HUMAN CAPITAL

Critical Skills and 

Competency 

Assessments Should 

Help Guide DOD 

Civilian Workforce 

Decisions

Report to the Chairman, Committee on 

Armed Services, U.S. Senate

January 2013

GAO-13-188

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-13-188, a report to the 

Chairman, Committee on Armed Services, 

U.S. Senate 

January 2013

HUMAN CAPITAL

Critical Skills and Competency Assessments Should 

Help Guide DOD Civilian Workforce Decisions

Why GAO Did This Study

DOD is in large part dependent on the 

skills and competencies of civilian 

personnel comprising almost 800,000 

FTE positions. Between fiscal years 

2002 and 2012, DOD’s budgeted 

civilian personnel costs increased by

about 21 percent, to about $72 billion. 

In fiscal year 2010, the then-Secretary 

of Defense directed the Office of the 

Secretary of Defense and other 

headquarters commands to freeze (or 

cap) the number of civilian FTEs at the 

fiscal year 2010 level for fiscal years 

2011-13. During fiscal year 2011, he 

extended the cap to the military 

services for fiscal years 2012-13 and

granted exceptions adjusting the caps

above fiscal year 2010 levels. As 

requested, GAO determined (1) the 

military services’ progress in meeting 

adjusted civilian workforce cap targets 

for fiscal year 2012 and associated 

savings and (2) steps DOD has taken 

to help ensure that, in implementing 

the cap, it has maintained critical skills 

and competencies for its civilian 

workforce. GAO limited its focus to 

U.S. civilian direct–hire employees 

(not, for example, foreign national 

employees) and to service efforts to 

meet cap levels in fiscal year 2012. 

GAO reviewed DOD’s efficiency 

guidance and analyzed service fiscal 

year 2010-12 budget information. 

What GAO Recommends

GAO recommends that DOD involve 

functional community managers and 

use information from its critical skill and 

competency gap assessments as they 

are completed to make informed 

decisions for future changes to the 

workforce and document its strategies. 

DOD partially concurred with these

recommendations and noted actions 

taken. 

What GAO Found

In fiscal year 2012, the Navy and the Air Force met their adjusted civilian 

workforce cap targets, but the Army did not. The Department of Defense (DOD) 

estimated the civilian workforce cap saved the department $2.2 billion in fiscal 

year 2012 and would save a total of $11.5 billion through 2016. At the time the 

cap was extended to the services, each was executing its fiscal year 2011 

budgets with additional planned growth expected. Further, the services were 

granted departmentwide and service-specific exceptions to exceed their fiscal 

year 2010 levels by 13,001 full-time equivalents (FTE), or 3.7 percent. The table 

below compares the services’ fiscal years 2012 and 2010 levels. 

Comparison of Fiscal Year 2012 Full-Time Equivalent Levels with Fiscal Year 2010 Levels and 

Exceptions (by Service in Full-time Equivalents) 

Service

Fiscal year 2010 

workforce levela 

Exceptions

granted

Fiscal year 2012 

workforce cap

Fiscal year 2012

execution level

Navy 87,991 6,618 94,609 92,826

Air Force 123,940 3,839 127,779 122,097 

Army 138,739 2,544 141,283 152,341

Source: GAO Analysis of DOD Data

a

The Resource Management Decision determined the fiscal year 2010 workforce level for DOD, 

rather than the budgeted level. 

It is unclear the extent to which DOD considered departmentwide priorities for 

critical skills and competencies to achieve current and future missions when 

implementing the cap. DOD’s decisions about which skills and competencies to 

maintain were not informed by competency gap assessments because DOD has 

not completed most of those assessments. In 2006, Congress mandated that 

DOD conduct competency gap assessments, as part of its strategic workforce 

planning efforts, which GAO reported in September 2012 was only completed for 

8 of 22 mission critical occupations. Functional community managers are

responsible for these assessments, but did not provide input to the services to 

help preserve critical skills and competencies. DOD is working toward completing 

its gap assessments by 2015. Skill and competency gaps undermine agencies’ 

ability to meet vital missions. For example, GAO has reported that the shortage 

of trained acquisition personnel impedes DOD’s capability to oversee and 

manage contracts. A fully developed workforce plan, with all completed gap 

assessments, would help DOD make informed decisions about reducing its 

workforce and develop strategies to mitigate skill shortages that impact on 

achieving the mission. Moreover, DOD did not document how it maintained 

critical skills and competencies when making decisions in implementing the cap, 

including decisions about exceptions to the cap. DOD granted exceptions to the 

cap which, officials stated, were to meet specific mission priorities. For example, 

DOD granted exceptions for the acquisition workforce in an effort to meet the 

department’s goal of increasing its acquisition workforce by 10,000 full-time 

equivalent positions by fiscal year 2015. Internal control standards state that 

significant events need to be clearly documented. Without documenting the 

approach, GAO cannot determine the extent to which DOD maintained the 

department’s critical skills and competencies. View GAO-13-188. For more information, 

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

farrellb@gao.gov. 
Page i GAO-13-188 Civilian Workforce 

Letter 1 

Background 5

The Navy and the Air Force Met Their Adjusted Civilian Workforce 

Cap Targets while the Army Did Not, but DOD Estimates 

Savings Resulting From the Cap 10

DOD’s Civilian Workforce Cap Was Not Informed by Complete 

Competency Gap Assessments and Strategies to Maintain 

Critical Skills Were Not Documented 15

Conclusions 19

Recommendations for Executive Action 20

Agency Comments and Our Evaluation 20

Appendix I Comparison of the Defense Agencies’ and Military Services’ 

Civilian Workforce Caps 23 

Appendix II Scope and Methodology 25 

Appendix III Comments from the Department of Defense 29 

Appendix IV GAO Contact and Staff Acknowledgments 31 

Related GAO Products 32

Tables 

Table 1: Services’ Budgeted and Projected Growth 11

Table 2: Comparison of Fiscal Year 2012 Full-Time Equivalent 

Levels with Fiscal Year 2010 Levels and Exceptions (by 

Service in Full-time Equivalents) 12

Table 3: Comparison of the Civilian Workforce Cap at the Defense 

Agencies and Military Services 23

Table 4: DOD Organizations Contacted 25

Contents 
Page ii GAO-13-188 Civilian Workforce

Figures

Figure 1: DOD Civilian Workforce Trends Fiscal Year 2002-2012 6

Figure 2: Total DOD Civilian Personnel Payroll Expenditures Fiscal 

Year 2002-2012 7

Figure 3: Timeline of DOD’s Civilian Workforce Cap for Fiscal 

Years 2010-2012 8

Figure 4: Service Workforce Levels, Fiscal Years 2010-2012 13

Abbreviations

DOD Department of Defense 

FTE Full-time equivalent 

OSD Office of the Secretary of Defense

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-13-188 Civilian Workforce

United States Government Accountability Office 

Washington, DC 20548

January 17, 2013

The Honorable Carl Levin

Chairman

Committee on Armed Services

United States Senate

Dear Mr. Chairman:

The achievement of the mission of the Department of Defense (DOD) is 

dependent in large part on the skills and expertise of its civilian workforce, 

which constitutes approximately 800,0001 full-time equivalents (FTEs) 

that have a wide variety of responsibilities and duties, some of which are 

mission-essential combat support functions that were traditionally 

performed by the uniformed military. Among other things, DOD’s civilian 

personnel develop policy, gather intelligence, manage finances, maintain 

weapon systems, and award contracts and oversee contractor 

performance. Since the events of September 2001, this workforce has 

grown in numbers and budget. In fiscal year 2012 alone, DOD budgeted 

approximately $72 billion for its civilian personnel, an increase of 

approximately $12.6 billion2

, or 21 percent, since fiscal year 2002. 

However, as the federal government confronts growing fiscal challenges 

and DOD faces competition for funding, the department announced 

Efficiency Initiatives.3

 

1

This includes all civilian employees, including foreign nationals.

These initiatives were designed to reduce 

duplication, overhead, and excess, and instill a culture of savings and 

restraint across DOD. These initiatives include, among other things, 

soliciting input from outside experts about ways DOD can be more 

efficient, conducting front end assessments to inform the department’s 

2

In constant, fiscal year 2013 dollars.

3

The then-Secretary of Defense announced efficiency initiatives through a series of 

memos and a speech, including: Secretary of Defense Memorandum, Department of 

Defense (DOD) Efficiency Initiatives (August 16, 2010); Secretary of Defense 

Memorandum, Guidance on DOD Efficiency Initiatives with Immediate Application (August 

20, 2010); Secretary of Defense Memorandum, Defense Agency and Field Activity 

Organizational Assessments (August 27, 2010); Secretary of Defense Robert Gates, 

Secretary of Defense Statement on Department Budget and Efficiencies (January 6, 

2011); and Secretary of Defense Memorandum, Track Four Efficiency Initiatives Decisions 

(March 14, 2011).

 
 

Page 2 GAO-13-188 Civilian Workforce

fiscal year 2012 budget request, and reducing excess and duplication 

across the department.

On August 16, 2010, the then-Secretary of Defense issued a 

memorandum as part of the Efficiency Initiatives in which he directed the 

department to freeze (for the purposes of this report referred to as a 

“cap”4

) the number of civilian positions within the Office of the Secretary 

of Defense (OSD), defense agencies, field activities, Joint Staff, and 

Combatant Commands at the fiscal year 2010 levels for fiscal years 

2011-2013.5 Additionally, the Secretary of Defense’s August 20, 2010 

Efficiency Memorandum states that the Deputy Secretary of Defense was 

authorized to grant exceptions,6 on a component basis, for compelling 

circumstances. Additionally, the August 16, 2010 memorandum indicated 

that no full-time OSD positions were to be created after fiscal year 2010 

to replace contractors except for critical needs. On January 25, 2011, 

DOD extended the civilian workforce cap to the military services for fiscal 

years 2012 and 2013 and granted exceptions that increased their caps 

above the fiscal year 2010 levels7

 

4

Although the first of the Secretary’s memo’s referred to a freeze on the civilian workforce, 

a subsequent Secretary of Defense memo referred to the initiative as a “cap” on the 

number of positions. According to officials, the initiative is more appropriately called a cap 

because the workforce is not frozen—i.e., hiring is still permitted—so long as the 

workforce remains under the specified capped level. Thus, for the purposes of this review, 

we will refer to this initiative as the civilian workforce cap. However, DOD officials noted 

that exceptions can be authorized by the Secretary of Defense at any time to allow for 

growth beyond the designated cap levels.

. The services had previously not been 

included by the Secretary’s memoranda. The related Resource 

5

Although the memo refers to “billets”, officials from the Office of the Under Secretary of 

Defense (Comptroller) stated that the cap is on full-time equivalents (FTE) employment 

and is tracked as such. 

6

While the Secretary’s memo states the Deputy Secretary of Defense is authorized to 

grant exceptions, the Navy was granted an exemption of its ship maintenance personnel 

and was allowed future growth. However, for the purposes of this report we will refer to 

both exemptions and exceptions as “exceptions”. 

7

DOD only included U.S. Direct Hire, direct funded FTEs in its cap to the services; i.e., 

foreign national and reimbursable employees are not included. For the purposes of this 

report we will discuss U.S. Direct Hire direct funded FTEs only. 
 

Page 3 GAO-13-188 Civilian Workforce

Management Decision8—which is used to document decisions made 

during the preparation of submissions to the President’s Budget—

specified that the workforce cap would only apply to portions of DOD’s 

total civilian workforce.9

As you requested, we determined (1) the military services’ progress in 

meeting adjusted civilian workforce cap targets for fiscal year 2012 and 

associated savings and (2) steps DOD has taken to help ensure that, in 

implementing the cap, it has maintained critical skills and competencies 

for its civilian workforce.

To determine the progress the military services10

 

8

The Resource Management Decision is a budget decision document issued during the 

joint review of Service budget submissions by Office of the Secretary of Defense and the 

Office of Management and Budget. Resource Management Decisions reflect the decisions 

of the Secretary of Defense as to appropriate program and funding to be included in the 

annual defense budget request which, in turn, is included in the President’s Budget.

have made in meeting 

their respective civilian workforce FTE cap levels for fiscal year 2012, we 

reviewed Resource Management Decision 703A2 issued by the Secretary 

of Defense, which outlined the military services’ (for the purposes of this 

report, we are including the U.S. Marine Corps with the Navy in all 

aspects of discussion) FTE levels for fiscal year 2012 in light of the 

civilian workforce cap, including any FTE reductions necessary to meet 

the cap. We also reviewed the Secretary of Defense’s series of 

memoranda on the Efficiencies Initiatives to identify the Secretary’s 

original guidance on the initiative. We then reviewed the direction 

provided in those memoranda, the military services’ civilian workforce cap 

levels and any resulting reductions to the civilian workforce, as well as 

exceptions to the workforce cap, outlined for the services in Resource 

9

According to OSD officials, draft versions of the Resource Management Decision were 

shared with service leadership prior to the issuance of the final Resource Management 

Decision 703A2. Thus, through these drafts, the services were made aware of the 

workforce cap—and could start planning— prior to the formal issuance of the Resource 

Management Decision on January 25, 2011. 

10Due to differences identified between the defense agencies and the military services 

with regard to such things as notification timeframes for inclusion in the cap and the 

specific categories of employees capped, we focused our review solely on U.S. Direct 

Hire, direct funded civilian employees of the military services. We met with select defense 

agencies to discuss their approaches to planning for and implementing the workforce cap; 

however, the information obtained is not generalizeable to other defense agencies or the 

larger DOD civilian workforce and only represents the experience of the two defense 

agencies we met with. Information on these differences is included in Appendix I. 
 

Page 4 GAO-13-188 Civilian Workforce

Management Decision 703A2. We obtained workforce level data updates 

from officials in each of the military services to determine the services’ 

progress in implementing the workforce cap and met with officials from 

the Office of the Assistant Secretary for Financial Management and 

Comptroller for each of the military services. We analyzed OSD and 

military service budget documents to identify the services’ programmed 

FTE levels prior to the cap and the revised FTE levels after the 

implementation of the workforce cap. We also interviewed officials from 

the Office of the Under Secretary of Defense (Comptroller) and the Office 

of the Under Secretary of Defense for Personnel and Readiness to obtain 

an understanding of how the cap levels and exceptions were identified 

and assigned across the department. Because the cap was limited to 

U.S. Direct Hire, direct funded civilian FTEs, we focused on that subset of 

the workforce for this report. We found workforce data, as well as OSD 

and military service budget documents, sufficiently reliable for the 

purposes of our reviewing and reporting on the progress and steps taken 

in implementing this efficiency initiative. With respect to savings 

associated with the cap, we reviewed key DOD budget documents, such 

as the budget justification books and the Resource Management Decision 

703A2. We also reviewed briefings pertaining to expected savings and 

costs from the cap. In addition, we interviewed knowledgeable officials 

from the Office of the Secretary of Defense and each of the military 

services to discuss anticipated savings and costs associated with the 

civilian workforce cap.

To determine any steps that OSD and the military services have taken to 

help ensure that, in implementing this efficiency initiative, they maintained 

critical skills and competencies for its civilian workforce, we reviewed prior 

GAO reports, as well as plans, policies, and guidance developed by OSD, 

the military services, and select defense agencies related to the 

implementation of the civilian workforce cap. In addition, we interviewed 

officials at OSD and the military services. We also met with officials from 

select installations—based on a non-probability site selection 

methodology that considered, for example, (1) the total number of 

reductions required to meet the cap, (2) proximity of locations to other 

military installations also implementing the workforce cap and reductions, 

(3) locations that experienced either success of challenges in meeting 

their caps—to determine how lower-level organizations planned for and 

implemented the workforce cap. More specifically, we met with ten 

installations—two per military service (to include the Army, the Navy, the 

Air Force, and the Marine Corps) and two defense agencies (the Defense 

Threat Reduction Agency and the Defense Information Systems Agency). 

Our selection methodology included two defense agencies because of the 
 

Page 5 GAO-13-188 Civilian Workforce

differences in how the cap was applied to the defense agencies 

compared with the military services. Although not generalizable, our site 

selection provides a cross section of installations and defense agencies 

to provide context in our discussion. See appendix I for a comparison of 

the planning and implementation differences between the groups outlined 

in the Secretary’s memos and the military services. 

We conducted this performance audit from February 2012 to January 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. Further details about our 

objectives, scope, and methodology are contained in Appendix II.

DOD’s civilian workforce develops policy, provides intelligence, manages 

finances, maintains weapon systems, and oversees and manages 

contracts, among other things. This workforce also performs a wide 

variety of duties and responsibilities, including mission-essential combat 

support functions, such as logistics support and maintenance, which 

traditionally have been performed by the uniformed military. A key 

component of this workforce also provides deployable civilian experts to 

Afghanistan and other theaters of operation. As such, DOD’s total civilian 

workforce11

 

11DOD’s total civilian workforce includes among others U.S. Direct Hire, direct funded 

civilian employees and foreign nationals. 

has reached approximately 800,000 FTEs, which constitutes 

approximately 17 percent growth since 2002, most of which has occurred 

since 2008. An FTE is the number of total hours worked divided by the 

maximum number of compensable hours in a work year. For example, if 

the work year is defined as 2,080 hours, then one worker occupying a 

paid full time job all year would consume one FTE. Two persons working 

for 1,040 hours each would consume one FTE between the two of them. 

See Figure 1 for DOD civilian workforce FTE trends for the total civilian 

workforce from fiscal year 2002 through fiscal year 2012.

Background
 

Page 6 GAO-13-188 Civilian Workforce

Figure 1: DOD Civilian Workforce Trends Fiscal Year 2002-2012

Note: Fiscal year 2012 is estimated. This figure includes all civilian employees including foreign 

nationals. 

Budgeted funding for the total civilian workforce totaled approximately 

$72 billion in fiscal year 2012. See Figure 2 for total DOD civilian 

personnel payroll expenditures from fiscal year 2002 through fiscal year 

2012.
 

Page 7 GAO-13-188 Civilian Workforce

Figure 2: Total DOD Civilian Personnel Payroll Expenditures Fiscal Year 2002-2012

Note: Fiscal year 2012 is estimated. This figure includes funding for all civilian employees including 

foreign nationals. 

In May 2010, the Secretary of Defense delivered a speech which 

emphasized that over the last decade, the department’s spending on 

Operation and Maintenance—a broad budget category encompassing 

approximately $200 billion worth of the day-to-day activities of the military, 

including the majority of the civilian personnel funding and other activities 

such as training and overseas humanitarian, disaster and civic aid—had 

nearly doubled, not counting expenses directly related to the wars. 

Subsequently, in August 2010, the Secretary directed DOD to undertake 

the departmentwide Efficiency Initiatives to reduce duplication, overhead, 

and excess, and instill a culture of savings and restraint across the 

department. The Secretary’s August 2010 memoranda specified that the 

department should freeze (or cap) the number of OSD, defense agency, 

field activity, Joint Staff, and Combatant Command positions at the fiscal 

year 2010 levels for fiscal years 2011-2013. The August 20 memorandum 

stated that the Deputy Secretary of Defense was authorized to grant 

exceptions on a component basis, as necessary. In Resource 

Management Decision 703A2 the cap was extended to the services for 

fiscal years 2012 and 2013, and provided for departmentwide exceptions 

for certain critical capabilities. Although the Secretary’s August 2010 

memos directed that the civilian workforce be capped at the fiscal year 
 

Page 8 GAO-13-188 Civilian Workforce

2010 level, they also permitted exceptions to be granted on a case-bycase basis by the Deputy Secretary of Defense; these exceptions were 

incorporated into the Resource Management Decision which increased 

the services’ FTE levels above their fiscal year 2010 levels. See Figure 3 

for a timeline of the planning for and implementation of DOD’s Civilian 

Workforce Cap.

Figure 3: Timeline of DOD’s Civilian Workforce Cap for Fiscal Years 2010-2012

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

organizations during the 1990s demonstrates the importance of strategic 

workforce planning. Strategic workforce planning, an integral part of 

human capital management, helps ensure that an organization has the 

staff with the necessary skills and competencies to accomplish its 

strategic goals. In July 2012 we testified that the department’s downsizing 

in the early 1990s did not focus on reshaping the civilian workforce in a 

strategic manner. This downsizing resulted in significant imbalances in 

terms of shape, skills, and retirement eligibility and a workforce 

characterized by a growing gap between older, experienced employees 

and younger, less experienced ones. More specifically, in 1992, we 

reported that DOD intended to undertake a multiyear downsizing effort 
 

Page 9 GAO-13-188 Civilian Workforce

aimed at reducing the civilian workforce by nearly 229,000 positions, or to 

20 percent below its fiscal year 1987 levels. We also reported in 1992 that 

DOD’s 1991 downsizing plan12 had a number of data gaps and 

limitations, including incomplete and inconsistent data related to 

workload, workers, and projected force reductions. Specifically, we found 

that the department’s efforts were hampered by incomplete data and the 

lack of a clear strategy for avoiding the adverse effects of downsizing and 

minimizing skills imbalances.13

Strategic workforce planning is an iterative, systematic process that 

addresses two critical needs: (1) aligning an organization’s human capital 

program with its current and emerging mission and programmatic goals 

and (2) developing long-term strategies for acquiring, developing, and 

retaining an organization’s workforce to achieve programmatic goals. 

However, since 2001, we have listed strategic human capital 

management as a governmentwide high-risk area, stating that serious 

human capital shortfalls threatened the ability of many federal agencies to 

economically, efficiently, and effectively perform their missions.14 DOD 

has a number of strategic human capital management challenges 

included in the high-risk list, including a shortage of trained acquisition 

personnel. While significant steps have been taken, the area remains 

high risk governmentwide15

GAO recently defined “efficiency” as maintaining federal government 

services or outcomes using fewer resources (such as time and money) or 

because of a need to develop and implement 

plans to address current and emerging critical skill and competency gaps 

that could undermine agencies’ abilities to meet their vital missions.

 

12Section 322 of the National Defense Authorization Act for Fiscal Year 1991, Pub. L. No. 

101-510 (1990), directed DOD to establish guidelines for reductions made in the number 

of civilian workers employed by industrial or commercial type activities. The act also 

directed certain DOD agencies or components to submit 5 year master plans for those 

workers, providing information on workload, demographics, and employee furloughs and 

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

request for fiscal year 1992.

13GAO Defense Force Management: Expanded Focus in Monitoring Civilian Force 

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

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

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

14GAO, High-Risk Series: An Update, GAO-01-263 (Washington, D.C.: January 2001). 

15GAO, High-Risk Series: An Update, GAO-11-278 (Washington, D.C.: February 2011). 
 

Page 10 GAO-13-188 Civilian Workforce

improving or increasing the quality or quantity of services or outcomes 

while maintaining (or reducing) resources. DOD’s Efficiency Initiatives are 

the department’s most recent comprehensive effort to reduce duplication, 

overhead, and excess, and instill a culture of savings and restraint across 

the department. Over time, a number of other governmentwide initiatives 

have, among other things, emphasized the importance of reducing 

spending and improving government efficiency. For example, the Budget 

Control Act of 2011,16 signed on August 2, 2011, established limits on 

discretionary spending for fiscal years 2012 through 2021and provided for 

automatic reductions in direct spending, among other things.

In fiscal year 2012, the Navy17

At the time the cap was extended to the services, each was in a pattern of 

growth. Table 1 demonstrates the budgeted and projected FTE growth for 

each of the services from fiscal year 2010 through 2012.

and the Air Force met their adjusted 

civilian workforce cap targets, but the Army did not. Although not all of the 

services met their adjusted civilian workforce caps, DOD estimated that 

implementing the civilian workforce cap saved the department $2.2 billion 

in fiscal year 2012 and would save a total of $11.5 billion through fiscal 

year 2016 in which OSD officials stated, the department could, in part, 

use to reinvest for higher priority missions.

18

 

16Pub. L. No. 112-25 (2011). The Budget Control Act of 2011 enacted several of its 

provisions by amending the Balanced Budget and Emergency Deficit Control Act of 1985, 

Pub. L. No. 99-177. Some of the modified provisions of the Balanced Budget and 

Emergency Deficit Control Act of 1985 were recently further amended by the American 

Taxpayer Relief Act of 2012, Pub. L. No. 112-240, § 901 (2013). 

17The U.S. Marine Corps is a part of the Department of the Navy and therefore U.S. 

Marine Corps civilian personnel and respective cap is included in the Navy data. 

18The services’ projected growth in fiscal year 2012 are the levels of U.S. Direct Hire, 

direct funded FTEs the respective service projected in its fiscal year 2011 future years 

defense plan. This projection took place prior to the announcement of the civilian 

workforce cap.

The Navy and the Air 

Force Met Their 

Adjusted Civilian 

Workforce Cap 

Targets while the 

Army Did Not, but 

DOD Estimates 

Savings Resulting 

From the Cap
 

Page 11 GAO-13-188 Civilian Workforce

Table 1: Services’ Budgeted and Projected Growth

Service

Fiscal year 2010a

(budgeted)

Fiscal year 2011a

(budgeted)

Percent of 

budgeted growth 

from fiscal year 

2010-2011

2012 Projected FTE levels 

(as of the fiscal year 2011 

budget and prior to cap 

announcement)

Percent of projected 

growth from fiscal 

year 2011-2012

Navy 92,171 93,780 1.7 95,556 1.9

Air Force 124,099 137,470 10.8 143,049 4.1

Army 138,705 144,290 4.0 145,270 0.7

Source: GAO analysis of DOD Data. 

Note: The Navy data includes U.S. Marine Corps civilian employees. Further, this table only includes 

U.S. Direct Hire employees. 

a

The budgeted years’ data is the budgeted FTE levels as stated in each respective fiscal year’s 

President’s Budget. 

During the second quarter of fiscal year 2011, the services were officially 

notified that their respective civilian workforces would be capped to the 

fiscal year 2010 levels with exceptions. The services were authorized to 

exceed their fiscal year 2010 civilian workforce levels by 13,001 FTEs, or 

3.7 percent in part because the Secretary of Defense initially included 

certain DOD-wide exceptions above the fiscal year 2010 levels, when the 

cap was extended to the military services. Specifically, the Secretary 

extended the civilian workforce cap to the services for fiscal years 2012 

and 2013 at the fiscal year 2010 levels,

19 with exceptions granted that 

increased their caps, according to officials, for departmentwide mission 

priorities. The Secretary later approved more exceptions above the fiscal 

year 2010 levels due to specific service requests. The Navy was granted 

the largest number of exceptions resulting in approximately 7.5 percent 

growth above its fiscal year 2010 level20

 

19 According to Resource Management Decision 703A2 for fiscal year 2012, the cap was 

the fiscal year 2010 level presented in the 2011 President’s Budget. As a result, the fiscal 

year 2010 levels are estimates based on budgeted civilian workforce levels and execution

data available at the time of the submission of the fiscal year 2011 President’s Budget. 

and the Air Force was granted 

exceptions resulting in 3.1 percent growth above its fiscal year 2010 level. 

The Army was granted the fewest total number of exceptions in fiscal 

year 2012, which equates to about 1.8 percent growth above its fiscal 

year 2010 level. Table 2 demonstrates the numbers of exceptions granted 

20Navy officials consider the exception for its shipyard maintenance personnel as an 

“exemption”. We do not make a distinction between exemption and exception because the 

Navy was granted a finite amount over its fiscal year 2010 level for shipyard maintenance 

personnel similar to other exceptions granted.
 

Page 12 GAO-13-188 Civilian Workforce

for each service above their respective fiscal year 2010 levels and fiscal 

year 2012 execution levels.

Table 2: Comparison of Fiscal Year 2012 Full-Time Equivalent Levels with Fiscal 

Year 2010 Levels and Exceptions (by Service in Full-time Equivalents) 

Service

Fiscal year 2010 

workforce levela Exceptionsgranted

Fiscal year 2012 

workforce cap

Fiscal year 2012

execution levelsb

Navy 87,991 6,618 94,609 92,826

Air Force 123,940 3,839 127,779 122,097

Army 138,739 2,544 141,283 152,341

Source: GAO analysis of DOD data.

Note: The Navy data includes U.S. Marine Corps civilian employees. Further, this table only includes 

U.S. Direct Hire employees 

a

Fiscal Year 2010 Workforce Level is determined by the Resource Management Decision as the 

baseline for the cap by DOD, rather than the budgeted level for that year.

b

Fiscal Year 2012 execution is equal to the year-end FTE usage. 

Navy and Air Force officials stated that in order to meet their adjusted cap 

in fiscal year 2012, these services took steps to obligate funds for fewer 

FTEs than they had budgeted for in fiscal year 2011. Officials stated that 

if they had not taken these steps, these services fiscal year 2011 civilian 

workforce budgets would have allowed them to grow beyond their fiscal 

year 2012 cap which could have necessitated involuntary separations. As

a result, the Navy obligated funds for approximately 1,700 fewer FTEs 

than initially planned, and the Air Force obligated funds for almost 7,800 

fewer FTEs than originally planned. In contrast, the Army obligated funds 

for approximately 8,700 more FTEs than originally planned in fiscal year 

2010 and 7,400 more FTEs in fiscal year 2011. Army officials stated that 

because the Army’s FTEs were so high in fiscal year 2011, they were not 

able to reduce the workforce quickly enough to reach the fiscal year 2012 

cap without conducting a significant reduction-in-force, which, officials 

stated they avoided by realigning funds to pay for the overages.

See Figure 4 for an interactive graphic that includes the services’ actual 

FTE execution levels in fiscal year 2010, 2011, and 2012, as well as 

previously identified budgeted FTE levels and workforce cap levels.
Page 1 *$2&LYLOLDQ:RUNIRUFH

Figure 4: Service Workforce Levels, Fiscal Years 2010-2012

Interactivity instructions: Roll over a data type in the key to single it out.

Budgeted FTEs

Actual FTEs

FTE level

0

100,000

125,000

150,000

2010 2011 2012 2010 2011 2012 2010 2011 2012

Navy Air Force Army

Fiscal year and service

Fiscal year 2010 workforce level

Fiscal year 2012 adjusted FTE cap, 

including exceptions

Projected FTE level; prior to 

announcement and implementation

of civilian workforce cap

Key

Source: GAO analysis of DOD data.

FTE level

Year and service

0

100,000

125,000

150,000

2010 2011 2012 2010 2011 2012 2010 2011 2012

Navy Air Force Army

Source: GAO analysis of DOD data.
 

Page 14 GAO-13-188 Civilian Workforce

As shown above, not all of the services met their adjusted civilian 

workforce caps; however, DOD estimated that implementing the civilian 

workforce cap the services saved the department $2.2 billion in fiscal year 

2012 and would save a total of $11.5 billion through fiscal year 2016. The 

estimated savings were determined by calculating the difference in cost 

between the planned growth of the civilian workforce departmentwide and 

the cost of the workforce at the capped levels.

However, the savings estimates did not account for any additional costs 

incurred for planning and implementation of the cap, according to DOD 

officials. DOD officials stated that costs were not included in the estimates 

because it is difficult to determine which costs are attributable to the 

planning and implementation of the cap and which costs are incurred 

during the normal course of business. For example, we found that the 

department utilized the Voluntary Early Retirement Authority and 

Voluntary Separation Incentive Program to incentivize voluntary 

separation from the department. OSD officials told us that these programs 

were not limited in their use to the civilian workforce cap and are available 

annually pursuant to their statutory authority.21 DOD anticipates spending 

approximately $115 million on these voluntary separation incentives in 

fiscal year 2012, which is an increase of $63 million over fiscal year 

2011’s cost of $52 million. DOD expects to spend $63.5 million on 

voluntary separation incentives for fiscal year 2013. However, DOD 

officials were not able to directly identify how much of the voluntary 

separation incentives in fiscal year 2012 are a direct result of the civilian 

workforce cap.

 

215 U.S.C. § 9902
 

Page 15 GAO-13-188 Civilian Workforce

In implementing the cap, it is unclear the extent to which DOD maintained 

departmentwide priorities for critical skills and competencies needed to 

achieve current and future missions because DOD (1) has not completed 

its competency gap assessments and (2) did not document how it 

maintained departmentwide critical skills and competencies.

DOD’s steps to maintain critical skills and competencies included granting 

the services departmentwide and service-specific exceptions to the cap. 

These exceptions were granted in order to meet specific departmental 

priorities, according to agency officials. Departmentwide exceptions 

granted through the Resource Management Decision increased civilian 

workforce targets above the original FTE cap levels through the budget 

process. For example, DOD granted departmentwide exceptions for the 

acquisition workforce for continued growth in an effort to meet the 

department’s goal of increasing its acquisition workforce by 10,000 fulltime equivalent positions by fiscal year 2015. According to DOD’s 2010 

Quadrennial Defense Review, the department’s priorities include, among 

other things, the need for acquisition personnel who have the skills and 

training necessary to successfully perform their jobs.22

Later, the Secretary approved additional exceptions requested by the 

services for specific mission priorities. According to Comptroller officials, 

the military services had the opportunity to submit requests for additional 

exceptions to the Deputy Secretary of Defense—who could ultimately 

approve or deny these requests on a case by case basis—for hiring 

needs above the cap level deemed necessary by the military services to 

meet specific missions. For example, the Navy requested exceptions for 

FTEs in ship maintenance and the Air Force requested exceptions for 

FTEs in testing and evaluation which were ultimately approved by OSD23

 

22DOD, Quadrennial Defense Review Report (February 2010). 

. 

As noted, for example, the Navy was granted the largest number of 

exceptions to the workforce cap—totaling 6,618 FTEs over its fiscal year 

23As noted, the Secretary of Defense, through an efficiency initiative memo, provided the 

Deputy Secretary of Defense the authority to grant exceptions to the cap for compelling 

circumstances. 

DOD’s Civilian 

Workforce Cap Was 

Not Informed by 

Complete 

Competency Gap 

Assessments and 

Strategies to Maintain 

Critical Skills Were 

Not Documented
 

Page 16 GAO-13-188 Civilian Workforce

2010 level. In total, we estimated that the departmentwide and service 

specific exceptions equate to $1.3 billion24

However, DOD has not completed its competency gap assessments—

identifying gaps in the existing or projected civilian workforce that should 

be addressed to ensure that the department has continued access to the 

critical skills and competencies—to help inform decisionmaking that 

would preserve critical skills and competencies. Further, it is essential 

that gap analyses for strategic workforce planning include an evaluation 

in numbers of personnel needed, as well as for the critical skills and 

competencies needed for the workforce

in personnel costs.

25. In 2006, Congress mandated 

that DOD develop a strategic human capital plan to shape and improve 

the civilian employee workforce to include, among other elements, an 

assessment of gaps in the existing and projected civilian employee 

workforce that should be addressed to ensure that the department has 

continued access to the critical skills and competencies to support 

national security requirements and effectively manage the department.26

We reported in 200927 and again in 201228

 

24We calculated this estimate by multiplying the total number of exceptions granted by the 

budgeted average total compensation and benefits for FTEs from the President’s Budget 

for fiscal year 2012. 

that DOD had still not fully 

addressed all elements of its mandate, to include the competency gap 

assessment element for its mission critical occupations. Further, our 2012 

report found DOD has also not conducted its mandated assessment of 

the appropriate mix or capabilities of military, civilian, and contractor 

personnel. DOD has identified 24 mission critical occupations, including 

Logistics Management, Financial Administration, and Information 

Technology Management. Of these occupations, 22 are associated 

specifically with the overall civilian workforce and are discussed in the 

DOD’s Strategic Workforce Plan, while, the remaining 2 are acquisition25 GAO, Human Capital: Further Actions Needed to Enhance DOD’s Civilian Strategic 

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

26 National Defense Authorization Act for Fiscal Year 2006, Pub. L. No. 109-163, § 1122 

(2006) (codified as amended at 10 U.S.C. § 115b). 

27GAO, Human Capital: Opportunities Exist to Build on Recent Progress to Strengthen 

DOD’s Civilian Human Capital Strategic Plan, GAO-09-235 (Washington, D.C.: February 

10, 2009).

28GAO, Human Capital: DOD Needs Complete Assessments to Improve Future Civilian 

Strategic Workforce Plans, GAO-12-1014 (Washington, D.C.: September 27, 2012).
 

Page 17 GAO-13-188 Civilian Workforce

related occupations—contracting and quality assurance—and are 

discussed in the Defense Acquisition Workforce Improvement Strategy 

(published as a separate report). We also reported that functional 

community managers reported conducting competency gap assessments 

for 8 of the 22 mission-critical occupations.

29 These 8 occupations include 

nurses, pharmacists, clinical psychologists, social workers, medical 

officers, security specialists, police officers, and human-resources 

managers. Further, in cases where the functional community managers 

did conduct gap analyses, they did not report the results of these 

assessments in DOD’s Strategic Workforce Plan. According to DOD 

officials responsible for developing the civilian workforce plan, 

competency gaps will be assessed using the Defense Competency 

Assessment Tool30 that is scheduled for initial deployment in late fiscal 

year 2013.31

We have previously reported that an agency needs to define the critical 

skills and competencies that it will require in the future to meet its 

strategic program goals. Doing so can help an agency align its humancapital approaches that enable and sustain the contributions of all the 

critical skills and competencies needed for the future. Once an agency 

identifies the critical skills and competencies that its future workforce must 

Further, in some cases, other competency models, such as 

that for the financial management community, will be available at the end 

of 2012. DOD also stated that it is preparing to pilot a capabilities based 

approach to assess its civilian, military, and contractor workforces. DOD 

has noted that it has developed initiatives to meet statutory requirements 

for its strategic workforce plan, including having gap assessments, by 

fiscal year 2015.

 

29 For DOD’s 2010-2018 plan, 11 of 12 functional communities—which consist of 

employees who perform similar functions—provided some information on 22 occupations 

that DOD has identified as mission critical. The Acquisition Functional Community did not 

submit its assessments for inclusion in DOD’s 2010-2018 Strategic Workforce Plan and, 

according to DOD officials, a separate report on the acquisition community will be 

submitted to Congress in March 2013. 

30The Defense Competency Assessment Tool is an Army system that is being updated for 

Department-wide use to replace multiple competency tools and will become part of an 

Enterprise Competency Management Framework.

31According to March 2012 testimony by the then acting Under Secretary of Defense for 

Personnel and Readiness, the Defense Competency Assessment Tool is scheduled for 

deployment in fiscal year 2013, and that through it DOD will be able to assess workforce 

competencies and develop strategies to reduce critical skill gaps that may impact mission 

accomplishment by fiscal year 2015. 
 

Page 18 GAO-13-188 Civilian Workforce

possess, it can develop strategies tailored to address gaps in the number, 

skills and competencies, and deployment of the workforce.32

Officials at each of the military services told us they planned for the 

implementation of the civilian workforce cap for fiscal year 2012 based on 

the levels assigned in the Resource Management Decision 703A2 

accounting for their service-specific critical skills and competencies; 

however, the extent to which the services took into account the 

departmentwide priorities for critical skills and competencies needed to 

achieve current and future missions is unclear. Specifically, the services 

each took their own approach to considering critical skills and 

competencies but the extent to which DOD’s enterprisewide Mission 

Critical Occupations were considered was not clear because their 

approaches were not documented. According to the Office of Personnel 

Management’s Human Capital Assessment and Accountability 

Framework, developed in conjunction with the Office of Management and 

Budget, agencies transforming their strategic human capital management 

programs should document strategies for workforce planning that define 

roles, responsibilities, and other requirements of the strategies. Without 

proper documentation, agencies cannot measure the effectiveness of 

human capital management approaches as a basis for developing, 

implementing, and evaluating their workforce planning processes. In 

addition, service officials stated that the Office of the Secretary of 

Defense’s Functional Community Managers did not provide input to the 

services to help ensure departmentwide critical skills and competencies 

were maintained in implementing the civilian workforce cap. DOD’s Fiscal 

Year 2010-2018 Strategic Workforce Plan states the functional 

community managers are responsible for identifying current and future 

mission requirements, identifying competencies needed for mission 

readiness, and assessing competency gaps. However, in implementing 

the cap, Army officials told us that the Army held a series of briefing 

sessions between its Vice Chief of Staff and command leadership to 

We also 

identified completing competency gap assessments as a key element in 

the strategic workforce planning process. Having a fully developed 

workforce plan, with completed gap assessments, would help DOD make 

informed decisions about reductions in its workforce and develop 

strategies to mitigate skill shortages that impact on achieving the mission.

 

32GAO, Human Capital: Key Principles for Effective Strategic Workforce Planning, 

GAO-04-39 (Washington, D.C.: Dec. 11, 2003). 
 

Page 19 GAO-13-188 Civilian Workforce

allocate the service’s overall cap across its commands and installations. 

During these sessions, according to officials, the Vice Chief directed 

commanders to assess and brief on the risks and impacts to missions for 

5 percent, 10 percent, or 15 percent reductions to civilian workforce levels 

within their commands, which enabled the Vice Chief to consider risk in 

making allocation decisions. Navy officials stated that the Navy 

Comptroller’s office and senior leadership allocated the Navy’s civilian 

workforce cap and any necessary FTE reductions—to include the Marine 

Corps—over approximately a one-week period in December 2010 once 

draft versions of Resource Management Decision 703A2 were released, 

prior to the formal issuance of the Resource Management Decision in 

January 2011. Air Force officials told us the Air Force conducted “3-Star 

Summits” which allocated the cap and any necessary reductions across 

the service’s major commands and, according to service officials, helped 

the Air Force to avoid making arbitrary reductions to the civilian 

workforce. However, without DOD documenting its approach, we cannot 

determine the extent to which the department’s plans to implement the 

civilian workforce cap considered the need to maintain critical skills and 

competencies.

DOD has a large, diverse federal civilian workforce that is instrumental in 

maintaining our national security. With the long-term fiscal challenges 

currently facing the nation, reductions to the civilian workforce may be 

considered in the future as an option to achieve cost savings, especially 

in light of the drawdown in Afghanistan. Through the Secretary’s initiative, 

the department has taken initial steps to identify areas of potential cost 

savings and improved efficiency—including capping the growth of DOD’s 

civilian workforce. DOD projected it would save money to reinvest in 

higher priorities by slowing the growth of its civilian workforce, or in some 

instances, reducing the number of civilian employees. However, 

identification of critical skill and competency gaps and involvement of 

stakeholders, such as functional community managers would help the 

department manage its workforce more strategically. As DOD continues 

working towards completing its gap assessments, information as it 

becomes available from these assessments can better inform key human 

capital decision processes. Further, to be successful in any future efforts 

to plan for and shape its civilian workforce, it is imperative that the 

department cautiously and strategically take into account departmentwide 

critical skills and competencies needed to maintain and meet its mission, 

drawing upon experiences and lessons learned from the implementation 

of the cap should additional reductions become necessary.

Conclusions
 

Page 20 GAO-13-188 Civilian Workforce

To help ensure the department maintains its critical skills and 

competencies, when planning for and implementing future civilian 

workforce actions, we recommend that the Secretary of Defense direct 

the Under Secretary of Defense for Personnel and Readiness take the 

following two actions: 

• Involve functional community managers and to the extent possible, 

use information from gap assessments of its critical skills and 

competencies as they are completed to make informed decisions for 

possible future reductions or justify the size of the force that it has.

• Document its efforts to strategically manage its civilian workforce and 

maintain critical skills and competencies for future reductions.

In written comments on a draft of this report, DOD partially concurred with 

both recommendations. DOD’s comments are reprinted in appendix III. 

DOD commented that it is concerned that the scope of our review and 

recommendations do not address the original intent of the mandate, 

which DOD characterized as being to identify the process by which the 

department determined civilian workforce levels in the context of 

efficiency initiatives and efforts to reduce duplication, overhead, and 

excess as well as instill a culture of savings and restraint. However, our 

review was not in response to a mandate. Rather, we initiated our review 

in response to a request from the Chairman, Senate Committee on 

Armed Services. We conferred with requestor’s staff to develop the 

review’s scope and methodology, and made recommendations intended 

to improve DOD’s ability to determine civilian workforce needs. We 

continue to believe that involving functional community managers and 

using information from gap assessments of critical skills and 

competencies will help the department make informed decisions for future 

reductions of the civilian workforce and for justifying the size of its current 

workforce. 

DOD partially concurred with our recommendation to involve functional 

community managers and to the extent possible, use information from 

gap assessments of critical skills and competencies as they are 

completed to make informed decisions for possible future reductions or 

justify the size of the force that it has. As we noted in our report, the 

department has not completed competency gap assessments for all of its 

22 mission critical occupations as mandated by Congress in 2006 as part 

of DOD’s strategic workforce planning. These competency gap 

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
 

Page 21 GAO-13-188 Civilian Workforce

assessments are evolving and DOD expects to have a workforce plan 

that responds to statutory requirements, including competency gap 

analyses by 2015. The department’s commitment to delivering a 

comprehensive Strategic Workforce Plan that addresses competency 

gaps and critical skill shortfalls in its civilian personnel is a step in the right 

direction. In response to our draft report, DOD also stated in its agency 

comments that it aligns its workforce (both in size and structure) to 

mission and as such justifies the current size or possible 

reductions/increases to that workforce based on mission workload rather 

than competency or skill gaps to deliver capabilities. However, we 

continue to believe that the department is not in a position to fully justify 

the size of its workforce until it has fully addressed its mandate to identify 

areas of critical skill and competency gaps within the civilian workforce. 

Further, DOD noted that its civilian workforce is sized and structured 

based on capabilities necessary to carry out its mission. It is important to 

note that our prior work has found that DOD’s Strategic Workforce Plans 

have not assessed the appropriate mix of military, civilian, and contractor 

personnel or assessed the capabilities of each of these workforces as 

mandated by Congress. In September 2012, DOD stated that it is 

preparing to pilot a capabilities based approach to assess its civilian, 

military, and contractor workforces. We will continue to monitor the 

results of DOD’s pilot program and how assessments are used for future 

workforce decisions. 

DOD also partially concurred with our recommendation to document its 

efforts to strategically manage its civilian workforce and maintain critical 

skills and competencies for future reductions. DOD stated in its agency 

comments that the department remains committed to the functional 

community management construct, and has embarked on a 

comprehensive effort to assess competencies and proficiencies. DOD 

further stated that to the extent possible, DOD plans to use information 

obtained from skill and competency gap assessments to ensure that 

personnel actions are effecting current and/or future civilian workforce 

restructuring or resizing initiatives are done in a manner that preserves 

organic knowledge, minimizes competency gaps, and avoids shortfalls in 

critical skills. The department’s efforts towards meeting the statutory 

requirements of the Strategic Workforce Plan are a positive step. 

However, as noted, in prior work, we have reported that in DOD’s 

Strategic Workforce Plans DOD has not assessed the appropriate mix of 

military, civilian, and contractor personnel or assessed the capabilities of 

each of these workforces as mandated by Congress. As we have 

previously reported, while developing its Strategic Workforce Plan, the 

department should document strategies for workforce planning that define 
 

Page 22 GAO-13-188 Civilian Workforce

roles, responsibilities, and other requirements of the strategies. Without 

proper documentation, agencies cannot measure the effectiveness of 

their human capital management approaches as a basis for developing, 

implementing, and evaluating their workforce planning processes or 

demonstrate how workforce decisions were made.

We are sending copies of this report to interested congressional 

committees, the Secretary of Defense, the Deputy Secretary of Defense, 

the Under Secretary of Defense for Personnel, and Readiness, the Under 

Secretary of Defense (Comptroller), the Secretary of the Army, the 

Secretary of the Navy, and the Secretary of the Air Force.

If you or your staff have any questions regarding this report, please 

contact me at (202) 512-3604 or farrellb@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix V. 

Sincerely yours,

Brenda S. Farrell

Director

Defense Capabilities and Management
Appendix I: Comparison of the Defense 

Agencies’ and Military Services’ Civilian 

Workforce Caps

Page 23 GAO-13-188 Civilian Workforce

The former-Secretary of Defense’s memoranda outlining the Efficiency 

Initiatives provided the department with some initial direction on the 

civilian workforce cap. Subsequently, Resource Management Decision 

703A2, developed as part of the Department of Defense’s (DOD’s) 

deliberations in support of their submission to the fiscal year 2012 

President’s Budget, provided some additional guidance on the civilian 

workforce cap. Table 3 compares the planning and implementation of the 

civilian workforce cap between the defense agencies and military 

services.

Table 3: Comparison of the Civilian Workforce Cap at the Defense Agencies and Military Services 

Defense Agencies, Headquarters Activities, 

Combatant Commands, and Other DOD 

components other than the Military Services Military Services

Method of notification about 

civilian workforce cap

Two separate Efficiency Initiative memoranda issued 

by the then-Secretary of Defense Robert M. Gates. 

Resource Management Decision 703A2.

a

 

Timeframes for notification Secretary Gates’ memoranda were issued August 

16, 2010 and August 20, 2010. 

Resource Management Decision 703A2 was 

issued January 25, 2011, as part of the fiscal year 

2012 budget process. Some service officials 

reported being notified of the cap in late December 

2010, when the Resource Management Decision 

was circulated in draft form.

Additional specifications/

guidance provided 

The August 16, 2010 memorandum stated, as 

follows:

Freeze the number of Office of the Secretary of 

Defense (OSD), defense agency, field activity, Joint 

Staff, and Combatant Command ) billets at the fiscal 

year 2010 levels for the next three years. 

Additionally, no full-time OSD positions will be 

created after fiscal year 2010 to replace contractors 

except for critical needs.

The August 20, 2010 memorandum expanded upon 

the prior memorandum’s direction and stated, as 

follows:

A cap, at fiscal year 2010 levels, in the aggregate 

number of authorized and funded manpower billets 

in OSD, Joint Staff, Combatant Commands, Office of 

the Inspector General of the DOD, Defense 

Agencies, and DOD Field Activities, and all other 

organizational entities outside the Military 

Departments for the next three fiscal years. This 

action is intended to preclude further personnel 

growth in these areas and to facilitate the previously 

announced organizational “zero based” reviews. The 

Deputy Secretary of Defense is authorized to grant 

exceptions to this cap, on a component basis, for 

compelling circumstances.

The issuance of the Resource Management 

Decision 703A2 in January 2011 reiterated the 

terms of the August 16, 2010 memorandum and 

added that,

This freeze has now been extended to the 

Military Departments.

Appendix I: Comparison of the Defense 

Agencies’ and Military Services’ Civilian 

Workforce Caps
Appendix I: Comparison of the Defense 

Agencies’ and Military Services’ Civilian 

Workforce Caps

Page 24 GAO-13-188 Civilian Workforce

Defense Agencies, Headquarters Activities, 

Combatant Commands, and Other DOD 

components other than the Military Services Military Services

Segment of the civilian 

workforce impacted by the 

cap

Resource Management Decision 703A2 further 

identified the workforce impacted by the cap, stating, 

as follows:

The fiscal year 2010 column of the fiscal year 2011 

President’s Budget for U.S. Direct Hires (Direct and 

Reimbursable) civilian full-time equivalents (FTEs) 

for each Component is the baseline for the 

manpower freeze. 

According to officials, OSD did not provide specific 

guidance to the military services on which 

segments of the workforce were capped; however, 

according to service officials, they were instructed 

that the workforce cap was only on U.S. DirectFunded, direct-hire personnel funded out of all 

authorization accounts. However, some officials 

reported confusion about whether reimbursable 

employees were to be included. 

Timeframes for 

implementation of the 

civilian workforce cap

The defense agencies (and others) were notified of 

the civilian workforce cap prior to the start of fiscal 

year 2011 and could therefore plan their fiscal year 

FTE execution in line with their designated cap 

levels. The agencies could also begin taking action 

to cap and, if necessary, reduce their civilian 

workforces in fiscal year 2011. 

As noted, the civilian workforce cap was 

extended to the military services in Resource 

Management Decision 703A2, as part of the 

fiscal year 2012 budget development process. 

Any reductions to the services’ civilian personnel 

funding associated with the civilian workforce cap 

were made in Fiscal Year 2012 President’s 

Budget. Although the services could begin taking 

action to cap and, if necessary, reduce their 

civilian workforces in fiscal year 2011, their fiscal 

year 2011 budget did not reflect those reductions.

Source: GAO analysis of DOD memos, guidance, and budget documents, as well as interviews with OSD and service officials.

a

The Resource Management Decision is used to document decisions made during the preparation of 

submissions to the President’s Budget. 
Appendix II: Scope and Methodology

Page 25 GAO-13-188 Civilian Workforce

To address our audit objectives, we reviewed relevant Office of the 

Secretary of Defense (OSD) and military service policies and guidance 

regarding the civilian workforce cap, such as the Secretary’s Efficiency 

Initiatives memoranda and the Resource Management Decision 703A2. 

We reviewed these and other relevant documentation, and interviewed 

officials from the Department of Defense (DOD) organizations identified in 

Table 4.

Table 4: DOD Organizations Contacteda

Office of the Secretary of Defense • Office of the Under Secretary of Defense (Comptroller) 

• Office of the Under Secretary of Defense for Personnel & Readiness

• Office of the Under Secretary of Defense for Acquisition, Technology, & Logistics, Human 

Capital Initiatives

Department of the Army • Office of the Assistant Secretary of the Army, Manpower & Reserve Affairs

• Office of the Assistant Secretary of the Army, Financial Management & Comptroller

• Office of the Deputy Assistant Secretary of the Army, Civilian Personnel/Quality of Life

• Office of the Deputy Chief of Staff, Army G1

• Office of the Assistant Army G1, Civilian Personnel

• Installation Management Command, Fort Sam Houston, Texas

• Training and Doctrine Command, Fort Eustis, Virginia

Department of the Navy • Office of the Assistant Secretary of the Navy, Manpower and Reserve Affairs

• Office of the Assistant Secretary of the Navy, Financial Management & Comptroller

• Commander, Navy Installations Command

• Commander, Navy Region Mid Atlantic, Naval Station Norfolk, Virginia

• Commander, Navy Region Southwest, Naval Base San Diego, California

• U.S. Marine Corps, Office of Manpower and Budget

• Marine Corps Base Camp Pendleton, California

• Marine Corps Recruit Depot, San Diego California

Department of the Air Force • Office of the Secretary of the Air Force, Financial Management and Comptroller

• Office of the Secretary of the Air Force, Manpower, Personnel and Services

• Office of the Deputy Assistant Secretary of the Air Force, Financial Management & 

Budget, Budget Operations & Programs

• Air Force Personnel Center, Randolph Air Force Base, Texas

• Air Combat Command, Langley Air Force Base, Virginia

Defense Agencies • Washington Headquarters Services

• Defense Information Systems Agency

• Defense Threat Reduction Agency, Office of the Comptroller

Source: GAO data.

a

Unless otherwise indicated, these offices and agencies are located within the Washington, D.C. 

metropolitan area. 

Appendix II: Scope and Methodology
Appendix II: Scope and Methodology

Page 26 GAO-13-188 Civilian Workforce

To evaluate the progress the military services have made in meeting their 

respective civilian workforce full-time equivalent (FTE) cap levels for fiscal 

year 2012, we reviewed the Secretary of Defense’s series of 

memoranda—including those dated August 16, 2010 and August 20, 

2010 which directed a freeze (or cap) on civilian manpower billets1

—on 

the Efficiencies Initiative to identify the Secretary’s guidance on that 

initiative, as well as Resource Management Decision 703A2 which 

assigned the cap levels to the services. We then compared the direction 

provided in those memoranda to the military services’ civilian workforce 

cap levels and any resulting reductions to the civilian workforce, as well 

as exceptions to the workforce cap, outlined for the services in Resource 

Management Decision 703A2, as part of the fiscal year 2012 budget 

development. We obtained workforce level data updates from officials in

each of the military services to determine the services’ progress in 

implementing the workforce cap and making any required reductions. 

More specifically, to obtain workforce data on the services’ civilian fulltime equivalent levels and clarification on exceptions the services’ 

received to the cap, we met with knowledgeable officials from the Office 

of the Assistant Secretary for Financial Management and Comptroller for 

each of the military services2

 

1

Although the Secretary’s memos referred to manpower billets, officials in the Office of the 

Under Secretary of Defense (Comptroller) stated that the cap was on civilian full–time 

equivalent levels. 

. We analyzed OSD and military service 

budget documents and data from the Fiscal Years Defense Program to 

identify the services’ authorized FTE levels prior to the cap and the 

revised FTE levels after the implementation of the workforce cap. We also 

interviewed officials from the offices identified in Table 4 to obtain an 

understanding of how the cap levels and exceptions were identified and 

assigned across the department. We found workforce data, as well as 

OSD and military service budget documents, sufficiently reliable for the 

purposes of our reviewing and reporting on the progress and steps taken 

in implementing this efficiency initiative. To evaluate the extent to which 

the department realized any savings from the civilian workforce cap, we 

reviewed key DOD budget documents—including the individual services’ 

civilian personnel cost exhibits and budget justification books. We also 

reviewed any briefings pertaining to expected savings and voluntary 

separation incentive costs from the cap. In addition, we interviewed 

2

The United States Marine Corps is part of the Department of the Navy and therefore 

United States Marine Corps civilian personnel and respective cap is included in the Navy 

data for the purposes of this report.
Appendix II: Scope and Methodology

Page 27 GAO-13-188 Civilian Workforce

knowledgeable officials from the Office of the Secretary of Defense and 

each of the military services to discuss anticipated savings and costs 

associated with the civilian workforce cap.

To determine any steps that OSD and the military services have taken to 

help ensure that, in implementing this efficiency initiative, they maintained 

critical skills and competencies for its civilian workforce, we reviewed 

GAO’s Key Principles for Effective Strategic Workforce Planning3

 

3

GAO: Human Capital: Key Principals for Effective Strategic Workforce Planning

, as well 

as plans, policies, and guidance developed by OSD, the military services,

and select defense agencies related to the implementation of the civilian 

workforce cap. We used DOD’s Fiscal Year 2010-2018 Strategic 

Workforce Plan and prior GAO work to define “critical skills” as the core 

mission and support occupations that are vital to the accomplishment of 

an agency’s goals and objectives. We further defined “critical 

competencies” as a set of behaviors that encompass knowledge, skills, 

abilities, and personal attributes that are critical to successful work 

accomplishment—specifically, what employees know, what they do, and 

how they do it and translate into effective on-the-job performance. We 

also interviewed officials at OSD and military services, in the offices 

identified in Table 4. In addition, we met with officials from select 

installations—based on a non-probability site selection methodology that 

considered, for example, (1) the total number of reductions required to 

meet the cap, (2) proximity of locations to other military installations also 

implementing the workforce cap and reductions, (3) locations that 

experienced either success of challenges in meeting their caps—to 

determine how lower level organizations planned for and implemented the 

workforce cap. More specifically, we met with ten installations identified in 

Table 4—two per military service (including the Marine Corps) and two 

defense agencies (Defense Threat Reduction Agency and Defense 

Information Systems Agency). Our selection methodology also included 

two defense agencies because of the differences in how the cap was 

applied to the defense agencies compared with the military services. 

Although not generalizable, our site selection provides a cross section of 

installations and defense agencies to provide context in our discussion. 

See appendix I for a comparison of the planning and implementation 

differences between the groups outlined in the Secretary’s memos and 

the military services, as well as information related to these specific 

GAO-04-39. (Washington, D.C.: December 11, 2003).
Appendix II: Scope and Methodology

Page 28 GAO-13-188 Civilian Workforce

defense agencies. We also obtained and analyzed guidance and tracking 

documents developed by these organizations.

We conducted this performance audit from February 2012 to January 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix III: Comments from the Department 

of Defense

Page 29 GAO-13-188 Civilian Workforce

Appendix III: Comments from the 

Department of Defense
Appendix III: Comments from the Department 

of Defense

Page 30 GAO-13-188 Civilian Workforce
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 31 GAO-13-188 Civilian Workforce

Brenda S. Farrell (202) 512-3604 or farrellb@gao.gov

In addition to the contact named above, Lori Atkinson, Assistant Director; 

Marion Gatling, Assistant Director (retired); Mae Jones; Brian Pegram; 

Charles Perdue (retired); Terry L. Richardson; Norris Smith III; Spencer 

Tacktill; Michael Willems; and Jennifer Weber made key contributions to 

this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments
Related GAO Products

Page 32 GAO-13-188 Civilian Workforce

Human Capital: DOD Needs Complete Assessments to Improve Future 

Civilian Strategic Workforce Plans. GAO-12-1014. Washington, D.C.: 

September 27, 2012.

Human Capital: Complete Information and More Analyses Needed to 

Enhance DOD’s Civilian Senior Leader Strategic Workforce Plan. 

GAO-12-990R. Washington, D.C.: September 19, 2012.

DOD Civilian Workforce: Observations on DOD’s Efforts to Plan for 

Civilian Workforce Requirements. GAO-12-962T. Washington, D.C.: 

July 26, 2012.

Defense Acquisition Workforce: Improved Processes, Guidance, and 

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

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

Defense Acquisitions: Further Actions Needed to Improve Accountability 

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

D.C.: April 6, 2012.

DOD Civilian Personnel: Competency Gap Analyses and Other Actions 

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

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

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

February 2011.

Human Capital: Opportunities Exist for DOD to Enhance Its Approach for 

Determining Civilian Senior Leader Workforce Needs. GAO-11-136. 

Washington, D.C.: November 4, 2010.

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

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

September 27, 2010.

Human Capital: Opportunities Exist to Build on Recent Progress to 

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

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

The Department of Defense’s Civilian Human Capital Strategic Plan Does 

Not Meet Most Statutory Requirements. GAO-08-439R. Washington, 

D.C.: February 6, 2008.

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