United States General Accounting Office

GAO Report to Congressional Committees

April 1997 FORCE STRUCTURE

Streamlining Plans

Could Enable Navy to

Reduce Personnel

Below Fiscal Year 1999

Goal

GAO/NSIAD-97-90

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-272548 

April 18, 1997

The Honorable Dirk Kempthorne

Chairman, Subcommittee on Personnel

Committee on Armed Services

United States Senate

The Honorable Stephen Buyer

Chairman, Subcommittee on Military Personnel

Committee on National Security

House of Representatives

This report discusses (1) the size and composition of Navy active duty forces between 1989 and

1999, (2) the Navy’s plans to achieve its fiscal year 1999 active duty force goal and initiatives

that could further reduce forces beyond the planned fiscal year 1999 level, and (3) the Navy’s

processes for determining active military force requirements. Because of your expressed

interest in oversight of military personnel issues, we are addressing this report to you. This

report should be useful to your Committees in deliberations on the future size and composition

of the Navy. This report contains two recommendations to the Secretary of the Navy and

matters for congressional consideration.

We are sending copies of this report to the Secretaries of Defense and the Navy and the

Director, Office of Management and Budget. Copies will also be made available to others on

request.

If you or your staff have any questions on this report, please call me on (202) 512-3504. Major

contributors to this report are listed in appendix II.

Richard Davis

Director, National Security

 Analysis
Executive Summary

Purpose Since the end of the Cold War, the U.S. Navy has reduced its active

military forces by about 28 percent and has plans to further reduce its

personnel to help modernize a smaller but more capable force. In 1996,

pay and allowances for active duty Navy personnel was $17 billion, or

about 25 percent of the Navy’s total obligational authority. Because of

congressional concerns about active duty personnel levels, GAO examined

(1) the size and composition of Navy active duty forces between 1989 and

1999, (2) the Navy’s plans to achieve its fiscal year 1999 active duty force

goal and initiatives that could further reduce forces beyond the planned

fiscal year 1999 level, and (3) the Navy’s processes for determining active

military force requirements. GAO has issued related reports on the Army

and the Air Force.1

Background The 1993 Department of Defense (DOD) Bottom-Up Review assessed the

security needs of the United States. The review concluded that there was a

need for a naval force of 12 aircraft carriers, 11 air wings, 45 to 55 attack

submarines, and 346 battle force ships to carry out the national military

strategy. Although the review did not specify the personnel force level

needed to execute the strategy, defense guidance subsequently specified

that the Navy should reduce its active duty personnel to 394,900.2

In 1996, the Congress established minimum active end strengths for each

service. The 1997 Defense Authorization Act gave the Secretary of Defense

limited flexibility to decrease each service’s minimum end strength by

1 percent. The Navy’s minimum end strength was set at 395,000.

For defense planning purposes, DOD has divided force structure and

associated military and civilian personnel into two basic

categories—mission and infrastructure. Mission programs include those in

combat; direct combat support; intelligence; research, development, test,

and evaluation; command, control, and communications; and space. The

Navy’s infrastructure programs comprise activities that provide support

services and primarily operate from fixed locations. Infrastructure

activities include acquisition infrastructure; installation support; central

command, control, and communications; central logistics; central medical;

central personnel; force management; and central training. As of

1

Force Structure: Army Support Forces Can Meet Two-Conflict Strategy With Some Risks

(GAO/NSIAD-97-66, Feb. 28, 1997) and Force Structure: Potential Exists to Further Reduce Active Air

Force Personnel (GAO/NSIAD-97-78, Mar. 28, 1997).

2

The term “personnel” is used throughout this report to connote positions for which funding has been

requested or provided.

Page 2 GAO/NSIAD-97-90 Force Structure
Executive Summary

September 30, 1996, about 55 percent of active duty personnel were in

mission-related positions, the remainder being in infrastructure positions.

The Navy uses different processes to determine personnel requirements

for its mission forces and its shore establishment. The biggest difference

between the two processes is the top-down approach of the process for

determining mission-related personnel requirements and the bottom-up

approach of the shore process. For most mission forces, the Navy uses

centrally established measurable criteria to form the basis for its

personnel requirement levels for specific missions. The Navy uses a

decentralized “efficiency review” process conducted by 22 separate

commands to determine personnel requirements for its infrastructure

activities and a small portion of its mission activities, such as intelligence,

research and development, and command and control—about half of the

Navy’s active duty personnel. Under this process, the Navy’s major

commands3

 identify personnel requirements for the shore-based activities.

The Assistant Chief of Navy Personnel for Total Force Programming,

Manpower, and Information Resources Management is the Navy’s policy

and program manager for determining shore personnel requirements. For

the last 25 years, numerous audit reports by GAO and other organizations

have criticized the Navy’s various processes to determine shore personnel

requirements.

The Federal Managers’ Financial Integrity Act (FMFIA) requires that agency

internal control systems be periodically evaluated and that the heads of

executive agencies report annually on their systems’ status. FMFIA requires

that a corrective action plan be devised and that milestones be established

to correct identified problems.

Results in Brief The Navy plans to reduce its active military forces from 592,652 in fiscal

year 1989 to 394,900 in fiscal year 1999. By the end of fiscal year 1999,

infrastructure-related positions will have been reduced at a slightly greater

rate than mission-related positions. During the drawdown, the Navy plans

to reduce the number of enlisted personnel at a higher rate than officers

and the number of junior officers and enlisted personnel at higher rates

than senior personnel. While officers and enlisted personnel in

mission-related positions will decline by nearly the same percentage,

enlisted personnel will decline by a greater percentage than officers in

infrastructure positions. As a result, the proportion of officers in

3

This report uses the term “major command” to refer to the major commanders or bureaus that are

authorized personnel resources directly by the Chief of Naval Operations to accomplish assigned

missions and tasks.

Page 3 GAO/NSIAD-97-90 Force Structure
Executive Summary

infrastructure positions will increase from about 17 percent in fiscal year

1989 to 21 percent in fiscal year 1999. The effect is that costs will not

decline in proportion to personnel.

As of September 30, 1996, the Navy had reduced its active military

personnel by 164,700 primarily by decommissioning ships, submarines,

and aircraft squadrons and closing shore-based activities. The Navy will

need to reduce its forces by another 33,100 to reach its end strength goal

by continuing to close bases, decommission ships, submarines, and

aircraft squadrons, plus reducing recruiting and associated training and

outsourcing some functions. In addition, the Navy has ongoing initiatives

that could eliminate thousands of personnel positions (military and

civilian) after the year 2000. Some initiatives, such as implementing

labor-saving technologies and changing existing policies, are expected to

eliminate positions on ships, submarines, and in aircraft squadrons. The

Navy will also continue its efforts to reduce shore positions by

regionalizing, consolidating, and outsourcing various activities.

For 25 years, the Navy has not properly assessed personnel requirements

for its shore-based activities primarily because of the low priority that the

Navy traditionally gave to managing the shore establishment, ineffective

Navy management and oversight of the shore requirements program, and

changes in program direction. Neither Navy headquarters nor most of the

shore commands have devoted the attention and resources to make the

shore requirements program work. Past evaluations of the requirements

process for mission-related personnel have not surfaced similar or other

major shortcomings. Therefore, GAO focused primarily on the shore

requirements process. The Navy is instituting several measures to

strengthen the shore requirements program. However, without continued

high-level Navy support and long-term commitment, there is no guarantee

that the fate of these proposals will be any different than those of earlier

years. The Navy has little assurance that resources are being used

efficiently and that its shore establishment is appropriately sized without

an effective long-term program for determining personnel requirements.

Accordingly, GAO believes this represents a material weakness in the Navy

that should be reported under the Federal Managers’ Financial Integrity

Act. GAO believes improving the requirements process is particularly

important as the Navy looks for savings and efficiencies to modernize and

recapitalize its operating forces.

Page 4 GAO/NSIAD-97-90 Force Structure
Executive Summary

Principal Findings

Personnel Assigned to

Mission Programs Reduced

Slightly Less Than

Personnel Assigned to

Infrastructure Programs

Since 1989, the Navy has reduced active duty personnel assigned to

mission and infrastructure activities. The Navy anticipates that by fiscal

year 1999, it will have cut mission-related active duty end strength from

about 319,800 in fiscal year 1989 to about 219,800 in fiscal year 1999, or

31 percent; infrastructure-related end strength will decrease from about

272,900 in fiscal year 1989 to about 175,100 in fiscal year 1999, or

36 percent, as seen in figure 1.

Page 5 GAO/NSIAD-97-90 Force Structure
Executive Summary

Figure 1: Navy Downsizing Trends—Personnel Assigned to Mission and Infrastructure Programs for Fiscal 

Years 1989 to 1999

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Fiscal year

Personnel

Mission totals Infrastructure totals

Source: GAO analyses of DOD Future Years Defense Program data.

Note: Fiscal year 1989-94 personnel numbers are actual figures, while fiscal year 1995-99

personnel numbers are Navy estimates.

By the end of 1999, the Navy will have reduced two key components

within each of these categories. Within the mission category, the Navy

plans to reduce combat forces and direct support forces by

Page 6 GAO/NSIAD-97-90 Force Structure
Executive Summary

decommissioning ships, submarines, and air squadrons. About 81 percent

of the infrastructure cuts will be in training and personnel functions. To

achieve these reductions, the Navy plans to close and consolidate recruit

and general skill training centers and to reduce professional education

programs. It also plans to eliminate flight training positions, as it decreases

the total numbers of pilots and naval flight officers. Downsizing personnel

administration and recruiting activities will also help the Navy meet its end

strength goal by fiscal year 1999.

The composition of the Navy’s active duty force will also change between

fiscal year 1989 and 1999. A larger percentage of enlisted personnel

positions will be reduced than is planned for officer positions. For

example, the Navy plans to eliminate about 180,100 enlisted

positions—about 35 percent—and 17,600 active duty officer positions, or

about 24 percent, by fiscal year 1999. During the drawdown, the Navy’s

personnel have grown more senior in rank because the Navy has

eliminated a higher percentage of personnel in its junior ranks than its

senior ranks, and the number of personnel joining the force has declined.

Navy officials attribute this trend primarily to the increased technical

nature of the modern Navy, which requires higher skilled personnel, and

the need to fill positions on the joint staff and DOD agencies, which require

higher graded people.

Navy Has Plan to Reach

Force Goal, but Initiatives

Could Lead to Further

Decreases

The Navy will need to eliminate about 33,100 military positions during

fiscal years 1997 through 1999 to meet its fiscal year 1999 goal of 394,900

active duty personnel. Almost three quarters of the cuts will be taken from

four areas: reducing the number of ships, submarines, and aircraft;

eliminating recruit and general skills training positions; eliminating

military base support positions, largely through outsourcing; and reducing

the number of temporary positions needed for a smaller force. Temporary

positions include those for personnel changing stations, patients,

prisoners, and a small number of positions that the Navy reserves to meet

critical short-term shortages.

In addition to these planned cuts, the Navy has ongoing initiatives that

could further reduce active military force levels at shore activities and

aboard ships. However, the Navy is unsure of both the number of military

positions that could be eliminated and when the cuts could be achieved

because many studies have not been completed. For example, analyses to

regionalize and consolidate shore activities are ongoing in San Diego,

California; Jacksonville and Pensacola, Florida; Pearl Harbor, Hawaii;

Page 7 GAO/NSIAD-97-90 Force Structure
Executive Summary

Washington, D.C.; Norfolk, Virginia; and Puget Sound, Washington. While

these studies have not been completed, Navy officials believe regionalizing

and consolidating shore-based activities could save millions of dollars

mainly by improving business practices and eliminating civilian and

military positions.

The Navy’s Smart Ship program is designed to reduce the number of

military personnel aboard ships by incorporating labor-saving technologies

and changing crewing policies. The Navy will not quantify expected

savings until it completes the tests on the U.S.S. Yorktown and issues its

test report in June 1997. Once these tests are completed, the Navy hopes

to apply the same principles and technologies to other ships in the fleet,

thus multiplying the benefits. In addition to the Smart Ship program, the

Navy is designing future ships—LPD-17, CVX, and SC-21 class ships—to

operate with reduced crews. If these new ships are built and crewed as

currently envisioned, the Navy could further reduce personnel

requirements as it replaces older, more personnel-intensive ships.

Shore Personnel

Requirements Program Has

Been Ineffective for More

Than Two Decades

Over a period of many years, the Congress has expressed concern about

the Navy’s shore personnel requirements program and has on several

occasions directed the Navy to develop a more rigorous system to justify

shore-based personnel needs. The Navy has not resolved the problems

raised by the Congress. Examples of problems cited are (1) many of the

major shore commands have not complied with one or more program

requirements, (2) reviews often have not used standards to compare one

function to another or between similar functions at separate activities, and

(3) the quality and consistency of reviews differ from one command to

another and often even between similar activities. In essence, few

commands have devoted the attention and resources necessary to make

the program work. In most cases, the efficiency review program has

become one of justifying existing resource allocations rather than

evaluating alternative combinations of people, material, facilities, and

organizational structures to ensure that the most cost-effective

combination of resources is used, as Navy instructions specify.

The various audit organizations that have reviewed this program attribute

its ineffectiveness primarily to weak Navy management and oversight.

While the Assistant Chief of Navy Personnel for Total Force Programming,

Manpower, and Information Resources Management is the Navy’s policy

and program manager for determining shore personnel requirements, this

office has not adequately overseen the decentralized efficiency review

Page 8 GAO/NSIAD-97-90 Force Structure
Executive Summary

program. According to a Naval Audit Service report, for example, the

responsible office has made only limited challenges to obvious efficiency

review problems and did not identify the serious problems discussed in

previous audit reports. Other factors, such as the number of Navy

organizations that provide funding to the shore establishment, have also

made the program difficult to manage.

The Navy has taken steps to strengthen the current shore requirements

program. For example, it is changing the program to enable comparative

analyses of like functions and is working to standardize base operating

support functions to facilitate unit costing. However, without high-level,

long-term Navy support and commitment, and improved management

oversight, there is no assurance that the fate of these initiatives will be any

different than those of earlier years.

Recommendations To improve the management and allocation of personnel resources to the

shore establishment, GAO recommends that the Secretary of the Navy

report to the Secretary of Defense the lack of an effective shore

requirements determination program as a material weakness under FMFIA

to maintain visibility of the issue and ensure action is taken. GAO also

recommends that the Secretary of the Navy create an action plan with

milestones to resolve long-standing problems with the shore personnel

requirements program. The plan should specifically explain how the Navy

will attempt to overcome the fundamental problems—such as lack of

senior Navy management commitment to effective management of the

shore establishment and ineffective management oversight and

accountability—that have plagued this program.

Matters for

Congressional

Consideration

Given the long history of congressional concern over the Navy’s ability to

effectively determine the size and composition of its shore establishment,

the Congress may wish to require the Navy to submit its plan of action,

with milestones, to the Congress. In addition, as part of this plan, the

Congress may also want the Navy to demonstrate its progress and provide

specific details on the steps it has taken at headquarters and at the major

command level to (1) improve management oversight and accountability

of the personnel requirements determination process at all levels;

(2) increasingly utilize standardization and comparative analysis of like

activities as part of the requirements process; (3) improve staff training

and ensure that only technically qualified staff conduct efficiency reviews;

and (4) establish a link between the shore personnel requirements process

Page 9 GAO/NSIAD-97-90 Force Structure
Executive Summary

and the Navy’s various initiatives to reduce its shore infrastructure, many

of which were discussed in chapter 3 of this report.

Agency Comments DOD partially concurred with the recommendation in GAO’s draft report that

the lack of a valid shore requirements determination program be reported

as a material weakness under the FMFIA. While DOD agreed that there have

been weaknesses and inconsistencies in the execution of the Navy’s shore

personnel requirements program, it believes the Navy has a valid program

and that improvements have been and continue to be implemented. For

these reasons, DOD did not agree to report this issue as a material

weakness. GAO acknowledges in this report that the Navy has recently

undertaken various initiatives to improve its process for identifying shore

personnel requirements. This is the same pattern the Navy has followed

over the past 25 years—that is, after a critical audit report, the Navy

initiates changes and promises improvements. Unfortunately, the expected

improvements have not occurred. Because of this long-standing pattern

and the importance of this issue, GAO continues to believe that the shore

personnel requirements program should be reported as a material

weakness under FMFIA. We have modified the recommendation somewhat,

however, to focus on the effectiveness rather than the validity of the

program. The Navy also provided technical comments on GAO’s draft

report, which GAO considered in preparing the final report. DOD’s

comments on a draft of this report are reprinted in appendix I.

DOD concurred with the recommendation that the Secretary of the Navy

develop an action plan with milestones to ensure that positive results of

ongoing initiatives are sustained.

Page 10 GAO/NSIAD-97-90 Force Structure
Page 11 GAO/NSIAD-97-90 Force Structure
Contents

Executive Summary 2

Chapter 1 

Introduction

16

Military Pay and Allowances Are a Large Part of Navy’s Total

Obligational Authority

16

Navy Will Have Reduced Its Force by One-Third by Fiscal Year

1999

16

Congressional Actions Stem Drawdown of Active Duty Personnel 17

Active Duty Force Consists of Mission and Infrastructure Forces 18

Military Personnel and O&M Appropriations Fund a Sizeable

Portion of Navy Infrastructure Activities

19

Objectives, Scope, and Methodology 20

Chapter 2 

Navy Will Have a

Smaller, More Senior

Force by Fiscal Year

1999

23

Navy Has Proportionately Reduced Forces Assigned to Mission

and Infrastructure Programs

23

Enlisted Personnel Will Be Reduced More Than Officers 27

Conclusions 32

Chapter 3 

Ongoing Initiatives

Could Enable Navy to

Reduce Personnel

Below Its Fiscal Year

1999 Goal

33

Navy Plans to Achieve Drawdown Goal by Fiscal Year 1999 33

Initiatives May Enable the Navy to Reduce Personnel Below Its

Goal

35

Conclusions 40

Chapter 4 

Problems Still Exist

With Navy’s Shore

Personnel

Requirements

Program

41

Navy Uses Separate Processes to Determine Personnel

Requirements for Forces at Sea and on Shore

41

Shore Program Criticized by the Congress and Audit

Organizations for 25 Years

46

Continued Problems Affect Navy’s Ability to Manage Shore

Establishment

48

Improved Navy Management and Oversight Are Key to Resolving

Problems With Shore Requirements Program

53

Conclusions 54

Page 12 GAO/NSIAD-97-90 Force Structure
Contents

Recommendations 55

Matters for Congressional Consideration 55

Agency Comments and Our Evaluation 55

Appendixes Appendix I: Comments From the Department of Defense 58

Appendix II: Major Contributors to This Report 63

Tables Table 2.1: Changes in Active Duty Forces by Mission Category

Between Fiscal Year 1989 and 1999

25

Table 2.2: Changes in Active Duty Forces by Infrastructure

Category Between Fiscal Year 1989 and 1999

26

Table 2.3: Changes in Officer and Enlisted Personnel in Mission

and Infrastructure Programs between Fiscal Year 1989 and 1999

30

Table 3.1: Planned Navy Force Cuts From Fiscal Years 1996 to

1999

33

Table 3.2: Expected Changes in the Number of Navy Platforms

Between Fiscal Year 1996 and 1999

34

Table 4.1: Authorized Military Positions Within the Major Shore

Commands as of December 1996

44

Table 4.2: Audit Findings of Select Reports on the Navy’s Shore

Personnel Requirements Program

48

Figures Figure 1: Navy Downsizing Trends—Personnel Assigned to

Mission and Infrastructure Programs for Fiscal 

Years 1989 to 1999

6

Figure 1.1: Changes in Active Duty Navy Personnel Between

Fiscal Year 1989 and 1999

17

Figure 1.2: Direct Infrastructure Funding by Navy Appropriation

for Fiscal Year 1996

20

Figure 2.1: Navy Downsizing Trends—Personnel Assigned to

Mission and Infrastructure Programs for Fiscal Years 1989 to

1999

24

Figure 2.2: Decline in the Number of Officers and Enlisted

Personnel between Fiscal Year 1989 and 1999

28

Figure 2.3: Increase in the Percentage of Navy Officers Assigned

to DOD Positions Beyond Navy Control—Fiscal Years 1990 and

1996

31

Page 13 GAO/NSIAD-97-90 Force Structure
Contents

Abbreviations

DOD Department of Defense

FMFIA Federal Managers’ Financial Integrity Act

FYDP Future Years Defense Program

GAO General Accounting Office

MFT Mission Function Task

MRC Major Regional Conflict

NAVMAC Navy Manpower Analysis Center

O&M operations and maintenance

OSD Office of the Secretary of Defense

ROC/POE Required Operational Capability/Projected Operational

Environment

SHORSTAMPS Shore Requirements, Standards, and Manpower

Planning System

Page 14 GAO/NSIAD-97-90 Force Structure
Page 15 GAO/NSIAD-97-90 Force Structure
Chapter 1 

Introduction

The Department of Defense’s (DOD) 1993 Bottom-Up Review determined

that the Navy would have 11 active and 1 reserve aircraft carriers, 11 air

wings, 45 to 55 attack submarines, and 346 battle force ships to carry out

the national military strategy. The review did not specify the number of

military personnel required to implement the national strategy. However,

DOD later determined that the active components would consist of about

1.4 million active duty personnel, 394,900 of which would be Navy

personnel.

Military Pay and

Allowances Are a

Large Part of Navy’s

Total Obligational

Authority

Pay and allowances for active and reserve personnel are funded through

the military personnel appropriation, comprising 27 percent of the Navy’s

total obligational authority of $66.7 billion for fiscal year 1996. A total of

almost $18.3 billion was budgeted for military personnel—$17 billion for

active personnel and $1.3 billion for reserves. This amount was exceeded

only by the Navy’s operation and maintenance (O&M) appropriation

category, which totaled $22.1 billion. The O&M appropriation includes

salaries and benefits for about 222,400 civilian personnel. With military

pay and allowances encompassing a significant portion of the budget, the

Navy is looking to reduce this budget category, in part, to increase

financing for long-term force modernization and recapitalization

programs.

Navy Will Have

Reduced Its Force by

One-Third by Fiscal

Year 1999

The Navy reduced its active duty authorized force by about 28 percent

from the post-Cold War high of 592,692 personnel1

 in fiscal year 1989 to

428,000 in fiscal year 1996. The Navy anticipates reducing its forces by an

additional 33,100 personnel to reach its goal of 394,900 active duty

personnel by the end of fiscal year 1999. This amount represents a

33-percent reduction since fiscal year 1989, as shown in figure 1.1.

1

The term “personnel” is used throughout this report to connote positions for which funding has been

requested or provided.

Page 16 GAO/NSIAD-97-90 Force Structure
Chapter 1 

Introduction

Figure 1.1: Changes in Active Duty Navy Personnel Between Fiscal Year 1989 and 1999

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

350,000

400,000

450,000

500,000

550,000

600,000

650,000

Fiscal year

Personnel

Source: GAO analysis of DOD Future Years Defense Program (FYDP) data.

Note: Fiscal year 1989-94 personnel numbers are actual figures, while fiscal year 1995-99

personnel numbers are Navy estimates.

Congressional Actions

Stem Drawdown of

Active Duty Personnel

The Congress established minimum active duty personnel levels for each

military service as part of the National Defense Authorization Act for

Fiscal Year 1996. The Navy’s minimum end strength was set at 395,000. In

creating the personnel floors, the Congress sought to (1) ensure the

services had an adequate number of personnel to carry out the national

military strategy and (2) show that the drawdown of active forces was

Page 17 GAO/NSIAD-97-90 Force Structure
Chapter 1 

Introduction

over to avoid future recruiting and retention problems. The Congress

believed the personnel floors would assist the services to manage the

effects of high operations and personnel tempo.

The National Defense Authorization Act for Fiscal Year 1997 allows the

Secretary of Defense limited flexibility to decrease personnel by 1 percent

of the floors. For the Navy, this means the active duty force cannot drop

below 391,050 personnel. The legislation requires the services to obtain

statutory authority for decreases below 1 percent of the floors.

Active Duty Force

Consists of Mission

and Infrastructure

Forces

For defense planning purposes, DOD has divided its forces into two basic

categories—mission and infrastructure.2

 Navy mission programs consist of

the aircraft carriers, air wings, submarines, and battle force ships (as

defined in the Bottom-Up Review) and the forces that provide direct

combat support; intelligence; and command, control and communications

in wartime. Activities that provide support to the mission forces and

primarily operate from fixed locations, such as installations, bases, and

shipyards, are classified as infrastructure programs. Infrastructure

programs are divided into the following eight categories: acquisition

infrastructure; installation support; central command, control, and

communications; central logistics; central medical; central personnel;

force management; and central training. Since fiscal year 1989, personnel

assigned to mission programs have ranged between 54 to 57 percent of the

Navy’s total active duty forces, while personnel assigned to infrastructure

programs have comprised the balance, ranging between 43 to 46 percent

of the force structure.

More than 90 percent of the Navy’s total mission forces is comprised of

combat and direct support forces. Combat forces consist of all tactical

naval forces—tactical air forces, sea based antisubmarine warfare forces,

surface combatant ships and submarines, maritime patrol and undersea

surveillance forces, amphibious, and mine warfare forces. Direct support

forces provide support to various segments of naval tactical forces.

Examples include fleet communications, destroyer tenders, and

intermediate aircraft maintenance.

Four infrastructure categories—installation support, central medical,

central personnel, and central training—comprised approximately

2

In June 1995, the Institute for Defense Analysis issued a manual and mapping scheme that categorizes

each of the FYDP program elements as either mission or infrastructure programs. The FYDP is an

authoritative record of current and projected force structure, costs, and personnel levels that have

been approved by the Secretary of Defense.

Page 18 GAO/NSIAD-97-90 Force Structure
Chapter 1 

Introduction

85 percent of the Navy’s total infrastructure force in fiscal year 1996.

Central training and central medical were the two largest Navy

infrastructure categories that year, with combined forces totaling 

106,756 personnel, or almost 55 percent of the personnel assigned to

infrastructure-related activities. Central training consists of activities that

furnish funding, equipment, and personnel to provide nonunit training of

new personnel and multiple types of skill and proficiency training. Central

medical consists of all hospitals and other medical activities that directly

support the medical care system, including medical training, management

of the medical system, and support of medical installations.

Military Personnel

and O&M

Appropriations Fund

a Sizeable Portion of

Navy Infrastructure

Activities

As shown in figure 1.2, most of the Navy’s direct infrastructure activities in

fiscal year 1996 are funded by two appropriations—O&M, about 42 percent,

and military personnel, about 33 percent. The O&M appropriation provided

$11.7 billion for Navy infrastructure activities, while the military personnel

appropriation provided $9 billion. In April 1996, we reported3

 that these

appropriations were closely associated with the force’s readiness and

quality-of-life—priority areas of the Secretary of Defense for the last few

years.

3

An analysis of DOD’s direct infrastructure funding by appropriation for fiscal years 1996-2001 is

included in Defense Infrastructure: Budget Estimates for 1996-2001 Offer Little Savings for

Modernization (GAO/NSIAD-96-131, Apr. 4, 1996).

Page 19 GAO/NSIAD-97-90 Force Structure
Chapter 1 

Introduction

Figure 1.2: Direct Infrastructure

Funding by Navy Appropriation for

Fiscal Year 1996

Other

O&M

Military personnel

25%

42%

33%

Source: GAO analysis of DOD FYDP data.

Objectives, Scope,

and Methodology

Because of congressional concerns about active duty personnel levels, we

examined (1) the changes in size and composition of Navy active duty

forces between fiscal year 1989 and 1999, (2) the Navy’s plans to reduce

forces to mandated minimum levels by fiscal year 1999 and initiatives that

could further reduce forces beyond these levels, and (3) the Navy’s

processes for determining active force requirements. Companion reports

on the Army and the Air Force have also been published.4

To determine how the size and composition of Navy active duty forces

have changed since the end of the Cold War, we analyzed end strength and

funding level data contained in the historical FYDP database and the fiscal

year 1996 FYDP. We used DOD’s Office of Program and Evaluation definition

of mission and infrastructure program elements and analyzed changes

4

Force Structure: Army Support Forces Can Meet Two-Conflict Strategy With Some Risks

(GAO/NSIAD-97-66, Feb. 28, 1997) and Force Structure: Potential Exists to Further Reduce Active Air

Force Personnel (GAO/NSIAD-97-78, Mar. 28, 1997).

Page 20 GAO/NSIAD-97-90 Force Structure
Chapter 1 

Introduction

between fiscal year 1989 and 1999. We used these years because 1989

represents the most recent peak for active duty Navy personnel, at the end

of the Cold War, and 1999 is the year the Navy is expected to reach its goal

of 394,900 personnel. We discussed changes and apparent trends with

responsible Navy officials from the Office of the Deputy Chief of Naval

Operations (Manpower and Personnel).

To determine how the Navy plans to reduce forces by fiscal year 1999, we

reviewed the historical FYDP and 1996 FYDP forecasts and discussed areas

that were projected to decline significantly with responsible personnel

from the Deputy Chief of Naval Operation’s Total Force

Programming/Manpower Directorate. To determine the effect current cost

saving initiatives could have on personnel levels, we met with cognizant

officials from the offices directing the initiatives. We also met with

headquarters manpower and personnel officials; manpower officials at the

Commander in Chief, Atlantic Fleet, in Norfolk, Virginia; and the

Commander in Chief, Pacific Fleet, in Pearl Harbor, Hawaii. We had

numerous discussions with responsible officials at the Navy Manpower

Analysis Center (NAVMAC) in Millington, Tennessee. Finally, we visited four

ships from different classes and discussed their current and projected end

strength levels with senior officer and enlisted personnel. Due to the

nature of this review, we did not do a detailed analysis of each cost

savings initiative. We currently have other work underway to specifically

examine DOD’s outsourcing, consolidation, and regional maintenance

efforts.

To determine how the Navy establishes its active force requirements, we

interviewed manpower and personnel officials from Navy headquarters,

NAVMAC officials, fleet manpower specialists, and contractor officials who

help develop requirements documents for Navy ships. We also interviewed

the heads of the manpower analysis teams of the Atlantic and Pacific

Commanders in Chief and officials from some of the Navy’s other major

shore commands who identify personnel requirements for these

commands. We reviewed pertinent documentation, as well as prior reports

issued by the Naval Audit Service, the Navy Inspector General’s office, and

us, and met with officials from the Naval Audit Service in Falls Church,

Virginia. We focused our efforts primarily on the Navy’s process for

determining shore personnel requirements and on improvements that are

being made to the process, since this is where the Navy has encountered

the greatest criticism. Because past evaluations have not identified major

shortcomings in mission-related personnel requirements, we did not

Page 21 GAO/NSIAD-97-90 Force Structure
Chapter 1 

Introduction

review this process in detail. Nor did we evaluate whether the process

yields accurate mission requirements.

Our review was performed from October 1995 to February 1997 in

accordance with generally accepted government auditing standards.

Page 22 GAO/NSIAD-97-90 Force Structure
Chapter 2 

Navy Will Have a Smaller, More Senior

Force by Fiscal Year 1999

The Navy expects to reduce its active duty forces by about 197,800

personnel between fiscal year 1989 and 1999. Infrastructure-related

program forces will be reduced at a slightly higher rate than

mission-related program forces. The Navy’s active duty force of fiscal year

1999 will be more senior and experienced than the fiscal year 1989 force

because the Navy plans to reduce the number of (1) enlisted personnel at a

higher rate than officers and (2) junior officers and enlisted personnel at

higher rates than senior personnel. Although several factors limit the

Navy’s flexibility in managing the forces during the downsizing process,

such as the large number of officer positions controlled by legislation

rather than Navy policy, the Navy anticipates meeting its

394,900-personnel goal by the end of fiscal year 1999.

Navy Has

Proportionately

Reduced Forces

Assigned to Mission

and Infrastructure

Programs

The Navy has significantly reduced the number of forces assigned to both

mission and infrastructure-related programs and further reductions are

planned. Through fiscal year 1996, the Navy reduced mission program

forces by about 86,600 positions, or approximately 27 percent, and

infrastructure program forces by about 78,100 positions, or approximately

29 percent, below the fiscal year 1989 personnel levels. During the

remainder of the drawdown period—fiscal years 1997 to

1999—infrastructure program forces will be reduced more than

mission-related program forces. The Navy’s plans show infrastructure

program forces will decline by another 19,700 personnel, while

mission-related program forces will decline by about 13,400 personnel. As

shown in figure 2.1, the Navy plans to reduce mission-related program

forces by about 100,000 positions, or approximately 31 percent, and

infrastructure-related program forces by about 97,800 positions, or

36 percent, between fiscal year 1989 and 1999. Navy officials believe that it

is important to continue reducing the size of its infrastructure past fiscal

year 1999; however, due to the uncertainty about what savings might be

achieved and when, current FYDP projections do not show active duty

military personnel in the infrastructure-related forces decreasing beyond

fiscal year 2000.

Page 23 GAO/NSIAD-97-90 Force Structure
Chapter 2 

Navy Will Have a Smaller, More Senior

Force by Fiscal Year 1999

Figure 2.1: Navy Downsizing Trends—Personnel Assigned to Mission and Infrastructure Programs for Fiscal Years 1989 to

1999

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Fiscal year

Personnel

Mission totals Infrastructure totals

Source: GAO analysis of DOD FYDP data.

Navy Will Reduce Forces

by Eliminating Combat and

Direct Support Forces

The Navy’s plans show that two key components within the

mission-related categories will sustain most of the personnel drawdown.

For example, between fiscal year 1989 and 1999, about 95 percent of the

total reductions earmarked for mission forces will occur in two major

components: combat forces and direct support forces. Combined, these

two mission-related categories will decrease by about 95,000 personnel by

Page 24 GAO/NSIAD-97-90 Force Structure
Chapter 2 

Navy Will Have a Smaller, More Senior

Force by Fiscal Year 1999

the end of fiscal year 1999. The changes in Navy personnel requirements

for mission-related force structure categories are shown in table 2.1.

Table 2.1: Changes in Active Duty

Forces by Mission Category Between

Fiscal Year 1989 and 1999 Mission category FY 1989 FY 1999 Change

Percent

change

Combat forces 198,502 141,404 (57,098) (29)

Direct support forces 101,178 63,261 (37,917) (37)

All other mission forcesa 20,092 15,116 (4,976) (25)

Total 319,772 219,781 (99,991) (31)

aOther mission forces include intelligence; research, development, test, and evaluation;

command, control and communication; and space programs.

Source: GAO analysis of DOD FYDP data.

The Navy accelerated its drawdown in fiscal year 1992 after completing its

involvement in Operation Desert Storm. By decommissioning many ships,

submarines, and air squadrons, and eliminating associated direct support

forces, the Navy was able to reduce a major portion of its mission-related

personnel requirements. Between fiscal year 1989 and 1996,

decommissioning actions resulted in net decreases in the force structure: 

3 aircraft carriers; 8 cruisers; 73 surface combatants—battleships, cruisers,

destroyers, and frigates; 39 submarines; 206 F-14A aircraft; and 229 A-6E

aircraft.

According to Navy officials and FYDP data, the Navy is taking the following

actions to reduce combat forces between fiscal year 1989 and 1999:

• decommissioning nonmissile frigates, thereby eliminating 12,098 positions;

• reducing the force structure assigned to submarine-launched ballistic

missiles, eliminating 8,563 positions;

• reducing the number of steam driven cruisers and destroyers in the active

fleet while building 18 Arleigh Burke class destroyers, eliminating 

5,718 positions;

• decommissioning all 4 battleships, eliminating 5,246 positions;

• reducing the force structure assigned to attack submarines, eliminating

5,272 positions;

• decommissioning most of its A-6 squadrons, eliminating 3,623 positions;

and

• decommissioning all of its A-7 air squadrons, resulting in the loss of 

1,699 positions.

Page 25 GAO/NSIAD-97-90 Force Structure
Chapter 2 

Navy Will Have a Smaller, More Senior

Force by Fiscal Year 1999

Along with its combat forces, the Navy is also reducing its active duty

direct support forces. For example, the Navy is

• eliminating 7,662 positions assigned to underway replenishment ships;

• decreasing the number of attack submarines, thereby eliminating 

5,731 other positions assigned to submarine support functions;

• decommissioning support ships, thereby eliminating 5,562 positions;

• reducing its active duty P-3 fleet, thereby eliminating 4,119 active duty

positions assigned to antisubmarine warfare patrol squadrons; and

• reducing the number of active aircraft carriers and associated air wings,

thereby eliminating 434 E-2 squadron positions.

Majority of

Infrastructure-Related Cuts

Will Occur in Central

Training and Central

Personnel

The Navy will reduce infrastructure-related active duty forces by about

97,800 personnel between fiscal year 1989 and 1999. The reductions in

personnel for each of the eight infrastructure-related force structure

categories are shown in table 2.2.

Table 2.2: Changes in Active Duty

Forces by Infrastructure Category

Between Fiscal Year 1989 and 1999 Infrastructure category FY 1989 FY 1999 Change

Percent

change

Central training 129,775 63,662 (66,113) (51)

Central personnel 40,226 27,078 (13,148) (33)

Installation support 34,037 25,401 (8,636) (25)

Force management 21,973 17,598 (4,375) (20)

Central logistics 9,713 7,704 (2,009) (21)

Central command, control,

and communications

3,482 1,480 (2,002) (58)

Central medical 32,782 31,420 (1,362) (4)

Acquisition infrastructure 892 776 (116) (13)

Total 272,880 175,119 (97,761) (36)

Source: GAO analysis of DOD FYDP data.

The greatest number of personnel decreases in infrastructure-related

program forces are expected to occur in central training and central

Page 26 GAO/NSIAD-97-90 Force Structure
Chapter 2 

Navy Will Have a Smaller, More Senior

Force by Fiscal Year 1999

personnel activities. The decline in central training is caused primarily by

the large decrease in the Navy’s mission force structure. As the mission

program force structure declines, the number of students also declines,

and requirements for instructors likewise diminish. According to a Navy

official, most of the central training drawdown is attributed to (1) closing

the two recruit training centers at San Diego, California, and Orlando,

Florida, and consolidating the remaining recruit training functions at the

Great Lakes Training Center, Illinois, and (2) closing general skill training

centers. Declining requirements for flight training and other professional

education programs—including reducing enrollment in the Naval Academy

and preparatory schools—also contribute to the drawdown of personnel in

central training functions.

The drawdown experienced by the central personnel function is also

associated with a smaller active duty mission force structure. As the force

structure declined, requirements for recruiting activities were reduced,

and the requirement for accessions also declined. The single largest

drawdown in central personnel activities has been in the number of

transients—those on travel, leave in route, or temporary duty status

(except for training) while on permanent change of station orders. The

number of transients is expected to decline from 24,712 to 16,053

personnel, or 35 percent, between fiscal year 1989 and 1999.

Enlisted Personnel

Will Be Reduced More

Than Officers

During this downsizing process, the size and composition of active duty

naval forces have changed and will continue to change. A higher rate of

junior grade enlisted personnel and junior grade officers will be released

from active duty than their senior grade counterparts. A larger proportion

of enlisted personnel will be eliminated from infrastructure-related

activities when compared to the percentage of officers eliminated from

similar activities. Navy enlisted personnel will experience a larger

percentage of the overall reductions than is planned for the officer corps.

For example, the number of enlisted personnel will decline by about

180,100 positions, or about 35 percent; however, the number of officers

will decline by only 17,600 positions, or about 24 percent, by fiscal year

1999, as shown in figure 2.2. According to Navy officials, the greater

decline in enlisted personnel is due primarily to the increased technical

nature of the modern Navy and the number of officers assigned to

positions over which the Navy has no control, such as joint/DOD positions.

Page 27 GAO/NSIAD-97-90 Force Structure
Chapter 2 

Navy Will Have a Smaller, More Senior

Force by Fiscal Year 1999

Figure 2.2: Decline in the Number of Officers and Enlisted Personnel Between Fiscal Year 1989 and 1999

1989 1991 1993 1995 1997 1999

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

Fiscal year

Personnel

Enlisted Officer

Source: GAO analysis of DOD FYDP data.

Military Personnel Will

Grow More Senior in Rank

During Downsizing

The gradual “grade creep” experienced by both officers and enlisted

personnel is another change in the composition of the active duty force.

Officers and enlisted personnel will grow more senior in rank during the

downsizing because more personnel in junior ranks will leave the force

compared to those in senior ranks. For example, our analysis shows that

Page 28 GAO/NSIAD-97-90 Force Structure
Chapter 2 

Navy Will Have a Smaller, More Senior

Force by Fiscal Year 1999

senior officer ranks—commander through admiral—will decline by about

12 percent between fiscal year 1989 and 1997. However, the junior

officers—ensign through lieutenant commander—will decline by about

23 percent during the same period. A similar trend also exists at the senior

enlisted grades. Senior enlisted personnel—second class petty officer

(E-5) to master chief petty officer (E-9)—will decline by about 29 percent

between fiscal year 1989 and 1997. However, junior enlisted

personnel—seaman recruit (E-1) to 3rd-class petty officer (E-4)—will

decline by 35 percent during the same period. Also, fewer personnel have

joined the force.

An analysis of the top six enlisted pay grades provides another example of

changes in the active duty force structure. In fiscal year 1989, about

70 percent of enlisted personnel occupied the top six pay grades—E-4 to

E-9. However, Navy requirements call for the top six enlisted pay grades to

increase slightly—reaching 73 percent by fiscal year 1998—because of the

significant personnel downsizing within the enlisted personnel ranks.

According to Navy officials, strength planners will limit this number to

69.9 percent. These changes substantiate the direction of the post-Cold

War era Navy. In recent congressional testimony, the Chief of Naval

Personnel stated that the Navy’s personnel goal is “to grow a more senior

and experienced force, to reduce our recruiting burden and stockpile

needed skills and experience.”

Greater Percentage of

Enlisted Personnel Will Be

Reduced in Infrastructure

Categories

The mix of officers and enlisted personnel assigned to mission and

infrastructure-related programs will also change during the downsizing

period. Our analysis shows a parallel decline in officer and enlisted

personnel assigned to mission programs. However, officers will

experience a smaller percentage decrease in infrastructure-related

activities. Between fiscal year 1989 and 1999, officers and enlisted

personnel assigned to mission-related activities will decline by about

30 percent. However, in infrastructure-related activities, the officer corps

will experience a 21-percent decrease, while enlisted personnel will

decline by 39 percent, as shown in table 2.3.

Page 29 GAO/NSIAD-97-90 Force Structure
Chapter 2 

Navy Will Have a Smaller, More Senior

Force by Fiscal Year 1999

Table 2.3: Changes in Officer and

Enlisted Personnel in Mission and

Infrastructure Programs Between

Fiscal Year 1989 and 1999

Mission programs Infrastructure programs

Officers Enlisted Officers Enlisted

FY 1989 26,512 293,260 45,641 227,239

FY 1999 18,502 201,279 36,048 139,071

Percent change (30) (31) (21) (39)

Source: GAO analysis of DOD and FYDP data.

According to Navy officials, one reason for the smaller percentage

decrease of officers versus enlisted personnel in infrastructure forces can

be attributed to the relatively large number of Navy officers assigned to

medical and joint/DOD positions. These positions are classified as

infrastructure and generally have a high number of officers. For example,

in fiscal year 1996, about 10,800 Navy officers were assigned to such

positions.

Medical and Joint/DOD

Positions Have Remained

Stable

The Navy does not determine requirements for some personnel because

the positions are determined by law or controlled by other agencies. For

example, the National Defense Authorization Act of 1991 restricts the

Secretary of Defense from reducing military medical personnel unless DOD

certifies the number of personnel being reduced is excess to current or

projected needs and does not increase the cost of services provided under

the Civilian Health and Medical Program of the Uniformed Services. Also,

under the Goldwater-Nichols Defense Reorganization Act of 1986, the

Secretary of Defense specifies the number of officer joint duty assignment

positions that each service must fill. Further, DOD cannot increase or

decrease the number of personnel that support the National Foreign

Intelligence Program without approval from the Director of Central

Intelligence. Likewise, the number of military positions within the Special

Operations Command cannot be adjusted unless directed by the Deputy

Secretary of Defense.

Navy officials noted that medical and joint/DOD duty positions, which have

a high number of officers, account for most of the positions outside the

direct control of the Navy. In fiscal year 1996, 20 percent of the Navy’s

active duty officer positions and about 9 percent of the active duty enlisted

positions were beyond Navy control. Navy data show that the combined

number of medical and joint duty DOD positions will remain relatively

stable through fiscal year 1999, despite a 33-percent decline in the active

duty force. As a result, the number of officer positions that the Navy

Page 30 GAO/NSIAD-97-90 Force Structure
Chapter 2 

Navy Will Have a Smaller, More Senior

Force by Fiscal Year 1999

cannot unilaterally reduce has increased from 10,244, or 14 percent, in

fiscal year 1990 to 11,703, or 20 percent, in fiscal year 1996, as seen in

figure 2.3.

Figure 2.3: Increase in the Percentage

of Navy Officers Assigned to DOD

Positions Beyond Navy

Control—Fiscal Years 1990 and 1996

86.0%

14.0%

Fiscal year 1990

80.1%

19.9%

Fiscal year 1996

Navy controlled DOD controlled 

Note: Navy database for fiscal year 1989 was incomplete; therefore, our basis of comparison is

limited to fiscal year 1990.

Source: Navy Total Force Manpower Management System database.

In November 1995, the DOD Inspector General reported that although the

services have reduced the number of active duty personnel, there has been

no corresponding decrease in the number of joint positions. The report

noted the services must still give priority to joint staffing, with a

substantially smaller pool. The Inspector General also reported there was

no standard methodology or criteria for determining and validating

Page 31 GAO/NSIAD-97-90 Force Structure
Chapter 2 

Navy Will Have a Smaller, More Senior

Force by Fiscal Year 1999

personnel requirements. The National Defense Authorization Act for Fiscal

Year 1997 requires us to review DOD’s actions in response to the Inspector

General’s report. This review will be conducted in calendar year 1997.

Conclusions Reduced Navy force structure and related support activities since the Gulf

War have allowed the Navy to also significantly reduce the number of

active duty personnel. These reductions are in keeping with the direction

established in the Bottom-Up Review for shifting the focus from a national

security strategy designed to meet a global Soviet threat to one oriented

toward the post-Cold War era. So far, mission and infrastructure-related

forces have been proportionately reduced. However, within these two

broad categories, key components have sustained most of the drawdown.

These components include the combat and direct support categories for

mission programs and the central training and central personnel

categories of the infrastructure. The number of personnel in other

categories, such as intelligence and medical personnel, are beyond the

Navy’s control because the number of positions are limited by legislation

or controlled by other agencies. Overall, however, the reductions have

been more focused toward junior enlisted and officer personnel as less

complex and technologically sophisticated platforms have been retired.

Based on these trends, the Navy will move toward a more senior and

experienced force, and as a result, pay-related costs will not decline in

proportion to personnel.

Page 32 GAO/NSIAD-97-90 Force Structure
Chapter 3 

Ongoing Initiatives Could Enable Navy to

Reduce Personnel Below Its Fiscal Year

1999 Goal

In addition to plans for drawing down active military forces to 394,900 by

fiscal year 1999, the Navy is working on ways to reduce the force further at

shore activities and aboard ships. For example, the Navy is evaluating

ways to regionalize and consolidate shore activities at many locations,

which could save millions of dollars by employing better business

practices and eliminating civilian and military positions. Initiatives that

could further reduce at sea requirements include the Smart Ship program

and future ship acquisition programs that emphasize smaller crews.

Navy Plans to Achieve

Drawdown Goal by

Fiscal Year 1999

The 1996 FYDP shows that the Navy plans to eliminate 33,100 active military

requirements in moving from 428,000 personnel in fiscal year 1996 to

394,900 personnel in fiscal year 1999. Navy plans show that forces will be

reduced in both mission and infrastructure categories. Table 3.1 shows the

cuts that are programmed to occur as the Navy continues to close bases

and decommission ships, submarines, and air squadrons; reduces

recruiting, training, transient, and temporary positions; and eliminates or

outsources base support positions.

Table 3.1: Planned Navy Force Cuts

From Fiscal Years 1996 to 1999 Category Planned force cutsa

Mission 13,400

Combat and direct support

(sea)

9,600

Combat and direct support

(shore)

3,000

Other mission forces 800b

Infrastructure 19,700

Recruit and general skills

training

8,300

Base operation supportc 4,900

Transient and holding

accounts

2,000

Recruiting 400

Other infrastructure forces 4,100b

Total 33,100

aAll figures are rounded to the nearest hundred.

bThese reductions will be spread across numerous categories with the requirements for most

categories being cut by 100 positions or less.

cIncludes positions at surface, subsurface, air, and training bases, and other base support

positions.

Source: GAO analysis of DOD FYDP data.

Page 33 GAO/NSIAD-97-90 Force Structure
Chapter 3 

Ongoing Initiatives Could Enable Navy to

Reduce Personnel Below Its Fiscal Year

1999 Goal

Planned Cuts in Mission

Forces

Although the Navy plans to commission 18 ships, 3 submarines, and 

2 aircraft squadrons by September 30, 1999, it will continue to

decommission more ships, submarines, and air squadrons than it

commissions. The net effect is that the Navy will eliminate about 9,600 sea

duty requirements from its combat and direct support forces by that date.

Table 3.2 shows planned changes in force levels for certain ships,

submarines, and aircraft squadrons between September 30, 1996, and

September 30, 1999.

Table 3.2: Expected Changes in the

Number of Navy Platforms Between

Fiscal Year 1996 and 1999 Platforms

As of

9/30/96

Leaving

the fleet

Joining

the fleet

As of

9/30/99

Aircraft carriers 12 1 1 12

Cruisers 31 2 0 29

Destroyers 51 0 15 66

Frigates 43 12 0 31

Submarines 97 27 3 73a

Amphibious assault

ships

22 2 2 22

Submarine

tenders

4 1 0 3

Ammunition ships 4 4 0 0

Aircraft squadrons 155 6 2 151

aThis number includes 55 attack submarines and 18 ballistic missile submarines.

Source: Chief of Naval Operations Manpower Resources Branch.

The Navy also plans to eliminate about 3,000 shore requirements from its

combat and direct support forces. In all, the Navy will eliminate about

12,600 requirements from these two mission categories between fiscal year

1996 and 1999.

Planned Cuts in

Infrastructure Forces

As shown by table 3.1, the Navy plans to eliminate about 19,700 positions

from its infrastructure forces between fiscal year 1996 and 1999. Cuts in

recruit and general skills training will account for about 8,300 of these

positions. Some of these positions will be eliminated because the Navy

will have fewer recruits to train, but several other factors will contribute

to the cuts. For example, recruit training has been shortened by 2 weeks;

therefore, the Navy needs fewer recruit training positions. Also, the Navy

has eliminated several of its career fields, thus eliminating the need for

some general skills training positions. Some general skills schools have

Page 34 GAO/NSIAD-97-90 Force Structure
Chapter 3 

Ongoing Initiatives Could Enable Navy to

Reduce Personnel Below Its Fiscal Year

1999 Goal

had their terms shortened, and the number of positions reduced as the

Navy shifts from equipment specific training to more general training.

Finally, the Navy is eliminating training positions as it shifts training from

schools to operational units.

The Navy also plans to eliminate (1) more than 4,900 base operations

support positions, primarily through outsourcing and base closures;

(2) about 400 military recruiting positions due to reduced recruiting efforts

and civilian substitution; and (3) about 2,000 positions from its transient

and holding accounts1

 due to the decline in the Navy’s total end strength

and efforts to reduce the time people spend between duty stations.

Initiatives May Enable

the Navy to Reduce

Personnel Below Its

Goal

Concurrent with its implementation of plans to downsize the active force

level to 394,900, the Navy has begun a series of cost-saving initiatives

designed to provide funds for modernization and recapitalization. The

Navy expects these initiatives to achieve a portion of their cost savings by

reducing active military personnel requirements on shore and at sea.

However, it is less certain about the exact savings that it can achieve and

when it will be able to eliminate the associated positions. As a result, the

Navy did not fully program these anticipated personnel savings into its

1996 FYDP. Short-term efforts to regionalize and consolidate activities, and

longer term efforts to improve base efficiency could reduce the number of

shore positions. Initiatives that could reduce sea requirements include the

Smart Ship program and future ship designs that emphasize reduced crew

sizes. The Navy’s regional maintenance initiative has already reduced both

shore and sea requirements, and the Navy expects this initiative to achieve

further personnel savings.

Shore-Based Initiatives The Navy is evaluating opportunities to regionalize and consolidate

shore-based activities so that redundant functions and overhead can be

eliminated and management layers reduced. The evaluations are based on

the fundamental principle that no individual organization should perform a

function that a regional organization or the private sector can do more

cost effectively. Evaluations of different locations are in various stages of

implementation or planning. The initial analysis at San Diego is nearly

complete, and the Navy expects to save about $40 million by reducing

overhead and eliminating about 450 civilian and 265 military positions. The

initial analyses at Jacksonville and Pearl Harbor are awaiting final

1

The transient account includes positions for patients, prisoners, and personnel changing duty stations.

Positions in the holding account are used to fill critical short-term shortages. The holding account

comprises about 0.5 percent of the Navy’s end strength.

Page 35 GAO/NSIAD-97-90 Force Structure
Chapter 3 

Ongoing Initiatives Could Enable Navy to

Reduce Personnel Below Its Fiscal Year

1999 Goal

approval, but the cuts are expected to be somewhat smaller than those at

San Diego. The Navy recently began collecting and analyzing data to

determine ways to regionalize and consolidate activities in several areas

with large active duty populations—Norfolk, Pensacola, Puget Sound, and

the National Capital regions. However, it is too early to project personnel

savings from these initiatives. In addition, the Navy plans to begin

initiatives at the remaining shore concentration areas, including Guam,

Japan, Europe, Texas, New Orleans, and the Great Lake and Northeast

regions, in the near future. According to Navy officials, these initiatives

may eliminate hundreds of military positions at each location, but

improved business practices and eliminated civilian positions are

expected to produce the greatest savings.

Outsourcing/privatization2

 is one of the Navy’s primary initiatives that is

expected to yield savings. The Navy expects savings to begin accruing in

fiscal year 2000 and increase to $1.3 billion per year by the end of fiscal

year 2003. To achieve these savings, the Navy projects that it will need to

open about 80,000 positions (50,000 civilian and 30,000 military) to

outsourcing competition. In January 1997, the Navy announced plans to

ask the private sector to submit bids to perform selected functions that

Navy civilian and military personnel now perform in Guam, Puerto Rico,

and throughout the United States. The Navy will then determine which

functions can be performed less expensively by the private sector. Since

only about 2,300 of the approximately 10,700 announced positions are

military, it is likely that most of the savings from these initial outsourcing

efforts will come from the Navy’s civilian workforce. We recently issued a

report that focused on DOD’s outsourcing efforts.3

Navy officials believe that the installation management accounting project

is a key to efficient shore infrastructure and could lead to further

personnel streamlining. This project is aimed at standardizing the methods

individual installations use to collect costs for their core business areas

and key functions and sub-functions. Historically, cost collection methods

varied among installations, and information was not always available to

help Navy managers determine the true costs of performing certain

functions. For example, they often did not know the cost of providing

2

Under both outsourcing and privatization, private firms provide services the Navy previously

performed. Under outsourcing, the Navy retains ownership of facilities and maintains a significant

degree of participation and control of operations. Under privatization, the Navy divests ownership of

certain assets. For simplification, we use the term outsourcing to refer to both outsourcing and

privatization.

3

Base Operations: Challenges Confronting DOD as It Renews Emphasis on Outsourcing

(GAO/NSIAD-97-86, Mar. 11, 1997).

Page 36 GAO/NSIAD-97-90 Force Structure
Chapter 3 

Ongoing Initiatives Could Enable Navy to

Reduce Personnel Below Its Fiscal Year

1999 Goal

bachelor enlisted and officer quarters because utility and military

personnel costs were not tracked for these facilities. Utility and military

personnel costs were often tracked at the base level or higher. By

December 1996, the Navy had identified its core business areas and key

functions and had developed cost and coding schemes that it is continuing

to refine. The Navy hopes to implement this project during the last quarter

of fiscal year 1997 and to have reliable cost data for individual functions

and activities by fiscal year 1998. The data will enable local managers to

use personnel and other assets more efficiently on their bases and will also

provide the information necessary for headquarter organizations to

compare the costs of performing similar functions at different locations.

According to Navy officials, this project is expected to achieve personnel

and other cost savings as improved information leads to better decisions

and “best practices” are shared among locations.

Another shore initiative that could reduce military positions is the Smart

Base project. This project’s goal is to increase shore installation efficiency

through the use of commercially available technologies and/or

management methods. Promising applications will be tested at Naval

Station Pascagoula, Mississippi, or Naval Shipyard Portsmouth, New

Hampshire, and installation could begin as early as March 1997. No

personnel savings have been projected yet.

Sea-Based Initiatives In addition to potential shore duty cuts, the Navy expects to reduce

military personnel by eliminating some sea duty requirements, primarily as

a result of the Smart Ship program. This program was begun in December

1995 to reexamine the way the Navy crews surface ships. Its goal is to

reduce workloads by implementing labor-saving technology and changing

crewing policies. The Navy solicited proposals from commercial,

academic, and Navy technical experts and approved more than 

90 proposals for evaluation on 1 of its Aegis cruisers, U.S.S. Yorktown.

Tests are being conducted during the ship’s December 1996 through

April 1997 deployment, and the final report is scheduled to be issued by

June 30, 1997. The Navy will reduce the size of the U.S.S. Yorktown’s crew

if the report shows that workload has been reduced sufficiently.

The Navy will not project personnel savings for the Smart Ship program

until it completes deployment testing aboard the U.S.S. Yorktown and

proves that the ship can meet its mission requirements with a smaller crew

without compromising ship or crew safety. Although the U.S.S. Yorktown

was expected to leave up to 50 personnel ashore during its deployment

Page 37 GAO/NSIAD-97-90 Force Structure
Chapter 3 

Ongoing Initiatives Could Enable Navy to

Reduce Personnel Below Its Fiscal Year

1999 Goal

testing, final personnel savings could be much smaller. Previous sea trials

that tested innovative concepts were not all successful. However, if

current tests are successful, the Navy hopes to apply the findings to other

ships in the fleet and new ship designs, thereby multiplying any identified

personnel savings.

Some savings could come from changes in the basic assumptions about

the way the Navy operates. For example, the Navy is testing a “reliability

centered maintenance concept” on the U.S.S. Yorktown. Under this

concept, the crew operates relatively inexpensive equipment until it fails

and then replaces it, rather than using the Navy’s standard

manpower-intensive, preventive maintenance procedures. The Navy is also

testing a new watch organization on the ship. This organization is based on

a core team that will be supplemented by response or reaction teams.

Because the Navy could easily transfer these concepts to other ships, it

could quickly achieve personnel savings if the new maintenance concept

and shipboard watch organization are successfully demonstrated on the

U.S.S. Yorktown. However, it may take years to achieve some other Smart

Ship savings that require the installation of new computers and other

labor-saving equipment as ships are overhauled and modernized.

The Navy had also hoped to achieve savings by eliminating sea duty

requirements through “optimum manning” proposals. Between December

1995 and November 1996, the Navy issued 25 proposals to reduce

workload and training costs for ships, submarines, and aviation squadrons

through requirements, policy, and equipment changes. According to Navy

estimates, these proposals could have saved up to $203 million a year.

However, by December 1996, only one proposal had been accepted. Most

of the other proposals met with opposition, but a few are being tested

under the Smart Ship program for later consideration.

The associated personnel savings of some sea-based initiatives are not

expected to accrue until after fiscal year 1999. For example, new classes of

ships requiring smaller crews, such as the CVX, LPD-17, and SC-21, will

not reach the fleet until after the turn of the century. However, if these

future ships are built and crewed as currently envisioned, they could

reduce military personnel requirements in the next decade and beyond, as

they replace older, more personnel-intensive ships.

Regional Maintenance The Navy expects its regional maintenance initiative to enable it to reduce

personnel requirements at sea and on shore by eliminating excess

Page 38 GAO/NSIAD-97-90 Force Structure
Chapter 3 

Ongoing Initiatives Could Enable Navy to

Reduce Personnel Below Its Fiscal Year

1999 Goal

infrastructure, integrating maintenance and supply functions, providing

customers with a single accountable provider of maintenance, and evenly

distributing workload between maintenance facilities.4

 However, it is

difficult to assign specific personnel savings to this initiative because it is

closely linked with base closures and ship decommissionings. For

example, Navy plans to decommission several destroyer and submarine

tenders were accelerated due to the initiative, which resulted in this

initiative eliminating 7,395 sea duty repair requirements in fiscal years

1995 and 1996. However, requirements that were eliminated outside the

repair departments were not attributed to this initiative. The same type of

uncertainty exists when tabulating shore personnel savings associated

with this initiative. For example, some maintenance facilities were

recommended for consolidation and closure under both this initiative and

the last base realignment and closure process. Between fiscal year 1996

and 2003, the Navy expects to eliminate about 3,200 additional military

requirements as a result of this initiative. About 800 of these requirements

will be eliminated from the planned decommissioning of the submarine

tender U.S.S. Simon Lake in fiscal year 1999.

Protected Positions and

Navy Rotation Policies

Could Inhibit Navy From

Making Some Cuts

The Navy cannot consider reducing certain parts of its force due to

protective legislation. For example, regionalization and consolidation

studies could not recommend cuts in medical positions as a result of

consolidations if the recommended cuts would push medical levels below

the floors provided in the National Defense Authorization Act for Fiscal

Year 1996. Legislation also protects some foreign intelligence positions.

In addition, it is questionable whether the Navy would eliminate or

outsource shore positions if the specific cuts would adversely affect

sea/shore rotation. Because the Navy found that retention suffers as sea

duty and family separation increase, it established equitable sea/shore

rotation as a goal for all career enlisted personnel—E-5 through E-9. The

goal states that personnel should have a minimum of 3 years of shore duty

for every 3 years of sea duty. While the Navy does not create shore

positions just to meet the rotation goal, it considers military sea/shore

rotation in deciding whether to shift military shore positions to civilians or

contractors.

4

The Navy plans to implement this initiative in three overlapping phases. The first phase, which began

in fiscal year 1995, integrated and consolidated the intermediate maintenance facilities that perform

minor repairs, such as calibrating, repairing, or replacing damaged equipment, parts, or components.

The second phase, begun in fiscal year 1996, integrates and consolidates intermediate maintenance

facilities with depot level maintenance facilities, which perform major repairs. The third phase will

improve business practices and integrate maintenance processes and information management

systems, beginning in fiscal year 1997.

Page 39 GAO/NSIAD-97-90 Force Structure
Chapter 3 

Ongoing Initiatives Could Enable Navy to

Reduce Personnel Below Its Fiscal Year

1999 Goal

Despite attempts to balance rotation, more than half of the Navy’s career

enlisted personnel are exceeding the sea duty goal. Therefore, Navy

officials are closely evaluating prospective shore duty cuts from the

standpoint of how they would affect rotation. However, if sea duty

requirements continue to decline as a result of decommissionings,

implementation of Smart Ship concepts and technologies, and the

introduction of new ship designs, fewer shore positions will be needed to

balance sea/shore rotation. Therefore, more shore positions could be filled

with civilians or contractors, if they are less costly.

Conclusions Due to uncertainties about the number of requirements that would be

affected, the Navy did not use any substantial savings from the Smart Ship

and Smart Base projects, the regionalization and consolidation initiative,

or the installation management accounting project when projecting future

personnel requirements in the 1996 FYDP. Therefore, although the Navy has

not officially expressed a desire to go below its personnel goal of 394,900,

it is possible that these ongoing initiatives could push personnel levels

below that goal by the end of fiscal year 1999. Depending on the success of

these initiatives, outsourcing, and the introduction of new ships with

reduced crews, the Navy could reduce its military personnel even further

in the future.

Page 40 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

The Navy has had a long-standing problem quantifying the size of its shore

infrastructure needed to support its operating forces. Despite concerns

raised by the Congress and various audit organizations for more than 20

years, many of the same problems continue with the current program.

Problems continue primarily because of the low priority the Navy has

traditionally given to managing the shore establishment and the ineffective

oversight of the shore requirements program. Without an effective

requirements program, the Navy has little assurance that resources

directed at personnel requirements are being used in the most efficient

way possible and that its shore establishment is appropriately sized.

Having an effective program is particularly important as the Navy looks for

savings and efficiencies to modernize and recapitalize its operating forces.

Navy Uses Separate

Processes to

Determine Personnel

Requirements for

Forces at Sea and on

Shore

The Navy uses separate processes to determine personnel requirements

for its operating forces and its shore-based personnel who support the

operating forces. Traditionally, the Navy has devoted its greatest attention

to its operating forces—its ships, submarines, and squadrons that form the

basis of its contribution to U.S. national security. As such, according to

Navy officials, the management and funding of these forces have received

the Navy’s highest priority and attention, while the management of the

shore infrastructure has been secondary. These priorities are reflected in

the processes the Navy uses to establish personnel requirements for its

forces at sea and on shore and the extent to which the processes have

been implemented as intended.

Requirements Process for

Mission-Related Personnel

The Navy’s process to determine personnel requirements for its operating

forces is a centralized top-down approach that is based on measurable

criteria and involves close cooperation between headquarters and the

fleets. The process begins when the Navy’s warfare sponsors1

 use the

national military strategy and the Navy’s war plans to draft the required

operational capability/projected operational environment (ROC/POE)

statement for individual operational units. In these documents, the warfare

sponsors identify the primary missions the units must be fully capable of

performing during wartime and the secondary warfare missions that the

units are also expected to perform, but which are not essential to carrying

out the wartime mission. The ROC/POE statements also list specific

capabilities to support the assigned missions under various operating

conditions. Warfare sponsors are responsible for ensuring that assigned

1

Warfare sponsors are responsible for the planning, programming, and procuring of resources and for

resource assessments. They also fund resources and set policy and are often referred to as resource

sponsors.

Page 41 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

missions and required capabilities in the ROC/POE statements are consistent

for similar units.

After an operational unit’s ROC/POE has been drafted, NAVMAC reviews it and

develops a personnel requirements document for the unit. The warfare

sponsor then combines the personnel requirements document with the

draft ROC/POE statement and forwards the package to both fleet and

headquarter units for review and comment. Before the final versions of

these documents are signed and issued, the Deputy Chief of Naval

Operations for Plans, Policy, and Operations reviews them to ensure they

comply with established naval policies and doctrines. Finally, the warfare

sponsor signs the ROC/POE and the Assistant Chief of Naval Personnel for

Total Force Programming, Manpower, and Information Resources

Management approves the manpower documents.

Because past evaluations of the Navy’s process for determining personnel

requirements for the operating forces have not surfaced major

shortcomings in the process, we did not review this process in detail.

NAVMAC officials consider this process to yield accurate mission

requirements and attribute the success of the fleet requirements process to

three factors:

• Well-defined workload. ROC/POE statements provide the means for defining

the measurable workloads necessary to accomplish the Navy’s missions.

They list the types of equipment that must be operated and the training

that must be conducted for a unit to meet its mission requirement, under

each condition of readiness (general quarters, wartime cruising, peacetime

cruising, and peacetime in port).

• Centralized requirements determination. Although the requirements

determination process for operating forces is driven from the top down, it

has active involvement from the Navy’s operating forces and technical

experts. ROC/POE statements and personnel requirements documents are

not finalized until everyone from the Navy’s manpower organizations to

the fleet commanders in chief have had a chance to review and comment

on the package.

• Direct linkage to the Navy’s planning, programming, and budgeting system.

The fact that the warfare sponsors draft a ROC/POE statement and are

required to fund a high percentage (approximately 90 percent) of

operational units’ personnel requirements ensures their active

participation throughout this process. According to the Navy, this active

participation, motivated by fiscal discipline, forces warfare sponsors to

Page 42 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

make risk assessments and trade-offs when developing their ROC/POE

statements.

Requirements Process for

Infrastructure-Related

Personnel

The Navy uses an “efficiency review” process to determine personnel

requirements for its shore establishment. This process determines

personnel requirements for all infrastructure activities and a small portion

of the Navy’s mission activities, such as intelligence, research and

development, and command and control—about half the Navy’s active

personnel. The process was established to determine and document the

minimum quantitative and qualitative personnel requirements to perform

the Navy’s support missions ashore. If carried out as intended, the

efficiency review process identifies the best method by which work can be

performed and the most efficient resource mix (e.g., military personnel,

civilians, and contractors) to accomplish this work. In most cases,

however, the process has not been carried out as intended and has

become one of justifying existing resource allocations rather than

evaluating alternative combinations of people, material, facilities, and

organizational structures to ensure that the most cost-effective

combination of resources is used, as Navy instructions specify. The

Assistant Secretary of the Navy (Manpower and Reserve Affairs) and the

Chief of Naval Personnel are to provide policy guidance and program

oversight to ensure that integrity is maintained; expected benefits are

realized; and policy, standards, and criteria are being adhered to. The

Assistant Chief of Naval Personnel for Total Force Programming,

Manpower, and Information Resources Management is the Navy’s policy

and program manager for determining shore personnel requirements.

NAVMAC supports this office by providing technical assistance, supporting

program management, providing manpower management training, and

performing other related tasks.

The shore establishment’s personnel requirements process differs in

several ways from the process for the operating forces. The biggest

difference between the two is the bottom-up approach of the shore

process versus the top-down approach of the requirements determination

process for operating forces. Personnel requirements for the shore

establishment are determined by the Navy’s 22 major shore commands,2

rather than by Navy headquarters, as is the case with the Navy’s operating

forces. Table 4.1 shows the distribution of active military positions within

the Navy’s 22 shore commands as of December 1996.

2

This report uses the term “major command” to refer to the major commanders or bureaus that are

authorized personnel resources directly by the Chief of Naval Operations to accomplish assigned

missions and tasks.

Page 43 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

Table 4.1: Authorized Military

Positions Within the Major Shore

Commands as of December 1996

Shore Command Number of personnel

Chief, Bureau of Medicine and Surgery 30,094

Commander-in-Chief, U.S. Atlantic Fleet 25,953

Commander-in-Chief, U.S. Pacific Fleet 23,548

Chief of Naval Education and Training 18,309

Chief of Naval Personnel 8,311

Commander, Naval Reserve Forces 8,669

Chief of Naval Operations 6,528

Commander, Naval Security Group Command 5,860

Naval Computer and Telecommunications Command 5,123

Commander, Naval Sea Systems Command 3,536

Commander, Naval Air Systems Command 3,647

Commander-in-Chief, U.S. Naval Forces Europe 3,759

Commander, Naval Special Warfare Command 1,481

Commander, Naval Oceanography Command 1,180

Assistant for Administration/Under Secretary of the Navy 1,014

Commander, Naval Facilities Engineering Command 1,014

Commander, Naval Supply Systems Command 911

Commander, Naval Intelligence Command 890

Commander, Space and Naval Warfare Systems Command 656

Director, Strategic Systems Programs Office 525

Commander, Military Sealift Command 276

Office of the Chief of Naval Research 172

The process to determine shore requirements begins with a mission,

function, task (MFT) statement, or document, that is written by an activity

or by the parent shore command and identifies the mission of the

organizational component or work center and the work tasked or required

of that component. From the MFT statement, efficiency review analysts

then develop a performance work statement that identifies authorized

work to be done and authorized products or services from individual

departments, divisions, or the activity as a whole and establishes

standards for quantity of output. It serves as a basis for work

measurement, methods improvement, and other industrial engineering and

management tools both within and outside the efficiency review process.

We found in our review that MFT statements often served as the baseline

for performance work statements. While MFTs are a critical part of the

shore requirements process, we found that many of the shore commands

we reviewed did not devote much time or attention to developing these

Page 44 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

statements or ensuring they complied with requirements. An official from

one command’s efficiency review team told us that MFTs sometimes had to

be redone because the activities had written very general statements

without the specificity needed for an efficiency review. In many cases,

MFTs had not even been prepared at the time of the efficiency reviews or

they were out of date. MFTs generally are written without coordination

between one shore command and another or with Navy headquarters,

even for similar activities. As a result, MFTs for similar activities at different

commands can vary widely. According to the Navy, however, this may

change as a result of a proposal to standardize MFTs for base operating

support functions.

After establishing MFT statements and doing other planning, shore

commands conduct efficiency reviews to determine the number of

personnel that are needed in their various activities. The Navy allows each

command to establish its own procedures to do this as long as the

methodology to determine personnel requirements is defendable.

According to a NAVMAC official, 4 of the 22 shore commands have

centralized teams who conduct efficiency reviews and identify personnel

requirements for the various activities within their commands. The other

commands have varying structures ranging from very decentralized, where

the responsibility for conducting efficiency reviews is left up to each

individual activity, to a structure where the parent command provides

some guidance and assistance to the activities performing the efficiency

reviews.

The process of funding personnel requirements is another difference

between the shore establishment and the operating forces. Whereas the

Navy’s ships, submarines, and aircraft squadrons are funded to at least

90 percent of their identified personnel requirements,3

 the Navy has no

such requirement for its shore establishment. Funding is dependent on

what the resource sponsors4 decide they can provide for each of their

activities. While the Navy established a funding floor for its operating

forces, it did not do this for the shore establishment because it did not

believe it could always fund shore requirements at a particular level,

according to Navy officials. Therefore, while “minimum requirements” are

supposedly identified for specific shore activities, less than 70 percent of

3

The remaining 10 percent of the requirement, if needed during a contingency operation, is filled with

active duty personnel from the shore establishment.

4

A resource sponsor is responsible for a group of programs and resources constituting certain warfare

and supporting warfare tasks. In liaison with other Navy offices, the resource sponsor prepares and

justifies a Navy position on resource allocation to ensure a fiscally effective and balanced program.

Page 45 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

the identified requirements for some activities are actually funded,

according to a Navy official.

Shore Program

Criticized by the

Congress and Audit

Organizations for 25

Years

Congressional questions about the credibility of the Navy’s requirements

for its shore-based personnel have been raised over many years. Since the

early 1970s, the Congress has expressed concern about the various

processes the Navy has used to determine personnel requirements for the

shore establishment and on several occasions directed the Navy to

develop a more rigorous system to justify shore-based personnel needs. In

addition, we, as well as other audit organizations, have issued numerous

reports identifying weaknesses in the shore requirements processes and

the overall shore requirements program. According to Navy officials, the

number of changes to the shore requirements program, directed by both

internal and external forces, has contributed significantly to the problems

the program has experienced throughout the years.

Changes to the Shore

Personnel Requirements

Program

The Navy has had a number of shore requirements programs over the past

25 years. In 1972, in response to congressional concerns, the Navy began

developing the Shore Requirements, Standards, and Manpower Planning

System (SHORSTAMPS). This system was to apply work measurement

techniques to develop staffing and work measurement standards that

could quantify total personnel requirements for military, civilian, and

contractor personnel supporting the shore establishment. Seven years

later, unsatisfied with the Navy’s slow progress in developing staffing

standards and quantifying shore-based personnel requirements under the

SHORSTAMPS program, the Congress directed that a new implementation

plan be developed. In the new plan, the Navy stated that it would be 8

more years before at least 70 percent of the shore population was under

staffing standards. In 1983, the Navy incorporated the SHORSTAMPS program,

as well as other Navy requirements programs such as the Efficiency

Review and Commercial Activities Programs into the new Navy Manpower

Engineering Program. The Navy Manpower Engineering Center was

created to centrally manage this program.

In 1986, the Secretary of the Navy decided to decentralize the shore

manpower requirements program because he did not believe the Navy’s

investment in overhead personnel at the Manpower Engineering Center

and its detachments had proven cost-effective compared with alternative,

less costly methods of determining requirements. As a result, the Navy

transferred responsibility for shore personnel requirements from the

Page 46 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

Manpower Engineering Center to the major shore commands. According

to a Naval Audit Service report, the Secretary of the Navy assured the

Congress that the Navy would maintain strong centralized control of the

requirements determination process while decentralizing execution of the

program. The Navy operates under this decentralized process today. Each

command is responsible for ensuring that efficiency reviews are

conducted using trained analysts under the command’s direction. The

Assistant Chief of Naval Personnel for Total Force Programming,

Manpower, and Information Resources Management provides overall

program management.

Similar Concerns Raised

Throughout the Years by

Audit Organizations

Over the years, reports from us, the Naval Audit Service, and the Naval

Inspector General have raised similar concerns about the Navy’s process

and overall program for determining shore personnel requirements. Many

of the same problems have continued to arise, as shown in table 4.2. Our

1985 report, for example, states in the initial pages that the report’s

findings are many of the same ones highlighted in our 1980 report on the

Navy’s shore requirements program.5

 The reports attribute the Navy’s

difficulty in eliminating these problems to the lack of effective Navy

oversight and the lack of senior Navy management commitment to the

shore requirements program.

5

Navy Manpower Management: Continuing Problems Impair the Credibility of Shore Establishment

Requirements (GAO/NSIAD-85-43, Mar. 7, 1985) and The Navy’s Shore Requirements, Standards, and

Manpower Planning System (SHORSTAMPS)—Does the Navy Really Want It? (GAO/FPCD-80-29, 

Feb. 7, 1980).

Page 47 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

Table 4.2: Audit Findings of Select Reports on the Navy’s Shore Personnel Requirements Program

Audit reports

Slow program

implementation

Non-use of

standards

Ineffective

management

oversight and

accountability

Reviews not

properly

conducted

Lack of top Navy

management

commitment

Report of Command

Inspection of Bureau of Naval

Personnel (Naval Inspector

General, 1994)

X X X

Department of the Navy

Efficiency Review Program

(Naval Audit Service, 1992)

X X X X X

Department of the Navy

Management Control Program,

Accounting Systems Review

Process, and the Efficiency

Review Program (Naval Audit

Service, 1991)

X X

Navy Shore Manpower

Program: Decision to

Decentralize Needs to Be

Rethought (GAO, 1987)

X X

Navy Manpower Management:

Continuing Problems Impair

the Credibility of Shore

Establishment Requirements

(GAO, 1985)

X X X X X

The Navy’s Shore

Requirements, Standards, and

Manpower Planning System

(SHORSTAMPS)—Does the

Navy Really Want It? (GAO,

1980)

X X X X X

Continued Problems

Affect Navy’s Ability

to Manage Shore

Establishment

Many of the problems identified in previous audit reports still exist today.

For example, major shore commands are still slow to comply with or are

not complying with various program requirements, there is still a lack of

standards to enable a comparison of one function to another, and

efficiency review quality differs from one command to another and often

from one activity to another. Few of the shore commands, as well as Navy

headquarters, have devoted the attention and resources to make the

efficiency review program work as specified in Navy instructions. For

most commands, according to a NAVMAC official, the process has become

one of justifying existing resource allocation rather than evaluating

alternative combinations of manpower, material, facilities, and

Page 48 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

organizational structures and ensuring that the most cost-effective

combination of resources is used, as required.

Compliance With Program

Requirements

In January 1988, the Secretary of the Navy directed the Chief of Naval

Operations to establish a requirements baseline for shore requirements

and to complete the first 5-year review cycle of all Navy shore activities by

the end of fiscal year 1994. The major shore commands were charged with

conducting the efficiency reviews that would establish the baseline, and

the Director of the Total Force Programming and Manpower Division was

designated the program manager, providing overall program oversight. By

the end of fiscal year 1994, none of the major shore commands had

completed their efficiency reviews. According to a NAVMAC official, this

may have been due to a misunderstanding about the required completion

date. The deadline was later extended to September 30, 1995. By the end

of fiscal year 1995, about 73 percent of the commands had completed their

efficiency reviews, but less than 35 percent of them had submitted the

results for inclusion in the Navy’s Total Force Manpower Management

System, the single authoritative source for personnel authorizations data.

In a 1995 memorandum to Navy shore commands, the Director, Total

Force Programming and Manpower Division stated that the absence of

requirements data in this system would be considered evidence that no

process was used to determine personnel requirements. As of March 1996,

one of the biggest shore commands—U.S. Atlantic Fleet—still had not

begun efficiency reviews on 10 percent of its activities and still had a

number of other reviews ongoing. Officials estimated needing another year

to finish all its work. As of February 1997, Atlantic Fleet officials said just

one efficiency review remained to be completed.

Shore commands generally attributed the delay in completing and

implementing the efficiency reviews to a lack of resources. In addition,

officials responsible for conducting efficiency reviews stated that they

often have to respond to other personnel-related taskings from their

commands, which takes them away from conducting efficiency reviews.

NAVMAC officials stated that strong leadership and command management

support enabled some commands, such as the U.S. Pacific Fleet, to

respond to efficiency review program requirements.

Staff Training The qualifications of the staff that perform efficiency reviews has been

another area of concern for many years and has affected a command’s

ability to complete its efficiency reviews in accordance with program

Page 49 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

requirements. The veteran analysts we talked with during this review, who

had been involved with the shore requirements program for nearly 20

years, told us it takes a combination of training and about 1 1/2 years of

experience working with a trained analyst before someone can effectively

conduct efficiency reviews.

In our 1980 and 1985 reports, we recommended that the Navy establish

personnel management career fields, such as the Air Force has had for its

military and civilian personnel for many years. While the Navy included a

manpower, personnel, and training core competency in one of its new

officer career fields (Fleet Support Officer), it has not taken similar steps

for its civilian employees. Navy instructions require shore commands to

ensure that efficiency reviews are conducted using trained analysts.

According to a NAVMAC official, usually it is left up to the activity to pursue

such training. We found in some cases that the individuals conducting

efficiency reviews were low-ranking civilians or military personnel who

were doing the reviews as a collateral duty, with little or no training.

During our initial visits, we found that only two of the six commands we

reviewed consistently pursued efficiency review training for their staff.

Recently, one other added efficiency review training for some staff.

NAVMAC used to provide efficiency review training for the Navy but recently

canceled the course because of budget concerns. NAVMAC officials told us

that similar training is available from the other services and that the type

of training NAVMAC provides in the future will focus on more Navy-unique

systems.

Efficiency Review Quality Under the current decentralized efficiency review program, each

command is responsible for designing and implementing its own program.

This includes developing an appropriate methodology, identifying staff to

perform the reviews, and providing appropriate training. A number of past

audit reports have noted that efficiency review quality differs from one

shore command to another. This conclusion was verified by NAVMAC and by

findings in a 1994 Navy Inspector General report.6

 The Inspector General

report states that efficiency reviews of similar activities performed by

different commands are not necessarily consistent or comparable. For

example, security, administrative operations, and food services were

found within most shore commands and yet no up-to-date standards

existed to facilitate comparison from one command to another. In 1996,

6

Report of Command Inspection of Bureau of Naval Personnel, Naval Inspector General, (Mar. 14-25,

1994).

Page 50 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

NAVMAC completed a series of comparative analyses of personnel

requirements at various naval air stations. The analyses, while

rudimentary, showed variances in the number of personnel at similar

activities. According to Navy officials, comparative analyses have become

an important part of the Navy’s efforts to regionalize and consolidate base

operations. In addition, the new shore requirements concept will also

stress standardization and comparative analyses.

In August 1995, as part of the Navy’s comparative analysis work, the

Director, Total Force Programming and Manpower Division, tasked

NAVMAC to ensure that (1) shore commands’ validated requirements are

fully justified; (2) efficiency reviews are a thorough evaluation of

alternative combinations of manpower, material, facilities, and

organizational structures; and (3) the most cost-effective combination of

resources is used. The Director further added that NAVMAC should return

efficiency reviews for further analysis if NAVMAC considers the shore

commands’ reviews inadequate. Likewise, NAVMAC should endorse

efficiency reviews that set the best standard. While NAVMAC officials

acknowledge that many efficiency reviews have not met the requirements,

they have not returned any of these reports to the commands to be redone.

Ensuring this level of compliance can only be accomplished through

on-site validation visits, according to these officials, and due to NAVMAC’s

limited staff, this is not possible.

According to NAVMAC officials, some commands devote more resources,

provide more training, and place a greater priority on conducting

efficiency reviews than do others. As a result, a command’s ability to

produce quality reviews is affected. For example, according to Pacific

Fleet officials, the Pacific Fleet had 57 civilians as of February 1997, many

of whom were veteran manpower specialists, and a budget of about

$4.4 million to conduct efficiency reviews. The Atlantic Fleet, with a

similar population base, had 3 officers, 21 enlisted, and 17 civilians and a

budget of about $1.1 million at the same time period to conduct its

program, according to Atlantic Fleet officials.7

 The Pacific Fleet was able

to complete its efficiency reviews in 1995, but as of February 1997, the

Atlantic Fleet was still working on its reviews. Officials at several shore

commands told us that the reviews are time-consuming and costly and that

the commands would not place a high priority on conducting the reviews

unless the commands’ resources were threatened for not doing so.

7

This does not include funding for military personnel.

Page 51 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

Proposals Aim to Improve

Navy’s Ability to Quantify

Shore Requirements

During this review, Navy officials stressed that they are aware of and are

addressing many of the concerns raised during our review and in past

audit reports. For example, Navy officials said they recognize the

importance of being able to compare like functions, from one command to

the next, and the personnel numbers associated with each function. In

1996, the Navy completed a study of 18 naval air stations to identify

common core functions and the commensurate personnel allocated to

these functions. The Director, Total Force Programming and Manpower

Division, believed that comparative efficiency review analysis was the best

way to execute shore requirements oversight responsibilities. According to

a NAVMAC official, this comparative analysis effort was incorporated into

other shore initiatives discussed in chapter 3, and by the Single Shore

process, discussed below.

The Navy has begun work on a revised personnel requirements

determination concept called the Single Shore Methodology. According to

the Navy, it will take about 1 to 2 years before this process is fully

implemented throughout the shore establishment. The process employs a

common format for both peacetime and wartime conditions and

emphasizes mission, function, and task statements; associated outputs;

and allocated personnel assets to accommodate comparative analyses of

like functions performed at a variety of commands and under various

conditions of readiness. According to Navy officials, the evolving

methodology sets the framework for standardization, analysis of like

activities, accountability, and management oversight. They believe the

development of standardized manpower statements and workload

indicators will allow the Navy to more efficiently manage personnel

requirements and authorizations.

The Navy believes that the installation management accounting project,

described in chapter 3, will also contribute to greater standardization for

the shore establishment. With this project, the Navy is working to

standardize base operating support functions performed within

installations. The focus of this effort is to develop core business functions,

establish uniform output measures, and capture all expenses related to

those functions to facilitate unit costing.

While these two efforts address long-standing problems—standardization

and management oversight—so have past shore requirement proposals. To

be successful, the Single Shore process will require significant and

sustained up-front labor in the designing of standardized workload

indicators and will require continued oversight to ensure that shore

Page 52 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

commands understand and use the new process. Most important, the new

initiatives will require continued support from Navy leadership to

strengthen the shore personnel requirements program and to prevent the

problems that occurred in the past.

In its 1994 Bureau of Naval Personnel inspection report, the Naval

Inspector General noted that infrastructure end strength reductions are

difficult to achieve when the funding of these activities comes from so

many different sources. Currently, 17 different entities contribute to the

funding of the Navy’s shore establishment. In 1994, the Navy consolidated

its base operating support functions under the Director of Shore

Installation Management. While many of the other shore functions are still

split among numerous entities, the Navy believes this recent consolidation

will allow greater control over base operating support requirements and

facilitate standardization and a comparative analysis of like functions.

Improved Navy

Management and

Oversight Are Key to

Resolving Problems

With Shore

Requirements

Program

In the audit reports issued since the early 1980s, the issue of ineffective

management oversight and accountability has been identified as the

primary reason why the various shore personnel requirements programs

have not been successful. The lack of effective oversight and leadership

has prevented the Navy from reconciling long-standing problems. For

example, our 1985 report states that although SHORSTAMPS (the

requirements program at the time) had a number of defects, the key

problem was the absence of monitoring and enforcement to ensure the use

of staffing standards and to manage the shore requirements program in

accordance with implementation instructions. Yet, 7 years later, the Naval

Audit Service’s 1992 report states that major shore commands did not

provide the quality control oversight required by Navy instructions and

that they generally assigned only one or two persons to oversee their

entire efficiency review program, which could involve dozens of reviews.

Similarly, the report noted that Navy headquarters was not performing

on-site reviews as required and was making only limited challenges to

obvious efficiency review problems. As of August 1991, Navy headquarters

had only one individual assigned to review and approve efficiency review

reports, and NAVMAC had just three people assigned, according to the Naval

Audit Service report.

Page 53 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

Inadequate Navy Oversight

and Accountability Fosters

Material Management

Weaknesses

The Federal Managers’ Financial Integrity Act (FMFIA) requires ongoing

evaluations of internal agency management controls and accounting

systems and annual reports to the President and the Congress on the

condition of those systems. FMFIA is not limited to accounting or

administrative matters. Rather, it is intended to address the entire range of

policies and procedures that management employs to perform its mission

efficiently and effectively. In February 1994, the Secretary of Defense

directed all Assistant Secretaries of Defense to improve implementation of

FMFIA.

Numerous audits by us and DOD organizations have linked the Navy’s

problems with its shore personnel requirements program to a lack of

management oversight and inadequate internal controls. In its March 1992

report, the Naval Audit Service concluded that the internal control system

for managing the efficiency review program was not adequate to prevent

or promptly detect material errors and irregularities in operations. The

findings in this report disclosed numerous material internal control

weaknesses; yet, none of the deficiencies were identified through the

Management Control Program prescribed by Navy instructions or reported

to the Chief of Naval Operations in the annual certification statement

regarding compliance with the FMFIA. Seven of the 8 commands in the

review did not designate the efficiency review program as an assessable

unit. Consequently, they did not perform vulnerability assessments or

management control reviews specifically related to the program.

In the past, the Navy has demonstrated that it recognizes the importance

of a credible requirements determination process. In its FMFIA Statements

of Assurance, the Navy has identified deficiencies in the area of

requirements determination for equipment, supplies, materials, training,

and systems acquisition. In many instances, according to the Navy, the

requirements have been overstated, understated, unrealistic, inadequately

supported, or invalid, resulting in unnecessary funding and purchases or

hindering fleet readiness because not enough material is available to meet

requirements.

Conclusions The Navy has several programs underway in various stages of

implementation that are intended to further define both ship- and

shore-based personnel requirements. Some of these programs could result

in substantial reductions in personnel. However, without continued

high-level Navy support and long-term commitment, there is no assurance

that the fate of these proposals will be any different than those of earlier

Page 54 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

years. While the Navy has traditionally placed the greatest priority and

management attention on its operating forces, given the current budget

environment, when the Navy must find billions of dollars in savings to

apply to force modernization, shore personnel requirements must come

under continued scrutiny. Without an effective shore requirements

program, the Navy has no assurance that the resources it is applying to the

shore establishment are properly sized to support the operating forces.

Recommendations To improve the management and allocation of personnel resources to the

shore establishment, we recommend that the Secretary of the Navy report

to the Secretary of Defense the lack of an effective shore requirements

determination program as a material weakness under FMFIA to maintain

visibility of the issue and ensure action is taken. We also recommend that

the Secretary of the Navy create an action plan with milestones to resolve

long-standing problems with the shore personnel requirements program.

The plan should specifically explain how the Navy will attempt to

overcome the fundamental problems—such as lack of senior Navy

management commitment to effective management of the shore

establishment and ineffective management oversight and

accountability—that have plagued this program.

Matters for

Congressional

Consideration

Given the long history of congressional concern over the Navy’s ability to

effectively determine the size and composition of its shore establishment,

the Congress may wish to require the Navy to submit its plan of action,

with milestones, to the Congress. In addition, as part of this plan, the

Congress may also want the Navy to demonstrate its progress and provide

specific details on the steps it has taken at headquarters and at the major

command level to (1) improve management oversight and accountability

of the personnel requirements determination process at all levels;

(2) increasingly utilize standardization and comparative analysis of like

activities as part of the requirements process; (3) improve staff training

and ensure that only technically qualified staff conduct efficiency reviews;

and (4) establish a link between the shore personnel requirements process

and the Navy’s various initiatives to reduce its shore infrastructure, many

of which were discussed in chapter 3 of our report.

Agency Comments

and Our Evaluation

DOD concurred with our recommendation that the Secretary of the Navy

develop an action plan with milestones to ensure that positive results of

ongoing initiatives to improve the shore requirements process are

Page 55 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

sustained. But DOD only partially concurred with our recommendation that

the Secretary of the Navy report the lack of a valid shore requirements

determination program as a material weakness under FMFIA. DOD agrees

that there have been weaknesses and inconsistencies in the execution of

the shore manpower requirements program, but it believes a credible

shore requirements program exists in the Navy and that improvements

have been and continue to be implemented. DOD believes that the Navy’s

current initiatives to improve shore infrastructure management are a

positive trend toward recognizing past problems and developing solutions

to improve oversight and requirements determination. For these reasons,

DOD did not agree to report this issue as a material weakness.

While we acknowledge that the Navy has recently undertaken various

initiatives to improve the management of its shore establishment and the

identification of shore personnel requirements, the Navy has yet to identify

how these initiatives will be any different from the many programs and

initiatives introduced by the Navy over the past 25 years, which failed to

correct long-standing problems with the shore requirements program. We

are skeptical, therefore, that these initiatives, however well-intended, will

be any more successful—particularly since few have been implemented.

Therefore, we continue to believe that the shore personnel requirements

program should be reported as a material weakness under FMFIA. We have

modified the recommendation somewhat, however, to focus on the

effectiveness rather than the validity of the program.

In its comments, DOD stated that the Navy has evaluated this issue in the

past. For example, the Navy’s Management Control Reviews conducted in

July 1993 identified no significant material weaknesses with the program.

But, the Navy could not produce any documentation to indicate the basis

upon which these decisions were made. We find it difficult to understand

how a thorough review of this issue in July 1993 would have identified no

significant material weaknesses, particularly because these reviews were

conducted immediately after the issuance of numerous audit reports that

were critical of the Navy’s efficiency review process and shore

requirements program, suggesting the presence of numerous potential

material weaknesses. Navy headquarters officials did not know whether

previous Management Control Reviews had been conducted at the major

command level. We believe it is important to assess the efficiency review

program at this level, as well as at headquarters, since the commands are

responsible for running their own programs and conducting the efficiency

reviews.

Page 56 GAO/NSIAD-97-90 Force Structure
Chapter 4 

Problems Still Exist With Navy’s Shore

Personnel Requirements Program

The Navy also provided technical comments to this report. While we took

issue with some of these comments, we incorporated others where

appropriate.

Page 57 GAO/NSIAD-97-90 Force Structure
Appendix I 

Comments From the Department of Defense

Page 58 GAO/NSIAD-97-90 Force Structure
Appendix I 

Comments From the Department of Defense

Now on p. 55.

Page 59 GAO/NSIAD-97-90 Force Structure
Appendix I 

Comments From the Department of Defense

Page 60 GAO/NSIAD-97-90 Force Structure
Appendix I 

Comments From the Department of Defense

Page 61 GAO/NSIAD-97-90 Force Structure
Appendix I 

Comments From the Department of Defense

Now on p. 55.

Page 62 GAO/NSIAD-97-90 Force Structure
Appendix II 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Carol R. Schuster, Associate Director

Richard J. Herley, Assistant Director

M. Elizabeth Guran, Evaluator-in-Charge

Michael J. Ferren, Senior Evaluator

Ronald D. Leporati, Senior Evaluator

(701079) Page 63 GAO/NSIAD-97-90 Force Structure
Ordering Information

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

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

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

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

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

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 6015

Gaithersburg, MD 20884-6015

or visit:

Room 1100

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

U.S. General Accounting Office

Washington, DC

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

or by using fax number (301) 258-4066, or TDD (301) 413-0006.

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

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

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

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

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

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

info@www.gao.gov

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

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100