Defense Acquisition Workforce: Actions Needed to Guide Planning Efforts and Improve Workforce Capability
Published: 2015-12-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO and others have found that DOD needs to take steps to ensure DOD has an adequately sized and capable acquisition workforce to acquire about $300 billion in goods and services annually. DOD is required by statute to develop an acquisition workforce plan every 2 years. DOD issued a plan in 2010, in which it called for the department to increase the size of the acquisition workforce by 20,000 positions by fiscal year 2015, but has not yet updated the plan.
Congress included a provision in statute for GAO to review DOD's acquisition workforce plans. In the absence of an updated plan, this report examines DOD's efforts to (1) increase the size of its acquisition workforce, (2) identify workforce competencies and mitigate any skill gaps, and (3) plan for future workforce needs. GAO analyzed current and projected DOD workforce, budget, and career field data; reviewed completed competency assessments; and obtained insights on workforce challenges from the largest acquisition commands within the Army, Navy and Air Force.
section_title: What GAO Found
paragraphs: The Department of Defense (DOD) has increased the size of its acquisition workforce from about 126,000 in September 2008 to about 153,000 in March 2015. The growth was accomplished by hiring additional civilian personnel, insourcing work previously performed by contractors, adding more military personnel, and re-categorizing existing positions. However, 6 of the 13 acquisition career fields, including 3 priority career fields—contracting, business and engineering—did not meet growth goals.
DOD has completed workforce competency assessments for 12 of the 13 acquisition career fields and added training classes to address some skill gaps. It is unclear the extent to which skill gaps remain, in part because 10 of the career fields have not conducted follow-up competency assessments to gauge progress. DOD has not established time frames for doing so. Office of Personnel Management standards state that identifying skill gaps and monitoring progress towards addressing gaps are essential steps for effective human capital management.
DOD has not updated its acquisition workforce plan, which would allow it to be better positioned to meet future needs. GAO's analysis of DOD budget information indicates that many career fields will continue to be significantly over or under the growth goals DOD established in 2010, especially in priority career fields such as contracting and engineering. In the past, some hiring decisions made by DOD components using the Defense Acquisition Workforce Development Fund exceeded initial 2010 career field targets. In addition, over the past 7 years, about 2,700 personnel, or 26 percent of those hired with these funds, were in career fields that were not considered high priority in the 2010 acquisition workforce plan. An updated plan that includes revised career field goals, coupled with guidance on how to use the Defense Acquisition Workforce Development Fund, could help DOD components focus future hiring efforts on priority career fields. Without an integrated approach, the department is at risk of using the funds to hire personnel in career fields that currently exceed their targets or are not considered a priority.
section_title: What GAO Recommends
paragraphs: GAO recommends that DOD complete the remaining competency assessment, establish time frames for conducting follow-up assessments, issue an updated acquisition workforce plan, and issue guidance to prioritize the use of funding. DOD concurred with GAO's recommendations.

section_title: Letter
paragraphs: The acquisition workforce of the Department of Defense (DOD) must be  able to effectively award and administer contracts totaling more than $300  billion annually. The contracts may be for major weapon systems, support  for military bases, consulting services, and commercial items, among  others. A skilled acquisition workforce is vital to maintaining military  readiness, increasing the department’s buying power, and achieving  substantial long-term savings through systems engineering and  contracting activities.
During the 1990s, as defense budgets decreased, DOD reduced the size  of its military and civilian acquisition workforce and by the early 2000s  began relying more heavily on contractors to perform many acquisition  support functions. DOD reported that between 1998 and 2008, the  number of military and civilian personnel performing acquisition activities  decreased 14 percent from about 146,000 to about 126,000 personnel.  Amid concerns about the skill gaps within the military and civilian  workforce and the growing reliance on contractors, the Secretary of  Defense announced his intention in April 2009 to rebalance the workforce  mix. DOD issued an acquisition workforce plan in April 2010 that specified  DOD would add 20,000 military and civilian personnel to its workforce by  fiscal year 2015 through hiring actions and converting contractor positions  to civilian or military positions. The 2010 acquisition workforce plan also  identified growth targets for each of DOD’s 13 acquisition career fields  and included a process for assessing workforce competencies.
This report examines DOD’s efforts to rebuild its acquisition workforce.  We began this work in response to Section 1108 of the National Defense  Authorization Act for Fiscal Year 2010, which, as amended, requires DOD  to develop a strategy for improving DOD’s civilian workforce, including a  plan specifically for DOD’s military and civilian acquisition workforce, on a  biennial basis. The legislation also contained a provision for GAO to  assess plans that DOD was to submit between 2009 and 2012. DOD  issued a strategic workforce plan that included an appendix detailing the  plan for the acquisition workforce in April 2010; accordingly, we assessed  the plan and issued a report. DOD is currently developing an update to  the April 2010 acquisition workforce plan, but it is uncertain when it will be  issued. In the absence of an updated plan, we determined the extent to  which DOD has (1) increased the size of its acquisition workforce; (2)  identified workforce competencies and mitigated any skill gaps; and (3)  planned for future workforce needs.
To determine the extent to which DOD has increased the size of its  acquisition workforce, which consists of both civilian and military  personnel, we collected acquisition workforce data for fiscal years 2008  through 2015 from DOD’s DataMart, a central repository of workforce  data. We analyzed the data to determine whether DOD has met its overall  and individual career field growth targets and to identify workforce trends.  Because DOD’s acquisition workforce plan addressed the department’s  strategy to revitalize its acquisition workforce between fiscal years 2009  and 2015, we used workforce data from the end of fiscal year 2008 as a  baseline to conduct our analysis. In most cases we compared fiscal year  2008 data to March 2015 data. However, in some cases the most current  data DOD could provide was through the end of fiscal year 2014. We  noted whether we used fiscal year 2014 or March 2015 data as  appropriate in the report. To assess the reliability of DOD’s DataMart  data, we (1) reviewed existing information about the data and the system  that produced them, (2) reviewed the data for obvious errors in accuracy  and completeness, and (3) worked with agency officials to identify any  data problems. When we found discrepancies, we brought them to DOD’s  attention and worked with DOD officials to correct the discrepancies. We  also interviewed agency officials knowledgeable about the data. We  determined that the data were sufficiently reliable for the purposes of our  report. We interviewed acquisition leaders in each of the military  departments and other defense agencies, collectively referred to in this  report as DOD components, to determine how the growth in the  acquisition workforce was achieved in their respective components.
To determine the progress DOD has made to identify acquisition  workforce competencies and mitigate any skill gaps, we analyzed all  competency assessments that had been completed by October 2015. We  determined if career fields completed the process outlined in DOD’s 2010  acquisition workforce plan and whether these efforts met the Office of  Personnel Management’s key principles for assessing the management  of human capital. We also interviewed leaders in six career fields, which  generally comprise the largest career fields and together make up 73  percent of the acquisition workforce, to obtain their insights into the  competency assessment process and challenges. The leaders we  interviewed were from the business; program management; contracting;  engineering; production, quality, and manufacturing; and test and  evaluation career fields. We identified new and revised training classes  offered by the Defense Acquisition University to address skill gaps, and  discussed efforts to develop proficiency standards with officials from the  Defense Acquisition University and the military departments as well as  some career field leaders.
To determine the extent to which DOD has planned for future workforce  needs, we analyzed workforce and funding data submitted as a part of  the fiscal year 2016 president’s budget submission and the planned  funding levels for the Defense Acquisition Workforce Development Fund  for fiscal years 2015 through 2020. To assess the reliability of the  workforce and funding data, we (1) reviewed the data for obvious errors in  accuracy and completeness; and (2) worked with DOD officials to identify  any data problems. When we found discrepancies (such as missing data),  we brought them to DOD’s attention and worked with DOD officials to  correct the discrepancies. We also interviewed agency officials  knowledgeable about the data. We determined that the data were  sufficiently reliable for the purposes of our report. We also met with  officials at each military department’s largest acquisition command— Air  Force Materiel Command, Army Materiel Command, and Naval Sea  Systems Command—to determine the impact growth efforts had on the  commands and how future workforce needs are determined. Together,  these commands constitute about 42 percent of DOD’s acquisition  workforce. We also met with representatives from the Under Secretary of  Defense for Acquisition, Technology and Logistics’ Human Capital  Initiatives Directorate to discuss future workforce planning efforts.
We conducted this performance audit from February 2015 to December  2015 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.
subsections: section_title: Background
paragraphs: Strategic workforce planning—an integral part of human capital  management—is an iterative, systematic process that helps organizations  determine if they have staff with the necessary skills and competencies to  accomplish their strategic goals. We have previously reported that having  the right workforce mix with the right skill sets is critical to achieving  DOD’s mission, and that it is important for DOD, as part of its workforce  planning, to conduct gap analyses of its critical skills and competencies.
Since 2001, GAO has included strategic human capital management as a  government high-risk area. In 2002, we reported that DOD recognized  that human capital strategic planning is fundamental to effective overall  management. Further, we reported that DOD was working to identify and  address problems that have been hampering this effort, which included a  lack of accurate, accessible, and current workforce data; mature models  to forecast future workforce requirements; a link between DOD’s planning  and budgeting processes; and specific planning guidance. In 2015, we  reported that DOD has demonstrated sustained leadership commitment  to address its acquisition workforce challenges, underscored by the  department’s emphasis on growing and training the acquisition workforce  through its Better Buying Power initiatives.
As part of our larger body of work examining human capital management  issues, we and the Office of Personnel Management have identified six  key principles of strategic workforce planning that organizations should  incorporate in their processes, including: aligning workforce planning with strategic planning and budget  formulation;  involving managers, employees, and other stakeholders in planning;  identifying critical gaps and competencies and analyzing workforce  gaps; developing workforce strategies to address gaps in numbers, skills, building the capabilities needed to support workforce strategies  through steps that ensure the effective use of human capital  flexibilities; and monitoring and evaluating progress toward achieving workforce  planning and strategic goals.
Several offices within DOD play key roles in strategic planning activities,  such as determining the size and makeup of the acquisition workforce,  budgeting for the workforce, assessing workforce competencies, and  addressing skill gaps (see table 1).
Pursuant to the Defense Acquisition Workforce Improvement Act, DOD  identified 13 career fields and designated acquisition-related positions  held by military or civilian personnel. DOD also established certification  requirements that included education, training, and experience elements  for each acquisition position. Certification is the procedure through which  DOD components determine that an employee meets these requirements  for one of three levels in each acquisition career field.
DOD components fund their acquisition workforce personnel through a  variety of accounts, including (1) operation and maintenance; (2)  research, development, test and evaluation; and (3) working capital.  Additionally, Congress established the Defense Acquisition Workforce  Development Fund in 2008 to provide funds dedicated to recruiting,  training, and retaining the acquisition workforce. There are two boards  that oversee acquisition workforce programs, including the Fund and  related initiatives. The Senior Steering Board is expected to meet  quarterly and provide strategic oversight, while the Workforce  Management Group is expected to meet bimonthly and oversee the  fund’s operations and management (see table 2).
section_title: DOD Exceeded Its Overall Acquisition Workforce Growth Goal, but Shortfalls Exist in Several Career Fields
paragraphs: DOD has increased the size of its workforce since September 2008,  exceeding its 20,000 personnel growth target by over 7,000 as of March  2015. The growth varied within individual components. For example, the  Air Force and Navy, as well as the other DOD agencies collectively, have  more acquisition personnel now than in fiscal year 2008. Conversely, the  Army has experienced an 8 percent decrease in the size of its acquisition  workforce since fiscal year 2008 due to Army-wide cost savings  measures that have impacted the size of the civilian workforce. The  reported increase in DOD’s acquisition workforce was accomplished  through hiring of additional personnel, converting functions previously  performed by DOD contractors to performance by DOD civilian personnel  (referred to as insourcing), adding military personnel to the acquisition  workforce, and administratively recoding existing personnel, the last of  which does not result in an increase in DOD’s workforce capacity.  Shortfalls, however, exist in certain career fields. For example, 6 of  DOD’s 13 acquisition career fields, including 3 priority career fields— contracting, engineering, and business—did not meet growth goals.
subsections: section_title: Overall Acquisition Workforce Growth Goals Have Been Met
paragraphs: DOD increased the size of its military and civilian acquisition workforce by  21 percent, from about 126,000 to about 153,000, between September  2008 and March 2015. This equates to a nearly 27,000 personnel  increase and 7,000 personnel more than identified in DOD’s April 2010  acquisition workforce plan. Figure 1 shows that most of this growth  occurred in fiscal years 2009 and 2010.
Acquisition workforce growth outpaced losses between fiscal years 2008  and 2012. However, in fiscal years 2013 and 2014, the department  experienced a small decrease. During this time, DOD components were  faced with sequestration and other cost-cutting measures. In  preparation for these cuts, the Under Secretary of Defense for  Acquisition, Technology and Logistics issued a memorandum in  September 2012 that specified that DOD components were to take a  strategic view in workforce decisions and protect the rebuilding  investments, especially in light of ongoing contractor support reductions.  For the most part, components were able to sustain the acquisition  growth levels they had already achieved, with the exception of the Army,  which lost several thousand personnel. In fiscal year 2015, each  component again experienced an increase, with the exception of the  Army. According to Army Defense Acquisition Career Management  officials, the Army’s cost-cutting efforts have affected all aspects of Army  operations, including acquisition. Since 2008, the number of overall Army  military and civilian personnel has decreased by 91,000, or 12 percent,  from 790,000 to 699,000. The acquisition portion of this reduction was  almost 3,400 personnel.
The department grew the acquisition workforce through a combination of  hiring and insourcing actions, as originally planned, as well as by adding  military personnel and administratively recoding existing positions. Figure  2 shows how DOD increased the acquisition workforce through fiscal year  2014, the most recent year for which DOD could provide complete data.
About 72 percent of the workforce growth has been achieved through  hiring new civilian employees, with more than half of this increase  attributable to funds provided through the Defense Acquisition Workforce  Development Fund. Since 2009, DOD has spent about $1.8 billion from  the fund to recruit and hire about 10,400 new civilian employees. DOD  used the majority of the funding to pay their salaries for a 2- to 3-year  period, after which the components fund the personnel through their own  budget accounts. The hiring actions generally were in the career fields  that DOD indicated were a priority in the 2010 acquisition workforce plan.  For example, about three-quarters of all Defense Acquisition Workforce  Development Fund hiring was targeted toward five priority career fields— contracting, business, engineering, program management, and auditing— identified in DOD’s April 2010 acquisition workforce plan. DOD  components used their own funds to hire the balance of the new civilian  and military employees identified in the figure above.
Overall, insourcing accounted for about 14 percent of the workforce  growth. DOD originally planned to insource 10,000 contractor positions  for the acquisition workforce by fiscal year 2015. Components insourced  about 3,400 positions prior to a March 2011 revision to DOD’s insourcing  policy. According to the memorandum revising the policy, which was  issued jointly by the Under Secretary of Defense for Acquisition,  Technology and Logistics and the Under Secretary of Defense  Comptroller/Chief Financial Officer, a case-by-case approach would be  used for additional insourcing of acquisition functions based on critical  need, whether a function is inherently governmental, and the benefit  demonstrated by a cost-benefit analysis. DOD officials stated that the  revised policy effectively curtailed any additional efforts.
Based on data provided by DOD’s Human Capital Initiatives Directorate,  we estimate that recoding accounted for at least an 11 percent increase  in DOD’s overall acquisition workforce. Acquisition officials stated that  administrative recoding efforts, which resulted in both increases and  decreases to the acquisition workforce, were made to ensure that all  acquisition personnel were properly accounted for within each component  and career field. According to acquisition officials, recoding was  necessary because some personnel were performing acquisition  functions the majority of the time, but were not counted as a part of the  acquisition workforce. These personnel generally continued to perform  the same duties and do not equate to an increase in the capacity of the  organization. The recoded personnel are required to meet acquisition  professional certification standards, including training, education, and  experience requirements. According to Human Capital Initiatives and  DOD component officials, recoding primarily occurred in three career  fields—facilities engineering, life cycle logistics, and science and  technology manager. For example, Air Force Materiel Command  estimated that it recoded approximately 3,600 personnel at its  maintenance depots as acquisition personnel, some of which were  recoded to the life cycle logistics career field.
Increases in the number of military positions accounted for 3 percent of  the workforce growth. According to Army and Air Force acquisition  officials, one of the primary reasons DOD increased the number of  military personnel serving in the acquisition workforce was to provide  increased capacity. Much of this growth was in the contracting career field  during contingency operations in Iraq and Afghanistan.
Overall, Human Capital Initiatives statistics show that growth efforts have  helped DOD reshape the civilian workforce. In fiscal year 2008, DOD  found that about half of its civilian acquisition workforce had 10 years or  less before they were eligible for retirement, with far fewer mid-career  individuals ready to take their place or provide mentoring and supervision  to those workforce members who were early in their career. Defense  Acquisition Workforce Development Fund hiring has helped strategically  reshape the workforce by bolstering critical functions and building early  and mid-career workforce size. Although no specific goals were set, figure  3 shows the progress DOD has made increasing the number of early- career staff (those eligible to retire in 20 years or more) and mid-career  staff (those eligible to retire in 11 to 20 years).
There have also been improvements in the training and qualifications of  the workforce. For example, the percent of the workforce that met  certification requirements increased from 58 percent to 79 percent  between fiscal years 2008 and 2014. In addition, the number of  acquisition personnel with a bachelor’s degree or higher increased from  77 to 83 percent. However, DOD still faces the challenge of an aging  workforce, as statistics also show that the average age of the workforce  has been static since 2008 at about 45 years, and the percentage of  retirement eligible personnel has remained at 17 percent. Defense  acquisition officials recognize the risks associated with the loss of very  experienced members of the acquisition workforce. These officials noted  they are concerned about retaining an adequate number of personnel in  the senior career group to provide leadership and continuity for the  workforce between 2020 and 2030.
section_title: Growth Goals Not Met in Some Priority Career Fields
paragraphs: While DOD met the overall acquisition growth goal, it did not accomplish  the goals set for some career fields. The 2010 acquisition workforce plan  identified growth goals, expressed in terms of a percent increase from  fiscal year 2008 to fiscal year 2015, for each of the 13 acquisition career  fields. The plan indicated that targeted growth in 5 of these priority career  fields—auditing, business, contracting, engineering, and program  management—would help DOD strategically reshape its acquisition  workforce. As of March 2015, our analysis shows that DOD exceeded its  planned growth for 7 career fields by about 11,300 personnel, including  the priority career fields of auditing and program management. The  department did not, however, reach the targets in its growth plan for the  other 6 career fields by about 4,400 personnel, including the priority  career fields of contracting, business, and engineering (see figure 4).
According to military department acquisition officials, shortfalls in  contracting and engineering career fields are largely the result of high  attrition rates and difficulty in hiring qualified personnel. Despite these  challenges, the engineering career field was within 1 percent of its hiring  goal. The business career field did not meet its overall growth goal in part  because of recoding actions that resulted in a loss to the career field,  greater than expected attrition, and Army cost-cutting efforts. Leaders in  some of these areas are trying to identify ways to complete activities  more efficiently to reduce the impact of shortfalls. For example, the Cost  Assessment and Program Evaluation office, which is responsible for  completing independent cost estimates for acquisition programs, has  started an initiative to develop a centralized database and virtual library of  cost and acquisition data so that cost analysts spend less time gathering  data and more time analyzing it.
section_title: DOD Has Completed Most Workforce Assessments, but Has Limited Data on Workforce Proficiency and Skill Gaps
paragraphs: Increasing the number of people performing acquisition work is only part  of DOD’s strategy to improve the capability of its workforce; another part  is ensuring that the workforce has the requisite skills and tools to perform  their tasks. DOD developed a five-phased process that included surveys  of its employees to assess the skills of its workforce and to identify and  close skill gaps. Efforts to complete the process were hindered by low  survey response rates and the absence of proficiency standards. Further,  DOD has not established time frames for when career fields should  conduct another round of competency assessments to assess progress  towards addressing previously identified gaps and to identify emerging  needs.
subsections: section_title: All but One Career Field Completed Required Competency Assessment
paragraphs: In October 2009, section 1108 of the National Defense Authorization Act  for Fiscal Year 2010 required DOD to include certain information as a part  of its acquisition workforce plan, including an assessment of (1) the  critical skills and competencies needed by the future DOD workforce for  the 7-year period following the submission of the report, (2) the critical  competencies of the existing workforce and projected trends in that  workforce based on expected losses due to retirement and other attrition,  and (3) gaps in DOD’s existing or projected workforce that should be  addressed to ensure that DOD has continued access to critical skills and  competencies. Subsequently, the April 2010 acquisition workforce plan  outlined a five-phased process that each of the 13 career fields was to  use to assess the skills of its workforce and to identify and close skill gaps  (see figure 5).
DOD functional leaders generally relied on input from senior experts to  identify the baseline competencies for phase 1, used subject matter  experts to identify work situations and competencies contributing to  successful performance for phase 2, and solicited feedback on the  models through limited testing with the workforce for phase 3. To validate  models and assess workforce proficiency in phase 4, career field leaders  relied on surveys that were sent to all or a sample of personnel to solicit  their assessment of (1) the criticality of each competency, (2) how  frequently they demonstrated each competency, and (3) how proficient  they were at each competency. For phase 5, among other things, DOD  planned to report on the progress made to identify and close skill gaps  and ensure that the competencies remained current.
As of October 2015, 12 of the 13 career fields had completed at least an  initial competency assessment. The production, quality, and  manufacturing career field is the only career field that had not completed  all of the phases at least once, due primarily to turnover in leadership,  according to an Office of the Secretary of Defense official. According to  DOD’s Human Capital Initiatives officials, this career field intends to  complete its initial competency assessment by the end of 2017. In the  interim, this official noted that the functional leader and the functional  integrated product team will continue to actively assess workforce gaps  and needs and will use other resources, such as the Defense Acquisition  University, to address known skill gaps. Until such time, however, this  career field may not have the necessary information to fully identify and  assess skill gaps, as statutorily required.
section_title: Low Competency Assessment Response Rates and the Absence of Proficiency Standards Hindered DOD’s Ability to Assess Workforce Proficiency for Most Career Fields
paragraphs: Assessing workforce proficiency, according to the Office of Personnel  Management’s human capital assessment guidance, allows agencies to  target their recruitment, retention, and development efforts. DOD planned  to collect data on workforce proficiency as a part of the competency  assessment process by pairing supervisor and employee responses to  questions included in the surveys, but this effort was hindered by low  response rates. In a separate, but related, effort DOD has not yet  completed efforts to develop proficiency standards for the acquisition  career fields, which would ultimately allow leaders to measure employee  proficiency against standards that are specific to each career field.
Contracting and auditing were the two career fields that were able to pair  supervisor and employee responses collected in competency  assessments to make observations about workforce proficiency. These  results helped senior leaders identify areas where the workforce did not  possess the same level of proficiency as supervisors expected. For  example, senior contracting leaders determined that, among other things,  fundamental contracting skills were needed across entry and mid-career  levels of the contracting workforce and currency, breadth and depth of  knowledge were needed across mid-career and senior levels. Leaders  emphasized the importance of not only mastering the “what,” but in being  able to use critical thinking and sound judgment to apply the knowledge,  thus mastering the “how.” In response, the contracting senior leaders  worked together with the Defense Acquisition University to develop a 4- week research-intensive fundamentals course that provides new hires  practical experience using the Federal Acquisition Regulation and the  Defense Federal Acquisition Regulation Supplement. The auditing career  field overhauled its training curriculum for new auditors to closely tie with  government auditing standards, which career field officials stated would  play a large role in addressing gaps in the auditing competencies. The  new hire curriculum consists of a 2-week onboarding session, followed by  a 2-week class in basic contract audit skills, plus another 2-week class  focused on applying the skills in specific types of audits.
The other 10 career fields that completed a competency assessment  relied on staff self-assessments to make observations about workforce  proficiency because of low survey response rates, particularly by  supervisors. As a result, the Center for Naval Analysis, which conducted  surveys for these 10 career fields, generally stated in its reports that the  results were less verifiable because they were not validated against  supervisor responses and that leaders should exercise caution when  extrapolating the results. Overall response rates for these career fields  ranged from 13 to 37 percent. Five of the career field leaders we met with  stated that they used other reviews and input from functional integrated  product teams to complement the survey results and then worked with the  Defense Acquisition University to develop or update training classes. The  program management career field, for example, conducted two studies,  one in 2009 and another in 2014. The studies included interviews of  program managers and program executive officers to identify  opportunities to improve the proficiency of programs managers through  additional training or experience requirements for program management  candidates. The studies identified, among other things, the need to  improve program managers’ awareness of earned value management,  which is a project management technique for measuring performance and  progress, and business acumen. In response, the Defense Acquisition  University developed a class called “Understanding Industry” which  covers such issues as how contractors align their business strategies,  finances, and operations to meet corporate goals.
The Center for Naval Analysis reported that it did not explicitly identify  proficiency gaps as a part of conducting the competency assessment  surveys for most career fields because no proficiency standards exist.  The Center for Naval Analysis strongly encouraged leadership to set  standards based on baseline data gathered in the surveys. DOD began  efforts to establish department-wide proficiency standards in 2012 under  the Acquisition Workforce Qualification Initiative. Overall, DOD estimated  that it would require establishing up to 2,000 standards across the  acquisition career fields. However, the project leader stated that it proved  difficult to develop a set of standards whose applicability would be  common across all personnel, including those with the same position title,  because employees perform different acquisition activities across or even  within the DOD components. Further, the project leader stated that it  became apparent that developing a single database to collect and track  experiences of the acquisition workforce would take considerable time  and expense and would contribute to the proliferation of systems that an  organization would have to support and maintain.
The goal of this initiative is now to map competencies for each career  field to on-the-job outcomes, with a focus on assessing the quality versus  the quantity of the experiences, according to the project leader. Initiative  officials are working with the Defense Contract Management Agency to  leverage a database that the agency uses to track employee experiences.  For now, initiative officials are creating a computer-based tool using Excel  software that employees can use to track their individual acquisition  experience. The tool is designed to be used by employees to facilitate  career development conversations with supervisors. The project leader  expects that the tool should be available for use in 2016.
section_title: DOD Has Not Identified a Time Frame to Conduct Follow-up Assessments
paragraphs: According to the Office of Personnel Management, as part of their  workforce planning activities, agencies should monitor and evaluate their  efforts to address competency gaps on a continuous basis. DOD has not  determined how often competency assessments should be conducted;  however, five career field leaders we met with stated that assessments  should be completed every 3 to 5 years. They stated that this would allow  leadership time to gauge the success of efforts to address previous skill  gaps, identify current skill gaps, and identify emerging needs.
In that regard, the business and contracting career fields recently  completed a second round of workforce assessments and are in the  process of analyzing results or identifying actions to address gaps. The  other 10 career fields that completed an initial competency assessment  did so between 2008 and 2012, but have not completed another round of  workforce assessments to determine if their workforce improvement  efforts were successful and what more needs to be done. Half of these 10  career field leaders indicated that they plan to complete another  assessment between 2016 and 2019, or about 5 to 8 years after the initial  assessment was conducted for most career fields. Without establishing  appropriate time frames to conduct follow-up assessments and  completing those assessments, acquisition workforce leaders will not  have the data needed to track improvement in the capability of the  workforce and focus future training efforts, as called for by Office of  Personnel Management standards.
section_title: DOD Has Not Issued an Updated Acquisition Workforce Strategy or Guidance on Workforce Funds to Focus Future Hiring Decisions
paragraphs: DOD generally plans to maintain the current level and composition of the  acquisition workforce. DOD has not, however, verified that the current  composition of the workforce will meet its future workforce needs.  Officials at the Air Force Materiel Command, Army Materiel Command,  and Naval Sea Systems Command indicated that they are having  difficulties meeting program office needs, especially in the contracting and  engineering career fields. These two priority career fields will remain  under the levels targeted by DOD’s April 2010 workforce plan, while  several other career fields will continue to exceed their targeted level.  Further, Human Capital Initiatives has not issued an updated workforce  strategy that includes revised career field goals or issued guidance on the  use of the Defense Acquisition Workforce Development Fund to guide  future hiring decisions.
subsections: section_title: DOD Plans to Maintain Current Workforce Levels and Mix, but Selected Commands Are Concerned about Meeting Acquisition Program Needs
paragraphs: In an April 2015 memorandum, the Under Secretary of Defense for  Acquisition, Technology and Logistics stated that it is imperative for the  components to sustain and build on the investment made to increase the  capacity and capability of the acquisition workforce. Specifically, the  components were told to responsibly sustain the acquisition workforce  size and make adjustments based on workload demand and  requirements.
According to January 2015 workforce projections included in budget  exhibits that components developed for the fiscal year 2016 president’s  budget, the components generally plan to maintain the current level and  composition of the civilian and military acquisition workforce through fiscal  year 2020, though individual components project slight shifts. For  example, these projections indicate that the Army plans to increase the  size of its acquisition workforce by almost 2.5 percent by predominantly  adding military personnel, while the Air Force projects a less than 1  percent decrease and the Navy projects a decrease of almost 2 percent.
The other DOD components are planning to decrease the size of their  current workforces collectively by about 5 percent. However, Army  officials stated that in September 2015, the Army revised its projection. It  now estimates that its acquisition workforce will decrease by about 1,800,  or 5 percent, by fiscal year 2020 as a result of recent reductions to the  Army’s entire military structure from fiscal year 2016 forward. According  to DOD guidance, the component budget exhibits contain estimates of the  number of authorized and funded acquisition workforce personnel through  the Future Years Defense Program. The estimates do not provide  information on components’ workforce projected shortfalls.
Our analysis of the budget exhibits shows that to maintain the overall size  of the workforce at around 150,000, DOD components collectively plan to  spend between $18.5 billion and $19.4 billion annually through fiscal year  2020. This funding will be used to pay acquisition workforce salaries,  benefits, training, and related workforce improvement initiatives. The total  amount includes about $500 million in planned funding annually for the  Defense Acquisition Workforce Development Fund, which will be used to  hire about 4,900 new employees through fiscal year 2020 to help sustain  the current size of the workforce and continue training and development  efforts. Budget documents also indicate, however, that many career fields  are projected to continue to be significantly over or under their original  growth targets identified in DOD’s April 2010 acquisition workforce plan  (see figure 6).
Our analysis of the PB-23 submissions indicates that eight career fields  will lose about 2,500 positions collectively between 2015 and 2020. One  of these career fields, life cycle logistics, is projected to lose almost 1,400  of these positions, but will still be significantly over the growth target  established in 2010. Five career fields are expected to grow by a total of  about 1,000 positions, with the majority of this growth in the contracting  and facilities engineering career fields. The growth expected between  2015 and 2020 will allow purchasing to meet its initial growth target.  Despite this projected growth, however, four of the priority career fields— contracting, business, engineering, and audit—will remain under the April  2010 growth targets.
Further, concerns about the levels of contracting and engineering  personnel were expressed by officials at each of the three major  acquisition commands we met with—Air Force Materiel Command, Army  Materiel Command, and Naval Sea Systems Command. For example,
Air Force Materiel Command has not been able to hire enough  personnel to offset a 10 percent attrition rate in the contracting career  field, according to career field leaders. It also has shortfalls in  engineering personnel, which requires multiple programs to share  engineers with particular technical expertise. The command manages  personnel shortfalls by assessing risks for its programs and then  reallocating staff from programs that are considered to have less risk  to new programs or programs that have more risk. Command officials  cited several reasons for the shortfalls. First, since fiscal year 2013,  the command has initiated 19 new acquisition programs without  budgeting for the civilian and military personnel needed to adequately  support the entire portfolio of the command’s programs. Second,  command officials noted that they have lost some military and civilian  acquisition personnel due to DOD-wide cuts in operation and  maintenance funding accounts from which these personnel are paid.  Finally, officials stated that the command has made cuts to the  contractor workforce that more than offset the growth in the military  and civilian acquisition workforce to date.
Army Materiel Command officials stated that the command is currently  experiencing shortfalls in the contracting career field and the shortfall  is expected to reach about 800 personnel by fiscal year 2020. The  shortfalls are the result of several cost-cutting actions taken by the  Army since fiscal year 2011 to implement mandated reductions and  caps on future spending. For example, the command’s contracting  organization was only able to fund about 3,600 of its authorized 4,000  positions. Officials from that organization stated that they have moved  over $100 million in contract actions from overburdened contracting  offices to other contracting offices within the command that have  additional capacity. Officials estimate that they can only mitigate the  impact of about one-third of planned reductions through workload  realignments and process changes. In addition, the command has  taken on several new missions without gaining additional resources,  including contingency contract administration services that were  previously performed by the Defense Contract Management Agency  and lead responsibility for contracting in Afghanistan, which was  previously provided through a joint contracting organization assigned  to U.S. Central Command.
Naval Sea Systems Command officials stated that the command is  experiencing shortfalls in the contracting and engineering career  fields, and they are projecting additional shortfalls by fiscal year 2020.  One metric the command is tracking to assess contracting workload  shows that the number of new contract awards that are delayed into  the next fiscal year was approximately 100 for fiscal year 2015. This  includes the contract award for the Navy’s Own Ship Monitoring  System, a technology for submarine sonar systems, as well as the  Aegis Weapon System Modernization production upgrades. The  number of new contract awards that are delayed into the next fiscal  year is expected to grow to about 430 contracts by fiscal year 2020 as  a result of workload increases and shortfalls in the contracting career  field. Command officials expect current shortfalls in contracting  personnel to be exacerbated by DOD-wide cuts to civilian personnel.
In addition, Naval Sea Systems Command engineering officials said  that one-third of the command’s technical specifications and  standards, which serve as the fleet’s instructional manual on routine  ship maintenance, have not been reviewed in the past 20 years. They  said that the backlog of specification and standard reviews indirectly  contributed to two failures within 5 years of the main reduction gears  on a Navy destroyer—a warship that provides multi-mission offensive  and defensive capabilities. The failures resulted from an industry  change in oil composition that was not addressed by corresponding  changes to the Navy’s maintenance standards for the ship.
In general, command officials could not provide validated data on the  extent of current workforce shortfalls, but each military department is  developing models to help better project acquisition program needs and  quantify potential shortfalls. Specifically:
The Air Force Materiel Command pilot-tested an updated Air Force  workforce model in 2015 to assist with personnel planning over the life  cycle of a program based on factors such as type of program and life  cycle phase. The model projects that the command will have a  shortfall of over 1,300 military and civilian acquisition positions by  fiscal year 2017, and nearly 1,900 positions by fiscal year 2021.  Command officials are working closely with acquisition program  managers to validate program needs and to identify weaknesses in  the model. Additional functionality is expected to be added over the  next several years that will allow the command to target hiring to fill  specific workforce gaps. For example, instead of soliciting applications  for engineers in general, the command could more specifically target  materials engineers.
The Assistant Secretary of the Army for Acquisition, Logistics and  Technology is in the process of developing personnel planning  models that will better allow organizations to forecast their manpower  requirements. The program management model was approved by the  Army Manpower Analysis Agency and is beginning to be used by  program managers. Army Materiel Command officials expect a new  contracting model to be available for use later in fiscal year 2016.  Additional models for research and development and test and  evaluation are also being planned.
Naval Sea Systems Command officials stated that they are in the  process of developing career field-specific tools to, among other  things, forecast needs, help identify skill gaps, and create demand  signals for career development opportunities. No date was provided  for when these tools will be available.
section_title: DOD Does Not Have an Updated Acquisition Workforce Strategy or Guidance on the Use of Defense Acquisition Workforce Development Funds to Help Focus Future Hiring Decisions
paragraphs: DOD has not issued an updated acquisition workforce strategy to help  guide future hiring decisions. According to Human Capital Initiatives  officials, budget uncertainties have been the primary reason for the delay.  The Director of Human Capital Initiatives noted that senior DOD and  military department leadership regularly discuss the state of the  acquisition workforce and its capacity to address emerging needs and  challenges. The Director also noted that similar discussions occur at  various levels within DOD components. As a result, the Director stated  that while the size and composition of the workforce differs from what was  called for in DOD’s 2010 acquisition workforce plan, DOD’s current and  projected workforce largely reflect the decisions made during these  discussions. However, according to acquisition officials we met with, DOD  components and sub-components make thousands of individual hiring  decisions, based not only on the need to obtain critical skills, but to also  sustain growth already achieved in a career field, address emerging  issues, and meet other priorities. Human Capital Initiatives officials said  that they are working to issue an updated acquisition workforce plan in  2016.  10 U.S.C. Section 115b requires that DOD issue a biennial acquisition  workforce strategy that, among other things, assesses the appropriate  mix of military, civilian, and contractor personnel capabilities and includes  a plan of action to meet department goals. Further, as we have previously  reported, issuing a workforce strategy and an associated plan of action is  crucial for DOD to effectively and efficiently manage its civilian workforce  during times of budgetary and fiscal constraint. For example, continuing  cuts to operation and maintenance budget accounts and efforts to reduce  headquarters spending by 20 percent over the next few years could result  in additional reductions to acquisition workforce positions in some career  fields. In addition, Section 955 of the National Defense Authorization Act  for Fiscal Year 2013 requires DOD to plan to achieve civilian and service  contractor workforce savings that are not less than the savings in funding  for military personnel achieved from reductions in military strength, which  could also affect the size of the acquisition workforce. DOD may also be  faced with another round of sequestration cuts, which could result in  hiring freezes or workforce reductions. Without issuing an updated  workforce strategy, as statutorily required, DOD may not be positioned to  meet future acquisition needs.
Aligning the use of the Defense Acquisition Workforce Development Fund  to high priority workforce needs is also crucial. In the past, some hiring  decisions made by DOD components using the Defense Acquisition  Workforce Development Fund exceeded initial 2010 career field targets.  In addition, over the past 7 years, about 2,700 personnel, or 26 percent of  those hired with these funds, were in career fields that were not  considered high priority in the 2010 acquisition workforce plan. For  example, funds were used to hire about 850 personnel for the life cycle  logistics career field that is significantly over its growth target. To focus  use of the funds, the Assistant Secretary of the Army for Acquisition,  Logistics and Technology issued guidance in March 2013 that identified  critical career field priorities for the future acquisition workforce and  emphasized the need to balance critical acquisition skills needed with  other personnel requirements during times of constrained budgets and  limited personnel resources. In fiscal year 2014, the Assistant Secretary  of the Navy for Research, Development and Acquisition directed that 75  percent of Navy’s hiring using these funds should be in priority career  fields such as contracting, engineering, and business. The Air Force has  not issued similar guidance on how to target hiring efforts to meet critical  needs.
Section 1705 of Title 10, U.S. Code, requires the Human Capital  Initiatives Directorate to issue guidance for the administration of the  Defense Acquisition Workforce Development Fund. The guidance is to  identify areas of need in the acquisition workforce, including changes to  the types of skills needed. The Director of Human Capital Initiatives told  us, however, that while key stakeholders involved in acquisition workforce  planning, such as the Senior Steering Board and defense acquisition  career managers, discuss areas of need in the workforce, the office does  not issue guidance on how DOD components should prioritize their hiring  decisions. Without clearly linking the use of these funds with the strategic  goals of the department, components may continue to over-hire in some  career fields and not be able to adequately meet critical acquisition  program needs in other career fields.
section_title: Conclusions
paragraphs: DOD has focused much needed attention on rebuilding its acquisition  workforce and has used the Defense Acquisition Workforce Development  Fund to increase hiring and provide for additional training that supports  this effort. This is especially noteworthy given that the department faced  sequestration and other cost-cutting pressures over the past several  years.
Now that the department has surpassed its overall growth goals and has  moved into a workforce sustainment mode, the 2010 acquisition  workforce plan needs to be updated. Focus should now be placed on  reshaping career fields to ensure that the most critical acquisition needs  are being met. DOD attempted to strategically reshape its acquisition  workforce with the 2010 acquisition workforce plan, but fell short in  several priority career fields, including contracting and engineering. An  updated plan that includes revised career field goals, coupled with  guidance on how to use the Defense Acquisition Workforce Development  Fund, could help DOD components focus future hiring efforts on priority  career fields. Without an integrated approach, the department is at risk of  using the funds to hire personnel in career fields that currently exceed  their targets or are not considered a priority.
DOD has also made progress in identifying career field competencies, but  additional steps are needed to complete this effort. For example, the  production, quality, and manufacturing career field has yet to complete its  initial competency assessment and DOD has not established time frames  to conduct follow-up assessments for the other career fields so that it can  determine if skill gaps are being addressed. Office of Personnel  Management standards state that identifying skill gaps and monitoring  progress towards addressing gaps are essential steps for effective human  capital management. Without completing all competency assessments  and establishing time frames for completing follow-up assessments,  acquisition leaders will not have the data needed to track improvement in  the capability of the workforce.
section_title: Recommendations for Executive Action
paragraphs: To improve DOD’s oversight and management of the acquisition  workforce, we are making four recommendations. Specifically, to ensure  that DOD has the right people with the right skills to meet future needs,  we recommend that the Under Secretary of Defense for Acquisition,  Technology and Logistics direct the Director, Human Capital Initiatives to: Issue an updated acquisition workforce plan in fiscal year 2016 that  includes revised career field goals;  Issue guidance to focus component hiring efforts using the Defense  Acquisition Workforce Development Fund on priority career fields;
Ensure the functional leader for the production, quality, and  manufacturing career field completes an initial competency  assessment; and
Establish time frames, in collaboration with functional leaders, to  complete future career field competency assessments.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOD for comment. In its written  comments, which are reprinted in appendix I, DOD concurred with our  recommendations and described the actions it plans to take. DOD also  provided technical comments, which we incorporated in the report as  appropriate.
In response to our recommendation that DOD issue an updated  acquisition workforce plan, the department stated that it is currently  working on the fiscal year 2016–2021 Defense Acquisition Workforce  Strategic Plan, and that it plans to provide the draft plan for review by the  end of 2015. The department, however, did not indicate specifically that  the updated plan would include revised career field goals. We believe  updated career field goals should be included in the plan because they  can help inform future hiring decisions and rebalance the size of each  career field, if necessary.
The department concurred with our recommendation that the Director,  Human Capital Initiatives issue guidance to focus hiring efforts using the  Defense Acquisition Workforce Development Fund on priority career  fields. However, it stated that determining which career fields are a  priority is most appropriately determined by the components. The  department indicated that the Director, Human Capital Initiatives would  work with the components to issue guidance that ensures the Defense  Acquisition Workforce Development Fund is used to best meet both  enterprise and specific component workforce needs. We believe these  actions would meet the intent of our recommendation.
In response to our recommendation that the production, quality, and  manufacturing career field complete an initial competency assessment,  the department stated that it will complete the initial assessment by the  end of 2017.
In response to our recommendation to establish time frames for  completing future career field competency assessments, the department  agreed and indicated that it will work with acquisition workforce functional  leaders to establish time frames to complete future career field  competency assessments, as needed.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, the Under Secretary of Defense  for Acquisition, Technology and Logistics, and other interested parties.  The report is also available at no charge on the GAO website at  http://www.gao.gov.
Should you or your staff have any questions about this report, please  contact me at (202) 512-4841 or dinapolit@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 and other major contributors to  this report are listed in appendix II.
section_title: Appendix I: Comments from the Department of Defense
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Cheryl Andrew, Assistant  Director; Miranda Berry; Virginia A. Chanley; Teakoe S. Coleman; Maria  Durant; Katheryn Hubbell; Heather B. Miller; Jenny Shinn; Robert  Swierczek; Ozzy Trevino; and Alyssa Weir made key contributions to this  report.
section_title: Related GAO Products
paragraphs: Defense Acquisition Workforce: The Air Force Needs to Evaluate  Changes in Funding for Civilians Engaged in Space Acquisition.  GAO-13-638. Washington, D.C.: July 8, 2013.
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 Contract Management Agency: Amid Ongoing Efforts to Rebuild  Capacity, Several Factors Present Challenges in Meeting Its Missions.  GAO-12-83. Washington, D.C.: November 3, 2011.
Defense Acquisition Workforce: Better Identification, Development, and  Oversight Needed for Personnel Involved in Acquiring Services.  GAO-11-892. Washington, D.C.: September 28, 2011.
Department of Defense: Additional Actions and Data Are Needed to  Effectively Manage and Oversee DOD’s Acquisition Workforce.  GAO-09-342. Washington, D.C.: March 25, 2009.
Acquisition Workforce: Department of Defense’s Plans to Address  Workforce Size and Structure Challenges. GAO-02-630. Washington,  D.C.: April 30, 2002.
Department of Defense Contracted Services  DOD Contract Services: Improved Planning and Implementation of Fiscal  Controls Needed. GAO-15-115. Washington, D.C.: December 11, 2014.
Defense Contractors: Additional Actions Needed to Facilitate the Use of  DOD’s Inventory of Contracted Services. GAO-15-88. Washington, D.C.:  November 19, 2014.
Defense Acquisitions: Update on DOD’s Efforts to Implement a Common  Contractor Manpower Data System. GAO-14-491R. Washington, D.C.:  May 19, 2014.
Defense Acquisitions: Continued Management Attention Needed to  Enhance Use and Review of DOD’s Inventory of Contracted Services.  GAO-13-491. Washington. D.C.: May 23, 2013.
Defense Acquisitions: Further Actions Needed to Improve Accountability  for DOD’s Inventory of Contracted Services. GAO-12-357. Washington,  D.C.: April 6, 2012.
Human Capital: DOD Should Fully Develop Its Civilian Strategic  Workforce Plan to Aid Decision Makers. GAO-14-565. Washington, D.C.:  July 9, 2014.
Human Capital: Strategies to Help Agencies Meet Their Missions in an  Era of Highly Constrained Resources. GAO-14-168. Washington, D.C.:  May 7, 2014.
Human Capital: Additional Steps Needed to Help Determine the Right  Size and Composition of DOD’s Total Workforce. GAO-13-470.  Washington, D.C.: May 29, 2013.
Human Capital: Critical Skills and Competency Assessments Should Help  Guide DOD Civilian Workforce Decisions. GAO-13-188. Washington,  D.C.: January 17, 2013.
Human Capital: DOD Needs Complete Assessments to Improve Future  Civilian Strategic Workforce Plans. GAO-12-1014. Washington, D.C.:  September 27, 2012.
Human Capital: Further Actions Needed to Enhance DOD’s Civilian  Strategic Workforce Plan. GAO-10-814R. Washington, D.C.: September  27, 2010.
Human Capital: A Guide for Assessing Strategic Training and  Development Efforts in the Federal Government. GAO-04-546G.  Washington, D.C.: March 1, 2004.
Human Capital: Key Principles for Effective Strategic Workforce Planning.  GAO-04-39. Washington, D.C.: December 11, 2003.
High-Risk Series: An Update. GAO-15-290. Washington, D.C.: February  11, 2015.
Federal Workforce: OPM and Agencies Need to Strengthen Efforts to  Identify and Close Mission-Critical Skills Gaps. GAO-15-223. Washington,  D.C.: January 30, 2015.
Defense Headquarters: DOD Needs to Reassess Personnel  Requirements for the Office of Secretary of Defense, Joint Staff, and  Military Service Secretariats. GAO-15-10. Washington, D.C.: January 21,  2015.
Sequestration: Observations on the Department of Defense’s Approach in  Fiscal Year 2013. GAO-14-177R. Washington, D.C.: November 7, 2013.
DOD Civilian Workforce: Observations on DOD’s Efforts to Plan for  Civilian Workforce Requirements. GAO-12-962T. Washington, D.C.: July  26, 2012.
Defense Workforce: DOD Needs to Better Oversee In-sourcing Data and  Align In-sourcing Efforts with Strategic Workforce Plans. GAO-12-319.  Washington, D.C.: February 9, 2012.