DOD’s total workforce is made up of three main components: military personnel (including the active military and the reserve and guard forces), , and contractor support. Figure 1 shows the DOD civilian employeesnumber of the active and reserve components of the military, civilians, and estimated contractor FTEs that comprised DOD’s total workforce in fiscal year 2011. Over the last decade, Congress has enacted or amended several laws that govern DOD’s management of its total workforce. These interconnected provisions provide a framework for DOD total workforce management that requires DOD to adopt and enforce specific policies. In addition to those policy requirements, DOD is also required to submit information to Congress about its workforce and workforce planning, including, among other things, a strategic plan for shaping its civilian workforce, an annual inventory of contracted services and budget justification information concerning its contractor workforce. Other provisions govern the overall composition of DOD’s workforce, and outline the circumstances under which it is appropriate to convert performance of functions from one of the three workforce components to another. This section provides a high level overview of selected relevant provisions, as well as the major responsibilities regarding workforce management assigned to departmental leadership and organizations. 10 U.S.C. § 129a governs DOD’s general policy for total force management and was significantly amended in December of 2011. Section 129a now requires the Secretary of Defense to establish policies and procedures for determining the most appropriate and cost efficient mix of military, civilian, and contractor personnel to perform the mission of the department. These policies and procedures are required to clearly provide that attainment of a DOD workforce sufficiently sized and comprised of the appropriate mix of personnel necessary to carry out the mission of the department and the core mission areas of the armed forces takes precedence over cost. The law also specifies that these procedures shall specifically require DOD to use, among other things, the civilian strategic workforce plan (see 10 U.S.C. § 115b below) and the inventory of contracted services (see 10 U.S.C. § 2330a below) when making determinations regarding the appropriate workforce mix. 10 U.S.C. § 115b requires the biennial submission of a strategic workforce plan to shape and improve DOD’s civilian workforce. Among other things, the plan is required to address the appropriate mix of military, civilian, and contractor personnel capabilities, a requirement that DOD’s plan submissions have not addressed to date. 10 U.S.C. § 2330a requires the Secretary of Defense to submit an annual inventory of activities performed pursuant to contracts for services, which, among other things, is required to include information concerning the number of contractor employees, expressed as full- time equivalents, subject to certain exceptions. Section 2330a also requires that the DOD component heads perform a review of the contracts and activities in the inventory to ensure that the activities on the list do not include inherently governmental functions or illegal personal services contracts, and, to the maximum extent practicable, do not include functions closely associated with inherently governmental functions. The inventory is also to be used to identify additional categories of functions for possible conversion to civilian performance pursuant to 10 U.S.C. § 2463 (below). Additionally, section 2330a requires DOD component heads to develop a plan, including an enforcement mechanism and approval process, to use the inventory to implement 10 U.S.C. § 129a (above), to inform strategic workforce planning, such as the plan required by 10 U.S.C. § 115b (above), to facilitate the use of the inventory in the submission of budgetary information in compliance with 10 U.S.C. § 235 (below), and to perform conversions identified during the review described above. 10 U.S.C. § 2463 requires the Secretary of Defense make use of the inventory of contracted services, compiled pursuant to 10 U.S.C. § 2330a (above), for the purpose of identifying certain functions performed by contractors, to include closely associated with inherently governmental functions, critical functions and acquisition workforce functions, that should be given special consideration for conversion to civilian performance. 10 U.S.C. § 235 requires that the Secretary of Defense include (in the budget justification materials submitted to Congress) information that clearly and separately identifies both the amount requested for the procurement of contract services for each DOD component, installation, or activity and the number of contractor FTEs projected and justified for each DOD component, installation, or activity based on the inventory of contracts for services and the statutorily required reviews of the inventory data (see 10 U.S.C. § 2330a and 10 U.S.C. § 2463 above). Following DOD’s fiscal year 2010 announcement of its efficiency initiatives (including a cap on its civilian workforce FTEs at fiscal year 2010 levels), and in light of the planned drawdown of military personnel, Congress enacted two additional provisions that shape the composition of DOD’s total workforce. Section 808 of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. No. 112-81 (2011)) requires, among other things and subject to certain exceptions, that the total amount obligated by DOD for contract services in fiscal years 2012 and 2013 may not exceed the total amount requested for contract services in the fiscal year 2010 President’s budget. The fiscal year 2010 president’s budget was the baseline DOD used in developing its civilian workforce cap; the effect of this provision is to provide a parallel cap on contracted services working from a similar baseline. Section 955 of the National Defense Authorization Act for Fiscal Year 2013 (Pub. L. No. 112-239 (2013)) requires the Secretary of Defense to, among other things, develop an efficiencies plan for the civilian and contract workforces. The plan is required to achieve savings in the total funding of those workforces not less than savings achieved for basic military personnel pay from reductions in end strength over the same period of time, subject to certain exceptions. Among these exceptions are expenses for personnel performing critical functions identified by the Secretary of Defense as requiring exemption in the interest of the national defense. Additionally, there is a body of guidance that relates to determining what work should be performed by each sector of the total DOD workforce, including an Office of Federal Procurement Policy Letter, and several DOD guidance documents. These documents, collectively, require that migration of work between DOD’s three workforce components be supported by analysis, and provide when the relevant components should be considered for performing new requirements. Office of Federal Procurement Policy Policy Letter 11-01: This policy letter, among other things, (1) clarifies what functions are inherently governmental, (2) explains how agencies must manage work that is “closely associated” with inherently governmental functions, and (3) requires agencies to identify “critical functions” to ensure that they have enough internal capability to retain control over functions that are core to the agency’s mission and operations. DOD Directive 1100.4: This directive outlines manpower requirements determination noting that national military objectives shall be accomplished with a minimum of manpower that is organized and employed to provide maximum effectiveness and combat power. It requires that military (active and reserve) and civilian manpower resources be programmed in accordance with validated manpower requirements, and within fiscal limits and acceptable levels of risk identified in defense planning and programming guidance. DOD Instruction 1100.22: This instruction outlines DOD policy and procedures for determining the appropriate mix of manpower (military and civilian) and private sector support (contractors). DOD Directive Type Memorandum 09-007: Provides business rules for use in estimating and comparing the full costs of military and DOD civilian manpower and contract support. It requires components to use certain business rules when performing an economic analysis in support of workforce decisions, which include determining the workforce mix of new or expanding mission requirements that are not inherently governmental or exempt from private-sector performance. 10 U.S.C. §§ 2461 and 2463 and OMB circular A-76 are also relevant to the subject of transitions between workforce types, depending on the type of transition. Collectively, this body of law and guidance requires DOD to collect a variety of information for its decision makers to review and use in making strategic workforce management decisions. These requirements are especially significant in light of the current and long-term future fiscal pressures facing DOD, which will require identification of all of those functions currently being performed by each workforce sector, prioritization of those functions, and strategic determinations as to whether the performance of functions is appropriately distributed across these three sectors. Several offices have responsibility for implementing these laws and regulations and managing the department’s total workforce. The Office of the Under Secretary of Defense, Personnel and Readiness (USD, P&R), has overall responsibility for issuing guidance on manpower management to be used by the DOD components, providing guidance on manpower levels of the components, and developing manpower mix criteria and other information to be used by the components to determine their workforce mix. The Under Secretary of Defense (Comptroller) and the Director, Cost Assessment and Program Evaluation (CAPE) play key roles in determining the amounts budgeted for military and civilian personnel, as well as contracted services. The Under Secretary of Defense (Comptroller) is responsible for ensuring that the budget for DOD is consistent with the total force management policies and procedures. The Secretaries of the military departments and heads of the defense agencies have overall responsibility for the requirements determination, planning, programming, and budgeting for total force management policies and procedures, as well as having numerous responsibilities related to manpower management as detailed in DOD guidance.