Defense Headquarters: DOD Needs to Reevaluate Its Approach for Managing Resources Devoted to the Functional Combatant Commands
Released: 2014-06-26T00:00:00

Letter

Background

Combatant Command Responsibilities

DOD’s Unified Command Plan sets forth basic guidance to all combatant commanders and establishes the missions, responsibilities, and areas of geographic responsibility among all the combatant commands. There are currently nine combatant commands—six geographic and three functional. The six geographic combatant commands have responsibilities for accomplishing military operations in defined areas of operation and have a distinct regional military focus. The three functional combatant commands operate worldwide across geographic boundaries and provide unique capabilities to the geographic combatant commands and the military services. In addition, each combatant command is supported by multiple service component commands that help provide and coordinate service-specific forces, such as units, detachments, organizations, and installations, to help fulfill the combatant commands’ current and future operational requirements. Figure 1 is a map of the headquarters locations of the functional combatant commands, to include their subordinate unified commands and their respective service component commands.

Combatant Command Structure

Unless otherwise directed by the President or the Secretary of Defense, the combatant commanders organize the structure of their commands as they deem necessary to carry out assigned missions. The commands’ structure may include a principal staff officer; personal staff to the commander; a special staff group for technical, administrative, or tactical advice; and other staff groups that are responsible for managing personnel, ensuring the availability of intelligence, directing operations, coordinating logistics, preparing long-range or future plans, and integrating communications systems. The commands may also have liaisons or representatives from other DOD agencies and U.S. government organizations integrated into their staffs to help enhance the commands’ effectiveness in accomplishing their missions. While the commands generally conform to these organizational principles, there may be variations in a command’s structure based on its unique mission areas and responsibilities.

Joint Publication 1, Doctrine for the Armed Forces of the United States. permanent authorized positions for military, civilian, and other personnel responsible for managing the day-to-day operations of the command.

Military Service Supporting Responsibilities

Title 10 of the U.S. Code assigns the Secretaries of the military departments responsibility for a variety of tasks specific to their respective forces, to include organizing, equipping, and training tasks. In addition to these service-specific tasks, Title 10 of the U.S. Code also assigns the Secretaries of the military departments responsibility for assisting the combatant commands, to include responsibility for assigning all forces under their jurisdiction to the combatant commands to perform missions assigned to those commands and responsibility for carrying out functions to fulfill current and future operational requirements of the combatant commands.

In addition to service-specific tasks, DOD Directive 5100.03, Support of the Headquarters of Combatant and Subordinate Unified Commands, states that the military departments—as combatant command support agents—are responsible for programming, budgeting, and funding the administrative and logistical support of the headquarters of the combatant commands and subordinate unified commands. On an annual basis, each of the three military departments assess needs and develop a request for funding as part of their respective operation and maintenance budget justification to meet this requirement to support the combatant commands and subordinate unified commands. The directive assigns each military department responsibility for specific combatant commands and subordinate unified commands. As the combatant command support agent for the three functional combatant commands, the Air Force is responsible for allocating funding to combatant commands’ mission As areas, including the costs for civilian salaries, awards, and travel.such, the operating costs of these commands are generally subsumed within the Air Force’s budget and funded through operation and maintenance appropriations. Table 1 provides a listing of the functional combatant commands, their subordinate unified commands, and the military departments that support them.

Other Combatant Command Funding

Some of the functional combatant commands also receive funding through appropriations other than operation and maintenance. Specifically, Title 10 of the U.S. Code gives the Commander, Special Operations Command, the authority to prepare and submit to the Secretary of Defense program recommendations and budget proposals for special operations forces and for other forces assigned to SOCOM through a separate major force program category. In addition, funding for TRANSCOM’s costs to support headquarters operations comes primarily from the Air Force’s Transportation Working Capital Fund, which is part of the Air Force Working Capital Fund. Unlike the other combatant commands, TRANSCOM is operated in a fee-for-service manner and charges its customers for transportation services. TRANSCOM and its service component commands bill the customers for services rendered, customers transfer funds into the Transportation Working Capital Fund to pay the bill, and TRANSCOM and its service component commands receive payment from the Transportation Working Capital Fund. Officials noted that one component of these transportation costs is overhead, to include pay for civilian personnel, material and supplies, equipment, travel, and facility operations.

Resources Devoted to the Functional Combatant Commands Have Grown Considerably over the Last Decade

Authorized Military and Civilian Positions Have Grown at the Functional Combatant Commands

Our analysis shows that the functional combatant commands’ number of authorized positions has substantially increased since fiscal year 2004 primarily due to added missions and responsibilities. Taken together, the authorized number of military and civilian positions for the three functional combatant commands almost doubled from 5,731 in fiscal year 2004 to 10,515 in fiscal year 2013.

All three functional combatant commands’ number of authorized positions grew. SOCOM’s authorized military and civilian positions more than doubled from 1,885 in fiscal year 2004 to 4,093 in fiscal year 2013. According to SOCOM officials, an increase in authorized positions at the Special Operations Research, Development, and Acquisition Center and the Joint Special Operations Command contributed to the growth at the command. TRANSCOM’s number of authorized military and civilian positions more than doubled from 863 in fiscal year 2004 to 1,956 in fiscal year 2013. According to TRANSCOM officials, the realignment of the Defense Courier Service from Air Mobility Command to TRANSCOM and the Joint Enabling Capabilities Command from the Joint Staff to TRANSCOM were the primary contributors to the increase in authorized positions at the command. STRATCOM’s authorized military and civilian positions increased by 50 percent from 2,983 in fiscal year 2004 to 4,466 in fiscal year 2013. During this period, the creation of new organizations at STRATCOM to fill additional mission requirements, including Joint Functional Component Commands (Integrated Missile Defense; Intelligence, Surveillance, and Reconnaissance; Global Strike; and Space), two Centers (U.S. Strategic Command Center for Combating Weapons of Mass Destruction and the Joint Warfare Analysis Center), and a subordinate unified command (United States Cyber Command), were the primary contributors to the increase in authorized positions at the command. Figure 2 shows the number of authorized military and civilian positions at the functional combatant commands.

As with our findings in our May 2013 report on the geographic combatant commands, we found that, over time, the functional combatant commands have become more reliant on civilian personnel to meet their mission needs.civilian positions at the functional combatant commands almost tripled— from about 1,900 in fiscal year 2004 to about 5,200 in fiscal year 2013. According to DOD officials, the increase in authorized civilian positions is the result of attempts to rebalance workload and become a cost-efficient workforce, namely by converting positions filled by military personnel or in-sourcing services performed by contractors to civilian positions, and adding civilians in specific functional areas, such as intelligence and Specifically, we found that the number of authorized cyber, to support warfighter needs.authorized civilian positions at the functional combatant commands increased from about one-third of authorized positions in 2001 to about half in 2013. However, the functional combatant commands also increased the number of military personnel to support the headquarters. This is reflected in our analysis, which shows that from fiscal years 2004 through 2013 the number of authorized military positions also increased, by about 40 percent, from 3,850 to more than 5,300. Figure 3 shows changes in the functional combatant commands’ number of authorized military and civilian positions from fiscal years 2004 through 2013.

Authorized Military and Civilian Positions Have Grown at the Service Component Commands

Our analysis of data provided by the service component commands of the functional combatant commands showed that the service component command positions also increased, although not as much as in the functional combatant commands that they support. Specifically, total authorized military and civilian positions for the service component commands increased from about 6,675 in fiscal year 2002 to about 7,815 in fiscal year 2013. Changes in the authorized military and civilian positions at STRATCOM’s and SOCOM’s service component commands, as well as the establishment of new commands, drove the overall increase in total authorized positions, while the service component commands supporting TRANSCOM reduced their total authorized positions over the period. Among the military services, the Air Force’s service component commands saw the greatest increase in authorized positions, accounting for more than two thirds of the total increase in authorized military and civilian positions. This increase is primarily attributable to the establishment of Air Force Global Strike Command—a service component command to STRATCOM—which was activated in fiscal year 2009 to develop and provide combat-ready forces for nuclear deterrence and global strike operations, and is responsible for the nation’s intercontinental ballistic missile wings. The creation of Air Force Global Strike Command added over 330 additional military positions in fiscal year 2010. Figure 4 shows the increase in authorized positions at the service component commands that we reviewed.

We found that the service component commands’ authorized military and civilian mix has changed slightly since fiscal year 2002. In fiscal year 2002 the mix was 55 percent civilian and 45 percent military, and in fiscal year 2013 the mix was about 60 percent civilian and 40 percent military.

Trends in Contractor Full-Time Equivalents Not Identifiable Due to Data Variations across the Commands

The availability of data on contractor full-time equivalents varied across the combatant commands, and thus trends in full-time equivalents were DOD officials stated the department generally tracks not identifiable.and reports expenditures for contract services, and that the combatant commands were not required to maintain historical data on the number of contractor personnel. As a result, we found that the combatant commands had taken varied steps to collect data on contractor full-time equivalents. We also found that the data on the number of personnel performing contract services at the service component commands varied or were unavailable, and thus trends could not be identified. We found that some service component commands do not maintain data on the number of personnel performing contract services, and others used different methods to track these personnel, for instance counting the number of contractors on hand or the number of identification badges issued.

In recent years, Congress has enacted legislation to help improve DOD’s ability to manage its acquisition of services; to make more strategic decisions about the right workforce mix of military, civilian, and contractor personnel; and to better align resource needs through the budget process to achieve that mix. For example, Section 2330a of Title 10 of the U.S. Code requires DOD to annually compile and review an inventory of activities performed by contractors pursuant to contracts for services. Moreover, our work over the past decade on DOD’s contracting activities has noted the need for DOD to obtain better data on its contracted services and personnel to enable it to make more-informed management decisions, ensure department-wide goals and objectives are achieved, and have the resources to achieve desired outcomes. In response to our past work, DOD has outlined its approach to document contractor full- time equivalents and collect personnel data from contractors in DOD’s inventory of contract services. However, DOD does not expect to fully collect contractor personnel data until fiscal year 2016.

Secretary of Defense, Combatant Command (COCOM) Civilian and Contractor Manpower Management. for these services in the fiscal year 2010 President’s Budget Request. Furthermore, the National Defense Authorization Act for Fiscal Year 2014 extends these limits into fiscal year 2014.

Costs to Support Headquarters Operations Have Grown for Combatant and Service Component Commands

Total costs to support headquarters operations at the three functional combatant commands we reviewed increased substantially from fiscal years 2001 to 2013. Our analysis of data provided by the commands shows that the costs to support headquarters operations—including costs for civilian pay, contract services, travel, and equipment —increased more than fourfold in constant fiscal year 2013 dollars, from about $296 million in fiscal year 2001 to more than $1.236 billion in fiscal year 2013. A primary driver for the growth in costs has been the increase in SOCOM’s costs to support headquarters operations, which increased more than sixfold, from about $75 million in fiscal year 2001 to almost $467 million in fiscal year 2013. Costs increased across SOCOM headquarters and subordinate organizations, to include the Special Operations Research, Development and Acquisition Center, the theater special operations commands, and the Joint Special Operations Also, STRATCOM’s costs to support headquarters Command.operations almost quadrupled, from about $164 million in fiscal year 2001 to almost $624 million in fiscal year 2013. This increase in STRATCOM’s costs was largely driven by the costs to establish and operate several new subordinate organizations—Joint Functional Component Commands and U.S. Cyber Command—which reflect new missions and responsibilities assigned to STRATCOM over time. TRANSCOM’s costs to support headquarters operations more than doubled, from about $56 million in fiscal year 2001 to $145 million in fiscal year 2013. Growth in civilian pay and purchased services and equipment drove the increases in TRANSCOM’s costs to support headquarters operations. In addition, the transfer of the Joint Enabling Capabilities Command from the Joint Staff in fiscal year 2012 added tens of millions of dollars to TRANSCOM’s headquarters support costs. Figure 5 shows the overall change in the costs to support headquarters operations at the three functional combatant commands that we reviewed for fiscal years 2001 and 2013.

Total costs in constant fiscal year 2013 dollars to support headquarters operations increased slightly at the service component commands we reviewed, from about $614 million in fiscal year 2008 to about $657 million in fiscal year 2013.component commands saw the greatest increase in costs to support headquarters operations, primarily due to the establishment of Air Force Global Strike Command, which first reported costs in fiscal year 2010. Air Force costs were also driven by growth in costs for civilian pay associated with Air Force Space Command. In addition, SOCOM’s service component commands also experienced cost increases from fiscal years 2008 through 2013, primarily due to increases in costs for civilian pay. Conversely, TRANSCOM’s service component commands reduced their costs to support headquarters operations over the time period. Figure 6 shows the changes in the costs to support headquarters operations at the service component commands that we reviewed for fiscal years 2008 and 2013.

DOD’s Headquarters Reductions Do Not Include All Command Resources, Thus Affecting DOD’s Ability to Achieve Significant Cost Savings

In 2013, the Secretary of Defense set a target for reducing management headquarters budgets by 20 percent, but we found that DOD did not have an accurate accounting of the budgets and personnel associated with management headquarters to use as a starting point for reductions. Our work also found that management headquarters include about a quarter of the personnel at the commands—of the 10,500 authorized positions at the functional combatant commands, about 2,500 are considered to be management headquarters. As a result, about three-quarters of the authorized positions at the commands in our review are not included in the potential reductions. Moreover, without a clear and consistently applied starting point for reductions, it will be difficult for DOD to reliably track savings to management headquarters in the future.

DOD’s Planned Reductions to Headquarters Budgets Are Based on Self- Reported and Potentially Inconsistent Data

DOD relied on self-reported and potentially inconsistent data when implementing the Secretary of Defense’s planned headquarters reductions. In July 2013, the Deputy Secretary of Defense announced in a memorandum that the Secretary of Defense had directed reductions to DOD headquarters, to include the functional combatant commands, in an effort to streamline DOD’s management and eliminate lower-priority activities. The memorandum directed a 20 percent reduction to DOD components’ total management headquarters budgets for fiscal years 2014 through 2019, including costs for civilian personnel, contract services, facilities, information technology, and other costs that support headquarters functions. As outlined in budget documents, the targeted savings goal of 20 percent of headquarters operating budgets is to be realized by fiscal year 2019, with incremental savings each year beginning fiscal year 2015. DOD budget documents project the reductions will yield a total savings of about $5.3 billion over the period, with most savings coming in 2019.

DOD began efforts to initiate reductions to headquarters during the development of the fiscal year 2015 President’s Budget. According to DOD officials, the department used the end of the 5-year defense plan within the fiscal year 2014 President’s Budget, or fiscal year 2018, as a point to base the targeted savings goal of 20 percent of headquarters budgets through fiscal year 2019, with costs adjusted for inflation. Officials told us that the parameters for these savings were established so the department could achieve already-planned savings from prior efficiencies. DOD officials noted that the Secretary of Defense provided general guidance as to what should be considered management headquarters for the commands to use when identifying their total headquarters budgets and directed commands to include only operation and maintenance funding. Because the department does not have complete and reliable information on the resources being devoted to management headquarters, officials noted that each individual component was asked to identify and self-report its management headquarters operating budget from which reductions would be based. DOD officials further noted that after the individual components determined what they considered their management headquarters budgets to be, officials from DOD’s Office of Cost Assessment and Program Evaluation reviewed the documentation to ensure it was reflective of the intent of the reductions.

DOD focused its reductions on management headquarters, or major DOD headquarters activities, because, according to officials, doing so would ensure that the department saved as much money as possible for the warfighting elements. However, by relying on DOD components to self- report their total management headquarters budgets, DOD cannot ensure these self-reported budgets were captured consistently or reflect total headquarters costs among the commands. DOD officials reported that each of the combatant commands developed different approaches for identifying the population of resources on which to base reductions. Ultimately, officials determined that reductions would be based only on operation and maintenance funds.

We also found that the underlying data are often tracked in an inconsistent manner. During the course of our review, we found that the functional combatant commands and service component commands had different ways of capturing total costs to support headquarters operations. All of the commands included costs for categories like civilian compensation, and travel and transportation expenses. However, some commands included categories such as software for command-specific systems as well as command-specific equipment. Based on discussions with DOD officials, it is unclear whether the commands were consistent in their approaches for identifying and self-reporting the information they provided.

Some Costs and Authorized Positions Are Not Included in DOD’s Planned Headquarters Reductions

Our analysis shows that not all costs and authorized positions are included in DOD’s planned headquarters reductions and that all of the functional combatant commands exclude most of their authorized staffs from management headquarters totals. While the trends we described earlier in this report include the entire commands, we gathered information directly from the commands to determine how much of their organizations they considered management headquarters. We found that less than a quarter of their personnel are designated as management headquarters. This designation is critical because the Deputy Secretary of Defense’s July 2013 memorandum directed a 20 percent reduction to DOD components’ total management headquarters budgets for fiscal years 2014 through 2019, including costs for civilian personnel, contract services, facilities, information technology, and other costs that support headquarters functions. In addition, the memorandum noted that organizations should strive for a goal of 20 percent reductions in authorized government civilian staff at the headquarters as well as a goal of 20 percent reductions in military personnel billets on management headquarters staffs.

On the basis of our analysis of data on authorized positions at the functional combatant commands and their service component commands, we found that the commands designate less than a quarter of the total authorized positions as part of their management headquarters functions. Specifically, about 2,500 of about 10,500 total authorized positions are accounted for in the functional commands’ management headquarters position totals. As a result, a 20 percent reduction to management headquarters could result in a relatively small cut to the total number of positions at the three functional combatant commands. Specifically, as figure 7 shows, a 20 percent reduction to management headquarters positions means that, combined, the functional combatant commands would have to eliminate about 500 positions, or less than 5 percent of the overall authorized positions at the commands.

Compared to the functional combatant commands, the service component commands have a larger percentage of authorized positions included in their management headquarters totals. Based on our analysis of data on authorized positions at the service component commands, about 6,000 of about 7,800 total authorized positions are accounted for in the management headquarters position totals (77 percent). As such, a 20 percent reduction to management headquarters positions means that, combined, the service component commands would have to eliminate about 1,200 positions, or about 15 percent of the overall authorized positions at the commands. This reduction is larger than the 5 percent reduction that would be required at the functional combatant commands if the reductions are based on management headquarters totals, as DOD calculated them.

We further analyzed data provided by the individual functional combatant commands to determine what they included in their management headquarters totals. The proportion of personnel considered to be in management headquarters positions at the three functional combatant commands ranged from 20 to 28 percent of their overall personnel based on their 2013 authorized positions. DOD officials explained that the positions that are not accounted for in management headquarters positions perform more operationally focused tasks and functions. For example, STRATCOM officials stated that positions within the command’s Joint Functional Component Commands for Global Strike; Intelligence, Surveillance, and Reconnaissance; Integrated Missile Defense; and Space are not included in the command’s management headquarters totals because the positions within these components and the missions they perform are operational in nature. Similarly, TRANSCOM officials told us that because the Joint Enabling Capabilities Command is a deployable operational command component, all authorized positions within this component are excluded from the command’s management headquarters totals. Moreover, officials at each of the functional combatant commands told us that some authorized positions within their headquarters—such as those within the intelligence and operations directorates—are not considered management headquarters positions because these positions perform operational tasks and functions.

Examples of the positions within the individual commands that are included in management headquarters and those that are not are as follows:

About 20 percent of SOCOM’s reported total authorized positions, or about 800 of 4,100 authorized positions, are included in the command’s management headquarters position totals. According to officials, positions not included in management headquarters functions include 267 authorized positions in the Special Operations Research, Development, and Acquisition Center; the entirety of the Joint Special Operations Command headquarters; and certain positions within command directorates such as intelligence and operations. For example, only 1 of the 473 authorized military and civilian positions in the intelligence directorate is included in the command’s management headquarters position totals.

About 28 percent of STRATCOM’s reported total authorized positions, or about 1,200 of 4,500 total positions, are included in the command’s management headquarters position totals. According to officials, positions not counted as part of the command’s management headquarters totals include 1,544 authorized positions in the command’s Joint Functional Component Commands; 918 authorized positions at U.S. Cyber Command; and 64 authorized positions in the command’s J9 Mission Assessment and Analysis Directorate.

About 24 percent of TRANSCOM’s reported total authorized positions, or about 500 of 2,000 positions, are included in the command’s management headquarters position totals. According to officials, positions that are excluded from this total include about 260 authorized positions that are part of the Defense Courier Service, among others.

Figure 8 shows the number of authorized positions within the functional combatant commands in fiscal year 2013 included in management headquarters totals and the number not included.

While the functional combatant commands have components and associated positions that are more operational in nature, we found that each of these operational components have personnel that perform management headquarters functions, such as conducting planning, budgeting, and developing policies. For example, STRATCOM officials noted that the Joint Functional Component Commands have resource- management personnel that manage the component commands’ funding, which is a headquarters function, as defined in DOD Instruction 5100.73, Major DOD Headquarters Activities. However, STRATCOM excludes these personnel from its management headquarters totals because, according to STRATCOM officials, the headquarters directorates at these component commands are relatively small and personnel rely heavily on STRATCOM for support in these functional areas. Moreover, a majority of the positions in SOCOM’s research, development, and acquisition center, which manages and supports the development, acquisition, and fielding of critical items for special operations forces, are not included in the command’s management headquarters totals even though these personnel perform headquarters-specific functions as defined in DOD Instruction 5100.73, Major DOD Headquarters Activities.

Absent a Clear Starting Point, Savings Will Be Difficult to Track

DOD’s reduction initiatives targeted management headquarters, and the department reported a savings estimate from these reductions in its fiscal year 2015 budget submission, but because the department did not have a reliable way to determine the resources being devoted to such headquarters as a starting point, actual savings will be difficult to track. Specifically, DOD officials acknowledged the limitations of management headquarters data, stating that they did not have an operationally clear definition and good data about what constituted management headquarters, and agreed that this made it difficult to establish a starting point for reductions. However, the department does not have any plans to reevaluate the baseline on which the reductions are based, in part because it does not have an alternative source for complete and reliable data. Moreover, DOD reported in its fiscal year 2015 budget submission that reductions to management headquarters staffs will result in a savings of $5.3 billion through fiscal year 2019 in comparison to DOD’s overall expected $2.7 trillion budget over those fiscal years. The department based this total on incremental savings from reductions being realized each year from fiscal years 2015 through 2019. However, this represents a savings of about 2/10 of 1 percent. If DOD’s headquarters reductions do not have a clearly defined and consistently applied starting point on which to target savings—and reductions are only focused on what the commands have self-reported as management headquarters activities— then the department may not be able to track its savings to management headquarters or assure that reductions are achieved as intended.

Accounting for management headquarters is a long-standing challenge for DOD that has created problems before in tracking savings. In October 1997, in the wake of the mid-1990s military drawdown, we found that total personnel and costs of defense headquarters were significantly higher than were being reported. At the time, we found that about three-fourths of subordinate organizations excluded from the management headquarters accounting were actually performing management or management support functions and that such accounting masked the true size of DOD’s headquarters organizations. In March 2012, we concluded that DOD’s data on its headquarters personnel lacked completeness and reliability necessary for use in making efficiency assessments and decisions. We recommended that the Secretary of Defense revise DOD Instruction 5100.73, Major DOD Headquarters Activities, to include all headquarters organizations; specify how contractors performing headquarters functions will be identified and included in headquarters reporting; clarify how components are to compile the information needed for headquarters-reporting requirements; and establish time frames for implementing actions to improve tracking and reporting of headquarters resources. DOD generally concurred with the findings and recommendations in that report and is taking steps to address the recommendations. For example, DOD has begun the process of updating DOD Instruction 5100.73, Major DOD Headquarters Activities, to include all major DOD headquarters activity organizations. However, the department has not yet taken actions to fully address our recommendations. In April 2003, we testified on the importance of periodically reexamining whether current programs and activities remain relevant, appropriate, and effective in an agency’s ability to deliver on its mission and noted that restructuring efforts must be focused on clear goals. Moreover, key questions that agencies should consider when evaluating organizational consolidation note that the key to any consolidation initiative is the identification of and agreement on specific goals, with the goals of the consolidation being evaluated against a realistic assessment of how the consolidation can achieve them. We further noted that any consolidation initiatives must be grounded in accurate and reliable data.

Moreover, unless these issues are addressed, the department may be unable to convince external stakeholders, such as Congress, that its actions will address overhead in a meaningful way. Section 904 of the National Defense Authorization Act for Fiscal Year 2014 requires that DOD develop and submit a plan for streamlining management headquarters, to include the combatant commands, by June 2014.plan is to include a description of the planned changes or reductions in staffing and services and the estimated cumulative savings to be achieved from fiscal years 2015 through 2024. According to officials, DOD has not yet decided how it plans to track its management headquarters reductions and report to Congress to satisfy this statutory requirement. Without establishing a starting point for reductions that includes all headquarters personnel and resources within these commands, it is unclear how the department will provide reliable information to Congress. Moreover, since the universe of resources that DOD has identified for headquarters reductions is relatively small compared to the overall size of the functional combatant commands, unless the department reevaluates its decision to base reductions on management headquarters, it may not ultimately realize significant savings.

Conclusions

As it faces a potentially extended period of fiscal constraints, DOD has concluded that reducing the resources it devotes to headquarters is a reasonable area to achieve cost savings. However, by focusing the reductions on management headquarters budgets and personnel—which tend to be inconsistently defined and often represent a small portion of the overall headquarters—in the way it has, the department is, in effect, shielding much of the resources it directs to headquarters organizations like those of the functional combatant commands. Unless the department reevaluates its decision to focus reductions on management headquarters and sets a clearly defined and consistently applied starting point from which to base budgetary and staff reductions at headquarters organizations and track them, DOD is likely to face difficulties ensuring that its actions result in significant overhead savings. As the department continues to identify efficiencies in its operations and potential reductions in overhead, accurately identifying the universe of resources that DOD dedicates to headquarters and using that as a starting point for reductions would help DOD ensure it achieves savings. Finally, managing headquarters resources is a long-standing challenge at DOD. We have previously recommended that DOD improve the accounting of management headquarters functions and develop a process to periodically revalidate the size and structure of the combatant commands.

We believe that these recommendations apply to the functional combatant commands in this review, and are still valid, and thus are making no new recommendations on these issues.

Recommendations for Executive Action

In order to improve the management of DOD’s headquarters-reduction efforts, we recommend that the Secretary of Defense take the following three actions: 1. Reevaluate the decision to focus reductions on management headquarters to ensure the department’s efforts ultimately result in meaningful savings. 2. Set a clearly defined and consistently applied starting point as a baseline for the reductions. 3. Track reductions against the baselines in order to provide reliable accounting of savings and reporting to Congress.

Agency Comments and Our Evaluation

We provided a draft of this report to DOD for review and comment. In written comments on a draft of this report, DOD partially concurred with the first recommendation and concurred with the second and third recommendations. DOD’s comments are summarized below and reprinted in their entirety in appendix VIII.

DOD partially concurred with the first recommendation that the Secretary of Defense reevaluate the decision to focus reductions on management headquarters to ensure the department’s efforts ultimately result in meaningful savings. DOD stated that this department-wide recommendation would garner greater savings. However, DOD officials raised concerns that the recommendation seemed to be outside the scope of the review, which focused on the functional combatant commands, and with our distinction between management headquarters and below-the-line organizations and the functions that personnel in these positions perform. We agree that the recommendation has implications beyond the functional combatant commands. While our review was focused on the functional combatant commands, the issue we identified is not limited to these commands. The findings related to the three functional combatant commands illustrate a fundamental challenge facing the department in its efforts to reduce headquarters overhead. As discussed in this report, we have previously reported on problems with the way that DOD accounts for management headquarters across the department. As part of this review, we found that DOD did not have an accurate accounting of the budgets and personnel associated with management headquarters to use as a starting point for reductions. Given the longstanding issues with accounting for management headquarters, we believe the recommendation that the Secretary reevaluate the decision to focus the department’s reduction efforts on management headquarters is appropriate.

The department also stated in its letter that while the Secretary of Defense’s reductions were focused on management headquarters, the military services were allowed to reduce below-the-line organizations— those not designated as management headquarters—which includes elements of the combatant commands. According to DOD, these reductions will range from 3 percent up to 15 percent depending on the military service. We recognize that the military services plan to implement reductions that may result in savings at some non-management headquarters organizations across the department. However, the department’s response did not delineate how these reductions were determined, how they were applied by the military services, or how much the actions would ultimately save the department. Further, in discussions, DOD officials raised concerns about our distinction between management headquarters and below-the-line organizations and the functions that personnel in these positions perform. As noted in the report, we understand the distinctions as defined in guidance between management headquarters and below-the-line organizations, or those not considered to be part of an organization’s management headquarters. However, our analysis focused on the extent to which the functional combatant commands reported that personnel were performing management functions, and we noted that this data was self-reported and potentially inconsistent. The intent of the recommendation was to focus on positions not included in the commands’ assessment of management headquarters positions, but in response to DOD’s concern, we modified the recommendation to clarify that the goal of ensuring cost savings was related to the assessment of personnel performing management functions versus the definition of people included in management headquarters totals.

In its comments, the department also questioned the use of Joint Table of Distribution data from DOD’s Electronic Joint Manpower and Personnel System versus the Future Years Defense Program data in DOD’s Defense Resources Data Warehouse for this study. We attempted to use the data warehouse as part of our prior work examining the resources devoted to the geographic combatant commands in May 2013; however, after querying the database, Joint Staff officials explained that the data it yielded were unreliable. Therefore, the officials suggested that we obtain the authorized position and costs to support headquarters operations data directly from the combatant commands and service component commands. DOD noted in its comments that the data trends may be skewed since the Joint Table of Distribution presents a point-in-time look at on-hand personnel. For this review, we focused on authorized positions as documented on the combatant command’s Joint Tables of Distribution rather than focusing on personnel on hand because data on authorized positions provided the most accurate and repeatable data to identify trends. Moreover, the Chairman of the Joint Chiefs of Staff Instruction 1001.01A, Joint Manpower and Personnel Program, notes that Joint Tables of Distribution are documented in the Joint Staff’s Electronic Joint Manpower and Personnel System which is DOD’s system of record to document the unified combatant commands’ organizational structure and track the manpower and personnel required to meet the combatant commands’ assigned missions. The instruction also states that manpower authorizations on the Joint Table of Distribution should be compared with the Future Years Defense Program and any disconnects must be resolved. Finally, in January 2012, the Vice Director of the Joint Staff issued a memo identifying its Electronic Joint Manpower and Personnel System as the authoritative data source for DOD and for congressional inquiries of joint personnel, stating that the system must accurately reflect the manpower and personnel allocated to joint organizations, such as the combatant commands, to provide senior leaders with the necessary data to support decision making in a fiscally constrained environment. Therefore, we maintain that the use of authorized military and civilian positions from the combatant command’s Joint Tables of Distribution, as documented in DOD’s Electronic Joint Manpower and Personnel System, was appropriate for our review of the resources devoted to the functional combatant commands.

DOD concurred with the second and third recommendations that the Secretary of Defense: set a clearly defined and consistently applied starting point as a baseline for the reductions, and track reductions against the baselines in order to provide reliable accounting of savings and reporting to Congress. In its response, DOD recommended the use of the Future Years Defense Program data to set the baseline going forward and stated that it was enhancing data elements within DOD’s Resource Data Warehouse to better identify management headquarters resources to facilitate tracking and reporting across the department. We agree that enhancements to the data elements will increase DOD’s capability to track and report management headquarters resources across the department and, thus, the Future Years Defense Program data could be used to set baselines and track future reductions. These enhancements, if implemented, would address the intent of the recommendations.

DOD also provided what it considered significant points of fact. However, we considered these were technical comments, which we incorporated as appropriate.

We are sending a copy of this report to the appropriate congressional committees, the Secretary of Defense, the Chairman of the Joint Chiefs of Staff, and the Secretaries of the military departments. In addition, this report is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-3489 or pendletonj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix IX.

Appendix I: Objectives, Scope, and Methodology

We conducted this work in response to a mandate from the House Armed Services Committee to review the personnel and resources of the functional combatant commands. This report (1) identifies any trends in resources devoted to the functional combatant commands and their service component commands for fiscal years 2001 through 2013 to meet their assigned missions and responsibilities, and (2) evaluates the extent to which the Department of Defense’s (DOD) directed reductions to headquarters, like the functional combatant commands and supporting service component commands, could result in cost savings for the department.

To conduct this work and address our objectives, we identified sources of information within DOD that would provide data on the resources devoted to the functional combatant commands—U.S. Special Operations Command (SOCOM), U.S. Strategic Command (STRATCOM), and U.S. Transportation Command (TRANSCOM)—to include their subordinate unified commands and their corresponding service components commands.

To identify trends in the resources devoted to DOD’s functional combatant commands, including their subordinate unified commands and their service component commands, we obtained and analyzed data on available authorized military and civilian positions, and operation and maintenance obligations, from each of the commands and their corresponding service component commands from fiscal years 2001 through 2013. We focused our review on authorized positions, as these reflect the approved, funded manpower requirements at each of the functional combatant commands. To provide insight into the number of personnel assigned to each command, we obtained data on actual assigned personnel for fiscal year 2013. We also obtained and analyzed available data on contractors assigned to the commands, but based on the availability of data, we were not able to identify trends in contractors assigned to the individual commands. Our review also focused on operation and maintenance obligations—because these obligations reflect the primary costs to support headquarters operations of the combatant commands, their subordinate unified commands and other activities, and corresponding service component commands—including the costs for civilian personnel, contract services, travel, and equipment, among others. We included funds provided to TRANSCOM through the Transportation Working Capital Fund and to SOCOM through the command’s special operations–specific appropriations that provides funding for necessary special operations forces’ unique capabilities and items since these funds most appropriately reflect the primary mission and headquarters support for the commands. Our review excluded obligations of operation and maintenance funding for DOD’s overseas contingency operations not part of DOD’s base budget. Unless otherwise noted, we reported all costs in this report in constant fiscal year 2013 dollars. Since historical data were unavailable in some cases, we limited our review of the combatant commands authorized positions to fiscal years 2004 through 2013, and authorized military and civilian positions at the service component commands to fiscal years 2002 through 2013. Using available data, we provided an analysis of trends in operation and maintenance obligations at the combatant commands for fiscal years 2001 through 2013, but since historical data were unavailable in some cases for the service component commands, we limited our analysis of trends to fiscal years 2008 through 2013. We obtained data on actual assigned personnel for fiscal year 2013. To assess the reliability of the data, we interviewed DOD officials and analyzed relevant manpower and financial-management documentation to ensure that the authorized positions and data on operation and maintenance obligations that the commands provided were tied to mission and headquarters support. We also incorporated data-reliability questions into our data-collection instruments and compared the multiple data sets received from DOD components against each other to ensure that there was consistency in the data that the commands provided. We determined the data were sufficiently reliable for our purposes.

To determine the extent to which DOD’s directed reductions to headquarters, like the functional combatant commands and supporting service component commands, will result in cost savings for the department, we obtained and reviewed guidance and documentation on DOD’s and the services’ planned headquarters reductions, such as the department-issued memorandum outlining the reductions and various DOD budget-related data and documents. We then examined whether this information addressed some key questions we had developed for an agency to consider when evaluating proposals to consolidate management functions. We developed these key questions by reviewing our reports on specific consolidation initiatives that have been undertaken, complementing this with information gathered through a review of the relevant literature on public-sector consolidations produced by academic institutions, professional associations, think tanks, news outlets, and various other organizations. In addition, as illustrative examples for this prior work, we reviewed selected consolidation initiatives at the federal agency level and interviewed a number of individuals selected for their expertise in public management and government reform. We obtained data on the total authorized positions at the functional combatant commands for fiscal year 2013 as well as the number of positions deemed by the command to be performing headquarters functions and included in DOD’s planned reductions. To assess the reliability of the data, we interviewed DOD officials, analyzed relevant manpower documentation, incorporated data-reliability questions into our data-collection instruments, and compared the multiple data sets received from DOD components against each other to ensure that there was consistency in the data that the commands provided. We determined the data were sufficiently reliable for our purposes. We also interviewed officials at the functional combatant commands, some of their respective subordinate unified commands, and the service component commands to discuss specific headquarters positions and organizations that will be affected by DOD’s planned reductions in the commands and their service components.

We interviewed officials or, where appropriate, obtained documentation from the organizations listed below:

Manpower and Personnel Directorate

Strategic Plans and Policy Directorate Department of the Air Force

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

Assistant Secretary of the Army for Financial Management and Comptroller, Army Budget Office

U.S. Army Force Management Support Agency

Headquarters, U.S. Marine Corps Unified Combatant Commands and Subordinate Unified Commands

Marine Corps Forces U.S. Strategic Command

U.S. Army Space and Missile Defense Command / Army Forces Joint Functional Component Command for Integrated Missile Defense

Air Force Global Strike Command

Air Force Space Command

U.S. Special Operations Command

U.S. Army Special Operations Command

Air Force Special Operations Command

Naval Special Warfare Command

U.S. Marine Corps Forces Special Operations Command

Special Operations Command Central

Surface Deployment and Distribution Command We conducted this performance audit from May 2013 to June 2014 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Headquarters Locations of the Functional Combatant Commands, Their Subordinate Unified Commands, and Their Service Component Commands

This appendix contains information in noninteractive format presented in figure 1.

Appendix III: Resources at U.S. Special Operations Command and Its Service Component Commands (Part 1 of 6)

U.S. SPECIAL OPERATIONS COMMAND (SOCOM)

Mission: Provides special operations forces to defend the United States and its interests, and synchronizes planning of and operations against global terrorist networks.

Headquarters: MacDill Air Force Base, Florida Responsibility: Daily planning for and execution of SOCOM’s mission is performed by the command headquarters, three subordinate unified commands—Joint Special Operations Command, Special Operations Command–North, and Special Operations Command–Joint Capabilities—and two direct reporting units—Special Operations Joint Task Force and a Regional Special Operations Forces Coordination Center. SOCOM is also supported by four service component commands, which are the U.S. Army Special Operations Command; the Naval Special Warfare Command; the Air Force Special Operations Command; and the Marine Corps Special Operations Command.

Interactivity instructions: Click on the combatant command name to see more information.

See appendix VII for the noninteractive, printer-friendly version.

SOCOM’s Authorized Military and Civilian Positions, Fiscal Years 2004 through 2013

SOCOM’s Number of Authorized Military and Civilian Positions, Fiscal Years 2004 through 2013

5% Theater Special Operations Command (23)

15% Joint Special Operations Command (71)

80% SOCOM Headquarters (373)

SOCOM’s Service Component Commands’ Authorized Military and Civilian Positions, Fiscal Years 2002 through 2013

SOCOM’s Service Component Commands’ Authorized Military and Civilian Positions, Fiscal Year 2013

34% Air Force Special Operations Command (710)

12% Air Force Special Operations Command (29.4)

7% Marine Corps Special Operations Command (16.2) 14% Naval Special Warfare Command (33.2)

67% Army Special Operations Command (159.7)

14% Marine Corps Special Operations Command (304)

Fiscal Year 2013 Authorized Military and Civilian Positions by Directorate, Subordinate Command, and Component Command U.S. Special Operations Command Headquarters Directorates

Subordinate Unified Command Total Direct Reporting Units

U.S. Special Operations Command Grand Total

Fiscal Year 2013 Authorized Military and Civilian Positions by Directorate, Subordinate Command, and Component Command Service Component Commands

Service Component Command Grand Total

Appendix IV: Resources at U.S. Strategic Command and Its Service Component Commands (Part 1 of 6)

U.S. STRATEGIC COMMAND (STRATCOM)

Mission: STRATCOM conducts global operations in coordination with other combatant commands, military services, and appropriate U.S. government agencies to deter and detect strategic attacks against the United States and its allies.

Headquarters: Offutt Air Force Base, Nebraska Responsibility: Daily planning and execution for STRATCOM’s mission is performed by one subunified command—U.S. Cyber Command—and seven component commands—Joint Functional Component Command-Global Strike; Joint Functional Component Command-Space; Joint Functional Component Command-Integrated Missile Defense; Joint Functional Component Command-Intelligence, Surveillance, and Reconnaissance; the STRATCOM Center for Combating Weapons of Mass Destruction, the Standing Joint Force Headquarters for Elimination, and the Joint Warfare Analysis Center. STRATCOM is also supported by four service component commands, including Air Force Global Strike Command, Air Force Space Command, Army Space and Missile Defense Command / U.S. Army Forces Strategic Command, and Marine Corps Forces U.S. Strategic Command.

Interactivity instructions: Click on the combatant command name to see more information.

See appendix VII for the noninteractive, printer-friendly version.

STRATCOM’s Authorized Military and Civilian Positions, Fiscal Years 2001 through 2013

STRATCOM’s Number of Authorized Military and Civilian Positions, Fiscal Years 2001 through 2013

29% Cyber Command (180.9)

44% STRATCOM Headquarters (275.0)

24% Component Commands (167.5)

STRATCOM’s Service Component Commands’ Authorized Military and Civilian Positions, Fiscal Years 2002 through 2013

STRATCOM’s Service Component Commands’ Authorized Military and Civilian Positions, Fiscal Year 2013

28% Air Force Global Strike Command (991)

22% Army Forces Strategic Command (28.5)

1% Marine Corps Forces, Strategic Command (0.45)

31% Air Force Global Strike Command (40.6)

38% Air Force Space Command (1,363)

47% Air Force Space Command (60.1)

Fiscal Year 2013 Authorized Military and Civilian Positions by Directorate, Subordinate Command, and Component Command U.S. Strategic Command Headquarters Directorates

Headquarters Directorates Total Subunified Command

U.S. Strategic Command Grand Total

Fiscal Year 2013 Authorized Military and Civilian Positions by Directorate, Subordinate Command, and Component Command Service Component Commands

Service Component Command Grand Total

Appendix V: Resources at U.S. Transportation Command and Its Service Component Commands (Part 1 of 4)

U.S. TRANSPORTATION COMMAND (TRANSCOM)

Mission: TRANSCOM provides air, land, and sea transportation for the Department of Defense (DOD) in time of peace and war, with a primary focus on wartime readiness.

Headquarters: Scott Air Force Base, Illinois Responsibility: TRANSCOM provides air, land, and sea transportation for DOD and is the manager of the DOD Transportation System, which relies on military and commercial resources to support DOD’s transportation needs. The command, among other responsibilities, provides commercial air, land, and sea transportation; terminal management; aerial refueling to support the global deployment, employment, sustainment, and redeployment of U.S. forces; and is responsible for movement of DOD medical patients. TRANSCOM has one subordinate command—the Joint Enabling Capabilities Command. TRANSCOM works with three component commands to accomplish its joint mission: Air Mobility Command, Military Sealift Command, and Surface Deployment and Distribution Command.

Interactivity instructions: Click on the combatant command name to see more information.

See appendix VII for the noninteractive, printer-friendly version.

TRANSCOM’s Authorized Military and Civilian Positions, Fiscal Years 2001 through 2013

TRANSCOM’s Number of Authorized Military and Civilian Positions, Fiscal Years 2001 through 2013

27% Joint Enabling Capabilities Command (38.9)

73% TRANSCOM Headquarters (106.3)

TRANSCOM’s Service Component Commands’ Authorized Military and Civilian Positions, Fiscal Years 2002 through 2013

TRANSCOM’s Service Component Commands’ Authorized Military and Civilian Positions, Fiscal Year 2013

54% Air Mobility Command (1,145)

36% Surface Deployment and Distribution Command (104.7)

39% Air Mobility Command (112.0)

25% Military Sealift Command (72.1)

Fiscal Year 2013 Authorized Military and Civilian Positions by Directorate, Subordinate Command, and Component Command U.S. Transportation Command Headquarters Directorates

U.S. Transportation Command Grand Total Service Component Commands

Service Component Commands Grand Total

Appendix VII: Functional Combatant Command Organizational Structure Descriptions

This appendix contains information in noninteractive format presented in the organizational charts in appendixes III, IV, and V.

Appendix VIII: Comments from the Department of Defense

Appendix IX: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, key contributors to this report include Richard K. Geiger (Assistant Director), Tracy Barnes, Robert B. Brown, Tobin J. McMurdie, Carol D. Petersen, Michael Silver, Amie Steele, Erik Wilkins-McKee, and Kristy Williams.