Military Personnel: DOD Needs to Conduct a Data-Driven Analysis of Active Military Personnel Levels Required to Implement the Defense Strategy
Published: 2005-02-01T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Congress recently increased active military personnel levels for the Army and the Marine Corps. The Secretary of Defense has undertaken initiatives to use military personnel more efficiently such as rebalancing high-demand skills between active and reserve components. In view of concerns about active personnel, GAO reviewed the ways in which the Department of Defense (DOD) determines personnel requirements and is managing initiatives to assign a greater proportion of active personnel to warfigthing duties. GAO assessed the extent to which the Office of the Secretary of Defense (OSD) (1) has conducted a data-based analysis of active military personnel needed to implement the national defense strategy and (2) has a plan for making more efficient use of active military personnel and evaluating the plan's results.
section_title: What GAO Found
paragraphs: Our prior work has shown that valid and reliable data about the number of employees required to meet an agency's needs are critical because human capital shortfalls can threaten the agency's ability to perform missions efficiently and effectively. OSD provides policy and budget guidance on active personnel levels and has taken some steps toward rebalancing skills between active and reserve components, but it has not conducted a comprehensive, data-driven analysis to assess the number of active personnel needed to implement the defense strategy. A key reason why it has not conducted such a comprehensive analysis is that OSD has focused on limiting personnel costs in order to fund competing priorities, such as transformation. OSD conducts some analyses of active personnel, such as monitoring actual personnel levels, and the services have processes for allocating the active personnel they are authorized to key missions. However, OSD does not systematically review the services' processes to ensure that decisions about active personnel levels are linked to the defense strategy and provide required capabilities within acceptable risk. If OSD conducted a data-driven analysis that linked active personnel levels to strategy, it could more effectively demonstrate to Congress a sound basis for the active personnel levels it requests. The quadrennial review of the defense program planned for 2005 represents an opportunity for a systematic reevaluation of personnel levels to ensure that they are consistent with the defense strategy. Although OSD has identified some near- and long-term initiatives for assigning a greater proportion of active personnel to warfighting positions, it has not developed a comprehensive plan to implement them that assigns responsibility for implementation, identifies resources, and provides for evaluation of progress toward objectives. OSD officials told us a key reason why OSD does not have a plan to oversee its initiatives is that they have had to respond to other higher priorities. Sustained leadership and a plan for implementing initiatives and measuring progress can help decision makers determine if initiatives are achieving their desired results. Without such a plan, OSD cannot be sure that initiatives are being implemented in a timely manner and having the intended results. For example, the initiative to convert military positions to civilian or contractor performance is behind schedule. Specifically, OSD's goal was to convert 10,000 positions by the end of fiscal year 2004; however, the services estimate that they had converted only about 34 percent of these positions. By establishing performance metrics and collecting data to evaluate the results of its initiatives, OSD could better determine its progress in providing more active personnel for warfighting duties and inform Congress of its results.

section_title: Letter
paragraphs: The terrorist attacks of September 11, 2001, changed the security  environment of the United States. The Department of Defense (DOD) now  faces multiple complex threats both overseas and at home. U.S. forces,  particularly Army and Marine Corps ground forces, have experienced a  high pace of operations in support of missions in Iraq, Afghanistan, and  other locations. This pace has led to questions about whether the U.S.  armed forces have enough active military personnel to carry out and  sustain a wide range of ongoing and potential future military operations. In  the context of the high pace of operations, the Secretary of Defense  permitted a temporary increase of 30,000 Army active duty military  personnel in January 2004 to enable the Army to convert its combat forces  into more agile and deployable units while continuing to support ongoing  operations. Subsequently, in October 2004, Congress authorized increases  in personnel for the Army and the Marine Corps. However, the services’  active personnel needs are likely to be the subject of continuing debate  because increases in active personnel entail significant near- and long- term costs that compete with other priorities. For example, the Army  estimates that adding 30,000 active duty soldiers to its ranks will cost  about $3.6 billion annually. Senior DOD officials thus want to ensure that  the department uses active personnel as efficiently as possible before  personnel levels are permanently increased.
We prepared this report under the Comptroller General’s statutory  authority and are sending it to you because it contains information that  will be useful for your oversight and authorization responsibilities for  active military personnel. We reviewed how the Office of the Secretary of  Defense (OSD) determines active military personnel requirements and  manages initiatives to assign active personnel from infrastructure or  support positions to warfighting positions. Our objectives for this work  were to assess the extent to which (1) OSD has conducted a data-based  analysis of active military personnel needed to implement the national  defense strategy and (2) OSD has a plan for making more efficient use of  active military personnel and evaluating the plan’s results. We did not  examine reserve component requirements.
To assess OSD’s oversight of active military personnel requirements, we  examined OSD’s involvement in determining personnel requirements,  including policy and budget guidance. We also assessed the extent to  which OSD reviews service processes for determining military personnel  requirements and allocating personnel to authorized positions. Also,  relying on our prior work on best practices in human capital management,  we examined assessments that OSD and the services use to determine  requirements and inform decision making. To assess OSD’s and the  services’ management and implementation of initiatives to use military  personnel more efficiently, we collected and analyzed information on key  initiatives and examined the planning, implementation, and oversight  issues that will likely affect their success. We conducted our review from  August 2003 through January 2005 in accordance with generally accepted  government auditing standards. We determined that the data used were  sufficiently reliable for our objectives and in the context in which the data  are presented. Further information on our scope and methodology and  data reliability assessment appears in appendix I.
subsections: section_title: Background
paragraphs: For the past several years, DOD has planned and budgeted for about 1.4  million active military personnel active duty forces: about 482,400 in the  Army; 359,300 in the Air Force; 373,800 in the Navy; and 175,000 in the  Marine Corps. These active duty personnel levels have been generally  stable since the mid-1990s, when forces were reduced from their Cold War  levels of almost 2 million active military personnel. Active duty personnel  are considered to be on duty all the time.
Congress authorizes annually the number of personnel that each service  may have at the end of a given fiscal year. This number is known as  authorized end strength. Certain events, such as changes between planned  and actual retention rates, may cause differences between the  congressionally authorized levels and the actual numbers of people on  board at the end of a fiscal year. Table 1 shows the congressionally  authorized levels for fiscal years 2000 through 2005 as compared with the  services’ military personnel actually on board at the end of fiscal years  2000 through 2004.
As table 1 shows, the Army and the Air Force exceeded their authorized  end strengths by more than 3 percent in fiscal years 2003 and 2004.
The Secretary of Defense has statutory authority to increase the services’  end strengths by up to 3 percent above authorized levels for a given fiscal  year if such action is deemed to serve the national interest. In addition, if  at the end of any fiscal year there is in effect a war or national emergency,  the President may waive end strength authorization levels for that fiscal  year. On September 14, 2001, the President declared a state of national  emergency and delegated end strength waiver authority to the Secretary of  Defense. Since then, the President has annually renewed the national  state of emergency as well as end strength waiver authorities specified in  Executive Order 13223. In January 2004, the Secretary of Defense  exercised the President’s authority and increased temporarily the Army’s  end strength by 30,000 for fiscal years 2004 through 2009 to facilitate the  Army’s reorganization while continuing ongoing operations.
While the Secretary of Defense’s goal is ultimately to have the Army return  to an active military personnel level of 482,400 by 2009, in October 2004,  Congress increased the fiscal year 2005 end strength of the Army by 20,000  personnel, the Marine Corps by 3,000, and the Air Force by 400. Congress  also authorized additional authority for increases of 10,000 active Army  personnel and 6,000 Marines through fiscal year 2009. In contrast,  Congress reduced authorized end strength for the Navy by 7,900 personnel  from the fiscal year 2004 level. Moreover, Congress directed that for fiscal  year 2005, the Army will fund active military personnel increases in excess  of 482,400 and the Marine Corps will fund active military personnel  increases in excess of 175,000 through either a contingent emergency  reserve fund or an emergency supplemental appropriation.
section_title: OSD Has Not Conducted A Comprehensive, Data-Driven Analysis to Assess Active Personnel Requirements to Implement the Defense Strategy
paragraphs: Our prior work has shown that valid and reliable data about the number of  employees an agency requires are critical in preventing shortfalls that  threaten its ability to economically, efficiently, and effectively perform its  missions. Although OSD has processes through which it issues policy and  budget guidance that set the overall priorities for defense activities,  including personnel levels, it does not have a process for comprehensively  analyzing the active personnel levels needed to execute the defense  strategy within acceptable levels of risk. OSD has not placed an emphasis  on reviewing active military personnel requirements, focusing instead on  limiting personnel costs in order to fund competing priorities such as  transformation. The services have processes to establish their active duty  requirements; however, service processes vary in their methodologies, and  several major reviews are still ongoing and have not fully identified long- term personnel needs. Although OSD has performed some reviews related  to active duty levels, it does not review the services’ results in a systematic  way to ensure that decisions on the numbers of active military personnel  are driven by data that make clear the links between personnel levels and  strategic goals, such as the defense strategy. Conducting such a review  could enable OSD to more effectively demonstrate how the services’  requirements for active military personnel provide the capabilities to  execute the defense strategy within an acceptable level of risk. Further,  OSD could provide more complete information to Congress about how  active military personnel requirements for each service are changing and  about the implications of changes for future funding and budget priorities.  The quadrennial review of the defense program planned for 2005  represents an opportunity for a systematic analysis and reevaluation of  personnel levels to ensure that they are consistent with the defense  strategy.
subsections: section_title: Human Capital Best Practices Rely on Data-Driven Analyses to Guide Decision Making
paragraphs: Our prior work has shown that valid and reliable data about the number of  employees an agency requires are critical if the agency is to spotlight areas  for attention before crises develop, such as human capital shortfalls that  threaten an agency’s ability to economically, efficiently, and effectively  perform its missions. We have designated human capital management as a  governmentwide high-risk area in which acquiring and developing a staff  whose size, skills, and deployment meet agency needs is a particular  challenge. To meet this challenge, federal managers need to direct  considerable time, energy, and targeted investments toward managing  human capital strategically, focusing on developing long-term strategies  for acquiring, developing, and retaining a workforce that is clearly linked  to achieving the agency’s mission and goals.
The processes that an agency uses to manage its workforce can vary, but  our prior work has shown that data-driven decision making is one of the  critical factors in successful strategic workforce management. High- performing organizations routinely use current, valid, and reliable data to  inform decisions about current and future workforce needs, including data  on the appropriate number of employees, key competencies, and skills  mix needed for mission accomplishment, and appropriate deployment of  staff across the organizations. In addition, high-performing organizations  also stay alert to emerging mission demands and remain open to  reevaluating their human capital practices. Changes in the security  environment and defense strategy represent junctures at which DOD could  systematically reevaluate service personnel levels to determine whether  they are consistent with strategic objectives.
In 1999, Congress created a permanent requirement for DOD to conduct a  review of the defense program every 4 years and to report on its findings.  During these reviews, DOD is required, among other things, to define  sufficient force structure and “other elements” of the defense program  that would be required to execute successfully the full range of missions  called for in the national defense strategy and to identify a budget plan  that would be required to provide sufficient resources to execute  successfully these missions at a low-to-moderate level of risk. The  quadrennial review of the defense program thus represents an opportunity  for DOD to review elements related to force structure, such as the total  numbers of military personnel, both active duty and reserve, that are  needed to execute the defense strategy most efficiently and effectively.  Based on the legislative requirements, DOD plans to conduct a quadrennial  review in 2005 and publish its next report in 2006.
The terrorist attacks of September 11 changed the nation’s security  environment. Shortly thereafter, DOD issued a new national defense  strategy in its 2001 Quadrennial Defense Review Report. The 2001 report  outlined a new risk management framework consisting of four dimensions  of risk—force management, operational, future challenges, and  institutional—to inform the consideration of trade-off decisions among  key performance objectives within resource constraints. According to  DOD’s Fiscal Year 2003 Performance and Accountability Report, these  risk areas are to form the basis for DOD’s annual performance goals. In  November 2004, DOD reported its performance results for fiscal year 2004,  noting that it met some of its performance goals associated with these risk  management areas.
Our prior work suggests that agency leaders can use valid and reliable  data to manage risk by highlighting areas for attention before crises  develop and to identify opportunities for improving agency results. As  agency officials seek to ensure that risk remains balanced across their  agencies’ activities and investments, they can adjust existing performance  goals. Likewise, they can create new performance goals to gather data  about critical activities.
section_title: OSD Provides Policy and Budget Guidance to the Services but Does Not Conduct or Review Analyses of Active Personnel Requirements
paragraphs: OSD has recognized that the active and reserve forces have been  challenged to provide ready forces for current operations, including high  demand for some support skills, such as civil affairs and military police,  and is taking steps to achieve a number of objectives, such as improving  the responsiveness of the force and helping ease stress on units and  individuals with skills in high demand. For example, the Secretary of  Defense, in a July 9, 2003, memorandum, directed the services to examine  how to rebalance the capabilities in the active and reserve forces. The  services had already undertaken a number of steps to address  requirements for high-demand skills sets as a part of their ongoing  manpower management analyses. For example, in 2002 the Army began  planning for fiscal years 2004 through 2009 to address high-demand areas,  such as military police. However, the Secretary’s memorandum  accelerated the services’ rebalancing efforts, which are critical to  establishing requirements for active personnel.
OSD provides policy and budget guidance to the services on balancing the  costs of active personnel with other funding priorities, such as  transformation. Its approach to active personnel levels has been to limit  growth and initiate efforts to use current military personnel levels more  efficiently. OSD also conducts a number of ongoing and periodic reviews  and assessments related to active military personnel levels, although these  do not represent a systematic analysis of requirements for active military  personnel needed to perform missions in the nation’s defense strategy. For  example:    The 2001 Quadrennial Defense Review Report identified the defense  strategy that guided DOD’s analysis of the force structure. Under the  new strategy, DOD reported it needed sufficient forces to defend the  homeland, provide forward deterrence, execute warfighting missions,  and conduct smaller-scale contingency operations. Thus, DOD shifted  its force planning approach from optimizing the force for conflicts in  two particular regions to providing a range of capabilities for a variety  of operations, wherever they may occur. The report concluded that the  department’s existing force structure was sufficient to execute the  redesigned defense strategy at moderate risk, but it did not refer to a  specific OSD-led analysis to reassess the impact of the new  capabilities-based planning on the numbers of military personnel  needed. DOD officials said that the 2005 review may include a top- down review of end strength but did not provide further details about  the specific guidance to implement such a review.
To ensure that the services comply with congressionally authorized  active personnel levels on duty at the end of a fiscal year, OSD  monitors service reports for personnel on board. According to some  service officials, managing personnel levels is challenging for the  services because they cannot always control personnel management  factors, such as retention and retirement rates, which are affected by  servicemembers’ personal decisions. Compliance with authorized  personnel levels is one of the performance metrics that DOD presents  in its Performance and Accountability Report. According to the  department’s fiscal year 2003 report, for fiscal years 1999 through  2002, DOD met its goal of not exceeding authorized levels by more than  2 percent. However, in fiscal year 2003, the Army and the Air Force did  not meet this goal, having exceeded authorized limits by 4 percent and  4.5 percent, respectively, in order to maintain sufficient troops to fight  a global war on terrorism. Air Force officials told us that better than  expected recruitment and retention of personnel also caused the Air  Force to exceed the authorized limit. Also, the Army’s exercise of stop  loss authority, which prevents servicemembers from leaving the  service even if they are eligible to retire or their service contracts  expire, may have contributed to its overages in fiscal year 2003. DOD’s  fiscal year 2004 Performance and Accountability Report shows that the  Army and the Air Force again did not meet the performance goal,  exceeding authorized levels, by 3.7 percent and 5.7 percent,  respectively; the Navy and the Marine Corps did meet the goal. While  this measure is important for compliance with congressional direction,  it cannot be used to determine whether the active force has enough  personnel to accomplish its missions successfully because it does not  assess the extent to which end strength levels meet the nation’s  defense strategy at an acceptable level of risk.
DOD’s annual report to Congress on manpower requirements for fiscal  year 2005 broadly states a justification for DOD’s requested active  military personnel, but it does not provide specific analyses to support  the justification. Instead, the report provides summaries on personnel,  such as the allocation of active military personnel between operating  forces and infrastructure. Although the types of operating forces are  specified, for example, “expeditionary forces,” the specific capabilities  associated with such forces are not identified. The report also provides  the active military personnel data for the near term—fiscal years 2003  through 2005; it does not, however, contain data for the department’s  long-term planned allocations. Although the report stated that DOD will  continue to review the adequacy of military capabilities and associated  end strength requirements, the Office of the Secretary of Defense  (including the Offices of Policy; Personnel and Readiness; Comptroller;  and Program Analysis and Evaluation), Joint Staff, and some service  officials we interviewed could not identify a specific process or an  OSD-led analysis in which the department reexamines the basis for  active military personnel levels.
OSD coordinates with the services on active personnel levels throughout  the department’s planning and budgeting cycle, but it has not established a  process that would enable it to periodically examine the requirements for  the active military personnel and ensure that decisions are driven by data  that establish links between active military personnel levels and key  missions required by the national defense strategy. For example, OSD does  not systematically examine or validate the services’ methodologies or  results to assess personnel levels across the active force. Further, OSD  does not systematically collect data that would enable it to monitor how  the services are allocating personnel to key warfighting and support  functions.
subsections: section_title: The Services Use Varied Processes to Assess Changing Needs for Active Personnel, but OSD Has Not Conducted Systematic Analyses across the Services
paragraphs: Although each of the services has processes for assessing military  personnel requirements, the extent to which OSD has analyzed the results  of these processes is not clear. The services use different methodologies  for assessing their active personnel requirements, and their processes and  initiatives have different time frames. In addition, several key efforts to  assess requirements are still ongoing and have not yet identified long-term  requirements. These processes are described below.
The Army generates personnel requirements through a biennial process  known as Total Army Analysis. During the initial stages of this process,  Army force planners assess the numbers and types of units needed to  carry out missions specified in DOD and Army guidance. The most  recent Total Army Analysis—called Total Army Analysis 2011 because  it provides the force structure foundation for the Army’s fiscal year  2006 through 2011 planning cycle—included analyses of operating  force requirements for homeland defense, major combat operations,  forward deterrence, and ongoing military operations, among others, as  well as for personnel who operate installations and provide support  services. During the subsequent resourcing phase of the process, Army  officials determine how best to allocate the limited number of positions  authorized by OSD among active and reserve component units across  the Army’s force structure to minimize risk to priority missions.
The Army completed an initial version of Total Army Analysis 2011 in  spring 2004, but the Army continues to assess requirements as it carries  out changes to its basic force structure. These changes, discussed in  the Army Campaign Plan, alter the way in which the service organizes  and staffs its combat forces, and therefore will have significant impacts  on the numbers of active personnel the Army will need. In place of the  existing 10 active divisions, each comprising about 3 combat brigades  and associated support units, the Army’s new force structure will be  based on modular combat brigades, each with its own support units.  Under current plans, when the new structure is fully implemented in  2006, the Army will have 43 combat brigades, an increase of 10 brigades  from the 33 it had under the traditional divisional structure. Although  the Army has begun implementing plans to create a modular force  structure, several aspects of these plans are uncertain or have yet to be  determined. For example, the Army is considering increasing the  number of brigades it will have from 43 to 48. This increase could  require approximately 17,000 to 18,000 more personnel depending on  the types of brigades established. The Army plans to make the decision  by fiscal year 2006 based on resource considerations as well as the  status of ongoing military operations. Further, while the Army has  developed personnel requirements for its planned modular combat  brigades, it has not yet determined the overall number or composition  of all the support units, such as reconnaissance, which it will need to  support those brigades.
The Navy uses two separate processes to assess and validate  requirements for its operating forces and its infrastructure forces.  While the processes vary in scope and methodology, both are based on  activities’ workloads. For operating forces, such as ships and aviation  squadrons, workloads are based on each ship’s or squadron’s mission,  the capabilities needed to execute the mission, and the conditions  under which the mission is to be carried out. For shore-based  infrastructure forces, personnel requirements are based on the  numbers and types of personnel required to accomplish each activity’s  workload. As we have reported, the Navy has had difficulty in past  years justifying its shore requirements because it has not evaluated  alternative combinations of people, materiel, facilities, and  organizational structures to ensure that the most cost-effective  combination of resources is used. The Navy is also conducting  discrete analyses to identify opportunities to reduce military personnel  requirements in support of projected end strength reductions. By  reducing end strength, the Navy aims to free up funds for fleet  modernization. For example, it initiated studies on providing services,  such as meteorological support, financial management, religious  ministries, and recruiting. To achieve the lower cost, the Navy is  examining alternatives to military manpower—for example, using  technology or hiring private-sector contractors instead of using military  personnel. Furthermore, these studies aim to identify ways to eliminate  redundant activities by consolidating activities that provide similar  services. Under a separate set of reviews, the Navy is scrutinizing  positions in selected career fields such as supply support to determine  whether these positions are military essential or, rather, could be  staffed with civilian employees.
The Air Force’s current process for determining the manpower it needs  is focused on the requirements for training objectives and for operating  and maintaining bases and weapons systems in peacetime. However,  the Air Force is in the process of overhauling its manpower  requirements process to determine the capabilities it needs for its role  as an expeditionary force able to respond rapidly to worldwide  contingencies. The Air Force plans to continue using the same  methodological techniques (e.g., time studies, work sampling,  computer simulation, and aircrew ratios) to quantify its personnel  requirements, but the new process will include both the infrastructure  personnel and the warfighting force needed to support expeditionary  missions. The Air Force expects to implement its new capabilities- based approach by fiscal year 2008.
The Marine Corps uses modeling, simulations, spreadsheet analysis,  and other analytic tools to identify gaps in its capabilities to perform its  missions, and then identifies the personnel and skills needed to provide  the capabilities based largely on the professional judgment of  manpower experts and subject matter experts. The results are  summarized in a manpower document, updated as needed, which is  used to allocate positions and personnel to meet mission priorities. The  Marine Corps’ analyses for fiscal year 2004 indicated that to execute its  assigned missions the Corps needs about 9,600 more personnel than it  has on hand. The 2005 National Defense Authorization Act authorized  the Marine Corps to increase its end strength by 3,000 personnel to  178,000 in 2005 and to increase by an additional 6,000 personnel  between fiscal year 2005 and 2009.
Although the security environment has changed since 2001, OSD has not  conducted a systematic review of the services’ analyses and allocation of  personnel. Consequently, OSD cannot ensure that the end strength levels  established in its strategic and fiscal guidance reflect the numbers of  personnel needed to execute the defense strategy. Further, it cannot  ensure that it has a sufficient basis for understanding the risks associated  with different levels of active military personnel. While too many active  personnel could be inefficient and costly, having too few could result in  other negative consequences, such as inability to provide the capabilities  that the military forces need to deter and defeat adversaries. If OSD had a  data-driven rationale to support its funding requests for specific end  strength levels, it could provide congressional decision makers more  complete information on how active duty personnel requirements are  linked to the budget, the force structure, and the defense strategy.
section_title: OSD Does Not Have Comprehensive Plans to Manage Near- and Long-Term Initiatives to Increase the Proportion of Active Personnel in Warfighting Positions
paragraphs: OSD hopes to avert the need to increase active personnel levels by making  more efficient use of the current active military personnel within each  service, although it does not have a comprehensive plan for how it will  accomplish this and progress in implementing initiatives designed to make  more efficient use of active military is lagging behind goals. Specifically,  OSD has not developed a comprehensive plan for managing the initiatives  because the officials assigned this responsibility have competing demands  on their time and resources and have not made this a priority. Sustained  leadership and a plan for implementing initiatives and measuring progress  can help decision makers determine if initiatives are achieving their  desired results. In addition, although OSD has identified two near-term  initiatives-–military-to-civilian conversion and retraining for high-demand  skills-–current data indicate that the initiatives are not meeting their  quantitative goals or prescribed time frames because funding has not been  identified and time frames have not taken into account hiring and training  factors. OSD has approved quantitative goals and time frames for the near- term initiatives, and the services are taking steps to implement them, but  OSD does not have an implementation plan that assigns responsibility for  ensuring that the initiatives are implemented, identifies resources needed,  monitors progress, and evaluates their results. In addition to the near-term  goals, OSD has identified some long-term initiatives to reduce the need for  active personnel, such as using technology more extensively, although  these initiatives are not fully developed, and it hopes to identify additional  ways to use active personnel more efficiently. However, without a  comprehensive plan to manage implementation of its initiatives and assess  their results, OSD may be unable to determine whether the initiatives have  the desired effect of providing more military personnel for warfighting  duties, thus averting the need for more active personnel. Consequently,  OSD may not be able to track the progress of these initiatives and keep  Congress informed on the results of its initiatives to use active military  personnel more efficiently.
subsections: section_title: Responsibilities for Managing and Overseeing Initiatives Have Not Been Clearly Defined
paragraphs: According to officials in the Office of the Secretary of Defense’s Under  Secretaries for Policy and for Personnel and Readiness, in summer 2003,  the Secretary of Defense directed the Deputy Under Secretary of Defense  for Policy to develop a plan for managing initiatives that might either  directly or indirectly use the active force more efficiently. However, no  personnel were assigned responsibility for carrying out the Secretary’s  tasking, in part because of competing demands on staff time, such as  developing DOD’s Strategic Planning Guidance. According to a senior  official in the Policy office, OSD and service officials met soon after the  Secretary directed more efficient use of the force to discuss how to  provide oversight of the initiatives. However, other work demands took  priority, and they did not continue the meetings. In spring 2004, oversight  responsibilities for the initiatives were transferred to the Office of the  Under Secretary of Defense for Personnel and Readiness, according to an  official in the Office of Policy. Even after the transfer, OSD officials could  not identify an individual with responsibility for creating and  implementing a plan to organize, monitor, and evaluate the initiatives. In  response to an inquiry by the Secretary of Defense, in fall 2004 an official  in the Office of the Under Secretary of Defense for Personnel and  Readiness told us that he had begun developing ways to determine the  results of the services’ efforts to achieve workforce efficiencies. However,  at the time of our review, the methodology for the analysis was still being  developed.
Management principles embraced in the Government Performance and  Results Act of 1993 provide agencies a framework for implementing and  managing programs. One principle is the need to describe detailed  implementation actions as well as measurements and indicators of  performance (i.e., a performance plan). Critical elements of such a plan  include identifying resources and developing mechanisms to measure  outcomes and means to compare program results to performance goals. In  addition, sustained leadership in managing this plan is needed to ensure  that program objectives are implemented in accordance with the plan,  compare program results to performance goals, and take corrective  actions as needed.
Without oversight of the services’ implementation of initiatives to make  more efficient use of military personnel, DOD cannot be sure that changes  are having the desired effect. For example, the department recently  reported that it had completed its initiative to reduce and maintain the  numbers of active personnel assigned to headquarters units by 15 percent  from their 1999 levels. Although the objective of the initiative was to  increase the numbers of military personnel assigned to warfighting duties,  DOD did not collect data on how the military positions that had been  assigned to headquarters units were assigned after the reductions.  Therefore, DOD could not demonstrate whether headquarters staff  reductions directly resulted in more active military personnel being  available for the services’ warfighting duties and could not assess the  magnitude of any changes.
section_title: Military-to-Civilian Position Conversion and Active and Reserve Component Rebalancing Initiatives Are Not Meeting Expected Goals or Time Frames
paragraphs: While the services are in the process of implementing OSD’s initiatives to  use active personnel more efficiently in the near term, such as converting  military positions to civilian or contractor performance and rebalancing  the active and reserve component skills, the initiatives are not meeting  planned goals and time frames and are not having the desired results. The  services have made some progress in converting positions to civilians or  contractors and reassigning positions to high-demand skills, but most of  the services did not meet their quantitative goals or time frames for 2004  because of funding issues and delays in recruiting, hiring, contracting, and  training personnel. Without a plan for overseeing the services’  implementation of the initiatives, including assigning responsibility and  collecting data, OSD cannot assess progress toward meeting the goals of  moving military positions to the operating forces and take corrective  action, if needed.
subsections: section_title: Long-Term Initiatives Do Not Have Well-Defined Implementation Plans
paragraphs: Although DOD has begun to implement its two major initiatives, it had not  developed clear implementation plans for initiatives, which have longer- term or less direct effects on active military personnel who may be needed  for warfighting duties. While some of the long-term initiatives focus on  specific problems and issues, such as relying more on volunteers, others  are concepts the department would like to explore more fully over time,  such as greater use of varied technologies. Senior OSD officials  acknowledged that these initiatives are not yet completely developed and  do not yet have detailed implementation plans that identify time frames,  resources, and measures of success. Moreover, some long-term initiatives  may take years to implement, according to these officials. Consequently, it  may take years before OSD is in a position to determine whether these  long-term initiatives will yield the expected increases of active duty  military personnel for warfighting duties. For example, senior OSD  officials identified global reachback, other new technologies, and  volunteerism as initiatives the department is exploring, as described in  table 3.
The services targeted some technologies that they can use to reduce the  need for support personnel in the near term, although these may not be  implemented as planned because technologies are supplied first to  operational needs. For example, to reduce its reliance on about 3,000  Army National Guard and Reserve personnel who provide security-related  functions at Air Force bases, the Air Force planned to use ground  surveillance radars and thermal imagers to detect intruders and improve  surveillance in fiscal year 2004. However, the Air Force has not yet  outfitted its domestic military bases with this equipment because it was  needed for use on Army bases in Iraq and Afghanistan. As a result, the Air  Force must continue to rely on servicemembers for security until at least  fiscal year 2006, when it plans to buy additional equipment. For the long  term, Navy officials anticipate that acquisition of new technology related  to transformation could reduce the manpower it needs. For example, the  Navy expects the number of military personnel it will need to operate and  support its new DD(X) destroyer will be smaller than the number needed  to operate destroyers currently in use. However, Navy officials have not  yet determined the exact crew size for the new destroyers.
section_title: Conclusions
paragraphs: The changing security environment and high pace of operations resulting  from the global war on terrorism have led to significant debate about  whether there are a sufficient number of active military servicemembers to  carry out ongoing and potential future military operations. Although DOD  defined a new defense strategy that broadens the range of capabilities that  may be needed at home and around the world, OSD has not undertaken a  systematic, data-based analysis of how the changed strategy is linked to  personnel levels, so it cannot demonstrate how the current number of  active personnel supports the department’s ability to execute the strategy  within acceptable levels of risk. While personnel costs compete with costs  of other priorities, without data-driven analyses of the forces—including  active and reserve personnel—and how they are linked to the strategy,  DOD is limited in its ability to determine how best to invest its limited  resources over the near and long term between the competing priorities of  personnel costs and other needs. The department will also continue to  face challenges in achieving consensus with Congress on active duty end  strength levels, in light of the demands imposed by ongoing operations and  the significant changes in the security environment, until it can better  demonstrate the basis for its budget requests.
Although DOD has taken several positive steps to achieve its goal of using  active military personnel more efficiently, its initiatives may lose  momentum without additional management attention. Further, DOD  cannot assess whether the initiatives are having the desired effect of  providing more active personnel to warfighting positions because it has  not developed an implementation plan to coordinate and oversee the  initiatives put forward as contributing to more efficient use of active  forces. Until DOD develops a plan that assigns responsibilities, clarifies  time frames, identifies resources, and sets out performance metrics, DOD  will not be able to assess the progress of the initiatives and take corrective  action, if necessary. Moreover, in the absence of specific monitoring and  reporting, DOD will not be able to inform Congress on the extent to which  its efficiency initiatives are enabling it to meet emerging needs and better  manage the high pace of operations that U.S. active forces are currently  experiencing.
section_title: Recommendations for Executive Action
paragraphs: To facilitate DOD’s and congressional decision making on active military  personnel levels and to help DOD achieve its goals for assigning a greater  proportion of active military personnel to positions in the operating force,  we recommend that the Secretary of Defense take the following two  actions:    Conduct a review of active military personnel requirements as part of  the 2005 Quadrennial Defense Review. This review should include a  detailed analysis of how the services currently allocate active military  forces to key missions required by the defense strategy and should  examine the need for changes in overall personnel levels and in the  allocation of personnel in response to new missions and changes in the  defense strategy. The Secretary of Defense should summarize and  include in its Quadrennial Defense Review report to Congress DOD’s  conclusions about appropriate personnel levels for each of the services  and describe the key assumptions guiding DOD’s analysis, the  methodology used to evaluate requirements, and how the risks  associated with various alternative personnel force levels were  evaluated.
Develop a detailed plan to manage implementation of DOD’s initiatives  to use the force more efficiently. Such a plan should establish  implementation objectives and time frames, assign responsibility,  identify resources, and develop performance measures to enable DOD  to evaluate the results of the initiatives in allocating a greater  proportion of the active force to warfighting positions.
section_title: Agency Comments and Our Evaluation
paragraphs: The Deputy Under Secretary of Defense (Program Integration) provided  written comments on a draft of this report. The department generally  agreed with our recommendations and cited actions it is taking to  implement them. The department’s comments are reprinted in their  entirety in appendix II. In addition, the department provided technical  comments, which we incorporated as appropriate.
The department agreed with our recommendation that the Secretary of  Defense conduct an OSD-led, comprehensive assessment of the manning  and balancing the force needed to execute the defense strategy as part of  the next quadrennial review. In its comments, the department said that it  intends to meet the requirements that Congress set forth in mandating the  quadrennial review, including assessing the total force structure needed to  implement the defense strategy. Further, the department agreed with our  recommendation to report to Congress its conclusions about appropriate  personnel levels for each of the services and describe the key assumptions  guiding its analysis, the methodology used to evaluate the requirements,  and how the risks associated with various alternative personnel force  levels were evaluated. We believe that the department’s approach will  satisfy the intent of our recommendation if, in the course of the  quadrennial review, the manning and balancing of active and reserve  forces are specifically analyzed using appropriate methodologies,  assumptions, and evaluative techniques. Providing this information to  Congress will assist in its oversight of defense programs by providing a  sound basis for decision making on the size of the active and reserve  forces and the costs and risks associated with various alternatives.
The department also agreed with our recommendation to develop a  detailed plan to manage implementation of its initiatives to use the force  more efficiently and such a plan should establish implementation  objectives and time frames, assign responsibility, identify resources, and  develop performance measures to use the force more efficiently. In its  comments, the department noted that it has put in place some mechanisms  to capture and track activities that enable it to use the force more  efficiently. For example, it is now tracking the services’ military-to-civilian  conversions and documenting the results in its budget exhibits. The  department also noted that it has established a forum for OSD and service  officials to discuss and track the services’ initiatives to reduce stress on  the force. We believe that the department’s approach represents positive  steps. However, we believe that OSD should consider taking additional  actions to clearly assign responsibility and develop comprehensive plans  for implementing initiatives and measuring their progress. Critical  elements of such plans would include identifying resources and  developing mechanisms to measure outcomes and means to compare  program results to performance goals. By embracing these management  principles, OSD and service officials can help decision makers determine if  initiatives are achieving their desired results and take corrective actions as  needed.
We are sending copies of this report to other appropriate congressional  committees and the Secretary of Defense. We will also make copies  available to other interested parties upon request. In addition, the report  will be available at no charge on the GAO Web site at http://www.gao.gov.
If you have any questions about this report, please contact me at   (202) 512-4402. Major contributors to this report at listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: To assess the extent to which the Office of the Secretary of Defense (OSD)  has conducted a data-based analysis of active military personnel needed to  implement the national defense strategy, we identified and examined  relevant laws, presidential documents, and the Department of Defense  (DOD) guidance, reports, and analyses related to active military personnel  and the defense strategy. These documents included the 2001 Quadrennial  Defense Review Report, the defense strategy issued as part of the 2001  Quadrennial Defense Review Report, the National Military Strategy of the  United States of America 2004, the Defense Manpower Requirements  Report Fiscal Year 2005, the Secretary of Defense’s Annual Report to the  President and the Congress for 2003, and the Department of Defense  Performance and Accountability Report Fiscal Year 2004. Although the  total force includes active military personnel and National Guard and  reserve forces, our review focused on active military personnel because  Congress considered and passed legislation in 2004 to increase their  numbers. We examined the services’ guidance on processes for  determining personnel requirements for the total force to identify the  methodologies, time frames, and organizations involved in these  processes. We also obtained and analyzed the results of the services’  requirements processes and studies, and we discussed their status with  officials responsible for managing these efforts at DOD organizations.  These organizations included, but are not limited to, the Army’s Offices of  the Deputy Chiefs of Staff for Personnel and for Operations and Plans, and  the Army’s Programs Analysis and Evaluation Directorate; the U.S. Army  Forces Command; the Air Force’s Deputy Chiefs of Staff for Personnel and  for Plans and Programs; the Air Force Manpower Agency; the Air Force  Personnel Center; the Navy’s Deputy Chief of Naval Operation for  Manpower and Personnel; the Marine Corps Manpower and Reserve  Affairs; and the Marine Corps Combat Development Command.
Because it did not fall within the scope of our review, we did not assess  the services’ methodologies or validate the results of their requirements  analyses. We also examined guidance on the services’ processes for  allocating manpower resources. We identified criteria for examining  workforce levels through our products on strategic human capital  management and consulting with our staff with expertise in this area.  Testimonial evidence was obtained from officials assigned to (1) the  Offices of the Under Secretary of Defense for Policy, the Under Secretary  of Defense for Personnel and Readiness, and the Under Secretary of  Defense for Comptroller; (2) the Office of Program Analysis and  Evaluation; and (3) the Joint Chiefs of Staff. In addition, we analyzed  transcripts of public briefings and congressional testimony presented by  OSD officials. We reviewed DOD’s fiscal year 2005 Defense Manpower  Requirements Report and DOD’s fiscal years 2003 and 2004 Performance  and Accountability Reports to determine the manner and extent to which  OSD evaluates end strength in fulfilling statutory reporting requirements  pertaining to force management. We reviewed our prior work on the 2001  Quadrennial Defense Review to ascertain whether this process included  an explicit assessment of active duty personnel. To gain an independent  perspective on the OSD role in analyzing the number of active military  personnel needed to implement the national defense strategy, we  interviewed a former Assistant Secretary of Defense.
To assess the extent to which OSD has a plan to implement initiatives to  make more efficient use of active military personnel and evaluate their  results, we analyzed available internal DOD documentation such as  briefings, memoranda, and reports that identified DOD’s plans and time  frames. We obtained, analyzed, and compared OSD’s and the services’  fiscal year 2004 and 2005 targets to ascertain the differences. Also, we  compared the services’ fiscal year 2004 results with the services’ fiscal  year 2004 plans. To understand the reasons for any differences, we  discussed their status and implications with officials responsible for  managing these efforts at DOD organizations including, but not limited to,  the Offices of the Under Secretaries of Defense for Policy, for Personnel  and Readiness, and for Comptroller; the Army’s Offices of the Deputy  Chiefs of Staff for Personnel and for Operations and Plans; the U.S. Army  Forces Command; the Air Force’s Deputy Chiefs of Staff for Personnel; the  Navy’s Deputy Chief of Naval Operations for Manpower and Personnel;  and the Marine Corps’ Combat Development Command. We limited our  review to the major initiatives that were identified by these officials and  emphasized by the Secretary of Defense in his testimony because DOD  officials did not have a comprehensive document that listed or described  all the initiatives. We held further discussions with service officials and  obtained and analyzed written responses to our questions to (1) identify  the actions that the services took or will take in fiscal years 2004 and 2005  to implement the initiatives and (2) fully understand the challenges that  the services may face with implementation. Also, we reviewed DOD’s  fiscal year 2005 budget request to assess DOD’s expected costs for  military-to-civilian conversions. To identify the extent to which DOD had  implemented mandated reductions in major headquarters staff, we  reviewed the governing directives and analyzed DOD’s draft budget  exhibits for fiscal year 2004, which contained data on actual reductions for  the services and other defense organizations for fiscal year 2003 and  estimated reductions for fiscal years 2004 and 2005. We also interviewed  an OSD official and obtained data from the services to identify whether  they collected data on the extent to which military personnel affected by  headquarters reductions were reassigned to warfighting forces. Moreover,  we conducted interviews with officials from the Under Secretary of  Defense for Personnel and Readiness, the Army, the Air Force, the Navy,  and the Marine Corps and reviewed DOD guidance to understand DOD’s  process for managing conversions of military positions to civilian or  contractor positions. Further, we reviewed our prior audit work related to  the conversion of military positions to civilian or contactor positions, the  competitive sourcing process, and headquarters reductions to enhance our  understanding of DOD’s ongoing efforts to achieve efficiencies. Our work  was conducted in the Washington, D.C., metropolitan area; Atlanta,  Georgia; and San Antonio, Texas.
We performed our work from August 2003 through January 2005 in  accordance with generally accepted government auditing standards and  determined that data, other than those used for the efficiency initiatives,  were sufficiently reliable to answer our objectives. We interviewed data  sources about how they ensure their own data accuracy, and we reviewed  their data collection methods, standard operating procedures, and other  internal control measures. Concerning the fiscal year 2004 data for the  military-to-civilian conversions and rebalancing initiatives, we determined  that the Navy’s and the Marine Corps’ data were sufficiently reliable for  the purposes of our objectives. We considered the Army’s and the Air  Force’s military-to-civilian conversion and rebalancing skills data for fiscal  year 2004 to be of undetermined reliability because the two services did  not respond to our requests to provide documentation for the controls  they use to ensure the accuracy of their data. Even though those services’  officials presented the fiscal year 2004 data as their official numbers, we  cannot attest to their reliability. However, in the context in which the data  were presented, we determined the usage to be appropriate because the  fiscal year 2004 data did not constitute the sole support for our findings,  conclusions, and recommendations. Further, if the fiscal year 2004 results  were revised, our conclusions would remain unchanged.
section_title: Appendix II: Comments from the Department of Defense
paragraphs: The following is GAO’s comment on the department’s letter dated   January 12, 2005.
subsections: section_title: GAO Comment
paragraphs: 1. The department’s response correlates to the second part of our first  recommendation.
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to the persons named above, Deborah Colantonio,   Susan K. Woodward, Paul Rades, Leland Cogliani, Michelle Munn,  Margaret Best, Cheryl Weissman, Kenneth E. Patton, John G. Smale Jr.,  and Jennifer R. Popovic also made major contributions to this report.