Civilians comprise a significant portion of the Department of Defense’s (DOD) personnel strength; civilian employees alone account for one-third of DOD’s full-time work force. These civilians provide important support to military combat forces in peacetime and in war. Some deploy and provide needed support within theaters of operation. With the transition to an all-volunteer active-duty military force, DOD adopted the “Total Force” policy in 1973, which recognized that the reserves, retired military members, civilian government workers, and private contractor personnel could add to the active forces in ensuring the national defense. The objectives of DOD force management policies are to (1) maintain, during peacetime, as small an active-duty military force as possible and (2) use civilian employees and contractor personnel wherever possible, to free the military forces to perform military-specific functions. In 1990, DOD reported to the Congress that in implementing the Total Force policy, it had, among other things, improved use of the DOD civilian employee, contractor, and host nation support communities. In fiscal year 1994, DOD’s programmed civilian end strength was estimated at 923,000 personnel, with an estimated cost of about $42 billion in salaries and benefits. These civilians work for each of the military services; in Defense agencies, such as the Defense Logistics Agency or the Defense Finance and Accounting Service; and in other organizations, such as the Offices of the Secretary of Defense (OSD) or the Joint Chiefs of Staff (JCS). Civilian employees currently represent over one-third of DOD’s total full-time equivalent force. This ratio has remained relatively constant since 1987, as table 1.1 shows. (App. I shows the same information by service and the Defense agencies.) As table 1.1 also shows, both military and civilian personnel end strengths have declined since 1987, when DOD was at its peak strength. Based on its fiscal year 1995 budget, DOD estimates that, by 1999, it will achieve a 33-percent reduction in its military end strength and a 30-percent reduction in civilian end strength since 1987. While most civilians support the military forces both at home and abroad in peacetime and at home during times of war, some civilians historically have deployed with and supported the military forces within theaters of operations. As far back as the American Revolution, civilians served as wagoneers and drivers to tow artillery and move supplies. During the Persian Gulf War, DOD used over 14,000 civilian employees and contractor personnel to support its military forces. According to DOD’s April 1992, final report to the Congress on the Conduct of the Persian Gulf War, civilian expertise contributed directly to the success achieved. DOD and service officials also generally recognize that during peacetime civilians cost less than military members of comparable pay grades. Responding to various legislative provisions over the past 20 years requiring the use of the least costly form of personnel consistent with military requirements, DOD has gone through periods of concentrated efforts to replace military positions with civilian ones. For example, in the 1970s, the services replaced nearly 48,000 military personnel in support positions with 40,000 civilian employees. As shown in table 1.2, the services, in recent years, targeted nearly 20,000 military positions for conversion to civilian ones. The services, however, did not maintain adequate records to substantiate the achievement of the intended conversions or validate the savings. Significant differences exist in the way military and civilian positions are managed. These differences affect DOD’s costs and control over its forces. The military personnel system is often described as a centrally managed, “closed” system, meaning that persons recruited with no prior military service are generally brought in at entry-level positions and progress through the ranks, whether in the enlisted pay grades or the officer corps. Decisions pertaining to assignment, promotion, rotation, and retention are centrally controlled at service headquarters. The military personnel management system operates totally under policies and guidance established by DOD, which helps ensure that military leaders have control over their personnel. The civilian personnel system, on the other hand, is often described as a more “open,” or decentralized, system. Such a system allows new hires to enter an organization at various levels, depending on each person’s qualifications and experience. Although most civilians begin their government service at lower, entry-level pay grades, managers are not restricted to hiring them at lower-graded entry levels. Civilian employees are also subject to the federal civilian personnel regulatory framework that governs such issues as hiring procedures, working hours, overtime, and job retention rights. Unlike their military counterparts, who are employed “globally” and can be transferred anywhere, civilian employees are generally employed at the local installation level. Career opportunities are generally identified at the local level. While civilian personnel management is described as being decentralized, local managers view their control over civilian force management as limited because budget guidance and downsizing goals, established at higher organizational levels, can mandate reductions in end-strength levels and constrain their hiring authority. Unlike funding for military personnel, funding for civilian personnel is not aggregated into a single account that permits close monitoring. Rather, funding for civilian personnel is spread among several accounts within the DOD budget. For example, funding for most civilian personnel is included in the operation and maintenance appropriation in the DOD budget—an account that also includes spare parts, fuel for equipment, and military training. DOD’s policy is to establish its total personnel requirements at (1) the minimum level and least cost necessary to carry out assigned peacetime missions aimed at deterring aggression and (2) a level sufficient to retain capability to quickly respond to any combat needs that develop. The first priority is major combat forces such as fighter pilots, tank crews, sailors, and submariners. Combat forces are exclusively military, whether active-duty or reserve. After combat forces are determined, remaining forces are to be established to adequately support the combat forces. Support forces may include active-duty military, reserve military, civilian employees, contractor employees, and host nation personnel. Each service has implemented its own procedures for determining peacetime personnel requirements in support positions. These procedures—labeled by the different services as efficiency reviews, manpower surveys, or engineering studies—are intended to identify the most efficient personnel mix for performing assigned missions and tasks. Although some variations exist in service procedures, decisions on peacetime personnel resources generally should include two major considerations. First, service officials are to identify a task to be performed and establish the number of personnel needed, by specific skill, to perform the task. Second, they are to determine whether civilian employees, contractor personnel, or military members are the most appropriate source of the required skills, based upon DOD and services policies. These policies generally state that civilians are to be used in support positions that do not require military incumbency for reasons of law, training, security, discipline, rotation, or combat readiness, or that do not require military background for successful performance of the duties involved. When military incumbency is not essential, yet the work must be done by government personnel, civilian employees are to be used. If the workload is not military essential and not required to be done by government workers, contractor personnel may be used; however, decisions to use contractor personnel must be supported by cost comparisons. The execution of military operations may require the use of additional military and civilian personnel to bring the peacetime force structure to required wartime levels. The buildup of forces to sustain a contingency operation is called mobilization; contingency planning, or mobilization planning, is the broad umbrella under which the services determine their wartime personnel and materiel requirements. Military requirements are determined through analyses of numerous strategies and assumptions about how to fight a war and the need for a range of phased, incremental increases in force capability. Military forces needed immediately are programmed into the peacetime active-duty military. Other military forces needed for later deployment can be programmed into the reserves. Requirements for civilians in theaters of operations will depend on the nature of the contingency and the types of military units involved. To ensure that DOD civilian employees would perform critical support functions in-theater during a conflict, DOD established the emergency-essential civilian employee program in 1985. One objective of this program is to obtain written statements from combat-essential employees affirming that they understand the commitments of their positions and that they will continue to perform their functions while other civilians are being evacuated from combat areas. In 1990, after criticism from our office and the DOD Inspector General, DOD required the services to implement procedures to ensure that contractor personnel who perform combat-essential support functions will continue their services in-theater during conflicts. Concerned about the extent to which DOD is addressing civilian personnel requirements as it downsizes and restructures its total force, the Chairman of the House Committee on Armed Services, Subcommittee on Readiness asked us to review the decision-making processes the services use to determine whether a position should be military or civilian. In response to this request we examined (1) DOD and service efforts to replace military personnel in peacetime support positions with DOD civilian employees and (2) the adequacy of planning for the future use of DOD civilian employees and contractor personnel to support military forces in theaters of contingency operations. We were also asked to follow up on actions taken to correct problems identified by DOD and the services that were associated with the deployment of civilians to the Persian Gulf War. To identify trends and opportunities for replacing military personnel in support positions with civilian employees, we reviewed DOD and service criteria for determining when a position should be military or civilian. We obtained perspectives from personnel management officials on efforts to identify functions that civilians can perform. We also obtained available data on the number and types of military positions converted to civilian under a 1989 Defense Management Review Decision and interviewed DOD officials to identify reasons for not achieving the intended conversions.