United States General Accounting Office

GAO Report to Congressional Committees

October 1996 DOD FORCE MIX

ISSUES

Converting Some

Support Officer

Positions to Civilian

Status Could Save

Money

G O A

years

1921 - 1996

GAO/NSIAD-97-15

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-274401 

October 23, 1996

The Honorable Dirk Kempthorne

Chairman

The Honorable Robert C. Byrd

Ranking Minority Member

Subcommittee on Personnel

Committee on Armed Services

United States Senate

The Honorable Robert K. Dornan

Chairman

The Honorable Owen B. Pickett

Ranking Minority Member

Subcommittee on Military Personnel

Committee on National Security

House of Representatives

In 1994, we recommended that the Secretary of Defense study

opportunities to convert certain support positions from military to civilian

status, since federal civilian personnel cost the military less than military

personnel of roughly equal grade/rank.1

 Our 1994 detailed analysis was

focused primarily on enlisted positions. Although the Department of

Defense (DOD) concurred with our recommendation, it converted no

positions based on this work. It also filed a congressionally mandated

report on military to civilian conversions2

 and explained that large-scale

conversions of military positions would not be undertaken until its civilian

workforce stabilized at the conclusion of the drawdown. DOD had

converted 3,219 positions by the end of fiscal year 1996 to comply with the

requirement in the Fiscal Year 1996 National Defense Authorization Act to

convert at least 3,000 positions.

We have conducted a similar analysis of commissioned officer positions

using fiscal year 1996 end strength data and, in accordance with our basic

legislative responsibilities, are reporting our results to you because they

fall within your committees’ jurisdiction. Our review is a first step in

identifying officer positions that perform certain support and

1

DOD Force Mix Issues: Greater Reliance on Civilians in Support Roles Could Provide Significant

Benefits (GAO/NSIAD-95-5, Oct. 19, 1994).

2

Department of Defense Report on the Civilian and Military Mix in Support Occupations, Report to the

House Committee on National Security and Senate Committee on Armed Services, Office of the Under

Secretary of Defense (Personnel and Readiness), April 1995.

Page 1 GAO/NSIAD-97-15 DOD Force Mix Issues
B-274401 

administrative functions as candidates for civilian conversion. Our specific

objectives were to identify the

• criteria the services use to determine which officer positions are “military

essential,” positions that DOD believes must be filled by a military person;

• positions currently filled with officers that might be filled with civilians

without harming operational capabilities; and

• savings from converting positions from military to civilian status. To

achieve the second objective, we developed criteria based on DOD

directives and guidance before applying it to selected officer positions in

support activities.

Background DOD planned to end fiscal year 1996 with about 234,000 active duty officers.

Officers serve in warfighting positions as infantry commanders and fighter

pilots and support positions as civil engineering officers, personnel

officers, and veterinarians. About 108,000 officers (approximately

46 percent) are assigned to support positions. As shown in table 1, the

number of officers the services planned to assign to such support

positions in fiscal year 1996 ranged from about 6,800 officers (Marine

Corps) to about 37,900 officers (Army).

Table 1: Officer Positions by Major

Defense Mission Category (fiscal Year

1996) in Thousands of Positions Army Navy

Air

Force

Marine

Corps Total

Warfighting missions 38.2 26.2 30.5 10.5 105.4

Defense-wide missions 5.2 4.0 10.3 0.7 20.2

Support missions 37.9 28.6 35.1 6.8 108.4

Total 81.3 58.8 75.9 18.0 234.0

Source: DOD.

The services’ downsizing efforts continued at the time of our review and

DOD planned to reduce officer positions by about 11,100 to achieve an end

strength of about 222,900 officers between fiscal years 1996 and 1999.

Civilian pay and benefits generally cost less than military pay and benefits

(excluding special classes of employees, such as air traffic controllers and

law enforcement personnel). As a result, the greater the number of

positions converted, the greater the savings.

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Results in Brief Since 1954, DOD Directive 1100.4 has required the services to staff positions

with civilian personnel unless the services deem a position military

essential for one or more reasons, including combat readiness, legal

requirements, training, security, rotation, and discipline. However, the DOD

directive and service implementing guidance provide local commanders

with wide latitude in justifying the use of military personnel in their

staffing requests.

The Army, the Navy, and the Air Force are currently staffing officers in

about 9,500 administrative and support positions that civilians may be able

to fill at lower cost and with greater productivity due to the civilians’ much

less frequent rotations. Examples of career fields that contain positions

that might be converted are information and financial management.

DOD could save as much as $95 million annually by converting the roughly

9,500 positions we identified. Savings achieved through military to civilian

conversions can be used to pay for needed priorities such as weapon

systems modernization.

Final cost savings and the elapsed time before all of the savings were

realized would depend on how many positions DOD converted and how the

conversions were carried out. On the other hand, we recognize that a

number of impediments exist to military to civilian conversions, such as

the ongoing civilian drawdown in DOD and a perceived preference by local

commanders for military rather than civilian personnel in certain

positions. These impediments are not insurmountable, but they will be

difficult to overcome without direction and support from senior leaders at

DOD, such as from the Office of the Secretary of Defense (OSD), and

sustained attention to overcoming the impediments and developing and

executing the conversion plan.

A 1954 Directive

Specifies Military

Essential Criteria

In 1954, DOD issued Directive 1100.4, which requires defense activities to

program the minimum number of personnel needed to meet national

security objectives and to use civilians whenever possible. The guidance

directs the use of military personnel for any one or more of the following

reasons:

• Required training is only available in the military.

• The position is needed to maintain combat readiness.

• The position requires a general military background for successful

execution.

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• The law requires that the position be staffed by military personnel.

• The position must be military in order to maintain good order and

discipline or exercise authority under the Uniform Code of Military

Justice.

• The position is needed to ensure adequate opportunities to rotate

personnel from overseas locations or sea duty to tours of duty in the

Continental United States (CONUS).

• The position must be military for security reasons in which the incumbent

may be involved in combat, expected to use deadly force, or expected to

exhibit an unquestioned response to orders.

• The position requires unusual duty hours that are not normally compatible

with civilian employment.

The services, the joint activities, and the defense agencies were all created

and maintained to accomplish specific missions. These activities

established staffing requirements at the time their missions were tasked to

include determining which positions were military essential. Since the

activities were established, staffing requirements may have changed as

missions or doctrine changed, technological innovations were introduced,

funding priorities changed, or major reorganizations were implemented.

To respond to changes requiring additional personnel, commanders

determined new staffing requirements and requested authorization from

their major commands to fill the positions with DOD Directive 1100.4

available as guidance in determining which positions are military essential.

However, there are no DOD or service systems in place to ensure the

continued validity of previous decisions regarding the military essentiality

of established positions in organizations not experiencing such change.

Since the establishment of officer positions can be subjective and

judgmental and the services generally prefer using military rather than

civilian staffing, once the positions are established, neither the services

nor local commanders have much incentive to revalidate the positions and

these positions often remain categorized as military essential because they

already are military.

Thousands of Officer

Positions Are

Candidates for

Conversion

Our review of 32,155 positions (or about 14 percent of all active duty

officer positions) indicated that about 9,500 were candidates for military

to civilian conversion. We used criteria based on DOD and service

implementing guidance to evaluate such positions as research and

development officer and systems automation officer in the Army,

comptroller and oceanographer in the Navy, and acquisition management

officer and civil engineer in the Air Force.

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Criteria Based on DOD and

Service Implementing

Guidance to Identify

Conversion Candidates

To identify candidates for conversion, we developed criteria based on the

DOD directive and service implementing guidance. Our criteria consisted of

four questions that reflect the substance of the DOD criteria and considered

each position to be a conversion candidate when the answer was “no” to

all four. The questions were as follows:

(1)Is the primary skill or knowledge required in the position uniquely

available in the military?

(2)Does the position have a mission to deploy to a theater of operations in

wartime or during a contingency?

(3)Does any law require that the position be staffed by a military person?

(4)Is the position needed to support the normal rotation of

servicemembers deployed overseas or afloat to assignments in CONUS?

As shown in table 2, our criteria generally agreed with DOD’s.

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Table 2: Comparison of DOD’s and Our

Military Essential Criteria DOD Directive 1100.4 Our criteria

Training Is the primary skill or knowledge required in the position

uniquely available in the military?a

Combat readiness Is the primary skill or knowledge required in the position

uniquely available in the military?

Military background Is the primary skill or knowledge required in the position

uniquely available in the military?

Law Does any law require that the position be staffed by active

duty personnel?

Discipline Does any law require that the position be staffed by active

duty personnel?b

Rotation Is the position needed to support the normal rotation of

servicemembers deployed overseas or afloat to

assignments in CONUS?

Security Does the position have a mission to deploy to a theater of

operations in wartime or during a contingency?c

Unusual duty hours Noned

aWe considered positions military essential if the primary skill or knowledge required was not

unique to the military but the incumbent had to have other substantive knowledge or experience

that was unique to the military.

bOne aspect of the DOD criteria is that incumbents must be able to exercise Uniform Code of

Military Justice authority in certain positions.

cThe DOD criteria refer to the likelihood that incumbents will be involved in combat, while ours

recognizes only those that deploy to a theater of operations, which is where combat would occur.

The DOD criteria also refer to the need to staff positions with military personnel because the

incumbent may need to use deadly force. However, we did not consider that in our analysis

because the need for deadly force while nondeployed was unlikely in nearly all of the career

fields that we reviewed.

dWe did not develop a corresponding question because civilians sometimes work unusual duty

hours.

Source: DOD Directive 1100.4, “Guidance for Manpower Programs” (Aug. 20, 1954). For

purposes of our analysis, we accepted positions as military essential even if the only “yes” was to

the question on deployability to a theater of operations or the duty station is in a location other

than in CONUS. However, DOD deployed over 14,000 civilian federal employees and contractors

to the theater of operations during the Persian Gulf War, and non-CONUS locations include duty

stations in Hawaii, Alaska, and other locations where combat is unlikely. Thus, deployability alone

may not be sufficient justification for maintaining positions as military.

Outside experts reviewed our criteria. The experts suggested

modifications to the criteria, which we adopted. These officials believed

that our criteria, as modified, adequately identified military to civilian

conversion candidates.

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To apply our criteria, we judgmentally selected 37 career fields in the

Army, the Navy, and the Air Force and, using our criteria, evaluated officer

positions in those activities planned to be on the service personnel rolls at

the end of fiscal year 1996. We applied our criteria by comparing military

position classifications contained in relevant service manuals to position

classifications contained in the Department of Labor’s Dictionary of

Occupational Titles. Where we found corresponding positions in each, we

proceeded to our second question. To answer our second question, the

services provided us with the information specifying the number of

positions in each career field scheduled to deploy to a theater of

operations in a contingency. We also considered all positions assigned to

naval vessels or installations outside CONUS to be deployable and thus

military essential. Next, we interviewed service officials to determine

whether any laws required positions in our selected career fields to be

staffed by active duty personnel. Finally, we used service rotation policy

factors or related information to determine how many positions must be

reserved as military to maintain sea to shore or overseas to CONUS rotation

opportunities. The number of positions left after asking these four

questions and excluding positions from further consideration became the

number of positions that we believe are candidates for conversion.

We did not validate the need for any of the positions evaluated. For

purposes of our analysis, we accepted all positions shown on personnel

rolls for fiscal year 1996 as needed. We also did not attempt to determine

whether converted positions should be staffed by federal civilian

employees or contractors.

The Army Could Consider

Converting About 1,000

Positions

Our review of 7,184 positions in 16 career fields in the Army indicate that

about 1,000 are candidates for conversion to civilian status, as shown in

table 3.

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Table 3: Military to Civilian Conversion

Candidates in the Army

Career field

Positions

analyzed

Conversion

candidates

identified

Adjutant General 596 182

Comptroller 170 76

Contracting and industrial management 370 157

Foreign area officer 570 0

Logistics 588 28

Nuclear research and operations 90 0

Operations, plans, and training 841 0

Operations research/systems analysis 212 76

Ordnance 200 1

Personnel programs management 236 11

Psychological operations and civil affairs 51 0

Public affairs 133 17

Quartermaster 129 0

Research development and acquisition 955 134

Systems automation officer 641 323

Total 5,782 1,006

Note: We analyzed 1,402 positions known as “Branch Immaterial,” which consists of positions

whose job description does not correlate directly with a specific career field. The positions we

analyzed are not included in table 3, but we found 1 position that we identified as a conversion

candidate.

Source: Our analysis is based on position data supplied by the Army Force Integration Support

Agency.

As part of an initial effort in 1995 to assign military essential codes to

Army positions, the Army identified about 6,100 officer and enlisted

positions that it coded as available for conversion to civilian status.

However, Army officials were reluctant to provide us with additional

details until the analysis has been validated. Army officials also told us

that no conversions are planned until the Army is sure that it will be able

to hire civilian personnel (despite the ongoing civilian drawdown) to

execute the missions of the converted positions.

The Air Force Could

Consider Converting Over

6,800 Positions

Of the 18,713 commissioned officer positions we reviewed in the Air

Force, about 6,800 are candidates for military to civilian conversion, as

shown in table 4.

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Table 4: Military to Civilian Conversion

Candidates in the Air Force

Career field

Positions

analyzed

Conversion

candidates

identified

Acquisition management 2,545 2,058

Civil engineer 1,571 285

Communications 4,655 2,173

Financial officer 1,066 582

Information management 1,465 211

Logistics plans 647 170

Manpower 261 91

Morale, welfare, and recreation 333 25

Operations support 1,109 0

Personnel 1,131 662

Public affairs 375 61

Security police 1,013 206

Special duty 1,366 194

Transportation 467 0

Weather 709 123

Total 18,713 6,841

Sources: Our analysis is based on position data supplied by the Air Force.

Air Force manpower officials told us they believe that officers in OSD or

joint duty assignments should not be considered to be conversion

candidates because the Air Force does not control those positions. Our

analysis included OSD and joint duty positions, but we considered them

military essential based on our work with officials of the Air Force

manpower office.3

 However, some of these positions may also be

candidates for conversion because lack of control over a position is not a

military essential criterion and the Air Force would regain control over

officers assigned to joint duty positions that were converted.

Air Force manpower officials also told us that opportunities may exist for

military to civilian conversions in certain of the service’s 38 field operating

agencies. The Air Force assigned about 20,000 officers and enlisted

personnel in May 1995 (excluding Air National Guard and Air Force

Reserve personnel) to such field operating agencies as the Air Intelligence

Agency, the Air Weather Service, and the Military Personnel Center.

3

The Air Force had 2,199 officers assigned to OSD and joint duty positions at the time of our review.

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In 1996, the Air Force completed a draft study called the “Minimum

Military Essential Threshold” study and concluded that between 7,118 and

12,473 officer positions were candidates for conversion (depending on the

methodology used) in the same career fields that we reviewed. The Air

Force’s study looked at a greater number of career fields and positions

than we did and overall identified a range from 15,176 to 25,412 positions

as potential candidates for conversion, depending on the methodology

used.

The Navy Could Consider

Converting About 1,600

Positions

We reviewed 6,258 Navy officer positions and concluded that about 1,600

were candidates for military to civilian conversion, as shown in table 5.

Table 5: Military to Civilian Conversion

Candidates in the Navy

Career field

Positions

analyzed

Conversion

candidates

identified

Aerospace engineering aviation maintenance 542 74

Civil engineering 1,174 431

Engineering 825 238

Oceanography 322 159

Public affairs 184 90

Supply 3,211 647

Total 6,258 1,639

Source: Our analysis is based on data supplied by the Bureau of Naval Personnel.

We were not aware of any large-scale military to civilian conversion

analysis underway or completed by the Navy at the time of our review.

However, we identified one study completed in December 1995 by the

Naval Manpower Analysis Center that concluded that of 848 Judge

Advocate General positions (in November 1995), 24 could be eliminated,

27 could be converted to other occupations, and 59 could be eliminated

with their responsibilities transferred to contractors.

DOD Could Save About

$95 Million Annually by

Converting About 9,500

Positions

If DOD converted all of the positions that we identified and maintained the

existing grade structure, DOD could achieve annual cost savings of about

$95 million in the converted positions. Assuming DOD converted about

9,500 positions and maintained the grade structure that existed prior to

Page 10 GAO/NSIAD-97-15 DOD Force Mix Issues
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conversion, the Army could save as much as $10 million, the Navy as much

as $16 million, and the Air Force as much as $69 million. Savings could be

much higher if the services or DOD reviewed the approximately

76,000 support positions (staffed by officers) that we did not review and

identified additional conversion candidates.

We determined the average cost of military and federal civilian salary and

benefits in pay grades O-1 to O-6 and general schedule grades GS-7 to

GS-15 to estimate cost savings obtainable by converting positions from

military to their roughly equivalent civilian pay grade. As shown in table 6,

cost savings vary depending on the pay grade of the converted position.

Table 6: Average Cost Comparison of

Annual Military Compensation by Pay

Grade in CONUS Rank

Military

compensationa Grade

Civilian

compensationb

Civilian cost

advantage

O-6 $119,378 GS-15 $108,334 $11,044

O-5 100,502 GS-14 93,097 7,405

O-4 83,125 GS-12 67,394 15,731

O-3 67,469 GS-11 56,686 10,783

O-2 54,198 GS-9 47,333 6,865

O-1 40,458 GS-7 39,197 1,261

Note: All costs shown are costs to the government only.

aMilitary compensation includes average basic pay; basic allowance for quarters, including the

variable housing allowance; basic allowance for subsistence; the tax advantage accruing by

virtue of the nontaxability of the allowances; an employer’s contribution for the Federal Insurance

Contribution Act (FICA) and Medicare; an estimate of the cost of providing health care to

servicemembers and their families; and the value of benefit accruals under the military retirement

system. All benefits are in fiscal year 1996 numbers, except health care, which is in 1995

numbers.

bCivilian compensation includes salary paid at step 5 of the general schedule; an average

CONUS-based locality adjustment of 5.57 percent; government contributions to the Federal

Employees Retirement System, including matching contributions to the Thrift Savings Plan;

participation in the Federal Employees Health Benefit Program; the Federal Employees Group Life

Insurance Program; employer contributions for FICA and Medicare; and miscellaneous fringe

benefits such as workers’ compensation and awards or bonuses.

Sources: Our analysis is based on data supplied by OSD (Force Management Policy, Directorate

of Compensation); the Office of Management and Budget (OMB); OMB Circular A-76,

Performance of Commercial Activities; and our 1994 report on military to civilian conversions.

Grade equivalencies are based on comparisons established for Geneva Convention purposes

(DOD Instruction 1000.1, Jan. 30, 1974).

DOD and the services have been looking for ways to fund initiatives such as

weapon systems modernization by saving money in current operations.

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For example, as we reported in July 1996,4 the military personnel accounts

fund a sizable portion of DOD’s infrastructure, which DOD wants to decrease

to help pay for modern weapon systems. Also, the Army has a number of

streamlining initiatives underway intended to save as much as $8 billion.

Military to civilian conversions can offer additional opportunities to help

fund modernization.

However, final cost savings and the elapsed time before the full savings

are realized will depend on the number of positions converted and the way

conversions are carried out. DOD can convert positions to civilian status,

but it would have to cut the military force structure to achieve savings.5

 On

the other hand, DOD can maintain the existing force structure and increase

positions in career fields with identified shortages of authorizations.

However, maintaining the force structure should only be done with

adequate justification because DOD would experience a net increase in

costs if it maintains the same size force structure after conversion since no

military positions would be eliminated and civilian or contractor staffing

would increase.

Impediments Limit the

Services’ Ability to Convert

Positions to Civilian Status

Finally, as we reported in our 1994 report on military to civilian

conversions, a number of impediments exist to military to civilian

conversions. First, given the latitude of the services’ guidance and

instructions, local commanders are able to and may often prefer to use

servicemembers due to a perceived greater degree of control over staff.

Second, local commanders may have little guarantee that funding will be

provided for converted positions. Military pay is provided through the

service personnel accounts and funding will be available to continue

staffing the position. But because civilian pay is budgeted in a variety of

operation and maintenance accounts that also fund such other needs as

the purchase of fuel, spare parts for weapons and equipment, and training

of military personnel, the services may have different priorities than

providing sufficient civilian pay to support conversions. Thus, a local

commander who chooses to convert a position risks losing the military

position with little assurance that adequate funding will be provided to

hire a civilian replacement. Finally, DOD believes the ongoing civilian

personnel drawdown would make more difficult the task of converting

4

Defense Budget: Trends in Active Military Personnel Compensation Accounts for 1990-97

(GAO/NSIAD-96-183, July 9, 1996).

5

Congressional approval may be required to cut the military force structure.

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positions until the drawdown ends. However, as we reported in April 1996,6

DOD programmed a civilian drawdown of 26 percent from fiscal years 1993

to 2001, more than double the 12-percent recommended by the White

House’s National Performance Review. As a result, DOD could slow the rate

of the civilian drawdown to provide civilian staff to fill the approximately

9,500 conversion candidates that we identified in this report. These

impediments are not insurmountable, but will be difficult to overcome

without direction and support from DOD’s senior leadership, such as from

OSD, and sustained attention to carrying out conversions by senior-level

staff to overcome the impediments and develop and execute the

conversion plan.

Recommendations We recommend that the Secretary of Defense overcome the impediments

to conversion, develop a plan to convert officer positions in support

activities that are not military essential, and require that the services

implement the plan and report back to the Secretary on progress in

implementing the conversion plan.

To ensure that decisions identifying positions as military essential remain

valid, we recommend that the Secretary of Defense develop a process to

ensure that the need for military staffing in support positions is reassessed

when major changes or reorganizations occur.

Agency Comments and Our

Evaluation

DOD generally concurred with our report and acknowledged that support

positions exist that could be converted by the services and that cost

savings and other advantages can be obtained through such conversions.

DOD indicated that it would convene a series of meetings by the end of

October 1996 involving OSD, the services, and joint staff representatives to

develop approaches to facilitate conversions. Because DOD converted no

positions based on our 1994 review of enlisted position conversion

opportunities, these meetings should consider both officer and enlisted

positions for conversion.

DOD did not agree with our original recommendation to convene a joint

review board to facilitate conversions. But because DOD’s approach

involving high level support meets the intent of our first recommendation

to overcome the impediments and facilitate conversions, we have revised

6

Civilian Downsizing: Unit Readiness Not Adversely Affected, but Future Reductions a Concern

(GAO/NSIAD-96-143BR, Apr. 22, 1996).

Page 13 GAO/NSIAD-97-15 DOD Force Mix Issues
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our recommendation by deleting our suggestion that a joint review board

be convened.

DOD also stated that it has resisted provisions forcing conversions in the

past and that impediments such as lack of consistent funding to hire

civilians, the civilian drawdown, and the congressionally mandated

minimum military strength remain its principle concerns. DOD further

stated that our report does not offer adequate resolution to the

impediments to conversion. Developing solutions to the impediments was

beyond the scope of our work, although the impediments do not appear

insurmountable. First, DOD indicated that it cannot be assured of

consistent funding for civilian replacements without congressional action.

While this may be true, DOD can submit a proposed budget for

congressional action in the next budget cycle to reduce the military

personnel accounts and increase the operations and maintenance

accounts to pay civilian replacements. If DOD wants to change personnel

account and operations and maintenance fund appropriations in this fiscal

year, it will have to request congressional action. Once sufficient

operations and maintenance funds are appropriated, DOD would have to

ensure that the services use the funds to hire civilians and not for other

purposes (for which operations and maintenance funds are also available).

Second, DOD stated that conversions run contrary to the ongoing civilian

drawdown. We disagree. Conversions do not necessarily have to

counteract plans to reduce the size of government. For example, DOD

currently plans to reduce civilian end strength by 26 percent between

fiscal year 1993 and 2001. If DOD reduced civilian end strength by about

25 percent (rather than 26 percent), it would have enough civilian

authorizations to replace the 9,500 officers that we identified in this report.

Third, DOD stated that the minimum military strength mandated by

Congress is an impediment to conversion. However, conversion of support

positions from military to civilian status would not affect military

capability, but merely lower the cost of getting support work done, freeing

up funds that could be used to enhance modernization. As stated earlier,

achievement of savings depends on elimination of the military

authorizations freed up by conversion rather than reassigning to meet

other needs. Therefore, DOD could request that Congress revise minimum

military strength in the next congressional session if revisions are needed

to facilitate conversions and achieve cost savings.

DOD stated that it could not comment on the positions we identified for

conversion due to a lack of specifics in the report. In our report, we

identified the number of positions that we believe are candidates for

Page 14 GAO/NSIAD-97-15 DOD Force Mix Issues
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conversion. Although we could have specified which positions we

recommended for conversion, we did not because we wanted to avoid

unnecessarily limiting DOD’s discretion to select positions for conversion.

DOD also stated that our review reflected a point in time and did not take

into account programmed reductions. While it is true that our review did

reflect a point in time (the end of fiscal year 1996), DOD can convert any

positions still on personnel rolls after fiscal year 1996 that are not military

essential.

Finally, DOD stated that it had concerns about the methodology that we

proposed for identifying positions for conversion. Our methodology is one

of at least five that we are aware of that DOD could use. For example, in

1996, the Air Force applied three different methodologies for identifying

military essential (and non-essential) positions and concluded that over

25,000 officer positions could be converted using one approach. When we

compared the results of the Air Force’s most conservative analysis with

our own in the 15 career fields that we reviewed, we found that in 11 of

15 career fields, ours and the Air Force’s analyses differed by less than

100 positions per career field out of over 18,000 positions analyzed. In

addition, the Army identified over 6,000 positions that it concluded were

not military essential. DOD could select one or a combination of any of the

methodologies developed.

DOD’s comments are reprinted in appendix I. DOD also provided some

technical corrections that we have incorporated into the text of our report

as appropriate.

Scope and

Methodology

We reviewed DOD’s 1995 report to Congress on military to civilian

conversions, DOD directives, service orders and guidance, manuals, and

military to civilian conversion analyses conducted by the services. We also

interviewed officials and reviewed documents from the Office of the

Assistant Secretary of Defense (Force Management Policy); the Army’s

Directorate of Manpower; the Bureau of Naval Personnel and the Air

Force’s Directorate of Program and Evaluation in Washington, D.C.; the

Army’s Force Integration Support Agency in Virginia; the Naval Manpower

Analysis Center in Tennessee; and the Air Force Personnel Center in

Texas. We used information obtained from some of these sources to

develop our military essential criteria. We relied on our work in 1994 to

identify impediments to conversion and we found no evidence that any of

the impediments had changed.

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To estimate the potential cost savings to be obtained from conversions, we

compared the cost to the government of military pay, benefits, and

employer contributions such as that required under FICA with similar costs

likely to be incurred if the same positions were staffed with civilians of

comparable pay grades. To determine military costs, we multiplied the

average cash and in-kind compensation averages in officer grades from

O-1 to O-6 provided by the Assistant Secretary of Defense (Force

Management Policy, Directorate of Compensation) by the number of

positions we identified as military to civilian conversion candidates. To

account for differences in the number of positions available for conversion

at the different grades (and consequently to recognize differences in cost

savings at each grade), we multiplied the applicable pay grade average

cost savings by the number of positions in the same pay grade that we

believe should be converted. We also assumed that the percentage of

positions at each pay grade remained the same before and after

conversion.

To estimate the cost to the government of staffing converted positions, we

used cost factors provided to us by OMB; OMB Circular A-76, Performance of

Commercial Activities, which includes instructions to federal agencies on

determining the cost of federal pay and benefits; and information from the

Office of Personnel Management. For purposes of our analysis, we

assumed federal pay to be that paid at step 5 of the general schedule for

each applicable pay grade (because that is approximately the average pay

step within the pay grades and we used average military pay in estimating

the cost of military personnel). In accordance with instructions from OMB,

we multiplied annual salary (at step 5, including the average CONUS-based

locality adjustment of 5.57 percent) by specified cost factors to determine

the cost to the government of (1) the Federal Employees Retirement

System and government contributions to the Thrift Savings Plan, (2) the

employer’s contribution for FICA, (3) the Federal Employees Group Life

Insurance Program, and (4) the civilian retiree health care. We used Office

of Personnel Management cost data to estimate the cost to the government

of providing civilian health insurance coverage for current employees

under the Federal Employees Health Benefit Program. Finally, we used

OMB Circular A-76 to estimate the cost of miscellaneous fringe benefits

such as workers’ compensation and bonuses or other awards. As

recommended by an OMB official, we assumed that any converted position

would be staffed by a civilian employee covered under the Federal

Employees Retirement System. We restricted our analysis to those civilian

occupations not considered special class employees, such as air traffic

Page 16 GAO/NSIAD-97-15 DOD Force Mix Issues
B-274401 

controllers or law enforcement personnel. If converted positions are in

special classes, cost savings may be smaller or non-existent.

We conducted our work from December 1995 to September 1996 in

accordance with generally accepted government auditing standards.

We will send copies of this report to other interested congressional

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

Force; and the Director, OMB. Copies will be made available to others upon

request.

The major contributors to this report are listed in appendix II. If you have

any questions about this report, please contact me on (202) 512-5140.

Mark E. Gebicke

Director, Military Operations and

 Capabilities Issues

Page 17 GAO/NSIAD-97-15 DOD Force Mix Issues
Appendix I 

Comments From the Department of Defense

Page 18 GAO/NSIAD-97-15 DOD Force Mix Issues
Appendix I 

Comments From the Department of Defense

Now on p. 13.

Now on p. 13.

Page 19 GAO/NSIAD-97-15 DOD Force Mix Issues
Appendix II 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Sharon A. Cekala

William E. Beusse

Brian J. Lepore

William J. Rigazio

Dallas Field Office Roger L. Tomlinson

Norfolk Field Office Lawrence E. Dixon

Paul A. Gvoth, Jr.

(703013) Page 20 GAO/NSIAD-97-15 DOD Force Mix Issues
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