United States General Accounting Office

GAO Testimony

Before the Subcommittee on Military Personnel,

Committee on National Security, House of Representatives

For Release at

2:00 pm, EST

Tuesday,

April 8, 1997

GENERAL AND FLAG

OFFICERS

DOD’s Draft Study Needs

Adjustments

Statement of Mark E. Gebicke, Director, Military

Operations and Capabilities Issues, National Security and

International Affairs Division

GAO/T-NSIAD-97-122

Mr. Chairman and Members of the Subcommittee:

I am pleased to provide the preliminary results of our review of DOD’s draft

general and flag officer requirements report. I will discuss the process DOD

and the services used to do their respective studies and areas where we

believe the resulting draft DOD report and recommendations could be

improved. DOD’s draft report asks for more new active and reserve

component general and flag officer positions above their current

authorizations. I should stress the recommendations are preliminary and

do not represent DOD’s official position at this time.

Most of my remarks will deal with the results of the study of active

component requirements. DOD has delayed release of its draft report until

sometime after the release of the Quadrennial Defense Review (QDR)

report, which is scheduled for May 15, 1997. We hope DOD views the delay

as an opportunity to adjust its draft report to address our concerns. With

that introduction, let me provide a brief overview of those concerns and

then go back and discuss each of them in a little more detail.

Results in Brief Variations of two job evaluation methodologies were readily available and

were used on the 1997 general and flag officer studies. Both

methodologies are based on subjective judgments about positions

reviewed and allow management to subjectively override the results. To

save time, the Office of the Secretary of Defense (OSD) permitted each of

the services and the Joint Staff to independently and individually study its

own general and flag officer requirements with the methodology they

selected. Although using one methodology would have been a more

consistent and comparable approach than using different methodologies,

the individual study results would not necessarily have been much

different with a single methodology, due to the inherent subjectivity

involved. Accordingly, we do not believe that much would be gained by

redoing the services’ and Joint Staff’s studies. We think that some

adjustments to DOD’s draft report are in order, however.

We have three concerns about DOD’s draft report recommendations. We

are concerned that (1) actual requirements are unknown since the service

secretaries adjusted their respective service study recommendations on

general and flag officer requirements without explanation, (2) 35 general

and flag officer requirements were counted twice when OSD developed its

draft consolidated recommendations, and (3) the service studies did not

Page 1 GAO/T-NSIAD-97-122
fully consider the potential to convert military positions to civilian

positions that may not be military-essential.

If Congress provided the additional general and flag officer positions that

DOD’s draft recommendations call for, the estimated increase in cost would

be about $1.2 million annually for compensation paid to the new general or

flag officers and assistants, a relatively small amount for the one-time

purchase of new office furniture and other items, and $713,000 annually

for the 12 new general and flag officers provided to the Marine Corps in

1996. Our estimate is conservative because DOD provided no information

about nine new active component general or flag officer positions and

incomplete information about new reserve positions. In its draft report,

DOD committed to eliminating as many colonels’/Navy captains’ positions

as it is creating for brigadier generals/rear admirals (lower half), although

there is no mechanism that would cause that substitution to occur

automatically.

Background General and flag officer authorizations had remained constant from fiscal

year 1981 to 1991, even as troop strength has changed. In 1981, with the

defense build-up underway, general and flag officer authorizations

dropped by 46 to 1,073. They remained at 1,073 for a decade even as the

build-up continued and peaked, and as the drawdown began. In the

National Defense Authorization Act for Fiscal Year 1991, Congress

required DOD to reduce its general and flag officer positions in two

increments, first to 1,030 by the end of fiscal year 1994 and secondly to 858

by the beginning of fiscal year 1995. That number was subsequently

changed to 865. General and flag officer authorizations are set forth in title

10 of the U.S. Code.

In fiscal year 1996, a contractor studied Marine Corps general officer

requirements and concluded that the Marine Corps had requirements for

between 104 and 118 general officers (compared to the 68 authorized for

the Marine Corps at that time). Using the study as justification, the Marine

Corps requested 14 new general officer authorizations and Congress

granted 12 (in the National Defense Authorization Act for Fiscal Year

1997), raising the DOD-wide ceiling to 877 general and flag officers.

Congress has actually authorized more than 877 for fiscal year 1997. First,

Congress has added 12 general and flag officer positions above the 877 and

specified that they must be used for joint duty. These positions are

controlled by the Chairman of the Joint Chiefs of Staff for allocation to the

Page 2 GAO/T-NSIAD-97-122
services and are commonly referred to as the “Chairman’s 12.” Also,

Congress has permitted the services to “frock”—elevate the person in rank

but not immediately provide the accompanying compensation

increase—up to 75 colonels or Navy captains to the rank of brigadier

general or rear admiral (lower half). Thus, in total, the title 10 active duty

authorization, Chairman’s 12, and current frocking ceiling together provide

for 964 general and flag officer positions. This total will drop to 912 by

fiscal year 1999 because the Chairman’s 12 is a temporary authority that

expires on October 1, 1998, and the frocking ceiling is scheduled to drop

by 20 to 55 on October 1, 1997, and by another 20 to 35 on October 1, 1998.

I would like to make one other point about current authorizations. The

joint community does not need congressional approval to change the

number of general and flag officers it needs, it merely levies its

requirements on the services. To help the services cope with the mandated

reduction in general and flag officers in the early 1990s, the Chairman of

the Joint Chiefs of Staff reduced joint community general and flag officer

requirements from 280 to 218. However, in 1996, the joint community

added 11 new general and flag officer positions, and in 1997, the joint

community added another 15, for a total of 244. Since 1996, only the

Marine Corps has been granted any new general and flag officer

authorizations, and of the 12 positions authorized, the Marine Corps plans

to commit only 4, or one-third, to joint activities. Thus, of the 26 new joint

general and flag officers, the Army, Navy, and Air Force will have to

provide 22 from existing authorizations.

The Services Used

Various Approaches

to Study General and

Flag Officer

Requirements

Since the mid-1980s, a number of studies of general and flag officer

requirements have been done DOD-wide, for a specific service, or for the

joint community. These studies have been done using one of two job

evaluation methodologies.

The first methodology was developed by the Hay Group, Incorporated, and

is proprietary. This methodology is most commonly used for studies of

compensation practices in organizations, according to company literature.

The Hay methodology requires panels of officials from the organization

whose positions are being reviewed to score positions on the job factors

of “know-how,” “problem solving,” and “accountability.” The

methodology’s developers believe that these factors are the most

significant in distinguishing among jobs. Using the panel scores, positions

are ranked from most to least important. Hay Group officials told us that

Page 3 GAO/T-NSIAD-97-122
“natural cut points” usually become apparent and that these are the

thresholds between ranks of the positions evaluated.

The other methodology was developed by Kapos Associates, Incorporated.

The Kapos methodology groups positions into categories of positions with

similar responsibilities (in effect creating different definitions of a general

and flag officer for each group) and looks for up to 25 different attributes

of a general or flag officer in each position evaluated. These attributes

include the (1) rank of the official to whom the position reports,

(2) number of personnel and commands under the position, (3) inventories

controlled, and (4) duties involving representation before Congress.

To conduct its mandated study of general and flag officer requirements in

1997, DOD used a four-level study structure. The levels consisted of a

Working Committee based in OSD; a Steering Committee made up primarily

of the service personnel chiefs; an Executive Committee made up of senior

civilian leaders in DOD; and the Secretary of Defense, who was the final

approval authority. At DOD’s invitation, we attended meetings of the

Steering and Executive Committees as observers.

DOD’s approach to its study had six steps—five of which have been

completed. First, each service (including the joint community) did, or

contracted for, a study of requirements. The Air Force used a version of

the Hay methodology. The Joint Staff simply reported the number of joint

community requirements determined by the Hay Group in 1994 and 1996,

and supplemented that number by scoring additional positions on its own.

The Army used a version of the Kapos methodology to do its study. The

Navy contracted with Kapos in 1997 for its study. The Marine Corps

reported the results of a Kapos-conducted study of Marine Corps

requirements completed in 1996. Second, the service secretaries adjusted

the study results and forwarded recommendations to the Working

Committee. Third, the Working Committee compiled overall

recommendations and wrote a draft consolidated report. Fourth, the

Steering Committee accepted the draft report and forwarded it to the

Executive Committee. Fifth, the Executive Committee approved the draft

report and forwarded it to the Secretary of Defense. The process has

stopped at this point while DOD awaits the recommendations of the QDR.

DOD may adjust its recommendations for general and flag officer positions

in light of QDR recommendations and complete the sixth and final step of

approving and issuing the report at some time in the future.

Page 4 GAO/T-NSIAD-97-122
Job evaluation is an inherently subjective process, and the use of job

evaluation methodologies cannot overcome subjectivity. In our review of

the scholarly literature on job evaluation techniques, the theme of

subjectivity was repeated in a number ways. For example, the factors

selected for measurement are based on subjective judgment, and the

factors chosen can influence the results. The process of scoring the

positions is subjective, as is the overriding of the results by management.

Judgment comes into play throughout the process. As a result, while we

believe that a single methodology, consistently applied, would have been a

better approach than using different methodologies, we have no reason to

believe that the recommendations would have been much different.

Accordingly, we do not believe that the services and Joint Staff necessarily

need to redo their studies.

The Service

Secretaries Adjusted

Their Respective

Recommendations

Without Explanation

The service and joint community study results do not track to the

recommendations made by the service secretaries, and the discrepancies

are unexplained in DOD’s draft report. Overall, the service studies

concluded in the aggregate that 1,118 general and flag officers were

needed to meet service-specific and joint needs. However, the service

secretaries recommended only 995 general and flag officers be authorized,

a difference of 123.

The service secretaries respectively overrode their service’s study results

in developing their recommendations but did not explain the basis for the

adjustments. For example, Kapos Associates concluded that the Navy had

flag officer requirements of 328 (compared with the 220 currently

authorized1

) but the Secretary of the Navy only recommended 2492 flag

officers be approved. DOD’s draft report and other documents that we had

access to indicated that “pragmatic decisions” were made to reduce the

service studies’ recommendations because it would be difficult to

convince Congress that so many general and flag officers were needed.

The unexplained adjustments raise questions regarding the services’ actual

requirements.

Some Requirements

Were Counted Twice

The service secretaries and Chairman of the Joint Chiefs of Staff

developed their recommendations and provided them to the Working

Committee. Once the Working Committee had the five reports and

1

Section 526 of title 10 authorizes 216 flag officers for the Navy and the Navy has 4 of the Chairman’s

12.

2

The Navy recommended a title 10 ceiling of 240 plus frocking authority of 9.

Page 5 GAO/T-NSIAD-97-122
recommendations, it had to compile them into a single DOD report and set

of consolidated recommendations. However, the manner in which the

consolidated draft report handled the recommended new title 10 ceiling,

Chairman’s 12, and frocking, led to the double-counting of 35 positions.

First, the Working Committee accepted the service secretaries’ title 10

ceiling recommendations without modification, which in effect made them

the draft DOD recommendations on title 10 ceilings.

Second, the service studies, assuming the repeal of the Chairman’s 12,

created 12 new requirements. Their logic was that if the Chairman’s 12 was

repealed and the services still had to fill these joint positions, they had to

ask for more general and flag officer positions and did so by including

them in their recommended respective title 10 ceilings. However, DOD’s

draft proposed legislative changes did not recommend repeal of the

Chairman’s 12 at the time that the first recommendation on the title 10

ceiling would be adopted. Without concurrent repeal, the services would,

in effect, have increased their title 10 ceilings to account for the loss of the

Chairman’s 12, and the Chairman’s 12 would remain available until

expiration on October 1, 1998. To avoid double counting, either the

Chairman’s 12 would have to be repealed at the time title 10 authority is

increased, or the new ceilings would have to become effective on or after

October 1, 1998. We briefed the Working Committee on our observation

that 12 positions had been double counted. We were told that the count

was an oversight and DOD would recommend repeal of the Chairman’s 12

in the final proposed legislative change to avoid double counting. Because

DOD has not finalized its recommendations, we do not know whether the

repeal has been included.

Finally, the Army has handled the frocking ceiling differently from the

other services. Only the Army recommended that the DOD-wide frocking

ceiling be frozen at 75 to avoid the loss of 17 of its authorizations over the

next 2 years and developed its recommended title 10 ceiling with that in

mind. On the other hand, the other services made no recommendations on

frocking and would have permitted the DOD total to drop to 35 on schedule,

a loss of 23 frocking authorizations from the Navy, Air Force, and Marine

Corps. With the reduction in frocking ceilings in mind, the Air Force and

Navy (in 1997) and Marine Corps (in 1996) recommended increasing their

title 10 active component ceiling to counteract the loss. The Working

Committee had to reconcile the Army’s recommendation to maintain the

frocking ceiling at 75 with the other services’ willingness to let frocking

drop to 35 and make up the difference with higher title 10 ceilings. The

Page 6 GAO/T-NSIAD-97-122
Working Committee opted to recommend that frocking be maintained at

75 but did not adjust the Navy’s, Air Force’s, or Marine Corps’

recommended title 10 ceiling downward to account for the greater

frocking authority they would have under the recommendation. Therefore,

OSD’s frocking recommendation counts 23 positions twice because the

Navy, Air Force, and Marine Corps had recommended new title 10 ceilings

to account for the loss of 23 frocking authorizations, while OSD’s draft

recommendations would prevent the loss of the 23 frocking

authorizations, if accepted by Congress.

Table 1 displays current general and flag officer limits, the services’ study

results, service secretaries’ recommendations, and DOD’s

recommendations.

Table 1: Breakdown of General and Flag Officer Requirements Under Current and Proposed Levels

Service

Current title 10 ceiling

of 877 plus the

Chairman’s 12 and

current frocking limit

of 75

Results of the

services’ studies

Service secretaries’

recommendations

DOD’s draft

recommendations

Army 336 353 355 355

Navy 242 328 249 262

Air Force 299 319 308 314

Marine Corps 87 118 83 87

Total 964 1,118 995 1,018

Note: If all of OSD’s draft recommendations were adopted as currently written, DOD would

actually have 1,030 general and flag officers until October 1, 1998, due to double counting of the

Chairman’s 12, and 1,018 on and after that date.

The services also studied reserve component general and flag officer

requirements. DOD’s draft recommendations would increase reserve

component general and flag officers by 35 to 457, excluding those serving

as state adjutants general, assistant adjutants general, or serving in the

National Guard Bureau. Congress has exempted general officers serving in

those positions from the ceilings, allowing for another 178 general officers,

as of March 1997. We did not find evidence of double counting of reserve

requirements. It should be pointed out that frocking and other exemptions

available for active force management are not available in the reserves.

Page 7 GAO/T-NSIAD-97-122
Some Positions Could

Be Candidates for

Military-to-Civilian

Conversion

The services may be able to reduce their need for new general and flag

officer authorizations by converting some non military-essential positions

to civilian status and transferring the incumbents to military-essential jobs.

A number of positions that we examined may be candidates for

conversion. In 1996, we examined the possible military-to-civilian

conversion of officers in the ranks of colonel and Navy captain and below

and developed criteria to use for our evaluation.3

 Our criteria were closely

based on DOD Directive 1100.4, which provides the characteristics of

military-essential positions.

Using our criteria, we identified 12 general and flag officer positions for

conversion opportunities. For example, the position of the Army’s Director

of the Center for Military History is filled with a brigadier general. Using

our criteria, we believe that position may be a candidate for conversion.

The other services have similar positions but use civilians to fill them.

Also, the Army, Navy, Air Force, and Defense Finance and Accounting

Service together use seven general and flag officers ranked as high as

major general or rear admiral (upper half) in various financial

management positions, that are potential candidates for conversion based

on the criteria. We asked the services and Joint Staff why these positions

are military essential. The explanations ranged from military

regulations—but no laws—requiring the position be military to the

individual’s travelling to foreign countries periodically on official business.

But military regulations are not impediments to conversion because the

military issues its own regulations and can modify or repeal them.

Likewise, the need for foreign travel on official business is not an

impediment. Federal civilian employees and contractors routinely travel to

foreign destinations on official business.

The Army was the only service that identified positions for conversion.

The Army converted three positions in the acquisition area and one in base

operations at its Training and Doctrine Command. Other general and flag

officer positions in all the services and the joint community may also be

conversion candidates.

3

DOD Force Mix Issues: Converting Some Support Officer Positions to Civilian Status Could Save

Money (GAO/NSIAD-97-15, Oct. 23, 1996).

Page 8 GAO/T-NSIAD-97-122
DOD’s Draft

Recommendations

and Actions Already

Taken Would Cost

About $1.9 Million

We estimate that the annual cost increase will be about $1.2 million if the

Congress accepts all of DOD’s draft recommendations plus about $713,000

annually for the 12 new general officers already provided to the Marine

Corps. The annual cost includes (1) an increase in military compensation

for the new general or flag officers; (2) compensation for officer aides and

civilian assistants such as secretaries; and (3) entertainment (to which

some but not all general or flag officers are entitled). In addition, the joint

community would incur one-time costs for the purchase of office furniture

and other equipment. Our estimate is conservative because DOD provided

no information for nine new joint general and flag officer positions.

Our total cost estimate assumes that the services would reduce the

number of colonels’/Navy captains’ positions by the same number of

added general and flag officer positions, as DOD’s draft report said would

happen. If not, added costs could be much higher. For example, the

Marine Corps retained 12 colonel positions and deleted 6 first lieutenant’s,

5 captain’s, and 1 major’s positions to account for its 12 new general

officer positions in 1996. The Marine Corps will incur additional military

compensation costs of about $713,000 per year with 12 new general

officers over what it would have been with the 12 lower ranked officers.

As demonstrated by the Marine Corps example, the promised decrease in

colonels/Navy captains is not automatic. The numbers of colonels/Navy

captains are governed by limits in the Defense Officer Personnel

Management Act (P.L. 96-513, Dec. 12, 1980) and are related to the overall

size of the commissioned officer corps, not the number of general and flag

officers. Thus in the absence of a mechanism that would cause a

one-to-one substitution for existing colonels/Navy captains to occur

automatically, the services would have to take specific action to reduce

the colonel/Navy captain positions.

It should be noted that permitting a higher frocking ceiling, rather than

increasing title 10 ceilings, would not cost additional money because

frocked officers do not receive the pay of the higher grade until promoted.

Waiting for the QDR

Before Changing

General and Flag

Officer Authorizations

Is Prudent

The services’ force structure, roles and missions, deployment strategies,

and other matters are periodically reassessed and changed to meet

emerging threats and missions. For example, the bottom-up review

strategy has led to changes in the force structure that were projected, at

the time, to take up to 6 years to implement, although general and flag

officer authorizations did not change in response. More recently, Congress

required DOD to conduct the QDR and issue a report by May 15, 1997. The

Page 9 GAO/T-NSIAD-97-122
report is mandated to include (1) the threats examined in doing the QDR,

(2) the defense strategy and force structure needed to execute the

strategy, (3) the effect on the force structure of participation in peace

operations and operations other than war, (4) the anticipated roles of the

reserves, and (5) the appropriate ratio of combat-to-support forces and a

number of related issues. As with the bottom up review, the QDR may

recommend changes in roles and missions, force structure, and other

defense strategies. Such changes could result in a change in the numbers

or ranks of general or flag officers needed to lead military organizations.

Thus, we concur with DOD’s decision to wait until the QDR results are

known before submitting a final report on general and flag officer

requirements. This will allow DOD flexibility to adjust its draft

recommendations in light of QDR recommendations. It also provides DOD an

opportunity to address the areas of concern that we have raised. To that

end, we offer the following recommendations.

Recommendations Before the final report on general and flag officer requirements is sent to

the Congress, we recommend the Secretary of Defense modify the current

draft report to include

• an explanation of the criteria used by the service secretaries to modify the

results of the services’ studies, and a statement about whether the

numbers represent the actual requirements for general and flag officers,

• an adjustment to the consolidated draft recommendations to eliminate

double-counting,

• an evaluation of the potential to convert non military-essential general and

flag officer positions to civilian status, and

• an explanation of the mechanism to ensure that the number of

colonel’s/Navy captain’s positions are reduced by the same number of

added general and flag officers.

This concludes my statement and I would be pleased to answer your

questions.

(703177) Page 10 GAO/T-NSIAD-97-122
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