Having the right people with the right skills to successfully manage acquisitions is critical for DOD. The Department spends about $100 billion annually to research, develop, and acquire weapon systems and tens of billions of dollars more for services and information technology. Moreover, this investment is expected to grow substantially. At the same time, DOD, like other agencies, is facing growing public demands for better and more economical delivery of products and services. In addition, the ongoing technological revolution requires a workforce with new knowledge, skills, and abilities. Between 1989 and 1999, DOD downsized its civilian acquisition workforce by almost 50 percent to about 124,000 personnel as of September 30, 1999. These reductions resulted from many DOD actions including the implementation of acquisition reforms, base realignments and closures, and congressional direction. DOD estimates that as many as half of the remaining acquisition personnel could now be eligible to retire by 2005. DOD believed that these actual and projected reductions could be exacerbated by increased competition for technical talent due to a full- employment economy and a shrinking labor pool. As a result of the years of personnel reductions and the increasing competition for replacement talent, DOD concluded that its acquisition workforce was on the verge of a crisis—a retirement-driven talent drain. In responding to this concern, the Under Secretary of Defense for Acquisition, Technology and Logistics (USD/AT&L) created the Acquisition 2005 Taskforce in April 2000 to examine how the acquisition workforce could be reshaped. The Task Force consisted of representatives from the military services, defense agencies, and offices of the secretary of defense supported by contractor teams to help collect information and it sought input from the acquisition community as well as outside experts. The Task Force identified new initiatives as well as existing DOD programs that were considered innovative approaches to recruiting, developing, and retaining its future acquisition workforce. Specifically, the Task Force recommended 31 new initiatives, 8 ongoing initiatives that it believed should continue to be fully supported, and 7 innovative programs that it identified as best practices to be implemented throughout DOD’s acquisition organizations. Reshaping a workforce is challenging for any agency. As we have previously reported, because mission requirements, client demands, technologies, and other environmental influences change rapidly, a performance-based agency must continually monitor its talent needs. It must be alert to the changing characteristics of the labor market. It must identify the best strategies for filling its talent needs through recruiting and hiring and follow up with the appropriate investments to develop and retain the best possible workforce. This includes continuously developing talent through education, training, and opportunities for growth. In addition, agencies must match the right people to the right jobs and, in the face of finite resources, be prepared to employ matrix management principles, maintaining the flexibility to redeploy their human capital and realigning structures and work processes to maximize economy, efficiency and effectiveness. A key to overcoming these challenges is to develop and sustain commitment to a strategic, results-oriented approach to human capital planning—one that incorporates financial management, information technology management, and results-oriented goal-setting and performance measurement. Within high-performing organizations, this begins by establishing a clear set of organizational intents—mission, vision, core values, goals and objectives and strategies—and then integrating human capital strategies to support these strategic and programmatic goals. Taking a strategic approach to human capital planning can be challenging in itself. First, it requires a shift in how the human resource function is perceived, from strictly a support function to one integral to an agency’s mission. Second, agencies may also find that they need some of the basic tools and information to develop strategic plans, such as accurate and complete information on workforce characteristics and strategic planning expertise. DOD’s report to the armed services committees shows progress in its efforts to revitalize the workforce. Specifically, as discussed below, DOD is working to remove barriers to its strategic planning initiatives; continuing with an effort to test various human capital innovations; and beginning to make significant changes to its acquisition workforce-training program. We did not assess the effectiveness of DOD’s initiatives, but they do target some of the root problems hampering the acquisition workforce, and they recognize the substantial challenges involved in adopting a strategic approach to reshaping the workforce. The task force’s first recommendation was to develop and implement human capital strategic planning for the acquisition workforce. DOD recognizes that human capital strategic planning is fundamental to effective overall management. DOD has worked to identify and address problems that have been hampering this effort, which include 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. As shown in figure 1, DOD recognizes that it will take a considerable amount of time just to lay a good foundation for strategic planning. Part of this long-term effort will involve making a cultural shift—from viewing human capital as a support function to a mission function—as well as developing better data on the work and models to project needs and potential shortfalls. DOD reports that it is establishing a workforce data management strategy to improve the collection and storage of personnel data. The intent is to identify new data requirements and information needs for strategic planning. DOD is also working to develop more sophisticated modeling tools. Such tools are intended to help DOD components to identify gaps between future workforce requirements and the expected workforce inventory—a critical part of the process needed for addressing acquisition workforce size and structure issues such as recruiting, training, and career development. DOD also has taken steps to link its planning effort to its budget process. For example, DOD’s report states that it is developing a new budget exhibit that will identify workforce requirements during the budget process and improve DOD’s ability to fund those requirements. Such actions are intended to enable DOD to identify and obtain the necessary funding to implement programs needed to close the gaps. Though DOD is taking good steps toward developing a strategic plan, it may well find that additional effort is needed to provide planners with effective tools. For example, DOD reports that it has provided more planning guidance, such as the updated Defense Planning Guidance and Quadrennial Defense Review, to help planners identify future workforce requirements during its second strategic planning cycle. However, DOD recognizes that this guidance may not be specific and articulate enough at the operational business unit level to help planners to identify future acquisition workforce requirements. DOD’s report states that the Acquisition Workforce Personnel Demonstration Project is an ongoing initiative that addresses various acquisition workforce size and structure issues. The demonstration project started in February 1999 to experiment with various concepts in workforce management, such as those pertaining to recruiting, hiring, and retention. For example, the demonstration project is testing simplified job announcements by combining information such as the job description, availability, and workforce characteristic requirements into a single document. In another example, the demonstration project is also testing broadbanding concepts that are intended to allow managers to set pay and facilitate pay progression. Broadbanding would allow managers to recruit candidates at differing pay rates and to assign employees within broad job descriptions consistent with the needs of the organization and the skills and abilities of the employee. However, participation in this project is fairly limited. As of September 2001, 5,300 acquisition personnel across DOD are participating in the demonstration project out of a maximum 95,000 personnel allowed by statute. DOD reports that it is aggressively transforming its acquisition training approach to reshape the acquisition workforce and address human capital resource challenges. Specifically, DOD’s Defense Acquisition University (DAU) plans to change its course content and training methods to provide more relevant training to an expected influx of new acquisition personnel hired to replace retiring workers. For example, DAU is working with teams in each career field to revise course content to reflect recent acquisition reforms and eliminate duplicate material. Also, DAU is increasing the number of web-based courses available and opening additional training centers near large acquisition workforce populations to meet the training needs and to reduce the cost of providing this training. In addition, in conjunction with USD/AT&L officials, DAU is establishing partnerships with colleges and professional organizations to reciprocate certification course credits for DOD’s employees as well as for employees from other agencies and the potential employees from the private sector. DAU has recently experienced budget cuts and while DAU officials did not anticipate that the cuts would significantly affect these ongoing initiatives, student throughput may be reduced. The National Defense Authorization Act for Fiscal Year 2002 required DOD to summarize its actions and plans to implement the task force’s recommendations. For each of the Task Force’s recommendations, DOD was to specifically include a summary of actions taken and specific milestones and dates for completion. DOD was also to provide reasons for not implementing recommendations, any planned alternate initiatives to the recommendations, and any additional planned initiatives. DOD’s report generally provides this information—not just for the 31 recommendations but also for two additional DOD initiatives. The report provides detailed information about some of DOD’s actions, such as human capital strategic planning and the demonstration project, as described in more detail in appendix I. However, information on other actions was unclear or incomplete. Specifically: DOD’s report does not clearly present the overall status of the 31 new recommendations. DOD’s report states that 14 recommendations are “in implementation”, 14 recommendations have been “merged” into follow-on strategies, and 3 recommendations will not be pursued. Although our review did show that DOD did not plan to pursue these 3 recommendations, we concluded, as shown in appendix I, that actions addressing 24 recommendations are in the process of being implemented, and 4 are actually completed. DOD’s report does not consistently provide enough information about actions taken on some recommendations.