United States General Accounting Office

GAO Report to Congressional Requesters

April 1998 QUADRENNIAL

DEFENSE REVIEW

Some Personnel Cuts

and Associated Savings

May Not Be Achieved

GAO/NSIAD-98-100

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-278199 

April 30, 1998

The Honorable Strom Thurmond

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable John R. Kasich

Chairman, Committee on the Budget

House of Representatives

As you requested, we reviewed the Department of Defense’s (DOD)

May 1997 Report of the Quadrennial Defense Review (QDR), which directed

the services to reduce the number of active, reserve, and civilian

personnel. Specifically, our report discusses (1) the basis for the personnel

cuts, (2) the services’ plans to implement personnel cuts and achieve

savings, (3) the extent that the services believe the cuts will impact their

ability to execute the national military strategy, and (4) DOD’s plans to

monitor the services’ progress in implementing the cuts. We did not review

planned cuts to the defense agencies. We are reporting separately on other

aspects of the QDR, including DOD’s process and methodology for assessing

force structure and modernization requirements and the implications of

the QDR decisions on DOD’s Future Years Defense Program (FYDP).

Background The National Defense Authorization Act for Fiscal Year 1997 directed the

Secretary of Defense, in consultation with the Chairman, Joint Chiefs of

Staff, to conduct a review of the defense program. The legislation required

DOD to report on a number of topics, including the defense strategy, the

force structure best suited to meet the strategy, and the appropriate ratio

of combat to support forces. During the QDR process, DOD considered three

alternatives for implementing the national defense strategy to shape and

respond to current needs and prepare the force for the future within an

expected budget of about $250 billion annually (constant 1997 dollars).

One alternative focused on current dangers and called for maintaining the

current force structure and investment levels. Another alternative focused

on future dangers and allocated more resources to modernizing for the

future but significantly reduced the current force. The final alternative,

selected by DOD, targeted infrastructure activities, called for modest force

structure cuts, and increased modernization funding to $60 billion per

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year. According to the QDR, this option retains sufficient force structure to

meet current requirements and reallocates resources to invest in force

modernization.

A principal objective of the QDR was to understand the financial risk in

DOD’s program plans and devise ways to manage that risk. The QDR noted

that past years’ procurement funds were used for unplanned operating

expenses. The QDR concluded that as much as $10 billion to $12 billion per

year in future procurement funding could be diverted for unplanned

operating expenses. The QDR also noted that the migration of procurement

funding is caused by unprogrammed operating expenses from

underestimating day-to-day operating costs, unrealized savings from

initiatives such as outsourcing or business process reengineering, and new

program demands. To address this financial instability, the QDR directed

cutting some force structure and personnel, shedding additional excess

facilities through more base closures and realignments, streamlining

infrastructure, and reducing quantities of some new weapon systems.

Congress establishes minimum active duty personnel levels for each

service as part of the annual national defense authorization process. Thus,

congressional approval for the QDR active duty personnel reductions will

be needed because they would reduce the number of personnel below the

current approved levels. The QDR directed the services to cut 61,700 active,

54,000 reserve, and 60,800 civilian personnel by fiscal year 2003, except for

7,700 of the civilian cuts that DOD expected to achieve by fiscal year 2005.

DOD expected to save about $3.7 billion annually by fiscal year 2003 as a

result of these cuts. The QDR personnel cuts are in addition to those cuts

the services had planned in the fiscal year 1998 FYDP through fiscal

year 2003, which was prepared before the QDR. Appendix I shows the total

projected personnel reductions by service through fiscal year 2003.

Results in Brief DOD’s decision to reduce personnel as part of the Quadrennial Defense

Review was driven largely by the objective of identifying dollar savings

that could be used to increase modernization funding. DOD officials

concluded that a 10-percent force structure cut would result in

unacceptable risk in implementing the national military strategy and

determined that the review process had not identified sufficient

infrastructure savings to meet DOD’s $60 billion modernization goal. Thus,

the Secretary of Defense directed the services to develop plans to cut the

equivalent of 150,000 active military personnel to save between $4 billion

and $6 billion in recurring savings by fiscal year 2003. The services

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proposed initiatives to eliminate about 175,000 personnel and save an

estimated $3.7 billion. Although the services relied on some ongoing

studies to develop proposals to achieve the cuts, some of the analyses

were limited. Moreover, variations existed in the services’ plans. For

example, the Navy relied extensively on planned force structure cuts,

whereas the Air Force cuts are primarily based on outsourcing.

Considerable risk remains in some of the services’ plans to cut 175,000

personnel and save $3.7 billion annually by fiscal year 2003. With the

exception of the Air Force, the services have plans that should enable

them to achieve the majority of the active military cuts by the end of fiscal

year 1999. However, the fiscal year 1999 future years defense program,

which is the first to incorporate the Quadrennial Defense Review

decisions, does not include all the personnel cuts because the Office of the

Secretary of Defense determined that some of the Air Force’s active

military cuts announced in May 1997 are not executable at this time,

according to service officials. Moreover, plans for some cuts are still

incomplete or based on optimistic assumptions about the potential to

achieve savings through outsourcing and reengineering and may not be

implemented by fiscal year 2003 as originally anticipated. For example,

there is no agreement within the Army on how 25,000 of the 45,000 reserve

cuts will be allocated. Moreover, the Air Force assumed that all military

positions planned to be competed would be contracted out rather than

relying on historical experience that shows a civilian workforce wins

40 percent of all competitions. This and other assumptions could make it

difficult to achieve as many as 6,900 of the Air Force civilian cuts included

in the fiscal year 1999 future years defense program.

Service officials believe that the majority of the planned personnel cuts

will not impact the services’ ability to implement the national military

strategy. The cuts are primarily focused on reducing personnel associated

with infrastructure activities or combat forces that are not critical to

meeting war-fighting requirements, according to service officials. The Air

Force military personnel cuts will focus primarily on personnel assigned

to infrastructure activities rather than mission forces and will involve

replacing military personnel with less costly civilians or contractors rather

than eliminating functions. Navy officials stated that its plan to achieve

personnel savings by eliminating surface combatants will not affect its

ability to implement the strategy because more capable ships have entered

the Navy’s inventory. In February 1997, we reported that a smaller active

Army support force could increase the Army’s risk of carrying out current

defense policy. Although the Army has reduced its active support forces as

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part of the Quadrennial Defense Review cuts, it believes these cuts will not

significantly increase the risk associated with implementing the national

military strategy because the positions are being transferred to the reserve

component.

Because some aspects of DOD’s plan to reduce personnel will not occur or

will be delayed, it is critical that the Office of the Secretary of Defense

monitor the services’ progress in achieving the personnel cuts and

associated savings. The Office plans to review the services’ progress in

achieving the personnel cuts during its annual review of the services’

budgets. According to Office of the Secretary of Defense officials, the

Defense Management Council, which was established in November 1997

by the Secretary of Defense to oversee progress in achieving defense

reform initiatives, will oversee the services’ outsourcing plans.

Personnel Cuts Are

Based on DOD’s Goal

to Increase

Modernization

Funding

The level of personnel cuts called for in the QDR was based on DOD’s plan to

achieve dollar savings that would (1) reduce the possibility that

procurement funds would be used for unplanned expenses and (2) enable

DOD to increase and maintain procurement funding at $60 billion annually.1

In March and April 1997, DOD officials concluded that a 10-percent force

structure cut would result in an unacceptable risk in implementing the

national military strategy and that the potential savings from infrastructure

initiatives identified during the QDR process would not be sufficient to

ensure that procurement funding would not be used for unplanned

expenses. As a result, senior civilian officials and the service chiefs agreed

that the services needed to eliminate the equivalent of about 150,000 active

military personnel, which Office of the Secretary of Defense (OSD) officials

estimated would save between $4 billion and $6 billion annually by fiscal

year 2003. The Secretary of Defense directed the service chiefs to develop

initiatives to achieve personnel cuts and assess how to allocate the cuts

among active, reserve, and civilian personnel.

In May 1997, the Secretary of Defense approved the services’ proposals to

eliminate about 175,000 active, reserve, and civilian personnel and save an

estimated $3.7 billion by 2003, as shown in table 1. The savings estimates

vary among the services because of the different levels of active, reserve,

and civilian personnel cuts and the extent of outsourcing included in the

services’ plans. For example, the Navy and the Air Force plan to cut about

30,000 and 46,000 active, reserve, and civilian personnel, respectively.

1

The fiscal year 1999 FYDP shows that $45.1 billion was funded for procurement in fiscal year 1998 and

that $48.7 billion was budgeted for fiscal year 1999.

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Despite the larger personnel cut, the Air Force’s estimated savings are

significantly lower than the Navy’s because most of the Air Force cuts will

occur primarily from replacing military and civilian personnel with

contractors, which saves only a portion of current salaries. In contrast, the

Navy plans to eliminate personnel primarily by reducing force structure,

such as surface combatants, which will save all of the current and future

salaries.

Table 1: QDR Personnel Cuts and

Estimated Savings by Fiscal Year 2003

(fiscal year 1997 constant dollars in

millions)

Number of personnel

Service Active Reserve Civilian

Estimated

savings

Army 15,000 45,000 33,700 $1,540

Navy 18,000 4,100 8,400 1,210

Air Force 26,900 700 18,300 790

Marine Corps 1,800 4,200 400 170

Total 61,700 54,000 60,800 $3,710

Note: The QDR also directed that 18,000 civilian employees assigned to defense agencies be

cut, which OSD estimated would save $1.5 billion.

Source: Report of the Quadrennial Defense Review and OSD.

The Army plan was based on the assumption that it had to eliminate the

equivalent of 45,000 active personnel. The Army decided to cut its active,

reserve, and civilian personnel each by the equivalent of 15,000 active

personnel. The active cuts were based primarily on transferring some

active combat service and combat service support missions to the reserves

and allocating percentage cuts to most of the major command institutional

forces.2

 The Army decided to cut the reserves by 45,000, which it believed

to be the equivalent of 15,000 active positions, based on the assumption

that three reserve component positions equaled the cost of one active

position. In allocating the cuts between the reserve components, the Army

considered an analysis of forces that indicated about 6,300 Army Reserve

and 62,000 Army National Guard forces were not included in current war

plans. After considering this analysis and other factors, the Army decided

to cut the Army Reserve by 7,000 personnel and the Army National Guard

by 38,000 personnel. After the release of the QDR, Army National Guard

officials stated that they were not included in the process used to

determine the scope of the cuts and that they have yet to reach agreement

with Army headquarters on all the personnel cuts. The Army reserve

2

Institutional forces, called the Table of Distribution and Allowances, generally provide nondeployable

support to the Army infrastructure, which includes training, doctrine development, and base

operations.

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components have agreed to cut 20,000 reserve personnel by fiscal

year 2000 and defer allocation of the remaining 25,000 cuts. The Army

civilian cuts were based primarily on a plan to compete 48,000 civilian

positions, with the assumption that private contractors would win one-half

of the competitions. However, the Army’s plan was not based on a study of

missions and functions by location. The Army assumed that all eligible

positions in commercial activities would be competed and that it could

reclassify some positions that cannot currently be competed.3

 The

remainder of the civilian cuts were based on efforts to reengineer the

Army Materiel Command and reduce the number of military technicians in

the reserve component.4

The Navy proposed reducing its active, reserve, and civilian personnel by

about 4.5 percent each. The majority of the active military cuts were based

on planned force structure cuts, such as reducing the number of surface

combatants and attack submarines, and transferring some active support

ships to the Military Sealift Command. The Navy Reserve cuts were based

primarily on plans to decommission frigates, deactivate some aircraft and

helicopters, and eliminate positions that had been funded but had not been

filled. The Navy expects to reduce civilian personnel primarily by

workload reductions and reengineering; however, it had not initiated any

studies, as of May 1997, to achieve these cuts. Unlike the Army and the Air

Force plans, the Navy plan assumes very few reductions from outsourcing

because the Navy, in its fiscal year 1998 budget, had programmed savings

of $2.5 billion from outsourcing by fiscal year 2003.

The Air Force planned to achieve the majority of its personnel cuts from

outsourcing and the remainder through consolidating fighter and bomber

squadrons and streamlining headquarters. The Air Force relied on an

ongoing study, known as Jump Start, to determine the potential for

reducing active military and civilian positions by outsourcing. This study

examined the potential for outsourcing at wing level rather than relying

exclusively on a broad, headquarters-only assessment of all personnel that

could potentially be outsourced. After the QDR, the Air Force identified

some problems with the data used to determine the potential number of

cuts; therefore, it programmed a smaller personnel reduction than that

identified in the QDR report.

3

Title 10 U.S.C. 2465 prohibits DOD from outsourcing civilian firefighters or security guards at military

installations. Chapter 146 of title 10 contains various provisions that restrict DOD’s outsourcing of

depot maintenance and base support activities.

4

Military technicians are full-time civilian employees who are also members of the reserve component.

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The Marine Corps plan to reduce active personnel was based primarily on

reducing and reorganizing the Marine Corps Security Battalion, which

provides security for Navy installations. The Marine Corps also proposed

to cut some administrative support in headquarters activities, but it had

not identified any specific actions as of May 1997. The Marine Corps had

also not developed specific plans to reduce reserve and civilian personnel.

Some Aspects of the

Services’ Plans Are

Incomplete and Based

on Optimistic

Assumptions

Not all of the QDR personnel cuts were included in the fiscal year 1999

FYDP. In addition, there is considerable risk that some of the cuts included

in the FYDP may not be achieved because (1) the Army has not agreed on

the allocation of 25,000 of the 45,000 reserve component cuts,

(2) significant reductions in the Air Force and the Army are based on

implementing aggressive outsourcing plans, and (3) some of the Army and

the Navy civilian reductions are contingent on the outcome of

reengineering studies. On the other hand, all of the services, except the Air

Force, have plans to achieve the majority of their active military cuts by

the end of fiscal year 1999. For example, the Navy plans to achieve about

14,200, or 79 percent, of its active military cuts in fiscal year 1999 through

force structure reductions, such as decommissioning surface combatants.

Moreover, the Navy has plans to achieve its reserve cuts, and the Army has

specific plans to achieve 20,000 reserve component cuts. Also, the Marine

Corps has plans to achieve the majority of its active and reserve cuts.

Although outsourcing is only a small part of the Navy’s QDR cuts, the Navy

has an aggressive outsourcing program that involves risk because the Navy

has not identified the majority of the specific functions that will be studied

to achieve the expected savings. Details of the services’ plans are included

in appendixes II through V.

Not All of the QDR

Personnel Reductions

Have Been Included in the

Fiscal Year 1999 FYDP

The Air Force did not program about 5,600, or 20 percent, of its active

military and 2,300, or 13 percent, of its civilian QDR reductions in the fiscal

year 1999 FYDP. The Air Force double counted some potential outsourcing

savings, and OSD deferred most of the Air Force’s plans to restructure

fighter squadrons and consolidate bomber squadrons because it

determined that the plans were not executable at this time. According to

an OSD official, OSD was concerned that the restructuring plan could be

construed by Congress as violating its guidance to refrain from any

planning for future base closures. Likewise, the Air Force reserves will not

be reduced by 700 personnel because, after the QDR was released, the Air

Force decided to increase the reserve end strength to cover an existing

wartime shortage, according to Air Force officials. These actions will

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reduce the Air Force’s planned recurring savings to about $600 million

compared with the $790 million it had planned to achieve by fiscal year

2003.

No Agreement on All of the

Army Reserve Component

Cuts

The QDR directed that the Army reduce its reserve components by 45,000

personnel. In June 1997, at a meeting convened to reach agreement on

how the reductions should be allocated, the reserve component agreed to

reduce end strength by 20,000 by fiscal year 2000—17,000 in the Army

National Guard and 3,000 in the Army Reserve. However, officials within

the Army do not agree on how the remaining 25,000 personnel will be cut.

For budgeting purposes, the Army allocated 21,000 personnel to the

National Guard and 4,000 to the Army Reserve in the fiscal year 1999 FYDP.

However, National Guard officials stated that they did not agree to the

additional cuts.

Significant Reductions Are

Contingent on

Implementing Aggressive

Outsourcing Plans

A significant portion of the active military and civilian cuts in the Air

Force, and the civilian cuts in the Army, are based on plans to conduct

private-public competitions to determine whether functions could be done

more economically by contractors or an in-house workforce consisting of

civilian employees.5

 In developing their plans, the services made different

assumptions about the personnel cuts that could be achieved through

these competitions. The Air Force identified the specific functions that

will be studied by base; however, it made some assumptions that could

overstate the number of civilian cuts. On the other hand, the Army had not

identified the majority of the specific functions by location to be

competed, and its plan assumes that all eligible civilian positions in

commercial activities can be competed.

Although the fiscal year 1999 FYDP reflects a lower number of reductions

through outsourcing than the Air Force’s May 1997 plan, the Air Force

made some assumptions that could make it difficult to achieve about 6,900

civilian cuts. According to Air Force officials, the fiscal year 1999 FYDP

reflects that about 22,000 military and 16,000 civilians will be eliminated

through outsourcing by fiscal year 2003. To estimate the potential

personnel cuts from outsourcing, the Air Force assumed that all of the

military positions included in its Jump Start study, and all of the military

and civilian positions included in a separate outsourcing study of targeted

functions at four bases, would be contracted out. This assumption differs

5

Office of Management and Budget Circular A-76 and its supplemental handbook set forth procedures

for agencies to conduct public-private competitions.

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from past Air Force experience, which shows that a civilian workforce

wins 40 percent of all competitions and that 60 percent of the work is

contracted out. Air Force officials noted that a standard 12-percent

overhead factor must now be included in the government cost estimate,

which they believe will result in more functions being contracted out. Our

recent review of the 12-percent overhead rate suggests the potential,

though not the certainty, for more competitions to be won by the private

sector.6

 If more functions are contracted out, then more civilian positions

will be eliminated. However, the Air Force commercial activities manager

stated that the Air Force has not had sufficient experience with the

12-percent overhead factor to determine if it will change the mix of

functions that remain in house or are contracted out. If the A-76 change

does not result in contractors winning more competitions and the results

are similar to past results, we estimate that the Air Force may not be able

to eliminate as many as 6,900 civilian positions.

The Army plans to compete 48,000 positions to achieve the majority of its

civilian reductions; however, the Army made some assumptions that could

make it difficult to achieve all of the planned cuts. For example, the Army

assumed that it could compete all 34,000 civilian positions in commercial

activities except those exempted by legislation, such as firefighters and

security guards. However, unlike the Air Force, the Army has not done a

study to determine if all positions can be competed. The Air Force found

that it is not practical to compete many positions in commercial activities

because the positions are spread across many units and locations.7

 The

Army announced studies covering about 14,000 of the 34,000 positions;

however, it has not identified the specific functions or location of the

remaining positions to be studied. Army officials stated the major

commands would identify the functions to be studied as part of their

future annual budgets. Finally, the study universe also included some

positions that involved performance of inherently governmental functions

and therefore cannot be competed. Army officials stated that, as part of

the Defense Reform Initiative, a study is underway to determine if all

positions are consistently and properly classified throughout DOD. Army

officials believe this review will reclassify about 14,000 positions to

commercial activities, which will then enable the positions to be

6

Defense Outsourcing: Better Data Needed to Support Overhead Rate for A-76 Studies

(GAO/NSIAD-98-62, Feb 27, 1998).

7

The Air Force had originally planned to compete about 21,000 positions in the communications and

information management function, but reduced its plan by about 5,400 positions, or 26 percent. Air

Force officials noted that these positions were at many units and locations, which made it difficult to

identify more economical ways of accomplishing the mission.

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competed. However, the Army does not have analysis to support this

figure.

The Navy planned to achieve about 1,300, or 7 percent, of its active

military and about 1,200, or 14 percent, of its civilian QDR personnel

reductions through outsourcing. However, the Navy now plans to achieve

about 660 of its active military QDR personnel cuts through outsourcing

because its initial plan did not adequately consider the impact that

outsourcing would have on sea-to-shore rotation.8

 In addition to the QDR

reductions, the Navy has programmed savings of $2.5 billion in its fiscal

year 1999 budget based on plans to study 80,500 positions—10,000 military

and 70,500 civilian—by fiscal year 2003. OSD has identified Navy

outsourcing as an area in which planned savings may not be fully

achieved. However, the Navy has not identified the majority of the specific

functions that will be studied to achieve the projected savings and has not

adjusted its personnel levels to reflect the effects of this outsourcing

initiative. Navy officials stated that each year the major commands will

identify the functions to study as part of their annual budgets.

Some Reductions Are

Contingent on the

Outcome of Reengineering

Studies

The Army’s plan to eliminate about 5,300 civilian personnel in the Army

Materiel Command through reengineering efforts involves risk because the

Command does not have specific plans to achieve these reductions. The

Army plans to use the results of reengineering studies to identify ways to

cut these positions; however, the studies are not scheduled to start until

after fiscal year 2000. Moreover, in February 1998, we reported that Army

efforts to reengineer the institutional forces have not been successful. For

example, the Army initially identified 4,000 active military institutional

positions that it planned to transfer to operational forces.9

 However, our

work showed that the underlying basis for most of these personnel savings

are questionable.

The Navy plan assumes that it will be able to eliminate about 1,100 civilian

personnel through reengineering and reducing the workload at the Navy

Facilities Engineering Command field structure. The Navy started a study

in January 1998 and plans to complete it by July 1998. To achieve the

savings target, Navy officials stated the study must identify ways to reduce

the workforce by 30 percent.

8

The Navy policy for sea-to-shore rotation is that enlisted personnel in grades E-5 through E-9 spend

no more than 4 years at sea for every 3 years on shore in the aggregate.

9

Force Structure: Army Efforts to Improve Efficiency of Institutional Forces Have Produced Few

Results (GAO/NSIAD-98-45, Feb. 26, 1998).

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Services Expect Few

Adverse Impacts

From Personnel Cuts

Service officials believe the majority of the planned personnel cuts will not

affect their ability to implement the national military strategy because they

will reduce infrastructure or, to the extent that the cuts involve combat

forces, implement missions more cost-effectively without any significant

loss in capability.

Almost one-half of the active military cuts will involve replacing military

personnel with reserve forces, civilian employees, or contractors rather

than eliminating functions outright. For example, the Air Force plans to

eliminate about 22,000 active military personnel through outsourcing. Air

Force officials noted that these personnel are not military essential

because they do not deploy, are not required to support overseas rotation

needs, and primarily involve infrastructure functions such as logistics and

base operating support. Moreover, on the basis of past experience, the Air

Force expects that 75 percent of these personnel will be replaced by either

civilian employees or contractors. The other 25 percent will be eliminated

because A-76 studies should result in more efficient organizations

requiring fewer personnel.

The Navy plans to eliminate about 5,400 active military personnel by

reducing the number of surface combatants from the current level of 128

to 116 and decommissioning 2 attack submarines. According to Navy

officials, the surface combatant reductions are possible because the newer

ships entering the fleet provide greater combat capability. Similarly, the

Marine Corps plans to eliminate 1,200 active military positions by

restructuring its security battalion, which provides support to the Navy.

Navy officials agreed with the Marines Corps’ proposed restructuring,

which will eliminate personnel associated with missions that are no longer

valid and reorganize personnel to provide the same level of support more

efficiently.

The Army believes that the plan to reduce active personnel can be

accomplished without significantly increasing the risk associated with

implementing the national military strategy. The Army plans to achieve

almost one-half of its QDR-directed active cut by transferring 7,100 active

military combat support and combat service support positions to the

reserve component. Army officials believe that this plan will enable it to

execute the national military strategy with an acceptable level of risk,

assuming adequate resourcing for active and reserve components,

availability of increased sea- and airlift, funding for equipment

modernization, and improvements to existing intelligence and

communication systems. However, the Army had not finalized its plan on

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which combat support and combat service support missions would be

transferred to the reserve component. Our February 1997 report on Army

support forces highlighted shortages in active support forces. We reported

that a smaller active Army support force did not appear feasible because it

could increase the Army’s risk of carrying out current defense policy.10

Specifically, our report stated that about 79,000 support forces needed in

the first 30 days of the first major theater war would arrive late because

the Army lacks sufficient numbers of active support forces and must rely

on reserve forces, which generally require more than 30 days to mobilize

and deploy.

Oversight of the

Services’ Plans Will Be

Critical to Achieving

QDR Goals

The May 1997 QDR report recognizes that one of the primary sources of

instability in DOD’s current plans is the possibility that planned

procurement funding may need to be used for other activities and that

unrealized savings is one of the key components of this problem. The

report discusses several factors that contribute to funding migration,

stating that “migration also occurs when the savings planned to accrue

from initiatives like competitive outsourcing or business process

reengineering fail to achieve their expectations fully.”

OSD has established two principal mechanisms for monitoring the services’

progress in achieving personnel cuts, according to OSD officials. First, it

expects to review the services’ plans for achieving personnel cuts during

annual reviews of the services’ budgets. Second, the Defense Management

Council, which was established in November 1997 by the Secretary of

Defense to oversee progress in achieving defense reform initiatives, will

monitor the services’ progress in meeting outsourcing goals. The Council

is chaired by the Deputy Secretary of Defense and includes representatives

from OSD, the Joint Staff, and the services.

In preparing their fiscal year 1999 budgets, the services used different

methods to reflect the personnel and dollar savings associated with

outsourcing, which could make it more difficult for DOD officials to

understand the services’ assumptions and plans for outsourcing and

monitor their progress. For example, the Navy’s projected personnel levels

included in its budget for fiscal years 1999 through 2003 reflect the force

structure cuts planned to meet QDR-mandated personnel levels but do not

reflect further cuts that could result from outsourcing. The Navy plans to

compete 10,000 military and 70,500 civilian positions by fiscal year 2003,

10Force Structure: Army Support Forces Can Meet Two-Conflict Strategy With Some Risks

(GAO/NSIAD-97-66, Feb. 28, 1997).

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and its budget assumes that these competitions will achieve $2.5 billion in

savings through fiscal year 2003. However, because the Navy does not

know how many civilians and military positions will be reduced as a result

of these competitions, it did not adjust the personnel figures in its budget

to reflect the projected effects of outsourcing. In contrast, the Air Force’s

projected personnel levels in the fiscal year 1999 budget reflect large cuts

in military and civilian personnel from outsourcing. In preparing their

budgets, each service assumed a different rate of savings as a result of

public-private competitions. For example, the Army assumed it would save

20 percent, the Air Force 25 percent, and the Navy 30 percent of its current

personnel expenses.

OSD officials stated that they are aware that the services used different

methods for reflecting the personnel and dollar impacts of outsourcing

and that the fiscal year 1999 FYDP reflects these different approaches. The

Acting Director of OSD’s Program Analysis and Evaluation Office has

established a task force to ensure that consistent and comparable

approaches are used for personnel and dollar savings.

Conclusions The personnel cuts directed by the QDR were driven primarily by the need

to identify dollar savings that could be used to increase modernization

funding. However, DOD may not achieve all the personnel cuts and

associated savings. With the exception of the Air Force, the services have

plans that should enable them to achieve the majority of the active military

cuts by the end of fiscal year 1999. However, these cuts depend on

Congress reducing the current minimum active duty personnel levels.

There is considerable risk that the active military cuts in the Air Force, the

reserve component cuts in the Army, and the civilian cuts in all the

services may not be achieved by fiscal year 2003 because the services’

plans are not complete and depend on outsourcing and reengineering

initiatives that are based on optimistic assumptions or largely undefined to

date. OSD recognizes that the planned savings from these initiatives have

not always been achieved, which contributes to the migration of

procurement funding. Therefore, it is critical that DOD monitor the

services’ progress in achieving the personnel cuts and savings.

Agency Comments

and Our Evaluation

DOD provided written comments on a draft of this report, which are

reprinted in appendix VI. In its comments, DOD wanted to clarify several

key issues to avoid over emphasizing negative aspects of the QDR

personnel reductions. For example, DOD noted that the QDR process began

Page 13 GAO/NSIAD-98-100 Quadrennial Defense Review
B-278199 

by developing an overarching defense strategy followed by assessments of

the force structure, readiness, and modernization to implement the

strategy. It believed the report’s emphasis on dollar savings ignores the

Department’s strategy assessment and noted that the resulting balanced

program recommended by the QDR is based on modest reductions and

restructuring of U.S. military forces to meet present threats. DOD also

noted that the QDR was a blueprint to revolutionize business affairs and

promote more efficient infrastructure, with many of the details to be fully

developed through the programming and budget cycles. Moreover, DOD

stated that our report is apparently based on information available as of

May 1997 and does not reflect the implementation details that were

developed during the fiscal year 1999 budget cycle. Finally, DOD noted that

we were critical of QDR decisions to downsize the Army’s active, reserve,

and civilian components. It stated these decisions were based on a careful

analysis of the risks, the potential impact on readiness, and the ability to

execute the cuts.

Our report specifically recognizes that the QDR included more than

personnel reductions and notes that we will be reporting separately on

other aspects of the QDR, such as the process for determining the force

structure and modernization requirements. We believe that the risk

associated with the services’ plans to implement the personnel cuts and

achieve the expected savings is an important linkage. Specifically, the

personnel cuts account for the majority of the savings DOD expects from

the QDR to increase modernization funding. Although this report reflects

our analysis of the services’ initial plans when the QDR was released in May

1997, it also assesses OSD and service actions to implement the QDR

personnel reductions as of February 1998. For example, the report reflects

OSD’s decision in December 1997 to defer much of the Air Force tactical

fighter and bomber consolidation plans and the Marine Corps’ decision,

made after the fiscal year 1999 budget was finalized, to reduce fewer

reserve personnel than directed in the QDR. The report also includes our

analysis of the services’ outsourcing and reengineering plans as of

February 1998. With regard to the Army, we found that some details of the

Army’s plan to reduce personnel, such as the number of active support

forces to be cut, had not been finalized as of May 1997. Moreover, our

report shows that the Army faces certain risks to execute some of the

reserve and civilian cuts, such as the lack of agreement within the Army on

how the majority of the reserve component cuts will be allocated.

Likewise, the majority of the Army’s civilian cuts are based on outsourcing

and reengineering efforts. However, the Army, unlike the Air Force, has

not identified the majority of the specific functions by location to be

Page 14 GAO/NSIAD-98-100 Quadrennial Defense Review
B-278199 

studied but plans to rely on the major commands to identify functions over

the next several years. In addition, the Army is also counting on some

functions being reclassified so they can be competed.

DOD also provided technical comments, which were incorporated as

appropriate.

Scope and

Methodology

To determine the basis for DOD’s decision to reduce personnel, we

interviewed senior DOD civilian and military officials to obtain information

on the decision-making process that led to the personnel cuts and

obtained documentation on the services’ proposals to cut active, reserve,

and civilian personnel. To obtain information on how the services plan to

achieve the cuts and how these cuts will impact the services’ ability to

execute the national military strategy, we interviewed officials who were

involved in developing and refining the individual service plans and

reviewed service studies and analyses that supported the proposed cuts.

We also obtained documentation from the services on data included in the

fiscal year 1999 FYDP and compared this data with the services’ May 1997

plans. Finally, we interviewed the Acting Director, OSD Program Analysis

and Evaluation Office, regarding DOD’s plans to monitor the services’

progress in implementing the cuts and obtained and analyzed information

concerning the services’ methods for reflecting in their budgets the

potential impact of outsourcing.

We conducted our work from May 1997 to February 1998 in accordance

with generally accepted government auditing standards.

We are providing copies of this report to other appropriate congressional

committees; the Secretaries of Defense, the Air Force, the Army, and the

Navy; and the Director, Office of Management and Budget. We also will

provide copies to other interested parties on request.

Page 15 GAO/NSIAD-98-100 Quadrennial Defense Review
B-278199 

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

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

appendix VII.

Richard Davis

Director, National Security

 Analysis

Page 16 GAO/NSIAD-98-100 Quadrennial Defense Review
Page 17 GAO/NSIAD-98-100 Quadrennial Defense Review
Contents

Letter 1

Appendix I 

Projected Personnel

Cuts by Service

Through Fiscal Year

2003

20

Appendix II 

Army Plan to Achieve

QDR Personnel Cuts

21

Some Active Military Cuts Have Not Been Identified 21

Agreement Has Not Been Reached on the Majority of Reserve

Component Cuts

23

Plans for Civilian Cuts Are Largely Undefined 24

Appendix III 

Air Force Plan to

Achieve QDR

Personnel Cuts

27

Air Force Has Not Programmed All Active Military QDR Cuts 27

Air Force No Longer Plans to Cut Reserves 29

Fiscal Year 1999 FYDP Will Not Include All QDR Civilian Cuts 29

Air Force Could Have Difficulty Achieving Cuts Included in the

FYDP

30

Appendix IV 

Navy Plan to Achieve

QDR Personnel Cuts

31

Most Active Military Cuts Result From Reducing Force Structure 32

Naval Reserve Cuts Are Split Between Force Structure and

Infrastructure Activities

34

Civilian Cuts Are Based on Reengineering Initiatives and

Projected Decreases in Workload

35

Other Outsourcing Studies Are Planned 36

Appendix V 

Marine Corps Plan to

Achieve QDR

Personnel Cuts

37

Most Active Cuts Involve a Reorganization of Security Forces 37

Reserve Cuts Are Fewer Than Directed by the QDR 38

Civilian Cuts Have Not Been Identified 40

Page 18 GAO/NSIAD-98-100 Quadrennial Defense Review
Contents

Appendix VI 

Comments From the

Department of

Defense

41

Appendix VII 

Major Contributors to

This Report

43

Tables Table 1: QDR Personnel Cuts and Estimated Savings by Fiscal

Year 2003

5

Table I.1: Projected Active Military, Reserve, and Civilian

Personnel Cuts by Service Through Fiscal Year 2003

20

Table II.1: Planned Active Army QDR Reductions 21

Table III.1: Air Force May 1997 and Fiscal Year 1999 FYDP Plans

for Reducing Active Military Personnel

28

Table IV.1: Navy Plan to Achieve QDR Reductions 31

Table IV.2: Active Navy Military Personnel Cuts from QDR Force

Structure Reductions

32

Abbreviations

DOD Department of Defense

FYDP Future Years Defense Program

QDR Quadrennial Defense Review

OSD Office of the Secretary of Defense

Page 19 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix I 

Projected Personnel Cuts by Service

Through Fiscal Year 2003

Table I.1 shows the projected active military, reserve, and civilian end

strength for fiscal year 2003 if all personnel cuts programmed in the fiscal

year 1998 Future Years Defense Program (FYDP) and directed in the

Quadrennial Defense Review (QDR) are implemented.

Table I.1: Projected Active Military,

Reserve, and Civilian Personnel Cuts

by Service Through Fiscal Year 2003 Component Army Navy Air Force

Marine

Corps

Active

Fiscal year 1997 end strength 495,000 402,000 381,100 174,000

Cuts programmed in the fiscal

year 1998 FYDP

0 14,500 15,500 0

Cuts directed in the QDR 15,000 18,000 26,900 1,800

Projected fiscal year 2003 end

strength if all cuts are achieved

480,000 369,500 338,700 172,200

Reserve

Fiscal year 1997 end strength 582,000 95,900 182,500 42,000

Cuts programmed in the fiscal year

1998 FYDP

7,500 2,400 2,900 0

Cuts directed in the QDR 45,000 4,100 700 4,200

Projected fiscal year 2003 end

strength if all cuts are achieved

529,500 89,400 178,900 37,800

Civilian

Fiscal year 1997 end strength 256,200 206,600 181,200 18,300

Cuts programmed in the fiscal year

1998 FYDP

22,800 23,700 17,400 500

Cuts directed in the QDR 33,700 8,400 18,300 400

Projected fiscal year 2003 end

strength if all cuts are achieved

199,700 174,500 145,500 17,400

Source: Fiscal Year 1998 FYDP and Report on the Quadrennial Defense Review, May 1997.

Page 20 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix II 

Army Plan to Achieve QDR Personnel Cuts

The QDR directed that the Army cut 15,000 active military, 45,000 reserve

component, and 33,700 civilian personnel. These cuts represent a

reduction of 3 percent for the active military, 5 percent for the reserve

component, and 15 percent for the civilian personnel end strengths

projected for fiscal year 2003 before the QDR. The Office of the Secretary of

Defense (OSD) estimated these cuts would save $1.5 billion by fiscal

year 2003. The Army has refined its plan since May 1997, but some

elements still remain undefined. For example, the Army has allocated all

of the active military cuts among the major commands, but the commands

have not identified some of the specific functions to cut. Likewise, over

one-half of the reserve component cuts have not been specifically

identified, and the majority of the civilian cuts are based on aggressive

outsourcing efforts that are largely undefined.

Some Active Military

Cuts Have Not Been

Identified

Army plans to implement various initiatives to achieve the QDR cut. These

initiatives are shown in table II.1.

Table II.1: Planned Active Army QDR

Reductions

Initiative

Positions

reduced

Transfer combat service support and combat support to reserve

components

7,100

Reduce major command headquarters 2,900

Reduce active support to the reserves 1,400

Reduce Army Materiel Command 1,300

Reduce and relocate some forces in Panama 1,000

Restructure military intelligence 1,000

Reduce Army Medical Command 800

Other 500

Total 16,000a

aThe Army plans to eliminate an additional 1,000 positions to offset a shortage in its “trainees,

transients, holdees, and students” force.

Source: Department of the Army.

The Army plans to transfer some combat support and combat service

support missions to the reserve component, which will eliminate about

Page 21 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix II 

Army Plan to Achieve QDR Personnel Cuts

7,000 active military positions. The reserve component has already taken

over about one-half of these missions. According to Army officials, these

transfers were based on an Army study that concluded that about 3,400

late-deploying combat support and combat service support activities could

be transferred to the reserves. The remaining 3,600 positions were to be

identified in the Total Army Analysis, expected to be released in

March 1998.1

The major commands have not specifically identified about one-half of the

2,900 cuts to their institutional forces. The Army allocated percentage cuts

to most of the major commands based on the judgment of senior Army

leaders. For example, commands that were considered low priority

received a higher percentage cut than commands that were considered a

higher priority. In February 1997, we reported that allocating positions

based on available budgets, without defining workload requirements, leads

to across-the-board cuts that reduce funds available to all commands

regardless of relative need.2

The Army has identified all of the cuts associated with active training

support to the reserve component. These cuts were based on an Army

study that concluded, among other things, that three existing active

headquarters components that support reserve training could be merged

into one. According to National Guard officials, the Guard supports the

concept of centralized training support to the reserve component but is

concerned that these reductions could result in less training support for

some units. These cuts comply with section 414 (a) of Public Law 102-190,

as amended,which requires the Army to provide a minimum of 5,000 active

personnel to provide training support to the reserve component.

The Army Materiel Command has identified all of its active military cuts.

The Command was reduced by 1,900 active military personnel, but only

1,300 of these cuts will be used to meet the QDR reduction. The remaining

600 cuts will be used to offset other force structure adjustments within the

Army. In developing its plans to reach the QDR cut, the Command first

identified positions that it wanted to remain with the military, such as

commanders and chaplains, and then decided to cut about 1,000 positions

by ceasing to perform some missions. For example, the Command

eliminated the new equipment training and developmental equipment

1

The Army uses the process known as Total Army Analysis to determine the number and types of

support units needed to support the Army’s combat forces and to allocate personnel authorizations to

required units.

2

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

(GAO/NSIAD-97-66, Feb. 28, 1997).

Page 22 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix II 

Army Plan to Achieve QDR Personnel Cuts

testing missions. According to Command officials, project managers for

new weapon systems will have to fund any new equipment training in the

future. On the other hand, the Army National Guard may assume some of

the developmental testing mission. The Command allocated the remaining

cuts across its subordinate commands.

The Army plans to cut 1,000 positions as part of a plan to reduce and

relocate some of the positions that are currently in Panama. For example,

the Army plans to eliminate about 400 positions in an infantry battalion

that is no longer needed.

The Army plans to cut its Medical Command by about 3 percent, or 800

positions, which is proportionate with the overall reduction to the active

Army. According to Office of the Surgeon General officials, these cuts are

based on changes in workload and populations served. Although the

Medical Command has tentatively identified about 400 of its cuts, these

cuts will not be finalized until the Total Army Analysis is complete. At the

time that we completed our work, the Command had not identified how to

allocate the remaining cuts.

The Army has identified about 300 of the cuts associated with its plans to

restructure military intelligence. According to Army officials, an ongoing

study, expected to be completed in May 1998, will identify the remaining

intelligence positions to be cut. Finally, the Army plans to cut 300

positions from the joint staff and defense agencies and 200 positions from

the 82nd Airborne Division. Army officials noted that the Joint Staff and

defense agencies positions were identified as part of the Secretary of

Defense’s recommendation, in the November 1997 Defense Reform

Initiative, to reduce headquarters. The Army plans to cut 200 positions that

are no longer required in the 82nd Airborne Division.

Agreement Has Not

Been Reached on the

Majority of Reserve

Component Cuts

The QDR directed that the Army reserve components be reduced by 45,000

personnel. At a meeting convened in June 1997 to reach agreement on how

the reductions should be allocated, the reserve components agreed to

reduce end strength by 20,000 (17,000 in the National Guard and 3,000 in

the Reserve) by fiscal year 2001. Officials have not agreed on how the

remaining 25,000 personnel reduction would be allocated. For budgeting

purposes, the Army allocated 21,000 of the remaining cuts to the Army

National Guard and 4,000 to the Army Reserve.

Page 23 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix II 

Army Plan to Achieve QDR Personnel Cuts

The Army National Guard plans to achieve the initial 17,000

reduction—5,000 in fiscal year 1998, 5,000 in fiscal year 1999, and 7,000 in

fiscal year 2000—through attrition. It does not plan to reduce force

structure along with the personnel cuts. The Army National Guard plans to

distribute the reductions among the states, based on their historical ability

to recruit and maintain Guard members, and reallocate personnel as

necessary to ensure that units with priority missions maintain readiness.

An Army National Guard readiness official stated that the reductions will

probably result in understaffing some institutional force units and the

combat divisions. As we reported in March 1996,3 DOD and Army studies

noted that many Army National Guard combat units are not needed to

meet the national security strategy. Although the Army has programmed a

reduction of an additional 21,000 personnel between fiscal years 2001 and

2003, the National Guard opposes these cuts and therefore has no specific

plans to implement them.

To achieve its cuts, the Army Reserve plans to eliminate 3,000 individual

mobilization augmentees in fiscal year 2000.4

 Army officials stated that,

about 1,500 personnel are in medical positions that, according to a

recently completed medical reengineering initiative, are excess to

requirements. The remaining 1,500 cuts will be based on ongoing reviews

of all Army Reserve Individual Mobilization Augmentee positions. The

Army has programmed an additional reduction of 4,000 personnel between

fiscal years 2001 and 2003; however, the Army Reserve is waiting for the

Total Army Analysis results to determine how these cuts will be made.

Plans for Civilian Cuts

Are Largely Undefined

Although the QDR directed that the Army cut 33,700 civilian personnel, the

Army’s plans are not completely defined and based on assumptions that

could make it difficult to achieve all of the cuts. For example, the Army

plans to achieve the majority of these cuts through outsourcing; however,

a significant portion of the plan has not been clearly defined. Moreover,

the Army assumed it could cut about 5,300 positions by reengineering the

Army Materiel Command, but it does not have specific plans to achieve the

majority of these cuts. The Army also assumed that it could cut 2,400

military technicians, but these cuts may be delayed because they are

directly tied to force structure reductions that are not currently

3

Army National Guard: Validate Requirements for Combat Forces and Size Those Forces Accordingly

(GAO/NSIAD-96-63, Mar. 14, 1996).

4

Individual mobilization augmentees are members of the selected reserve who augment active

component commands that have wartime requirements above their peacetime strength authorizations.

Page 24 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix II 

Army Plan to Achieve QDR Personnel Cuts

programmed. In fact, the Army Reserve plans to reduce 200 military

technicians and 200 civilians instead of 400 military technicians.

The Army’s outsourcing plan may be difficult to achieve because it

assumes that all eligible positions in commercial activities can be

competed and that the Army can increase the study population by

reclassifying some positions that cannot currently be competed. To

achieve the QDR cuts, the Army plans to compete 48,000 civilian

positions—34,000 positions currently in commercial activities and 14,000

positions that must be reclassified before they can be competed. The Army

assumes that it can compete all of the 34,000 civilian positions in

commercial activities. However, unlike the Air Force, the Army has not

done any study to determine if all positions can be competed. The Air

Force found that it is not practical to compete many positions in

commercial activities because they are spread across many units and

functions.

The Army has initiated studies covering about 15,000 of the 34,000

positions in commercial activities. However, some of these positions are

being used to satisfy personnel cuts that were identified before the QDR.

For example, a Test and Evaluation Command official noted that almost

all the positions eliminated through the ongoing studies will be used to

satisfy personnel reduction targets that existed before the QDR and not to

meet QDR cuts. Moreover, the Army has not identified the specific

functions by command or installation for the remaining 19,000 positions to

be studied. Army officials stated that the major commands would identify

the specific functions to be studied as part of each year’s budget.

The Army’s potential study universe includes 14,000 positions that are

currently considered inherently governmental and therefore cannot be

competed. According to Army officials, OSD is currently examining

whether relevant civilian positions are consistently and properly classified

as either a commercial activity or an inherently government function. The

Army expects that this effort will result in 14,000 positions being

reclassified as commercial activities and therefore becoming eligible to be

competed. However, there is currently no data available to support this

assumption.

The majority of the civilian cuts allocated to the Army Materiel Command

have not been specifically identified. The Command has identified specific

plans for about 3,200 of its 8,500 civilian cuts. For example, the Command

plans to eliminate the School of Engineering and Logistics at Red River

Page 25 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix II 

Army Plan to Achieve QDR Personnel Cuts

Army Depot, Texas, and reduce staff oversight of installation management

commandwide. The Command does not presently have specific plans for

the remaining 5,300 reductions. According to Command officials, the

remaining reductions are not scheduled to occur until after fiscal

year 2000, which should allow the Command time to develop plans to

achieve these cuts.

As part of the civilian cuts, the Army plans to cut 2,200 military

technicians—2,000 in the National Guard and 200 in the Army Reserve.

However, the cuts in the Army National Guard may not occur. Congress

sets annual end strengths for dual-status military technicians, which would

have to be reduced from current levels to accommodate the planned cuts.

Alternatively, 10 U.S.C. 10216 states that DOD must document reductions in

force structure if it budgets for a lower number of dual-status military

technicians than the authorized level. Army National Guard officials stated

that they do not plan to reduce force structure as part of the QDR, so they

do not intend to reduce the number of military technicians. The Army is

currently working to resolve this issue. On the other hand, the Army

Reserve plans to reduce force structure to eliminate its military

technicians.

Page 26 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix III 

Air Force Plan to Achieve QDR Personnel

Cuts

The QDR directed that the Air Force cut 26,900 active, 700 reserve, and

18,300 civilian personnel. These cuts represent a reduction of 7 percent for

the active military, 0.4 percent for the reserves, and 11 percent for the

civilian personnel end strengths projected for fiscal year 2003 before the

QDR. OSD estimated that these cuts would reduce personnel costs by about

$790 million by fiscal year 2003. However, the Air Force did not program

all of the QDR cuts in the fiscal year 1999 FYDP because (1) it decreased its

estimate of the number of military and civilian positions that can be

eliminated through outsourcing, (2) OSD deferred most of the Air Force’s

plan to restructure its combat forces because it was not executable by

fiscal year 2003, and (3) the Air Force decided not to cut reserve

personnel. Therefore, the Air Force’s fiscal year 1999-2003 budget only

accounts for about $600 million, or 76 percent, of the savings it planned to

achieve through the personnel cuts. Furthermore, the actual personnel

cuts could be significantly lower than the amount programmed because of

optimistic assumptions that the Air Force made regarding the potential for

outsourcing.

Air Force Has Not

Programmed All

Active Military QDR

Cuts

The Air Force has not included about 5,600 of the 26,900 active military

cuts directed by the QDR in the fiscal year 1999 FYDP because (1) it found

problems with the outsourcing estimates it had used in May 1997 as input

for the QDR cuts and (2) OSD deferred the majority of Air Force plans to

restructure some fighter and bomber squadrons. These actions lowered

the planned savings by about $156 million. Table III.1 shows the specific

initiatives the Air Force plans to implement the QDR cuts, the differences

between the May 1997 QDR plan and the fiscal year 1999 FYDP, and the

estimated impact of the differences on savings.

Page 27 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix III 

Air Force Plan to Achieve QDR Personnel

Cuts

Table III.1: Air Force May 1997 and

Fiscal Year 1999 FYDP Plans for

Reducing Active Military Personnel

Dollars in millions

Initiative

Cuts

based on

May 1997

QDR plan

Cuts based

on fiscal year

1999 FYDP Change

Estimated

impact on

savingsa

Outsourcing 25,400 22,100 (3,300) ($41)

Restructuring combat forces 4,800 1,400 (3,400) (170)

Streamlining headquarters 800 0 (800) (40)

Implementing other OSD

changes to active personnel

0 2,300 2,300 115

Reinvestingb (4,100) (4,500) 400 (20)

Total 26,900 21,300 (5,600) ($156)

aEstimates are based on an average active military salary of $50,000 per year and a 25-percent

savings from outsourcing, which were used by OSD to estimate savings from personnel cuts.

bThe Air Force plans to increase the number of personnel assigned to some missions to eliminate

existing shortfalls and respond to new missions.

Source: Our analysis of Air Force data.

Before the QDR, the Air Force began a study, known as Jump Start, to

examine the potential to outsource military and civilian positions in

commercial activities. In March 1997, we reported that this initiative

should enable the Air Force to reduce the size of the active force.1

Although Jump Start was not complete in May 1997 when the QDR report

was issued, the Air Force had developed preliminary estimates of the

number of active and civilian personnel that could be reduced through

outsourcing and used these estimates, along with other ongoing Air Force

outsourcing initiatives, to develop its QDR proposal to reduce active

personnel. The Air Force’s Jump Start analysis was fairly detailed.

Specifically, the Air Force analyzed its commercial activities by major

function and units and obtained input from both functional specialists and

major commands that would be affected. However, after the QDR was

released, the Air Force found that it had double counted—or overstated

the potential to reduce—about 3,300 military positions in Jump Start. The

Air Force corrected this error in its fiscal year 1999 budget. As a result, the

fiscal year 1999 FYDP assumes that 3,300 fewer active military positions will

be eliminated through outsourcing by 2003 than the amount assumed in

the Air Force’s May 1997 QDR plan.

1

Force Structure: Potential Exists to Further Reduce Active Air Force Personnel (GAO/NSIAD-97-78,

Mar. 28, 1997).

Page 28 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix III 

Air Force Plan to Achieve QDR Personnel

Cuts

The Air Force’s May 1997 QDR plan also included several initiatives to

restructure some combat forces that would have eliminated about 4,800

active military positions. In May 1996, we reported that the Air Force could

consolidate its fighter squadrons and maintain the same number of aircraft

but carry out its missions with fewer active duty personnel.2

 We developed

options that could eliminate between two and seven squadrons. However,

the fiscal year 1999 FYDP assumes that only about 1,400 of these positions

will be eliminated. During the QDR, the Air Force developed a plan to

increase the size of some active fighter squadrons from 18 to 24 aircraft

and transfer 1 active fighter wing to the reserves. The Air Force also

proposed to increase the size of some bomber squadrons from 12 to 18

aircraft. However, OSD deferred much of the fighter restructuring and the

entire bomber consolidation plans because it determined they were not

executable by fiscal year 2003. OSD was concerned that the restructuring

plan could be construed by Congress as violating its guidance to refrain

from any planning for future base closures. In preparing the fiscal year

1999 budget, OSD cut the active force by about 2,300 through other

initiatives, which offset some of the planned force structure reductions.

Air Force No Longer

Plans to Cut Reserves

The QDR report stated the Air Force reserve component would be reduced

by 700 personnel. This decision was based on an Air Force plan to cut 700

civil engineering positions in the reserves. According to Air Force officials,

these positions will be eliminated because they have no wartime mission.

However, the Air Force has subsequently decided to increase the reserve

end strength to cover an existing shortage in security police units. Thus,

the Air Force will not realize an estimated $5 million in savings.3

Fiscal Year 1999

FYDP Will Not Include

All QDR Civilian Cuts

The Air Force planned to achieve all but 100 of its 18,300 civilian cuts

through outsourcing. However, the fiscal year 1999 FYDP does not include

2,300 of the civilian cuts mandated by the QDR because the Air Force has

revised its estimate of the number of civilians that can be outsourced.

After the QDR was released, the Air Force found that it had double

counted—or overstated the potential to reduce—about 2,300 civilian

2

Air Force Aircraft: Consolidating Fighter Squadrons Could Reduce Costs (GAO/NSIAD-96-82, May 6,

1996).

3

This estimate was based on an average reserve salary of $7,000 per year, which was used by OSD to

estimate savings from personnel cuts.

Page 29 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix III 

Air Force Plan to Achieve QDR Personnel

Cuts

positions in Jump Start. Thus, the Air Force’s planned savings was reduced

by an estimated $29 million.4

Air Force Could Have

Difficulty Achieving

Cuts Included in the

FYDP

The Air Force’s difficulty in implementing QDR cuts may be compounded

because of optimistic assumptions it made in calculating the active

military and civilian outsourcing cuts included in the fiscal year 1999 FYDP.

Our analysis of the Air Force’s outsourcing estimates shows that the Air

Force may have a difficult time achieving as many as 3,000 military and

8,600 civilian cuts included in the FYDP. Examples of the problems we

identified are as follows:

• The Air Force found an additional 700 Jump Start positions that are

included in the fiscal year 1999 FYDP but had already been included in the

fiscal year 1998 FYDP, and therefore, cannot be used to meet QDR cuts.

• The fiscal year 1999 FYDP includes 1,200 administrative positions from the

Jump Start study that Air Force leaders determined are not good

candidates for outsourcing because they are split between many different

units and locations, thereby making it difficult to identify more economical

ways of accomplishing the mission.

• The Air Force may have overstated 5,700 civilian cuts in Jump Start

because it assumed that all the military positions being eliminated would

be contracted out. However, Air Force historical experience with

public-private competitions under the A-76 process shows that 40 percent

of these positions would remain in house with civilian employees.

• An Air Force outsourcing initiative that was separate from Jump Start but

was included in the fiscal year 1999 FYDP overstated civilian cuts by about

1,200 positions. Specifically, the Air Force has targeted selected functions

at 4 bases with about 3,000 positions—2,000 military and 1,000

civilians—to outsource. However, the Air Force did not base its personnel

cuts on its historical experience but assumed that all of these positions

would be replaced by contractor personnel. On the basis of the Air Force’s

past experience with cost comparison studies, we estimate that about

1,200 of these positions would remain in house with civilian employees.

Air Force officials agree that these errors and assumptions will make it

more challenging to achieve outsourcing estimates included in the fiscal

year 1999 FYDP. The officials stated that they are continuing to work

closely with the major commands to refine their estimates.

4

This estimate was based on an average civilian salary of $50,000 per year and a 25-percent savings

from outsourcing, which were used by OSD to estimate savings from personnel cuts.

Page 30 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix IV 

Navy Plan to Achieve QDR Personnel Cuts

The QDR report recommends that the Navy reduce 18,000 active military,

4,100 reserves, and 8,400 civilian personnel. This reduction represents

about a 4.5-percent cut of the active, reserve, and civilian personnel end

strengths projected for fiscal year 2003 before the QDR. The majority of the

active and reserve cuts result from force structure reductions. The Navy

plans to achieve the majority of the active military cuts in fiscal year 1999.

The civilian cuts depend primarily on the results of reengineering studies

and projected decreases in workload. The QDR cuts do not represent all the

potential personnel reductions in the Navy by fiscal year 2003 because the

Navy’s fiscal year 1999 budget projects savings of $2.7 billion by fiscal

year 2003 from competing 10,000 military and 75,500 civilian positions. The

Navy’s plan for achieving the QDR personnel cuts is summarized in 

table IV.1.

Table IV.1: Navy Plan to Achieve QDR

Reductions (fiscal years 1999-2003) Initiative Active Reserve Civilian

Reduce force structure 11,000 2,200 50

Reduce intermediate maintenance 1,400 250 250

Outsource 1,300 50 400

Streamline headquarters 950 0 300

Reduce individuals accounta 800 0 0

Reengineer Naval Facilities Engineering

Command

0 0 3,600b

Decrease in working capital fund workload 0 0 3,000

Other 2,550 1,600 800

Total 18,000 4,100 8,400

aThis account includes transients, patients, prisoners, and students. The reduction is directly

related to a smaller active military force.

bThis amount includes about 800 positions to be cut through outsourcing.

Source: Navy.

Page 31 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix IV 

Navy Plan to Achieve QDR Personnel Cuts

Most Active Military

Cuts Result From

Reducing Force

Structure

Approximately 11,000, or 61 percent, of the active cuts are associated with

force structure cuts called for in the QDR, as shown in table IV.2.

Table IV.2: Active Navy Military

Personnel Cuts from QDR Force

Structure Reductions (fiscal years

1999-2003)

Force structure change Positions

Deactivate 15 surface combatants 5,100

Deactivate 5 auxiliary ships and reduce the

crew size on 7 other auxiliary ships

2,000

Deactivate 2 submarines and 1 tender 1,600

Deactivate 2 amphibious ships 600

Deactivate 2 helicopter squadrons 400

Reduce F-14 squadron size 400

Other 900

Total 11,000

Source: Department of the Navy.

The Navy plans to decrease the number of surface combatants from the

current level of 128 to 116 by the end of fiscal year 2003. Navy officials said

that newer ships entering the fleet will be more capable than those being

deactivated. This increased capability will enable the Navy to provide

forward presence and comply with other aspects of the national military

strategy using fewer ships.

The Navy also plans to cut about 1,500 positions by deactivating five

auxiliary oiler ships staffed by active personnel and replacing them with

four ships that will be reactivated and staffed by civilian personnel

assigned to the Military Sealift Command. According to Navy officials, the

four ships that will be reactivated will be more economical primarily

because they require smaller crews. The Military Sealift Command

operates its ships with smaller crews because it hires skilled mariners,

whereas Navy ships often rely heavily on recruits that must be trained to

replace more skilled sailors. In addition, the Navy plans to cut about 500

positions by reducing the crew size on eight multiproduct auxiliary ships.1

1

A multiproduct auxiliary ship can transfer munitions, provisions, freight, food, and other consumables

to combatant ships while steaming along side at a distance from 80 to 300 feet.

Page 32 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix IV 

Navy Plan to Achieve QDR Personnel Cuts

We had previously reported that the Navy could transfer these ships to the

Military Sealift Command and save about $122.5 million.2

 The Navy

determined that these ships should continue to be staffed with smaller

military crews because the ships can maintain battle group speeds and

operate within battle group formations.

The Navy plans to eliminate about 300 positions by decommissioning two

attack submarines. The QDR states that this force reduction was based on

changing post-Cold War requirements. In addition, the Navy plans to

eliminate about 1,300 billets by decommissioning one submarine tender.

According to a Navy official, this decision was made because submarine

tenders are more expensive to operate than shore-based maintenance

activities and the Navy is willing to service its submarine fleet with two

tenders—one each in the Atlantic and Pacific Fleets.

The Navy plans to deactivate two amphibious ships and cut about 600

positions. According to Navy officials, this cut will leave the Navy with the

36 amphibious ships required to satisfy the Navy’s long-term goal for 12

amphibious readiness groups. According to the Navy, this goal will allow it

to meet wartime requirements and sustain peacetime operations.

The QDR assumes the Navy will cut about 400 positions by deactivating two

helicopter supply squadrons and relying on private contractors to provide

this service. However, the Navy is reconsidering whether this option is

viable for the helicopter detachment based in Guam.

The QDR concluded that the Navy would maintain 10 active carrier-based

airwings, but the Navy plans to reduce the size of F-14 squadrons from 14

to 10 aircraft, which will eliminate 40 aircraft and about 400 positions. A

Navy official stated this action was taken because F-14s are reaching their

fatigue life expectancy and are expensive to maintain. The Navy plans to

fund these squadrons as if they had 12 aircraft each, which will allow the

squadrons to satisfy mission requirements as well as maintain qualified

pilots to transition to the F/A-18F. However, the Navy does plan to return

the size of the fighter squadrons back to 14 aircraft when the F-14s are

replaced by F/A-18E/Fs during fiscal years 2001-08.

The Navy also plans to cut about 6,500 active military positions in

infrastructure-related activities. Some of the infrastructure cuts are based

on the projected force structure cuts. For example, the Navy plans to cut

2

Navy Ships: Turning Over Auxiliary Ship Operations to the Military Sealift Command Could Save

Millions (GAO/NSIAD-97-185, Aug. 8, 1997).

Page 33 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix IV 

Navy Plan to Achieve QDR Personnel Cuts

about 1,400 intermediate maintenance positions because a smaller force

will decrease workload. The Navy also plans to reduce Atlantic and Pacific

Fleet headquarters by 20 percent, or about 950 positions—490 in the

Atlantic Fleet and 460 in the Pacific Fleet. The Navy has identified the

specific positions within each fleet to eliminate.

Finally, the Navy planned to eliminate about 1,300 positions by

outsourcing selected functions in the Atlantic and Pacific Fleets. Fleet

officials stated that they now plan to eliminate only about 660 military

positions through outsourcing because the original plan included positions

that are still needed due to sea-to-shore rotation requirements.

Naval Reserve Cuts

Are Split Between

Force Structure and

Infrastructure

Activities

The Navy plans to achieve about 2,200, or 52 percent, of its 4,100 reserve

cuts by reducing force structure. It plans to achieve the remaining 1,900

cuts by reducing positions in various reserve support activities and

eliminating funded positions it has been unable to fill. The Navy plans to

eliminate nearly one-half of the positions in 1999 and the remainder

between 2000 and 2003.

The largest reserve force structure reduction results from the Navy’s

decision to reduce the number of reserve P-3 squadrons from eight to

seven and the number of aircraft per squadron from eight to six.3

 The

Navy’s plan will eliminate 22 aircraft and about 840 positions. According to

a Navy official, it is difficult to meet overseas deployment requirements

with reserve personnel, so the Navy decided it needed more active

personnel to satisfy this requirement.

The Navy also plans to eliminate about 240 positions by decommissioning

four Naval Reserve frigates, two in fiscal year 2002 and two in fiscal

year 2003. An additional 460 positions will be eliminated by deactivating

the helicopter squadrons that support these frigates. However, a Navy

official stated that the reserves may keep some of these frigates for an

increased role in drug interdiction missions, which could reduce the

number of positions originally scheduled to be cut. The Navy plans to

revisit this decision during the fiscal year 2000 budget process.

The Navy plans to reduce the size of helicopter minesweeper squadrons

from 12 to 8 aircraft, which will eliminate about 115 positions. The

minesweeping squadrons comprise active and reserve personnel and

3

These aircraft conduct antisurface, antisubmarine, surveillance, and mining operations for naval task

groups at sea.

Page 34 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix IV 

Navy Plan to Achieve QDR Personnel Cuts

aircraft. Navy officials stated that the Navy decided to reduce the number

of reserve aircraft because the reserve component could not adequately

staff and maintain the squadrons to satisfy the 72-hour deployment

requirement. The Navy also plans to deactivate one coastal minesweeper

that supports the U. S. Southern Command, which will eliminate about 115

positions.

The final reserve force structure change involves a decision to replace an

F-14 squadron of 14 aircraft with an F-18A squadron of 12 aircraft. Navy

officials noted that the F-18As are less expensive to operate and maintain

than the F-14 aircraft and that the normal reserve squadron size is 12

aircraft. This action will cut about 115 positions.

The Navy also plans to eliminate about 1,900 positions in various reserve

support activities. Some of these cuts result from the force structure

changes. For example, the Navy plans to cut about 250 maintenance

positions because the reserves will have fewer aircraft to maintain.

Another 185 positions will be eliminated based on the Navy’s decision to

deactivate a submarine tender from the active fleet. Additional positions

will be eliminated because the Navy has not been able to fill them. For

example, the Seabees have not been able to fill underwater construction

positions with qualified personnel primarily because they do not have the

money to pay for the 6-month training course that is required for sailors to

qualify for the program. The Seabees have also not been able to recruit

sailors coming off active duty who possess the required skills and training.

In addition, although the battalions have a wartime role, the Navy decided

that it was not feasible to fund battalion positions that were not being

filled. Together with reductions from Construction Battalion headquarters,

the Navy plans to cut about 600 battalion positions. Likewise, the Navy

plans to cut about 250 medical and 190 intelligence positions because they

remained unfilled.

Civilian Cuts Are

Based on

Reengineering

Initiatives and

Projected Decreases

in Workload

The Navy assumed that it could cut about 3,600 positions from the Naval

Facilities Engineering Command through various management

efficiencies. The Navy plans to achieve one-third of the 2,500 Public Work

Center cuts through productivity improvements, one-third through

workload reductions, and one-third through outsourcing. The Navy plans

to privatize utilities and streamline internal processes, such as acquisition

reform, to achieve the productivity cuts. For the workload reductions, the

Navy assumed that a 20-percent decline in the military construction

program (including base closures) between fiscal year 1998 and 2003

Page 35 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix IV 

Navy Plan to Achieve QDR Personnel Cuts

would equate to a 20-percent reduction in personnel. Finally, the

outsourcing cuts are based on Navy plans to study about 4,200 positions.

The Navy has studies underway for approximately 1,100 of these positions.

The Navy plans to study the remaining 3,100 positions in fiscal years 1999

through 2001; however, it has not yet identified the specific functions to be

studied.

The Navy plans to eliminate about 1,100 positions by reengineering the

Naval Facilities Engineering Command’s field divisions. The Navy has

started a study to determine how it can reduce the workforce by

30 percent through restructuring and streamlining operations and improve

services to Navy customers. The study is scheduled to be completed in

July 1998, and the reductions are scheduled to be implemented by fiscal

year 2000.

The Navy also assumes that it will be able to cut about 3,000 positions

funded through the working capital fund based on projected decreases in

workload. However, the Navy was not able to provide any documentation

to support these reductions.

Other Outsourcing

Studies Are Planned

The Navy’s fiscal year 1999 budget projects savings of $2.5 billion by fiscal

year 2003 from competing 80,500 positions—10,000 military and 70,500

civilian positions—over the next 5 years. However, the Navy did not

program any potential military or civilian personnel cuts based on its

outsourcing program. If the Navy studies all 80,500 positions, about 6,500

military and 35,000 civilian positions could be cut.4

 Alternatively, if the

Navy does not succeed in outsourcing these positions, it will have to

reduce the amount of its planned savings in subsequent budgets. To date,

the Navy has announced studies covering about 18,500 of these positions,

but it does not have the remaining 62,000 positions identified by function

or location.

4

DOD policy is that all military positions being competed are considered non-essential and will be

replaced by either a civilian employee or contractor. The Navy assumes that 6,500 of the active

positions could be cut but that 3,500 will remain military to support sea-to-shore rotation. The civilian

cuts are based on Navy experience that indicates 50 percent of the functions studied are won by

contractors.

Page 36 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix V 

Marine Corps Plan to Achieve QDR

Personnel Cuts

The QDR directed that the Marine Corps cut 1,800 active, 4,200 reserve, and

400 civilian personnel. These cuts represent a reduction of 1 percent for

the active military, 10 percent for the reserves, and 2 percent for the

civilian personnel end strengths projected for fiscal year 2003 before the

QDR. The Marine Corps did not have a specific plan for making the cuts at

the time the QDR was announced. However, during the summer and fall of

1997, the Marine Corps reviewed its activities to identify ways to reduce

personnel to QDR-directed levels as well as shift more resources to its

highest priority war-fighting units. The Marine Corps plans to eliminate

3,000 reserve positions, 1,200 less than directed in the QDR. Marine Corps

officials stated the revised plan will achieve approximately the same level

of savings implied in the QDR-proposed reduction because more positions

for reservists on full-time active duty are being eliminated.

Most Active Cuts

Involve a

Reorganization of

Security Forces

The Marine Corps plans to reduce the size of the Marine Security Force

Battalion and eliminate headquarters administrative and support positions

to achieve its active military cuts. The Marine Security Force Battalion has

historically provided security for some Navy installations and some

deployed Navy ships. These requirements have been reduced because the

number of nuclear weapons storage and transfer sites are decreasing,

nuclear weapons are no longer deployed on ships, and most Navy bases

are open to the public. The Navy has agreed that the Marine Corps could

reduce the size of the security battalion, eliminating about 1,200, or

40 percent, of its 3,000 positions. About 70 percent of these positions were

associated with missions that were no longer valid. The remaining

30 percent involved proposals to meet the same level of support through

more efficient use of personnel. The Marine Corps plans to satisfy the

Navy’s security needs by increasing the number of special anti-terrorist

platoons from 6 to 11, providing anti-terrorist training to the Navy

personnel on Navy bases and stations as needed, and continuing to

provide security guards for selected Navy activities. The Marine Corps also

plans to eliminate about 600 administrative positions by improving

efficiency and using new technology, although the positions have not been

specifically identified.

The Marine Corps developed its plan to meet active duty cuts outlined in

the QDR as a part of a broader effort to shift resources to its highest priority

operational requirements. In addition to developing a plan to achieve its

QDR cuts, the Marine Corps also identified about 4,000 positions that could

be eliminated and transferred to operational units to achieve a 90-percent

staffing level in these units. For example, the Marine Corps plans to

Page 37 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix V 

Marine Corps Plan to Achieve QDR

Personnel Cuts

eliminate or reduce administrative and support positions, such as

audio-visual and disbursing. The Marine Corps also plans to reduce or

eliminate some weapon systems. For example, the Marine Corps plans to

reduce about 850 positions related to cuts in certain infantry and missile

systems, including some anti-tank missile positions and all 383 HAWK

missile firing positions. A senior Marine Corps official said that, although

these systems are valuable, they are not the most critical and that the

resources can be better used in other ways. For example, despite the

capability of the HAWK system, its lift requirements make movement into

theater difficult. The Marine Corps plans to rely on Navy aircraft and Army

Patriot missiles to replace HAWK capabilities until a future anti-ballistic

missile defense is deployed.

Reserve Cuts Are

Fewer Than Directed

by the QDR

The QDR directed that the Marine Corps reduce its reserve component by

4,200. According to Marine Corps officials, the Commandant, after an

extensive review of the reserve force structure, decided to cut only 3,000

positions. Marine Corps officials noted that, although fewer positions are

being cut than the QDR directed, approximately the same level of savings

will be achieved because the Marine Corps original estimates were based

on average costs for drilling reservists who are generally paid for weekend

duty, whereas the Marine Corps’ revised plan cuts more full-time reservists

who have higher salaries that are comparable to active duty personnel.1

The Commandant chartered a reserve force structure review group to

make recommendations on restructuring the Marine Corps Reserve, within

QDR guidelines, to complement the active component in meeting the

requirements of the war-fighting commanders in chief. The group focused

on identifying forces not critical to meeting war-fighting requirements and

units at sites that are underutilized, not cost-effective, or in poor condition

and eliminating redundant or unnecessary headquarters overhead. An

additional consideration was to minimize the impact on individual

personnel whose positions will be eliminated. This consideration meant

closing units in areas where there are other units within the geographical

area so that personnel displaced by closings can fill positions in other

local units.

On the basis of the work of the force structure review group, the

Commandant decided to eliminate 3,000 reserve positions: 1,434 positions

from drilling units, 695 individual mobilization augmentees, and 553

1

According to Marine Corps officials, OSD instructed the Marine Corps to calculate savings by equating

four reserve positions to one active duty position. However, full-time reservists, as opposed to

reservists who drill on weekends, are paid the same as active duty personnel. Thus, eliminating one

full-time position would save as much as eliminating four drilling unit positions.

Page 38 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix V 

Marine Corps Plan to Achieve QDR

Personnel Cuts

positions for reservists on active duty. The Marine Corps also plans to

reduce the number of new recruits by 318 positions. Full-time reserve

personnel represent the highest cost category. By eliminating more of

these positions than it originally estimated, the Marine Corps expects to

achieve approximately the same level of savings and lose fewer personnel

than directed in the QDR.

To achieve the reductions in drilling units, the Marine Corps plans to

deactivate units and realign personnel and organizations at various sites

throughout the United States. The Marine Corps plans to deactivate one

theater missile defense (HAWK) unit and reorganize another, which will

eliminate about 475 positions. This action corresponds to the Marine

Corps’ decision to eliminate HAWK units in the active force. The Marine

Corps also plans to deactivate 10 other units, which will eliminate about

740 positions. Some of these units had difficulty in recruiting and

sustaining their occupational specialties and were already understaffed,

whereas others had no wartime mission. Finally, other cuts are based on

plans to restructure some units so that the Marine Corps can accomplish

its missions more efficiently without undermining operational

effectiveness. For example, the Marine Corps plans to cut about 230

positions by deactivating one Marine Wing Support Squadron and

transferring some of its functions to other squadrons.

The Marine Corps plans to reduce 695 individual mobilization augmentee

positions in fiscal years 1998 and 1999 through attrition. The individual

mobilization augmentees currently serve in many capacities, including

headquarters and support activities. The Marine Corps allocated the cuts

to each functional area, such as communications and information.

However, it is currently conducting a review to identify the specific

positions within each area to eliminate.

Full-time reserve reductions will be taken by units spread throughout the

Marine Corps Reserve, including small cuts in some operating units. The

largest number of reductions—175—will come from the reserve air wing,

which had 1,080 full-time reserve positions. The Marine Corps plans to

achieve most of these reductions by reducing air wing headquarters staff

(77 positions) and eliminating HAWK units (34 positions). Headquarters

and support units will be cut by higher percentages than other units. For

example, Marine Corps headquarters will eliminate 49, or 37 percent, of its

133 active reserve positions, and the Marine Corps Combat Development

Command will be reduced by 15, or 75 percent, of its 20 active reserve

positions. In addition, the Marine Corps plans to consolidate reserve

Page 39 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix V 

Marine Corps Plan to Achieve QDR

Personnel Cuts

administrative activities in one location, which will eliminate about 155

active reserve positions.

Civilian Cuts Have

Not Been Identified

To achieve the civilian cuts, the Marine Corps plans to eliminate 63

positions, or 10 percent, of the civilian staff at its headquarters and other

activities in the Washington, D.C., area. The remaining 237 positions to be

eliminated will be prorated among other installations worldwide. The

Marine Corps has not identified the actual positions to be cut. Over the

next 5 years, the Marine Corps will provide funding for fewer positions,

and the local commanders will have to decide which positions to cut.

Because of the long lead time, Marine Corps officials believe the cuts can

be achieved through normal attrition and targeted incentives and without

reductions in force.

Page 40 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix VI 

Comments From the Department of Defense

Page 41 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix VI 

Comments From the Department of Defense

Page 42 GAO/NSIAD-98-100 Quadrennial Defense Review
Appendix VII 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Janet St. Laurent

Mike Kennedy

Ron Leporati

Margaret Morgan

Lisa Quinn

(701116) Page 43 GAO/NSIAD-98-100 Quadrennial Defense Review
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