Force Structure: Assessments of Navy Reserve Manpower Requirements Need to Consider the Most Cost-effective Mix of Active and Reserve Manpower to Meet Mission Needs
Published: 2005-10-18T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 2004, the Navy completed a study of how many selected reserve personnel are needed to support the active force in meeting current and future mission requirements. The Ronald W. Reagan National Defense Authorization Act for 2005 mandated that GAO assess several aspects of the Navy's study. This report addresses (1) the criteria and process the Navy used to conduct the review and what limitations affected the Navy's analyses and implementation plan; and (2) how the recommendations from the review will affect the reserve's personnel, funding, and command and control relationship with the active force.
section_title: What GAO Found
paragraphs: In conducting its review of Selected Reserve personnel requirements, the Navy established criteria and followed a structured process, but GAO noted two limitations that could have potentially affected the quality of the results. The Navy did not analyze the most cost-effective mix of active and reserve personnel and in some cases used outdated mission documents as the baseline for analysis. The Department of Defense personnel directive states that missions should be accomplished using the least costly mix of personnel. In addition, GAO's prior work has shown that when reserve forces can successfully meet deployment and operational requirements, they can perform missions for less cost than active forces, and that decisions about the number of personnel needed to perform government functions should be driven by valid and reliable data. The 10 activities' justification packages GAO reviewed did not indicate if or how commanders evaluated the cost-effectiveness of using active or reserve personnel. A key reason why cost-effectiveness was not evaluated is that the Fleet Forces Command provided no guidance requiring that such an analysis be conducted or submitted as part of the activities' justification packages. Additionally, because the Navy had not devoted the resources to update some of its baseline mission documents prior to the start of the review, some of the activities' analyses did not start with the best possible data, which may have resulted in inaccuracies in their determinations about capabilities and personnel requirements. Including cost-effectiveness in the criteria for the zero-based review and documenting such analyses, as well as ensuring data accuracy, could have better demonstrated a sound basis for the recommended personnel changes and, in some cases, may have led to different recommendations. The review's recommendations will result in a change in the force mix, some cost savings, and the active force assuming greater command and control over reserve forces. The Chief of Naval Operations approved personnel changes that would result in a net reduction of over 16,000 reserve positions, a net increase of about 880 positions in the active force, and a net increase of about 450 civilian personnel positions. The reasons for these recommended changes varied by activity. The Fleet Forces Command also initially estimated that the Navy could save approximately $283.5 million annually by implementing the personnel recommendations, although this estimate is changing as some activities reexamine their personnel requirements using more recent data. In addition to total force personnel changes, the active force is assuming greater command and control responsibility for the reserve force. For example, the active force is now responsible for the training and readiness of the reserve forces and is receiving their status reports. This realignment of responsibility is consistent with the Chief of Naval Operation's expectations for creating a more integrated total force.

section_title: Letter
paragraphs: The role of the Navy Reserve is to provide mission-capable units and  manpower to support Navy peacetime and wartime operations.  In fiscal  year 2004, the Navy Reserve was authorized 85,900 selected reservists, the  primary source of reserve mobilization manpower to support the 369,800  military personnel in the active force. The Secretary of Defense noted in a July 2003 memorandum that the balance of capabilities between the active  and reserve forces was not right to meet future mission requirements.  In  response, the Chief of Naval Operations announced an effort to transform  the Navy Reserve and create a more integrated total force in which Navy Reserve capabilities are tied directly to active units in support of Sea Power  21 mission requirements.  As part of a continuing process to fully integrate  its active and reserve forces, in August 2004 the Navy completed a zero­ based review of the requirements for Navy selected reservists. The  objective of the review was to determine how many selected reserve  personnel are needed to support the active force in meeting current and  future Navy mission requirements.
In the Ronald W. Reagan National Defense Authorization Act for 2005,Congress mandated that we assess several issues related to the Navy’s  review of selected reserve manpower requirements, including (1) the  extent that the Navy used clearly defined and consistent criteria and a  sound methodology in determining the future mix of active and reserve  components and (2) the extent the Navy’s zero-based review process  considered operational concepts and emerging mission requirements.  As  agreed with your offices, we provided an interim briefing addressing these  objectives on March 29, 2005. To summarize the results of our work, this  final report addresses the following questions:  1.	 What criteria and process did the Navy use to conduct its zero-based  review of reserve manpower requirements, and what, if any, limitations  affect the Navy’s analyses and implementation plans?  2.	 How will the recommendations from the zero-based review affect the  reserve’s manpower, funding, and command and control relationship  with the active force?
To answer these questions, we analyzed the criteria, process, and guidance  the Fleet Forces Command used to conduct the zero-based review by  reviewing the documentation for selected Navy activities.  As part of our  analysis, we examined the review results for 10 Navy activities and visited  the Naval Air Forces Command and four other selected activities to assess  the zero-based review process at the activity level and obtain detailed  information about recommended reserve manpower changes. In addition,  we obtained information from Navy Headquarters and Navy Reserve  Headquarters to determine how the review’s results would impact active  and reserve command and control relationships and reviewed planned  funding documents to assess the extent that recommended reserve  manpower changes were reflected in future budgets.  We also obtained  information from the Office of the Assistant Secretary of the Navy,  Manpower and Reserve Affairs to determine the relationship between the  Department of the Navy Human Capital Strategy and the Navy’s zero-based  review.  Except for some outdated mission documents used as the baseline  for manpower requirements, we concluded the data were sufficiently  reliable for the purpose of this report.  We conducted our review from  September 2004 through September 2005 in accordance with generally  accepted government auditing standards. A more detailed description of  the scope and methodology used in our review can be found in appendix I.
subsections: section_title: Background
paragraphs: The Navy has 690,000 men and women in the Ready Reserve, the Standby  Reserve, and the Retired Reserve.  The Ready Reserve, which at the time of  the zero-based review, consisted of 85,900 members in the Selected  Reserve and 65,066 in the Individual Ready Reserve, is the primary  manpower pool for the Navy Reserve.  The Selected Reserve contains those  units and manpower that are most essential to the wartime missions  because it provides mission-capable units and individuals to augment the  active Navy force when required.  For example, the Selected Reserve  consist of Naval aviation units, Naval coastal warfare groups, medical  personnel, and submarine forces personnel.  The Individual Ready Reserve  consists of individuals who have received training in the active Navy force  or Selected Reserve.  Members of the Selected Reserve receive priority  over other reservists for training and equipment and they generally are the  first to be called to active duty by a presidential order.
In August 2003, the Chief of Naval Operations directed the Commander of  the Fleet Forces Command to validate the Navy Selected Reserve  manpower requirements and determine the ability of the Navy Reserve to  provide required capabilities to the Navy forces.  To accomplish this, the  Fleet Forces Command conducted a zero-based review over a 10-month  period, from October 2003 to August 2004.  Based on the review, the  Command recommended reducing the size of the Selected Reserve from  85,900 authorized positions to about 70,000 by fiscal year 2011—a decrease  of about 16,000 authorized positions.  The Chief of Naval Operations  approved the zero-based review results for implementation in August 2004.
The zero-based review is a component of the Navy’s ongoing active/reserve  integration initiative. This initiative is an essential element of the  Department of the Navy’s Human Capital Strategy, which was announced in  June 2004.  According to the Assistant Secretary of the Navy as well as  Navy and Marine Corps manpower officials, accelerating manpower costs,  changes in the global military environment, and evolving military  requirements prompted the Department of the Navy to develop this  strategy. The overall goal of the strategy is to have the best people with the  proper skills, training, and experience in the right jobs.  The strategy serves  as high-level guidance for the Navy and Marine Corps to use in developing  their own implementation plans.  As shown in figure 1, the strategy consists  of three elements: civilian personnel transformation, naval military  personnel transformation, and Navy active/reserve integration.
Implementing the National Security Personnel System will facilitate the  Department of Defense’s civilian personnel transformation efforts, while  the Navy military personnel transformation is driven by the implementation  of the Navy’s Sea Warrior Initiative. The active/reserve integration  segment of the human capital strategy is aimed at ensuring the proper  balance between the Navy’s active and reserve forces.  Although the Navy  initiated the zero-based review prior to the announcement of the human  capital strategy, the review is intended to satisfy a major tasking of the  active/reserve integration element—validating the requirements for reserve  manpower.
section_title: Zero-Based Review Used a Structured and Participatory Process, but Two Limitations Could Have Impacted Results
paragraphs: The Navy’s zero-based review process included specific criteria and  guidance on how to evaluate the number of reservists needed and involved  consistent reporting and documentation by Navy activities.  The Navy’s  iterative review process allowed extensive communications between Navy  activities, the Fleet Forces Command, and others to finalize proposals for  reserve manpower requirements and validate the results. However, our  analysis showed two review limitations.  First, Navy activities identified  capability gaps by comparing its current active force to mission  requirements, but did not conduct analyses to determine the most cost­ effective mix of active and reserve manpower.  Second, some activities  used outdated mission documents which were critical for determining the  manpower needed to perform missions.  These limitations could have  adversely impacted the results of the review.
subsections: section_title: Structured Process Included The Navy’s Fleet Forces Command created a structured process for Detailed Guidance and Specific Criteria, and Was Consistently Documented
paragraphs: performing the zero-based review by providing detailed guidance and  specific criteria to determine the reserve manpower needed to augment the  active forces to perform current and future Navy missions. The guidance was provided to 37 active component activities, consisting of 664 functions.
The criteria for assessing reserve manpower requirements included the  importance of the reserve component to the mission, reserve component’s  warfighting capability, current status of the reserves’ capability, and the  reserves’ warfighting capability role in the Sea Power 21 operational  concept. In following the guidance and applying these criteria, the  functions conducted a capability gap analysis by determining (1) the extent  to which the active forces could meet the mission requirement and (2) how  many reserve personnel would be required to fill any remaining gaps in the  active forces’ capability.
The zero-based review guidance also required review results to be reported  and documented in a standardized format.  Our review of 10 of 37 activity  packages submitted to the Fleet Forces Command confirmed that each of  the 232 functions associated with the 10 activities completed a structured  electronic spreadsheet containing pertinent information about mission  capability requirement, current manpower authorizations, and proposed  manpower changes to justify the reserve manpower needed to perform its  assigned mission.  Each function also cited that its mission linked to one of  the pillars of Navy Sea Power 21.  For example, all eight of the Naval  Security Group activity’s functions linked their missions to Sea Shield, the  pillar that provides sea-based theater and strategic defense.  The functions  also considered the manpower needs of emerging mission requirements.  For example, the Naval Coastal Warfare Groups from the Naval Surface  Forces activity identified the need for an additional 1,028 reserve positions  to support homeland defense by increasing port security and harbor  defense at our port facilities in the United States and overseas.
section_title: Participatory and Iterative Process Helped the Navy Finalize Proposals and Validate Results
paragraphs: The zero-based review involved substantial interaction between Navy  activities, the Fleet Forces Command, and outside subject matter experts  to develop the final justification for reserve manpower and perform  multilevel reviews of proposed reserve manpower changes. While the  active component conducted the review, the Navy activities occasionally  relied on the Navy Reserve Command for needed manpower data  according to a command official.  The Commander of the Navy Reserve  Force also participated in the high-level review of the proposed reserve  manpower changes.  The process allowed multiple two-way  communications to finalize proposals for reserve manpower requirements  and validate the results. In instances where the Fleet Forces Command  disagreed with an activity’s initial proposal, the activity revised and  resubmitted its proposal or provided additional justification until the  disagreement was resolved.  After the Fleet Forces Command made a  decision about the number of authorized reserve positions, it notified the  activities and allowed them to again officially request reconsideration by  providing additional documentation and support.  For example, the Naval  Air Systems Command first submitted justification for 652 reserve  positions.  However, after reviewing the justification package, the Fleet  Forces Command recommended eliminating all of the Naval Air Systems  Command’s reserve positions because they were not linked to mobilization  requirements.  The Naval Air Systems Command resubmitted justification  for 226 reserve positions to provide special skills and support for  contingency operations.  The justification convinced the Fleet Forces  Command to approve 226 reserve positions.
Within the Fleet Forces Command, the activities’ packages were first  reviewed by analysts and an initial review board.  A subject matter expert  review board then reviewed the proposals before passing them on to an  executive board of senior officers.  After the executive board approved the  results, they were given to the Commander of the Fleet Forces Command,  who also reviewed and approved the results.  The criteria the Fleet Forces  Command used for validating the reserve manpower requirements included  whether (1) the particular mission is suitable for the reserve component,  (2) the position is required to be filled by a military person, (3) the position  fills a gap in the active component’s capabilities, and (4) the reserve  component can perform the mission.  The validation process included a  mission risk assessment by the Fleet Forces Command of how important  the reserve forces were to performing the mission.  The Command then  assigned a low, moderate, or high-risk designation as to whether the active  component could perform the mission without the planned contribution  from the reserve component.  For example, the Fleet Forces Command  assessed that there was a low risk that the Maritime Patrol Reconnaissance  function could not perform the mission without the reserves’ contribution.  After the results were validated, they had to be approved by the Total Force  Flag Steering Group, a group of senior officers, including the Commander  of the Navy Reserve Force, charged with ensuring continued progress in  the integration of Navy active and reserve forces. At the end of the review,  the Fleet Forces Command recommended reserve manpower changes to  the Chief of Naval Operations for his approval.
section_title: Two Review Limitations Could Have Adversely Affected Results
paragraphs: The Navy’s zero-based review had two limitations that could have changed  the number of active and reserve manpower recommended to the Chief of  Naval Operations. The Navy (1) did not assess the most cost-effective mix  of active and reserve manpower to perform the mission and (2) used  outdated critical mission documents as a baseline for manpower  requirements.
subsections: section_title: Identifying Capability Gaps in the Active Force May Not Have Produced the Most Cost- effective Mix of Active and Reserve Forces
paragraphs: The Navy’s zero-based review process focused on identifying the extent to  which the active force could perform Navy missions and then determining  whether reserve manpower could fill any remaining gaps, which may not  have resulted in the most cost-effective mix of active and reserve forces.  Given the Department of the Navy’s affordability challenges and the  Assistant Secretary of the Navy’s concern about accelerating manpower  costs, the service must find ways to ensure it is accomplishing its mission  with the most cost-effective mix of active, reserve, and civilian forces.  In  his guidance for 2004, the Chief of Naval Operations stated his commitment  to fully integrating the active, reserve, and civilian forces.  However, he also  noted the need to minimize the total number of personnel on payroll and  stated, “but we do not want to spend one extra penny for manpower we do  not need.”  Additionally, the Department of Defense’s directive that covers  manpower management states that missions should be accomplished using  the least costly mix of manpower. We have shown that when the reserve  force can successfully meet deployment and operational requirements, it  can generally perform missions at a lower cost than the active force  because active units have all full-time personnel assigned whereas reserve  units have mostly part-time personnel assigned.By identifying capability  gaps in the active force as the primary criterion for determining the  required reserve manpower, the Navy failed to assess whether the lower  cost reserve force could be used to meet capabilities currently provided by  the active force.
While the Fleet Forces Command’s general guidance indicated that the  manpower requirements review should consider cost in determining an  adequate return on investment, it also stated that the return on  investment should be based on commanders’ judgment.  However, the  Command did not require the activities to perform cost analyses to  determine the most cost-effective mix of active and reserve forces needed  to perform assigned missions as a basis for proposing the future mix of  active and reserve manpower. If the most cost-effective mix of active and  reserve forces had been a major criterion in the review process, the results  might have been different and the Navy may have been able to realize  additional savings for some activities. For example, our current analysis of  Navy data showed that the manpower costs for a reserve squadron of nine  P-3 Maritime Patrol and Reconnaissance aircraft would be approximately  $20 million annually—about $8 million or 29 percent less than the  estimated manpower cost of $28 million for an active squadron.
Outdated Mission Documents  May Have Resulted in Inaccurate  have resulted in inaccurate recommendations about the Navy reserve  Manpower Recommendations 	 manpower needed to perform missions in the future. According to the  Navy’s instruction, the documents that provide information about a unit’s  mission and the specific operating environment of the units are the most  critical element for developing manpower requirements.  Additionally, our  prior work has shown that decisions about the manpower needed to  perform government functions should be driven by valid and reliable data.However, in its briefing to the Chief of Naval Operations, the Fleet Forces  Command acknowledged that many of these critical mission documents  were outdated.  Our analysis confirmed this shortcoming.  For example, 25  of the 31 functions belonging to the five activities we visited did not have  recently validated mission documents on which to base their manpower  reviews.  The Fleet Forces Command stated that the critical mission  documents had not been updated because of the large amount and rapidity  of change and the lack of sufficient manpower analysts to keep up with  changes.  According to a Command official, the activities’ commanders  generally applied their judgment to update the most recently approved  mission documents before conducting their analyses to mitigate the risks.  However, this official agreed that use of these outdated mission documents  may have increased the likelihood that manning was not correct in the  associated manpower documents. Without validated and accurate mission  documents to serve as a baseline for manpower numbers, some of the zero­ based review’s determinations about capabilities and manpower  requirements may have been inaccurate.
section_title: Zero-Based Review Results Would Change the Mix of Active and Reserve Forces, Reduce Manpower Costs, and Change Some Command and Control Responsibilities
paragraphs: Implementation of the Navy’s zero-based review’s recommendations will  change the mix of active and reserve forces by decreasing the number of  reserve personnel and increasing the number of active and civilian  personnel.  Some cost savings are projected as a result of the  recommended changes. The zero-based review’s recommendations will  also have the active force assume greater command and control  responsibility over the reserve force.
subsections: section_title: Number of Reserve Personnel Would Substantially Decrease While Number of Active and Civilian Personnel Would Increase Slightly
paragraphs: The Navy’s zero-based review’s recommendations will substantially  decrease the number of reserve personnel and slightly increase the number  of active and civilian personnel. As indicated in table 1, the Chief of Naval  Operations approved a net reduction of over 16,000 reserve positions, a net increase of about 880 positions in the active force, and a net increase of 450 civilian personnel positions.
At the activities we visited, we found that the reasons for these  recommended changes in manpower varied.  For example, the Bureau of  Medicine and Surgery recommended cutting 2,198 reserve positions  because it had reduced the requirement for the number of fleet hospitals  from three to two and had rarely filled all of its specialized medical reserve  positions in the past.  By contrast, the Naval Security Group expected a net  increase of 156 manpower positions because the National Security Agency  had a need for two new capabilities (cryptologic linguists and signal  intelligence analysts) totaling 200 new positions, while anticipated  technology improvements would allow the Naval Security Group to  eliminate 44 reserve positions.  The Mine Warfare Command will make its  airborne and surface mine countermeasure units an all active force by  cutting 1,016 reserve positions from their airborne and surface mine  countermeasures mission and converting 537 full-time reserve positions to  active duty positions because the command could not recruit sufficient  manpower to fill its reserve positions.  With the additional active duty  positions, the Command stated that the airborne and surface mine  countermeasures missions could be fully accomplished without the reserve  component’s participation.  The Navy’s zero-based review results for the  five activities that we visited are shown in appendix II.
section_title: Manpower Changes Would Result in Some Cost Savings
paragraphs: The Fleet Forces Command initially estimated that implementing the  manpower changes recommended by the zero-based review would save  approximately $283.5 million annually.  However, these original estimated  savings are changing.  Some active component activities are reexamining  their manpower requirements and submitting changes to their original  proposals because of organizational changes and other ongoing  refinements to manpower requirements.  For example, the Naval Air  Forces now plans to eliminate an additional 378 reserve positions because  the Navy plans to retire additional P-3 Maritime Patrol and Reconnaissance  aircraft due to airframe fatigue problems. In another case, subsequent to  the zero-based review, the Navy established the Maritime Force Protection  Command that assumed reserve functions that were previously within the  Surface Forces and the Military Sealift Commands.  However, upon its  establishment, the Maritime Force Protection Command determined that  5,250 reserve positions would be needed versus the 5,840 positions the  Fleet Forces Command originally approved.
Although the Chief of Naval Operations approved the zero-based review  results in August 2004, the changes were not included in the Department of  the Navy’s fiscal year 2005 budget.  The Fleet Forces Command has  required each Navy activity to complete a transition plan and the Navy has  included the recommended manpower changes in the Future Years  Defense Program beginning in fiscal year 2006.  All changes resulting from  the zero-based review are to be completed by 2011.
section_title: Active Force to Assume Greater Command and Control of Reserve Force
paragraphs: The zero-based review prompted changes in the command and control  relationships between the Navy active and reserve forces, whereby the  active force will assume greater command and control over the reserve  force.  Under the recommended changes, the active force will assume  responsibility for the training and readiness of the reserve force.  For  example, the Commander, Navy Reserve Force, will now report to the  Commander, Fleet Forces Command, for the training and readiness of the  reserve force.  In addition, the Commander, Naval Air Force Reserve, has  physically moved from New Orleans to San Diego to be colocated with the  Commander, Naval Air Forces, to whom he reports for readiness and  training of reserve aviation forces.  This realignment of responsibility is  consistent with the Chief of Naval Operations’ objective to create a more  integrated total force.
section_title: Conclusions
paragraphs: The Navy’s zero-based review was an important first step in its overall  strategy to assess the role of the Navy reserve in the total Navy force.  The  review is also a critical element in helping the Navy achieve its desire to  reduce manpower costs and move toward a more affordable total force.  However, the Navy’s approach of using capability gaps in the active force as  the means to determine Navy reserve manpower requirements was too  narrow.  Without consideration of manpower cost-effectiveness as directed  by Department of Defense guidance, this approach did not provide  assurance that the Navy will have the most cost-effective mix of active and  reserve forces in the future.  Furthermore, using outdated mission  documents as a baseline for determining manpower requirements  substantially reduced assurance that the Navy activities started with the  best data for making quality manpower assessments.  As the Navy  continues to update and review its manpower requirements and identify  ways to reduce its manpower costs in order to make resources available for  other investments, it is important that all future assessments consider the  most cost-effective force mix and be based on current mission documents.
Recommendations for 	 To assist the Navy in meeting its human capital strategy goals and ensure  Executive Action  that ongoing and future Navy active and reserve manpower requirement assessments result in the most cost-effective force, we recommend that the  Secretary of Defense direct the Secretary of the Navy to take the following  two actions: develop and implement guidance to ensure that (1) ongoing and future  workforce reviews include cost analyses to determine the most cost­ effective mix of active and reserve manpower and (2) the methodology  for and results of cost analyses are documented and allocate the required resources to maintain current Navy mission  documents that would provide a valid baseline for ongoing and future  workforce reviews.
Agency Comments and 	 In written comments on a draft of this report, the Department of Defense  Our Evaluation	 concurred with our recommendations. The department provided technical comments, which we incorporated as appropriate. The department’s  comments are reprinted in their entirety in appendix III.
We are sending copies of this report to the Secretary of Defense, the  Secretary of the Navy, and other interested congressional committees and parties.  We will also make copies available to others upon request.  In  addition, the report will be available at no charge on the GAO Web site at  http://www.gao.gov.
Please contact me at (202) 512-4402 or stlaurentj@gao.gov if you or your staff have any questions concerning this report.  Contact points for our  Office of Congressional Relations and Public Affairs may be found on the  last page of this report.  Major contributors to this report are listed in  appendix IV.
section_title: Scope and Methodology
paragraphs: To determine the criteria and process the Navy used to conduct its zero­ based review of reserve manpower requirements and the limitations that  could affect the Navy’s analyses and implementations plans, we obtained  and analyzed the guidance and expectations the Chief of Naval Operations  provided to the Fleet Forces Command concerning the zero-based review.  We also obtained and analyzed detailed information about the guidance and  instructions the Fleet Forces Command provided to Navy activities  concerning (1) the criteria to use for determining the required reserve  manpower, (2) how the activities should report their review results to the  Fleet Forces Command, (3) the review and validation process for the  results reached during the zero-based review, and (4) plans for  implementing the zero-based review results.  Additionally, we met with  Fleet Forces Command officials, as well as officials from the five activities  we visited, and analyzed 10 of 37 justification packages the activities  submitted to the Fleet Forces Command to further understand how the  zero-based review was conducted at the different command levels, identify  the extent to which cost-effectiveness of manpower changes was  considered, and assess the consistency with which the activities reported  their review results.  Moreover, we analyzed prior GAO reports and  applicable Navy publications for criteria and best practices in conducting  manpower requirement reviews.
To determine how the recommendations from the zero-based review will  affect the reserve’s manpower, funding, and command and control  relationships with the active force, we obtained and analyzed the  justification packages submitted by the 10 Navy activities, the  recommended changes in the number of required reserve manpower and  the cost factors used to calculate manpower savings as well as the  corresponding projected funding requirements for reserve manpower.  We  also obtained information about, and discussed how the Navy plans to  implement the results from the zero-based review with officials at the Fleet  Forces Command and the five activities we visited.  Additionally, we  reviewed communications from the Chief of Naval Operations and  discussed how the zero-based review would change command and control  relationships between the active and reserve forces with officials at the  Fleet Forces Command and the Navy Reserve Command.
We assessed the reliability of pertinent data about information supporting  the activities’ proposals for reserve manpower changes and projected  manpower changes.  We examined 10 activity justification packages for  consistency in the Navy’s validation and reserve manpower requirements  reporting processes.  We also verified the manpower budget programming  factors the Navy used to calculate projected manpower savings and  performed a sample calculation to test the reliability of the projections.  Except for the problem with outdated mission documents we noted in the  body of the report, we concluded that the data were sufficiently reliable for  the purpose of this report.
We performed our review from September 2004 through September 2005 in  accordance with generally accepted government auditing standards.
section_title: Selected Navy Activities Visited
paragraphs: After performing substantial review work at Navy Headquarters and the  Fleet Forces Command to obtain overall review results and general  information about how the Navy conducted its zero-based review, we  visited five Navy activities to obtain more detailed information:  Headquarters, Naval Air Forces; Headquarters, Naval Submarine Forces;  Bureau of Medicine and Surgery; Naval Security Group; and Headquarters,  Mine Warfare Command. We selected these particular activities because of  special interest from the professional staff of the Senate and House Armed  Services Committees and because the zero-based review results involved  major changes to reserve manpower requirements for these activities. The  purpose of our visits was to understand in detail the review procedures at  the activity level and assess the consistency with which the activities  (1) followed the guidance and criteria provided by the Fleet Forces  Command and (2) reported their review results. During our visits at these  activities, we also discussed with officials the rationale for recommending  major changes to their reserve manpower requirements.
The information below summarizes the results of the zero-based review for  each of the five activities we visited.  These summaries are based on the  activities’ justification packages and our discussions with Fleet Forces  Command and activity officials about the rationale for their changes to  reserve manpower requirements.  All Navy reserve positions have been  approved by the Chief of Naval Operations (CNO) as of August 2004.
Activity 1:  Headquarters, Naval  Air Forces, San Diego,  management.  As shown in table 2, the zero-based review recommended  California almost a 25 percent reduction in naval aviation reserve manpower.
Headquarters, Naval Air Forces provides combat-ready and sustainable  naval air forces that are trained and equipped to operate in an environment that emphasizes safety, interoperability, and efficient resource  Of the 2,742 total decrease in reserve positions in naval aviation forces,  2,242 (82 percent) are from the Maritime Patrol and Reconnaissance (P-3  aircraft), Helicopter, and Aviation Intermediate Maintenance Division  communities. The decreases in these three communities were supported by  different rationales.
First, Naval Air Forces decided to cut 1,323 positions from the Maritime  Patrol and Reconnaissance units because P-3 airframe fatigue problems  caused the Navy to remove some aircraft from the active inventory.  To  provide the active force with additional aircraft, the activity  decommissioned four reserve squadrons, totaling 24 aircraft, and formed  three fleet response units, totaling 18 aircraft.  As a result, the activity  needed fewer personnel and 6 additional aircraft were provided to the  active force.
Additionally, the activity cut 491 positions from helicopter squadrons to  better provide projected surge capability for the Fleet Response Plan.  The  activity combined five reserve helicopter squadrons of 36 aircraft into three  fleet response units of 24 aircraft.  As a result, the activity needed fewer  personnel.
Finally, the activity cut 428 positions from the aviation intermediate  maintenance divisions.  The Fleet Forces Command decided to eliminate  all reserve positions from functions in which reserve personnel were not  able to meet deployment requirements.
subsections: section_title: Activity 2: Headquarters, Naval Submarine Forces, Norfolk, Virginia
paragraphs: The Naval Submarine Forces provide antisubmarine warfare, antisurface  ship warfare, precision land strike, mine warfare, intelligence, surveillance and early warning, and special warfare capabilities to the U.S. Navy, and  strategic deterrence capabilities to the U.S. Strategic Command. As shown  in table 3, the zero-based review recommended more than a 41 percent  reduction in naval submarine forces reserve manpower.
Of the total 1,105 decrease in reserve positions in Naval Submarine Forces,  1,061 (96 percent) resulted from decommissioning a submarine tender  (maintenance support ship) and decreasing reserve positions for logistics  and administrative support operations.
The activity cut 939 positions from an inactive submarine tender because  the Fleet Forces Command decided that this mission was not essential and  could be performed by a contractor. The activity also cut 122 positions  from logistics and administrative support operations because, according to  officials, the reservists’ part-time duty status would not allow them to  participate in submarine training deployments.
section_title: Activity 3: Bureau of Medicine and Surgery, members of active duty and retired personnel, while supporting Washington, D.C.
paragraphs: The Bureau of Medicine and Surgery provides health care to about 700,000  active duty Navy and Marine Corps members and to 2.6 million family contingency, humanitarian, and joint operations around the world. As  shown in table 4, the zero-based review recommended almost a 29 percent  reduction in medical reserve manpower.
Of the total 2,241 decrease in reserve positions for the Bureau of Medicine  and Surgery, 2,198 (98 percent) are from cuts in medical treatment facilities  and fleet hospitals.
The activity cut 1,388 positions from medical treatment facilities because  most of these positions were associated with special medical skills that  were never filled. The activity also cut 810 positions due to a reduction in  the number of fleet hospitals. The Navy reduced the number of fleet  hospitals from three to two because it does not expect to need as many  hospitals to meet mission requirements under new defense planning  guidance.
section_title: Activity 4: Naval Security Group, Fort Meade, Maryland
paragraphs: The Naval Security Group performs cryptologic and logistics support  functions for the fleet. As shown in table 5, the zero-based review recommended more than a 16 percent increase in naval security reserve  personnel.
The activity had a net increase of 156 reserve positions, which was  achieved through reductions of some positions and additions of other  positions.
The activity added 180 cryptologic linguists and 20 applied research and  development positions.  The number of positions for intelligence collection  and analysis increased because the National Security Agency agreed to pay  for the additional positions to meet its operational requirements. At the  same time, the activity cut 44 information operations positions because  anticipated technological advances in telephone and computer security  allowed the activity to reduce the number of personnel.
section_title: Activity 5: Headquarters, Mine Warfare Command, Corpus Christi, Texas
paragraphs: The Mine Warfare Command develops and evaluates mine warfare  doctrine, tactics, and equipment to conduct offensive and defensive mine warfare operations throughout the world. It is responsible for removing all types of mine threats, providing intelligence on foreign mine capabilities,  and developing tactics to counter other nations’ mining capabilities. As  shown in table 6, the zero-based review recommended more than a 90  percent decrease in mine warfare reserve manpower.
Of the total 1,158 decrease in reserve positions for the Mine Warfare  Command, 1,016 (88 percent) were taken from the Airborne and Surface  Mine Countermeasures Units. This decrease was a result of converting  reserve positions to active positions.
The activity cut 541 Airborne Mine Countermeasures positions by  reorganizing its two Airborne Mine Countermeasures squadrons, each of  which consisted of six active aircraft and four reserve aircraft, into two  squadrons of eight active aircraft each.  The activity decided to man the  two squadrons with only active manpower because the reserve functions  could not recruit sufficient manpower needed in specific specialties.
The activity also cut 475 Surface Mine Countermeasures positions.  The  activity decided to convert all reserve positions authorized for its 15 ships  to active positions because it had experienced reduced operational  effectiveness due to the inability to fill the reserve positions.
section_title: Comments from the Department of Defense
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Janet St. Laurent, (202) 512-4402 (stlaurentj@gao.gov)
section_title: Acknowledgments
paragraphs: Richard G. Payne, Assistant Director; George O. Morse; Willie J. Cheely, Jr.;  Nicole L. Collier; Bethann E. Ritter; Renee S. Brown; Jonathan Clark; and  Rebecca Shea also made significant contributions to this report.