Strategic workforce planning—an integral part of human capital management—is an iterative, systematic process that helps organizations determine if they have staff with the necessary skills and competencies to accomplish their strategic goals. We have previously reported that having the right workforce mix with the right skill sets is critical to achieving DOD’s mission, and that it is important for DOD, as part of its workforce planning, to conduct gap analyses of its critical skills and competencies. Since 2001, GAO has included strategic human capital management as a government high-risk area. In 2002, we reported that DOD recognized that human capital strategic planning is fundamental to effective overall management. Further, we reported that DOD was working to identify and address problems that have been hampering this effort, which included a lack of accurate, accessible, and current workforce data; mature models to forecast future workforce requirements; a link between DOD’s planning and budgeting processes; and specific planning guidance. In 2015, we reported that DOD has demonstrated sustained leadership commitment to address its acquisition workforce challenges, underscored by the department’s emphasis on growing and training the acquisition workforce through its Better Buying Power initiatives. As part of our larger body of work examining human capital management issues, we and the Office of Personnel Management have identified six key principles of strategic workforce planning that organizations should incorporate in their processes, including: aligning workforce planning with strategic planning and budget formulation; involving managers, employees, and other stakeholders in planning; identifying critical gaps and competencies and analyzing workforce gaps; developing workforce strategies to address gaps in numbers, skills, building the capabilities needed to support workforce strategies through steps that ensure the effective use of human capital flexibilities; and monitoring and evaluating progress toward achieving workforce planning and strategic goals. Several offices within DOD play key roles in strategic planning activities, such as determining the size and makeup of the acquisition workforce, budgeting for the workforce, assessing workforce competencies, and addressing skill gaps (see table 1). Pursuant to the Defense Acquisition Workforce Improvement Act, DOD identified 13 career fields and designated acquisition-related positions held by military or civilian personnel. DOD also established certification requirements that included education, training, and experience elements for each acquisition position. Certification is the procedure through which DOD components determine that an employee meets these requirements for one of three levels in each acquisition career field. DOD components fund their acquisition workforce personnel through a variety of accounts, including (1) operation and maintenance; (2) research, development, test and evaluation; and (3) working capital. Additionally, Congress established the Defense Acquisition Workforce Development Fund in 2008 to provide funds dedicated to recruiting, training, and retaining the acquisition workforce. There are two boards that oversee acquisition workforce programs, including the Fund and related initiatives. The Senior Steering Board is expected to meet quarterly and provide strategic oversight, while the Workforce Management Group is expected to meet bimonthly and oversee the fund’s operations and management (see table 2). DOD has increased the size of its workforce since September 2008, exceeding its 20,000 personnel growth target by over 7,000 as of March 2015. The growth varied within individual components. For example, the Air Force and Navy, as well as the other DOD agencies collectively, have more acquisition personnel now than in fiscal year 2008. Conversely, the Army has experienced an 8 percent decrease in the size of its acquisition workforce since fiscal year 2008 due to Army-wide cost savings measures that have impacted the size of the civilian workforce. The reported increase in DOD’s acquisition workforce was accomplished through hiring of additional personnel, converting functions previously performed by DOD contractors to performance by DOD civilian personnel (referred to as insourcing), adding military personnel to the acquisition workforce, and administratively recoding existing personnel, the last of which does not result in an increase in DOD’s workforce capacity. Shortfalls, however, exist in certain career fields. For example, 6 of DOD’s 13 acquisition career fields, including 3 priority career fields— contracting, engineering, and business—did not meet growth goals. DOD increased the size of its military and civilian acquisition workforce by 21 percent, from about 126,000 to about 153,000, between September 2008 and March 2015. This equates to a nearly 27,000 personnel increase and 7,000 personnel more than identified in DOD’s April 2010 acquisition workforce plan. Figure 1 shows that most of this growth occurred in fiscal years 2009 and 2010. Acquisition workforce growth outpaced losses between fiscal years 2008 and 2012. However, in fiscal years 2013 and 2014, the department experienced a small decrease. During this time, DOD components were faced with sequestration and other cost-cutting measures. In preparation for these cuts, the Under Secretary of Defense for Acquisition, Technology and Logistics issued a memorandum in September 2012 that specified that DOD components were to take a strategic view in workforce decisions and protect the rebuilding investments, especially in light of ongoing contractor support reductions. For the most part, components were able to sustain the acquisition growth levels they had already achieved, with the exception of the Army, which lost several thousand personnel. In fiscal year 2015, each component again experienced an increase, with the exception of the Army. According to Army Defense Acquisition Career Management officials, the Army’s cost-cutting efforts have affected all aspects of Army operations, including acquisition. Since 2008, the number of overall Army military and civilian personnel has decreased by 91,000, or 12 percent, from 790,000 to 699,000. The acquisition portion of this reduction was almost 3,400 personnel. The department grew the acquisition workforce through a combination of hiring and insourcing actions, as originally planned, as well as by adding military personnel and administratively recoding existing positions. Figure 2 shows how DOD increased the acquisition workforce through fiscal year 2014, the most recent year for which DOD could provide complete data. About 72 percent of the workforce growth has been achieved through hiring new civilian employees, with more than half of this increase attributable to funds provided through the Defense Acquisition Workforce Development Fund. Since 2009, DOD has spent about $1.8 billion from the fund to recruit and hire about 10,400 new civilian employees. DOD used the majority of the funding to pay their salaries for a 2- to 3-year period, after which the components fund the personnel through their own budget accounts. The hiring actions generally were in the career fields that DOD indicated were a priority in the 2010 acquisition workforce plan. For example, about three-quarters of all Defense Acquisition Workforce Development Fund hiring was targeted toward five priority career fields— contracting, business, engineering, program management, and auditing— identified in DOD’s April 2010 acquisition workforce plan. DOD components used their own funds to hire the balance of the new civilian and military employees identified in the figure above. Overall, insourcing accounted for about 14 percent of the workforce growth. DOD originally planned to insource 10,000 contractor positions for the acquisition workforce by fiscal year 2015. Components insourced about 3,400 positions prior to a March 2011 revision to DOD’s insourcing policy. According to the memorandum revising the policy, which was issued jointly by the Under Secretary of Defense for Acquisition, Technology and Logistics and the Under Secretary of Defense Comptroller/Chief Financial Officer, a case-by-case approach would be used for additional insourcing of acquisition functions based on critical need, whether a function is inherently governmental, and the benefit demonstrated by a cost-benefit analysis. DOD officials stated that the revised policy effectively curtailed any additional efforts. Based on data provided by DOD’s Human Capital Initiatives Directorate, we estimate that recoding accounted for at least an 11 percent increase in DOD’s overall acquisition workforce. Acquisition officials stated that administrative recoding efforts, which resulted in both increases and decreases to the acquisition workforce, were made to ensure that all acquisition personnel were properly accounted for within each component and career field. According to acquisition officials, recoding was necessary because some personnel were performing acquisition functions the majority of the time, but were not counted as a part of the acquisition workforce. These personnel generally continued to perform the same duties and do not equate to an increase in the capacity of the organization. The recoded personnel are required to meet acquisition professional certification standards, including training, education, and experience requirements. According to Human Capital Initiatives and DOD component officials, recoding primarily occurred in three career fields—facilities engineering, life cycle logistics, and science and technology manager. For example, Air Force Materiel Command estimated that it recoded approximately 3,600 personnel at its maintenance depots as acquisition personnel, some of which were recoded to the life cycle logistics career field. Increases in the number of military positions accounted for 3 percent of the workforce growth. According to Army and Air Force acquisition officials, one of the primary reasons DOD increased the number of military personnel serving in the acquisition workforce was to provide increased capacity. Much of this growth was in the contracting career field during contingency operations in Iraq and Afghanistan. Overall, Human Capital Initiatives statistics show that growth efforts have helped DOD reshape the civilian workforce. In fiscal year 2008, DOD found that about half of its civilian acquisition workforce had 10 years or less before they were eligible for retirement, with far fewer mid-career individuals ready to take their place or provide mentoring and supervision to those workforce members who were early in their career. Defense Acquisition Workforce Development Fund hiring has helped strategically reshape the workforce by bolstering critical functions and building early and mid-career workforce size. Although no specific goals were set, figure 3 shows the progress DOD has made increasing the number of early- career staff (those eligible to retire in 20 years or more) and mid-career staff (those eligible to retire in 11 to 20 years). There have also been improvements in the training and qualifications of the workforce. For example, the percent of the workforce that met certification requirements increased from 58 percent to 79 percent between fiscal years 2008 and 2014. In addition, the number of acquisition personnel with a bachelor’s degree or higher increased from 77 to 83 percent. However, DOD still faces the challenge of an aging workforce, as statistics also show that the average age of the workforce has been static since 2008 at about 45 years, and the percentage of retirement eligible personnel has remained at 17 percent. Defense acquisition officials recognize the risks associated with the loss of very experienced members of the acquisition workforce. These officials noted they are concerned about retaining an adequate number of personnel in the senior career group to provide leadership and continuity for the workforce between 2020 and 2030. While DOD met the overall acquisition growth goal, it did not accomplish the goals set for some career fields. The 2010 acquisition workforce plan identified growth goals, expressed in terms of a percent increase from fiscal year 2008 to fiscal year 2015, for each of the 13 acquisition career fields. The plan indicated that targeted growth in 5 of these priority career fields—auditing, business, contracting, engineering, and program management—would help DOD strategically reshape its acquisition workforce. As of March 2015, our analysis shows that DOD exceeded its planned growth for 7 career fields by about 11,300 personnel, including the priority career fields of auditing and program management. The department did not, however, reach the targets in its growth plan for the other 6 career fields by about 4,400 personnel, including the priority career fields of contracting, business, and engineering (see figure 4). According to military department acquisition officials, shortfalls in contracting and engineering career fields are largely the result of high attrition rates and difficulty in hiring qualified personnel. Despite these challenges, the engineering career field was within 1 percent of its hiring goal. The business career field did not meet its overall growth goal in part because of recoding actions that resulted in a loss to the career field, greater than expected attrition, and Army cost-cutting efforts. Leaders in some of these areas are trying to identify ways to complete activities more efficiently to reduce the impact of shortfalls. For example, the Cost Assessment and Program Evaluation office, which is responsible for completing independent cost estimates for acquisition programs, has started an initiative to develop a centralized database and virtual library of cost and acquisition data so that cost analysts spend less time gathering data and more time analyzing it. Increasing the number of people performing acquisition work is only part of DOD’s strategy to improve the capability of its workforce; another part is ensuring that the workforce has the requisite skills and tools to perform their tasks. DOD developed a five-phased process that included surveys of its employees to assess the skills of its workforce and to identify and close skill gaps. Efforts to complete the process were hindered by low survey response rates and the absence of proficiency standards. Further, DOD has not established time frames for when career fields should conduct another round of competency assessments to assess progress towards addressing previously identified gaps and to identify emerging needs. In October 2009, section 1108 of the National Defense Authorization Act for Fiscal Year 2010 required DOD to include certain information as a part of its acquisition workforce plan, including an assessment of (1) the critical skills and competencies needed by the future DOD workforce for the 7-year period following the submission of the report, (2) the critical competencies of the existing workforce and projected trends in that workforce based on expected losses due to retirement and other attrition, and (3) gaps in DOD’s existing or projected workforce that should be addressed to ensure that DOD has continued access to critical skills and competencies. Subsequently, the April 2010 acquisition workforce plan outlined a five-phased process that each of the 13 career fields was to use to assess the skills of its workforce and to identify and close skill gaps (see figure 5). DOD functional leaders generally relied on input from senior experts to identify the baseline competencies for phase 1, used subject matter experts to identify work situations and competencies contributing to successful performance for phase 2, and solicited feedback on the models through limited testing with the workforce for phase 3. To validate models and assess workforce proficiency in phase 4, career field leaders relied on surveys that were sent to all or a sample of personnel to solicit their assessment of (1) the criticality of each competency, (2) how frequently they demonstrated each competency, and (3) how proficient they were at each competency. For phase 5, among other things, DOD planned to report on the progress made to identify and close skill gaps and ensure that the competencies remained current. As of October 2015, 12 of the 13 career fields had completed at least an initial competency assessment. The production, quality, and manufacturing career field is the only career field that had not completed all of the phases at least once, due primarily to turnover in leadership, according to an Office of the Secretary of Defense official. According to DOD’s Human Capital Initiatives officials, this career field intends to complete its initial competency assessment by the end of 2017. In the interim, this official noted that the functional leader and the functional integrated product team will continue to actively assess workforce gaps and needs and will use other resources, such as the Defense Acquisition University, to address known skill gaps. Until such time, however, this career field may not have the necessary information to fully identify and assess skill gaps, as statutorily required. Assessing workforce proficiency, according to the Office of Personnel Management’s human capital assessment guidance, allows agencies to target their recruitment, retention, and development efforts. DOD planned to collect data on workforce proficiency as a part of the competency assessment process by pairing supervisor and employee responses to questions included in the surveys, but this effort was hindered by low response rates. In a separate, but related, effort DOD has not yet completed efforts to develop proficiency standards for the acquisition career fields, which would ultimately allow leaders to measure employee proficiency against standards that are specific to each career field. Contracting and auditing were the two career fields that were able to pair supervisor and employee responses collected in competency assessments to make observations about workforce proficiency. These results helped senior leaders identify areas where the workforce did not possess the same level of proficiency as supervisors expected. For example, senior contracting leaders determined that, among other things, fundamental contracting skills were needed across entry and mid-career levels of the contracting workforce and currency, breadth and depth of knowledge were needed across mid-career and senior levels. Leaders emphasized the importance of not only mastering the “what,” but in being able to use critical thinking and sound judgment to apply the knowledge, thus mastering the “how.” In response, the contracting senior leaders worked together with the Defense Acquisition University to develop a 4- week research-intensive fundamentals course that provides new hires practical experience using the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation Supplement. The auditing career field overhauled its training curriculum for new auditors to closely tie with government auditing standards, which career field officials stated would play a large role in addressing gaps in the auditing competencies. The new hire curriculum consists of a 2-week onboarding session, followed by a 2-week class in basic contract audit skills, plus another 2-week class focused on applying the skills in specific types of audits. The other 10 career fields that completed a competency assessment relied on staff self-assessments to make observations about workforce proficiency because of low survey response rates, particularly by supervisors. As a result, the Center for Naval Analysis, which conducted surveys for these 10 career fields, generally stated in its reports that the results were less verifiable because they were not validated against supervisor responses and that leaders should exercise caution when extrapolating the results. Overall response rates for these career fields ranged from 13 to 37 percent. Five of the career field leaders we met with stated that they used other reviews and input from functional integrated product teams to complement the survey results and then worked with the Defense Acquisition University to develop or update training classes. The program management career field, for example, conducted two studies, one in 2009 and another in 2014. The studies included interviews of program managers and program executive officers to identify opportunities to improve the proficiency of programs managers through additional training or experience requirements for program management candidates. The studies identified, among other things, the need to improve program managers’ awareness of earned value management, which is a project management technique for measuring performance and progress, and business acumen. In response, the Defense Acquisition University developed a class called “Understanding Industry” which covers such issues as how contractors align their business strategies, finances, and operations to meet corporate goals. The Center for Naval Analysis reported that it did not explicitly identify proficiency gaps as a part of conducting the competency assessment surveys for most career fields because no proficiency standards exist. The Center for Naval Analysis strongly encouraged leadership to set standards based on baseline data gathered in the surveys. DOD began efforts to establish department-wide proficiency standards in 2012 under the Acquisition Workforce Qualification Initiative. Overall, DOD estimated that it would require establishing up to 2,000 standards across the acquisition career fields. However, the project leader stated that it proved difficult to develop a set of standards whose applicability would be common across all personnel, including those with the same position title, because employees perform different acquisition activities across or even within the DOD components. Further, the project leader stated that it became apparent that developing a single database to collect and track experiences of the acquisition workforce would take considerable time and expense and would contribute to the proliferation of systems that an organization would have to support and maintain. The goal of this initiative is now to map competencies for each career field to on-the-job outcomes, with a focus on assessing the quality versus the quantity of the experiences, according to the project leader. Initiative officials are working with the Defense Contract Management Agency to leverage a database that the agency uses to track employee experiences. For now, initiative officials are creating a computer-based tool using Excel software that employees can use to track their individual acquisition experience. The tool is designed to be used by employees to facilitate career development conversations with supervisors. The project leader expects that the tool should be available for use in 2016. According to the Office of Personnel Management, as part of their workforce planning activities, agencies should monitor and evaluate their efforts to address competency gaps on a continuous basis. DOD has not determined how often competency assessments should be conducted; however, five career field leaders we met with stated that assessments should be completed every 3 to 5 years. They stated that this would allow leadership time to gauge the success of efforts to address previous skill gaps, identify current skill gaps, and identify emerging needs. In that regard, the business and contracting career fields recently completed a second round of workforce assessments and are in the process of analyzing results or identifying actions to address gaps. The other 10 career fields that completed an initial competency assessment did so between 2008 and 2012, but have not completed another round of workforce assessments to determine if their workforce improvement efforts were successful and what more needs to be done. Half of these 10 career field leaders indicated that they plan to complete another assessment between 2016 and 2019, or about 5 to 8 years after the initial assessment was conducted for most career fields. Without establishing appropriate time frames to conduct follow-up assessments and completing those assessments, acquisition workforce leaders will not have the data needed to track improvement in the capability of the workforce and focus future training efforts, as called for by Office of Personnel Management standards. DOD generally plans to maintain the current level and composition of the acquisition workforce. DOD has not, however, verified that the current composition of the workforce will meet its future workforce needs. Officials at the Air Force Materiel Command, Army Materiel Command, and Naval Sea Systems Command indicated that they are having difficulties meeting program office needs, especially in the contracting and engineering career fields. These two priority career fields will remain under the levels targeted by DOD’s April 2010 workforce plan, while several other career fields will continue to exceed their targeted level. Further, Human Capital Initiatives has not issued an updated workforce strategy that includes revised career field goals or issued guidance on the use of the Defense Acquisition Workforce Development Fund to guide future hiring decisions. In an April 2015 memorandum, the Under Secretary of Defense for Acquisition, Technology and Logistics stated that it is imperative for the components to sustain and build on the investment made to increase the capacity and capability of the acquisition workforce. Specifically, the components were told to responsibly sustain the acquisition workforce size and make adjustments based on workload demand and requirements. According to January 2015 workforce projections included in budget exhibits that components developed for the fiscal year 2016 president’s budget, the components generally plan to maintain the current level and composition of the civilian and military acquisition workforce through fiscal year 2020, though individual components project slight shifts. For example, these projections indicate that the Army plans to increase the size of its acquisition workforce by almost 2.5 percent by predominantly adding military personnel, while the Air Force projects a less than 1 percent decrease and the Navy projects a decrease of almost 2 percent. The other DOD components are planning to decrease the size of their current workforces collectively by about 5 percent. However, Army officials stated that in September 2015, the Army revised its projection. It now estimates that its acquisition workforce will decrease by about 1,800, or 5 percent, by fiscal year 2020 as a result of recent reductions to the Army’s entire military structure from fiscal year 2016 forward. According to DOD guidance, the component budget exhibits contain estimates of the number of authorized and funded acquisition workforce personnel through the Future Years Defense Program. The estimates do not provide information on components’ workforce projected shortfalls. Our analysis of the budget exhibits shows that to maintain the overall size of the workforce at around 150,000, DOD components collectively plan to spend between $18.5 billion and $19.4 billion annually through fiscal year 2020. This funding will be used to pay acquisition workforce salaries, benefits, training, and related workforce improvement initiatives. The total amount includes about $500 million in planned funding annually for the Defense Acquisition Workforce Development Fund, which will be used to hire about 4,900 new employees through fiscal year 2020 to help sustain the current size of the workforce and continue training and development efforts. Budget documents also indicate, however, that many career fields are projected to continue to be significantly over or under their original growth targets identified in DOD’s April 2010 acquisition workforce plan (see figure 6). Our analysis of the PB-23 submissions indicates that eight career fields will lose about 2,500 positions collectively between 2015 and 2020. One of these career fields, life cycle logistics, is projected to lose almost 1,400 of these positions, but will still be significantly over the growth target established in 2010. Five career fields are expected to grow by a total of about 1,000 positions, with the majority of this growth in the contracting and facilities engineering career fields. The growth expected between 2015 and 2020 will allow purchasing to meet its initial growth target. Despite this projected growth, however, four of the priority career fields— contracting, business, engineering, and audit—will remain under the April 2010 growth targets. Further, concerns about the levels of contracting and engineering personnel were expressed by officials at each of the three major acquisition commands we met with—Air Force Materiel Command, Army Materiel Command, and Naval Sea Systems Command. For example, Air Force Materiel Command has not been able to hire enough personnel to offset a 10 percent attrition rate in the contracting career field, according to career field leaders. It also has shortfalls in engineering personnel, which requires multiple programs to share engineers with particular technical expertise. The command manages personnel shortfalls by assessing risks for its programs and then reallocating staff from programs that are considered to have less risk to new programs or programs that have more risk. Command officials cited several reasons for the shortfalls. First, since fiscal year 2013, the command has initiated 19 new acquisition programs without budgeting for the civilian and military personnel needed to adequately support the entire portfolio of the command’s programs. Second, command officials noted that they have lost some military and civilian acquisition personnel due to DOD-wide cuts in operation and maintenance funding accounts from which these personnel are paid. Finally, officials stated that the command has made cuts to the contractor workforce that more than offset the growth in the military and civilian acquisition workforce to date. Army Materiel Command officials stated that the command is currently experiencing shortfalls in the contracting career field and the shortfall is expected to reach about 800 personnel by fiscal year 2020. The shortfalls are the result of several cost-cutting actions taken by the Army since fiscal year 2011 to implement mandated reductions and caps on future spending. For example, the command’s contracting organization was only able to fund about 3,600 of its authorized 4,000 positions. Officials from that organization stated that they have moved over $100 million in contract actions from overburdened contracting offices to other contracting offices within the command that have additional capacity. Officials estimate that they can only mitigate the impact of about one-third of planned reductions through workload realignments and process changes. In addition, the command has taken on several new missions without gaining additional resources, including contingency contract administration services that were previously performed by the Defense Contract Management Agency and lead responsibility for contracting in Afghanistan, which was previously provided through a joint contracting organization assigned to U.S. Central Command. Naval Sea Systems Command officials stated that the command is experiencing shortfalls in the contracting and engineering career fields, and they are projecting additional shortfalls by fiscal year 2020. One metric the command is tracking to assess contracting workload shows that the number of new contract awards that are delayed into the next fiscal year was approximately 100 for fiscal year 2015. This includes the contract award for the Navy’s Own Ship Monitoring System, a technology for submarine sonar systems, as well as the Aegis Weapon System Modernization production upgrades. The number of new contract awards that are delayed into the next fiscal year is expected to grow to about 430 contracts by fiscal year 2020 as a result of workload increases and shortfalls in the contracting career field. Command officials expect current shortfalls in contracting personnel to be exacerbated by DOD-wide cuts to civilian personnel. In addition, Naval Sea Systems Command engineering officials said that one-third of the command’s technical specifications and standards, which serve as the fleet’s instructional manual on routine ship maintenance, have not been reviewed in the past 20 years. They said that the backlog of specification and standard reviews indirectly contributed to two failures within 5 years of the main reduction gears on a Navy destroyer—a warship that provides multi-mission offensive and defensive capabilities. The failures resulted from an industry change in oil composition that was not addressed by corresponding changes to the Navy’s maintenance standards for the ship. In general, command officials could not provide validated data on the extent of current workforce shortfalls, but each military department is developing models to help better project acquisition program needs and quantify potential shortfalls. Specifically: The Air Force Materiel Command pilot-tested an updated Air Force workforce model in 2015 to assist with personnel planning over the life cycle of a program based on factors such as type of program and life cycle phase. The model projects that the command will have a shortfall of over 1,300 military and civilian acquisition positions by fiscal year 2017, and nearly 1,900 positions by fiscal year 2021. Command officials are working closely with acquisition program managers to validate program needs and to identify weaknesses in the model. Additional functionality is expected to be added over the next several years that will allow the command to target hiring to fill specific workforce gaps. For example, instead of soliciting applications for engineers in general, the command could more specifically target materials engineers. The Assistant Secretary of the Army for Acquisition, Logistics and Technology is in the process of developing personnel planning models that will better allow organizations to forecast their manpower requirements. The program management model was approved by the Army Manpower Analysis Agency and is beginning to be used by program managers. Army Materiel Command officials expect a new contracting model to be available for use later in fiscal year 2016. Additional models for research and development and test and evaluation are also being planned. Naval Sea Systems Command officials stated that they are in the process of developing career field-specific tools to, among other things, forecast needs, help identify skill gaps, and create demand signals for career development opportunities. No date was provided for when these tools will be available. DOD has not issued an updated acquisition workforce strategy to help guide future hiring decisions. According to Human Capital Initiatives officials, budget uncertainties have been the primary reason for the delay. The Director of Human Capital Initiatives noted that senior DOD and military department leadership regularly discuss the state of the acquisition workforce and its capacity to address emerging needs and challenges. The Director also noted that similar discussions occur at various levels within DOD components. As a result, the Director stated that while the size and composition of the workforce differs from what was called for in DOD’s 2010 acquisition workforce plan, DOD’s current and projected workforce largely reflect the decisions made during these discussions. However, according to acquisition officials we met with, DOD components and sub-components make thousands of individual hiring decisions, based not only on the need to obtain critical skills, but to also sustain growth already achieved in a career field, address emerging issues, and meet other priorities. Human Capital Initiatives officials said that they are working to issue an updated acquisition workforce plan in 2016. 10 U.S.C. Section 115b requires that DOD issue a biennial acquisition workforce strategy that, among other things, assesses the appropriate mix of military, civilian, and contractor personnel capabilities and includes a plan of action to meet department goals. Further, as we have previously reported, issuing a workforce strategy and an associated plan of action is crucial for DOD to effectively and efficiently manage its civilian workforce during times of budgetary and fiscal constraint. For example, continuing cuts to operation and maintenance budget accounts and efforts to reduce headquarters spending by 20 percent over the next few years could result in additional reductions to acquisition workforce positions in some career fields. In addition, Section 955 of the National Defense Authorization Act for Fiscal Year 2013 requires DOD to plan to achieve civilian and service contractor workforce savings that are not less than the savings in funding for military personnel achieved from reductions in military strength, which could also affect the size of the acquisition workforce. DOD may also be faced with another round of sequestration cuts, which could result in hiring freezes or workforce reductions. Without issuing an updated workforce strategy, as statutorily required, DOD may not be positioned to meet future acquisition needs. Aligning the use of the Defense Acquisition Workforce Development Fund to high priority workforce needs is also crucial. In the past, some hiring decisions made by DOD components using the Defense Acquisition Workforce Development Fund exceeded initial 2010 career field targets. In addition, over the past 7 years, about 2,700 personnel, or 26 percent of those hired with these funds, were in career fields that were not considered high priority in the 2010 acquisition workforce plan. For example, funds were used to hire about 850 personnel for the life cycle logistics career field that is significantly over its growth target. To focus use of the funds, the Assistant Secretary of the Army for Acquisition, Logistics and Technology issued guidance in March 2013 that identified critical career field priorities for the future acquisition workforce and emphasized the need to balance critical acquisition skills needed with other personnel requirements during times of constrained budgets and limited personnel resources. In fiscal year 2014, the Assistant Secretary of the Navy for Research, Development and Acquisition directed that 75 percent of Navy’s hiring using these funds should be in priority career fields such as contracting, engineering, and business. The Air Force has not issued similar guidance on how to target hiring efforts to meet critical needs. Section 1705 of Title 10, U.S. Code, requires the Human Capital Initiatives Directorate to issue guidance for the administration of the Defense Acquisition Workforce Development Fund. The guidance is to identify areas of need in the acquisition workforce, including changes to the types of skills needed. The Director of Human Capital Initiatives told us, however, that while key stakeholders involved in acquisition workforce planning, such as the Senior Steering Board and defense acquisition career managers, discuss areas of need in the workforce, the office does not issue guidance on how DOD components should prioritize their hiring decisions. Without clearly linking the use of these funds with the strategic goals of the department, components may continue to over-hire in some career fields and not be able to adequately meet critical acquisition program needs in other career fields. DOD has focused much needed attention on rebuilding its acquisition workforce and has used the Defense Acquisition Workforce Development Fund to increase hiring and provide for additional training that supports this effort. This is especially noteworthy given that the department faced sequestration and other cost-cutting pressures over the past several years. Now that the department has surpassed its overall growth goals and has moved into a workforce sustainment mode, the 2010 acquisition workforce plan needs to be updated. Focus should now be placed on reshaping career fields to ensure that the most critical acquisition needs are being met. DOD attempted to strategically reshape its acquisition workforce with the 2010 acquisition workforce plan, but fell short in several priority career fields, including contracting and engineering. An updated plan that includes revised career field goals, coupled with guidance on how to use the Defense Acquisition Workforce Development Fund, could help DOD components focus future hiring efforts on priority career fields. Without an integrated approach, the department is at risk of using the funds to hire personnel in career fields that currently exceed their targets or are not considered a priority. DOD has also made progress in identifying career field competencies, but additional steps are needed to complete this effort. For example, the production, quality, and manufacturing career field has yet to complete its initial competency assessment and DOD has not established time frames to conduct follow-up assessments for the other career fields so that it can determine if skill gaps are being addressed. Office of Personnel Management standards state that identifying skill gaps and monitoring progress towards addressing gaps are essential steps for effective human capital management. Without completing all competency assessments and establishing time frames for completing follow-up assessments, acquisition leaders will not have the data needed to track improvement in the capability of the workforce. To improve DOD’s oversight and management of the acquisition workforce, we are making four recommendations. Specifically, to ensure that DOD has the right people with the right skills to meet future needs, we recommend that the Under Secretary of Defense for Acquisition, Technology and Logistics direct the Director, Human Capital Initiatives to: Issue an updated acquisition workforce plan in fiscal year 2016 that includes revised career field goals; Issue guidance to focus component hiring efforts using the Defense Acquisition Workforce Development Fund on priority career fields; Ensure the functional leader for the production, quality, and manufacturing career field completes an initial competency assessment; and Establish time frames, in collaboration with functional leaders, to complete future career field competency assessments. We provided a draft of this report to DOD for comment. In its written comments, which are reprinted in appendix I, DOD concurred with our recommendations and described the actions it plans to take. DOD also provided technical comments, which we incorporated in the report as appropriate. In response to our recommendation that DOD issue an updated acquisition workforce plan, the department stated that it is currently working on the fiscal year 2016–2021 Defense Acquisition Workforce Strategic Plan, and that it plans to provide the draft plan for review by the end of 2015. The department, however, did not indicate specifically that the updated plan would include revised career field goals. We believe updated career field goals should be included in the plan because they can help inform future hiring decisions and rebalance the size of each career field, if necessary. The department concurred with our recommendation that the Director, Human Capital Initiatives issue guidance to focus hiring efforts using the Defense Acquisition Workforce Development Fund on priority career fields. However, it stated that determining which career fields are a priority is most appropriately determined by the components. The department indicated that the Director, Human Capital Initiatives would work with the components to issue guidance that ensures the Defense Acquisition Workforce Development Fund is used to best meet both enterprise and specific component workforce needs. We believe these actions would meet the intent of our recommendation. In response to our recommendation that the production, quality, and manufacturing career field complete an initial competency assessment, the department stated that it will complete the initial assessment by the end of 2017. In response to our recommendation to establish time frames for completing future career field competency assessments, the department agreed and indicated that it will work with acquisition workforce functional leaders to establish time frames to complete future career field competency assessments, as needed. We are sending copies of this report to the appropriate congressional committees, the Secretary of Defense, the Under Secretary of Defense for Acquisition, Technology and Logistics, and other interested parties. The report is also available at no charge on the GAO website at http://www.gao.gov. Should you or your staff have any questions about this report, please contact me at (202) 512-4841 or dinapolit@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff and other major contributors to this report are listed in appendix II. In addition to the contact named above, Cheryl Andrew, Assistant Director; Miranda Berry; Virginia A. Chanley; Teakoe S. Coleman; Maria Durant; Katheryn Hubbell; Heather B. Miller; Jenny Shinn; Robert Swierczek; Ozzy Trevino; and Alyssa Weir made key contributions to this report. Defense Acquisition Workforce: The Air Force Needs to Evaluate Changes in Funding for Civilians Engaged in Space Acquisition. GAO-13-638. Washington, D.C.: July 8, 2013. Defense Acquisition Workforce: Improved Processes, Guidance, and Planning Needed to Enhance Use of Workforce Funds. GAO-12-747R. Washington, D.C.: June 20, 2012. Defense Contract Management Agency: Amid Ongoing Efforts to Rebuild Capacity, Several Factors Present Challenges in Meeting Its Missions. GAO-12-83. Washington, D.C.: November 3, 2011. Defense Acquisition Workforce: Better Identification, Development, and Oversight Needed for Personnel Involved in Acquiring Services. GAO-11-892. Washington, D.C.: September 28, 2011. Department of Defense: Additional Actions and Data Are Needed to Effectively Manage and Oversee DOD’s Acquisition Workforce. GAO-09-342. Washington, D.C.: March 25, 2009. Acquisition Workforce: Department of Defense’s Plans to Address Workforce Size and Structure Challenges. GAO-02-630. Washington, D.C.: April 30, 2002. Department of Defense Contracted Services DOD Contract Services: Improved Planning and Implementation of Fiscal Controls Needed. GAO-15-115. Washington, D.C.: December 11, 2014. Defense Contractors: Additional Actions Needed to Facilitate the Use of DOD’s Inventory of Contracted Services. GAO-15-88. Washington, D.C.: November 19, 2014. Defense Acquisitions: Update on DOD’s Efforts to Implement a Common Contractor Manpower Data System. GAO-14-491R. Washington, D.C.: May 19, 2014. Defense Acquisitions: Continued Management Attention Needed to Enhance Use and Review of DOD’s Inventory of Contracted Services. GAO-13-491. Washington. D.C.: May 23, 2013. Defense Acquisitions: Further Actions Needed to Improve Accountability for DOD’s Inventory of Contracted Services. GAO-12-357. Washington, D.C.: April 6, 2012. Human Capital: DOD Should Fully Develop Its Civilian Strategic Workforce Plan to Aid Decision Makers. GAO-14-565. Washington, D.C.: July 9, 2014. Human Capital: Strategies to Help Agencies Meet Their Missions in an Era of Highly Constrained Resources. GAO-14-168. Washington, D.C.: May 7, 2014. Human Capital: Additional Steps Needed to Help Determine the Right Size and Composition of DOD’s Total Workforce. GAO-13-470. Washington, D.C.: May 29, 2013. Human Capital: Critical Skills and Competency Assessments Should Help Guide DOD Civilian Workforce Decisions. GAO-13-188. Washington, D.C.: January 17, 2013. Human Capital: DOD Needs Complete Assessments to Improve Future Civilian Strategic Workforce Plans. GAO-12-1014. Washington, D.C.: September 27, 2012. Human Capital: Further Actions Needed to Enhance DOD’s Civilian Strategic Workforce Plan. GAO-10-814R. Washington, D.C.: September 27, 2010. Human Capital: A Guide for Assessing Strategic Training and Development Efforts in the Federal Government. GAO-04-546G. Washington, D.C.: March 1, 2004. Human Capital: Key Principles for Effective Strategic Workforce Planning. GAO-04-39. Washington, D.C.: December 11, 2003. High-Risk Series: An Update. GAO-15-290. Washington, D.C.: February 11, 2015. Federal Workforce: OPM and Agencies Need to Strengthen Efforts to Identify and Close Mission-Critical Skills Gaps. GAO-15-223. Washington, D.C.: January 30, 2015. Defense Headquarters: DOD Needs to Reassess Personnel Requirements for the Office of Secretary of Defense, Joint Staff, and Military Service Secretariats. GAO-15-10. Washington, D.C.: January 21, 2015. Sequestration: Observations on the Department of Defense’s Approach in Fiscal Year 2013. GAO-14-177R. Washington, D.C.: November 7, 2013. DOD Civilian Workforce: Observations on DOD’s Efforts to Plan for Civilian Workforce Requirements. GAO-12-962T. Washington, D.C.: July 26, 2012. Defense Workforce: DOD Needs to Better Oversee In-sourcing Data and Align In-sourcing Efforts with Strategic Workforce Plans. GAO-12-319. Washington, D.C.: February 9, 2012.

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