United States Government Accountability Office

Washington, DC 20548 

Comptroller General

of the United States

July 13, 2006 

The Honorable Edward M. Kennedy 

United States Senate 

Subject: Differing Scope and Methodology in GAO and University of California Reports 

Account for Variations in Cost Estimates for Homosexual Conduct Policy 

Dear Senator Kennedy: 

You requested information concerning differences in cost estimates for implementing the 

Department of Defense’s (DOD) homosexual conduct policy reported by GAO and a 

University of California Blue Ribbon Commission (Commission). In February 2005,1

 we 

estimated that the cost to recruit and train replacements for enlisted servicemembers 

separated under the policy from fiscal years 1994 through 2003 was about $190.5 million. 

A year later,2

 the Commission estimated that the cost was at least $363.8 million over the 

same time period—91 percent more than our estimate. This report answers the following 

questions: (1) What factors contributed to the difference in estimated costs reported by 

GAO and the Commission? (2) What factors accounted for the difference in estimated 

enlistee training costs in our 19983

 and 2005 reports? 

Difference in GAO and 

Commission Cost Estimates

Over 90 percent of the difference between the GAO and Commission cost estimates was in 

enlistee training costs. Our 2005 report estimated the cost to train replacements for 

servicemembers separated under the policy over the 10-year period at $95.1 million, while 

the Commission’s estimate was $252.4 million. The differences in estimates are primarily 

attributable to two items. First, our estimate focused largely on the direct and 

incremental training costs associated with the specific occupations of servicemembers 

separated under the policy for the applicable years. The Commission based its estimate 

on average training costs for all occupations indexed for inflation. Secondly, the 

Commission’s estimate included a significant overhead allocation for things like DOD’s 

overall training infrastructure. As noted below, we do not believe that allocating such 

 

1

 GAO, Military Personnel: Financial Costs and Loss of Critical Skills Due to DOD’s Homosexual Conduct 

Policy Cannot Be Completely Estimated, GAO-05-299 (Washington, D.C.: Feb. 23, 2005). 2

 University of California Blue Ribbon Commission, “Financial Analysis of ‘Don’t Ask, Don’t Tell’: How much 

does the gay ban cost?” (Santa Barbara, Calif.: Feb. 14, 2006). 

3

 GAO, Military Attrition: Better Data, Coupled With Policy Changes, Could Help the Services Reduce 

Early Separations, GAO/NSIAD-98-213 (Washington, D.C.: Sept. 15, 1998). 
fixed costs is appropriate since they represent sunk costs. Additionally, the Commission’s 

estimate included training costs for the Marines, individuals in medical occupations, 

officers, and out-processing costs for separation travel. As we stipulated in our 2005 

report, we did not include costs for the Marines because they were not capable of 

providing costs by occupational specialty. Additionally, the services could not reasonably 

estimate training costs for medical personnel and officers, and we did not consider 

separation travel costs in our analysis. In view of all the above, we stand behind our 

estimate of $95.1 million. 

As we disclosed in our 2005 report, for privacy reasons, we did not review separated 

servicemembers’ personnel records, including their training histories. Instead, we used 

military specialty codes

4

 to match separated servicemembers to specific occupations. 

Relevant factors regarding this population—such as occupation, rank, length of service, 

and skill level—contributed to enlistee training cost averages for this finite group of 

individuals that were much lower than DOD-wide training cost averages for all enlistees. 

For example, over one-half of separated servicemembers had the rank of E2 or below and 

about one-third served in the military for 6 months or less, thereby limiting the amount of 

training completed. Additionally, about 30 percent of servicemembers separated over the 

10-year period were in the occupational category “Not Occupationally Qualified, General,” 

indicating that they had not completed occupational training, been assigned to an 

occupation, or allowed to perform in an occupation on their own. We relied on the 

expertise and knowledge of the training commands in each service for case-by-case 

estimates of per-member training costs for separated servicemembers. For example, 

servicemembers classified by DOD as “Not Occupationally Qualified, General” were given 

credit for completing basic training in our analysis. Also, the training costs for each 

occupation were weighted by the number of servicemembers discharged in each 

occupation. As a result, occupations that had more servicemembers received more 

weight. 

The Commission used in its analysis a DOD-wide training cost estimate from our 1998 

report for the average cost of basic plus initial skills training for all enlistees in all 

occupations. Because this estimate includes costs for the entire training infrastructure, its 

use results in a much higher estimate. Infrastructure costs remain constant regardless of 

the number of individuals trained and represent sunk costs that exist whether enlistees 

complete their contract terms or not. The Commission also computed the value lost to the 

military by calculating a monthly return on the military’s investment in training for service 

after training and before discharge. The Commission reported enlisted training costs of 

$331.9 million, which were offset by their estimated return on investment of $79.5 million;

therefore, the cost to the military was $252.4 million. 

 4

 Military specialty codes are elements of the enlisted classification structure that identify an individual 

position or group of closely related positions by service on the basis of the duties involved. The term used 

to designate a military specialty differs according to the military service concerned, such as “military 

occupational specialty,” used by the Army and Marine Corps; “Air Force specialty,” used by the Air Force;

and “Navy enlisted classification,” used by the Navy. 

2 GAO-06-909R Military Personnel 
Difference in Training Cost Estimates

in Our 1998 and 2005 Reports

Although our 1998 and 2005 reports both dealt, in part, with enlistee training costs, the 

reports answered different questions, addressed different populations, covered different 

time frames, and used different parameters to compute training cost estimates. In 1998, 

we estimated the average cost of training an enlistee (basic and initial skills training) at 

$28,800, which the Commission converted to $33,372 in 2004 dollars in its analysis of the 

cost of DOD’s homosexual conduct policy. The estimated per-member training cost for 

the occupations performed by servicemembers separated under the policy in our 2005 

report was $18,000 for the Navy, $7,400 for the Air Force, and $6,400 for the Army. These 

estimated costs are significantly lower than the Commission’s estimate because they are 

primarily based on direct and incremental training costs. 

Our 1998 estimate was designed to determine the extent of DOD’s investment in recruiting 

and training first-term enlistees. The estimate includes total infrastructure costs for all 

services combined and was intended to demonstrate the magnitude of the cost of training 

all recruits (hundreds of thousands each year) and the potential loss when attrition rates 

are high. Average enlistee training costs were computed as a straight average by dividing 

the total costs of training by the total number of new enlistees. Including total 

infrastructure costs was not appropriate for our 2005 estimate since individuals separated

for homosexual conduct represent such a small proportion of the active force (about 950 

per year over the 10-year period). Our 2005 estimates were designed to identify costs over 

a 10-year period for training replacements by occupational specialty for those separated 

under the policy. 

- - - - - 

We are sending copies of this report to the Secretary of Defense and other interested 

parties. We will provide copies to others upon request. In addition, the report is available 

at no charge on the GAO Web site at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact Derek Stewart at 

(202) 512-5559 or stewartd@gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this report. 

Sincerely yours, 

David M. Walker 

Comptroller General 

of the United States 

(350839) 

3 GAO-06-909R Military Personnel