DOD CIVILIAN 

WORKFORCE

Observations on DOD’s 

Efforts to Plan for Civilian 

Workforce Requirements 

Statement of Brenda S. Farrell 

Director, Defense Capabilities and Management

Testimony 

Before the Subcommittee on Readiness, 

House Armed Services Committee

For Release on Delivery 

Expected at 11:30 a.m. EDT 

Thursday, July 26, 2012

GAO-12-962T

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-962T, a testimony 

before the Subcommittee on Readiness, 

Committee on Armed Services, House of 

Representatives. 

July 26, 2012 

DOD CIVILIAN WORKFORCE

Observations on DOD’s Efforts to Plan for Civilian 

Workforce Requirements

Why GAO Did This Study

DOD’s workforce of 783,000 civilians 

performs a wide variety of duties, 

including some traditionally performed 

by military personnel, such as missionessential logistics support and 

maintenance, as well as providing 

federal civilian experts to Afghanistan 

and other theaters of operations. 

With the long-term fiscal challenges 

facing the nation, reductions to the 

civilian workforce may be considered 

to achieve cost savings. Human capital 

has remained a critical missing link in 

reforming and modernizing the federal 

government’s management practices, 

even as legislation and other actions 

since 1990 have been put in place to 

address major management areas. In 

the past, GAO has observed that the 

federal government has often acted as 

if people were costs to be cut rather 

than assets to be valued. DOD 

previously experienced significant 

downsizing in the 1990s where it did 

not focus on reshaping the civilian 

workforce in a strategic manner. 

Particularly as decision makers 

consider proposals to reduce the 

civilian workforce, it will be critical to

DOD’s mission for the department to 

have the right number of federal 

civilian personnel with the right skills. 

This testimony discusses DOD’s 

1) prior experience with civilian 

workforce downsizing, and 2) current 

strategic human capital planning 

efforts.

This testimony is based on GAO 

reviews issued from March 1992 

through June 2012. 

What GAO Found

Prior Department of Defense (DOD) civilian workforce downsizing efforts in the 

1990s were not oriented toward shaping the makeup of the workforce, resulting 

in significant imbalances in terms of shape, skills, and retirement eligibility. 

Specifically, in a series of reviews GAO found that DOD’s efforts in the 1990s to 

reduce its federal civilian workforce to levels below that of 1987 were hampered 

by incomplete data and lack of a clear strategy for avoiding skill imbalances and 

other adverse effects of downsizing. For instance, in 1992, GAO found that DOD 

used incomplete and inconsistent data related to workers, workload, and 

projected force reductions. Further, the approaches DOD has relied on to 

accomplish downsizing have sometimes had unintended consequences. The use 

of voluntary attrition, hiring freezes, and financial separation incentives allowed 

DOD to mitigate some adverse effects of civilian workforce reductions, but were 

less oriented toward shaping the makeup of the workforce than was the 

approach the department used to manage its military downsizing. For DOD, this 

was especially true of the civilian acquisition workforce. The department, which in 

2011 obligated about $375 billion to acquire goods and services, was put on the 

verge of a retirement-driven talent drain in this workforce after 11 consecutive 

years of downsizing, according to a DOD report. Finally, GAO has found that the 

use of strategies such as financial separation incentives makes it difficult to 

document or estimate the actual cost savings of government downsizing efforts, 

especially in cases where the work previously performed by the eliminated 

personnel continues to be required. For example, if the work continues to be 

required, it may need to be contracted out to private companies and contract 

costs should be considered in determining whether net savings resulted from 

workforce reductions.

DOD has taken positive steps towards identifying its critical skills, but there are 

opportunities to enhance the department’s current strategic workforce plans.

GAO and the Office of Personnel Management have identified leading principles

to incorporate into effective workforce plans, such as the need to identify and 

address critical skills and competencies. DOD has been required to have a

civilian strategic workforce plan since 2006. Currently, DOD is required to 

develop a strategic workforce plan that includes, among other things, an

assessment of the skills, competencies and gaps, projected workforce trends, 

and needed funding of its civilian workforce. GAO has found improvements in

DOD’s efforts to strategically manage its civilian workforce. For instance, GAO 

reported in 2010 that DOD’s 2009 strategic workforce plan assessed critical skills 

and identified 22 mission-critical occupations, such as acquisition and financial 

management. However, DOD’s plan only discussed competency gap analyses 

for 3 of its 22 mission-critical occupations, which GAO has reported is key to 

enabling an agency to develop specific strategies to address workforce needs. 

For example, GAO found that DOD had not conducted a competency gap 

analysis for its financial management workforce, and GAO remains concerned 

that DOD lacks critical information it needs to effectively plan for its workforce 

requirements. GAO is currently reviewing DOD’s latest strategic workforce plan, 

which was released in March 2012. The results of this review are expected to be 

released in September 2012.

View GAO-12-962T. For more information, 

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

or farrellb@gao.gov 
 

Page 1 GAO-12-962T 

Chairman Forbes, Ranking Member Bordallo, and Members of the 

Subcommittee:

Thank you for providing me the opportunity to be here today to discuss 

GAO’s observations on the Department of Defense’s (DOD) civilian 

workforce requirements. Having the right number of federal civilian 

personnel with the right skills is critical to achieving the DOD mission—

particularly as the department faces the current and emerging challenges 

of the 21st century. DOD’s civilian workforce performs a wide variety of 

duties and responsibilities, including mission-essential combat support 

functions, such as logistics support and maintenance, which traditionally 

have been performed by the uniformed military. A key component of this 

workforce also provides federal civilian experts to Afghanistan and other 

theaters of operation. Moreover, career civilian personnel possess 

“institutional memory,” which is particularly important in DOD because of 

the frequent rotation of military personnel and the short tenure of the 

average political appointee. During its downsizing in the early 1990s, our 

prior work1

With the long-term fiscal challenges facing the nation, reductions to the 

civilian workforce may be considered to achieve cost savings. Our prior 

work has noted that an organization’s people—its human capital—are its 

most critical asset in managing for results. However, human capital has 

remained a critical missing link in reforming and modernizing the federal 

government’s management practices, even as legislation and other 

actions since 1990 have attempted to address most major management 

areas. Further, GAO’s reports have noted that the federal government 

has often acted as if people were costs to be cut rather than assets to be 

valued. In 2001, after a decade of government downsizing and curtailed 

investments in human capital, we reported that federal human capital 

strategies were not appropriately constituted to adequately meet the 

found that DOD did not focus on reshaping the civilian 

workforce in a strategic manner. That downsizing resulted in skills 

imbalances and a workforce characterized by a growing gap between 

older, experienced employees and younger, less experienced ones. At 

the time of this downsizing, a common concern often voiced by Defense 

managers was that workforce constraints were driving workload rather 

than workload requirements being used to define workforce levels.

 

1

GAO, Defense Force Management: Expanded Focus in Monitoring Civilian Force 

Reductions Is Needed, GAO/T-NSIAD-92-19 (Washington, D.C.: March 18, 1992). 

 
 

Page 2 GAO-12-962T 

current and emerging needs of the government and the country’s citizens 

in the most effective, efficient, and economical manner possible. That 

same year, we designated strategic human capital management across 

the entire federal government as a high-risk area2 because of the longstanding lack of leadership in the area and, in part, because critical skill 

gaps could undermine agencies’ abilities to accomplish their missions. 

While significant progress has been made—for example, through the 

various authorities and flexibilities provided to agencies for managing the 

federal workforce—the area remains high risk governmentwide3

My testimony today will discuss our observations on (1) DOD’s prior 

experience with civilian workforce downsizing, and (2) its current strategic 

human capital planning efforts. For this testimony, we relied on our prior 

work on a range of governmentwide and human capital-related issues. 

We conducted the work supporting our prior reports, which were issued 

from March 1992 through June 2012, in accordance with generally 

accepted government auditing standards.

because 

of a need to develop and implement plans to address current and 

emerging critical skill gaps that are undermining agencies’ abilities to 

meet their vital missions. The federal government’s current budget and 

long-term fiscal pressures underscore the importance of a strategic and 

efficient approach to human capital management—an approach that 

would help ensure the recruitment and retention of individuals with the 

needed critical skills. Specifically, with regard to DOD, our subsequent 

work has emphasized that effective planning can enable the department 

to have the right people, with the right skills, doing the right jobs, in the 

right places, at the right time by making flexible use of its internal 

workforce and appropriately using contractors. Particularly as decision 

makers consider proposals to reduce the civilian workforce, it will be 

critical to DOD’s mission for the department to have the right number of 

federal civilian personnel with the right skills.

 

2

GAO, High-Risk Series: An Update, GAO-01-263 (Washington, D.C.: January 2001).

3

GAO, High-Risk Series: An Update, GAO-11-278 (Washington, D.C.: February 2011). 
 

Page 3 GAO-12-962T 

GAO’s body of work related to prior workforce reductions at DOD and other 

organizations demonstrates the importance of strategic workforce planning, 

including a consideration of costs, to help ensure that DOD has a fully 

capable workforce to carry out its mission. According to GAO’s Standards 

for Internal Control,

4 management should ensure that skill needs are 

continually assessed and that the organization is able to obtain a workforce 

that has the required skills that match those necessary to achieve 

organizational goals. Section 322 of the National Defense Authorization Act 

for Fiscal Year 1991 directed DOD to establish guidelines for reductions in 

the number of civilian workers employed by industrial or commercial type 

activities. The act also directed certain DOD agencies or components to 

submit 5 year master plans for those workers, providing information on 

workload, demographics, and employee furloughs and involuntary 

separations, with the materials submitted to Congress in support of the 

budget request for fiscal year 1991.5

In a series of subsequent reviews,

Subsequently, in 1992, we reported 

that DOD intended to undertake a multiyear downsizing effort aimed at 

reducing the civilian workforce by nearly 229,000 positions, or to 20 percent 

below its fiscal year 1987 levels. However, in 2000, we reported that DOD’s 

approach to prior force reductions was not oriented toward shaping the 

makeup of the workforce, resulting in significant imbalances in terms of 

shape, skills, and retirement eligibility.

6

 

4

GAO, Standards for Internal Control in the Federal Government, 

we found that the department’s efforts 

were hampered by incomplete data and the lack of a clear strategy for 

avoiding the adverse effects of downsizing and minimizing skills 

imbalances. For instance, we reported in 1992 that DOD’s 1991 

downsizing plan developed in response to section 322 had a number of 

data gaps and limitations, including incomplete and inconsistent data 

related to workload, workers, and projected force reductions. More 

specifically, DOD pointed out that the plan’s data limitations were partly 

due to uncertainty about the results of a pending Base Closure and 

GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).

5

The National Defense Authorization Act for Fiscal Year 1991, Pub. L. No. 101-510, §322 

(1990).

6

GAO, Defense Force Management: Expanded Focus in Monitoring Civilian Force 

Reductions Is Needed, GAO/T-NSIAD-92-19 (Washington, D.C.: March 18, 1992); and 

Defense Force Management: Challenges Facing DOD as It Continues to Downsize Its 

Workforce, GAO/NSIAD-93-123 (Washington, D.C.: February 12, 1993). 

Prior Civilian 

Workforce Reductions 

Demonstrate the 

Importance of 

Strategic Workforce 

Planning
 

Page 4 GAO-12-962T 

Realignment round and the impacts of Operations Desert Shield and 

Desert Storm. We concluded that broader assessments were needed to 

determine the magnitude of civilian workforce reductions and their 

potential impact on given areas and regions, as well as the impact of 

hiring constraints on the ability of all DOD civilian organizations to 

efficiently and effectively accomplish their missions.

We also have reported7 that the approaches DOD has relied on to 

accomplish past civilian workforce downsizing have sometimes had 

unintended consequences, such as workforce skills imbalances. For 

instance, DOD’s approach to past civilian downsizing relied primarily on 

voluntary attrition and retirements and varying freezes on hiring authority 

to achieve force reductions, as well as the use of existing authorities for 

early retirements to encourage voluntary separations at activities facing 

major reductions-in-force. The National Defense Authorization Act for 

Fiscal Year 1993 authorized a number of transition assistance programs 

for civilian employees, including financial separation incentives—

”buyouts”—to induce the voluntary separation of civilian employees.8

DOD credited the use of these separation incentives, early retirement 

authority, and various job placement opportunities in its avoidance of 

nearly 200,000 involuntary demotions and separations. The tools 

available to DOD to manage its civilian downsizing helped mitigate some 

adverse effects of force reductions. However, DOD’s approach to civilian 

workforce reductions was less oriented toward shaping the makeup of the 

workforce than was the approach it used to manage its military 

downsizing and resulted in significant imbalances in terms of shape, 

skills, and retirement eligibility. We also reported9

 

7

GAO, Human Capital: Strategic Approach Should Guide DOD Civilian Workforce 

Management, GAO/T-GGD/NSIAD-00-120 (Washington, D.C.: March 9, 2000). 

that, while managing 

force reductions for its uniformed military, DOD followed a policy of trying 

to achieve and maintain a degree of balance between its accessions and 

losses in order to “shape” its uniformed forces in terms of rank, years of 

service, and specialties. In contrast, we did not see as much attention 

devoted to planning and managing civilian workforce reductions. 

8

The National Defense Authorization Act for Fiscal Year 1993, Pub. L. No. 102-484, 

§4465 (1992). 

9

GAO/T-NSIAD-92-19. 
 

Page 5 GAO-12-962T 

Moreover, the Acquisition 2005 Task Force’s final report10

Our work on the downsizing conducted by other organizations adds 

further perspective on some challenges associated with certain strategies 

and the need to conduct effective planning when downsizing a workforce. 

In 1995, we conducted a review

found, for 

instance, that this was especially true of the civilian acquisition workforce, 

which from September 1989 to September 1999 was reduced by almost 

47 percent. This rate of reduction substantially exceeded that of the rest 

of the DOD workforce. Eleven consecutive years of downsizing produced 

serious imbalances in the skills and experience of the highly talented and 

specialized civilian acquisition workforce, putting DOD on the verge of a 

retirement-driven talent drain.

11

 

10The Acquisition 2005 Task Force, Final Report: Shaping the Civilian Acquisition 

Workforce of the Future (October 2000).

of downsizing undertaken by 17 private 

companies, 5 states, and 3 foreign governments, generally selected 

because they were reputed to have downsized successfully. We reported 

that a number of factors may constrain organizations’ downsizing 

strategies, such as public sentiment, budget limitations, legislative 

mandates to maintain certain programs, and personnel laws. Moreover, 

we found that using attrition as a sole downsizing tool can result in skills 

imbalances in an organization’s workforce because the employees who 

leave are not necessarily those the organization determined to be excess. 

Further, we also found that attrition is often not sufficient to reduce 

employment levels in the short term. In addition, some workforce 

reduction strategies have been found to slow the hiring, promotion, and 

transfer process and create skills imbalances. However, we found that 

one key theme emerged from such downsizing efforts. Specifically, most 

organizations found that workforce planning had been essential in 

identifying positions to be eliminated and pinpointing specific employees 

for potential separation. In organizations where planning did not occur or 

was not effectively implemented, difficulties arose in the downsizing. For 

example, we reported that a lack of effective planning for skills retention 

can lead to a loss of critical staff, and that an organization that simply 

reduces the number of employees without changing work processes will 

likely have staffing growth recur eventually.

11GAO, Workforce Reductions: Downsizing Strategies Used in Select Organizations, 

GAO/GGD-95-54 (Washington, D.C.: March 13, 1995).
 

Page 6 GAO-12-962T 

We have also identified the potential cost implications of downsizing in 

our prior work. In 1995, we reported that the savings realized from 

government downsizing efforts are difficult to estimate. Payroll savings 

attributed to workforce reductions would not be the amount of actual 

savings to the federal government from the personnel reductions because 

of other costs associated with such efforts—for example, separation 

incentives— or, in the case of reductions-in-force, severance pay. In 

addition, the ultimate savings would depend on what happened to the 

work previously performed by the eliminated personnel. For example, if 

some of the work was contracted out to private companies, contract costs 

should be considered in determining whether net savings resulted from 

workforce reductions.

In 2001, we concluded that, considering the enormous changes that 

DOD’s civilian workforce had undergone and the external pressures and 

demands faced by the department, taking a strategic approach to human 

capital would be crucial to organizational results. As I will discuss further, 

this is no less true today than it was in 2001.

I turn now to opportunities we have identified for DOD to enhance its 

strategic human capital planning. Since the end of the Cold War, the 

civilian workforce has undergone substantial change, due primarily to 

downsizing, base realignments and closures, competitive sourcing 

initiatives, and DOD’s changing mission. For example, between fiscal 

years 1989 and 2002, DOD’s civilian workforce shrank from 1,075,437 to 

670,166—about a 38 percent reduction. According to the department, as 

of January 2012, DOD’s total civilian workforce had grown to include 

about 783,000 civilians.12

 

12This workforce total is based on Defense Civilian Personnel Data Service data as of 

January 31, 2012 obtained from the Defense Civilian Personnel Advisory Service monthly 

update briefing entitled DOD Demographics as of Jan. 31, 2012, 

As I have noted, the achievement of DOD’s 

mission is dependent in large part on the skills and expertise of its civilian 

workforce, and today’s current and long-term fiscal outlook underscore 

the importance of a strategic and efficient approach to human capital 

management. The ability of federal agencies to achieve their missions 

and carry out their responsibilities depends in large part on whether they 

can sustain a workforce that possesses the necessary education, 

knowledge, skills, and competencies. Our work has shown that 

successful public and private organizations use strategic management 

Opportunities Exist 

for DOD to Enhance 

Its Strategic Human 

Capital Planning
 

Page 7 GAO-12-962T 

approaches to prepare their workforces to meet present and future 

mission requirements. Preparing a strategic human capital plan 

encourages agency managers and stakeholders to systematically 

consider what is to be done, how it will be done, and how to gauge 

progress and results. While the department has made progress adopting 

some of these approaches, we remain concerned that some missing key 

elements of strategic workforce planning will hinder DOD’s ability to most 

effectively and efficiently achieve its mission.

As we have reported in the past, federal agencies have used varying 

approaches to develop and present their strategic workforce plans. To 

facilitate effective workforce planning, we and the Office of Personnel 

Management have identified six leading principles such workforce plans

should incorporate, including:

• aligning workforce planning with strategic planning and budget 

formulation;

• involving managers, employees, and other stakeholders in planning;

• identifying critical skills and competencies and analyzing workforce 

gaps;

• employing workforce strategies to fill the gaps;

• building the capabilities needed to support workforce strategies 

through steps to ensure the effective use of human capital flexibilities; 

and

• monitoring and evaluating progress toward achieving workforce 

planning and strategic goals.

The application of these principles will vary depending on the particular 

circumstances the agency faces. For example, an agency that is faced 

with the need for a long lead time to train employees hired to replace 

those retiring and an increasing workload may focus its efforts on 

estimating and managing retirements. Another agency with a future 

workload that could rise or fall sharply may focus on identifying skills to 

manage a combined workforce of federal employees and contractors.

Over the past few years, Congress has enacted a number of provisions 

requiring DOD to conduct human capital planning efforts for its overall 

civilian, senior leader, and acquisition workforces and provided various 
 

Page 8 GAO-12-962T 

tools to help manage the department’s use of contractors, who augment 

DOD’s total civilian workforce. For example, the National Defense 

Authorization Act for Fiscal Year 2006 directed DOD to create and 

periodically update a strategic human capital plan that addressed, among 

other things, the existing critical skills and competencies of the civilian 

workforce as well as projected needs, gaps in the existing or projected 

civilian workforce, and projected workforce trends.13 Subsequent acts 

established additional requirements for the human capital plan, including 

requirements to assess issues related to funding of its civilian 

workforce.14

We have closely monitored DOD’s efforts to address the aforementioned 

requirements. In our September 2010 review of DOD’s 2009 update to its 

human capital strategic plan15 we found that, although DOD had 

demonstrated some progress in addressing the legislative requirements 

related to its Civilian Human Capital Strategic Workforce Plan, several 

key elements continued to be missing from the process—including such 

elements as competency gap analyses and monitoring of progress. Our 

work found that DOD’s plan addressed the requirement to assess critical 

skills. Specifically, the overall civilian workforce plan identified 22 missioncritical occupations16

 

13The National Defense Authorization Act for Fiscal Year 2006, Pub. L. No. 109-163. 

§ 1122 (2006).

that, according to the department, represent the 

results of its assessment of critical skills. According to DOD, missioncritical occupations are those occupations that are key to current and 

future mission requirements, as well as those that present a challenge 

regarding recruitment and retention rates and for which succession 

14See, for example, The John Warner National Defense Authorization Act for Fiscal Year 

2007, Pub. L. No. 109-364. § 1102 (2006); The National Defense Authorization Act for 

Fiscal Year 2008, Pub. L. No. 110-181, § 851 (2008); The National Defense Authorization 

Act for Fiscal Year 2010, Pub. L. No. 111-84, § 1108 (2009); and The National Defense 

Authorization Act for Fiscal Year 2012, Pub. L. No. 112-81, §935 (2011). See also 10 

U.S.C. §115b, for the current requirements.

15GAO, Human Capital: Further Actions Needed to Enhance DOD’s Civilian Strategic 

Workforce Plan, GAO-10-814R (Washington, D.C.: September 27, 2010).

16DOD has identified 24 enterprisewide mission-critical occupations; 22 of these 

occupations are associated specifically with the overall civilian workforce and are 

discussed in the strategic workforce plan, while, the remaining 2 are acquisition-related 

occupations—contracting and quality assurance—and are discussed in the Defense 

Acquisition Workforce Improvement Strategy (published as a separate report). 
 

Page 9 GAO-12-962T 

planning is needed. Examples of mission-critical occupations include (1) 

contracting, (2) accounting, and (3) information technology management. 

However, as noted, DOD’s plan lacked such key elements as competency 

gap analysis and monitoring of progress. Our prior work17 identified 

competency gap analyses and monitoring progress as two key elements in 

the strategic workforce planning process. Competency gap analyses 

enable an agency to develop specific strategies to address workforce 

needs and monitoring progress demonstrates the contribution of workforce 

planning to achieving program goals. For example, at the time of our 

review, because the plan discussed competency gap analyses for only 3 of 

the 22 mission-critical occupations and did not discuss competency gaps 

for the other 19 mission-critical occupations, we determined that the 

requirement was only partially addressed. Moreover, DOD was in the initial 

stages of assessing competency gaps for its senior leader workforce, but it 

had not completed the analysis needed to identify gaps. Without including 

analyses of gaps in critical skills and competencies as part of its strategic 

workforce planning efforts, DOD and the components may not be able to 

design and fund the best strategies to fill their talent needs through 

recruiting and hiring or to make appropriate investments to develop and 

retain the best possible workforce. Further, DOD leadership may not have 

information necessary to make informed decisions about future workforce 

reductions, should further reductions to its workforces become necessary.18

We currently have ongoing work assessing DOD’s 2010 Strategic 

Workforce Plan, which the department released in March 2012. The results 

of this review are expected to be released in September 2012. 

In light of the challenges DOD has faced in its strategic workforce 

planning, we support the department’s participation in efforts being made 

across the federal government to address governmentwide critical skills 

gaps. Currently, the Office of Personnel Management and DOD are 

 

17GAO, DOD Civilian Personnel: Comprehensive Strategic Workforce Plans Needed, 

GAO-04-753 (Washington, D.C.: June 2004). 

18In May 2010, the Secretary of Defense directed DOD to undertake a department-wide 

efficiency initiative to assess how the department is staffed, organized, and operated; the 

goal was to reduce excess overhead costs and to reinvest the resulting savings in 

sustaining the force structure and modernizing the weapons portfolio of the department. 

As part of this initiative, the Secretary directed the department to freeze the number of 

Office of the Secretary of Defense, defense agency, field activity, Joint Staff, and 

Combatant Command billets at the fiscal year 2010 levels for the next three years. 
 

Page 10 GAO-12-962T 

leading a working group comprised of members of the Chief Human 

Capital Officers Council tasked with (1) identifying mission-critical 

occupations and functional groups, (2) developing strategies to address 

gaps in these occupations and groups, and (3) implementing and 

monitoring these strategies. 

Our reviews of DOD’s acquisition, information technology, and financial 

management workforces—which include a number of DOD’s identified 

mission-critical occupations—amplifies some of our overarching 

observations related to strategic workforce planning. In fiscal year 2011 

alone, DOD obligated about $375 billion to acquire goods and services to 

meet its mission and support its operations in the United States and 

abroad. As noted, our prior work found that the significant reductions to 

the acquisition workforce in the 1990s produced serious imbalances in 

the skills and experience of this highly talented and specialized workforce. 

The lack of an adequate number of trained acquisition and contract 

oversight personnel has, at times, contributed to unmet expectations and 

placed DOD at risk of potentially paying more than necessary. Our 

February 2011 high-risk report noted that DOD needs to ensure that its 

acquisition workforce is adequately sized, trained, and equipped to meet 

department needs. We further reported in November 2011 that the 

department has focused much-needed attention on rebuilding its 

acquisition workforce and made some progress in terms of growing the 

workforce, identifying the skills and competencies it needed, and used 

such information to help update its training curriculum. 

While DOD has acknowledged that rebuilding its acquisition workforce is a 

strategic priority, our most recent review19 of the Defense Acquisition 

Workforce Development Fund found that DOD continues to face 

challenges in strategic workforce planning for its acquisition workforce.20

 

19GAO, Defense Acquisition Workforce: Improved Processes, Guidance, and Planning 

Needed to Enhance Use of Workforce Funds, GAO-12-747R (Washington, D.C.: 

June 20, 2012). 

20In section 852 of the National Defense Authorization Act for Fiscal Year 2008, Congress 

established the Defense Acquisition Workforce Development Fund to help alleviate some 

long standing challenges and provide additional funds for the recruitment, training, and 

retention of acquisition personnel. In authorizing the Defense Acquisition Workforce 

Development Fund, Congress noted that its intention was to ensure that the DOD 

acquisition workforce has the capacity—both in personnel and skills—needed to properly 

perform its mission, provide appropriate oversight of contractor performance, and ensure 

that the department receives the best value for the expenditure of resources. 
 

Page 11 GAO-12-962T 

Specifically, we found that DOD lacks an overarching strategy to clearly 

align this fund with its acquisition workforce plan. The department has also 

not developed outcome-related metrics, such as the extent to which the 

fund is helping DOD address its workforce skills and competencies gaps. 

Moreover, we remain concerned that the acquisition workforce continues to 

face challenges in terms of the age and retirement eligibility of its members. 

According to the most recent reported data from the Federal Acquisition 

Institute, as of December 2011, the average age of the acquisition 

workforce ranged from 47 years to 51.7 years, with at least 36 percent of 

the workforce becoming eligible to retire over the next 10 years. 

We have also identified a number of challenges associated with DOD’s 

workforce planning for its financial management and information 

technology workforces. With regard to the financial management 

workforce, we reported21 in July 2011 that DOD’s financial management 

has been on GAO’s high-risk list since 1995 and, despite several reform 

initiatives, remains on the list today. Specifically, we noted that effective 

financial management in DOD will require a knowledgeable and skilled 

workforce that includes individuals who are trained and certified in 

accounting. DOD accounting personnel are responsible for accounting for 

funds received through congressional appropriations, the sale of goods 

and services by working capital fund businesses, revenue generated 

through nonappropriated fund activities, and the sales of military systems 

and equipment to foreign governments or international organizations. 

According to DOD’s fiscal year 2012 budget request, the Defense 

Finance and Accounting Service22 processed approximately 198 million 

payment-related transactions and disbursed over $578 billion in fiscal 

year 2010. However, we also reported in July 2011 that DOD’s strategic 

workforce plan lacked a competency gap analysis for its financial 

management workforce, thus limiting the information DOD has on its 

needs and gaps in that area and the department’s ability to develop an 

effective financial management recruitment, retention, and investment 

strategy to address other financial management challenges. With regard 

 

21GAO, DOD Financial Management: Numerous Challenges Must Be Addressed to 

Improve Reliability of Financial Information, GAO-11-835T (Washington, D.C.: 

July 27, 2011). 

22The Defense Finance and Accounting Service was created on November 26, 1990 as 

DOD’s accounting agency to consolidate, standardize, and integrate finance and 

accounting requirements, functions, procedures, operations, and systems. 
 

Page 12 GAO-12-962T 

to DOD’s information technology workforce, we reported23

DOD’s workforce is comprised of military personnel, civilians, and 

contractors. DOD has acknowledged, however, that with approximately 

30 percent of its workforce eligible to retire by March 31, 2015, and the 

need to reduce its reliance on contractors to augment the current 

workforce, it faces a number of significant challenges. Our September 

2010 review of DOD’s strategic workforce plan found that the department 

had issued a directive stating that missions should be accomplished using 

the least costly mix of personnel (military, civilian, and contractors) 

consistent with military requirements and other needs. However, the 

department’s workforce plan did not provide an assessment of the 

appropriate mix of military, civilian, and contractor personnel capabilities. 

More recently, the House Report

in November 

2011 that, as threats to federal information technology infrastructure and 

systems continue to grow in number and sophistication, the ability to 

secure these infrastructure and systems will depend on the knowledge, 

skills, and abilities of the federal and contractor workforce that 

implements and maintains these systems. We noted that DOD’s 

information assurance workforce plan—which addresses information 

technology—incorporates critical skills, competencies, categories, and 

specialties of the information assurance workforce, but only partially 

describes strategies to address gaps in human capital approaches and 

critical skills competencies.

24

 

23GAO, Cybersecurity Human Capital: Initiatives Need Better Planning and Coordination, 

accompanying a proposed bill for the 

National Defense Authorization Act for Fiscal Year 2013 directs GAO to 

assess what measures DOD is taking to appropriately balance its current 

and future workforce structure against its requirements. Specifically, we 

plan for our review to include: (1) the process by which DOD identified its 

civilian workforce requirements, taking into consideration the withdrawal 

from Iraq and impending withdrawal from Afghanistan; and (2) the 

analysis done by DOD to identify core or critical functions, including which 

of those functions would be most appropriately performed by military, 

civilian, or contractor personnel. Our report is due to the Armed Services 

Committees of the House and Senate by March 15, 2013.

GAO-12-8 (Washington, D.C.: November 29, 2011). 

24H.R. Rep. No. 112-479, at 196-197 (2012), which accompanies H.R. 4310, 112th Cong. 

(2012). 
 

Page 13 GAO-12-962T 

In conclusion, DOD has a large, diverse federal civilian workforce that is 

key to maintaining our national security. However, as we have noted, 

DOD’s workforce also includes military and contractor personnel and 

changes made to one of these groups may impact the others. As such, 

we are currently assessing the measures the department is taking to 

appropriately balance its current and future workforce structure and its 

requirements.

Chairman Forbes, Ranking Member Bordallo, this concludes my prepared 

remarks. I would be happy to respond to any questions that you or other 

Members of the Subcommittee may have at this time.

For future questions about this statement, please contact Brenda S. 

Farrell, Director, Defense Capabilities and Management, at 

(202) 512-3604 or farrellb@gao.gov. In addition, contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this statement. Individuals who made key contributions to 

this statement include Margaret Best, Assistant Director; Spencer Tacktill; 

Jennifer Weber; Erik Wilkins-McKee; Nicole Willems; and John Van 

Schaik. In addition, Penny Berrier, Mark Bird, Timothy DiNapoli, Gayle 

Fischer, Steven Lozano, Belva Martin, Carol Petersen, and Rebecca

Shea made contributions to this report.

Contacts and 

Acknowledgments
Defense Acquisition Workforce: Improved Processes, Guidance, and 

Planning Needed to Enhance Use of Workforce Funds. GAO-12-747R. 

Washington, D.C.: June 20, 2012.

Defense Acquisitions: Further Actions Needed to Improve Accountability 

for DOD’s Inventory of Contracted Services. GAO-12-357. Washington, 

D.C.: April 6, 2012.

Defense Workforce: DOD Needs to Better Oversee In-sourcing Data and 

Align In-sourcing Efforts with Strategic Workforce Plans. GAO-12-319. 

Washington, D.C.: February 9, 2012.

Streamlining Government: Key Practices from Select Efficiency Initiatives 

Should Be Shared Governmentwide. GAO-11-908. Washington, D.C.: 

September 30, 2011.

DOD Financial Management: Numerous Challenges Must Be Addressed 

to Improve Reliability of Financial Information. GAO-11-835T. 

Washington, D.C.: July 27, 2011.

DOD Civilian Personnel: Competency Gap Analyses and Other Actions 

Needed to Enhance DOD’s Strategic Workforce Plans. GAO-11-827T. 

Washington, D.C.: July 14, 2011.

High Risk Series: An Update. GAO-11-278. Washington, D.C.: 

February 16, 2011.

Human Capital: Further Actions Needed to Enhance DOD’s Civilian 

Strategic Workforce Plan. GAO-10-814R. Washington, D.C.: 

September 27, 2010.

Workforce Planning: Interior, EPA, and the Forest Service Should 

Strengthen Linkages to Their Strategic Plans and Improve Evaluation. 

GAO-10-413. Washington, D.C.: March 31, 2010.

Human Capital: Opportunities Exist to Build on Recent Progress to 

Strengthen DOD’s Civilian Human Capital Strategic Plan. GAO-09-235. 

Washington, D.C.: February 10, 2009.

High Risk Series: An Update. GAO-07-310. Washington, D.C.: 

January 31, 2007.

Related GAO Products
Human Capital: Agencies Are Using Buyouts and Early Outs with 

Increasing Frequency to Help Reshape Their Workforces. GAO-06-324. 

Washington, D.C.: March 31, 2006.

DOD Civilian Personnel: Comprehensive Strategic Workforce Plans 

Needed. GAO-04-753. Washington, D.C.: June 30, 2004.

Human Capital: Major Human Capital Challenges at the Departments of 

Defense and State. GAO-01-565T. Washington, D.C.: March 29, 2001.

High Risk Series: An Update. GAO-01-263. Washington, D.C.: 

January 1, 2001.

Human Capital: Strategic Approach Should Guide DOD Civilian 

Workforce Management. GAO/T-GGD/NSIAD-00-120. Washington, D.C.: 

March 9, 2000.

Human Capital: A Self Assessment Checklist for Agency Leaders. 

GAO/GGD-99-179. Washington, D.C.: September 1999.

Acquisition Management: Workforce Reductions and Contractor 

Oversight. GAO/NSIAD-98-127. Washington, D.C.: July 31, 1998.

Workforce Reductions: Downsizing Strategies Used in Select 

Organizations. GAO/GGD-95-54. Washington, D.C.: March 13, 1995.

Defense Civilian Downsizing: Challenges Remain Even With Availability 

of Financial Separation Incentives. GAO/NSIAD-93-194. Washington, 

D.C.: May 14, 1993.

Defense Force Management: Challenges Facing DOD As It Continues to 

Downsize Its Civilian Workforce. GAO/NSIAD-93-123. Washington, D.C.: 

February 12, 1993.

Defense Force Management: Expanded Focus in Monitoring Civilian 

Force Reductions Is Needed. GAO/T-NSIAD-92-19. Washington, D.C.: 

March 18, 1992.

Defense Force Management: DOD Management of Civilian Force 

Reductions. GAO/T-NSIAD-92-10. Washington, D.C.: February 20, 1992.

Defense Force Management: Limited Baseline for Monitoring Civilian 

Force Reductions. GAO/NSIAD-92-42. Washington, D.C.: 

February 5, 1992.

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