropriateness, affordability, and sustainability of 

personnel-related costs. The report referenced our past 

recommendations, including a 2007 recommendation that DOD should 

establish a clear compensation strategy that includes performance 

measures to evaluate the efficiency of compensation in meeting recruiting 

and retention goals.4 DOD has taken some steps to evaluate the 

effectiveness of specific pay and benefits included in military 

compensation but has not comprehensively assessed the effectiveness of 

its mix of pays and benefits and used the results to develop a 

compensation strategy as we recommended. Most recently, in November 

2015, we reported on the extent to which the Office of the Secretary of 

Defense, Department of the Army, and the Army National Guard have 

conducted their oversight responsibilities of the Army National Guard’s 

financial incentives programs.5 We found that, although Department of 

the Army and National Guard regulations require evaluations of the 

effectiveness of the Army National Guard financial incentives programs—

 3 National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181 (Jan. 28, 

2008) (Fiscal Year 2008 NDAA). Congress’s authorization enacted a DOD 

recommendation to consolidate S&I pays into eight broad categories. In its Report of the 

Tenth Quadrennial Review of Military Compensation (Sept. 2008), DOD noted in part that 

the large number of legacy pays made the system difficult to administer and that the 

degree of flexibility varied among pays. DOD recommended consolidating the many 

existing pays into a smaller number of broad categories that would offer the advantages of 

efficiency, flexibility, and effectiveness.

4 GAO, Military Personnel: DOD Needs to Establish a Strategy and Improve Transparency 

over Reserve and National Guard Compensation to Manage Significant Growth in Cost, 

GAO-07-828 (Washington, D.C.: Jun. 20, 2007).

5 GAO, Military Recruiting: Army National Guard Needs to Continue Monitoring, Collect 

Better Data, and Assess Incentives Programs, GAO-16-36 (Washington, D.C.: Nov. 17, 

2015). 
Page 3 GAO-17-39 Special and Incentive Pay

including S&I pays such as enlistment and reenlistment bonuses—the 

Army and the Army National Guard had not evaluated and documented 

the effectiveness of the programs.6 Further, we reported that DOD did not 

include Reserve Component obligation data in required reports that are 

used to help ensure that DOD is using the most efficient and costeffective processes in the recruitment of new personnel. On the basis of 

our findings, we recommended that the Secretary of the Army, in 

conjunction with the Director, Army National Guard, exercise their 

oversight responsibilities by evaluating and documenting the 

effectiveness of the Army National Guard’s incentives program in meeting 

its goals. In addition, we recommended that DOD enforce its requirement 

for the Reserve Components to submit information on the amounts of 

incentives obligated and incorporate the required information in the 

recruiting resources reports. DOD concurred with the recommendations, 

and has taken action to implement the second recommendation. For 

additional information on our prior work on military personnel 

compensation incentives, see a list of related products at the end of this 

report.

A Senate Armed Services Committee report accompanying a bill for the 

National Defense Authorization Act for Fiscal Year 2016 includes a 

provision for us to review the effectiveness of DOD’s S&I pay programs.7

This report assesses (1) trends in DOD obligations for S&I pay programs 

for fiscal years 2005 through 2015, and the extent to which DOD reports 

such obligations department-wide; and (2) the extent to which the military

services applied key principles of effective human capital management in 

the design of S&I pay programs for recruitment and retention of 

servicemembers in selected high-skill occupations for fiscal years 2010 

through 2015.

To address our first objective, we obtained and analyzed data on S&I pay 

programs from the annual budget justification materials published by 

DOD and the military services. We analyzed obligations for S&I pays from 

their active and Reserve Component military personnel accounts for fiscal

years 2005 through 2015. We selected this timeframe to enable us to 

evaluate trends over time, and fiscal year 2015 was the most recent year 

 6 Army Regulation 135-7, Army National Guard and Army Reserve Incentives Programs

(Apr. 15, 1996), and National Guard Regulation 600-7, Selected Reserve Incentive 

Programs (Aug. 12, 2014).

7 S. Rep. 114-49 (2015), accompanying S. 1376, a proposed bill for the National Defense 

Authorization Act for Fiscal Year 2016.
Page 4 GAO-17-39 Special and Incentive Pay

of available obligations data at the time of our review. To assess the 

reliability of the data on S&I pays, we assessed the completeness of the 

data and compared the data against other data sources. As a result of our 

assessment and discussions with DOD officials, we determined that 

obligation data for active component S&I pay programs were sufficiently 

reliable. DOD’s Financial Management Regulation, which provides a 

uniform budget and accounting classification that is to be used for 

preparing budget estimates, requires the Reserve Components to report 

obligations for certain recruiting and retention bonuses but does not 

require the services to report all Reserve Component S&I obligation data 

separately from other types of compensation. As such, we requested data 

on Reserve Component obligations for S&I pay programs from each of 

the services. We determined that obligation data for Reserve Component 

S&I pay programs—other than those for the Marine Corps Reserve—

were unreliable due to incompleteness or inconsistency, as discussed 

later in this report. Further, we examined DOD policy, key statutes, 

accounting standards, and federal internal control standards for 

developing and reporting cost information to determine the extent to 

which they were followed by DOD when reporting on S&I pay 

obligations.8

To address our second objective, we selected a non-generalizable 

sample of S&I pay programs associated with high-skill occupations from 

across the military services to review in greater detail as case studies. In 

selecting the case studies, we sought to include (1) a mix of S&I pay 

programs associated with an occupation-specific pay authority and S&I 

pay programs that apply authorities that are available across occupation 

types; (2) programs containing pays in varying stages of implementation; 

and (3) at least one emerging occupation. We selected the S&I pay 

programs associated with the following three occupations, identified as 

“high-skill” in the congressional provision in Senate Report 114-49, for 

focused study: aviation, cybersecurity, and nuclear propulsion. These 

occupations were chosen because each service uses different 

approaches to offering S&I pays to aviators; cybersecurity is an emerging 

 8 The Chief Financial Officer’s Act of 1990, Pub. L. No. 101-576 (Nov. 15, 1990) 

underscores the importance of improving financial management in the federal 

government. Among other things, the act calls for developing and reporting cost 

information. Statement of Federal Financial Accounting Standard Number 4, “Managerial 

Cost Accounting Standards and Concepts,” is aimed at providing reliable and timely 

information on the full cost of federal programs, their activities, and outputs. GAO, 

Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: Nov. 1999).
Page 5 GAO-17-39 Special and Incentive Pay

occupation for which there are no designated S&I pays; and while the 

nuclear propulsion occupation is limited to one military service, it is a 

relatively high-cost S&I pay program. While the findings of the case 

studies cannot be generalized to all S&I pay programs across DOD, they 

reflect a range of characteristics of such programs and are associated 

with skills and missions deemed critical by the department. To identify 

criteria for evaluating the effectiveness of S&I pay programs designed to 

recruit and retain military servicemembers, we reviewed a compilation of 

GAO’s body of work on human capital management and DOD’s human 

capital guidance.9 Using these sources, we selected seven key principles 

of effective human capital management that can be applied to assess the 

effectiveness of the services’ S&I pay programs’ design.10 We applied 

these seven key principles to DOD and service practices for designing 

their S&I pay programs associated with the three case study occupations 

we selected. In addition to using the key principles, we also compared 

aspects of DOD’s S&I pay program guidance with federal internal control 

standards that emphasize the importance of establishing clear and 

consistent agency objectives.11 This report provides the results of our 

three case studies, and appendixes II through IV provide additional 

information and analysis for each case study. For additional details on our 

scope and methodology, see appendix V.

We conducted this performance audit from July 2015 to February 2017 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

 9 GAO, A Model of Strategic Human Capital Management, GAO-02-373SP (Washington, 

D.C.: Mar. 15, 2002); GAO, Human Capital: Key Principles for Effective Strategic 

Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11, 2003); GAO, High-Risk 

Series: An Update, GAO-11-278 (Washington, D.C.: February 2011); Department of 

Defense, Eleventh Quadrennial Review of Military Compensation (June 2012); 

Department of Defense, DOD Diversity and Inclusion Strategic Plan 2012-2017 (2012).

10 The seven key principles are listed in figure 3 of this report.

11 GAO/AIMD-00-21.3.1.

Background
Page 6 GAO-17-39 Special and Incentive Pay

The Department of Defense’s military compensation package includes a 

collection of pays and benefits used to retain and recruit active duty 

servicemembers, including basic pay, allowances for housing and 

subsistence, and federal tax advantages. In addition, servicemembers 

can be provided with compensation for specific duties and occupations or 

conditions of service in the form of S&I pays. As we reported in 2011, 

DOD and the services are authorized to offer various S&I pays that 

provide targeted monetary incentives to specific groups of personnel to 

influence the numbers of personnel in specific situations in which less 

costly methods have proven inadequate or impractical.12

The services use a variety of S&I pay programs to help meet staffing 

targets for the three high-skill occupations we selected as case studies for 

this review (see table 1). These S&I pay programs are generally used to 

improve accession and retention of servicemembers. We discuss the 

services’ use of S&I pays to support these occupations in more detail in 

appendixes II – IV.

Table 1: Special and Incentive Pay Programs Used for Select Occupations, Fiscal Years 2010 – 2015

Officer Enlisted

Nuclear Propulsion

Navy • Nuclear Career Accession Bonus

• Nuclear Career Annual Incentive Bonus

• Nuclear Officer Accession Bonus

• Nuclear Officer Continuation Pay

• Submarine Support Incentive Pay

• Assignment Incentive Pay

• Enlisted Supervisor Retention Pay

• Sea Duty Incentive Pay

• Selective Reenlistment Bonus

• Special Duty Assignment Pay

Aviation

Army • Assignment Incentive Pay

• Aviation Career Incentive Pay

• Aviation Continuation Pay

• Selective Reenlistment Bonus 

Navy • Aviation Career Incentive Pay

• Aviation Continuation Pay

N/A

Marine Corps • Aviation Career Incentive Pay

• Aviation Continuation Pay

• Selective Reenlistment Bonus

 12 GAO, Military Cash Incentives: DOD Should Coordinate and Monitor Its Efforts to 

Achieve Cost-Effective Bonuses and Special Pays, GAO-11-631 (Washington, D.C.: June 

21, 2011).

Purpose and Benefits of 

S&I Pays

S&I Pay Programs Used 

to Help Meet Staffing 

Targets for Three HighSkill Occupations
Page 7 GAO-17-39 Special and Incentive Pay

Officer Enlisted

Air Force • Assignment Incentive Pay

• Aviation Career Incentive Pay

• Aviation Continuation Pay

N/A

Cybersecurity

Army • Assignment Incentive Pay • Assignment Incentive Pay

• Selective Reenlistment Bonus

• Special Duty Assignment Pay

Navy N/A • Selective Reenlistment Bonus

Marine Corps N/A • Selective Reenlistment Bonus

Air Force N/A • Selective Reenlistment Bonus

Legend: N/A = Not applicable. No special and incentive pays were offered to personnel in these categories.

Source: GAO analysis of DOD data. | GAO-17-39

Note: In addition to the special and incentive pays listed above, the services also offered enlistment 

bonuses to enlisted personnel who served in nuclear propulsion, aviation (remotely piloted aircraft 

operators), and cybersecurity career fields from fiscal year 2010 through fiscal year 2015. However, 

this table does not include enlistment bonuses because service officials told us that at the time the 

servicemember enlists in the armed services enlistment bonuses are generally not linked to a 

servicemember’s occupation. Servicemembers in these occupations do not necessarily receive these 

pays concurrently. The pay programs listed in this table for the aviation occupation apply only to 

those personnel directly responsible for the flight operations of an aircraft.

In its 2008 Report of The Tenth Quadrennial Review of Military 

Compensation (QRMC), DOD recommended consolidating the more than 

60 S&I pays into 8 broad categories in order to increase the pay system’s 

flexibility and effectiveness as a force management tool. These 

categories include enlisted force management pay, officer force 

management pay, nuclear officer force management pay, aviation officer 

force management pay, health professions officer force management pay, 

hazardous duty pay, assignment or special duty pay, and skill incentive or 

proficiency pay. Prior to the release of DOD’s Tenth QRMC in 2008, 

Congress authorized the consolidation of the 60 legacy authorities into 8

authorities based on the categories. This change is required to be 

completed by January 28, 2018. In addition to the 8 consolidated 

authorities, existing authorities for the 15-year career status bonus and 

the critical skills retention bonus were retained.13 According to DOD, as of 

October 2016, 5 of the 8 consolidated special pay authorities had been 

fully or partially implemented by revising and transitioning existing S&I 

pay programs in conformance with the new consolidated authorities. 

According to a DOD official, implementation of the remaining 3

 13 The 8 newly created consolidated pay categories and the two retained bonus 

authorities are classified in chapter 5, subchapter II of Title 37 of the U.S. Code. 

DOD’s Effort to 

Consolidate S&I Pay 

Categories
Page 8 GAO-17-39 Special and Incentive Pay

consolidated authorities is expected to be completed by October 2017. In 

June 2011 we recommended that DOD monitor its efforts in consolidating 

S&I pay programs under its new authorities to determine whether 

consolidation resulted in greater flexibility.14 DOD officials had previously 

stated that they would not be able to assess whether the consolidation 

resulted in greater flexibility until the consolidation is complete. See 

appendix I for additional details on DOD’s implementation of the 

consolidation effort.

Within the Office of the Secretary of Defense, the Deputy Under 

Secretary of Defense for Personnel and Readiness is responsible for 

DOD personnel policy and total force management. The Principal Deputy 

Under Secretary of Defense for Personnel and Readiness, under the 

Under Secretary of Defense for Personnel and Readiness, is responsible 

for providing overall guidance in the administration of the enlistment 

bonus, accession bonus for new officers in critical skills, selective 

reenlistment bonus, and critical skills retention bonus programs. It is DOD 

policy that the military services use enlistment, accession, reenlistment, 

and retention bonuses as incentives in meeting personnel requirements. 

The intent of bonuses is to attract and retain servicemembers in specific 

skills or career fields in which less costly methods have proven 

inadequate or impractical. According to policy, the military services must 

exercise this authority in the most cost-effective manner, considering 

bonus employment in relation to overall skill, training, and utilization 

requirements. Military skills selected for the award of enlistment, 

accession, reenlistment, and/or retention bonuses must be essential to 

the accomplishment of defense missions.15

 14 GAO-11-631.

15 DOD Instruction 1304.29, Administration of Enlistment Bonuses, Accession Bonuses for 

New Officers in Critical Skills, Selective Reenlistment Bonuses, and Critical Skills 

Retention Bonuses for Active Members (Dec. 15, 2004), (incorporating change July 11, 

2016).

Roles and Responsibilities 

for the S&I Pay Program
Page 9 GAO-17-39 Special and Incentive Pay

DOD has experienced an overall decrease in active duty S&I pay 

obligations since fiscal year 2005, but it does not report comparable data 

on Reserve Component S&I pay programs.16 Our analysis of DOD’s 

annual budget data shows that the obligations of S&I pays for active duty 

military personnel, after accounting for inflation, decreased by 42 percent 

from fiscal year 2005 through fiscal year 2015, from $5.8 billion to $3.4 

billion.17 The 42 percent S&I pay obligation decrease from fiscal years 

2005 through 2015 also coincided with a 12 percent decline in active duty 

military average strengths. DOD officials attributed the decrease to a 

combination of reduced overseas contingency operations, a reduced 

annual average strength of the force, and a favorable recruiting climate.

DOD does not report complete information on S&I pay obligations for the 

Reserve Components, in part because DOD’s Reserve Components are 

not required to separately collect and report all S&I pay obligations in 

annual budget materials provided to Congress, thus limiting the extent to 

which we could identify and evaluate changes occurring within Reserve 

Components’ S&I pay programs.

Our analysis of DOD budget data shows that from fiscal year 2005 

through fiscal year 2015 the department’s active duty S&I pay obligations 

decreased by 42 percent, from $5.8 billion to $3.4 billion (see figure 1). In 

comparison, during the same time, the total active duty military personnel 

obligations decreased by 10 percent—largely due to end strength 

reductions. Obligations for active duty S&I pays increased from $5.8 

billion in fiscal year 2005 to $7.1 billion in fiscal year 2008 (by 22 percent), 

largely due to the increased use of S&I pays by the Army and the Marine 

Corps. Service officials attributed the increase to the Army and Marine 

Corps Grow-the-Force initiative.18 After peaking in 2008, active duty S&I 

pay obligations declined to $3.4 billion in fiscal year 2015. DOD officials 

 16 Reserve components include the Army National Guard, the Army Reserve, the Air 

National Guard, the Air Force Reserve, the Navy Reserve, and the Marine Corps Reserve.

17 Obligations are derived from actual obligations recorded in DOD’s annual budget 

materials and are presented in fiscal year 2015 dollars. To convert obligations to constant 

dollars, we used the series of military personnel deflators for fiscal years 2005 through 

2015 listed in DOD’s National Defense Budget Estimates for fiscal year 2015, published 

by the Office of the Under Secretary of Defense (Comptroller).

18 In January 2007, the President announced an initiative, referred to as “Grow-the-Force,”

to increase the end strengths in the Army and the Marine Corps by a combined total of 

101,000 by 2013.

Obligations for 

Special and Incentive 

Pays for Active Duty 

Personnel Have 

Decreased since 

Fiscal Year 2005, but 

DOD Does Not 

Report Comparable 

Data for Reserve 

Component 

Personnel

Obligations for Special 

and Incentive Pays for 

Active Duty Personnel 

Decreased from Fiscal 

Years 2005 through 2015
Page 10 GAO-17-39 Special and Incentive Pay

attributed this decrease to a combination of reduced overseas 

contingency operations, a drawdown in forces, and an economic 

recession that led to a more favorable recruiting climate and less need to 

offer S&I pays. As shown in figure 1, the 42 percent S&I pay obligation 

decrease from fiscal years 2005 through 2015 also coincided with a 12 

percent decline in active duty military average strengths, demonstrating 

the services’ ability to adjust certain S&I pays in response to changing 

economic conditions and labor market dynamics, as well as trends in the 

number of military personnel.19

Figure 1: Active Duty Personnel Special and Incentive Pay Obligations and Total 

Active Duty Average Strengths, Fiscal Years 2005 - 2015

Note: Obligation amounts include obligations for overseas contingency operations and mobilized 

Reserve Component servicemembers. Mobilized reservists are also included in the average strength 

data.

From fiscal years 2005 through 2015, obligations for S&I pays varied 

across the pay categories under which legacy S&I pays are being 

consolidated (see figure 2). Specifically, since the peak in fiscal year 

2008, obligations in all but three consolidated S&I pay categories 

 19 “Military average strength” reflects the fiscal year average of monthly end strength data 

for enlisted personnel. “End strength” represents the actual number of personnel on board 

at the end of a fiscal year.

Trends Varied across S&I 

Pay Categories
Page 11 GAO-17-39 Special and Incentive Pay

decreased. For example, obligations for hazardous duty pay, which 

consolidated legacy pays that traditionally operated as entitlement 

authority and was paid to servicemembers performing hazardous duties 

enumerated in statute, peaked in fiscal year 2008 to $1.2 billion due to 

the operational tempo and steadily declined as a result of the drawdown 

in forces to $259 million in fiscal year 2015 (by 79 percent).20 Similarly, 

the general bonus pay for enlisted members, which accounted for 29 

percent of the total obligations for S&I pays from fiscal years 2005 

through 2015, grew from $1.7 billion in fiscal year 2005 to $2.5 billion in 

fiscal year 2008 (by 47 percent) and subsequently declined to $727 

million in fiscal year 2015 (by 71 percent). Service officials attributed the 

increase to the Army and Marine Corps Grow-the-Force initiative, which 

resulted in an increased use of enlistment and retention bonuses, and 

attributed the subsequent decrease to the drawdown in forces and the 

economic recession. Service officials noted that while obligations and the 

number of Selective Reenlistment Bonus (SRB) contracts have declined 

overall since fiscal year 2008, for certain high demand specialties, such 

as special operations, cyber, and nuclear personnel, obligations and the 

numbers of bonus contracts have increased due to the need to retain 

these personnel.

 20 “Entitlement authority” is the authority to make payments for which budget authority is 

not provided in advance by an appropriation act to any person under the provisions of the 

law containing such authority. The U.S. government is legally required to make the 

payments to such persons who meet the requirements established by law.
Page 12 GAO-17-39 Special and Incentive Pay

Figure 2: Obligated Amounts for Special and Incentive Pays and Bonuses Provided to Active Duty Personnel by Special and 

Incentive Pay Category, Fiscal Years 2005 - 2015

Note: Obligations are reported in fiscal year 2015 constant dollars. Obligation amounts include 

obligations for overseas contingency operations and mobilized Reserve Component servicemembers.

The Reserve Components did not consistently collect and report 

complete obligation data for each S&I pay program. Specifically, the 

Reserve Components’ budget justification materials did not contain 

obligation data for S&I pays provided to Guard and reserve members to 

the same level of detail as the active component, and the Marine Corps 

Reserve was the only Reserve Component able to provide total 

obligations for S&I pays.21 Depending on the type of duty they are 

performing, Reserve Component members may be eligible for special and 

incentive pays, such as aviation career incentive pay, foreign language 

proficiency pay, special pays for health professionals, diving duty pay, 

hazardous duty pays, and others. Reservists are generally eligible for 

 21 Our analyses of S&I pay obligations for the reserve component included part-time and 

full-time reservists but excluded reservists who were mobilized since they are paid out of 

the active component’s budget. Part-time reservists are required to maintain readiness 

through scheduled drilling and training, usually one weekend a month (i.e., inactive duty 

training) and 2 weeks a year (i.e., annual training). Full-time reservists serve as full-time 

administration and support staff to the various reserve components.

DOD Could Not Provide 

Complete Obligation Data 

on Special and Incentive 

Pays for All Reserve 

Components
Page 13 GAO-17-39 Special and Incentive Pay

special and incentive pays during active duty training under the same 

conditions as active component personnel. Typically, they may receive a 

pro-rated portion of the full monthly amount corresponding to the number 

of days served. Reserve component members may also be eligible for 

special and incentive pays during inactive duty for training, and they 

typically receive such compensation at a rate proportional to the amount 

of inactive duty compensation they receive (i.e., one-thirtieth of the 

monthly rate for each unit training assembly).22

Our review of the services’ annual budget materials found that the 

services did not report Reserve Component S&I pay obligations in their 

annual budget materials in a manner consistent with the active 

component. This was because DOD’s Financial Management 

Regulation,

23 which provides guidance for a uniform budget and 

accounting classification that is to be used for preparing budget 

estimates, including the budget justification materials we reviewed, does 

not require the services to do so. For the active military personnel budget 

materials, the regulation contains guidance and a framework that require 

the services to separately report obligations for each S&I pay. In contrast, 

the regulation requires the Reserve Components to list obligations for 

certain bonuses but does not require them to report obligations for all S&I 

pays separately; instead, it specifies that many Reserve Component S&I 

pays be grouped together with other military personnel obligations under 

a single budget activity.24 For example, in accordance with DOD 

guidance, all the Reserve Components reported obligations for 

accession, reenlistment, and enlistment bonuses for their administration 

and support personnel. In addition to the bonuses, the Navy Reserve 

separately identified obligations for aviation continuation pay and foreign 

language proficiency pay in its annual budget materials for its 

administration and support personnel. The Air Force Reserve also 

separately identified obligations for foreign language proficiency pay in its 

 22 A unit training assembly is generally a 4-hour period of instruction, and there are usually 

four unit training assemblies per drill weekend.

23 Department of Defense 7000.14R, Financial Management Regulation (May 2015).

24 DOD’s Financial Management Regulation specifies that special pay and incentive pay 

for hazardous duty obligations for active duty for training personnel should be grouped 

with obligations for other pay and allowances, such as basic pay and basic allowance for 

housing, under a single budget subactivity. DOD’s Financial Management Regulation also 

specifies that incentive pay for hazardous duty obligations for inactive duty for training 

personnel should be grouped with basic pay, retired pay accrual, and social security under 

a single budget subactivity.
Page 14 GAO-17-39 Special and Incentive Pay

annual budget materials for its administration and support personnel. 

However, for many of the other S&I pays, the services grouped S&I pay 

obligations with other military personnel obligations under a single budget 

activity, as is allowed under the regulation.

We requested that the Reserve Components provide us with S&I pay 

obligation data that were not contained in annual budget materials, but 

the Marine Corps reserve was the only Reserve Component that was 

able to provide obligations for each S&I pay for all the years included in 

our review (fiscal years 2005 through 2015). Army, Navy, and Air Force 

officials told us that their systems were not originally designed to collect 

and report obligations for individual S&I pays for the Reserve 

Components. As a result, the Army and the Air Force could not provide 

additional data. The Navy provided some additional data, but we 

determined that these data were not reliable because of inconsistencies 

and incompleteness. For example, the Navy could not provide obligation 

data for all S&I pays—instead providing execution data.25 Further, 

according to Navy officials, certain S&I pays are not consistently 

categorized in their system, making it difficult to identify cost trends in 

these S&I pays over time. Further, these services could not provide the 

portion of their Reserve Components’ military personnel budgets that S&I 

pay obligations represent. S&I pay obligations for the Marine Corps 

Reserve accounted for roughly 2 percent ($172 million) of its total military 

personnel budget on average from fiscal years 2005 through 2015. 

However, this percentage may not be representative of all the services’

Reserve Components, as the services’ reliance on S&I pays can vary, as 

we observed variability among the active components. Similarly to active 

duty S&I pay obligations, Marine Corps Reserve data also indicated that 

obligations peaked in fiscal year 2009 due in part to an increased offering 

of new enlistment bonuses. According to Marine Corps officials, this 

increase helped to support recruitment and retention of additional Marines 

required to sustain two major theater combat operations as well as to 

provide forces to Special Operations, Cyberspace Operations, and 

various headquarters staffs.

 25 The term “obligation” refers to a definite commitment by a federal agency that creates a 

legal liability to make payments immediately or in the future. Agencies incur obligations, 

for example, when they award grants or sign contracts. An “expenditure” is the actual 

spending of money by the issuance of checks, disbursement of cash, or electronic transfer 

of funds made to liquidate a federal obligation. GAO, A Glossary of Terms Used in the 

Federal Budget Process, GAO-05-734SP (Washington, D.C.: Sept. 2005).
Page 15 GAO-17-39 Special and Incentive Pay

The Office of the Under Secretary of Defense (Comptroller) has 

established budgetary information as a priority area for DOD’s Financial 

Improvement and Audit Readiness Plan. The Comptroller’s memorandum 

establishing these priorities states that, because budgetary information is 

used widely and regularly for management, DOD will place the highest 

priority on improving its budgetary information and processes.26 In 

support of DOD’s policy to use the most efficient and cost-effective 

processes in the military services’ recruitment of new personnel, DOD 

components are required to track and report all resource information 

applicable to enlisted members and officers who join the military services, 

including recruitment incentives.27 Furthermore, according to key statutes

and accounting standards, agencies should develop and report cost 

information.28 Besides demonstrating financial accountability in the use of 

taxpayer dollars by showing the full cost of federal programs, the cost 

information can be used by the Congress and federal executives in 

making decisions about allocating federal resources, authorizing and 

modifying programs, and evaluating program performance. The cost 

information can also be used by program managers in making managerial 

decisions to improve operating economy and efficiency.

According to the Office of the Under Secretary of Defense (Comptroller), 

there is no requirement to collect and report obligations separately for 

each of the Reserve Component’s S&I pays. For example, guidance such 

as DOD’s Financial Management Regulation for DOD’s annual budget 

justification materials does not require the Reserve Components to collect 

and report such data. As a result, with the exception of the Marine Corps 

Reserve, the Reserve Components have not collected and reported S&I 

pay obligations separately. Furthermore, officials noted that there is no 

requirement to collect this information because the Reserve Component 

personnel generally accrue S&I pays at a much lower rate than do active 

duty personnel. DOD officials told us that the services would likely need 

to make programming changes to various financial and personnel 

 26 DOD, Under Secretary of Defense (Comptroller) Memorandum, “Priorities for Improving 

Financial Information and Processes for Achieving Audit Readiness,” Aug. 11, 2009.

27 DOD Instruction 1304.32, Military Services Recruiting Related Reports (Mar. 26, 2013).

28 The Chief Financial Officer’s Act, Pub. L. No. 101-576 (Nov. 15, 1990) underscores the 

importance of improving financial management in the federal government. Among other 

things, the act calls for developing and reporting cost information. Statement of Federal 

Financial Accounting Standard Number 4, “Managerial Cost Accounting Standards and 

Concepts,” is aimed at providing reliable and timely information on the full cost of federal 

programs, their activities, and outputs.
Page 16 GAO-17-39 Special and Incentive Pay

systems in order to separately track and report Reserve Component S&I 

pay obligations in their budget materials. However, DOD officials were 

unable to provide estimates of the costs associated with making such 

changes, and they told us that DOD has not explored other approaches 

that may be cost-effective to collect and report such information. 

According to federal internal control standards, agencies should have 

financial data to determine whether they are meeting their goals for 

accountability for the effective and efficient use of resources, which would 

apply to DOD in gauging the cost-effectiveness of changes to its financial 

and personnel systems for tracking and reporting S&I pay obligations for 

reservists.29 Although S&I pay amounts provided to Reserve Component 

servicemembers are most likely a fraction of what is paid to the active 

component servicemembers, the total amounts could add to hundreds of 

millions of dollars over time, on the basis of data provided by the Marine 

Corps. Furthermore, according to Marine Corps officials, analysts were 

able to obtain data on S&I obligations for the fiscal years under our review 

using their financial pay systems without making any changes to these 

systems. Until DOD explores cost-effective approaches to collect and 

report S&I pay program data for the Reserve Components, DOD may not 

know the full cost of its S&I pay programs, may not be able to make fully 

informed decisions about resource allocation, and may not be able to 

evaluate program performance over time.

 29 GAO/AIMD-00-21.3.1.
Page 17 GAO-17-39 Special and Incentive Pay

The military services have largely applied key principles of effective 

human capital management in using S&I pay programs to retain 

servicemembers within our selected case study occupations (nuclear 

propulsion, aviation, and cybersecurity). However, the consistency with 

which the services applied these principles varied by service and by 

occupation. DOD and the services have not taken steps to fully ensure 

consistent application of principles of human capital management in some 

S&I pay programs for selected occupations and thereby ensure 

effectiveness in the programs’ design.

Our review found that the military services largely applied key principles 

of effective human capital management in selected S&I pay programs. 

However, the consistency with which they applied the principles varied 

across the services and across selected nuclear, aviation, and 

cybersecurity occupations. In our March 2002 report on strategic human 

capital management, we stated that making targeted investments in 

employees is a critical success factor associated with acquiring, 

developing, and retaining talent.30 Our report noted that, in making such 

investments, agencies must consider competing demands and limited 

resources and must balance and prioritize those factors. Similarly, in its 

Eleventh QRMC, DOD outlined a number of “core elements” for ensuring 

that investments in S&I pay strategies are cost-effective and optimize 

limited resources.31 On the basis of our prior work and the 

recommendations from DOD’s QRMC, we selected seven key principles 

of human capital management that can be applied to assess whether the 

services’ S&I pay programs are designed to ensure their effectiveness. 

These seven key principles of human capital management include, 

among other things, decision-making about human capital investment that 

 30 GAO-02-373SP.

31 DOD, Report of the Eleventh Quadrennial Review of Military Compensation (June 

2012).

The Military Services 

Varied in Their 

Application of Key 

Principles of Effective 

Human Capital 

Management in S&I 

Pay Programs for 

Selected Occupations 

and Have Not Taken 

Steps to Fully Ensure 

Effectiveness in 

Program Design

The Military Services 

Largely Applied Key 

Principles of Human 

Capital Management in 

S&I Pay Programs, but 

Consistency Varied across 

the Services and Selected 

Occupations
Page 18 GAO-17-39 Special and Incentive Pay

is based largely on the expected improvement of agency results and is 

implemented in a manner that fosters top talent; consideration of 

replacement costs when deciding whether to invest in recruitment and 

retention programs; and assessments of civilian supply, demand, and 

wages that inform updates to agency plans as needed. Figure 3 lists the 

seven key principles and our assessment of the extent to which they were 

addressed in the military services’ S&I pay programs for each of our three 

case study occupations.

Figure 3: Assessment of Military Service Special and Incentive Pay Programs for Selected Occupations against Key 

Principles of Effective Human Capital Management
Page 19 GAO-17-39 Special and Incentive Pay

Note: We reviewed a compilation of GAO’s body of work on human capital management and DOD’s 

human capital guidance. Using these sources, we selected seven key principles of human capital 

management that can be applied to assess the effectiveness of the services’ S&I pay programs.

Based on our analysis of military service policies and guidance, annual 

S&I pay program proposals submitted to the Office of the Secretary of 

Defense (Personnel and Readiness), and interviews with officials, we 

determined that the services largely applied key human capital principles 

to the S&I pay programs for three selected occupations (nuclear 

propulsion, aviation, and cybersecurity). The extent to which the 

principles were applied varied in consistency by service and by 

occupation.

The Navy’s nuclear propulsion program demonstrated consistent 

application of all seven principles throughout the use of S&I pays for both 

officers and enlisted personnel. We found that the Navy uses a four-part 

approach to planning, implementing, and monitoring its S&I pay programs 

for nuclear-trained personnel to ensure effectiveness in nuclear personnel 

recruitment and retention. Together, these practices align with the 

principles of effective human capital management. For example, the 

Navy’s approach addresses key principle #2 by considering the high 

replacement costs of its nuclear personnel—up to $986,000 per trainee—

in justifying a strategy that prioritizes investment in retention initiatives 

over new accessions or recruits. In addition, the Navy sets optimal bonus 

amounts for nuclear officers and enlisted personnel by monitoring civilian 

nuclear salaries and employment demand (key principle #7), studying the 

effects of changes to bonus amounts on retention behavior (key principle

#5), and making changes to bonus amounts as appropriate (key principle 

#4). Moreover, the Navy makes informed decisions about its investments 

in S&I pay programs for nuclear personnel by using both quantitative and 

qualitative models for predicting numbers of personnel and retention rates 

as accurately as possible (key principle #6). Finally, Navy officials perform 

periodic personnel audits to ensure that recipients of its nuclear-related 

S&I pays are continuing to meet eligibility criteria, thereby helping to 

ensure that only qualified members are retained (key principle #3).

We found that the Navy fully addressed each of the seven key principles 

of effective human capital management in managing its program to retain 

pilots. The Army, the Marine Corps, and the Air Force largely applied the 

principles, but we found that the extent to which the services addressed 

the key principles varied (see figure 3). For example, all of the services 

identified opportunities to improve their S&I pay programs, and 

incorporate these changes into the next planning cycle (key principle #6). 

The Navy and the Marine Corps addressed key principle #6 for their 

Nuclear Propulsion Occupation

Aviation Occupation
Page 20 GAO-17-39 Special and Incentive Pay

Aviation Continuation Pay (ACP) program by (1) offering different pay 

amounts to pilots by specific platform (the model of aircraft a pilot 

operates) and (2) reducing or suspending the pay when staffing goals had 

been achieved. In contrast, the Air Force offered ACP to broad categories 

of pilots across multiple platforms, and it generally offered the maximum 

amount allowed by law. Only the Navy and Marine Corps fully 

incorporated quality measures into decisions to offer S&I pays to pilots 

(key principle #3). For example, the Navy incorporated quality into its 

ACP program by targeting the bonus to pilots on track for Department 

Head positions and canceling bonus contracts for pilots who were not 

promoted to Department Head. In contrast, the Air Force considered the 

expected positive effect on retention as a factor for offering ACP, but did 

not specifically consider the relative quality of pilots within a targeted 

community as a factor for awarding an ACP contract.

In addition, the services varied in how they incorporated a review of the 

civilian aviation sector in their decisions to offer retention bonuses to 

pilots (key principle #7). For example, the Army has not reviewed or 

considered commercial aviation in the context of its S&I pay program for 

pilots—largely because the Army provided ACP only to special operations 

pilots, and the skillset required for this mission does not have a clear 

civilian-sector equivalent.32 The Navy fully addressed this principle by 

specifically identifying comparable salary levels for commercial aviation 

pilots. The Air Force and the Marine Corps partially addressed this 

principle by considering the relationship between the compensation 

offered to their pilots and to commercial aviation pilots, but they did not 

specifically identify comparable salary levels and use them to determine 

retention bonus amounts. In addition, the services reached different 

conclusions about the extent to which the civilian aviation sector 

competes with the military for pilots. Specifically, the Navy stated that 

airline compensation would have to increase in order to have a significant 

impact on the retention of Navy pilots, and the Marine Corps reported that 

the potential increase in hiring by commercial airlines did not warrant the 

offering of ACP bonuses in fiscal year 2013. In contrast, the Air Force’s 

reports endorsing aviator retention bonuses stated that civilian aviation 

compensation factored into the Air Force’s decision to keep bonus 

amounts at the statutory limit of $25,000 per year. In February 2014, we 

reported that commercial aviation compensation decreased by almost 10 

 32 In fiscal year 2011, the Army also offered ACP to instructor pilots for Apache 

helicopters.
Page 21 GAO-17-39 Special and Incentive Pay

percent in constant dollars from 2000 to 2012.33 In July 2016, DOD 

reported to Congress on aviation-related S&I pays.34 DOD’s report stated 

that the military has experienced high levels of pilot retention as a result 

of decreased civilian airline pilot salaries, significantly reduced civilian

airline pilot hiring, increased military pay and benefits, and an increased 

sense of duty and patriotism after the events of September 11, 2001. 

However, the report added that the department anticipated that increased 

hiring by commercial airlines over the ensuing 5 to 7 years could 

necessitate increasing bonus amounts from $25,000 per year to a range 

of $38,500 to $62,500 per year. As such, DOD’s report requested that 

Congress consider increasing the rates of Aviation Career Incentive Pay, 

and specifically increase the maximum authorized level of Aviation 

Continuation Pay from $25,000 per year to $35,000 per year.

Similar to our findings with regard to aviation-related S&I pay programs, 

we found that the services are also not consistently applying the 

principles of effective human capital management in implementing S&I 

pay programs for their cybersecurity personnel. As shown in figure 3 

above, our assessment found that although none of the services fully 

addressed all seven principles for the cybersecurity occupation, they all 

addressed each principle at least partially. Each service consistently 

addressed three of the seven principles, including having clear and 

consistently applied criteria (key principle #1), considering the 

replacement cost of personnel (key principle #2), and identifying 

opportunities for improvement and incorporating them in planning (key 

principle #6). For example, the Army, the Navy, the Air Force and the 

Marine Corps have all addressed several principles through their 

development of criteria to guide their decisions to invest in SRBs for 

cybersecurity personnel. Examples of those criteria include growing 

requirements; personnel replacement costs (including training); and 

mission criticality of the skill set. Service officials stated that they 

considered replacement costs and noted that replacing these personnel 

would be more costly than offering an SRB. According to service officials, 

depending on the military occupational specialty, after initial military 

training, specialized training may take from 8 months to 3 years. Service 

officials cited costs to train their cyberforces as ranging from about 

 33 GAO, Aviation Workforce: Current and Future Availability of Airline Pilots, GAO-14-232

(Washington, D.C.: Feb. 2014).

34 DOD, Office of the Deputy Under Secretary of Defense for Military Personnel Policy, 

Report To Congress In Support of Increasing Special And Incentive Pays for Aviation 

Officers (July, 2016).

Cybersecurity Occupation
Page 22 GAO-17-39 Special and Incentive Pay

$23,000 to over $500,000. We found that the Navy and the Marine Corps 

have taken steps to implement their S&I pay programs in a way that 

would help retain the most valuable personnel in the cybersecurity 

occupation in terms of top performance (key principle #3). For example, in 

order to retain the most qualified personnel, in fiscal year 2012 the Marine 

Corps began to use a rating system that would help decision-makers to 

differentiate Marines’ performance during the reenlistment process.

According to Army and Air Force officials, the purpose of the SRB 

program is to retain adequate numbers of qualified enlisted personnel 

serving in critical skills, and the bonus generally was not designed to 

target top performers. Further, we found that only the Army has tailored 

its SRB program to target cybersecurity personnel within non-designated 

cyber career fields (key principle #4). Specifically, the Army further targets 

personnel in career fields by location and skill, which enables it to target 

cybersecurity personnel in non-designated cyber career fields. The 

Marine Corps and the Air Force do not target cybersecurity personnel in 

non-designated cyber career fields. According to Navy officials, they do 

not have designated cybersecurity career fields and do not directly target 

cybersecurity personnel when offering bonuses. In addition, the services 

varied in how they incorporated a review of the civilian cybersecurity 

occupation in their decisions to offer S&I pays to cybersecurity personnel 

(key principle #7). For example, as part of determining the amount to 

offer, the Army and the Navy considered the wage of civilians in cyberrelated career fields. The Navy noted in its justification for offering 

selective reenlistment bonuses that sailors within cyber-related career 

fields could qualify for positions in the civilian workforce with salaries 

starting at $90,000 with a $5,000 to $10,000 sign-on bonus. According to 

Marine Corps and Air Force officials, the Marine Corps and the Air Force 

did not consider civilian wages in cyber-related career fields when 

determining whether to offer a retention bonus.

As noted above, the military services largely incorporated key principles 

of effective human capital management into the S&I pay programs used 

for nuclear propulsion, aviation, and cybersecurity occupations. However, 

our review found that DOD and the services have not taken steps to fully 

ensure consistent application of the principles in some S&I pay programs 

for these selected occupations and to ensure effective program design. 

First, although DOD reports have stated that S&I pays are used 

efficiently, we found that DOD has not taken steps to support this 

conclusion. Specifically, DOD has not reviewed whether its S&I pay 

programs have incorporated the key principles of human capital 

management that we identified, or whether they have used resources 

DOD And the Military 

Services Did Not Take 

Steps to Fully Ensure the 

Effectiveness of S&I Pay 

Programs’ Design
Page 23 GAO-17-39 Special and Incentive Pay

efficiently because DOD officials told us that the services and different 

occupations have unique needs that make comparison and assessment 

difficult. DOD guidance pertaining to enumerated S&I pay programs 

generally requires the Assistant Secretary of Defense for Personnel and 

Readiness, using delegated authority, to monitor and propose revisions to 

bonus and special pay programs. For example, DOD Directive 1304.21 

directs the Principal Deputy Under Secretary of Defense for Personnel 

and Readiness, acting under the Under Secretary of Defense for 

Personnel and Readiness, to monitor bonus programs of the military 

services and recommend measures required to attain the most efficient 

use of resources devoted to programs on enlistment bonuses, accession 

bonuses for new officers in critical skills, selective reenlistment bonuses, 

and critical skills retention bonuses for active members.35 Consistent with 

the policy, the Office of the Under Secretary of Defense for Personnel and 

Readiness monitors the services’ S&I pay programs, including bonuses. 

However, on the basis of interviews with DOD officials, we found that 

DOD has not systematically included in its monitoring efforts a review of 

whether S&I pay programs have used resources efficiently, nor has it 

developed measures required to attain efficient use of S&I pay program 

resources.36 The officials stated that DOD has contracted with a research 

organization to develop a quantitative modeling tool that would enable the 

services to set cost-efficient bonus amounts. Such a tool may help the 

services to consistently apply human capital management principle #3 in 

instances where they are not already doing so in their S&I pay programs 

for aviation and cybersecurity (see figure 3). This principle calls for 

investment decisions to be based on expected improvement in agency 

 35 DOD Directive 1304.21, Policy on Enlistment Bonuses, Accession Bonuses for New

Officers in Critical Skills, Selective Reenlistment Bonuses, and Critical Skills Retention 

Bonuses for Active Members (Jan. 31, 2015).

36 DOD policy requires the services to provide annual execution reports on the enlisted 

bonus program, but the information in these reports is limited. In November 2015 we 

reported that, although Department of the Army and National Guard regulations require 

monitoring and evaluation of the effectiveness of authorized pay incentives—including 

enlistment and reenlistment bonuses—in achieving overall objectives, the Army and Army 

National Guard have not evaluated and documented the effectiveness of the programs. 

Moreover, we reported that incentives were not always being used to fill military 

occupational specialties that were consistently below authorized levels and that incentives 

were being sometimes used for military occupational specialties that were consistently 

above approved levels. We recommended that the Army take six actions, including 

evaluating and documenting the effectiveness of the Army National Guard’s incentives 

program in meeting its goals. GAO, Military Recruiting: Army National Guard Needs to 

Continue Monitoring, Collect Better Data, and Assess Incentives Programs, GAO-16-36

(Washington, D.C.: Nov. 17, 2015).
Page 24 GAO-17-39 Special and Incentive Pay

results and implemented in a manner that fosters top talent. Depending 

on the inputs to the modeling tool, once developed, it could also help the 

Army, the Marine Corps, and the Air Force to address principle #7 by 

assessing civilian supply, demand, and wages and by updating their 

plans as needed for their S&I pay programs. According to DOD officials, 

however, progress on this effort has been slowed by competing 

priorities—that is, by the department’s focus on adjusting the military 

retirement system. In the absence of measures for ensuring efficiency in 

S&I pay programs, DOD and the services generally assess their S&I pay 

programs’ effectiveness by the extent to which they achieve desired 

staffing targets. However, this approach does not ensure that S&I pay 

programs are using resources in the most efficient manner, as DOD 

guidance requires. Until DOD reviews whether its S&I pay programs have 

incorporated the key principles of human capital management that we 

identified, reviews whether the programs have used resources efficiently, 

and prioritizes and completes the establishment of measures for efficient 

use of resources, DOD and the services may lack assurance that S&I pay 

programs are effective and that resources are optimized for the greatest 

return on investment.

Secondly, on the basis of our interviews with DOD officials, we found that 

the department has not assessed the extent to which its non-monetary 

incentives could result in the retention of personnel at a lower cost than 

S&I pays and with equal or better effectiveness. An assessment of this 

kind would help the services to consistently apply human capital 

principles #4 and #5 in its cybersecurity S&I pay programs (see figure 3). 

Specifically, an assessment of non-monetary incentives would help 

ensure that approaches are tailored to meet the services’ needs by 

identifying and evaluating unique staffing issues, and by collecting and 

reviewing historical retention data to evaluate the effects and 

performance of S&I pay programs. In our case study review of S&I pay 

programs associated with the nuclear propulsion program, Navy officials 

told us that changes to S&I pays provide only short-term solutions when 

retention shortfalls are caused by servicemembers’ quality-of-life 

concerns about things like deployment lengths and geographic instability. 

As a result, Navy officials told us that they use a variety of non-monetary 

incentives to complement S&I pays for retention purposes, including 

guarantees for shore duty and graduate education opportunities. We 

found that DOD and the services also take steps to understand what nonmonetary incentives improve servicemember satisfaction and retention. 

For example, through its periodic Status of Forces surveys, DOD collects 

information from servicemembers on their satisfaction with non-monetary 

incentives and their plans to leave or stay in the military, among other 
Page 25 GAO-17-39 Special and Incentive Pay

things. In addition, DOD officials told us that the services collect feedback 

from servicemembers who are separating to understand their reasons for 

leaving. However, according to DOD officials, they have not taken steps 

to routinely leverage existing feedback mechanisms and evaluate

whether these non-monetary approaches can be expanded as less costly 

alternatives to address retention challenges, because they believe that 

S&I pay programs may be more efficient than non-monetary incentives. 

Without conducting routine assessments of the impact of non-monetary 

incentive approaches on retention behavior and on the necessary levels 

of S&I pays, DOD and the services do not know whether they are using 

the most efficient and effective combination of incentives for achieving 

retention objectives at the lowest possible cost.

Third, with regard to key principle #3, department-level guidance on S&I 

pay programs does not explicitly incorporate personnel performance into 

eligibility criteria or retention decisions as a way to foster top talent and 

improve program results. For example, DOD guidance we reviewed on 

critical skills retention bonuses does not include explicit provisions 

addressing personnel performance that would ensure that monetary 

incentives are targeted to top performers.37 At the service-level, some but 

not all S&I pay programs for the three case study occupations included 

direction for targeting pays to personnel based on their levels of 

performance, consistent with principle #3. For example, the Navy 

reported that they implement their program for awarding aviation retention 

bonuses to pilots to explicitly connect the bonus contract to a pilot’s 

successful promotion to a department head position. If the pilot fails to be 

promoted, the bonus contract is canceled.38 In addition, the Navy’s

instruction on its nuclear officer incentive pay program considers 

performance by excluding servicemembers who are undergoing 

disciplinary actions, who failed to maintain nuclear qualifications, or who 

failed to be selected for promotions, among other things.39 DOD officials 

 37 DOD Directive1304.21, Policy on Enlistment Bonuses, Accession Bonuses for New 

Officers in Critical Skills, Selective Reenlistment Bonuses, and Critical Skills Retention 

Bonuses for Active Members (Jan. 31, 2005); DOD Instruction 1304.29, Administration of 

Enlistment Bonuses, Accession Bonuses for New Officers in Critical Skills, Selective 

Reenlistment Bonuses, and Critical Skills Retention Bonuses for Active Members. (Dec. 

15, 2004), (incorporating change July 11, 2016); DOD Instruction 1304.34, General Bonus 

Authority for Officers (July 11, 2016).

38 Assistant Secretary of the Navy (Manpower and Reserve Affairs), Report to Congress 

on Fiscal Year 2014 Aviation Continuation Pay Program (Dec. 4, 2014).

39 OPNAVINST 7220.11E, Nuclear Officer Incentive Pay Program (Dec. 29, 2014).
Page 26 GAO-17-39 Special and Incentive Pay

told us that S&I pay programs were not designed to target top performers

and that the services use other means to recognize performance, such as 

promotions. Federal internal control standards emphasize the importance 

of establishing clear and consistent agency objectives, which would apply 

to DOD’s determination about incorporating personnel performance into 

eligibility criteria or retention decisions for its S&I pay programs.40 Until 

the services clarify existing guidance for S&I pay programs regarding the 

extent to which personnel performance should be incorporated into 

retention decisions where appropriate, consistent with principle #3, the 

application and understanding of the guidance may be inconsistent 

among service officials responsible for managing S&I pay programs.

Finally, with regard to key principle #4, which calls for tailoring 

approaches for meeting organizational needs by evaluating unique 

staffing issues, we found that the military services have awarded SRBs to 

cybersecurity personnel in accordance with their broader military 

occupational specialty rather than tailoring the awards toward the skill 

sets within those specialties that have specific or unique staffing 

shortfalls. According to information received from service officials, the 

services have some cybersecurity specific career fields; however, each

military service continues to assign cybersecurity personnel to military 

occupational specialties that include other types of personnel skill sets, 

such as intelligence or information technology. However, the Army 

recently began to tailor its SRB program to target cybersecurity 

personnel. The Navy, the Marine Corps, and the Air Force—unlike the 

Army—have not imposed other conditions by which to direct SRBs to 

personnel with specific cybersecurity skill sets within a broader military 

occupational specialty. According to service officials, cybersecurity is an 

emerging occupation, and the services have not yet assigned all of their 

cybersecurity personnel to cybersecurity-designated career fields. Marine 

Corps officials told us, for example, that cybersecurity within the enlisted 

community is often a secondary skill set associated with other primary 

specialties. According to DOD officials, the Marine Corps has the ability to 

target SRBs to a secondary skill; however according to Marine Corps 

officials, the Marine Corps has not begun to do this for the cybersecurity 

community. As a result, these services have not awarded SRBs to 

personnel with cybersecurity skill sets without also awarding it to other 

skill sets within the same occupational specialty that may not have the 

same staffing needs. DOD’s policy on the enlisted bonus program states 

 40 GAO/AIMD-00-21.3.1.
Page 27 GAO-17-39 Special and Incentive Pay

that the SRB may be used to obtain the reenlistment or voluntary 

extension of an enlistment in exchange for a member’s agreement to 

serve for a specified period in at least one of the following reenlistment or 

extension categories: a designated military skill, career field, unit, or 

grade; or to meet some other condition or conditions imposed by the 

Secretary of the Military Department concerned. Until the services 

develop approaches to directly target SRBs to personnel with 

cybersecurity skill sets, they may award SRBs to specialties that include 

non-cybersecurity personnel for whom the SRB is unneeded. Further, 

without consistently targeting their SRBs toward specific skill sets, the 

services may not be using the SRBs as cost-effectively as possible.

Strategic management of S&I pay programs is important to support 

DOD’s ability to sustain its all-volunteer force, providing a suite of flexible 

compensation approaches that can be used to address staffing issues 

more efficiently than basic pay increases. In addition, the effective use of 

S&I pay programs, like other components of military compensation, is 

important for the efficient use of budgetary resources. As DOD officials 

seek to efficiently manage the department’s budget, S&I pay programs 

are likely to be a continued area in which to find efficiencies and cost 

savings. However, without exploring cost-effective approaches to collect 

and report complete obligation data for each S&I pay program for the 

Reserve Components, DOD may not know the full cost of its S&I pay 

programs, may not be able to make fully informed decisions about 

resource allocation, and may not be able to evaluate program 

performance over time. According to DOD officials, DOD has also not 

reviewed the extent to which the services’ S&I pay programs incorporate 

key principles of effective human capital management, or whether S&I 

pay programs have used resources efficiently; nor has it prioritized and 

completed the establishment of measures for ensuring the efficient use of 

resources. Furthermore, the military services do not consistently apply 

key human capital management principles to their S&I pay programs, 

such as by using non-monetary incentives to retain personnel or 

incorporating personnel performance into eligibility criteria or retention 

decisions as a way to foster top talent and improve program results. In 

addition, service officials told us that the military services have not 

completely identified cyber workforces, thereby limiting their ability to 

target S&I pays to critical specialties. Without addressing these issues, 

DOD and the services may not be able to ensure that S&I pay programs 

are effectively designed and that resources are optimized for the greatest 

return on investment.

Conclusions
Page 28 GAO-17-39 Special and Incentive Pay

To facilitate DOD’s oversight of the military services’ S&I pay programs, 

and to fully ensure the effectiveness of these programs, we recommend 

that the Secretary of Defense take the following five actions:

• Direct the Under Secretary of Defense (Comptroller), in coordination 

with the military services, to explore cost-effective approaches to 

collect and report S&I pay program data for the Reserve Components;

• Direct the Under Secretary of Defense for Personnel and Readiness, 

in coordination with the military services, to

• review whether S&I pay programs have incorporated key 

principles of effective human capital management and used 

resources efficiently, and prioritize and complete the 

establishment of measures for the efficient use of resources;

• routinely assess the impact of non-monetary incentive approaches 

on retention behavior and on the necessary levels of S&I pays;

• clarify existing guidance for S&I pay programs regarding the 

extent to which personnel performance should be incorporated 

into retention decisions; and

• Direct the Secretaries of the Military Departments to develop 

approaches to directly target SRBs to cybersecurity skill sets.

We provided a draft of this report to DOD for review and comment. In its 

written comments, reproduced in appendix VI, DOD concurred with three 

of our recommendations and partially concurred with two. DOD also 

provided technical comments on the draft report, which we incorporated 

as appropriate.

In regard to our first recommendation—to explore cost-effective 

approaches to collect and report S&I pay program data for the Reserve 

Components—DOD concurred, adding that it will maintain its focus on the 

recruiting and retention pays for both the active and reserve components, 

and will continue to work with the Reserve Components to strengthen the 

collection of the remaining special and incentive pays. This action could 

meet the intent of our recommendation if it results in DOD exploring 

approaches to collect and report more complete and consistent data on 

S&I pays for the Reserve Components.

In regard to our second recommendation— to review whether S&I pay 

programs have incorporated key principles of effective human capital 

management and used resources efficiently, and to prioritize and 

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
Page 29 GAO-17-39 Special and Incentive Pay

complete the establishment of measures for the efficient use of 

resources—DOD partially concurred, stating in its written comments that 

DOD does use key principles of effective human capital management, 

and although not articulated as GAO’s principles, share common goals 

and results. We agree there are similarities and as noted in the report 

DOD has demonstrated that it has used many of them. DOD stated that it 

will support the opportunity to review and improve upon the principles and 

methods to assess the efficiency of its S&I pay programs, and, where 

appropriate, will incorporate these principles in future DOD policy 

issuances and updates. We continue to believe that fully implementing 

the key principles of effective human capital management that we 

identified would help DOD and the services to ensure that S&I pay 

programs are effectively designed and that resources are optimized for 

the greatest return on investment.

In regard to our third and fourth recommendations—to routinely assess 

the impact of non-monetary incentive approaches on retention behavior 

and on the necessary levels of S&I pays, and to clarify existing guidance 

for S&I pay programs regarding the extent to which personnel 

performance should be incorporated into retention decisions—DOD 

concurred. In written comments, DOD provided examples of nonmonetary incentives used by the services as alternatives to cash pays 

and bonuses. DOD also noted that the department will clarify existing 

guidance regarding the extent to which personnel performance will be 

incorporated into retention decisions.

In regard to our fifth recommendation—to develop approaches to directly 

target SRBs to cybersecurity skill sets—DOD partially concurred. In 

written comments, DOD stated that the services are responsible for 

developing their personnel requirements in order to meet individual 

service needs, and that it has provided the services with the necessary 

staffing tools to recruit and retain servicemembers in the cybersecurity 

skill sets. DOD also noted that it is crucial for the services to retain their 

flexibility to utilize these pays and benefits to address service-specific 

shortfalls within their cybersecurity workforce and noted that it will assist 

the services in growing and maintaining their cybersecurity workforce 

through existing and future DOD policies. We recognize that the services 

are responsible for their specific personnel requirements and that 

flexibility is important. However, as noted in our report, each military 

service has assigned cybersecurity personnel to military occupational 

specialties that include other types of personnel skill sets, such as 

intelligence or information technology. As a result, because the services 

offer SRBs by military occupational specialty, the services may award 
Page 30 GAO-17-39 Special and Incentive Pay

SRBs to specialties that include non-cybersecurity personnel for whom 

the SRB is unneeded. Therefore, we continue to believe that there are 

benefits to developing approaches to target cybersecurity personnel in 

non-designated cybersecurity fields.

We are sending copies of this report to the appropriate congressional 

committee, the Secretary of Defense, the Under Secretary of Defense for 

Personnel and Readiness, the Secretaries of the Army, the Navy, and the 

Air Force, and the Commandant of the Marine Corps. In addition, this 

report will be available at no charge on the GAO website at 

http://www.gao.gov.

If you or your staff have any questions regarding this report, please 

contact me at (202) 512-3604 or farrellb@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made major contributions to 

this report are listed in appendix VII.

Brenda S. Farrell

Director

Defense Capabilities and Management
Appendix I: DOD’s Progress in Consolidating 

Special and Incentive Pays

Page 31 GAO-17-39 Special and Incentive Pay

In its September 2008 Tenth Quadrennial Review of Military 

Compensation, the Department of Defense (DOD) reported that the basic 

pay table provided limited flexibility to tailor the department’s human 

capital approaches. DOD also noted that for many special pays, detailed 

eligibility rules and precise payment amounts are set in statute and could 

only be changed by congressional action. As a result, when staffing 

needs or market conditions change, managers sometimes could not 

adjust special and incentive (S&I) pay eligibility criteria or payment levels 

in response to those changing circumstances.1 DOD recommended that 

the more than 60 S&I pays be replaced with 8 broad categories. In 

addition to these 8 categories, existing authorities for the 15-year career 

status bonus and the critical skills retention bonus would be retained. The 

review identified three benefits of consolidation: (1) increasing the 

services’ flexibility to allocate resources to those areas that would most 

effectively meet staffing needs; (2) decreasing the number of pays and 

therefore reducing the administrative burden of managing over 60 

different pays with different sets of rules and funding streams; and (3) 

authorizing the services to allocate S&I pay to their highest priority 

staffing needs which would allow the services to respond quickly to 

changing staffing needs throughout the fiscal year. The National Defense 

Authorization Act for Fiscal Year 2008 authorized the consolidation and 

required DOD to complete the transition by January 28, 2018.2 DOD 

began implementing the consolidation in 2008, and according to a DOD 

official, expects the process to be completed by October 2017 (see figure 

4).

 1

DOD, Report of The Tenth Quadrennial Review of Military Compensation (Sept. 2008).

2

Pub. L. No. 110-181 div. A, title VI, subtitle F (Jan. 28, 2008).

Appendix I: DOD’s Progress in Consolidating 

Special and Incentive Pays
Appendix I: DOD’s Progress in Consolidating 

Special and Incentive Pays

Page 32 GAO-17-39 Special and Incentive Pay

Figure 4: DOD’s Timeline for Implementing Consolidation of Special and Incentive Pays into Eight Categories

According to DOD officials and our analysis of updated DOD guidance, as 

of October 2016, DOD has at least partially transitioned 5 of the 8

consolidated S&I pay program authorities (see table 2). DOD has also 

fully transitioned the authorities for the 2 legacy pays that were retained. 

According to a DOD official, implementation of the remaining 3

consolidated authorities is expected to be completed by October 2017.

Table 2: GAO Analysis of DOD Special and Incentive Pays Consolidation Status

Special and Incentive Pay Category

DOD Initial 

Estimated

Completion Date

GAO Analysis of 

Current Status

(as of October 

2016)

1. General Bonus Authority for Enlisted Members, 37 U.S.C. § 331 September 30, 2013a • Enlistment in the Armed Forces (37 U.S.C. § 308i; 37 U.S.C. § 309) • Enlistment in or Affiliation with a Reserve Component (37 U.S.C. § 308c; 37 U.S.C. 

§ 308g)

√ 

• Reenlistment or Extension of Enlistment in a Designated Career Field or Unit (37 

U.S.C. § 308; 37 U.S.C. § 308b; 37 U.S.C. § 308h; 37 U.S.C. § 326)

√ 

• Transfers between a Regular and Reserve component in the Same Service √ • Transfers to a Regular or Reserve Component in Another Service (37 U.S.C. § 

327)

√ 

2. General Bonus Authority for Officers, 37 U.S.C. § 332 January 11, 2017 • Accession into the Armed Forces (37 U.S.C. § 324; 37 U.S.C. § 330; 37 U.S.C. § 

308j(b))

○ 

• Affiliation with a Reserve Component (37 U.S.C. § 308j(a)) ○ 
Appendix I: DOD’s Progress in Consolidating 

Special and Incentive Pays

Page 33 GAO-17-39 Special and Incentive Pay

Special and Incentive Pay Category

DOD Initial 

Estimated

Completion Date

GAO Analysis of 

Current Status

(as of October 

2016)

• Remain on Active Duty or Serve in an Active Status (37 U.S.C. § 317; 37 U.S.C. § 

318; 37 U.S.C. § 319; 37 U.S.C. § 321; 37 U.S.C. § 315)

○ 

• Transfers Between a Regular and Reserve Component in the Same Service ○ • Transfers to a Regular or Reserve Component in Another Service (37 U.S.C. § 

327)

○ 

3. Special Bonus and Incentive Pay Authorities for Nuclear Officers, 37 U.S.C. § 

333b July 3, 2012 

• Nuclear Officer Bonus (37 U.S.C. § 312; 37 U.S.C. § 312b) √ • Nuclear Officer Incentive Pay (37 U.S.C. § 312c) √ 

4. Special Aviation Incentive Pay and Bonus Authorities for Officers, 37 U.S.C. § 

334c October 20, 2016 

• Aviation Incentive Pay (37 U.S.C. § 301a ) √ • Aviation Bonus (37 U.S.C. § 301b) √ 

5. Special Bonus and Incentive Pay Authorities for Officers in Health 

Professions, 37 U.S.C. § 335

December 31, 2016d 

• Accession Bonuses (37 U.S.C. § 302h, 37 U.S.C. § 302j; 37 U.S.C. § 302d) √ • Critical Skill Accession Bonus (37 U.S.C. § 302k; 37 U.S.C. § 302l) √ • Retention Bonus (37 U.S.C. § 301d; 37 U.S.C. § 301e; 37 U.S.C. § 302a(b);37 

U.S.C. § 302g; 37 U.S.C. § 302i) 

√ 

• Incentive Pays (37 U.S.C. § 302(a)(2); 37 U.S.C. § 302(a)(3);37 U.S.C. § 302(h); 

37 U.S.C. § 302b(a)(2); 37 U.S.C. § 302b(a)(3); 37 U.S.C. § 308c; 37 U.S.C. § 

302f; 37 U.S.C. § 302a(a)(2); 37 U.S.C. § 303(a); 37 U.S.C. § 302(a)(4); 37 U.S.C. 

§ 302(b); 37 U.S.C. § 302b(a)(4); 37 U.S.C. § 302b(a)(6); 37 U.S.C. § 302b(g); 37 

U.S.C. § 302e; 37 U.S.C. § 302g(a))

√ 

• Board Certified Pay (37 U.S.C. § 302(a)(5); 37 U.S.C. § 302b(a)(5); 37 U.S.C. § 

302c; 37 U.S.C. § 303(b)) 

√ 

6. Hazardous Duty Pay, 37 U.S.C. § 351 • Hostile Fire (37 U.S.C. § 310(a)(2)(A); 37 U.S.C. § 310(a)(2)(B); 37 U.S.C. §

310(a)(2)(C))

October 1, 2017 ○ 

• Hazardous Duty (37 U.S.C. § 301(a)(1); 37 U.S.C. § 301(a)(2); 37 U.S.C. §

301(a)(3); 37 U.S.C. § 301(a)(4); 37 U.S.C. § 301(a)(5); 37 U.S.C. § 301(a)(6); 37

U.S.C. § 301(a)(7); 37 U.S.C. § 301(a)(8); 37 U.S.C. § 301(a)(9); 37 U.S.C. § 

301(a)(10); 37 U.S.C. § 301(a)(11); 37 U.S.C. § 301(a)(12); 37 U.S.C. § 

301(a)(13); 37 U.S.C. § 301(c); 37 U.S.C. § 305b)

○ 

• Imminent Danger (37 U.S.C. § 310(a)(2)(D)) ○ 

7. Assignment Pay or Special Duty Pay, 37 U.S.C. § 352 October 1, 2017 • Submarine Duty, Hardship Duty, Career Sea Duty, and Assignment Pays (37

U.S.C. § 301c; 37 U.S.C. § 305; 37 U.S.C. § 305a(a); 37 U.S.C. § 305a(c); 37

U.S.C. § 306; 37 U.S.C. § 306a; 37 U.S.C. § 307; 37 U.S.C. § 307a; 37 U.S.C. § 

308d; 37 U.S.C. § 314)

○ 

8. Skill Incentive Pay or Proficiency Bonus, 37 U.S.C. § 353 
Appendix I: DOD’s Progress in Consolidating 

Special and Incentive Pays

Page 34 GAO-17-39 Special and Incentive Pay

Special and Incentive Pay Category

DOD Initial 

Estimated

Completion Date

GAO Analysis of 

Current Status

(as of October 

2016)

• Career Skill Pay October 20, 2016 √ • Proficiency Bonus May 21, 2013 √ 

Retained Legacy Incentive Pays 

15-year Career Status Bonus for members Entering Service on or After August 1, 

1986, 37 U.S.C. § 354 (37 U.S.C. § 322)

January 28, 2008 √ 

Retention Incentives for Members Qualified in Critical Military Skills or Assigned to 

High Priority Units, 37 U.S.C. § 355 (37 U.S.C. § 323)

March 14, 2008 √ 

Legend: √ fully or partially implemented; ○ not yet implemented.

Source: GAO analysis of DOD data. | GAO-17-39

a

The services completed the consolidation of the General Bonus Authority for Enlisted members on 

March 12, 2013.

b

The Navy is the only service eligible for Nuclear Pays.

c

Only the Marine Corps Reserve has completed full consolidation of Aviation S&I Pays.

d

Consolidation for medical specialties such as licensed clinical psychologists, licensed clinical social 

workers, physician assistants, licensed veterinary officers, and public health officers occurred on July 

23, 2009. Consolidation for general dentists occurred on April 29, 2011.
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 35 GAO-17-39 Special and Incentive Pay

Officers and enlisted personnel in the Navy’s nuclear propulsion program 

are tasked with safely operating and maintaining the nuclear reactors that 

power the Navy’s fleet of aircraft carriers and submarines (see figure 5).

Figure 5: Sailors in the Navy’s Nuclear Propulsion Program Operate and Maintain the Nuclear Reactors That Power Aircraft 

Carriers and Submarines

Navy officials described the nuclear propulsion program as rigorous, 

technically demanding, and staffed with highly trained and skilled 

personnel. Sailors in the nuclear propulsion occupation totaled nearly 

23,000 in fiscal year 2016 (about 6 percent of the Navy’s active and 

Reserve Component personnel), including approximately 5,700 officers 

and about 17,200 enlisted members.1 The cadre of nuclear officers 

includes specialties such as surface warfare officers; submarine warfare 

officers; engineering duty officers; naval reactor engineers; pilots; and 

naval flight officers. Enlisted personnel in the nuclear propulsion program 

serve as operators and supervisors in the following types of skills, among 

others: electronics technicians; electrician’s mates; engineering laboratory 

technicians; and machinist’s mates.

 1 The nuclear propulsion program also includes government civilian and contractor 

employees.

Appendix II: Case Study on Nuclear 

Propulsion Pays

Overview of the 

Nuclear Propulsion 

Occupation
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 36 GAO-17-39 Special and Incentive Pay

Before their assignment to a nuclear billet, officers and enlisted personnel 

attend 6 months of classroom study at the Navy’s nuclear power school, 

and another 6 months of nuclear prototype training, where they acquire 

hands-on experience. Navy officials estimate that the cost of nuclear

training was about $405,000 per officer or enlisted student as of fiscal 

year 2016. In addition, the cost of accessing and retaining a nuclear 

officer through his or her initial service obligation, including expenses for 

undergraduate education and salary, is estimated to have been $581,000 

as of fiscal year 2016.

As of 2016, the U.S. nuclear industry includes 60 commercially operating 

nuclear power plants across 30 states and more than 100,000 

employees. The median pay for a civilian nuclear engineer was about 

$103,000 per year in 2015, according to the U.S. Bureau of Labor 

Statistics. Officers and enlisted members of the Navy’s nuclear propulsion 

program can transition easily to civilian employment in the nuclear 

industry for several reasons, according to Navy officials. First, officials 

stated that civilian nuclear jobs are directly correlated with skills that 

nuclear personnel acquire in the Navy, and officers can complete civilian 

nuclear certifications on their first attempt nearly twice as frequently as 

can other new hires. Second, officials told us that civilian employers can 

train a new employee hired from the Navy with fewer resources and about 

half the time compared with training an employee hired from outside the 

nuclear propulsion program. Finally, Navy officials told us that, due to a 

wave of expected civilian retirements through 2021, more than 45,000 

civilian nuclear jobs may become available. On the basis of feedback 

from nuclear personnel leaving the Navy, Navy officials also told us that 

high salaries in the civilian sector and the appeal of geographic stability 

are factors that influence retention in the nuclear propulsion program. The 

Navy estimates that about 80 percent of transitioning nuclear officers 

accept jobs in technical management in the civilian nuclear industry.

To help meet retention and recruitment goals, the Navy has maintained a 

long-standing program of special and incentive (S&I) pays for nuclear 

propulsion personnel. Navy officials told us that these pays are a last line 

of defense, coupled with non-monetary incentives, for mitigating declining 

retention in the nuclear community.

Currently, there are 11 S&I pays available in the Navy for the recruitment 

and retention of nuclear personnel. Five of the 11 pays are limited to 

officers in the nuclear propulsion community and are described in table 3. 

Civilian Nuclear 

Employment

The Navy’s Special 

and Incentive Pays 

for Nuclear 

Propulsion Personnel
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 37 GAO-17-39 Special and Incentive Pay

The other 6 pays, for enlisted personnel, are discussed later in this 

appendix.

Table 3: Special and Incentive Pays Available to Officers in the Navy’s Nuclear Propulsion Occupation

Frequency and 

Amount(s) per 

Payment, 2015a

Overview of Eligibility-Criteriab Range of Annual 

Recipients (numbers 

of personnel, fiscal 

years 2010-2015)

1. Nuclear Officer Accession Bonus (NOAB) (37 U.S.C. § 333; OPNAVINST 7220.11E, Nuclear Officer Incentive Pay Program 

(Dec. 29, 2014))

• One-time

• $15,000

Unrestricted line officers or prospective unrestricted line officers (midshipmen, reserve 

officer training corps candidates, or enlisted sailors) who are accepted for nuclear 

officers’ training leading to qualification for duty in connection with the supervision, 

operation, and maintenance of naval nuclear propulsion plants.

513 –

713

2. Nuclear Career Accession Bonus (NCAB) (37 U.S.C. § 333; OPNAVINST 7220.11E, Nuclear Officer Incentive Pay Program 

(Dec. 29, 2014))

• One-time

• $2,000

Unrestricted line officers on active duty who have successfully completed the nuclear 

propulsion training program leading to qualification for duty in connection with the 

supervision, operation, and maintenance of naval nuclear propulsion plants.

c 

3. Nuclear Officer Continuation Pay (COPAY) (37 U.S.C. § 333, OPNAVINST 7220.11E, Nuclear Officer Incentive Pay Program 

(Dec. 29, 2014)

• Annual 

installments

• $30,000 or 

$35,000

Nuclear surface warfare officers or nuclear submarine officers on active duty and 

currently qualified for duty in connection with the supervision, operation, and 

maintenance of naval nuclear propulsion plants. Officers must have completed 

minimum service requirements, are generally serving in at least the pay grade of O-3 

and not higher than 0-6, who agree to a contract of generally 3 to 7 years of service.

2,068 – 2,359c,d

4. Nuclear Career Annual Incentive Bonus (AIB) (37 U.S.C. § 333; OPNAVINST 7220.11E, Nuclear Officer Incentive Pay Program 

(Dec. 29, 2014))

• Annual 

installments

• $10,000, 

$12,500, or 

$22,000

Unrestricted line officers, limited duty officers and chief warrant officers on active duty, 

currently qualified for duty in connection with the supervision, operation, and 

maintenance of naval nuclear propulsion plants, having completed minimum service 

requirements as an officer and continuing on active duty after completion of other 

existing service contracts. Participants must be serving in pay grade W-2 through W-5 

or O-1 through O-6, and must not be serving in a period of obligated service incurred 

as a result of accepting COPAY. Also, participants must not be entitled to receive 

aviation career incentive pay.

c

5. Submarine Support Incentive Pay (SSIP) (37. U.S.C. § 355; NAVADMIN 293-10, Submarine Support Incentive Pay Program 

(Aug. 30, 2010))e

• Annual 

installments

• $15,000, 

$20,000, or 

$25,000

Officers on active duty who screened for commanding officer, submarine support, 

having completed at least 20 years of active service but not more than 25 years, and 

currently serving in paygrades O-5 or O-6, who agree to a contract of 1, 2, or 3 years.

Participants must be previously nuclear trained as an officer but not currently qualified 

for the supervision, operation, or maintenance of nuclear propulsion plants.

18 – 77d

Source: GAO analysis of Navy policies and budget data. | GAO-17-39

Notes: The Navy completed the consolidation of authority for NOAB, NCAB, COPAY, and AIB pays 

on July 3, 2012. Authority to enter into new SSIP agreements pursuant to 37 U.S.C. § 355 expires 

December 31, 2017.
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 38 GAO-17-39 Special and Incentive Pay

a

The amounts shown were established in Navy guidance for nuclear personnel in 2015. The actual 

statutory caps may be higher.

b

The overview of eligibility criteria is derived from cited service-level policy, Navy budget justification 

materials, and interviews with Navy officials. It represents a summary of some, but not all, of the 

requirements that a recipient of each pay must meet. Complete criteria are identified in cited servicelevel policy. Officers may not receive any of the above pays concurrently.

c

Recipients and obligations associated with the NCAB, COPAY, and AIB pays are reported 

collectively in the Navy’s annual budget justification documents as Nuclear Officer Incentive Pay 

(NOIP). The NOAB is part of the NOIP program, but the Navy reports data for recipients and 

obligations separately in its annual budget justification documents.

d

The range of recipients includes officers who received initial payments and those who received 

anniversary award payments.

e

Although officers eligible for the SSIP program may not be currently nuclear qualified, unlike eligibility 

criteria in the other four nuclear propulsion pay programs, participants must have been previously 

nuclear trained and be screened for commanding officer submarine support. The Navy uses this 

program to retain skilled personnel for critical submarine support billets, ensuring that submarine 

officers are available to fill positions both at sea and ashore. Participating officers are ineligible to 

receive either COPAY or AIB.

Of the five pays shown in table 3, nuclear officers may receive only one at 

a time. A nuclear officer will generally receive one or more of these pays 

over his or her career. The Navy manages the first four pays in table 3 

collectively and refers to them as the Nuclear Officer Incentive Pay 

(NOIP) program. Compared with S&I pays available to officers in other 

Navy occupations, the community of nuclear propulsion officers ranks 

second to the medical community in terms of total possible S&I pay 

compensation over a 30-year career. Specifically, the Navy estimated that 

in fiscal year 2015, a medical officer could earn about $1.6 million in S&I 

pays over his or her career, while a nuclear propulsion officer could earn 

approximately $1.1 million over a career. The total amount of possible 

career S&I pays for a nuclear officer is about twice that of the next highest 

compensated career group——about $530,000 for a Sea, Air, Land 

(SEAL) officer over his or her career.

There are 6 S&I pays available to enlisted nuclear personnel in 

connection with their service in nuclear occupations. These 6 pays are 

shown in table 4 and are discussed in further detail below.
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 39 GAO-17-39 Special and Incentive Pay

Table 4: Special and Incentive Pays Available to Enlisted Personnel in the Navy’s Nuclear Propulsion Occupation 

Frequency and Amount(s) per Payment, 2015a Overview of Eligibility-Criteriab

Range of Annual 

Recipients 

(numbers of 

personnel, fiscal 

years 2010-2015)

1. Selective Reenlistment Bonus (SRB) (37 U.S. C. § 331, General bonus authority for enlisted members; OPNAVINST 1160.8A, 

Selective Reenlistment Bonus Program (Jan. 30, 2007))

• Annual (lump sum and annual installments)

• Variable, capped at $75,000 or $100,000 

depending on rating, Navy Enlisted Classification, 

years of service, and reenlistment period

Completion of at least 17 continuous months of active 

service, but not more than 10 years; eligible to reenlist 

or voluntarily extend an enlistment for 3 or more years; 

serving in select ratings, Navy Enlisted Classifications, 

and skills.

1,000 – 1,650c

2. Enlisted Supervisor Retention Pay (ESRP) (37 U.S.C. § 331, Enlisted Bonus Program; Navy Memorandum, Delegation of 

Authority to Administer a Nuclear-Trained Enlisted Supervisor Selective Retention Bonus Program (Jul. 18, 2016))

• Initial and annual installments

• Variable, depending on rating, Navy Enlisted 

Classification, years of service and reenlistment 

period, and capped at $200,000 in a career

Nuclear rated petty Officers E-5 or above on active 

duty, eligible to reenlist for a minimum of 2 years or up 

to 6 years, and having completed at least 10 years but 

not more than 23 years of naval service.

297 – 406c

3. Special Duty Assignment Pay (SDAP) (37 U.S.C. 307, Special pay: Special duty assignment pay for enlisted members; 

OPNAVINST 1160.6B, Special Duty Assignment Pay Program (Dec. 29, 2006))

• Monthly

• $150, $300, $375, or $450, depending on billet

Enlisted personnel on active duty in pay grade E-3 or 

higher, assigned to and working in a designated 

special duty assignment.

8,878 – 9,754

4. Sea Duty Incentive Pay (SDIP) (37 U.S.C. 307a, Special pay: Assignment Incentive Pay; NAVADMIN 231/12, Sea Duty Incentive 

Pay Program (July 30, 2012))

• Monthly

• $450 or $1,000, depending on rating or billet

Enlisted personnel on active duty currently who 

volunteer to serve in specific enlisted communities 

undermanned at sea. Participants may either extend 

their sea duty assignment or curtail their current shore 

duty assignment and return to sea duty early. 

Specifically for the nuclear program, must be an 

Engineering Department Master Chief (generally E-8 or 

E-9) or Leading Engineering Laboratory Technician 

(generally E-5 or E-6).

d

5. Assignment Incentive Pay (AIP) (37 U.S.C. 307a, Special pay: Assignment Incentive Pay; Navy Policy Memorandum 003-06, 

Assignment Incentive Pay (Dec. 7, 2006))

• Monthly, paid in lump sum depending on tour 

length

• $166.67

Active duty personnel having completed the first 

permanent duty assignment following initial training, 

applied for select assignments (i.e., specifically for the 

nuclear propulsion program, AIP-eligible assignments 

are only for the Nuclear Power Training Unit), and 

serving in grades E-5 to E-9.

d

6. Enlistment Bonus (37 U.S.C. 331, General bonus authority for enlisted members; OPNAVINST 1160.9, Enlistment Bonus (EB) 

Program (Apr. 5, 2007))
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 40 GAO-17-39 Special and Incentive Pay

Frequency and Amount(s) per Payment, 2015a Overview of Eligibility-Criteriab

Range of Annual 

Recipients 

(numbers of 

personnel, fiscal 

years 2010-2015)

• One-time

• $11,000

Initial enlistees in the Navy and certain prior-service 

members selected for the nuclear field program who 

successfully complete the course of instruction; enlist 

for up to 6 years; and meet all requirements for the 

nuclear field program.

2698 – 3161

Source: GAO analysis of Navy policies and budget data. | GAO-17-39

Notes: The Navy has not yet completed consolidation of the SDAP, SDIP, and AIP. Until 

consolidation is complete, these programs are authorized under legacy S&I pay statutes. Authority to 

enter into new ESRP agreements under 37 U.S.C. § 355 expires December 31, 2017.

a

The amounts shown were established in Navy guidance for nuclear personnel in 2015. The actual 

statutory caps may be higher.

b

The overview of eligibility criteria for nuclear personnel is derived from cited service-level policy, 

Navy budget justification materials, and interviews with Navy officials. It represent a summary of 

some, but not all, of the requirements that an applicant for (or recipient of) each pay must meet. 

Complete criteria are identified in cited service-level policy.

c

The range of recipients for the SRB and ESRP includes personnel who received initial contract 

awards but not personnel who received anniversary payments.

d

We did not collect data on the number of recipients of SDIP and AIP. Because we determined that 

these pays are limited in scope and purpose, we excluded them from our analysis.

Of the 6 S&I pays for enlisted nuclear personnel shown in table 4, all but 

Enlisted Supervisor Retention Pay (ESRP) are also offered across the 

Navy to select occupations or specialties outside of the nuclear field. 

Enlistees selected for nuclear training may be eligible for an enlistment 

bonus if they complete training and attain their nuclear rating. After 

attaining their nuclear rating, nuclear-trained enlisted personnel are then 

eligible to receive monthly Special Duty Assignment Pay (SDAP) of up to 

$600 per month, depending on their billet.2 Many enlisted nuclear 

personnel will also apply for and receive one or more reenlistment 

bonuses over their careers. Specifically, eligible members may receive a 

Selective Reenlistment Bonus (SRB) if they have fewer than 10 years of 

service and an ESRP bonus once they have more than 10 years of 

service.

In addition to monthly SDAP and one or more SRB and ESRP bonuses, 

nuclear-trained enlisted personnel may also be eligible for monthly Sea 

Duty Incentive Pay (SDIP) and monthly Assignment Incentive Pay (AIP) 

at some point (or points) in their career. SDIP and AIP are limited to 

 2 The statutory cap on SDAP is set at $600 per month. However, the Navy may choose to 

offer a lesser amount. In 2015, the Navy offered up to $450 per month under the SDAP 

program.
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 41 GAO-17-39 Special and Incentive Pay

sailors who apply and are selected to fill certain critical billets. Within the 

nuclear propulsion program, SDIP payments of either $450 or $1,000 per 

month are limited to two specific types of supervisory billets on 

submarines at sea. As of 2016, AIP amounts are $166.67 per month and 

are available only to sailors who volunteer to serve as Nuclear Power 

Training Unit instructors.

The Navy obligated more than $169 million per year in constant 2015 

dollars, on average, on nuclear-related S&I pays from fiscal years 2010 

through 2015.3 This $169 million average amount represented 

approximately 11 percent of the Navy’s average annual obligations for 

special and incentive pays to all of its active duty personnel during that 

same period. Although for fiscal years 2010 through 2015 the Navy’s total 

annual obligations for all S&I pays declined by about 17 percent, S&I 

pays for nuclear personnel increased by 2 percent over the same period 

in constant 2015 dollars. Retention bonuses for officers and enlisted 

personnel—specifically, NOIP and SRB—accounted for the largest total 

obligations of the Navy’s S&I pays that we analyzed further for the 

nuclear occupation (see figure 6).

 3 This total includes obligations for 8 of 11 pays shown in tables 3 and 4, excluding Sea 

Duty Incentive Pay (SDIP), Assignment Incentive Pay (AIP), and the enlistment bonus for 

nuclear enlisted personnel. We did not include SDIP and AIP in our analysis because of 

their limited purpose for influencing personnel assignments to select billets as opposed to 

being used for retention or recruitment for the nuclear propulsion program more broadly. 

We did not include the enlistment bonus because Navy officials told us that up to one-third 

of enlisted trainees drop out of training each year and do not receive the bonus as a 

result. They told us that, consequently, the Navy disburses less funding than what it 

obligates for these bonuses. Because the scope of our review is limited to analysis of 

obligations for S&I pays, excluding disbursement data, our analysis of enlistment bonus 

obligations may have been misleading given the lower disbursement rates, and therefore 

we omitted this from our scope.

Retention Bonuses 

Represented the 

Largest Portion of the 

Navy’s S&I Pay 

Obligations for the 

Nuclear Propulsion 

Occupation in Fiscal 

Years 2010 through 

2015
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 42 GAO-17-39 Special and Incentive Pay

Figure 6: Average Annual Obligations for Navy’s S&I Pays for Nuclear Personnel and for Other Active Duty Personnel and 

Activities, Fiscal Years 2010 - 2015

(Constant 2015 dollars)

a

The Nuclear Officer Incentive Pay (NOIP) obligations shown include obligations for Nuclear Officer 

Continuation Pay, the Nuclear Career Annual Incentive Bonus, and the Nuclear Career Accession 

Bonus.

For fiscal years 2010 through 2015, total obligations for officer S&I pays 

declined by approximately 7 percent, from approximately $80 million to 

about $75 million in constant 2015 dollars. NOIP obligations accounted 

for about 99 percent of those obligations. By contrast, SSIP comprised 

around 1 percent of obligations over that period because of its limited use 

by the Navy for retaining a goal of 25 O-5 or O-6 submarine officers each 

year.4 As shown in figure 7, NOIP obligations for Nuclear Officer 

Continuation Pay (COPAY), Nuclear Career Annual Incentive Bonuses 

(AIB), and Nuclear Career Accession Bonuses (NCAB), in particular, 

varied in accordance with yearly changes in the number of recipients for 

those pays.

 4 Navy officials told us that they are currently evaluating the need to continue offering this 

pay.

S&I Pay Obligations for 

Nuclear Officers
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 43 GAO-17-39 Special and Incentive Pay

Figure 7: Annual Obligations for and Recipients of the Navy’s Nuclear Officer 

Incentive Pay Program, Including—Nuclear Officer Continuation Pay, Nuclear 

Career Annual Incentive Bonus, and Nuclear Career Accession Bonus, Fiscal Years 

2010 - 2015

Obligations for COPAY, AIB, and NCAB increased in fiscal years 2011 

and 2012 following years in which the Navy fell short of officer retention 

goals. Because retention levels for nuclear surface warfare officers 

declined each year from 2010 to 2014, according to NOIP program 

documentation, the Navy increased the COPAY rate for this group of 

officers from $30,000 to $35,000 (in nominal dollars) per year in 

December 2014.

For fiscal years 2010 through 2015, total obligations for S&I pays for 

nuclear enlisted personnel increased by nearly 11 percent, from about 

$85 million to approximately $94 million in constant 2015 dollars. SRB 

obligations accounted for about half or more of those total obligations 

each year. As shown in figure 8, SRB obligations generally increased in 

proportion with yearly changes in the number of recipients, rising overall 

by about 45 percent from fiscal year 2010 to fiscal year 2015 in constant 

2015 dollars.

S&I Pay Obligations for 

Nuclear Enlisted

Personnel
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 44 GAO-17-39 Special and Incentive Pay

Figure 8: Annual Obligations for and Recipients of the Navy’s Selective 

Reenlistment Bonus for Nuclear Personnel, Fiscal Years 2010 - 2015

SRB obligations for nuclear personnel also varied from year to year 

because of changes the Navy made to the program in terms of the 

possible amounts that sailors were eligible to receive. Specifically, award 

ceilings and bonus multiples were increased or decreased for certain 

nuclear ratings and reenlistment “zones” at different times.5 For example, 

in April 2014 seven different nuclear ratings became eligible for an 

increased, newly established ceiling of $100,000. The Navy also 

increased the multiples associated with a few ratings and reenlistment 

zones at that time. On the other hand, in September 2012 the Navy 

decreased the bonus multiples for three nuclear ratings.

Figure 9 shows that, for fiscal years 2010 through 2015, total obligations 

for SDAP to nuclear enlisted personnel decreased overall from $27 

million to $26 million (about 5 percent) in constant 2015 dollars, while the 

numbers of recipients increased (by approximately 9 percent).

 5 Eligibility for the Selective Reenlistment Bonus (SRB) is limited to members with 17 

months of continuous active duty but not more than 14 years of active duty. This time 

period is further divided into three zones. Participants may receive only one bonus per 

zone during a career. However, nuclear-trained sailors who have 10 to 23 years of service 

are eligible to apply for Enlisted Supervisor Retention Pay (ESRP) instead of the SRB. 
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 45 GAO-17-39 Special and Incentive Pay

Figure 9: Annual Obligations for and Recipients of the Navy’s Special Duty 

Assignment Pay for Nuclear Personnel, Fiscal Years 2010 - 2015

Our analysis showed that the downward trend in SDAP obligations 

relative to the increased number of recipients is attributable in part to the 

effects of inflation. The SDAP award levels have remained the same 

since December 2006.

The Navy’s obligations for ESRP declined steadily each year from fiscal 

years 2010 to 2014 in constant 2015 dollars (see figure 10).
Appendix II: Case Study on Nuclear Propulsion 

Pays

Page 46 GAO-17-39 Special and Incentive Pay

Figure 10: Annual Obligations for and Recipients of the Navy’s Enlisted Supervisor 

Retention Pay for Nuclear Personnel, Fiscal Years 2010 - 2015

Figure 10 also shows that ESRP recipients declined in all years except 

fiscal year 2012. The increase in that year corresponded with the Navy’s 

January 2012 restructuring of the ESRP program. Specifically, the Navy 

increased the maximum eligibility period for enlisted personnel in terms of 

their years of service from 20 to 23. This change increased the number of 

sailors eligible for the bonus and ultimately increased the total number of 

reenlistments. In addition, the Navy reconfigured its reenlistment zones 

for ESRP at that time, including narrowing the zone associated with its 

most expensive contracts and thereby decreasing their associated costs. 

According to Navy program documents we reviewed, the reconfiguration 

of ESRP incentivized retention of the most qualified senior enlisted sailors 

and linked ESRP eligibility to continued achievement of career 

milestones. The result, according to the program documents, has been an 

overall improvement in program outcomes in terms of the sailors retained, 

with lower yearly costs.
Appendix III: Case Study on Aviation Pays

Page 47 GAO-17-39 Special and Incentive Pay

Each of the military services relies on pilots to operate aircraft (see figure 

11). For the purpose of this case study, we define “pilot” as a 

servicemember directly responsible for the flight operations of an aircraft. 

We include both traditionally piloted aircraft (aircraft with crew on board, 

both fixed-wing and rotary-wing) and remotely piloted aircraft (aircraft 

without crew on board). However, due to data limitations, we have 

included non-pilot aviators in some trend analyses and have noted when 

we have done so.1

Figure 11: Examples of Military Pilots 

Before qualifying to operate aircraft for military missions, pilots must 

complete a series of training requirements. The lengths associated with 

this training vary by specific type of aircraft and range from 18 weeks for 

remotely piloted aircraft (RPA) operators on certain platforms to 5 years 

for a fighter jet pilot. The cost of replacing an experienced pilot can be 

significant. For example, in 2014 the Army estimated the cost of replacing 

a special operations rotary-wing pilot with 6 years of experience at $8.8 

 1 Non-pilot aviators include those personnel responsible for navigation or weapon systems 

on traditionally piloted aircraft. These include Naval Flight Officers in the Navy and the 

Marine Corps and Combat Systems Officers and Air Battle Managers in the Air Force. 

Similarly, for the RPA community, some datasets included non-pilot aviators, such as 

those personnel operating weapon systems or sensors rather than the aircraft.

Appendix III: Case Study on Aviation Pays

Overview of the 

Aviation Occupation
Appendix III: Case Study on Aviation Pays

Page 48 GAO-17-39 Special and Incentive Pay

million, and in 2014 the Air Force estimated the cost of replacing a fighter 

pilot with 5 years of experience at $9 million.

According to the U.S. Bureau of Labor Statistics, the U.S. civilian-sector 

aviation industry employed 238,400 airline and commercial pilots, 

copilots, and flight engineers in 2014. The U.S. military employed 

approximately 34,100 active-duty pilots in the same timeframe.2 In 

February 2014, we reported that U.S. airlines have historically recruited 

military pilots and that these pilots can be competitive in the commercial 

aviation sector due to their accumulation of flying hours while in the 

military. However, we also noted that, according to some airline 

representatives, the percentage of pilots with military experience who

were hired by airlines declined from about 70 percent prior to 2001 to 

about 30 percent as of 2013.3 Most of the services discussed the 

relationship between their military pilot workforces and the civilian aviation 

sector in their annual reports analyzing the effects of the Aviation 

Continuation Pay (ACP) program and its impact on retention.4 Our 

analysis found that the services’ conclusions about the level of 

competition represented by recruitment from the commercial aviation 

sector varied. Specifically, the Air Force concluded that it needed to 

increase bonus amounts to retain sufficient numbers of pilots, while the 

Navy and the Marine Corps concluded that they did not. For example, in 

reports supporting the ACP programs in fiscal years 2010 through 2015, 

the Air Force consistently stated that it expected increased recruitment of 

pilots from the commercial aviation sector, and cited this as justification 

for continued offerings of retention bonuses. In contrast, the Navy stated 

that airline compensation would have to increase in order to have a 

significant impact on the retention of Navy pilots. Also, the Marine Corps 

reported that the potential increase in hiring by commercial airlines did not 

warrant the reinstatement of ACP bonuses for fiscal year 2013. The fiscal 

year 2016 National Defense Authorization Act required the Department of 

Defense (DOD) to report to Congress by February 1, 2016, on a marketbased compensation approach to the retention of aviation officers that 

 2 This figure does not include RPA pilots.

3 GAO, Aviation Workforce: Current and Future Availability of Airline Pilots, GAO-14-232

(Washington D.C.: February 28, 2014).

4 Annual reports are submitted to the Secretary of Defense and Congress pursuant to 37 

U.S.C. § 301b(i), which is the legacy S&I provision authorizing special pay for aviation 

career officers extending their period of active duty.

Civilian Pilot 

Employment
Appendix III: Case Study on Aviation Pays

Page 49 GAO-17-39 Special and Incentive Pay

considers the pay and allowances offered by commercial airlines to pilots 

and the propensity of pilots to leave the Air Force to become commercial 

airline pilots.5 DOD responded in July 2016 with a report in support of 

increasing aviation-related S&I pays.6 DOD’s report noted that the military 

has experienced high levels of pilot retention as a result of decreased 

civilian airline pilot salaries, significantly reduced civilian airline pilot 

hiring, increase military pay and benefits, and an increased sense of duty 

and patriotism after the events of September 11th, 2001. However, the 

report added that the department—based on a study by the RAND 

Corporation—anticipated that increased hiring by commercial airlines 

over the next 5 to 7 years would require bonus amounts to increase from 

$25,000 per year to a range of $38,500—62,500 per year. As such, DOD 

requested that Congress consider increasing the rates of Aviation Career 

Incentive Pay, and increase the maximum authorized level of Aviation 

Continuation Pay from $25,000 per year to $35,000 per year.

According to DOD officials, all traditionally piloted aircraft are operated by 

officers, while some RPAs are operated by enlisted personnel. 

Specifically, the Marine Corps and the Army rely on enlisted personnel to 

operate their RPAs, while officers generally operate Air Force and Navy 

RPAs.7 The Air Force initially assigned servicemembers from the 

traditionally piloted aircraft community to pilot RPAs until a dedicated 

RPA-pilot career track was established. The Navy uses only pilots rated 

on traditionally piloted aircraft to fly RPAs and, according to officials, does 

not plan to create a designated RPA career track. These differences in 

how the services staff RPA positions, combined with statutory and policy 

limitations on offering aviation-specific S&I pays for the RPA community, 

have led to a variety of S&I pays being used to retain RPA operators. 

Specifically, per statute and DOD policy, only pilots rated on traditionally 

piloted aircraft have been provided Aviation Career Incentive Pay (ACIP). 

In addition, the decision of the Army and the Marine Corps to use enlisted 

personnel to operate RPAs has meant that these pilots cannot receive 

 5 Pub. L. No. 114-92, § 617(e) (Nov. 25, 2015). 

6 DOD, Office of the Deputy Under Secretary of Defense for Military Personnel Policy, 

Report To Congress In Support Of Increasing Special And Incentive Pays For Aviation 

Officers (July, 2016).

7 In December 2015 the Air Force announced plans to use enlisted personnel to operate 

certain types of RPA. According to a Navy official, some enlisted Navy personnel operate 

small tactical RPAs.

Aviation Workforce 

Mix
Appendix III: Case Study on Aviation Pays

Page 50 GAO-17-39 Special and Incentive Pay

ACIP or ACP, as only officers qualify for these pays. Instead, the Army 

and the Marine Corps have used the Selective Reenlistment Bonus 

(SRB) to retain these pilots. In April 2014 we reported on the need for the 

Air Force to assess its workforce mix for RPA operators. Specifically, we 

recommended that the Air Force develop a recruiting and retention 

strategy for RPA operators and evaluate using alternative personnel 

populations to operate RPAs.8 The Air Force concurred with our 

recommendation to develop a recruiting and retention strategy, stating 

that it expected to have a recruiting and retention strategy that was 

tailored to the specific needs and challenges of RPA pilots by October 

2015. However, this has not been completed. The Air Force partially 

concurred with our recommendation to evaluate the viability of using 

alternative personnel populations as RPA pilots, but as of December 

2016 this recommendation has not been implemented.

The military services used a variety of special and incentive pay programs 

to retain pilots in fiscal years 2010 through 2015, including combinations 

of up to four different types of pays (see table 5).

Table 5: Special and Incentive Pays Provided to Pilots, Fiscal Years 2010 – 2015 

Army Air Force Navy Marine Corps

Aviation Career Incentive Pay 

(ACIP)

(37 U.S.C. § 301a)

√ √ √ √

Aviation Continuation Pay (ACP)

(37 U.S.C. § 301b)

√ √ √ √a

Selective Reenlistment Bonus 

(SRB)

(37 U.S.C. § 331 (a)(3))

√b N/A N/A √a

Assignment Incentive Pay (AIP)

(37 U.S.C. § 307a)

√b √c N/A N/A

Legend: √ = Pay is used by the service; N/A = Not applicable. No special and incentive pays were 

offered to personnel in these categories.

Source: GAO analysis of DOD data. | GAO-17-39

a

The Marine Corps suspended offering new ACP contracts in fiscal year 2012. According to officials, 

the Marine Corps offered SRB to enlisted personnel operating RPAs.

b

According to officials, the Army offered SRB to enlisted personnel operating RPAs, and AIP to pilots 

in the Special Operations Aviation Regiment.

 8 GAO, Air Force: Actions Needed to Strengthen Management of Unmanned Aerial 

System Pilots, GAO-14-316 (Washington, D.C.: Apr. 10, 2014).

Special and Incentive 

Pays for Pilots
Appendix III: Case Study on Aviation Pays

Page 51 GAO-17-39 Special and Incentive Pay

c

According to officials, the Air Force offered AIP to pilots only qualified on RPA platforms.

ACIP is offered only to officers. DOD defines this pay as a financial 

incentive for officers to pursue a military career as aviators.9 The pay was 

first offered in 1974, in part to compensate aviators for the inherent 

dangers associated with military flight. Until October 2016, DOD policy for 

ACIP did not recognize operation of an RPA as aerial flight, and therefore 

RPA pilots who were not graduates of traditional undergraduate pilot 

training were not authorized to receive ACIP.10 From fiscal years 2010 

through 2015, the pay levels for ACIP established in statute varied by 

years of aviation service, and ranged from $125 to $840 per month 

($1,500 - $10,080 per year) for pilots rated on traditionally piloted 

aircraft.11 For example, the rate for pilots with over 6 to 14 years of 

aviation service (which accounted for 37 percent of military pilots for fiscal 

years 2010 through 2015) has not changed since 1989, which due to 

inflation equates to a net 57 percent decrease in the purchasing power of 

this benefit. Recent statutory changes have allowed DOD to begin 

offering ACIP to RPA pilots, to a maximum of $1,000 per month ($12,000 

per year).12 DOD has updated guidance to reflect this change, and has 

also provided the services with the option not to provide ACIP to all 

pilots.13 Our analysis of ACIP obligations from fiscal years 2010 through 

2015 shows an overall decrease of 15 percent. Figure 12 displays how 

obligations for ACIP decreased across all four military services from fiscal 

 9 DOD Instruction 7730.57, Aviation Incentive Pays and Continuation Bonus Program

(Aug. 12, 2008). As part of DOD’s effort to consolidate S&I pay authorities, this instruction 

was cancelled by DOD Instruction 7730.67, Aviator Incentive Pays and Bonus Program

(Oct. 20, 2016). However, it was applicable from fiscal year 2010 through fiscal year 

2015.

10 DOD Instruction 7730.67, Aviator Incentive Pays and Bonus Program (Oct. 20, 2016).

11 The National Defense Authorization Act for Fiscal Year 2017 increased the maximum 

monthly rate to $1,000. Pub. L. No. 114-328, § 616(a) (Dec. 23, 2016).

12 In Fiscal Year 2016, Congress authorized aviation special pays for RPA pilots, setting 

the maximum pay at $1000 per month for ACIP. National Defense Authorization Act for 

Fiscal Year 2016, Pub. L. No. 114-92 (Nov. 25, 2015).

13 DOD Instruction 7730.67, Aviator Incentive Pays and Bonus Program (Oct. 2016). This 

Instruction also changed the name of this pay from Aviation Continuation Incentive Pay 

(ACIP) to Aviation Incentive Pay (AvIP).

Pilot-Specific Pays

Aviation Career Incentive 

Pay (ACIP)
Appendix III: Case Study on Aviation Pays

Page 52 GAO-17-39 Special and Incentive Pay

years 2010 through 2015. During this time the population of active duty 

pilots operating traditionally piloted aircraft declined by 5 percent.

Figure 12: Total Funds Obligated for Aviation Career Incentive Pay by Service, 

Fiscal Years 2010 – 2015

Note: Obligations are reported in fiscal year 2015 constant dollars. Data include non-pilot aviators.

ACP is offered only to officers. The pay was first authorized in fiscal year 

1981, and DOD defines it as a financial incentive to retain qualified, 

experienced officer aviators who have completed—or are within 1 year of 

completing—any active duty service commitment incurred for 

undergraduate aviator service. According to DOD officials, in practice, 

pilots generally qualify for ACP at approximately 10 years of aviation 

service—the end of their initial active duty service obligation. From fiscal 

year 2010 through 2015 the level of pay was set by each service and was

capped at $25,000 per year for pilots operating traditionally piloted 

aircraft.14 During this time, most of the services offered contracts up to 5 

 14 The National Defense Authorization Act for Fiscal Year 2016 authorized ACP for RPA 

pilots and set the annual cap at $35,000 for RPA pilots only. Pub. L. No. 114-92 (Nov. 25, 

2015). The National Defense Authorization Act for Fiscal Year 2017 authorized all ACP 

eligible pilots to receive up to $35,000 annually. Pub. L. No. 114-328, § 616(a) (Dec. 23, 

2016).

Aviation Continuation Pay

(ACP)
Appendix III: Case Study on Aviation Pays

Page 53 GAO-17-39 Special and Incentive Pay

or 6 years long, but in fiscal year 2013, the Air Force began offering 9-

year contracts to fighter pilots for a total contract amount of $225,000.

Starting in fiscal year 2015, the Air Force offered 9-year contracts to all 

pilots for a total contract amount of up to $225,000.

The services may target ACP to specific groups of aviators, adjust the 

pay amounts on an annual basis, or choose not to offer the pay at all. 

Table 6 shows that the services implemented ACP differently for pilots of 

different types of aircraft, and that their implementation approaches 

generally varied from year to year.

Table 6: Active Duty Aviation Continuation Pay Contract Amounts 

(Range of Contract Amounts Offered by Fiscal Year)

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Air Force Fixed $45,000-

$125,000

$45,000-

$125,000

$45,000-

$125,000

$45,000-

$225,000

$125,000-

$225,000 

$125,000-

$225,000

Rotary $45,000-

$125,000

$45,000-

$125,000

$45,000-

$125,000

$45,000-

$125,000

$125,000 $125,000-

$225,000

RPA - - $125,000 $125,000 $125,000 $125,000-

$225,000

Navy Fixed $125,000 $25,000-

$125,000

$50,000-

$125,000

$50,000-

$125,000

$75,000-

$125,000

$75,000-

$125,000

Rotary $125,000 $50,000 $25,000-

$75,000

$75,000 $75,000 $75,000

RPA - - - - - -

Marine Corps Fixed $15,000-

$90,000

$25,000-

$50,000

- - - -

Rotary $6,000-

$85,000

$0-

$60,000

- - - -

RPA - - - - - -

Army Fixed - - - - - -

Rotary $12,000-

$150,000

$12,000-

$150,000

$12,000-

$150,000

$12,000-

$150,000

$12,000-

$150,000

$12,000-

$150,000

RPA - - - - - -

Legend: FY = fiscal year; RPA = remotely piloted aircraft, — = Aviation Continuation Pay contracts were not offered to pilots in these categories for the specified fiscal year.

Source: GAO analysis of DOD data. | GAO-17-39

Note: The amounts listed are the range of amounts offered over the contract term for each platform, 

for the specific fiscal year offering. Aviation Continuation Pay contracts offered to non-pilot aviators 

are not included.

The Reserve Components also provided ACP to pilots. Specifically, the 

Marine Corps Reserve, the Air Force Reserve, the Air National Guard, 

and the Navy Reserve all offered ACP to pilots for at least a portion of 
Appendix III: Case Study on Aviation Pays

Page 54 GAO-17-39 Special and Incentive Pay

fiscal years 2010 through 2015. Similarly to the active component, the 

Reserve Components used ACP to retain pilots to help personnel 

inventories meet requirements.15

For fiscal years 2010 through 2015, obligations for ACP decreased by 53 

percent across DOD. Figure 13 shows how the extent of this decrease 

varied for each of the services, largely due to different policy decisions at 

the service level about how to implement the pay. These implementation 

approaches are discussed in further detail below.

Figure 13: Total Obligations for Aviation Continuation Pay, Fiscal Years 2010 – 2015

Notes: Obligations are reported in fiscal year 2015 constant dollars. Data include non-pilot aviators. 

Data include obligations both for new contracts and contracts signed in prior years.

We found that each of the services took a different approach to 

implementing ACP. Specifically, there are differences in how the services 

identified the target population and established the contract amounts 

offered. These approaches resulted in different amounts of ACP offered 

 15 While we obtained and reviewed documentation of the Reserve Component ACP 

programs for fiscal years 2010 through 2015, as noted in our report we found limitations 

with overall Reserve Component S&I pay data. As such, our focus in this case study is on 

the S&I pays provided to active duty pilots.
Appendix III: Case Study on Aviation Pays

Page 55 GAO-17-39 Special and Incentive Pay

(see table 6). Some of the primary differences we identified are that the 

Air Force offered ACP to broad categories of pilots (for example, fighter 

pilots, RPA pilots), while the Navy and Marine Corps offered ACP by 

specific platform (that is, the model of aircraft a pilot operates). The Army 

offered ACP to a small group of elite special operations rotary-wing pilots. 

Also, the Marine Corps suspended ACP offerings in fiscal year 2012, and 

is the only service to have done so.16

The SRB is available only to enlisted personnel and therefore is used as 

an aviation pay only by the Army and the Marine Corps, because the 

Navy and the Air Force do not generally use enlisted personnel to pilot 

aircraft. DOD defines this pay as an incentive for enlisted personnel to 

reenlist in positions experiencing retention challenges. The level of pay is 

set by each service, not to exceed $30,000 for each year of obligated 

service on active duty.17 The Army and the Marine Corps have offered the 

SRB to enlisted personnel operating RPAs. Specifically, in fiscal years 

2010 through 2015 the Army provided 783 bonuses to RPA operators, at 

an average rate of $9,501 per year, and the Marine Corps provided 123

bonuses to RPA operators, at an average rate of $2,376 per year.

Both officers and enlisted personnel may qualify for AIP. DOD defines this 

as a pay used to encourage members to volunteer for difficult-to-fill jobs 

or assignments in less desirable locations. The level of pay is set by each 

service, up to a cap of $3,000 per month ($36,000 per year).18 For fiscal 

years 2010 through 2015, according to service officials, the Army offered 

AIP to pilots in the Special Operations Aviation Regiment, and the Air 

Force offered AIP to RPA operators. Air Force officials told us that their 

intent was to use AIP to allow pilots only rated on RPAs to be 

 16 The Marine Corps Reserve offered ACP in fiscal years 2013 through 2015.

17 37 U.S.C. § 331.

18 37 U.S.C. § 307a.

Additional Special 

and Incentive Pays 

Offered to Pilots

Selective Reenlistment 

Bonus (SRB)

Assignment Incentive Pay 

(AIP)
Appendix III: Case Study on Aviation Pays

Page 56 GAO-17-39 Special and Incentive Pay

compensated at a comparable level to those RPA operators who were 

rated on traditionally piloted aircraft and who were receiving ACIP.
Appendix IV: Case Study on Cyber Workforce 

Pays

Page 57 GAO-17-39 Special and Incentive Pay

The Department of Defense’s (DOD) cybersecurity workforce includes 

military personnel within the active and Reserve Components, DOD 

civilians, and contractors who all work together to accomplish DOD’s 

three primary cyber missions: (1) to defend DOD networks, systems, and 

information; (2) to defend the U.S. homeland and U.S. national interests 

against cyberattacks of significant consequence; and (3) to provide cyber 

support to military operational and contingency plans.1 The cybersecurity 

workforce includes various roles, such as designing and building secure 

information networks and systems, monitoring and detecting unauthorized 

activity in the cyberspace domain, and performing offensive and 

defensive cyberspace operations in support of the full range of military 

operations (see figure 14).

Figure 14: Sailors Assigned to the Navy Cyber Defense Operations Command

 1 DOD defines its cybersecurity workforce as personnel who secure, defend, and preserve 

data, networks, net-centric capabilities, and other designated systems by ensuring that 

appropriate security controls and measures are in place and taking internal defensive 

actions. DOD Directive 8140.01, Cyberspace Workforce Management (Aug. 11, 2015).

Appendix IV: Case Study on Cyber 

Workforce Pays

DOD’s Cybersecurity 

Workforce Mix
Appendix IV: Case Study on Cyber Workforce 

Pays

Page 58 GAO-17-39 Special and Incentive Pay

In November 2011 we reported that DOD faced challenges in determining 

the appropriate size for its cybersecurity workforce because of variations 

in how work is defined and the lack of a designated cybersecurity career 

field identifier for all of its cybersecurity personnel.2 Further, we reported 

that DOD had established a cybersecurity workforce plan, but that the 

plan only partially described strategies to address gaps in human capital 

approaches and critical skills and competencies, and that it did not 

address performance management or recruiting flexibilities. In addition, 

the plan only partially described building the capacity to support workforce 

strategies. We recommended that DOD either update its departmentwide 

cybersecurity workforce plan or ensure that departmental components 

have plans that appropriately address human capital approaches, critical 

skills, competencies, and supporting requirements for its cybersecurity 

workforce strategies. DOD concurred and implemented this 

recommendation by updating its cybersecurity workforce plan. DOD 

policy calls for maintaining a total force management perspective to 

provide qualified cyberspace government civilian and military personnel to 

identified and authorized positions, augmented where appropriate by 

contracted services support. These personnel function as an integrated 

workforce with complementary skill sets to provide an agile, flexible 

response to DOD requirements.3 In May 2011 we reported that DOD 

needed to define cybersecurity personnel with greater specificity in order 

for the military services to organize, train, and equip cyber forces. We 

recommended that DOD develop and publish detailed policies and 

guidance pertaining to categories of personnel who can conduct the 

various forms of cyberspace operations.4 DOD agreed with this 

recommendation and has taken steps to implement it. DOD asked the 

Institute for Defense Analyses to assess the current and projected total 

force mix for DOD’s Cyber Mission Force and, if possible, to suggest 

alternative staffing plans. The Institute for Defense Analyses issued its 

report in August 2016.

 2 GAO, Cybersecurity Human Capital: Initiatives Need Better Planning and Coordination, 

GAO-12-8 (Washington D.C.: Nov. 29, 2011).

3 DOD Directive 8140.01, Cyberspace Workforce Management (Aug. 11, 2015).

4

GAO, Defense Department Cyber Efforts: More Detailed Guidance Needed to Ensure 

Military Services Develop Appropriate Cyberspace Capabilities, GAO-11-421

(Washington, D.C.: May 20, 2011).
Appendix IV: Case Study on Cyber Workforce 

Pays

Page 59 GAO-17-39 Special and Incentive Pay

According to the U.S. Bureau of Labor Statistics, in 2014 more than 

82,000 information security analysts were employed in the United States, 

and in 2015 the median annual wage for information security analysts 

was $90,120.5 According to information obtained from the services, there 

is a need to offer S&I pays to the cybersecurity military workforce in order 

to compete with the civilian sector, which includes government, DOD 

contractors, and corporations. For example, the Navy noted in its 

justification for offering selective reenlistment bonuses (SRBs) that sailors 

within cyber-related career fields could qualify for positions in the civilian 

workforce with salaries starting at $90,000 with a $5,000 to $10,000 signon bonus.

Service officials told us that for fiscal years 2010 through 2015 the 

monetary incentive they have primarily relied on to retain cybersecurity 

personnel is the SRB. In addition to the SRB, starting in fiscal year 2015 

the Army offered assignment incentive pay (AIP) and special duty 

assignment pay (SDAP) to a select group of cybersecurity personnel 

working at the Army Cyber Command. Starting in fiscal year 2016 the Air 

Force offered SDAP to those in a designated cybersecurity career field. 

Of the retention bonuses and assignment pays being offered to 

cybersecurity personnel, officers are eligible only for AIP. According to 

services officials, during this same period S&I pays to officers in 

cybersecurity career fields were not as necessary as they were for 

enlisted personnel because the services had not experienced the same 

growth and retention concerns as they had with the enlisted personnel. 

However, an Air Force official noted that due to low staffing for 

Cyberspace Operations officers, the Air Force is currently assessing 

whether to offer the officer retention bonus. According to service officials, 

the services have the flexibility they need to effectively use S&I pays to 

address retention issues in the cybersecurity workforce. Table 7 shows 

the different monetary S&I pays that the services have used to incentivize 

cybersecurity personnel to remain in cyber-related career fields for fiscal 

years 2010 through 2015.

 5 The median wage is the wage at which half the workers in an occupation earned more 

than that amount and half earned less. According to the U.S. Bureau of Labor Statistics, 

for information security analysts in May 2015, the lowest 10 percent earned less than 

$51,280, and the highest 10 percent earned more than $143,770.

Employment of 

Civilian Cybersecurity 

Personnel

Special and Incentive 

Pays to Retain 

Cybersecurity 

Personnel
Appendix IV: Case Study on Cyber Workforce 

Pays

Page 60 GAO-17-39 Special and Incentive Pay

Table 7: Special and Incentive Pays Provided to Retain Cyber Personnel, Fiscal 

Years 2010–2015 

Army Navy Marine Corps Air Force

Enlisted

Selective Reenlistment Bonus (SRB)

(37 U.S.C. §331)

√ √ √ √

Special Duty Assignment Pay 

(SDAP)

(37 U.S.C. §307)

√a N/A N/A N/Ac

Assignment Incentive Pay (AIP)

(37 U.S.C. §307a)

√b N/A N/A N/A

Officers

Assignment Incentive Pay (AIP)

(37 U.S.C. §307a)

√b N/A N/A N/A

Legend: √ = Pay is used by the service; N/A = Not applicable. No special and incentive pays were 

offered to personnel in these categories.

Source: GAO analysis of DOD data. | GAO-17-39

a

Starting in fiscal year 2015 the Army began to offer special duty assignment pay to Army enlisted 

soldiers who are certified as an Army Cyber apprentice, journeyman, or master permanently assigned 

to an authorized Army Cyber Mission Force position.

b

Starting in fiscal year 2015 the Army began to offer assignment incentive pay to Army enlisted 

soldiers, warrant officers, and commissioned officers who are permanently assigned to an authorized 

Army Cyber position.

c

Starting in fiscal year 2016 the Air Force began to offer special duty assignment pay to Air Force 

personnel in career field Cyber Warfare Operations (1B4X1). However, this was not included in our 

case study because it is outside our scope.

For fiscal years 2010 through 2015, the services offered SRBs to cyberrelated career fields. According to DOD, the SRB is the primary monetary 

force-shaping tool to achieve required enlisted retention requirements by 

occupation or skill set. The level of pay is set by each service and is 

limited by the cap placed by DOD of $25,000 for each year of obligated 

service in an active component. The maximum amount of SRB payments 

that servicemembers can receive is $100,000 per contract for the active 

component.6 Factors that military service officials cited for determining 

SRB bonuses for cyber-related career fields include growing 

requirements, mission criticality of the skill set, and replacement costs. 

Officials also noted that they take into account previous retention trends, 

current budget constraints, and input from community managers. All of 

the services offer bonuses by career field identifier, which identifies the 

 6 DOD Instruction 1304.31, Enlisted Bonus Program (EBP) (March 12, 2013).

Selective Reenlistment 

Bonus
Appendix IV: Case Study on Cyber Workforce 

Pays

Page 61 GAO-17-39 Special and Incentive Pay

basic skills and training the servicemember holds. The Navy also may 

offer SRBs by rating7 and offers bonuses to personnel within the 

Cryptologic Technician (Networks) and Information Systems Technician 

ratings. As a result, all qualified personnel in a career field within the 

rating would be eligible for the bonus. According to Navy officials, they 

only offer by rating when necessary and in most cases the Navy uses the 

combination of rating, career field, and zone. Based on our review of 13 

SRB bonus announcements for fiscal years 2010 through 2015, the Navy 

offered a bonus to those in Cryptologic Technician (Networks) rating in all 

13 announcements and those in Information Systems Technician rating in 

11 of the 13 announcements. The Army adjusts the amount of the SRB 

based on rank, additional skills above the basic skills required for the 

career field, and location; the Navy and the Air Force adjust the bonus 

multiplier8 based on zone; and the Marine Corps adjusts the amount 

based on rank and zone.9 For example, the Army’s award amounts for 

Cryptologic Network Warfare Specialists for a 4-year reenlistment varied 

from $8,000 to $41,800 for fiscal years 2010 through 2015, depending on 

the rank, zone, skill, and location. Table 8 depicts the amounts offered for 

fiscal years 2010 through 2015 for selected career fields.

Table 8: Comparison of Services’ Use of Selective Reenlistment Bonuses Offered for a 4-Year Contract for Selected CyberRelated Career Fields, Fiscal Years 2010–2015 

Dollars in thousands

Occupation Other Rank FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Army: 35Q 

Cryptologic 

Network Warfare 

Specialist

E-3 - - $19.9 $19.9 $8.0 $13.9

E-4 - - $21.6 $21.6 $8.8 $15.1

E-5 - - $23.8 $23.8 $9.7 $16.7

E-6 to E-7 - - $26.7 $26.7 $10.8 $18.7

 7 Ratings are broad identifiers for a collection of related career fields. They identify career 

fields that encompass related aptitude, training, experience, knowledge, and skills for the 

purpose of career development and advancement. 

8 The Navy and the Air Force determine reenlistment bonus amounts by multiplying (1) a 

servicemember’s current monthly basic pay by (2) the member’s number of additional 

years (or fractions of year) of obligated service by (3) a bonus multiplier (the higher the 

factor, the greater the bonus). These three factors are multiplied together to derive a 

servicemember’s SRB award. The amount is limited by the maximum amount offered.

9 The services may use eligibility zones for the payment of Selective Reenlistment 

Bonuses. These zones are defined in terms of years of active duty service. Zone A 

includes reenlistments falling from 17 months to 6 years of active duty; zone B, from 6 to 

10 years; zone C, from 10 to 14 years; and zone E, from 18 to 20 years.
Appendix IV: Case Study on Cyber Workforce 

Pays

Page 62 GAO-17-39 Special and Incentive Pay

Occupation Other Rank FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Exploitation 

analyst within a 

specified 

location

E-3 - - - - - $19.9 

E-4 - - - - - $21.6 

E-5 - - - - - $23.8 

E-6 to E-7 - - - - - $26.7 

Interactive Onnet operator 

within a 

specified 

location

E-3 - - - - - $31.1

E-4 - - - - - $33.8

E-5 - - - - - $37.3

E-6 to E-7 - - - - - $41.8

Navy: 9308 

Interactive ONNET Operator

Zone A Any 5 5 5 5 7 7

Zone B Any 5 5 5 5 5 6

Zone C Any 5 5 5 5 5 6

Marine Corps: 

0689 Cyber 

Security 

Technician

Zone A E-5 to E-9 $58.5 $38.8 $49.0 $44.8 $60.8 $51.0

Zone B E-5 $36.0 $16.5 $28.0 $45.5 $46.3 $52.5

E-6 to E-9 $40.0 $18.3 $31.0 $50.3 $51.3 $58.0

Zone C E-5 $27.0 $11.8 $11.8 $18.0 - -

E-6 $31.0 $13.3 $13.5 $20.5 $35.0 $35.3

E-7 to E-9 $34.5 $14.8 $15.0 $22.8 $38.8 $39.3

Air Force: 1B4X1 

Cyber Warfare 

Operations

Zone A Any - 1 1 0 2 2

Zone B Any - 0 0 1 4 4

Zone C Any - 0 0 0 3 3

Zone E Any - 0 0 0 0 0

Legend: FY = fiscal year; - = No special and incentive pays were offered. The Army’s 35Q career field was established in fiscal year 2012 and the Army 

started to offer by skill and location starting in fiscal year 2015. The Air Force’s 1B4X1 career field was established in fiscal year 2011.

Source: GAO analysis of DOD data. | GAO-17-39

Notes: An amount shown for a given fiscal year is the maximum amount the service offered over the 

life of the contract. For the Navy and the Air Force, the amounts shown are multipliers used to 

calculate the bonus amount. For example, an E-6 with a monthly basic pay of $3,400 who reenlisted 

for 4 years could receive a bonus of $13,600 if the multiplier were 1. If the multiplier were 7, the 

bonus amount would be $95,200. However, if the calculated amount exceeded the maximum amount 

allowed, the bonus amount would be reduced to the maximum amount allowed.

In addition to offering SRBs, the Army has recently begun to offer AIP and 

SDAP to select cybersecurity personnel, and the Air Force has recently 

begun to offer SDAP. In 2015 the Army first approved the use of SDAP 

and AIP to target certain cybersecurity personnel. As of February 2015 

these pays targeted qualified cybersecurity personnel within the Army 

Cyber Command’s Cyber Mission Force. According to Army 

documentation, SDAP was approved because those in the Army’s Cyber 

Mission Force require special qualifications met through rigorous 

screening or special schooling. Also according to Army documentation, 

AIP was approved because positions within the Army’s Cyber Mission 

Other S&I Pays to 

Incentivize Cybersecurity 

Personnel
Appendix IV: Case Study on Cyber Workforce 

Pays

Page 63 GAO-17-39 Special and Incentive Pay

Force were considered difficult to fill. According to DOD policy, AIP is a 

temporary compensation tool to provide an additional monetary incentive 

to encourage servicemembers to volunteer for select difficult-to-fill or less 

desirable assignments, locations, or units designated by, and under the 

conditions of service specified by, the Secretary concerned. According to 

Army officials, the Army is exploring other approaches to further 

incentivize cybersecurity personnel within the Army Cyber Command’s 

Cyber Mission Force. Unlike the bonuses that are offered to soldiers 

qualified in a specified career field, the Army does not offer AIP or SDAP 

by career field and instead offers these pays only to personnel who are 

permanently assigned to authorized positions within the Cyber Mission 

Force and have completed the appropriate training and certifications. 

According to an Army official, in fiscal year 2015 the Army obligated 

$151,000 for 85 soldiers within the Cyber Mission Force to receive SDAP 

and obligated $310,000 for 128 personnel within the Cyber Mission Force 

to receive AIP. As noted in table 9, eligible cyber personnel receive 

monthly payments of between $350 and $800.

Table 9: Special Duty Assignment Pay and Assignment Incentive Pay Offered to 

Army Cybersecurity Personnel in Army Cyber Command, Fiscal Year 2015

Special Duty 

Assignment Pay 

monthly rate

Assignment 

Incentive Pay

monthly rate

Total 

monthly 

rate

Total 

annual 

rate

Enlisted personnel

Apprentice $150 $200 $350 $4,200

Journeyman $225 $300 $525 $6,300

Master $300 $500 $800 $9,600

Officers

Apprentice N/A $200 $200 $2,400

Journeyman N/A $300 $300 $3,600

Master N/A $500 $500 $6,000

Legend: N/A = Not applicable. Special duty assignment pay is authorized for enlisted personnel only.

Source: GAO analysis of DOD data. | GAO-17-39

According to an Air Force official, in fiscal year 2016 the Air Force first 

offered SDAP to cybersecurity personnel in career field Cyber Warfare 

Operations (1B4X1). The Air Force offered SDAP because 

servicemembers in career field 1B4X1 are considered to have highly 

specialized training and skill sets. Eligible cyber enlisted personnel 

receive monthly payments of between $150 and $225.
Appendix IV: Case Study on Cyber Workforce 

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Page 64 GAO-17-39 Special and Incentive Pay

As noted earlier, total obligations for all enlisted SRBs have been 

declining; however, SRB obligations for certain cybersecurity career fields 

have increased in recent years. For example, as shown in figure 15, after 

a significant decline from fiscal year 2010, Army obligations for cyberrelated SRBs have been increasing since fiscal year 2014, and as shown 

in figures 16 and 17, Navy and Marine Corps obligations for cyber-related 

SRBs have been increasing since fiscal year 2012. According to Army 

officials, the Army did not start to target cyber until 2013. The higher 

obligation amount seen in figure 15 for fiscal year 2010 was not due to a 

focus on cyber but was in part due to shortages in high density career 

fields, such as 25B and 25U. As noted earlier, in addition to cyber 

personnel, these career fields contain other types of personnel, such as 

information technology personnel. According to Navy officials, the 

decrease in fiscal year 2012 and the subsequent increase reflect the 

reenlistment need for the skills at the given time. According to Marine 

Corps officials, obligations for cyber-related fields decreased in fiscal 

years 2011 and 2012 because of reductions in force structure. The 

Marine Corps was reaching its reduced 2012 overall inventory goal, but

for certain career fields containing cybersecurity personnel there was an 

increase in force structure for fiscal year 2015 to support the Cyber 

Mission Force build-up,

10 which DOD began in 2012. The Air Force was 

unable to provide reliable SRB obligations for its cyber-related career 

fields.

 10 Among DOD’s cyber personnel and forces is the Cyber Mission Force. DOD’s Cyber 

Mission Force is to carry out DOD’s cyber missions. Once fully operational, Cyber Mission 

Force is projected to include nearly 6,200 military, civilian, and contractor support 

personnel from across the military departments and defense components.

Total Obligations for 

Selective 

Reenlistment 

Bonuses for Enlisted 

Cybersecurity 

Personnel Have 

Increased in Recent 

Years
Appendix IV: Case Study on Cyber Workforce 

Pays

Page 65 GAO-17-39 Special and Incentive Pay

Figure 15: Number of Selective Reenlistment Bonus Recipients and Total Dollars 

Obligated for Selective Reenlistment Bonuses for Career Fields Identified to Include 

Cybersecurity Army Personnel, Fiscal Years 2010–2015

Notes: Obligations are reported in fiscal year 2015 constant dollars. Cyber-related career fields 

include the following: 25B Information Technology Specialist; 25D Cyber Network Defender; 35Q 

Cryptologic Network Warfare Specialist; 25U Signal Support Systems Specialist; and 35T Military 

Intelligence Systems Maintainer/Integrator. Obligations and number of recipients includes all 

personnel within each career field noted, not just cybersecurity personnel.
Appendix IV: Case Study on Cyber Workforce 

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Page 66 GAO-17-39 Special and Incentive Pay

Figure 16: Number of Selective Reenlistment Bonus Recipients and Total Dollars 

Obligated for Selective Reenlistment Bonuses for Career Fields Identified to Include 

Cybersecurity Navy Personnel, Fiscal Years 2010–2015

Notes: Obligations are reported in fiscal year 2015 constant dollars. Cyber-related career fields and 

ratings include the following: Cryptologic Technician (Networks) and Information Systems Technician 

Ratings. Obligations and number of recipients includes all personnel within each career field noted, 

not just cybersecurity personnel.
Appendix IV: Case Study on Cyber Workforce 

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Page 67 GAO-17-39 Special and Incentive Pay

Figure 17: Number of Selective Reenlistment Bonus Recipients and Total Dollars 

Obligated for Selective Reenlistment Bonuses for Career Fields Identified to Include 

Cybersecurity Enlisted Marine Corps Personnel, Fiscal Years 2010–2015

Note: Obligations are reported in fiscal year 2015 constant dollars. Cyber-related career fields include 

the following: 0651 Cyber Network Operator, 0659 Cyber Network Systems Chief, 0681 Information 

Security Technician, 0689 Cyber Security Technician, 2651 Special Intelligence System 

Administrator/Communicator, and 6694 Aviation Logistics Information Management System 

Specialist. Obligations and number of recipients include all personnel within each career field noted, 

not just cybersecurity personnel.

The average per-person SRB amounts the services offered to cyberrelated career fields for fiscal years 2010 through 2015 varied, as shown 

in table 10, ranging from about $2,277 to about $71,788. During this time, 

the Navy’s Interactive Operators have consistently on average received 

the highest amounts, ranging from about $58,594 to $71,788. The Army 

on average paid the lowest bonus amounts to personnel within cyberrelated career fields.
Appendix IV: Case Study on Cyber Workforce 

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Page 68 GAO-17-39 Special and Incentive Pay

Table 10: Average Per-Person Rate of Selective Reenlistment Bonuses for Cyber-Related Career Fields/Ratings by Service, 

Fiscal Years 2010–2015

Career field/rating FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Army

25B Information Technology Specialist $6,832 $5,109 $5,192 $4,406 $2,277 $6,206

25D Cyber Network Defender $0 $0 $0 $0 $0 $11,975

35Q Cryptologic Network Warfare Specialist $0 $0 $18,778 $13,269 $8,198 $16,570

25U Signal Support Systems Specialist $5,116 $4,174 $3,521 $3,951 $2,818 $6,266

35T Military Intelligence Systems 

Maintainer/Integrator

$3,302 $8,106 $10,276 $5,496 $6,190 $7,778

Navy

27XX Information Systems Technician 

Personnel

$5,113 0 $35,694 $35,025 $31,264 $39,555

9308 Interactive ON-NET Operator $69,759 $71,788 $59,445 $58,594 $66,095 $66,938

Cryptologic Technician (Networks) $45,162 $35,173 $28,577 $35,411 $41,425 $41,473

Information Systems Technician $13,180 $14,792 $22,126 $20,643 $16,351 $15,496

Marine Corps

0651 Cyber Network Operator $37,400 $22,031 $26,546 $17,472 $29,327 $33,378

0659 Cyber Network Systems Chief $34,775 $13,047 $36,049 $28,797 $29,442 $30,696

0681 Information Security Technician $39,494 $38,875 $14,907 $22,867 $13,174 $13,000

0689 Cyber Security Technician $42,781 $48,098 $41,104 $51,565 $52,889 $50,298

2651 Special Intelligence System 

Administrator/Communicator

$31,763 $44,947 $45,790 $28,535 $22,199 $14,234

6694 Aviation Logistics Information 

Management System Specialist

$22,181 $30,253 $14,013 $17,845 $15,633 $15,289

Legend: FY = fiscal year.

Source: GAO analysis of DOD data. | GAO-17-39

Note: Average rates are reported in fiscal year 2015 constant dollars.

According to service officials, the Reserve Components may also use 

retention bonuses to retain personnel in cyber-related career fields. 

However, according to information received from service officials, the 

number of S&I pays that have been offered to retain cybersecurity 

personnel within the Reserve Components is relatively small. For 

example, according to documentation provided by the Navy, for fiscal 

years 2010 through 2015, the Navy Reserve expended about $379,000 to 

retain 68 personnel in cyber-related career fields. According to Marine 

Corps officials, the Marine Corps Reserve offers those in the Cyber 

Security Technician career field a retention bonus, and the current 

requirement for this career field is 12 personnel. Further, according to Air 

Force officials, the Air National Guard has not offered bonuses in the past 

to cyber-related career fields, and the Air Force Reserve did not offer 
Appendix IV: Case Study on Cyber Workforce 

Pays

Page 69 GAO-17-39 Special and Incentive Pay

cyber-related career field bonuses in fiscal year 2015 and did not have 

plans to offer bonuses in fiscal year 2016. For these reasons, we did not 

include the Reserve Components in our case study for cybersecurity.
Appendix V: Objectives, Scope, and 

Methodology

Page 70 GAO-17-39 Special and Incentive Pay

A Senate Armed Services Committee report accompanying a bill for the 

National Defense Authorization Act for Fiscal Year 2016 included a 

provision that we review the effectiveness of the Department of Defense’s 

(DOD) special and incentive (S&I) pay programs.1 This report assesses 

(1) trends in DOD obligations for S&I pay programs for fiscal years 2005 

through 2015 and the extent to which DOD reports such obligations 

department-wide and (2) the extent to which the military services applied 

key principles of effective human capital management in the design of 

S&I pay programs for recruitment and retention of servicemembers in 

selected high-skill occupations for fiscal years 2010 through 2015.

To address our first objective, we analyzed obligations for S&I pays from 

the military services’ active and Reserve Component military personnel 

accounts for fiscal years 2005 through 2015. We selected this timeframe 

to enable us to evaluate trends over time, and fiscal year 2015 was the 

most recent year of available obligations data at the time of our review. 

We obtained these data from the annual budget justification materials that 

DOD and the military services published in connection with their military 

personnel appropriations requests. We normalized S&I pay obligations 

data to constant fiscal year 2015 dollars using the series of military 

personnel deflators for fiscal years 2005 through 2015 published in 

DOD’s National Defense Budget Estimates for Fiscal Year 2015. To 

analyze trends in S&I pay obligations over time across the active military 

service components, we obtained obligations for the more than 60 S&I 

pays across the services and grouped them into nine categories in 

accordance with the consolidated pay categories authorized by Congress 

 1 S. Rep. 114-49 at 147 (2015) accompanying S. 1376, a proposed bill for the National 

Defense Authorization Act for Fiscal Year 2016. In this report, we use the term “special 

and incentive pays” to refer to those pays and bonuses in chapter 5 of Title 37 of the U.S. 

Code. 

Appendix V: Objectives, Scope, and 

Methodology
Appendix V: Objectives, Scope, and 

Methodology

Page 71 GAO-17-39 Special and Incentive Pay

in the National Defense Authorization Act for Fiscal Year 2008.2 We 

compared each active component’s total S&I pay obligations from fiscal 

years 2005 through 2015 with each service’s total military personnel 

obligations. In addition, we obtained average strength numbers from the 

annual budget justification materials and compared these data with the 

services’ S&I pay obligations and assessed any possible correlation.3 We 

discussed with service officials the factors that may have contributed to 

trends we identified in the S&I pay obligations data we reviewed. To 

assess the reliability of the data on S&I pays, we assessed the 

completeness of the data and compared the data against other data 

sources. GAO has designated DOD’s financial management area as high 

risk due to long-standing deficiencies in DOD’s systems, processes, and 

internal controls. Since some of these systems provide the data used in 

the budgeting process, there are limitations to the use of DOD budget 

data.4 However, based on discussions with appropriate DOD officials and 

our comparison of the trends in the budget data against other data 

sources, we determined that the S&I pay obligation data for the active 

component are sufficiently reliable for showing overall trends for S&I 

pays. However, we determined that data for Reserve Component S&I 

pays were unreliable due to incompleteness or inconsistency, as 

described earlier in this report. We compared the available Reserve 

Component data with guidance established in DOD’s Financial 

Management Regulation, which provides guidance for a uniform budget 

and accounting classification that is to be used for preparing budget 

 2 Pub. L. No. 110-181 div. A, title VI, subtitle F (Jan. 28, 2008). The nine categories 

include (1) General bonus authority for enlisted members (e.g., Selective Reenlistment 

Bonus and enlistment bonus); (2) Assignment pay or special duty pay (e.g., Assignment 

Incentive Pay, Special Duty Assignment Pay, and Career Sea Pay); (3) Hazardous duty 

pay (e.g., Hostile Fire and Imminent Danger Pay); (4) Special bonus and incentive pay for 

officers in health professions; (5) Special aviation incentive pay and bonus authorities 

(e.g., Aviation Career Incentive Pay and Aviation Continuation Pay); (6) Skill incentive pay 

or proficiency bonus (e.g., Foreign Language Proficiency Pay , Career Enlisted Flyer 

Incentive Pay, and Diving Pay); (7) Special bonus and incentive pay authorities for nuclear

officers (e.g., Nuclear Officer Incentive Pay and Nuclear Career Accession Bonus); (8) 

General bonus authority for officers (e.g., Accession Bonus for New Officers in Critical 

Skills and Judge Advocate Continuation Pay); and (9) Existing authorities which were 

retained (e.g., Critical Skills Retention Bonus and Combat-related Injury Rehabilitation 

Pay).

3 “Military average strength” reflects the fiscal year average of monthly end strength data 

for enlisted personnel. “End-strength” represents the actual number of personnel on board 

at the end of a fiscal year.

4 GAO-15-290, High Risk Series: An Update, (Washington, D.C.: Feb. 11, 2015).
Appendix V: Objectives, Scope, and 

Methodology

Page 72 GAO-17-39 Special and Incentive Pay

estimates, including the budget justification materials we reviewed.5

Further, we examined DOD policy, key statutes and accounting standards 

for developing and reporting cost information to determine the extent to 

which they were followed by DOD when reporting on S&I pay 

obligations.6 We compared the available Reserve Component data with 

guidance established in DOD’s Financial Management Regulation and 

with federal internal control standards to determine the extent to which 

the guidance was followed.7

To address our second objective, we selected a non-generalizable 

sample of three high-skill occupations from across the military services to 

review in greater detail as case studies. For the purposes of this review, 

we limited the scope and definition of “high-skill occupations” to the six 

occupations identified in Senate Report 114-49: nuclear maintenance and 

engineering (i.e., nuclear propulsion), pilots (i.e., aviation), critical 

language skills, information technology, cyber warfare (i.e., 

cybersecurity), and special operations. In selecting case studies from this 

pool of occupations, we sought to include (1) a mix of S&I pay programs 

associated with an occupation-specific pay authority and S&I pay 

programs that apply authorities that are available across occupation 

types; (2) programs containing pays in varying stages of implementing the 

consolidation authorities established in the National Defense 

Authorization Act for Fiscal Year 2008; and (3) at least one emerging 

occupation. On the basis of these three criteria, we selected nuclear 

propulsion, aviation, and cybersecurity as case studies. We selected 

nuclear because there are occupation-specific pays for nuclear personnel 

and the consolidation special bonus and incentive pay authorities for 

nuclear officers were completely implemented. We selected aviation 

because there are occupation-specific pays for aviators and the 

consolidation special aviation incentive pay and bonus authorities have 

not been fully implemented. In addition, we selected aviation because of 

the recent policy changes for aviation-related S&I pays involving remotely 

 5 Department of Defense 7000.14R, Financial Management Regulation (May 2015).

6 The Chief Financial Officer’s Act, Pub. L. No. 101-576 (Nov. 15, 1990), underscores the 

importance of improving financial management in the federal government. Among other 

things, it calls for developing and reporting cost information. Statement of Federal 

Financial Accounting Standards Number 4, “Managerial Cost Accounting Standards and 

Concepts,” is aimed at providing reliable and timely information on the full cost of federal 

programs, their activities, and outputs.

7 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: Nov. 1999).
Appendix V: Objectives, Scope, and 

Methodology

Page 73 GAO-17-39 Special and Incentive Pay

piloted aircraft pilots. Lastly, we selected cybersecurity because it is an 

emerging career field.

While the information obtained from the case studies is not generalizable 

for all occupations across DOD, it enabled us to obtain the perspectives 

of how the services use their S&I pay programs for the three high-skill 

occupations we selected.

To determine the extent to which the military services applied key 

principles of effective human capital management in the design of their 

S&I pay programs associated with our selected occupations, we reviewed 

DOD and service policies and guidance on the special and incentive pays 

used for the three occupations we selected. We analyzed available data 

and reports from the military services on the eligibility criteria, pay 

amounts, and numbers of recipients in each of the occupations, and we 

discussed with cognizant officials the context for changes to the S&I pay 

programs targeting these occupations. For our selected occupations, we 

reviewed the services’ retention, assignment, and officer accession S&I 

pay obligations to analyze trends and to understand reasons for any 

fluctuations we identified from fiscal years 2010 through 2015.8 To identify 

key principles of effective human capital management, we reviewed a 

compilation of GAO’s body of work on human capital management, 

DOD’s Eleventh Quadrennial Review of Military Compensation, and the 

DOD Diversity and Inclusion Strategic Plan 2012 - 2017.

9 Using these 

sources, we assembled a list of seven key principles of effective human 

capital management.10 To identify the extent to which the services met 

these key principles in the design of their S&I pay programs, we reviewed 

the principles and compared them with service-provided documentation 

on the S&I pay programs for our three case studies, including policies and 

guidance, administrative messages, program proposals and justifications, 

as well as with information obtained through interviews with service 

 8 We did not include enlistment bonuses in our analyses for our second objective because 

service officials told us that at the time the servicemember enlists in the armed services, 

enlistment bonuses are generally not linked to a servicemember’s occupation..

9 GAO, A Model of Strategic Human Capital Management, GAO-02-373SP; (Washington, 

D.C.: Mar. 15, 2002); GAO, Human Capital: Key Principles for Effective Strategic 

Workforce Planning, GAO-04-39; (Washington, D.C.: Dec. 11, 2003); GAO, High-Risk 

Series: An Update, GAO-11-278 (Washington, D.C.: Feb. 2011). Department of Defense, 

Eleventh Quadrennial Review of Military Compensation (June 2012). Department of 

Defense, DOD Diversity and Inclusion Strategic Plan 2012-2017 (2012).

10 The seven key principles are listed in figure 3 of this report.
Appendix V: Objectives, Scope, and 

Methodology

Page 74 GAO-17-39 Special and Incentive Pay

officials. The analysts then used this comparison between the principles 

and the service information to determine whether each service’s 

approach to the pay programs for our case studies was consistent with 

each principle. Specifically, for each case study of S&I pay programs 

associated with nuclear propulsion, aviation, and cyber operations, an 

analyst independently assessed whether each service’s processes for 

planning, implementing, and monitoring the pay programs addressed, 

partially addressed, or did not address the seven principles of human 

capital management. By addressed, we mean the principle was applied 

throughout the program and demonstrated through documentation and 

testimonial information from interviews with service officials; by partially 

addressed, we mean one or more parts of the principle, but not all parts, 

were explicitly addressed (e.g., the principle is addressed for one or a few 

pays within a program, but not for all; or the principle is demonstrated 

through policy but not through implementation); and by not addressed, we 

mean that no part of the principle was explicitly addressed from reviewing 

program documentation or interviews with officials. Following the initial 

case study assessments, a second analyst reviewed all available 

documentation and testimonial evidence for each principle and each 

service’s programs and made an assessment about the extent to which 

the principle was addressed. Where the two analysts disagreed, they 

discussed the evidence and reached consensus on the extent to which 

the principle in question was addressed. Once the assessment process 

was completed, we reviewed our results with cognizant DOD and service 

officials and incorporated their feedback or additional information where 

appropriate. In addition to the key principles for effective human capital 

management, we also compared aspects of DOD’s application of S&I pay 

program guidance with federal internal control standards that emphasize 

the importance of establishing clear and consistent agency objectives.11

To determine DOD’s progress in consolidating S&I pay programs from 

legacy statutory authorities to new authorities established in the National 

Defense Authorization Act for Fiscal Year 2008, we met with cognizant 

DOD officials and we obtained and reviewed documentation related to 

DOD’s implementation and status of the pay consolidation, such as 

updated or new DOD instructions resulting from the consolidation effort.12

 11 GAO/AIMD-00-21.3.1.

12 Pub. L. No. 110-181 (Jan. 28, 2008).
Appendix V: Objectives, Scope, and 

Methodology

Page 75 GAO-17-39 Special and Incentive Pay

We interviewed officials or, where appropriate, obtained documentation at 

the organizations listed below:

Office of the Secretary of Defense

• Office of the Under Secretary of Defense for Personnel and 

Readiness

• Office of the Under Secretary of Defense, Comptroller

• Office of the Assistant Secretary of Defense for Manpower and 

Reserve Affairs

• Office of the Assistant Secretary of Defense for Health Affairs

• Defense Manpower Data Center

Department of the Air Force

• Office of the Assistant Secretary of the Air Force for Financial 

Management and Comptroller

• Office of the Deputy Chief of Staff for Manpower, Personnel and 

Services (A1)

Department of the Army

• Army Budget Office

• Office of the Deputy Chief of Staff of the Army, G-1

• Army Human Resources Command

• Office of the Chief of the Army Reserve

• Office of the Director of the Army National Guard

Department of the Navy

• Office of the Assistant Secretary of the Navy for Manpower and 

Reserve Affairs

• Office of the Deputy Chief of Naval Operations for Manpower, 

Personnel, Training, and Operations (N1)

• Office of the Deputy Commandant of the Marine Corps for Programs 

and Resources

• Office of the Deputy Commandant of the Marine Corps for Manpower 

and Reserve Affairs
Appendix V: Objectives, Scope, and 

Methodology

Page 76 GAO-17-39 Special and Incentive Pay

We conducted this performance audit from July 2015 to February 2017 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix VI: Comments from the Department 

of Defense

Page 77 GAO-17-39 Special and Incentive Pay

Appendix VI: Comments from the 

Department of Defense
Appendix VI: Comments from the Department 

of Defense

Page 78 GAO-17-39 Special and Incentive Pay
Appendix VI: Comments from the Department 

of Defense

Page 79 GAO-17-39 Special and Incentive Pay
Appendix VII: GAO Contact and Staff 

Acknowledgments

Page 80 GAO-17-39 Special and Incentive Pay

Brenda S. Farrell, (202) 512-3604 or farrellb@gao.gov

In addition to the contact named above, key contributors to this report 

were Beverly Schladt, Assistant Director; Melissa Blanco, Aica Dizon, 

Farrah Graham, Foster Kerrison, Amie Lesser, Felicia Lopez, Martin 

Mayer, Shahrzad Nikoo, Stephanie Santoso, John Van Schaik , and 

Cheryl Weissman.

Appendix VII: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments
Related GAO Products

Page 81 GAO-17-39 Special and Incentive Pay

Unmanned Aerial Systems: Further Actions Needed to Fully Address Air

Force and Army Pilot Workforce Challenges. GAO-16-527T. Washington 

D.C.: March 16, 2016.

Military Recruiting: Army National Guard Needs to Continue Monitoring, 

Collect Better Data, and Assess Incentives Programs. GAO-16-36. 

Washington D.C.: November 17, 2015.

Unmanned Aerial Systems: Actions Needed to Improve DOD Pilot 

Training. GAO-15-461. Washington, D.C.: May 14, 2015.

Human Capital: DOD Should Fully Develop Its Civilian Strategic 

Workforce Plan to Aid Decision Makers. GAO-14-565. Washington, D.C.: 

July 9, 2014.

Air Force: Actions Needed to Strengthen Management of Unmanned 

Aerial System Pilots. GAO-14-316. Washington, D.C.: April 10, 2014.

Imminent Danger Pay: Actions Needed Regarding Pay Designations in 

the U.S. Central Command Area of Responsibility. GAO-14-230R. 

Washington, D.C.: January 30, 2014.

Human Capital: Additional Steps Needed to Help Determine the Right 

Size and Composition of DOD’s Total Workforce: GAO-13-470. 

Washington, D.C.: May 29, 2013.

Cybersecurity Human Capital: Initiatives Need Better Planning and 

Coordination. GAO-12-8. Washington, D.C.: November 29, 2011.

Military Cash Incentives: DOD Should Coordinate and Monitor Its Efforts 

to Achieve Cost-Effective Bonuses and Special Pays. GAO-11-631. 

Washington, D.C.: June 21, 2011.

Military Personnel: Military and Civilian Pay Comparisons Present 

Challenges and Are One of Many Tools in Assessing Compensation.

GAO-10-561R. Washington, D.C.: April 1, 2010.

Military Personnel: DOD Needs to Improve the Transparency and 

Reassess the Reasonableness, Appropriateness, Affordability, and 

Sustainability of Its Military Compensation System. GAO-05-798. 

Washington, D.C.: July 19, 2005.

Related GAO Products
Related GAO Products

Page 82 GAO-17-39 Special and Incentive Pay

A Model of Strategic Human Capital Management.GAO-02-373SP, 

Washington, D.C.: March 15, 2002.

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