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.