On the basis on its 1993 Bottom-Up Review, the Department of Defense (DOD) adopted a strategy of maintaining the capability to fight and win two nearly simultaneous major regional conflicts (MRC), conduct smaller scale operations such as peacekeeping, and provide overseas presence in critical regions. The Bottom-Up Review determined that the Air Force would have 20 fighter wings (13 active and 7 reserve), up to 187 bombers(161 active and 26 reserve), and 500 intercontinental ballistic missiles to implement the strategy. The Bottom-Up Review also concluded the Air Force should maintain the capability to provide (1) airlift to transport people and equipment during conflicts, (2) reconnaissance and command and control aircraft to provide information on the location and disposition of enemy forces, and (3) aerial refuelers to enhance mission effectiveness by refueling aircraft during long-range missions. The review did not specify the number of military personnel required to implement the national military strategy. However, DOD subsequently determined that the active components would consist of about 1.4 million active military personnel, 381,000 of which would be Air Force personnel. By the end of fiscal year 1997, the Air Force plans to have an active duty force of 381,100 personnel with an associated military pay of $16.8 billion. In 1996, Congress established minimum active duty personnel levels for each military service as part of the National Defense Authorization Act for Fiscal Year 1996. The Air Force floor was set at 381,000. In creating the floors, Congress sought to ensure that (1) the services had enough personnel to carry out the national military strategy and (2) the drawdown of active forces was over to avoid future recruiting and retention problems. Finally, Congress believed that this level force would allow the services to manage the effects of high operations and personnel tempo. The National Defense Authorization Act for Fiscal Year 1997 retained the floor, but allowed the Secretary of Defense the flexibility in certain circumstances to decrease personnel by 1 percent of the floor. For the Air Force, this means the number of active duty personnel cannot drop below 377,200. The legislation requires the services to obtain statutory authority for decreases below the 1-percent threshold. Over the last several years, DOD has categorized its planned forces and funding as either mission or infrastructure. Air Force mission forces consist of the fighter wings, bombers, and intercontinental missiles (as defined in the Bottom-Up Review) and the forces that provide direct combat support; intelligence; space support; and command, control and communications in wartime. Activities that provide support to the mission forces and primarily operate from fixed locations are classified as infrastructure forces. Infrastructure is divided into the following eight categories: acquisition management, force management, installation support, central communications, central logistics, central medical, central personnel, and central training. These categories are described in appendix I. Approximately 140,000, or 36 percent, of the active Air Force personnel are currently categorized as mission forces and 241,000, or 64 percent, are in infrastructure activities. The Secretary of Defense wants to reduce and streamline infrastructure to achieve savings to modernize the force. In April 1996, we reported that operations and maintenance and the military personnel appropriations must be reduced if spending for infrastructure activities is to decline, since they account for 80 percent of infrastructure funding. In fiscal year 1996, the Air Force spent about $28 billion of its $73 billion total budget on infrastructure activities. As shown in figure 1.1, about 83 percent of the Air Force’s direct infrastructure costs are funded by two appropriations—military personnel and operations and maintenance. One of the Air Force’s major initiatives to generate savings for weapons modernization is to study the potential to contract out infrastructure functions. In deciding whether a function can be transferred to contractors, the Air Force compares the relative cost of using civilian employees and private contractors to perform the same function. DOD data on cost comparisons completed between fiscal year 1978 and 1994 indicates that shifting work to contractors has reduced annual operating cost on average by 31 percent. Our initial work on another assignment indicates that such savings may not be as high as estimated by DOD, but that some savings do result. The Air Force uses a variety of methods to determine personnel requirements. These processes identify requirements as a function of workload or level of service based on assigned missions. The various methods include Air Force staffing standards for positions common throughout the Air Force such as security police; command staffing standards for functions unique to a particular command such as pilot training; a computer-generated model for aircraft maintenance positions; and crew ratios for each type of aircraft in the inventory. The Air Force does not have total control over the allocation of its personnel. For example, legislation and DOD directives establish ceilings on headquarters positions and mandate the number of positions that the Air Force must fill on the joint staff, and in unified commands and defense agencies. Table 1.1 shows the processes the Air Force uses to develop the number of active military positions required and the number of positions mandated by the Office of the Secretary of Defense (OSD) and legislation. The requirements for some military positions are determined either by directives or legislation rather than by the Air Force. For example, the National Defense Authorization Act for Fiscal Year 1996 restricts the Secretary of Defense from reducing military medical personnel unless DOD certifies that the number of people being reduced is excess to current and projected needs and does not increase the cost of services provided under the Civilian Health and Medical Program of the Uniformed Services. Also, the Goldwater-Nichols Defense Reorganization Act of 1986 gave the Secretary of Defense the authority to determine the number of joint officer positions. An April 1981 memorandum from the Deputy Secretary of Defense states that DOD cannot increase or decrease resources that support the National Foreign Intelligence Program without approval from the Director of the Central Intelligence Agency. Likewise, a December 1989 memorandum from the Deputy Secretary of Defense stated that the number of military positions within the Special Operations Command will not be adjusted unless directed by the Deputy Secretary of Defense. Because of congressional concerns about active duty personnel levels, we assessed (1) how the size and composition of the active Air Force has changed since 1986, (2) whether the Air Force has any shortages in meeting its wartime requirements, and (3) whether there is potential to reduce the active force further. We did not examine the need for the number of fighter wings, bombers, and intercontinental missiles identified by DOD’s 1993 Bottom-Up Review. We interviewed officials and reviewed documents at OSD and Air Force headquarters, Washington, D.C.; Air Combat Command, Norfolk, Virginia; Air Force Materiel Command, Dayton, Ohio; and Air Education and Training Command, San Antonio, Texas. To determine how the size and composition of the active force has changed, we analyzed data contained in the fiscal year 1997 FYDP and historical FYDPs. The FYDP displays the allocation of resources by programs and activities known as program elements. We used the mapping scheme developed by DOD’s Office of Program Analysis and Evaluation to identify mission and infrastructure program elements. We then compared the changes in active personnel by mission and infrastructure categories between fiscal year 1986 and 1997. We used fiscal year 1986 as a starting point because it represented the peak in the number of active duty personnel, preceding the post-Cold War drawdown. We obtained data on the number of active military positions that are determined by legislation or directives, but did not assess how the requirements for these positions were determined. To determine if the Air Force has wartime personnel shortages, we analyzed the results of the Air Force FORSIZE 95 exercise. To determine if the shortages identified by FORSIZE affected the Air Force ability to carry out the national military strategy, we interviewed Air Force headquarters functional managers to determine whether the shortages were in the forces that deploy to theaters of operation or in forces that sustain operations at bases in the United States. We also discussed their plans to resolve the shortages. Since FORSIZE did not analyze wartime requirements for medical personnel, we obtained data on wartime requirements from the Air Force Office of the Surgeon General. To assess the potential to further reduce the active force, we analyzed the military personnel reductions planned in fiscal year 1998. Our analysis was based on the Air Force’s fiscal year 1998 Budget Estimate Submission provided to OSD. In addition, we reviewed Air Force efforts to identify opportunities to replace military personnel with contractor and civilian personnel. Since these efforts have not been completed, our analysis was limited to reviewing the methodology for identifying potential positions and the plans for approving which positions will be studied or converted. In addition, we used our prior work to identify opportunities to more efficiently organize the active force. We conducted our review from November 1995 through December 1996 in accordance with generally accepted government auditing standards. Between fiscal year 1986 and 1997, the Air Force will reduce its active military personnel from 608,199 to 381,100, or by 37 percent. During this time, mission forces will be reduced at a much greater rate than infrastructure forces—47 percent compared to 30 percent. The Air Force reduced active military personnel primarily by (1) implementing the force structure reductions in accordance with the Bottom-Up Review, (2) closing bases, (3) transferring some missions to the reserves, and (4) reorganizing major commands and headquarters activities. Our analysis also indicated that the 1997 active duty Air Force will have a higher percentage of officers compared with the percentage in 1986. Between fiscal year 1986 and 1997, the Air Force will reduce its mission forces from approximately 262,000 to 140,000, or by 47 percent, as shown in table 2.1. The decrease in combat forces primarily resulted from implementing the Bottom-Up Review force structure, which significantly reduced the number of fighter wings, bombers, and intercontinental missiles. Table 2.2 compares the force structure between fiscal year 1986 and 1997. The Air Force reduced the number of fighter wings by retiring the F-4 and F-111 aircraft and transferring the F-15s required for the air defense of the United States as well as some close air support aircraft (A-10s) to the reserves. The Air Force reduced the bomber force by retiring the FB-111s and many B-52’s. Finally, the Air Force reduced the missile force by eliminating the Minuteman II intercontinental ballistic missiles and the ground launched cruise missiles. The decrease in direct combat support forces resulted primarily from transferring some airlift and refueling missions to the reserves and retiring some electronic warfare aircraft (RF-4Gs) and reconnaissance aircraft (TR-1s). In addition, some of the decrease resulted when the strategic airlift function was moved to the central logistics infrastructure category. The number of military personnel in command, control, and communications positions was reduced by abolishing the Air Force Communications Command. In addition, the increase in technologies such as automation and digital communications allowed the Air Force to assign fewer people to operate and maintain needed capability. The decrease in research, development, test, and evaluation primarily resulted from a change in the way these personnel are categorized. Prior to 1988, about 5,600 positions in acquisition and command support were included in the mission forces under the research, development, test, and evaluation activity. However, in 1988 the majority of these positions were moved to the acquisition infrastructure category when the Air Force merged two commands to form the Air Force Materiel Command. The remaining two mission categories, intelligence and space, gained personnel. While there were decreases in some intelligence functions such as the retirement of the SR-71, they were offset by increases resulting from the creation of the Defense Airborne Reconnaissance Office in 1994. The increase in space forces resulted primarily because some activities that were categorized as acquisition and direct support were transferred to space. Between fiscal year 1986 and 1997, the Air Force will reduce the number of active personnel in infrastructure functions from approximately 346,000 to 241,000, or by 30 percent. Significant decreases occurred in all infrastructure forces except acquisition, central medical, and central logistics as shown in table 2.3. The greatest number of personnel decreases occurred in installation support and central training activities. The decline in installation support was caused primarily by the closure of 20 active air bases by the Secretary of Defense’s Base Closure Commission in 1988 and the Base Closure and Realignment Commission in 1991 and 1993. The Air Force also contracted some base operations, which reduced the number of military personnel in installation support. The decrease in central training was related primarily to the decreases in mission force structure. For example, the decrease in the number of wings and bombers resulted in about a 6,700 decline in the number of undergraduate pilot and navigator training positions and about an 8,500 decrease in weapons systems training positions. Likewise, the decrease in the number of strategic forces reduced training requirements by about 2,400 positions. The overall decrease in the number of active personnel caused a decline of approximately 11,300 positions in general skill level training and about 4,900 positions in recruit training units. Approximately another 4,000 positions were eliminated from contracting for base operations at training bases. The primary reasons for the decreases in the other categories are described as follows: • Acquisition management—This category experienced a net decrease of 627 military positions. However, in 1988 the Air Force transferred about 5,600 positions from the mission research, development, test, and evaluation category into acquisition. Since 1988, the number of military personnel in the acquisition has declined by about 5,800. • Force management—The decreases occurred in the weather service, servicewide support, and from consolidation of various headquarters. For example, the Strategic Air Command, the Tactical Air Command, and the Military Airlift Command were combined to form the Air Combat Command and the Air Mobility Command; the Air Force Systems Command and the Air Force Logistics Command were combined to form the Air Force Materiel Command. • Central communications—Approximately 3,900 of the decrease occurred because the smaller number of fighter wings and bombers required fewer air traffic control personnel. • Central medical—The number of personnel in central medical has not decreased significantly. OSD and the services are currently assessing post-Cold War medical requirements. OSD is currently updating a 1994 study that will provide new estimates of wartime medical demands. However, the scheduled March 1996 completion has been delayed because OSD and the services advocate using different assumptions and methodologies for factors such as population-at-risk and casualty replacements, which affect overall medical requirements. • Central personnel—The decrease resulted primarily because the smaller force has reduced the number of permanent change-of-station moves, accessions, and training requirements, which has reduced the number of people in transit. Central logistics is the only infrastructure category that had a net increase of personnel. The increase resulted from a change in the way personnel associated with strategic airlift are categorized. Prior to 1992, airlift personnel were counted as direct support mission forces. However, they were moved to the central logistics category in fiscal year 1992 when the U.S. Transportation Command assumed responsibility for management of air transportation in peacetime. Between fiscal year 1986 and 1997, enlisted personnel will be reduced by 39 percent and officers by 32 percent. Our analysis shows a proportionate decline in officer and enlisted personnel in mission forces, but a higher percentage decrease of enlisted personnel in infrastructure activities as shown in table 2.4. According to Air Force officials, one reason for the smaller percentage decrease of officers versus enlisted personnel in infrastructure functions can be attributed to the disproportionate reduction of enlisted in base operations support where major decreases have occurred. Generally, there has been one officer for every 10 enlisted positions in this category. However, our analysis of this category showed that between fiscal year 1986 and 1997, the Air Force eliminated 46,349 enlisted and 3,256 officer positions or 15 enlisted positions for every officer position eliminated. Another reason for the smaller percentage decrease is that medical and joint/DOD positions, which have a high number of officers, are classified as infrastructure. As shown in table 2.5, the number of medical positions has remained relatively stable and the number of joint positions has decreased by 20 percent between fiscal year 1986 and 1997 while the active force as a whole declined by 37 percent. As a result, these positions have increased from 8 percent of the active force in fiscal year 1986 to 13 percent in fiscal year 1997 as shown in table 2.5. In November 1995, DOD’s Office of the Inspector General reported that although the services have reduced the number of active duty personnel, there has not been a corresponding decrease in the number of positions that must be filled on the Joint Staff and in defense agencies. The report noted that the services must still give priority to joint staffing, with a substantially smaller resource pool. Finally, the Inspector General found that no standard methodology or criteria are used to determine and validate personnel requirements for positions on the Joint Staff or in defense agencies. The National Defense Authorization Act for Fiscal Year 1997 requires us to review DOD’s actions in response to the Inspector General’s report. The Air Force uses the FORSIZE exercise to estimate total wartime personnel requirements. FORSIZE 95 identified an active wartime shortage of 19,585 personnel. However, the Air Force believes this shortage has little impact on their ability to implement the national military strategy because the shortfall is primarily in forces that sustain base operations in the United States during wartime, and the Air Force has identified alternatives for satisfying these shortages. FORSIZE 95 did not analyze medical requirements. However, a separate study of medical requirements concluded that the Air Force has more active duty medical personnel than needed for wartime. FORSIZE does not consider operations other than war (OOTW). Air Force officials stated that defense guidance assumes that the existing force requirements developed for the two MRCs can satisfy the needs of contingency operations without posing additional requirements. Air Force data shows that during fiscal years 1995 and 1996, certain types of units exceeded the Air Force goal of being deployed no more than 120 days per year. However, a July 1996 Air Force study concluded that the Air Force does not need to increase its military personnel requirements because of contingency operations, but it has to closely manage units that deploy frequently. The Air Force has taken several steps in recent years to reduce the impact of OOTWs on certain units. FORSIZE estimates the number of active and reserve forces and civilians needed to (1) deploy to support two MRCs, (2) support strategic missions such as airlift and space, and (3) sustain base operations during wartime. The initial exercise was in 1988; subsequent exercises were conducted in 1994 and 1995. There were no exercises in 1989 through 1993 because of the changing world environment, numerous Air Force command reorganizations, and the Persian Gulf War. FORSIZE 95 did not estimate medical requirements since OSD is conducting a separate study on these requirements. FORSIZE 95, which was completed in February 1996, projects wartime requirements for fiscal year 1997. As a starting point for FORSIZE, the Air Force develops a Time Phased Force Deployment List to deploy all 20 active and reserve fighter wings and bombers required by the Bottom-Up Review. In addition, FORSIZE determines requirements for personnel needed to operate at three additional bare bases (airfields with no supporting infrastructure) and to replace casualties (personnel that are killed or wounded and cannot return to duty). Air Force officials stated that the requirement for the bare bases is based on the Air Force’s experience during the Gulf War and other past operations. The number of aviator positions included in FORSIZE is based on the crew ratio established for each aircraft in the Air Force’s inventory. A crew ratio is the number of aircrews authorized per aircraft and is established to enable the Air Force to meet expected wartime sortie rates. For example, the current crew ratio for the F-15C is 1.25, which means that 1.25 pilots are authorized for each F-15C in the active inventory. Air Force officials noted that the actual sortie rates during the Gulf War were higher than could have been flown under the Air Force’s funded crew ratios and that additional pilots from units that had not deployed were therefore used. On the basis of this experience, the Air Force has increased the crew ratio for some aircraft, increased aircraft spares, and plans to use additional pilots from the schools to achieve higher sortie rates. Air Force officials noted that it is not economically feasible to increase the crew ratios beyond current levels because they would have to buy additional aircraft and spares in order to keep all crews properly trained. Personnel requirements for strategic and sustainment forces are determined at base level for 36 functional areas such as security police, transportation, and munitions. In determining these requirements, FORSIZE assumes that functions currently performed by military personnel will stay military. These base level assessments are intended to ensure that the Air Force has sufficient personnel at bases in the United States and overseas to (1) protect and maintain bases, (2) re-supply deploying forces, and (3) provide support to families of Air Force personnel who deploy to war and those that remain at their locations. FORSIZE then compares these requirements with authorized personnel by functional areas to determine if the Air Force has enough personnel to carry out missions specified in defense guidance. On the basis of FORSIZE 95, the Air Force concluded that it requires 364,324 active military personnel to meet its wartime requirements (not including medical). FORSIZE did not consider whether some functions that do not deploy could be met with other than military personnel such as civilian employees or contractors. As shown in figure 3.1, the forces that deploy make-up approximately one-third of the Air Force’s active military personnel requirements; strategic and sustainment forces account for the remaining two-thirds. (36%) (33%) The wartime personnel requirements estimated during FORSIZE include requirements to replace casualties. This number is classified but is based on two key elements. First, the population-at-risk is determined by an Air Force threat model. The population-at-risk includes the day-to-day casualty stream of personnel within the two theaters of operation who are expected to be killed in action, wounded in action, and otherwise disabled by disease or non-battle injuries. Second, casualty rates for each career field are established based on their proximity to the war zone. The closer the career field is to the war zone, the higher the casualty rate. For example, maintenance personnel on the flight line have a higher casualty rate than maintenance personnel working in a rear area. FORSIZE 95 identified a net active shortage of 19,585 personnel needed to meet wartime requirements. According to Air Force officials the shortage poses little risk to carry out the two MRC strategy because (1) it is predominantly in the forces that sustain base operations in the United States and not in the deploying forces and (2) other alternatives exist to cover most of the shortfall. Security police, transportation, intelligence, maintenance, and munitions account for approximately 16,300, or 83 percent, of the Air Force’s total shortage (see table 3.1). The remaining shortage occurred in 10 other functional areas. According to Air Force officials, all of the shortages, except munitions, are associated with requirements for sustaining forces. The munitions shortage exists because the Air Force has a shortage of military personnel in the bomb assembly and bomb loading specialties for the bomber force. In September 1996, we reported that the Air Force cannot meet its war-fighting requirement to support the full complement of B-1B and B-52H bombers allocated to regional commanders due to these personnel shortages. The Air Staff has tasked the Air Combat Command to develop a plan and identify funding requirements to eliminate the shortages using active or reserve personnel or a combination of both. According to Air Force officials, the security police shortage would occur in the sustaining force when some security police personnel guarding bases in the United States deployed to theaters of operation during wartime. Such deployment would create a shortage of security personnel to guard bases in the United States. Air Force security police personnel told us they could work around the shortfall by increasing workshifts, closing some gates at bases, and taking advantage of new sensor technology. In addition, one official noted that the Air Force could also contract for part-time security personnel. The transportation shortfall relates primarily to personnel that operate and maintain base motor pools in the United States. According to transportation officials, the individual ready reserve could be used to offset some of the shortage. According to a maintenance official, the maintenance shortfall represents only 2 percent of total maintenance requirements and is spread throughout a number of career fields, including jet engines, guidance and control, avionics systems, fabrication and parachute, and aircraft metal and technology. Maintenance officials told us that, because the maintenance shortfall is so small and would not impact mission readiness, they have no plans to examine alternatives to cover it. Few of the 10 remaining functional areas, which included such functions as comptroller, fuels, judge advocate, and weather, have significant shortages. Most have a shortage that ranges between 2 and 4 percent of their wartime requirement. According to Air Force officials, these shortages will be covered primarily by using the individual ready reserve and other management actions. In nine functional areas, authorized personnel exceeded requirements by 1,266 but the Air Force did not reallocate any of these positions to functional areas with shortages. For example, the education and training functional area had an excess of 244 personnel, but senior Air Force officials decided not to reallocate these positions until ongoing training initiatives have been completed. Likewise, there was an excess of 302 personnel in communications, but no action was taken because the career field is being merged with information management, which showed a shortage. According to an Air Force official, another reason the Air Force decided not to reallocate personnel is because the ongoing Quadrennial Defense Review may change the current national military strategy, which could change the Air Force’s active requirements and the need to reallocate personnel. OSD and Air Force analyses indicate the Air Force has more active duty medical personnel than needed for wartime requirements, but they have not yet agreed on the actual number of personnel to be reduced. A 1994 OSD study concluded that the number of medical positions within the services exceeded projected wartime requirements. This study is currently being updated because of the services’ concerns regarding the assumptions made to treat casualties and maintain peacetime operational readiness and training. However, a separate Air Force analysis showed the Air Force has about 5,900 active military medical personnel who are excess to projected wartime requirements. The Air Force expects that the ongoing OSD study will recommend reductions in medical personnel, so the Air Force plans to reduce the number of medical personnel in fiscal years 1998 through 2003. The Air Force does not assess personnel requirements for OOTWs under FORSIZE. According to Air Force officials, defense guidance assumes that the existing force requirements developed for the two MRCs can accomplish OOTW deployments without posing additional requirements. Nonetheless, headquarters Air Force and Air Combat Command officials are concerned about the high operations tempo OOTWs have on certain units, and believe the Air Force must closely manage its OOTW taskings to ensure certain units are not used excessively. Due to growing concern about the impact of OOTWs, the Air Combat Command sponsored a study of fiscal year 1994 deployment taskings. The study concluded that the Air Force did not need to increase personnel levels due to contingency operations, but noted that some functional areas were more impacted by contingency deployments than others. The study also concluded that commands and installations need to place more emphasis on accuracy and completeness of data reported for deployment requirements and actual deployments to promote a fairer distribution of taskings throughout units and across commands. Air Force data shows that, with the exception of one type of unit in the Air Force Special Operations Command, most units that exceeded the Air Force goal of being deployed no more than 120 days per year are in the Air Combat Command. Figure 3.2 shows the Air Combat Command units that exceeded the 120-day goal in 1995 and 1996. 1995 1996 Air Force standard To reduce the impact of OOTWs on certain units, the Air Force has implemented a policy to balance the workload throughout the Air Force, reduce taskings where appropriate, and make more use of reserve forces. For example, in 1995, the Air Combat Command chose not to send A/OA—10 aircraft to fiscal year 1996 National Training and Joint Readiness Training Centers exercises in order to reduce temporary travel for these units. The Air Force has also activated associate reserve squadrons for KC-135 refueling and E-3 Airborne Warning and Control System aircraft. Additionally, both the Air Force Reserve and the Air National Guard are now supporting a greater share of OOTW and other contingency taskings and have increased their participation in Joint Chief of Staff-sponsored exercises. This has been possible primarily due to the Air Force success in encouraging reservists to volunteer for such duty. DOD stated that although FORSIZE identified an active shortage of 19,600 personnel, this shortage could be addressed with a variety of sources, including technology, civilians, contractors, and Air National Guard and Air Force Reserve personnel. We agreed with DOD’s position. Our report reflects that the Air Force has identified several ways to compensate for these wartime shortages. Potential exists to reduce the number of active duty Air Force personnel significantly below the congressional floor of 381,000. In fiscal year 1998, the Air Force plans to seek statutory authority to reduce the number of active duty personnel to about 371,600 or 9,400 below the current floor. In addition, a preliminary air staff review of its infrastructure force has identified a potential to reduce the active force by as much as 75,000 beyond fiscal year 1998 by contracting out some functions now performed by military personnel and converting some military positions to civilian. Our prior work indicates that savings can occur by contracting out functions in lieu of using military personnel, and significant opportunities exist to convert military positions to less costly civilian positions. Some opportunities may also exist to reduce mission forces. Our prior work has shown the Air Force could reduce active personnel requirements by increasing the size of its fighter squadrons and transferring some bombers to the reserves. In addition, several ongoing defense studies such the Deep Attack Weapons Mix Study and the Quadrennial Defense Review could affect the Air Force’s future active duty personnel requirements. On the basis of the Air Force’s fiscal year 1998 budget proposal provided to OSD, the Air Force plans to seek statutory authority to reduce its active military end strength to about 371,600 or 9,400 below the current congressional floor. Air Force officials stated the planned personnel reductions will not lessen the Air Force’s war-fighting capability, since they are primarily in infrastructure-related functions. Our analysis of the planned decrease shows that 1,125, or 12 percent, are in mission forces and 8,415, or 88 percent, are in infrastructure forces as shown in table 4.1. The planned decrease in mission forces results primarily from three initiatives. First, the final drawdown of intercontinental ballistic missiles under the first Strategic Arms Reduction Treaty will reduce mission forces by 1,014 personnel. Second, the Air Force plans to retire the EF-111 electronic support aircraft in fiscal year 1998, which would reduce active military personnel by 525. However, the Air Force is concerned the Navy may not assume the electronics warfare mission within the planned time frame, which could delay these planned reductions. Finally, the Air Force plans to retire 8 C-130 aircraft, which will eliminate 360 positions. This reduction is based on a Joint Staff study that showed the Air Force has excess intra-theater airlift capacity. The decreases in mission forces are largely offset by increases related to funding six additional B-1B bombers for training and combat operations from the reconstitution reserve, activating an unmanned aerial vehicle squadron, and adding one Joint Surveillance Target Attack Radar System (E-8) and one Rivet Joint (RC-135). Air Force officials noted the additional Joint Surveillance Target Attack Radar System and Rivet Joint aircraft will help alleviate the high personnel tempo in these units. The planned infrastructure decreases are based primarily on the Air Force’s plans to either have civilian employees or contractors perform installation support and communication functions now performed by about 2,500 military personnel. The Air Force determined that these positions do not require military personnel because they do not deploy and are needed to support overseas rotation. Therefore, it plans to study the cost-effectiveness of contracting out the function or using civilian employees. The planned decrease in installation support also includes 360 positions providing base operating support at Howard Air Force Base in Panama. The Air Force assumes that all military personnel will withdraw from Panama after the United States turns control of the Panama Canal over to Panama in 1999. However, the State Department has recently announced an effort to study the possibility of keeping some U.S. military personnel in Panama after the transfer, which may impact the Air Force’s plans. The decrease in central medical personnel represents the start of an effort to align peacetime staffing with wartime requirements. A study by the Office of the Air Force Surgeon General showed the Air Force only needed 86 percent of its projected fiscal year 1999 medical personnel to meet wartime medical needs. The Air Force has programmed a 4.5-percent reduction (1,748 personnel) through fiscal year 2003. According to Air Force officials, it will take up to 12 years to eliminate the remaining positions to minimize personnel turbulence and impact on peacetime patient care. An Air Force official stated that even though the OSD study on post-Cold War medical requirements has not been completed, officials in the Office of the Air Force Surgeon General believe the study will recommend that the services reduce the number of medical personnel. Thus, these officials believe it is prudent to start reducing the number of medical personnel now. The need for such reductions must be certified by the Secretary of Defense under 10 U.S.C. 129c. The decrease in central personnel represents a decline in the number of personnel in transit. An Air Force official stated that the smaller force has reduced the number of permanent change-of-station moves, accessions, and training requirements, which reduces the number of people in transit. The changes in force management are caused primarily by decreases in the number of positions in the Air Weather Service, support to the Defense Finance and Accounting Service, and headquarters activities. Finally, the decrease in acquisition and the increase in central logistics are due to the transfer of base operations functions at test centers from the acquisition category to central logistics. Congress has directed DOD to prepare a plan to reduce the number of military and civilian personnel involved in acquisition by 25 percent over a period of 5 years beginning in fiscal year 1996. Air Force officials stated that they have not programmed this additional decrease because OSD and the services have not agreed on the definition of the acquisition workforce nor the baseline for measuring the reductions. The Air Force has not yet fully assessed the potential for substituting less costly civilian employees or contractors for some of the active duty personnel currently assigned to infrastructure activities. In the past, the Air Force has not periodically reviewed all of its positions to determine whether they must be filled by military personnel. However, the Air Force has recently begun an effort to identify such savings to help fund force modernization. Three ongoing Air Force studies have identified the potential for eliminating a significant number of active duty personnel. Two studies involve the potential to contract out commercial activity functions now being performed by military and civilian personnel and another involves the potential for converting military positions in inherently governmental functions to civilian positions. The Air Force’s ability to reduce the number of military positions identified in the ongoing studies could be constrained by DOD goals for reducing civilian positions. DOD Directive 1100.4 requires the services to staff positions civilian personnel unless the services deem that positions must be filled by military personnel for one or more of the following reasons, including combat readiness, legal requirements, rotation, security, training, and discipline. In addition, Office of Management and Budget Circular A-76 classifies government activities as either inherently governmental functions or commercial activities. Inherently governmental functions—those intimately related to the public interest such as fund control—must be done by federal employees. A commercial activity can be an entire organization or part of an organization that provides a product or service obtainable from a commercial source. Commercial activities include functions such as vehicle and facilities maintenance, automated data processing, and administrative support. Circular A-76 sets forth the procedures for agencies to study whether the functions could be done more economically by contractors. An ongoing Air Force study has identified about 52,600 active military positions allocated to functions that could potentially be performed by contractors or civilian employees. These positions have tentatively been identified as not military essential because their personnel do not deploy, support the rotation of forces to overseas bases and operations, or perform unique military missions or functions. The Air Force study is scheduled to be completed by the end of April 1997. The functional areas under review consist of all military positions in commercial activities within the Air Force’s major commands in the continental United States and some overseas locations. The Air Force has about 160,400 military positions in commercial activities. The Air Force has deemed that 82,700 of these positions must be filled by military personnel because they would deploy during wartime; about another 25,100 of these positions are in military-unique functions such as headquarters activities, recruiting, basic military training, and those personnel needed to maintain an overseas rotation base. Once these positions were eliminated from consideration, the Air Force was left with about 52,600 military in commercial activities that could be studied for possible conversion, as shown in table 4.2. To further assess the potential to contract out or use civilian employees for these positions, the Air Staff has provided each major command with the number of positions within their respective commands that are candidates for conversion. Each command is currently identifying the positions by base and organization to determine how many functions could be studied further to determine the relative cost savings associated with replacing military personnel with either contractors or civilian employees. The major commands are also required to identify barriers to contracting and recommend ways to overcome them. For example, current Air Force procedure exempts such units from being studied as candidates for conversion, if some personnel in the unit are expected to deploy. Air Staff officials noted the major commands may be able to identify ways around this problem in some cases, such as reorganizing units or transferring functions between bases. In a November 1996 letter to the Secretary of Defense, the Secretary of the Air Force stated that DOD’s existing civilian workyear policy needs to be modified so the Air Force can achieve savings by replacing military personnel assigned to positions that are not military essential with civilians. The letter noted that the Air Force’s experience has shown that 40 percent of the cost comparison studies performed since 1979 determined that an in-house civilian workforce was more cost-effective than contractors. When a function that was predominantly performed by military personnel remains in-house, the Air Force may have to increase the number of civilian employees, which runs counter to DOD’s efforts to reduce its civilian workforce. For example, the maintenance training function at Altus Air Force Base was performed by 1,444 personnel, of whom 1,401 were military and 43 were civilian employees. The cost comparison showed that an in-house civilian workforce would be more cost-effective than using the private sector. Thus, the Air Force had to increase the number of civilian employees by 692 in order to achieve the projected savings. The Secretary of the Air Force stated that the goals for civilian downsizing pose a disincentive for accomplishing work in the least costly manner and that some consideration should be given to relaxing civilian downsizing goals in such cases. The Air Force is also conducting a study to determine if there are opportunities to consolidate its 126 precision measurement electronic laboratories and have the work performed by civilian employees or contractors. There are about 1,200 military personnel in 50 labs in the active force, and the remaining labs are operated by contractors or are in the guard and reserve forces. These personnel are not included in the universe of military positions in commercial activities that could potentially be performed by civilian employees or contractors. According to an Air Force official, the preliminary study results indicate that the Air Force could consolidate from 126 to around 50 labs. This official noted that the final report, scheduled to be issued in April 1997, will contain a plan to consolidate the labs as well as for conducting cost comparison studies. The Air Force reviewed all military positions in inherently governmental functions to determine if military personnel are required. Military personnel were considered necessary if the position deployed, supported overseas rotation, was required by law, or was in a unique military function such as the honor guard or recruiting. On the basis of this criteria, the Air Force identified approximately 21,600 military positions that are not military essential and can potentially be converted to civilian positions as shown in table 4.3. Air Force officials told us they were preparing a briefing for senior Air Force leadership on the issues concerning military to civilian conversions. These officials stated that some of the major commands believe that many of the positions should remain military. For example, the Air Force Materiel Command believes all the acquisition positions should remain military because military personnel assigned to these positions bring operational and flightline experience, which is invaluable to developing new systems. However, we believe there is a good basis for studying the potential to replace some military personnel assigned to acquisition functions with civilian employees. According to DOD’s fiscal year 1997 FYDP, 41 percent of the Air Force’s acquisition workforce is military while only 12 percent of the Army’s is military. An Air Force official stated that the senior Air Force leadership will decide which, if any, positions will be converted from military to civilian. This official stated that no date has been set for the briefing. In October 1996, we reported that the Air Force could save $69 million by converting 6,800 officer positions in such fields as acquisition and financial management to civilian positions because they are not military essential. We found that civilian employees cost between $1,261 and $15,731 less annually than military personnel depending on the grade and rank. In October 1994, we reported that similar opportunities exist for converting enlisted support positions to civilian employees. Both of our reports noted that a number of impediments exist to military to civilian conversions. For example, guidance provides commanders with wide latitude in justifying the use of military personnel, and local commanders are perceived to prefer military rather than civilian employees in certain positions. Nonetheless, we noted these barriers can be overcome with active participation of senior managers. DOD concurred with our reports and agreed to convene a panel of senior managers within OSD, the joint staff, and the military services to examine the issue of military to civilian conversions. An OSD official stated that the issues concerning military to civilian conversions will be addressed as part of the Quadrennial Defense Review. Until recently, Air Force fighter wings were predominantly organized in three squadrons of 24 aircraft. However, the Air Force has decided to reduce its squadron size to 18, which also reduced its wing size to 54. This change in unit size increased the number of wings and squadrons to more than would have been needed had the squadron size stayed at 24. In May 1996, we reported that the Air Force’s arguments for using smaller squadrons do not justify the additional cost. Air Force officials maintain that more squadrons are needed to provide the Air Force flexibility to respond to numerous potential conflicts across the globe. Although the Air Force considers smaller fighter squadrons beneficial, it had not performed any analysis to justify its decision. We developed several options for consolidating the fighter force that would permit the Air Force to maintain the same number of aircraft but carry out its missions with fewer active duty personnel. Our options could eliminate between two and seven squadrons, and also eliminate a wing and/or fighter base and reduce operating costs up to $115 million annually. The Air Force’s requirements for active duty personnel could also be affected by several ongoing initiatives and studies. These include an Air Force study of the active/reserve force mix, DOD’s Deep Attack Weapons Mix Study, and the Quadrennial Defense Review required by the National Defense Authorization Act for Fiscal Year 1997. The Air Force is assessing options to transfer some functions now performed by the active force to the reserves. The Air Force plans to examine changes to the mix of active to reserve forces after the Quadrennial Defense Review is completed. Moreover, in our September 1996 report on DOD’s bomber force, we reported one option for restructuring the bomber force would be to place more B-1Bs in the Air National Guard. This option would reduce the cost to maintain DOD’s bomber force while maintaining DOD’s force of 95 B-1Bs. In 1993, DOD reported to Congress that placing B-1Bs in the Air National Guard would result in no loss of war-fighting capability. A major benefit of transferring bombers to the reserve component is that reserve units have traditionally been less expensive to operate than their active duty counterparts. These savings are attributed to two factors. First, DOD expects that an Air National Guard squadron will require fewer flying hours than an active squadron because Air National Guard units are able to recruit more experienced pilots who require less frequent training to maintain their proficiency. Personnel costs are the second major factor that account for the Air National Guard’s lower cost. In comparison with active squadrons that consist primarily of active duty military personnel, Air National Guard units rely heavily on less-costly civilians and part-time Guard personnel. In addition, DOD’s ongoing Deep Attack Weapons Mix Study could change DOD’s requirements for fighters and bombers, which would impact Air Force military personnel requirements. The Commission on Roles and Missions recommended that DOD conduct a DOD-wide cost-effectiveness study to determine the appropriate number and mix of deep attack capabilities currently fielded and under development by all the services. The first part of the study, which was to be completed in late 1996, was expected to analyze weapons mix requirements for DOD’s planned force structure in 1998, 2006, and 2014 and determine the impact of force structure changes on the weapon systems mix. As of February 1997, OSD was reviewing the results of this first phase and had not made the results public. The second part of the study will analyze trade-offs among elements of the force structure, such as bombers and tactical aircraft, for the same years and is to be completed in early 1997. The study should provide DOD with an opportunity to identify options to reduce some of its extensive ground attack capabilities, which could impact requirements for active duty personnel. The National Defense Authorization Act for Fiscal Year 1997 requires the Secretary of Defense to conduct a quadrennial review of the defense program. The first review, now underway, is scheduled to be completed in May 1997. It will examine defense strategy, force structure, force modernization and infrastructure and develop a defense strategy to the year 2005. The legislation also established a National Defense Panel to provide an independent assessment of DOD’s quadrennial review as well as to develop alternative force structures that could meet anticipated threats to the national security of the United States. The results of these studies could also impact the number of active duty military personnel. Potential exists to replace active military personnel with contractors or civilian employees. These potential reductions should not impact the Air Force’s ability to implement the national military strategy, since they are in the infrastructure forces rather than in the forces that deploy during wartime. The actual number of active military positions that could be eliminated depends on the results of several ongoing initiatives as well as senior Air Force leadership commitment to reduce infrastructure to fund force modernization. We believe that it is important for the Air Force to move as quickly as possible to complete its studies and make the conversions to contractor and civilian employees in view of the recurring savings that could be achieved. Developing a plan and time frames for such cost comparisons and conversions would permit the Air Force leadership to monitor efforts to reduce infrastructure. DOD has stated it must reduce infrastructure costs in order to modernize its force. Several ongoing Air Force studies have identified potential to replace military personnel with contractors or civilian employees. Therefore, we recommend that, once the ongoing studies are completed, the Secretary of the Air Force develop a plan that identifies time frames to study whether it is more cost-effective to transfer commercial activities now performed by military personnel to civilian employees or private contractors and includes time frames to convert military positions in inherently governmental functions to civilian positions. DOD fully concurred with two parts of our recommendation and partially concurred with one part. DOD stated that an existing system already tracks the services’ progress in completing cost comparison studies and converting positions, so there is no need to establish an additional system. We agreed with DOD and have modified the recommendation accordingly.

Summary: GAO reviewed the Air Force's personnel reduction efforts, focusing on: (1) how the size and composition of the active Air Force has changed since 1986; (2) whether the Air Force has sufficient numbers of personnel to meet wartime requirements; and (3) whether there is potential to further reduce the active force that could result in a more efficient force. GAO noted that: (1) between fiscal year (FY) 1986 and 1997, the Air Force will reduce its active military personnel from over 600,000 to 381,100, or by 37 percent; (2) mission forces have been reduced at a much greater rate than infrastructure forces during the last decade; (3) as a result, approximately two-thirds of the Air Force's 381,100 active duty personnel are now allocated to infrastructure functions such as installation support and acquisition; (4) further, today's smaller force has a higher ratio of officers than in 1986; (5) potential exists to reduce the active Air Force below the 381,100 minimum level set by Congress, without adversely affecting the Air Force's war-fighting capability; (6) in May 1996, GAO suggested options to consolidate fighter squadrons which, if implemented, would permit the Air Force to maintain the same number of aircraft but carry out its missions with fewer active duty personnel; (7) GAO has also reported that the Air Force could achieve savings by replacing military personnel in some administrative and support positions with civilian employees; (8) for FY 1998, the Air Force plans to seek statutory authority to reduce the active force by about 9,400 below the current minimum; (9) GAO's analysis shows the majority of these planned decreases are in infrastructure functions; (10) prompted by the Secretary of Defense's goal to reduce infrastructure to free funds for force modernization, the Air Force has recently identified a potential to reduce the active force by as many as 75,000 additional military personnel beyond FY 1998; (11) the Air Force is reviewing options for replacing military personnel assigned to infrastructure functions with civilian employees or contractors that may be able to perform some functions at less cost than military personnel; (12) the actual number of active personnel that will ultimately be replaced will depend on the results of continuing Air Force analysis to determine whether such substitutions will be organizationally feasible and cost-effective; (13) the Air Force projects it would have an active wartime shortage of about 19,600 personnel if two major regional conflicts occurred; (14) however, the Air Force does not need additional active personnel to cover this wartime shortage because it has identified ways to compensate for the shortage; and (15) moreover, this shortage would present little risk in carrying out the military strategy since it primarily affects forces that would provide operating support for bases in the United States rather than in the forces that would deploy to war.