United States General Accounting Office

GAO Report to Congressional Committees

February 1998 FORCE STRUCTURE

Army’s Efforts to

Improve Efficiency of

Institutional Forces

Have Produced Few

Results

GAO/NSIAD-98-65

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-278197 

February 26, 1998

The Honorable Strom Thurmond

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable Floyd D. Spence

Chairman

The Honorable Ike Skelton

Ranking Minority Member

Committee on National Security

House of Representatives

The Fiscal Year 1996 National Defense Authorization Act requires that we

annually assess the Army’s efforts to streamline infrastructure activities

and eliminate the inefficient use of personnel assigned to these activities.1

The Army refers to personnel assigned to infrastructure activities as

Tables of Distribution and Allowances (TDA), or institutional personnel. We

fulfilled this mandate by assessing the extent to which the Army has

(1) taken corrective action to resolve its material weakness in determining

institutional personnel requirements and (2) identified opportunities to

reduce personnel and realize savings through its Force XXI Institutional

Redesign effort. We are also providing our views on whether these

initiatives are producing the results necessary for the Army to improve the

efficiency of its institutional workforce. Our scope and methodology are

discussed in appendix I.

Background Institutional personnel are generally nondeployable military and civilians

who support Army infrastructure activities, such as training, doctrine

development, base operations, supply, and maintenance. One major

exception is in the medical area, since some personnel assigned to

institutional positions are expected to deploy in wartime. A significant

amount of the Army’s personnel and budget are devoted to institutional

functions. For example, the Army’s Program Objective Memorandum for

fiscal year 1998 included about 132,000 active Army and about 247,000

civilian institutional positions. These positions represented about 

1

The act requires that we report our findings and conclusions to Congress by March 1 of each year

from 1997 to 2002. Our first report issued under this legislative mandate was Force Structure: Army

Support Forces Can Meet Two-Conflict Strategy With Some Risks (GAO/NSIAD-97-66, Feb. 28, 1997).

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27 percent of the total active Army and 100 percent of Army civilians.

Funding for institutional personnel totals about $18 billion per year.

Army institutional functions have received increasing scrutiny in recent

years because the Army has been unable to (1) support personnel

requirements based on workload and (2) ensure that these functions are

carried out in the most efficient and cost-effective manner. In addition, the

Army continues to rely on its active personnel to perform institutional

functions despite shortfalls in operational forces. The Army Audit Agency

reported in 1992 and 1994 that the Army did not know its workload and

thus could neither justify personnel needs and budgets nor improve

productivity and efficiency.2

 Our February 1997 report recommended that

the Secretary of the Army report to the Secretary of Defense, as a material

weakness under the Federal Managers’ Financial Integrity Act, the Army’s

long-standing problem with determining institutional personnel

requirements without an analysis of the workload. The Army agreed with

the recommendation and prepared a plan, as required by the act, to

resolve the weakness. The plan was approved by the Assistant Secretary of

the Army for Manpower and Reserve Affairs in October 1997. All

corrective actions detailed in this plan are to be completed by

December 1999.

In January 1995, the Army began an effort to reengineer institutional

processes and redesign organizational structures so that the institutional

Army would effectively and efficiently develop, generate, deploy, and

sustain operational forces. The Army’s reengineering principles include

eliminating unnecessary layering of functions and reducing the number of

major headquarter commands. The Army stated that savings in active

Army institutional positions are to be reinvested in the operational forces.

The redesign effort, referred to as Force XXI Institutional Redesign, is to

be conducted in three phases, with each phase examining different

functions. Phase I was completed in March 1996, and phases II and III are

expected to be completed in March 1998 and March 2000, respectively. In

May 1997, the Secretary of Defense announced the results of the

Quadrennial Defense Review, which included reducing 33,700 civilian

Army positions and some active Army positions.3

 According to Army

officials, these reductions would be in addition to the 13,000 positions

2

Managing Workload, Organizations And Staffing, Army Audit Agency (HQ 94-751, June 23, 1994) and

Management Of Army Workload Of Tables Of Distribution And Allowances Organizations, Army Audit

Agency (HQ 92-T2, Jan. 21, 1992).

3

DOD stated in January 1998 that, under the Quadrennial Defense Review, Army civilians would be

reduced by 26,000 by fiscal year 2003 and 33,700 by fiscal year 2005.

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already programmed between fiscal years 1998 and 2003 or those resulting

from phase I redesign efforts.

In September 1997, the Deputy Secretary of Defense introduced DOD’s

strategic plan to implement the Government Performance and Results Act.

The plan contains six overall goals, including to “. . .fundamentally

reengineer the Department and achieve a 21st Century infrastructure by

reducing costs and eliminating unnecessary expenditures while

maintaining required military capabilities.” Army plans, such as the 

Force XXI Institutional Redesign effort, are to be linked to the overall

goals in the strategic plan.

Results in Brief The Army developed a corrective action plan to resolve its material

weakness in determining institutional personnel requirements but may

have difficulty achieving the plan’s completion date. Two critical subplans

have not been developed, one that implements a new costing system and

another that develops a new computer-based methodology—the Army

Workload Performance System. Without specific steps and milestones for

both of these efforts, the Army lacks the tools it needs to ensure that the

plan will be completed by December 1999. Milestones for both efforts have

slipped from original estimates, and in the case of the computer-based

methodology, the Army has missed some of its interim goals. In addition, a

plan initiative to ensure that major commands use a 12-step methodology

to analyze workload may not be implemented on time unless more

personnel are assigned to the office responsible for this effort. Currently,

personnel requirements programs at some major commands do not meet

Army 12-step criteria. Until the costing system, computer-based

methodology, and 12-step methodology are fully developed and integrated,

the Army cannot be sure that it has the most efficient and cost-effective

workforce (active military, reserve, civilian, or contractor) and that its

institutional personnel requirements are based on workload, as regulations

require.

The Army’s institutional redesign effort has not resulted in a reduction in

major command headquarters, and the dollar and position savings

identified are overstated. One redesign initiative resulted in the

redesignation of a major command as a subcommand. However, the Army

also created a new command, resulting in no net decrease in the number

of commands. Also, the Army transferred a command but did not

reorganize it to achieve efficiencies; therefore, this effort produced

virtually no decrease in the command’s 9,000 positions. Further, the Army

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anticipated $1.7 billion in savings from phase I efforts, but that amount will

be at least $405 million less because significant implementation costs for

some initiatives were not included in the Army’s fiscal year 1998-2003

Program Objective Memorandum. Finally, the Army transferred about

2,800 active Army positions from institutional to operational forces based

on two initiatives, but these initiatives did not produce the anticipated

savings, and personnel cuts had to be made elsewhere. Even though the

Army has appointed an executive agent for redesign assessments, no

single office systematically manages and monitors redesign results. Thus,

the Army does not know the status of specific initiatives, dollar savings,

implementation costs, or progress in reducing institutional positions.

Shortfalls in dollars and spaces add risk that the Army may not be able to

provide adequate resources for all of its programs.

Overall, the Army’s efforts to establish workload-based requirements and

redesign institutional functions have produced few results. Army

personnel trend data from 1992 to 2003 show that the Army has not been

successful in reducing the proportion of institutional to operating forces

within the active Army. In addition, the Army does not currently have a

workload basis for allocating its personnel resources among institutional

organizations and ensuring that the highest priority functions are funded

first. As a result, the Army may not have the analysis it needs to efficiently

allocate many of the institutional positions that are programmed to be

eliminated by fiscal year 2003 or additional reductions mandated by the

Quadrennial Defense Review. Further, the Army’s lack of progress in

identifying efficiencies means that some active Army personnel are not

available to fill shortages among operational forces, including deployable

support forces, which have historically been underresourced. Without

senior leadership attention, the Army’s current initiatives may not achieve

meaningful and measurable change.

The Army May Have

Difficulty Achieving

Material Weakness

Plan’s Completion

Date

The Army has made some progress by developing a material weakness

plan, but it may have difficulty achieving the plan’s December 1999

completion date for the following three reasons. First, Army commands

are not fully implementing the required 12-step methodology, and the

Army has acknowledged that staffing levels for oversight reviews to

ensure compliance are insufficient. Second, as of October 1997, critical

subplans outlining how the Army intends to meet its milestones had not

been developed for the costing system and the computer-based

methodology. The Army’s progress in implementing the computer-based

methodology during its initial pilot test has been slower than the Army has

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estimated. Last, milestones for critical portions of the plan have slipped

from original estimates, even though the plan’s overall completion date

has remained the same. Delays in implementing the plan’s corrective

actions could result in further reductions of institutional personnel

without the benefits of workload analysis and assessments of risks and

tradeoffs.

Army Institutional

Workforce Requirements

Are Not Based on

Workload

Army regulations require that the institutional workforce be based on

workload. However, our February 1997 report concluded that the Army

cannot identify and prioritize its institutional workload and therefore does

not have an analytical basis for assigning institutional personnel or

assurance that it has the minimum workforce for accomplishing

institutional missions. The material weakness plan acknowledges this

problem, stating that “. . .managers at all levels do not have the

information needed to improve work performance, improve organizational

efficiency, and determine and support staffing needs, manpower budgets,

and personnel reductions.”

The Army’s plan contains some logical steps to correct this material

weakness,4

 including the Army’s two near-term solutions to identifying the

number of institutional positions based on an analysis of the workload.

These solutions are a computer system for depots and arsenals, called the

Army Workload Performance System (AWPS), and the 12-step methodology

analysis for major commands. AWPS was developed to integrate workload

and workforce information so depot managers can project the workforce

needed to accomplish various levels of workload. The 12-step

methodology was developed to link personnel to workload, reduce the

cost of accomplishing work, and help managers make choices as they

balance personnel and workload. The Army plans to integrate the

workload and workforce information provided by the 12-step methodology

and AWPS with the Civilian Manpower Integrated Costing System.

According to Army officials, the Army will not be able to successfully link

workload and workforce to the budget without the integration of these

4

The plan’s corrective actions include linking the civilian workforce to the budget; updating the Army’s

personnel regulation to establish a new workload-based methodology as the Army standard (draft

Army Regulation 570-4); certifying major commands’ requirements processes; performing quality

assurance reviews of commands’ requirements determination studies; and implementing a new

computer system at Army depots, arsenals, and ammunition plants.

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three elements.5 For this reason, our review primarily focused on these

initiatives.

Commands Are Not Fully

Implementing the 12-Step

Method

Although the Army established the 12-step methodology in April 1996 as

the standard process for determining institutional requirements,

commands’ requirements programs fall short of what the Army expects.

(See app. II for a list of Army major commands.) The 12-step method

includes analyses of missions and functions, opportunities to improve

processes, workload drivers, workforce options (including civilian versus

military and contracting versus in-house), and organizational structure.

Figure 1 shows the components of the 12-step method. Even though Army

commands will continue to have some flexibility in creating their own

requirements program, they will be required to perform all of the analyses

included in the 12-step method. According to draft Army Regulation 570-4,

although specific processes for determining requirements can vary, all

processes must be approved by Army headquarters and have a common

conceptual framework that consists of the 12-step analyses.

5

In the long term, the Army would like to integrate its institutional forces into its requirements process

for operational forces, known as Total Army Analysis. Our February 1997 report discusses the Total

Army Analysis process.

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Figure 1: 12-Step Methodology

Step 1 - Create resource baseline

Step 2 - Validate mission

Step 3 - Evaluate functions

Step 4 - Analyze sources of labor

Step 5 - Define, validate, and project workload

Step 6 - Develop staffing model

Step 7 - Discuss issues and assumptions

Step 8 - Compute demand for labor

Step 9 - Describe staffing offsets

Step 10 - Structure new organization

Step 11 - Resolve issues

Step 12 - Document the results

Source: Army.

Currently, the Army has no formal review process for determining whether

major commands are using the 12-step methodology. Our review of

requirements programs at three major commands (Army Materiel

Command, Training and Doctrine Command, and Forces Command) found

that the programs differ substantially in coverage and content and do not

include all of the 12-step analyses.

The Army Materiel Command’s review did not systematically analyze labor

sources (steps 4 and 9), such as examining the potential for contracting

out various functions. Also, the Command did not perform efficiency

reviews (step 3) because it assumed that the organization had already

become efficient as a result of downsizing. Further, the Command did not

consider customer satisfaction (step 7) as an element of timeliness and

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quality of services or examine best practice approaches (step 3).6 Even

though these steps were not performed, the Command reported that it had

validated 79,941 personnel of its 80,542 assigned end strength—more than

99 percent.

The Training and Doctrine Command’s process examines similar functions

across installations to look for best practices and analyzes whether a

particular installation is structured efficiently. However, the process does

not include a decrement list (step 7), which contains options of how a

command may perform its mission by merging, eliminating, or transferring

functions if it receives fewer positions than expected.

The Forces Command’s process examines functions at each installation.

When this examination is completed, Command officials stated that they

would compare functions across installations. As of November 1997, the

Command had completed reviews at 3 of 11 installations and had not

compared similar functions across the installations to perform the best

practice analyses required in step 3. According to Command officials,

Forces Command plans to examine best practices at the conclusion of its

individual installation reviews in September 1998.

Insufficient Staff Could

Delay Required Reviews of

12-Step Approach and

Limit Army’s Management

Oversight

The material weakness plan establishes procedures for the Office of the

Assistant Secretary of the Army for Manpower and Reserve Affairs to

review commands’ requirements programs to ensure that they include the

12-step analyses. The Army’s plan to review commands’ compliance with

the 12-step method may be delayed if Manpower and Reserve Affairs does

not receive sufficient staff to conduct oversight reviews. According to a

Manpower and Reserve Affairs official, the office is to (1) certify

commands’ requirements programs and their compliance with the 12

steps, (2) conduct quality assurance reviews of commands’ requirements

studies, and (3) assist major commands by conducting 12-step reviews on

a contract basis. According to the plan, certification reviews are scheduled

to start in March 1998, and quality assurance reviews are scheduled to

begin in June 1998. To successfully accomplish these tasks within the

plan’s time frames, a Manpower and Reserve Affairs official estimated that

at least 35 additional staff would be needed. However, the material

weakness plan states that only nine staff would be hired. The Assistant

Secretary stated that executing the plan would require more resources.

The lack of staff could delay both the certification and quality assurance

6

Efficiency reviews and best practice approaches are designed to improve processes and structure

efficient organizations for accomplishing missions.

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reviews and prevent the Army from realizing the full benefits of this

approach.

Staff from the Office of the Assistant Secretary of the Army for Manpower

and Reserve Affairs cited their review of air traffic control operations as

an example of how the Army expects to benefit from proper application of

the 12-step methodology. At the beginning of the study, these institutional

positions totaled 2,238 at multiple locations. The study used the 12-step

method to develop a workforce model and recommended centralizing all

tactical personnel in a single battalion stationed at the Army’s Aviation

School at Fort Rucker, Alabama. The study concluded that this

consolidation could save 226 military positions, which the Army could

transfer to meet other requirements, and $5.5 million annually in stationing

and operating costs.

Subplan for Implementing

AWPS Has Not Been

Developed

AWPS is the Army’s second solution for determining workload-based

institutional requirements, identifying opportunities to achieve depot

efficiencies, and linking workload, personnel, and dollars. AWPS consists of

three modules—performance measurement control, workload forecasting,

and workforce forecasting—to determine workload-based personnel

requirements at the depots, arsenals, and ammunition plants. The

performance measurement control module compares actual to planned

cost and schedule performance, thereby allowing users to identify

problem areas. This module can identify the work centers contributing to

the most significant cost and schedule variances. The workload

forecasting module stores project data, labor expenditures, performance

data, and scheduling information by work center. This module allows

managers to compare workload levels to available direct labor and analyze

changes in forecasted workload. This comparison can reveal mismatches

or overloads before firm commitments are made to customers. Finally, the

workforce forecasting module contains information on employee skills

and leave and attrition rates. This information provides shop and depot

managers with an accurate picture of the overall number of employees and

the number that are available in each work center. Analyzing the

workforce by skill groups allows depot commanders to plan for the

amount of work that can be handled and to consider overtime,

contracting, or reassigning workers among different work centers.

The Army has been developing AWPS since February 1996. The established

goals for AWPS are (1) having all three modules operational at all five

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depots by January 1998;7 (2) operating a supplementary module 

(i.e., resource schedule and control) for supporting personnel assignments

to projects by fiscal year 2000; and (3) having all modules on line and

operational at depots, arsenals, and ammunition facilities by fiscal 

year 2000. However, as of December 1997, the Office of the Assistant

Secretary of the Army for Manpower and Reserve Affairs had not written

the subplan for implementing AWPS or identified the specific steps or

milestones needed to achieve the goals. Instead, the Army has set

short-term, interim steps as AWPS progresses. For example, in August 1997,

the Army established specific steps for correcting data errors between

August 1997 and January 1998. Without a detailed implementation

schedule, however, the Army lacks the tools it needs to ensure that it can

meet the milestones in the material weakness plan. For example, the

Army’s milestone for implementing AWPS at arsenals and ammunition

facilities has already changed from July to December 1998. Figure 2 shows

the difference in milestones between the June 1997 draft plan and the

October 1997 approved plan.

7

The five depots are Corpus Christi Army Depot in Texas, Anniston Army Depot in Alabama, Red River

Army Depot in Texas, Letterkenny Army Depot in Pennsylvania, and Tobyhanna Army Depot in

Pennsylvania.

Page 10 GAO/NSIAD-98-65 Force Structure
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Figure 2: Milestones in the June 1997 Draft Plan and October 1997 Approved Plan

Complete installation and training of personnel on

Army Workload Performance System at the five 

depots

Publish update of Army Regulation 570-4

Fully implement Civilian Manpower Integrated 

Costing System at Army Headquarters

Corrective actions

Milestones

in 6/97

draft plan

Milestones 

in 10/97 

approved 

plan

8/97

1/98

5/98

Begin certification procedures at major commands 3/98

12/97

Fully implement Civilian Manpower Integrated Costing 

System between Army Headquarters

and major commands

10/99

12/98

3/98

Begin quality assurance reviews of personnel 

requirements 

6/98 6/98

Extend Army Workload Performance System 

to arsenals and ammunition depots 7/98 12/98

10/99

Note: The October 1997 approved plan contains no publication date for Army Regulation 570-4.

Implementation of AWPS

Has Been More Difficult

Than Estimated

Implementation of AWPS at Corpus Christi Army Depot and other locations

has been more difficult than the Army originally estimated. For example,

in response to our February 1997 report, DOD reported that AWPS had been

successfully tested at Corpus Christi Army Depot. Also, the Army expected

the system to be operational at all five depots by March 1997. However,

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according to Industrial Operations Command officials,8 the Army must still

test and validate two of the three modules at Corpus Christi and correct

data errors from feeder systems.9

 Our review showed that, even though

AWPS equipment and software had been installed at all five depots, none of

the three modules is being fully used at any location, including Corpus

Christi.

Army Materiel Command officials cited problems that could affect the

Army’s ability to implement AWPS at the depots by December 1997. First,

the performance measurement control module has been undergoing

testing and validation since March 1997 and was planned to be fully

operational by December 1997, assuming that the data errors would be

corrected. As of August 1997, the Corpus Christi Army Depot was

correcting data errors and therefore was not using this module to manage

any depot work, not even work at the shop floor level as the Army had

originally claimed. The other two modules are planned to be operational

by February 1998, assuming that the data errors are corrected. An

unresolved problem in the workload forecasting module is how to

program work that will be started in one fiscal year and completed during

the following fiscal year. The amount of repair work assumed affects

management decisions on planning and scheduling the work and the

workforce needed.

Second, the Army states in its material weakness plan that AWPS training at

the five depots was to be completed by December 1997. However, as of

November 1997, AWPS users were not fully trained, and some training

requirements were not yet defined. Army officials stated that training on

the performance measurement control module has been completed at the

five depots. However, Corpus Christi Army Depot officials stated in

August 1997 that 257 staff members at the depot have been trained. The

depot employs approximately 1,500 personnel. Although not all 1,500

personnel need further training, depot and Industrial Operations

Command officials agreed that additional training is required to teach

shop floor supervisors and depot managers how to interpret AWPS data and

how to use it to identify work areas needing improvement. Command

officials stated that training for the workforce forecasting module was to

be completed by December 1997, but training requirements for the

workload forecasting module have not yet been defined.

8

The Industrial Operations Command is the headquarters command for all Army maintenance depots,

arsenals, and ammunition plants. It is a major subordinate command of the Army Materiel Command.

9

AWPS uses data from three feeder systems: the Standard Depot System, Army Time Attendance and

Personnel System, and Headquarters Accumulation System.

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Last, Industrial Operations Command officials told us that AWPS is still an

evolving concept and that corporate-level system requirements are not yet

defined. For example, no final decision has been made concerning

whether this Command and the Army Materiel Command will install the

Decision Support System, which would enable commands to examine data

from subordinate units and help identify processes that could be

reengineered to improve performance. In December 1997, Army officials

decided to add a material module to monitor ordering and delivery of

repair parts.

According to Army officials, the Army could realize benefits once AWPS is

operational and system users are trained. In July 1997, the Assistant

Secretary of the Army for Manpower and Reserve Affairs stated that all

depots and arsenals using AWPS will be able to match workload

requirements and personnel projections. Thus, any personnel reductions

will be based on the knowledge of work that will not be performed. AWPS

could also be used for setting performance goals, such as reducing repair

costs and cycle times, but Army officials stated that they have no

intentions of using AWPS for this purpose.

Costing System Subplan

Has Not Been Developed

The Civilian Manpower Integrated Costing System will be the Army’s

distributed, integrated database for costing institutional personnel

requirements and linking workload and workforce to the budget. Army

officials expect this system to provide funding information for various

workload and workforce levels that the 12-step method and AWPS project.

However, the subplan detailing the specific steps and milestones for

implementing the system has not been developed. Without the subplan,

the Army has no mechanism to measure its progress; therefore, managers

will not know whether intervention is necessary to meet milestones. The

system is essential for the Army to effectively prioritize work to be funded

and clearly identify work remaining unfunded.

The material weakness plan includes an October 1999 milestone for

implementing the Civilian Manpower Integrated Costing System at Army

headquarters and major commands and using the system to base

institutional budgets on workload analyses. The plan only includes one

interim step, and the milestone for this action has slipped. For example,

the milestone for implementing the system at Army headquarters changed

from May to December 1998. Also, monitoring progress is essential

because offices other than Manpower and Reserve Affairs are involved.

According to Manpower and Reserve Affairs officials, the Financial

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Management and Comptroller’s office is developing part of the system.

The officials also stated that successful implementation will require

compatible equipment at major commands and training the command’s

personnel how to use the system. However, milestones for these events

are not identified.

Delayed Implementation

Could Hamper Downsizing

Decisions

Delays in implementing the material weakness plan’s corrective actions

could hamper the Army’s efforts to efficiently allocate its institutional

resources. The Army’s workload analysis methods (12-step and AWPS)

could enhance future decisions affecting institutional force structure. The

12-step methodology includes an analysis to structure organizations

efficiently and assess whether positions should be filled by military,

civilian, or contractor personnel. Such information could be useful to

managers in deciding how to allocate reductions with the least effect on

accomplishing institutional missions. The Army programmed reductions of

6,200 institutional positions during fiscal year 1998 and another 7,000

positions between fiscal year 1999 and 2003. The Quadrennial Defense

Review mandates further reductions of 33,700 civilian positions and some

active Army positions. Delayed implementation may result in these

planned reductions being made without the benefit of workload analysis

and assessments of risks and tradeoffs.

Institutional Redesign

Has Not Lived Up to

Its Potential for

Reengineering the

Institutional Force

Force XXI Institutional Redesign is the Army’s effort to reengineer its

processes and streamline its organizational structure. It includes

consolidating major commands and realigning their missions to more

efficiently perform institutional functions. The Army defines reengineering

as a “. . .fundamental rethinking and radical redesign of business processes

to achieve dramatic improvements in critical, contemporary measures of

performance.” The Army Vice Chief of Staff is responsible for

reengineering Army processes and organizations. The Deputy Chief of

Staff for Operations and Plans is the executive agent for redesign

assessments and is responsible for performing day-to-day support

functions. Other Army headquarters offices are responsible for conducting

the assessments and implementing approved initiatives.

Even though redesign efforts began in January 1995, there has been no net

decrease in the number of major commands, and two of the redesign

studies have been canceled. Also, the dollar and personnel savings

estimates are overstated. The Army reported that redesign’s phase I

initiatives would save $1.7 billion over 6 years and that implementation

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would cost almost $27 million. The savings estimates are overstated

because they do not include significant implementation costs of at least

$405 million. Also, most of the 4,000 active Army positions that were to be

transferred from institutional to operational forces were based on

assumptions that may not occur. In addition, since no single office

monitors the results of institutional redesign efforts, the Army has no

systematic way of knowing the status of savings, implementation costs, or

institutional position transfers.

The Army’s redesign document, draft Pamphlet 100xx,10 states that it is

intended to provide a vision for redesigning the institutional force and

serve as the foundation for institutional doctrine. The pamphlet states

general goals of improving institutional force efficiencies but, other than

proposing models for reducing the number of major command

headquarters, does not cite specific, measurable performance goals.

However, the Government Performance and Results Act requires federal

agencies to identify strategic goals and develop performance measures to

gauge progress toward achieving each goal. The pamphlet is consistent

with this principle, stating that “clear performance measures should be

identified to gauge organizational progress.”

Redesign Effort Has Not

Resulted in Major

Organizational Changes or

Efficiencies

The Army’s institutional redesign effort has not reduced the number of

major commands, even though redesign documents state that the Army

will strive to do so. The redesign pamphlet introduces organizational

models that would reduce the Army’s current 15-major command structure

to 8 or 3 major commands. For example, the three-command structure

would manage the Army’s core capabilities of developing the force,

generating and projecting the force, and sustaining the force. Army

headquarters would retain responsibility for directing and resourcing

capabilities. During redesign phase I, the Army redesignated a major

command—the Information Systems Command—as a subcommand of

Forces Command. The Army also created a new major command—the

Space and Missile Defense Command. Thus, there has been no net

decrease in the number of major commands.

Some redesign transfer of functions from Army headquarters to major

commands have not yet resulted in significant efficiencies. For example,

the Recruiting Command transferred intact from Army headquarters to the

Training and Doctrine Command in October 1997 as a major subordinate

10Pamphlet 100xx has been in draft since June 1995 and, according to Army officials, has been

undergoing final editing since April 1997.

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command. However, there has only been a decrease of less than one-half

of 1 percent in the Recruiting Command’s institutional positions.

According to Army data, the Recruiting Command had 9,256 positions in

fiscal year 1997, and the Army projects 9,210 positions in fiscal year 1998.

The Army plans to merge the Recruiting Command with the Training and

Doctrine Command’s Cadet Command in October 1999, a move that the

Army expects will result in organizational efficiencies and fewer

institutional positions. The Army plans to conduct a business process

reengineering study to determine the most effective and efficient

organization which is expected to result in fewer organizational layers.

The Army initially planned to examine the following seven areas during

phase II of the redesign effort: installation management; unit, joint, and

interservice training; security and law enforcement; financial management;

medical and health; intelligence; and supply, services, and materiel.

However, officials from the Deputy Chief of Staff for Operations and Plans

told us that the financial management and supply, services, and materiel

assessments have been canceled. According to these officials, the

Financial Management and Comptroller’s office has chosen to use internal

efforts to identify financial management efficiencies, rather than complete

an institutional redesign assessment, because the Assistant Secretary of

the Army for Financial Management and Comptroller reports to the

Secretary of the Army and not the Army Vice Chief of Staff. Further, the

officials said that the Army Materiel Command will not complete the

supply, services, and materiel assessment because the Command was

responding to the mandated Quadrennial Defense Review reductions.

Pamphlet 100xx encourages outsourcing institutional functions. A recent

Defense Science Board study and the Quadrennial Defense Review also

concluded that some institutional functions should be contracted. If the

Army reduced its reliance on active military institutional personnel, more

military personnel would be available for operational units, including

deployable support units, which have historically experienced shortfalls.11

Although the number of Army institutional positions has decreased since

1992, Army data show that the proportion of active Army institutional to

operational forces has remained at about 29 percent and is projected to

remain at this level through fiscal year 2003, as shown in figure 3.

11Force Structure: Army Support Forces Can Meet Two-Conflict Strategy With Some Risks

(GAO/NSIAD-97-66, Feb. 28, 1997) and Peace Operations: Heavy Use of Key Capabilities May Affect

Response to Regional Conflicts (GAO/NSIAD-95-51, Mar. 8, 1995).

Page 16 GAO/NSIAD-98-65 Force Structure
B-278197 

Figure 3: Active Army Institutional

Positions as a Percent of Operational

Forces

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

0

100,000

200,000

300,000

400,000

500,000

0

20

40

60

80

100

Fiscal year

Number of positions Percent

Institutional 

percent

Operational 

positions

Source: Army force structure database as of the fiscal year 1997 President’s budget.

In addition, the proportion of all active Army institutional positions to the

total number of institutional positions is projected to increase slightly,

from 34.2 percent in 1992 to 35.8 percent in 2003. Table 1 compares the

number of military and civilian institutional positions in fiscal years 1992

and 2003.

Page 17 GAO/NSIAD-98-65 Force Structure
B-278197 

Table 1: Number of Active Army and

Civilian Institutional Positions in Fiscal

Years 1992 and 2003

Fiscal year 1992 Fiscal year 2003

Category

Total

institutional

positions

Percent of

total

Total

institutional

positions

Percent of

total

Active Army 171,539 34.2 130,644 35.8

Civilian 330,157 65.8 234,676 64.2

Total 501,696 100 365,320 100

Note: The active Army category includes positions allocated to major commands, headquarters,

and joint and defense agencies. Positions for transients, trainees, holdees, and students are not

included.

Source: Army force structure database as of the fiscal year 1997 President’s budget.

Dollar and Position

Savings Are Not Occurring

as Expected

Phase I savings estimates are overstated because significant costs are not

included in the Army’s 1998-2003 Program Objective Memorandum and

savings estimates are not definitive. Specifically, the memorandum

included savings of $1.7 billion and almost $27 million in implementation

costs resulting from 107 institutional redesign initiatives.12 However, at

least $405 million in implementation costs were not included in the

memorandum.

The Army Program Analysis and Evaluation Office is to develop the

service’s Program Objective Memorandum. According to an official from

this office, limited cost data were included in the memorandum because

the offices responsible for the initiatives did not provide cost data in a

timely manner. For example, the Army Program Analysis and Evaluation

Office did not include $69 million in implementation costs for five logistics

initiatives. In addition, the Army Program Analysis and Evaluation Office

did not include implementation costs for the Senior Reserve Officer’s

Training Corps initiative. This initiative proposed replacing the Senior

Reserve Officer’s Training Corps active duty institutional personnel with a

combination of active, reserve, or contracted former military personnel.

The Reserve Officer’s Training Corps program is in place at 300 colleges

and enables students to graduate with a degree and receive an officer’s

commission.

12Phase I produced a total of 144 initiatives. The remaining 37 initiatives are expected to be

implemented later. The initiatives submitted to the Vice Chief of Staff for approval contained estimates

of dollar and position savings, both civilian and military. Army officials noted that the initiatives may

also result in increased effectiveness. However, the officials did not provide any measures of

performance for increased effectiveness.

Page 18 GAO/NSIAD-98-65 Force Structure
B-278197 

In February 1996, the Deputy Chief of Staff for Operations and Plans

initially estimated that the Senior Reserve Officer Training Corps initiative

would cost $336 million over a 4-year period for contracting retired

personnel to replace all 2,100 active Army personnel in the corps.

However, the Army’s Program Objective Memorandum did not include any

of the implementation costs associated with the hiring of contractor

personnel to conduct the Senior Reserve Officer’s Training Corps

program. The Army’s memorandum only included implementation cost of

$2 million for RAND to study the concept of hiring contractor personnel.

Once implemented, the initiative is expected to require a recurring

operations and maintenance cost of $40,000 per contractor per year.13 For

example, if all 2,100 active Army personnel were replaced by

contractors—in general, retired officers—the Army would incur a cost of

$84 million per year.

Additionally, the $1.7 billion savings estimate is not definitive because two

offices disagree on the savings anticipated. The Deputy Chief of Staff for

Logistics is responsible for five logistics initiatives, which represent 

40 percent of the $1.7 billion phase I savings. The Army Program Analysis

and Evaluation Office and the Office of the Deputy Chief of Staff for

Logistics identified savings that varied from $12 million to $57 million per

initiative, as shown in table 2, even though the net difference amounted to

approximately $13 million. According to the Army Program Analysis and

Evaluation Office, the savings are also included in the 1998-2003 Future

Years Defense Program, but specific initiatives and groupings (such as

logistics-related initiatives) cannot be tracked because they are combined

with other Army efforts.

13Since the contractors are retired officers, this cost represents the difference between the contractor’s

active duty and retirement salary.

Page 19 GAO/NSIAD-98-65 Force Structure
B-278197 

Table 2: Differences in Phase I

Implementation Cost and Savings Data

Between Army Program Analysis and

Evaluation and Deputy Chief of Staff

for Logistics Offices

Costs Savings

Dollars in millions

Initiative PA&E DCSLOG PA&E DCSLOG

Single stock fund 0 $10 $429.7 $380

Standard Army retail

supply system

0 9.9 27.6 85

Velocity management/

order ship time

0 4 116.5 71.5

Integrated sustainment

maintenance

0 45 103.6 142

Materiel management

privatization

0 0 0.3 12

Total 0 $68.9 $677.7 $690.5

Note: PA&E—Program Analysis and Evaluation and DCSLOG—Deputy Chief of Staff for Logistics.

Source: Army Program Analysis and Evaluation and Deputy Chief of Staff for Logistics offices.

According to the Principal Deputy Assistant Secretary of the Army for

Financial Management and Comptroller, the burden is on the major

command to identify a “substitute bill payer” if redesign savings cannot be

achieved, since the savings have already been included in the fiscal 

year 1998-2003 Program Objective Memorandum. Officials from the Army

Program Analysis and Evaluation and Deputy Chief of Staff for Operations

and Plans offices concurred. For example, the fiscal year 1998-2003

memorandum claimed savings of approximately $430 million for the single

stock fund initiative. This effort is based on the belief that a single stock

fund eliminates duplicative materiel and financial management functions.

However, the Army Materiel Command, as the proponent for this initiative,

claims that fiscal year 1998 projected savings of $30 million will not be

realized because of problems in implementing changes to financial

systems. The Principal Deputy Assistant Secretary for Financial

Management and Comptroller told us that $30 million in savings will be

realized in fiscal year 1998—either from this initiative or elsewhere.

Phase I projected that 3,914 active Army positions could be transferred

from institutional to operational forces, but most of these transfers were

based on assumptions that may not occur. Our February 1997 report stated

that many of the active Army space transfers were based on initiatives that

have not been fully tested or approved; therefore, the savings were not

assured. As a result, we recommended that the Secretary of the Army

closely monitor the military positions the Army planned to save from the

Page 20 GAO/NSIAD-98-65 Force Structure
B-278197 

redesign initiatives and have a contingency plan in place in the event the

personnel savings do not materialize. DOD concurred with this

recommendation.

Officials from the Deputy Chief of Staff for Operations and Plans stated

that the 3,914 spaces were transferred from institutional to operational

forces, but most of the spaces did not come from the phase I redesign

initiatives. Two initiatives, which account for 2,850, or 73 percent, of the

3,914 active Army spaces, will not produce the projected number of

spaces. For example, the Senior Reserve Officer’s Training Corps initiative

was expected to transfer 2,100 positions. However, RAND currently

estimates the initiative will yield between 800 and 1,050 spaces because

the Army decided not to contract out all 2,100 spaces and is testing a

combination of active, reserve, and contract personnel.

Additionally, the transfer of positions is also based on reducing attrition.14

The Army assumed reduced attrition would free 750 training and

recruiting institutional positions. If personnel stay in the Army, then it

would not need to recruit and train replacements. However, the Training

and Doctrine Command currently projects an increase in initial entry

training requirements from fiscal years 1998 to 1999 rather than a

decrease. Army headquarters officials acknowledged that they could not

explain how the 750 spaces were calculated, and Command officials said

that it was not involved in deriving the 750 spaces.

No Office Monitors the

Results of Redesign Efforts

Even though the Deputy Chief of Staff for Operations and Plans is the

executive agent for redesign assessments, there is no single office that

systematically manages and monitors redesign results. Therefore, at any

given time, the Office of Operations and Plans does not know the status of

specific initiatives, dollar savings, implementation costs, or progress in

reducing institutional positions. In addition, any differences in projected

costs and savings have not been reconciled between the Army Program

Analysis and Evaluation and the Army offices responsible for specific

initiatives.

The Assistant Secretary of the Army for Financial Management and

Comptroller is responsible for quarterly Army performance reviews. These

reviews are for the Secretary of the Army, Army Chief of Staff, and

function chiefs to discuss problem areas. However, the Office of the

Assistant Secretary states that institutional redesign initiatives are

14Attrition is defined as a soldier leaving the Army before his or her term of enlistment expires.

Page 21 GAO/NSIAD-98-65 Force Structure
B-278197 

monitored and discussed only if their implementation or savings become

jeopardized. A Financial Management and Comptroller written statement

explains that none of the redesign initiatives have been designated as

topics to be monitored during the quarterly reviews, including the Senior

Reserve Officer’s Training Corps, which accounts for one-half the

projected position transfers and $336 million in unaccounted for

implementation costs. A Financial Management and Comptroller official

told us that some quarterly reviews were canceled and never rescheduled

and that monitoring institutional redesign results would require an

investment of too many resources.

Redesign Lacks Specific

Performance Goals

Pamphlet 100xx discusses the need to achieve efficiencies in performing

institutional functions. For example, the pamphlet states that it is

necessary to demonstrate that cost savings and/or operational efficiencies

will result from implementing redesign initiatives. However, beyond this

overarching guidance, the Army has not set specific, measurable,

performance goals and assessed the Army’s progress in achieving them

(e.g., program outcome evaluations). More recently, DOD guidance to the

military services for implementing the Government Performance and

Results Act states that the services should identify performance measures

that demonstrate how the services’ plans, such as Army Force XXI,

achieve the goals of DOD’s strategic plan.

Conclusions A sound, analytically based methodology would help the Army to ensure

that its institutional force is efficiently organized and comprises the

minimum number of personnel. Such a methodology is essential for the

Army to make data-based decisions on how to allocate resources among

institutional organizations, have assurance the highest priority functions

are funded, and be aware of the risks in not funding some institutional

functions. The use of workload-based criteria in implementing the

programmed downsizing of 13,000 positions and Quadrennial Defense

Review reductions could help the Army minimize effects on its ability to

perform institutional functions and may help introduce more efficient

organizations and processes. A smaller institutional force may also

generate savings the Army could apply to its modernization programs or

its operational forces.

Although the Army has a plan to correct this material weakness, the plan is

incomplete, and the Army may have difficulty accomplishing the

corrective actions within established time frames. The plan provides a

Page 22 GAO/NSIAD-98-65 Force Structure
B-278197 

mechanism to ensure compliance with the Army’s methodology for

determining institutional requirements. However, if the plan’s certification

and quality assurance milestones are extended due to insufficient

resources, the Army will be making reductions without knowing if

commands are performing the analyses required to make sound decisions

about staffing levels and reduce the cost of accomplishing institutional

functions.

The Army’s plan is to simultaneously develop workload approaches

(12-step method and AWPS) and a system to calculate the cost for

institutional positions. Until all three efforts are completed and integrated,

the Army cannot be assured that it has the minimum essential institutional

force, and the Army’s planning, programming, budgeting, and execution

system for institutional functions will not be based on workload. If key

subplans remain undeveloped, the Army has no method for assessing its

progress toward meeting the plan’s current completion date of

December 1999. As a result, further reductions or retention of institutional

personnel may result without the benefits of workload analysis and

assessments of risks and tradeoffs.

Army oversight is necessary to ensure that Force XXI institutional

redesign results are achieved. To date, the Army has not identified

specific, measurable redesign goals, even though its own guidance

acknowledges the importance of doing so. Army documents include

general goals for improving institutional efficiency but, other than

reducing the number of major commands, do not specify measures to

achieve efficiencies. Without measurable performance goals, it may be

difficult for the Army to know when its vision for the institutional force, as

stated in Pamphlet 100xx, is achieved. Further, savings will be less than

projected. In fact, the Army may not know the source of the savings

because no single office monitors the status of redesign initiatives or their

implementation costs.

The Force XXI redesign concept includes proposals to reduce the number

of major commands and realign their functions. Since the 12-step

methodology includes analyses of how to structure and staff organizations

efficiently, the Army could coordinate implementing major command

realignments with the 12-step analysis techniques. Such coordination

could result in institutional efficiencies, which would provide the Army an

opportunity to transfer military institutional personnel to fill shortfalls in

support forces. This transfer would increase the proportion of Army

Page 23 GAO/NSIAD-98-65 Force Structure
B-278197 

resources devoted to missions and decrease the proportion devoted to

infrastructure.

Recommendations To improve the Army’s ability to accurately project institutional

requirements, allocate institutional personnel, and make informed,

analysis-based decisions on risks and tradeoffs, we recommend that the

Secretary of the Army complete subplans of the material weakness plan,

modify milestones to accurately reflect available resources to accomplish

corrective actions, and closely monitor results.

To improve the Army’s ability to accurately project institutional

requirements derived from AWPS, we recommend that the Secretary of the

Army direct the Assistant Secretary for Manpower and Reserve Affairs to

develop a long-range master plan to implement AWPS, including milestones

and definitions of corporate-level requirements.

To improve the Army’s ability to make informed, analysis-based decisions

on benefits, risks, and tradeoffs in realigning major command

organizations and functions, we recommend that the Secretary of the

Army require that workload-based analyses, such as the 12-step

methodology, be used to demonstrate the benefits, risks, and tradeoffs of

Force XXI institutional redesign decisions.

To improve the Army’s ability to oversee reforms for increasing the

effectiveness and efficiency of its institutional force, we recommend that

the Secretary of the Army assign a single office the responsibility to

provide management and oversight of the institutional redesign process to

include identifying clear, specific, and measurable performance goals;

publishing these goals in a final version of Pamphlet 100xx; monitoring

savings and implementation costs; and periodically reporting results

achieved along with the stated goals and projections of the initiatives’

savings and implementation costs.

Agency Comments In written comments on a draft of this report, DOD generally concurred

with the report and all recommendations. DOD also stated that it will

request that the Army take appropriate action to implement our

recommendations. DOD’s comments are reprinted in their entirety in

appendix III.

Page 24 GAO/NSIAD-98-65 Force Structure
B-278197 

We are providing copies of this report to the Secretaries of Defense and

the Army, other appropriate congressional committees, and the Director of

the Office of Management and Budget. We will also provide copies to other

interested parties on request.

Please contact me at (202) 512-3504 if you or your staff have any questions

concerning this report. Major contributors to this report are listed in

appendix IV.

Sincerely yours,

Richard Davis

Director, National Security

 Analysis

Page 25 GAO/NSIAD-98-65 Force Structure
Contents

Letter 1

Appendix I 

Scope and

Methodology

28

Appendix II 

Army Major

Commands

30

Appendix III 

Comments From the

Department of

Defense

31

Appendix IV 

Major Contributors to

This Report

34

Tables Table 1: Number of Active Army and Civilian Institutional

Positions in Fiscal Years 1992 and 2003

18

Table 2: Differences in Phase I Implementation Cost and Savings

Data Between Army Program Analysis and Evaluation and

Deputy Chief of Staff for Logistics Offices

20

Figures Figure 1: 12-Step Methodology 7

Figure 2: Milestones in the June 1997 Draft Plan and October 1997

Approved Plan

11

Figure 3: Active Army Institutional Positions as a Percent of

Operational Forces

17

Abbreviations

AWPS Army Workload Performance System

DOD Department of Defense

TDA Tables of Distribution and Allowances

Page 26 GAO/NSIAD-98-65 Force Structure
Page 27 GAO/NSIAD-98-65 Force Structure
Appendix I 

Scope and Methodology

To determine the extent to which the Army addressed its historical

weakness in determining institutional requirements, we compared the

June 1997 draft material weakness plan to the October 1997 approved plan

to identify changes in milestones, progress in subplans’ development, and

the intent to administer and monitor the plan. We also examined Army and

Department of Defense (DOD) guidance and regulations regarding

implementation of workload-based systems and processes, such as the

12-step method and the Army Workload and Performance System (AWPS).

We obtained documentation and interviewed knowledgeable Army

officials from Army Headquarters, Office of the Assistant Secretary of the

Army for Manpower and Reserve Affairs, and the Deputy Chief of Staff for

Operations and Plans—Directorate of Force Programs, Washington, D.C.;

and the Industrial Operations Command, Rock Island, Illinois. We

observed pilot testing of AWPS at the Corpus Christi Army Depot, Texas.

We also analyzed documents and held discussions regarding AWPS system

implementation, status of training, management of depot workload,

systems requirements, and the lack of updated project schedules.

We obtained relevant documentation on existing requirements

determination processes at Forces Command, Fort McPherson, Georgia;

the Army Training and Doctrine Command, Fort Monroe, Virginia; the

Army Materiel Command, Alexandria, Virginia; and the Management

Engineering Activity, Huntsville, Alabama, which performed the Army

Materiel Command’s requirements assessments. The three major

commands account for 43 percent of the civilian institutional workforce

and 47 percent of the military institutional workforce. We compared each

of the command’s processes with the 12-step method to identify

compliance and program differences. We also assessed the use of the

requirements determination processes in budget formulation and

execution at Army Headquarters and the major commands.

To assess the extent to which the Army’s streamlining initiatives identified

opportunities to reduce Army personnel devoted to institutional functions

and realize savings, we reviewed streamlining guidance and interviewed

knowledgeable officials from the Office of the Assistant Secretary of the

Army for Manpower and Reserve Affairs; the Directorate of Force

Programs within the Deputy Chief of Staff for Operations and Plans; the

Assistant Secretary of the Army for Financial Management and

Comptroller; the Deputy Chief of Staff for Logistics; Forces Command;

Training and Doctrine Command; and Army Materiel Command. During

discussions with the officials, we obtained documentation describing each

Page 28 GAO/NSIAD-98-65 Force Structure
Appendix I 

Scope and Methodology

initiative, estimated implementation costs, and dollar and personnel

savings for the 107 fiscal year 1998-2003 institutional redesign initiatives.

We also obtained documentation and discussed military position transfers

from institutional to operational forces. However, our assessment focused

on those initiatives that represented the largest percentage of the phase I

redesign savings.

Officials from the Army’s Office of Program Analysis and Evaluation

provided documentation of the dollar savings included in the 1998-2003

Program Objective Memorandum and validated our analysis of those

numbers. The Office of the Assistant Secretary of the Army for Manpower

and Reserve Affairs validated the personnel savings.

To identify the distribution of active Army and civilian institutional

personnel and analyze institutional trends, we obtained the number of

institutional positions from fiscal years 1992 to 2003 from the Army Force

Management and Support Agency’s Structure and Manpower Allocation

System database. We did not conduct a full reliability assessment because

the data used in the report are for background and context and are not

vital to audit results. However, Army officials explained the imbedded

system edits they rely on to detect data errors and protect data integrity.

Additionally, we independently corroborated the numbers at two

commands. On the basis of our comparisons and the description of the

database’s system edits, we were satisfied that these data are the best

available and that they accurately support our statements on institutional

composition and trends.

We conducted our review from April to December 1997 in accordance with

generally accepted government auditing standards.

Page 29 GAO/NSIAD-98-65 Force Structure
Appendix II 

Army Major Commands

• Army Materiel Command

• Training and Doctrine Command

• Forces Command

• Medical Command

• Corps of Engineers

• Space and Missile Defense Command

• Special Operations Command

• Military Traffic Management Command

• Criminal Investigations Command

• Intelligence and Security Command

• Military District of Washington

• U.S. Army, Europe

• U.S. Army, Pacific

• Eighth U.S. Army

• U.S. Army, South

Page 30 GAO/NSIAD-98-65 Force Structure
Appendix III 

Comments From the Department of Defense

Page 31 GAO/NSIAD-98-65 Force Structure
Appendix III 

Comments From the Department of Defense

Now on p. 24.

Now on p. 24.

Now on p. 24.

Page 32 GAO/NSIAD-98-65 Force Structure
Appendix III 

Comments From the Department of Defense

Now on p. 24.

Page 33 GAO/NSIAD-98-65 Force Structure
Appendix IV 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Gwendolyn R. Jaffe, Assistant Director

Irene A. Robertson, Senior Evaluator

Vincent C. Truett, Senior Evaluator

Norfolk Field Office Brenda M. Waterfield, Evaluator-in-Charge

Jeanett H. Reid, Evaluator

(701112) Page 34 GAO/NSIAD-98-65 Force Structure
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