[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
[H.A.S.C. No. 112-105]
HEARING
ON
NATIONAL DEFENSE AUTHORIZATION ACT
FOR FISCAL YEAR 2013
AND
OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS
BEFORE THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
SUBCOMMITTEE ON MILITARY PERSONNEL HEARING
ON
MILITARY PERSONNEL BUDGET OVERVIEW--OFFICE OF THE SECRETARY OF DEFENSE
PERSPECTIVE
__________
HEARING HELD
FEBRUARY 28, 2012
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SUBCOMMITTEE ON MILITARY PERSONNEL
JOE WILSON, South Carolina, Chairman
WALTER B. JONES, North Carolina SUSAN A. DAVIS, California
MIKE COFFMAN, Colorado ROBERT A. BRADY, Pennsylvania
TOM ROONEY, Florida MADELEINE Z. BORDALLO, Guam
JOE HECK, Nevada DAVE LOEBSACK, Iowa
ALLEN B. WEST, Florida NIKI TSONGAS, Massachusetts
AUSTIN SCOTT, Georgia CHELLIE PINGREE, Maine
VICKY HARTZLER, Missouri
Michael Higgins, Professional Staff Member
Debra Wada, Professional Staff Member
James Weiss, Staff Assistant
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2012
Page
Hearing:
Tuesday, February 28, 2012, Military Personnel Budget Overview--
Office of the Secretary of Defense Perspective................. 1
Appendix:
Tuesday, February 28, 2012....................................... 19
----------
TUESDAY, FEBRUARY 28, 2012
MILITARY PERSONNEL BUDGET OVERVIEW--OFFICE OF THE SECRETARY OF DEFENSE
PERSPECTIVE
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Davis, Hon. Susan A., a Representative from California, Ranking
Member, Subcommittee on Military Personnel..................... 2
Wilson, Hon. Joe, a Representative from South Carolina, Chairman,
Subcommittee on Military Personnel............................. 1
WITNESSES
Rooney, Dr. Jo Ann, Acting Under Secretary of Defense for
Personnel and Readiness; accompanied by Dr. Jonathan Woodson,
Assistant Secretary of Defense (Health Affairs) and Director of
TRICARE Management Activity; Virginia S. Penrod, Deputy
Assistant Secretary of Defense (Military Personnel Policy); and
Pasquale (Pat) M. Tamburrino, Jr., Deputy Assistant Secretary
of Defense (Civilian Personnel Policy)......................... 3
APPENDIX
Prepared Statements:
Davis, Hon. Susan A.......................................... 25
Rooney, Dr. Jo Ann........................................... 27
Wilson, Hon. Joe............................................. 23
Documents Submitted for the Record:
[There were no Documents submitted.]
Witness Responses to Questions Asked During the Hearing:
[The information is retained in the subcommittee files and
can be viewed upon request.]
Questions Submitted by Members Post Hearing:
Ms. Bordallo................................................. 75
Mrs. Davis................................................... 73
Mr. Jones.................................................... 74
Mr. Loebsack................................................. 87
Mr. Wilson................................................... 73
MILITARY PERSONNEL BUDGET OVERVIEW--OFFICE OF THE SECRETARY OF DEFENSE
PERSPECTIVE
----------
House of Representatives,
Committee on Armed Services,
Subcommittee on Military Personnel,
Washington, DC, Tuesday, February 28, 2012.
The subcommittee met, pursuant to call, at 1:32 p.m., in
room 2128, Rayburn House Office Building, Hon. Joe Wilson
(chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. JOE WILSON, A REPRESENTATIVE FROM
SOUTH CAROLINA, CHAIRMAN, SUBCOMMITTEE ON MILITARY PERSONNEL
Mr. Wilson. The hearing will come to order. Like to welcome
everyone to the Military Personnel Subcommittee hearing
relative to the testimony of the perspective of the Office of
the Secretary of Defense on the President's fiscal year 2013
budget regarding military personnel matters.
Let me be very clear, personally: If it were up to me the
defense budget would not be reduced. The Department of Defense
[DOD] would not be tasked to find the $259 billion in reduction
over the next 5 years. And the services would not be operating
under the threat of a devastating sequestration process next
year.
America is at war today with increasing threats around the
world, and yet this budget proposes cuts that break faith with
military, military families, and veterans. And in particular, I
have just gotten back from Pakistan and last week it was
heartbreaking to be there at a time when there was a bombing at
a bus station--14 people killed, including 2 children--and then
the next day 5 policemen in an attack on a police station, and
then today there was the stopping of a bus and 16 people were
selected, taken off the bus, and executed right in front of the
other persons. And so there is such conflict around the world,
and I am just so proud of our military trying to stop those
types of attacks from being here.
Additionally, these cuts, I think, give a false
encouragement to our enemies, who are obsessed with death.
Having said that, the budget challenge that we are discussing
today is the reality and we must now confront it.
Certainly no one expected personnel programs to escape
close scrutiny. However, contrary to the public statements to
the Department of Defense that military personnel programs and
benefits have been protected under this budget proposal, the
totality of the personnel-related cuts are proportionate to the
cuts taken in any other budget category.
Major reductions to the Active Duty end strength of 100,000
will reduce spending but also exact a human cost on our
military families. The loss of the skills and experience within
the All-Volunteer Force will directly diminish our combat
capability when it is very likely we will continue to be
engaged in conflict in Afghanistan and other locations around
the world by enemies who dream of a long war.
This committee will endeavor, within the fiscal constraints
of an austere budget, to legislatively protect the annual end
strength targets to maintain a responsible drawdown. For those
who remain on Active Duty the budget projects reduced pay
raises in future years, precisely when economic conditions may
present the All-Volunteer Force with the challenge of a robust
job market.
The budget also recommends that the Congress eliminate
itself from the debate about reforming military retirement and
entrust that to a base realignment and closure-like commission.
Removing Congress from the reform process, I believe, is wrong-
headed when the Department of Defense leaders have not
recommended a retirement reform solution they believe will
successfully support the All-Volunteer Force. The people's
Congress must be accountable and not defer to unelected
appointees.
Finally, the most disturbing budget proposals are the
increases in health care premiums, and the increases are up to
345 percent. Not only will we question those increases today,
but we will also address them during a subcommittee hearing on
military health care next month.
I would like to welcome our distinguished witnesses from
the Office of the Secretary of Defense: Dr. Jo Ann Rooney, the
Acting Under Secretary of Defense for Personnel and Readiness;
Dr. Jonathan Woodson, the Assistant Secretary of Defense,
Health Affairs, and Director of TRICARE Management Activity;
Ms. Virginia S. Penrod, Deputy Assistant Secretary of Defense,
Military Personnel Policy; and Mr. Pasquale ``Pat'' M.
Tamburrino, the Deputy Assistant Secretary of Defense for
Civilian Personnel Policy.
And Mrs. Davis, we are very fortunate to have as ranking
member, Congresswoman Susan Davis, of California.
[The prepared statement of Mr. Wilson can be found in the
Appendix on page 23.]
STATEMENT OF HON. SUSAN A. DAVIS, A REPRESENTATIVE FROM
CALIFORNIA, RANKING MEMBER, SUBCOMMITTEE ON MILITARY PERSONNEL
Mrs. Davis. Thank you, Mr. Chairman.
And, Dr. Rooney, welcome. And we certainly appreciate your
being here, along with Dr. Woodson, Ms. Penrod, and Mr.
Tamburrino, Jr. Thank you very much.
Hope I said that right--Tamburrino? Okay.
The subcommittee members appreciate your views on the
fiscal year 2013 budget request for military personnel and we
look forward to hearing how the proposed budget will impact our
military personnel and their families.
While I think it is probably safe to say that the budget
reductions have not severely impacted the military personnel
accounts, they were not immune and they affect each and every
person who is serving today. My colleagues and I would like to
understand which personnel and family programs will be impacted
and to what extent.
We know the Department is undergoing an effort to eliminate
redundant and duplicative programs and ensure that the programs
that do remain are effective, but how are those decisions being
made? What measures will the services and the Department use in
making a determination of a program's effectiveness? Who will
decide the priority of one program over another?
And in this time of reduced defense spending we need to
ensure we are making well-informed decisions and have an
understanding of what these proposed cuts will have on the
recruitment and retention of our Armed Forces as well as the
impact to their families. We have seen over the past several
years the services making a good-faith effort to move funding
for quality of life programs into the base budget.
I am concerned, however, that the recent budget would move
the additional end strength for the Army and Marine Corps into
the Overseas Contingency Operations [OCO] account. If
additional end strength for the forces are being moved into the
OCO, will we begin to see other areas, such as quality of life
and support for wounded warriors that may not be an enduring
requirement, also included in the Overseas Contingency
Operations fund? And if that is the case, then what message
does that send to our men and women in uniform and their
families?
These are the types of questions and concerns that the
subcommittee will need to address. As the demand for these
programs and services remain constant, or in some cases rises
as the force returns home while the budget continues to
decline, we are going to face very difficult choices. So we
must remember that it is our men and women in uniform that
makes our military the best in the world and we must proceed
with caution.
Thank you, Mr. Chairman.
[The prepared statement of Mrs. Davis can be found in the
Appendix on page 25.]
Mr. Wilson. Thank you very much, Mrs. Davis.
And we will proceed to testimony, and we will be hearing--
for the benefit of the subcommittee members, you should be
aware that Dr. Rooney will make a statement and then we will
proceed straight to questions.
STATEMENT OF DR. JO ANN ROONEY, ACTING UNDER SECRETARY OF
DEFENSE FOR PERSONNEL AND READINESS; ACCOMPANIED BY DR.
JONATHAN WOODSON, ASSISTANT SECRETARY OF DEFENSE (HEALTH
AFFAIRS) AND DIRECTOR OF TRICARE MANAGEMENT ACTIVITY; VIRGINIA
S. PENROD, DEPUTY ASSISTANT SECRETARY OF DEFENSE (MILITARY
PERSONNEL POLICY); AND PASQUALE (PAT) M. TAMBURRINO, JR.,
DEPUTY ASSISTANT SECRETARY OF DEFENSE (CIVILIAN PERSONNEL
POLICY)
Dr. Rooney. Thank you.
Chairman Wilson, Congresswoman Davis, and distinguished
members of the subcommittee, I appreciate the opportunity to
appear before you to discuss personnel and readiness programs
in support of the President's budget request for fiscal year
2013. Thank you for your support of our Active and Reserve
military members, their families, and our government's
civilians who have done everything we ask of them and more.
As you have heard from Secretary Panetta, our fiscal year
2013 budget request was the product of an intensive review of
our defense strategy after a decade of war and substantial
growth in our budgets. Today I will describe how we can sustain
the All-Volunteer Force for generations to come--a force that
has a proven record of unprecedented success in operations
around the world. Accomplishing this will require the
Department to make hard choices regarding competing priorities
for limited funding.
Resourcing the reset of the force while maintaining
readiness will undoubtedly be one of the most challenging
issues of our time. As the Acting Under Secretary of Defense
for Personnel and Readiness my priorities focus on: total force
readiness, improving the military health system, and total
force support.
After 10 years of intensive operations our forces are among
the most capable in our Nation's history. Our Active and
Reserve service members and defense civilians are well prepared
to execute current operations and respond to emergent needs.
They are experienced and proficient in a wide range of real-
world operations, including operations not traditionally within
the Department's scope of responsibility.
As we end today's wars and adjust to new and changing
missions we find ourselves naturally transitioning back toward
a broader range of security missions. Although this transition
is occurring in the midst of an unfavorable and unavoidable
fiscal pressure, we have committed to maintaining a ready,
capable, All-Volunteer Force.
The performance of our military medical system in a time of
war continues to set new standards. The Department strives to
provide the best health care in the world to our service
members but the current cost growth of the military health
system is unsustainable.
We are pursuing a balanced, four-prong approach for
improving the health of our population and the financial
stability of the system to ensure we can continue to provide
this benefit in the future. The four legs of the stool, none of
which can be considered in isolation, include moving from a
system of health care to one of health, continuing to improve
our internal efficiencies, implementing provider payment
reform, and rebalancing cost-sharing.
My third focus area is total force support. One of the four
overarching principles of the defense strategy is to preserve
the quality of the All-Volunteer Force and not break faith with
our men and women in uniform or their families.
Despite difficult economic circumstances requiring budget
reductions across all levels of government, the Department
remains committed to providing service members and military
families with support programs and resources, empowering them
to address the unique challenges of military life. Ensuring the
needs of military families and service members are met
contributes to the overall well-being of the total force. This
includes access to mental health care; providing for the
educational needs of service members' children; support of
morale, welfare, and relief programs; and maintaining the
benefits at defense commissaries.
Secretary Panetta has directed that family programs
continue to be a priority for the Department and it remains my
priority as well.
Putting together this year's budget request in a balanced
package was a difficult undertaking. However, it was driven by
the strategy and developed by our uniformed and civilian
leadership working closely together.
As a result of that process I believe we have the right mix
of programs and policies in place to shape the force we need.
We will reduce the rate of growth of manpower costs, including
reductions in the growth of compensation and health care costs.
But as we take those steps we will continue to keep faith with
those who serve.
During the past decade the men and women who comprise the
All-Volunteer Force have shown versatility, adaptability, and
commitment, enduring the constant stress and strain of fighting
two overlapping conflicts. They have also endured prolonged and
repeated deployments. They have made innumerable sacrifices.
Some have been wounded and others have lost their lives.
As the Department reduces the size of the force we will do
so in a way that respects and honors the service of each and
every one. I look forward to continuing to work with you,
Chairman Wilson, Congresswoman Davis, and distinguished members
of this subcommittee, to support the men and women in our
Nation's armed services.
As you heard, accompanying me today are several senior
members of my staff. I would like to introduce Dr. Jonathan
Woodson, Assistant Secretary of Defense for Health Affairs; Ms.
V. Penrod, Deputy Assistant Secretary of Defense for Military
Personnel Policy; and Mr. Pat Tamburrino, Deputy Assistant
Secretary of Defense for Civilian Personnel Policy that also
includes total force management. All of us before you today
look forward to your questions.
Thank you.
[The prepared statement of Dr. Rooney can be found in the
Appendix on page 27.]
Mr. Wilson. Thank you very much. And what we will do is we
will proceed to each member of the subcommittee having 5
minutes to ask questions, and we have a person above reproach,
Mr. Craig Greene, who is going to be keeping up with this.
And I will go first.
First of all, Dr. Rooney, I am really concerned, sincerely,
that there seems to be a disproportionate reduction in effort
for the military which doesn't show up in other agencies. Are
you aware of, as you indicate a reduction in manpower cost for
the military, are there any--is there any other agency in
government or any other Department that is having a reduction
in manpower cost?
Dr. Rooney. Sir, as you indicated we are taking about 10
percent of our projected budget cuts in things dealing with
people and compensation but I am not aware of how that is
impacting other Departments across the government.
Mr. Wilson. And that just really concerns me, that there
are reductions in spending but it is disproportionate to the
military, again, in a time of war, as I have expressed.
Additionally, what new initiatives is the Department
pursuing to enhance the transition of service members and their
families to civilian life as those families prepare to separate
from the military?
Dr. Rooney. There are several. Most probably are aware of
the Yellow Ribbon Program, which really focuses on our Guard
and Reserve members, and that particular focus is enabling them
to transition much more effectively into their communities and
with employers throughout the area. That continues to have
great support and it also continues to have great results.
We also have been working with our colleagues in the
Department of Veterans Affairs [VA], Department of Labor, and
Department of Education to look holistically at the transition
of our service members. We are currently in the process, having
completed step one of that report and now working on the
implementation of what that will look like--so from when a
service member comes into the service until that point when
they make the ultimate transition, that that is a continuum and
prepares them for life outside.
And there are a number of other programs committed to
education both for our service members as well as their spouses
that we believe will positively impact that transition.
Mr. Wilson. And I appreciate you indicating a holistic
approach, because the Department of Labor, VA, DOD, I am just
really hopeful that people working together can address the
challenges. In my home state we have unemployment over 9
percent--many communities almost 20 percent. And so this needs
to be addressed.
Additionally, I have already expressed concern about the
health care insurance premium costs--TRICARE Prime. The fiscal
year [FY] 2013 increase is 30 to 78 percent but over 5 years
can be between 94 to 345 percent.
And now I found out today from the Washington Free Beacon
that the different insurance cost increases for the military do
not apply to civilian defense employees. Why would there be a
difference between the military and civilian defense employees?
Dr. Rooney. Sir, I will take the first part of that and
then I will ask my colleague, Dr. Woodson.
First of all, the civilians are not part of our TRICARE
system--the civilian government employees. So we are proposing
those increases in the TRICARE system, which impacts--the
particular increases--those that are retired, of working age,
as well as those that are over 65. So they are two very, very
different systems, first off, so we are just focusing in this
particular case on those costs with a program that is
administered within the Department of Defense. So that would be
this particular one.
And I will ask Dr. Woodson to comment on those specific
increases you mentioned.
Secretary Woodson. One of the major reasons I think, as Dr.
Rooney has already pointed out, is that the management of the
TRICARE insurance program and set of activities is within our
set of responsibilities and authorities, but also, as it stands
now, those receiving other Federal health benefits currently
pay a much higher cost share. But most importantly, they are
not within our authorities.
Mr. Wilson. Well, the percent, again--345 percent--really
is a great concern to me.
Finally, last year Governor John Baldacci, of Maine, was
hired for a yearlong study of military health care, and his
requirement was to provide recommendations for reforming the
health care system. Additionally, has he made a report? Was
that report included in the defense health program budget
reforms?
Dr. Rooney. Sir, if I can speak to--actually, my
understanding--and of course, Dr. Baldacci came before I joined
the Department so I am having to look at history a bit here--
but my understanding was he had a fairly broad scope in his
memorandum of understanding [MOU], which was it had to involve
health care but it could impact everything from readiness to
continuum of care and a number of initiatives in between. What
I can speak to is since November, when I have been in this
position, Dr. Baldacci has been working in two particular
areas, which is total force fitness, along with the joint
staff, which is a readiness issue with us and involves health
of the force; and then also he has been one of the key members
I have had doing site visits for our disability evaluation
system as we try to improve our timeliness on that.
Any reports he has given to this point have been oral to
me, so I am not sure if there will be a finalized written
report. And before that the only thing I saw from him were trip
reports or meeting reports, so----
Mr. Wilson. But not an annual report?
Dr. Rooney. No, sir. Nothing that I have seen.
Mr. Wilson. Thank you.
Mrs. Davis.
Mrs. Davis. Thank you, Mr. Chairman.
Dr. Rooney, I wonder if we could focus for a minute on the
issue of tuition assistance programs, because that has
certainly come to my attention and I am sure to many others, as
well. One out of five dollars--actually, that really refers to
the Military Spouse Career Advancement Account--goes to for-
profit schools. But the Senate Health Committee found that half
of all tuition assistance dollars are going to for-profit
schools, many of which have very poor student outcomes. We know
that these schools are aggressively targeting and recruiting
service members for their military benefits.
So, given the tough budget environment that we are facing
as well as the concerns about the sustainability of the tuition
assistance programs, I am just wondering what we are doing
about that and whether you feel that, in fact, some of the
concerns that Military Officers Association of America [MOAA]
has raised, Student Veterans of America have raised, what are
we doing to really ensure that our service members have access
to a high-quality education that protects them from aggressive
recruiting on bases and military-related Web sites?
Dr. Rooney. Thank you. As you know, not only to me,
education is extremely important, given my background that I
brought into the Department. But throughout the Department we
see education as a way for our service members and their
families to reach their greatest potential.
And you are right. The concern is that we need to be in a
position where we balance allowing our service members to have
the greatest choice among academic institutions--to be able to
study what they want where they want--and that often means
flexibility in terms of the delivery models that are given.
But at the same time we share your concern to make sure
that while we don't want to inhibit the members' choices that
we need to make sure we're holding all schools accountable for
quality delivery, being able to put together plans of education
so that service members know how they are going to get from
point A to the point where they are graduating with a degree or
a certificate, whatever they are studying, and then to hold the
institutions accountable and do such things as require them to
look at the experience of our service members or even our
spouses and see if there are ways that possibly that can count
towards credit.
So along that line, what we are currently working on is
developing a memorandum of understanding to be signed by
institutions that want to participate in our tuition programs.
And that memo was expected to be put in place by the end of
December, and because of some of the concerns you raised that
we also heard from a number of the organizations we actually
extended that deadline out so we could continue to meet with
them and address the concerns.
But the idea is not to pick particular schools or limit
access but make sure that we are saying, ``If you want to
participate you will need to do these things.'' And the
deadline to have that MOU signed now is March 31st, at which
point we feel that those schools that are willing to be held
accountable and that we can have a basis for service members to
compare what type of institution, that we will have that in
place at that time. And that should go very far in addressing
the kind of concerns that you raised.
Mrs. Davis. And I am sure you are aware, Dr. Rooney, that
some of our underperforming schools seem to have no problem
signing on to that but many of our schools with very strong
reputations, including the University of California, I believe,
had problems because of the transferability of credits and
experience. Do you think that as you are working--and I guess
the memorandum is due the end of this month--that you will have
resolved that issue?
Dr. Rooney. I believe we definitely will. There have been a
lot of conversations and direct work with the institutions as
well as organizations such as American Council on Education
[ACE] that actually represent a number of institutions on how
can we best look at this. And our goal is not to mandate that
institutions take experiential credits or give credit for
experiential learning, but that in fact, there is a mechanism
in place where they can actually look to see if that is
possible. I think that was one sticking point that--you know,
is it required or do we really want them to have a mechanism in
place?
And the other one was the transferability of credits. And
what we are trying to do is work with the schools to say, you
know, for instance, if you are taking English in a community
college and you are transferring to a 4-year institution, how
can we try to see some basis so our service members can
understand transferability and, where possible, do it. So I
think it was a case of just not forcing the institutions to
mandate transferability but really create a transparency in
process so our service members know and, frankly, so that we
can advise them better as they are going through that process.
Mrs. Davis. Thank you. We might come back to that.
Thank you very much.
Mr. Wilson. Thank you very much.
And we have Congressman Mike Coffman, of Colorado.
Mr. Coffman. Thank you, Mr. Chairman.
And thank you all for your--I would like to say your
service to the country, but some of you haven't served in
uniform, which is surprising. But thank you for your service to
the administration and, I suppose, to the country.
A 2007 Government Accountability Office [GAO] report
estimated the Reserve Component members' cost to be only 15
percent of the Active Duty Components. And yet, when we look at
this budget it seems to have a uniform sort of across-the-board
reduction of both the Active and the Reserve Components, as
well. And it would seem to me that what we ought to be doing is
taking a look at this 1.4 million right now uniformed military
personnel on Active Duty and saying, ``What functions could be
provided for in the Guard and Reserve?'' So instead of reducing
the size of the Guard and Reserve we ought to be expanding the
size of the Guard and Reserve and maintaining it so that we
don't have to reduce our capability and compromise our national
security, as it seems that this budget by the administration
does.
Can somebody tell me the rationale for the fact that we
didn't go down this path? I mean, Israel, as a nation, is in a
perpetual war footing and their backbone of their military is
the Guard and Reserve. So why didn't we--Dr. Rooney, why didn't
we go down this path?
Dr. Rooney. Sir, I believe if we look, in fact, we were and
are balancing our use of the Active Component with the Guard
and Reserve. We acknowledge that much of the capability, and in
fact, many of the areas of the capability are within the Guard
and Reserve. So as not to hollow out the force it is critical
that we have a balance between the two, and in all of the
discussions of the force reduction I can tell you that the
Reserve Component was well represented in that same room with
the discussions.
So I think again, it is a case of balance. And if you are
looking at the particular numbers, different components of the
service are actually drawing down their Active versus their
Reserve differently. And I can get you those specific numbers
in terms of that balance between the two, but I don't think the
intention is at all to diminish the use of our Guard and
Reserve in any of the components.
Mr. Coffman. Well it does. And that is unfortunate because
this is a plan that clearly cuts down the capability of the
United States military needlessly because we are cutting into
acquisition to sustain an Active Duty larger than it needs to
be--an Active Duty Force larger than it needs to be. But
obviously we differ in our experience, I having served in both
the Army and the Marine Corps.
Let me go back to another issue, and that is the size of
the civilian workforce at DOD. Can you tell me what the--is
it--what is the size of it today? Is it 68,000? What is it?
Dr. Rooney. Hang on. I can actually give you, Pat?
Mr. Tamburrino. The size of the workforce that comes from
the appropriated funds, approximately 730,000 people; the size
of the workforce that comes out of non-appropriated funds, like
Morale, Welfare, and Recreation [MWR]----
Mr. Coffman. Oh, I was way off.
Mr. Tamburrino [continuing]. Approximately 250,000 people.
So in round numbers the size of the workforce total is about a
million.
Mr. Coffman. About a million. So we have got--so on Active
Duty we have got 1.4 million uniformed personnel right now----
Mr. Tamburrino. Sir.
Mr. Coffman [continuing]. And we have--what is the--and we
have over a million in the civilian workforce?
Mr. Tamburrino. Slightly under a million.
Mr. Coffman. Wow. Slightly under a million. Okay. Just
trying to think in my mind how many casualties are produced by
somebody sitting behind a desk.
Now, so we are going to do an end strength reduction on our
Active Duty Force. So tell me what the end strength reduction
looks like for our civilian DOD workforce.
Dr. Rooney. At this point the projected is that it will go
down by about 7,000.
Mr. Coffman. Wow. Okay. Let me get this straight here. This
is great.
So what we are doing is--what is the number that we are
reducing our--our uniformed military by right now? 100,000 is
what we are reducing our uniformed military by and we are
reducing our civilian workforce by 7,000? Is that right? Is my
math wrong?
Dr. Rooney. Sir, I believe you have just included the
Active; you didn't consider the Active, Guard, and Reserve,
too----
Mr. Coffman. No, I am just talking about Active. Because
our DOD civilian workforce isn't part-time; they are full-time
employees. Am I correct in that?
Dr. Rooney. The number we gave you was full-time
equivalents, yes.
Mr. Coffman. Okay, so let's do the--tell me what the math
is here. So what is our Active Duty end strength reduction is
how much?
Dr. Rooney. 123,900.
Mr. Coffman. And our civilian workforce reduction is how
much?
Dr. Rooney. Current going forward 7,000, and that doesn't
include any previous reductions that have been taken over the
past several years.
Mr. Coffman. You know, I would like those numbers--specific
numbers back to us. And you referenced that some were done
before. Let's look at those, too--if you could give me those
numbers, too, that were done in the past. I find this stunning.
[The information referred to is retained in the
subcommittee files and can be viewed upon request.]
Mr. Wilson. Thank you, Congressman Coffman.
And we proceed now to Congressman Allen West, of Florida.
Mr. West. Thank you, Mr. Chairman, and also Ranking Member.
And thanks to the panel for being here today.
And as I talked to you earlier, Dr. Woodson, I am just a
simple old paratrooper, you know? Life is easy for us: red
light means you don't jump, green light means you do jump.
So when I sit and look at this I recall a great statement
by a famous Army general by the name of Cavasos, who said,
``Quantity has a quality all its own.'' So my first question is
this: I hear about how we sat down and we developed strategy.
When I was a commander we had a simple thing. Whenever we
had a mission we did what was called a troop-to-task analysis.
Did we really sit down and do a sincere troop-to-task analysis
for our uniformed military services as we look across every
single geographic area of responsibility [AOR] based upon the
threat assessment for the next 10 to 15 years so that we can
have the right capacity and capability to meet those threats?
The reason why I say this, after World War II we gutted our
military and then came Korea. We continue to try to make the
military bill-payer for our fiscal irresponsibility up here in
Washington, DC.
You know, we are not talking about units; we are talking
about real people, some of those people still my friends, some
of them even my relatives. So I would like to know that we
really and truthfully do a troop-to-task analysis by geographic
AOR that looked at the threat assessment, the capacity and
capability that will be necessary for the next 10 to 15 years.
Dr. Rooney. Sir, ultimately what we were having to do is
comply with the Budget Control Act. So we had a budget number
that we needed to fit our responses into. And I will tell you
that as the numbers in terms of what our troop drawdown is--the
goal of all of us in the Department is to make sure we do not
hollow out the force; so as we are drawing down we pay
attention to exactly the details you have indicated.
Mr. West. So based upon your answer, you know, we continue
to hear everyone come up and say, ``This is all based on
strategy. It was not based on budget and numbers first.'' What
you are telling me it was based upon the budget and numbers
first; it was not based upon a troop-to-task analysis of the
volatile situation in which we find ourselves all across the
world projecting out for the next 10 to 15 years.
Dr. Rooney. No. In fact, it was the strategy, and then
within the strategy then we had to tailor our budget to fit in
that strategy but we did have the constraint of what the
numbers on that budget were to meet that strategy.
Mr. West. This is my concern, going along with the ranking
member: We already have men and women doing five and six combat
tours of duty, and the unintended consequences of that--
divorces are up, suicides are up, drug problems are up. If we
are making this force smaller and these requirements continue
to get bigger, what is going to happen with all of these second
and third order things that are going to continue to occur,
especially for our families? We taking that into consideration?
Dr. Rooney. Sir, I believe we acknowledge the challenges
that you indicated and acknowledge that there is a special
stress on our military families and what the rotation and the
deployments have done to the families. It is one of the
reasons, also, that the Secretary mandated that we did not take
any significant cuts or, in many cases, no cuts at all to
family programs and instead tasked to make sure that those
programs we are delivering address those kinds of issues that
you indicated on there and that we wouldn't take a reduction in
those particular support programs.
Mr. West. Last question: You know, I am a 22-year veteran.
Has anyone--because everyone keeps talking about the rising
costs of retirees--have we looked at the adult population of
the United States of America--18 to whatever--and how many out
of that population are military retirees? Can anyone give me
that percentage?
Dr. Rooney. Percentage or total number? Sir, and you are
talking----
Mr. West. Either one.
Dr. Rooney [continuing]. How many are in the military
retirement system at this point?
Mr. West. Absolutely. When you look at comparison to the
population of the United States from 18 to--to whatever--
adults.
Ms. Penrod. Currently there are 1.47 million retirees.
Mr. West. Okay, so 1.47 million, and let's say out of an
overall population--let's be kind--300 million? What is that
percentage? You know, somebody that didn't go to the University
of Tennessee, can you do that real quick?
Dr. Rooney. Not even 3 percent.
Mr. West. My point is this----
Dr. Rooney. 0.3 percent.
Mr. West. My point is this: I read down here that we say
the primary criticism of military retirement over the last 25
years has been the escalating cost of the program. You are
talking about a small percentage of Americans that were willing
to give their entire lives to make sure we stay free and
protected this democracy. I don't think we should be going
after those people when they constitute such a small percentage
of our society.
So with that being said, I yield back, Mr. Chairman.
Mr. Wilson. Thank you, Congressman West.
And we now proceed to Congressman Austin Scott, of Georgia.
Mr. Scott. Thank you, Mr. Chairman.
And, Ms. Rooney, I just--you said it was three-tenths of 1
percent. Is that what you said--the last number that you gave?
Dr. Rooney. I believe based on the numbers the congressman
did, but my math might be off today so my apologies if it was.
Mr. Scott. No, that is pretty close to what I thought. And
just going back to the other numbers that you said, there will
be 123,900 reduction in our uniformed troops--total reduction
in troop--and only 7,000 in non-uniformed personnel?
Dr. Rooney. For fiscal year 2013.
Mr. Scott. Of the total number of employees, uniformed and
non-uniformed, how many uniformed personnel do we have right
now?
Dr. Rooney. If you count Guard and Reserve, approximately
2.2 million.
Mr. Scott. 2.2 million. And how many non-uniformed do we
have?
Dr. Rooney. Just under a million.
Mr. Scott. Just under a million. If we did it on a--on an
equal ratio then you would have--if you reduced 123,000 from
the uniformed you would be looking at somewhere in the range of
a 50,000-person reduction in the civilian force. Is that
correct?
Dr. Rooney. Let me make sure I clarify: That number that I
gave you for the reduction in the military was over the FYDP
[five year defense plan], and the civilian was just for the 1
year, which is the only thing we have for the budget right now.
Mr. Scott. Okay. And so if you did it on an equivalent
basis what do you think it would be?
Dr. Rooney. Your total number is about right if, in fact,
that was over the FYDP.
Mr. Scott. So I guess my question is if we are going to
have so many--if we are going to have that much reduction in
troop force why wouldn't you have a corresponding reduction in
the bureaucracy?
Dr. Rooney. Sir, as we view--and I mentioned and used the
term ``total force'' several times, so what we are doing as a
Department is looking at across, which includes our
contractors, our uniformed military, and our civilians, and at
any point in time looking and saying, ``What are these various
people doing and do we have the right people in the right
jobs?'' So I don't think I can sit here and say to you that
there is any specific number in terms of the civilians. At this
point we are looking at the appropriate mix and seeing and
viewing this in a total force, so it is not looking at one
particular component.
Mr. Scott. But ma'am, the reduction to the soldier is 17.7
times what it is to the bureaucratic machine that is over
there.
Dr. Rooney. I appreciate your comments, but I would say to
you that the services themselves, who understand what their
requirements are and what they need for end strength, are
driving our number in terms of what that military number is.
Mr. Scott. And ma'am, without the soldiers we don't need
all of the other bureaucrats, quite honestly. But I guess my
question, getting back to this--with all of the challenges that
we have going on in America right now with regard to the
economy, the proposal for the TRICARE Prime increase--are you
aware of any other increase that is as draconian as the TRICARE
Prime rate increases that are being proposed by this
administration?
Dr. Rooney. To comment generally, and I will ask Dr.
Woodson to step in--part of when you look at this increase it
is appropriate to go back to roughly 1996 and see that for most
of the time up till the current--about a year ago--there have
been no increases, and that is very different than what we have
seen in terms of even health care costs as well as what has
happened to most people in terms of their health care premiums.
The other piece is that 60 percent of our health care comes
from the private sector, so as private sector health care costs
are increasing we are actually seeing those same increases
going.
So I think that the reason, you are seeing first-time costs
that have not risen since 1996. But I will ask my colleague,
Dr. Woodson, to also comment specifically----
Mr. Scott. Ma'am, I am almost out of time. But with all due
respect, the general belief from the administration seems to be
that health care should be free for everybody other than the
people in the military, and if you are in the military then
they are going to get a five-fold increase over the next 5
years if we allow this to happen. Congress made it very clear--
chairman--the chairman of this committee--we suggested that
there could be increases but that those increases should not
exceed what the increase in pay or retirement benefits was. We
were very clear.
And that leads me to the next question of why do you
believe that it should--that it should be handled in a BRAC-
like manner--that the changes in the benefits should be handled
in a BRAC-like manner?
Dr. Rooney. You are specifically referring to the
retirement, sir, correct?
Mr. Scott. Yes, ma'am.
Dr. Rooney. Okay. We feel at this point we are internally
working on looking at retirement and saying if, in fact,
balancing recruitment and retention, are there other potential
systems? But we understand the difficulty in terms of making
any changes to this. So having an independent group and
commission, as is proposed by the President, be able to look at
the alternatives and a number of the possible alternatives that
we as a Department might put forward and be able to look at
that independently, and again, not work with all of you but
continue to work with Congress on this, that we felt the BRAC-
like commission would actually get us to a good result.
Mr. Wilson. Thank you very much, Congressman Scott.
And we now proceed to Congressman Joe Heck, of Nevada.
Dr. Heck. Thank you, Mr. Chairman. I apologize for having
to step out, but I kept one ear tuned to the television while I
was in the other room.
You know, I certainly appreciate what you all are trying to
accomplish. I think we all do. We understand we are in a very
difficult situation with a very constrained fiscal environment
trying to manage what we are going to do with one of the
largest drivers of our national budget.
And, of course, my biggest issue and my biggest concern has
always been with the Reserves. And, you know, I--Lieutenant
General Stultz comes in here quite a bit and talks about
recruiting a soldier for life and giving them the opportunity
to move between Active Duty, Reserve, you know, training
participation unit [TPU], into the Individual Ready Reserve
[IRR], and based Active Guard and Reserve [AGR] tour--whatever
is necessary to keep them engaged and keep them part of the
military establishment.
And I see now that we are going to, you know, cut upwards
of about 80,000 from the Army Active Duty Force over time. But
we are capping the Army Reserve where it is now at 205. And
actually, I think we are still over strength. We still have
somewhere to go until we get to 205.
But then there is--so I just question, how are we going to
keep that soldier for life? We are going to tell them, ``You
are leaving,'' through attrition, or whatever method, but we
don't have a spot for them in the Reserves now if we are going
to stay capped at 205, or we are already over our cap at 205.
You know, we have built an incredible capability in our
Reserves. We truly have become an operational force over the
last 10 years and a lot of that has been based on OCO money,
which is going away, not to mention baseline money--but OCO
money that is going away.
And so we see this requirement that we are going to put an
ever-increasing emphasis on utilization of the Reserves, which
is what General Odierno mentioned when he was before the full
committee not long ago on how he was going to mitigate risk,
and I wonder how we are going to maintain that capability as we
lose the funding source which has built it, which is OCO, and
not, then, keeping folks separating from the Active Component
and have the opportunity to go in--go into the Reserve Force.
I looked at these two, you know, involuntary separation
examples, and I hope they are just examples because, you know,
they are based on an E5, E6 and O3, O4, which in my mind are
the very folks we should be trying to keep at those grade
levels, and we should be trying to shed, you know, O5s and O6s
before we get rid of O3s and O4s. So I just wonder, how are you
going to balance that issue of, we are cutting up to 80,000
Army Active Duty troops and we have got no place to put them
even though the Reserves are saying we need to recruit a
soldier for life?
Dr. Rooney. Sir, I will start that and then I will turn it
over to Ms. Penrod.
Our role, and one that we take very seriously, is working
very closely with each of the services so that we can have
exactly the conversation you are indicating, which is, what is
that balance? What tools do we need to make sure that we are
maintaining capabilities, that we have identified and will
continue to identify as either current or emerging types of
requirements, and how do we best use that tool? And it is,
frankly, the force shaping.
Because you are right: We are constrained by the numbers,
we are constrained by our budget resources, and we are having
to make sure we continue to support that All-Volunteer Force
and make sure that it is ready and adaptable and all the
challenges that we have to it. So our role, clearly--and I will
ask Ms. Penrod to comment on the types of tools and the
directive that we have actually sent out to the forces saying
we will work with you but we need to look first at voluntary
separations, and then how do we use these tools forward? So I
will ask her to comment a little bit more about that.
Ms. Penrod. Yes. We have been working with the services. We
have had meetings with the Army staff, Navy, Air Force, Marine
Corps, but you can understand, they are--those are draft plans.
They intend to brief you when they come over to testify.
But one thing we are emphasizing--again, as Dr. Rooney
said, are voluntary over involuntary measures. We want to thank
the Congress for the tools that you provided last year in the
National Defense Authorization Act extending the voluntary
separation pay. We also understand, you know, there is normal
attrition in the Guard and Reserve. The services do plan as
much as possible to help transition the Active Duty Force into
the Guard and Reserve.
But again, I don't have the specifics for the plans, but we
are working with the services and trying to help them shape
their force and using all the tools so that the--they have the
skill sets that they need, they have the grade structure that
they need, and that they do not go after recessions like they
did in the mid-1990s.
Dr. Heck. And I appreciate that. And I know you are keeping
these things in mind, but I just want to emphasize the fact
that a lot of the high-demand, low-density units that are
currently being utilized are located in the Guard and the
Reserve, and if we are going to draw down Active Duty and we
don't have a place to put them in the Reserve, I feel that we
are ultimately going to impair our ability to be fully capable,
trained, and ready to go to war.
Thank you, Mr. Chair. I yield back.
Mr. Wilson. Thank you very much, Congressman Heck.
And we proceed now to Congresswoman Vicky Hartzler, of
Missouri.
Mrs. Hartzler. Thank you, Mr. Chairman. I had several
constituents in so I haven't been able to be here earlier, so I
don't have any questions. Thank you.
Mr. Wilson. And does anyone have any proceeding or further
question?
Mrs. Davis.
Mrs. Davis. Thank you, Mr. Chairman.
One thing I would like to ask, and this is always a
difficult thing--I am not asking for specifics so much, but we
are talking about TRICARE, we are talking about pharmacy
copays--difficult issues, I think, for people to address. But
one of the things that we haven't talked about is what if we
don't do that? Then, you know, what is it that has to pick up
that difference in trying to maintain what we have, which we
would all agree is very beneficial and we feel that it is, you
know, critically important to our families? At the same time we
are having to find cuts in other areas.
So I wonder, Dr. Woodson, what does that look like if, in
fact, we don't address it in this way?
Secretary Woodson. Yes. Thank you very much for that
question.
Given the constraints of the Budget Control Act, if no
adjustments are made in TRICARE fees and we don't achieve what
is a $12-plus billion savings over the FYDP, additional force
structure cuts will need to be made. And so, you know, the
optic that I think everyone needs to understand in these very
difficult times--and, you know, I am sitting here listening to
your questions and I understand what you are saying,
Congressman Heck, and Congressman West. You know, we have
talked offline about some of these issues.
And so the real issue is the constraint of the Budget
Control Act mandates that we have to look across the broad
spectrum of sort of programs and activities. I think the
Secretary made an incredible effort to limit the impact on
personnel and benefits like TRICARE--90 percent of the savings
comes from other areas.
But we need it to be considered at the table, and so the
issue and the short answer to your question is that without the
adjustment in fees there, force structure impacts will be felt.
We are now 10 percent of the base DOD budget; if we continue to
inflate at what has really been a moderated rate of about 5.3
percent and the top line of the DOD budget comes down we become
an increasingly greater percentage of the Department of Defense
budget and then we really impact training, manning, and
equipping the force.
So I think the key to remember--issue to remember is that
the line leadership was at the table with the civilian
leadership, that the proportion of cuts in programs was driven
by the strategy with input from the commanders at all levels--
the combatant command [COCOM] commanders--understanding what
capabilities they needed to preserve, as the Secretary has
said. We are going to be a smaller but more agile force that
leverages technology to be formidable wherever we go.
But also, getting our fiscal house in order is in the
national security best interest, as well. And so I think, you
know, the issue is that without additional TRICARE adjustments
force structure will be impacted.
Mrs. Davis. Thank you. I think sometimes just trying to
remember, I think, for a lot of my colleagues who don't go
back, necessarily, to 2001, is the rise that we had in terms of
defense spending. We obviously needed to do that, but I think
that--I know my colleague asked the question, do we have any
other increases across the board--the reality is there--if you
compare that to other accounts that rose during that period
there are very few that even come close. And so obviously there
are some changes that are being suggested.
I think we all just are pretty possessive of the personnel
accounts and want to be sure that those are reasonable and that
it makes sense.
Very quickly if you could, I think the issue of military
retirement has come up, and I know the BRAC-like commission has
been suggested. The question really is, is that an area that we
need to be changing now? I mean, is that something that really
is going to make a difference in this budget or are there other
changes that are occurring that make a whole lot more sense
right now? And how strongly do you feel that their retirement
issues should be addressed?
Dr. Rooney. Actually, the retirement--there is nothing in
the fiscal year 2013 budget that accounts for any change in
retirement. So that isn't a budget holder even in there.
We are looking at retirement--believe we should look at
retirement as part of overall compensation. And it is the
opportunity for us to look and say, does the current system
work for what we feel is the force of the future? So there
isn't a preconceived notion that, you know, there is a
particular proposal out there that is better than anything
else. In fact, that is why we are taking the time, looking and
saying, ``If you change this what does that do to recruitment
and retention?'' So this is more of a do we have the right
tools in terms of overall compensation, and this is the time to
be able to look at that as opposed to it being something
necessarily driven by a budget.
Mrs. Davis. Thank you.
Mr. Wilson. And thank you, Mrs. Davis.
And thank you all for being here. I would like a follow-up,
if I could be provided in regard to Governor Baldacci--the
costs of creating his position, the pay for his--himself as an
individual, administrative costs, travel costs, support
personnel with pay, administrative and travel costs. If you all
could provide that to me I would appreciate it.
[The information referred to is retained in the
subcommittee files and can be viewed upon request.]
Mr. Wilson. And again, thank you for being here today.
And the subcommittee shall be adjourned.
[Whereupon, at 2:26 p.m., the subcommittee was adjourned.]
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A P P E N D I X
February 28, 2012
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
February 28, 2012
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[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
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QUESTIONS SUBMITTED BY MEMBERS POST HEARING
February 28, 2012
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QUESTIONS SUBMITTED BY MR. WILSON
Mr. Wilson. What specific efforts are being made to address suicide
and suicide prevention in the National Guard and Reserves? Is there an
opportunity for local entities such as universities and hospitals to
partner with local Guard units to combat the problem? Where are the
biggest gaps right now in suicide prevention outreach?
Dr. Rooney. There are several efforts underway to address suicide
amongst the National Guard and Reserves. First, the Services utilize
Suicide Prevention Program Mangers (SPPM) to oversee and inform suicide
prevention efforts. The Directors of Psychological Health (DPH) operate
to assess and refer those needing behavioral health services. The SPPMs
and the DPHs work closely together to ensure goals of the suicide
prevention program are supported by the proper amount of behavioral
health resources in a specific location. The Vets4Warriors Peer Support
Helpline is available 24/7 to all of the Reserve Components and their
families. It offers access to well trained veteran-peer supporters who
have access to behavioral health clinicians and community referral
networks. Reserve Component Service and family members can call, text,
or chat online with the Veterans Crisis Line, and Military OneSource.
The National Defense Authorization Act for FY 2012 (section 533)
requires the Secretary of Defense develop suicide prevention
information and resources in a cooperative effort with other entities.
DOD is accomplishing this goal with a focus on the Reserve Components
through its membership on the National Action Alliance, which is
creating a National Suicide Prevention Strategy. A particular focus for
this group is Partners In Care, which under the auspices of the
Veteran/Military Working Group has developed a pilot in 5 states to
involve the faith based organizations in supporting local Reserve
Component units by training chaplains. Once the pilot is complete and
best practices identified, plans are underway by DOD to expand to all
interested states and territories. Also through the National Action
Alliance, DOD has networked with organizations interested in reaching
Reserve Component members who are enrolled in higher education.
Reserve Affairs has instituted a Suicide Prevention and Resilience
Resource Inventory project to identify best practices, gaps,
redundancies, and unmet needs among the Reserve Components.
______
QUESTIONS SUBMITTED BY MRS. DAVIS
Mrs. Davis. The FY12 National Defense Authorization Act requires
the Services to treat graduates from non-traditional secondary schools
that meet State graduation requirements in the same manner as they
treat graduates of secondary schools for the purposes of recruitment
and enlistment. As a non-traditional secondary education program that
provide mentorship and education focus, the National Guard Youth
ChalleNGe program has been successful in increasing the high school
diploma or GED attainment of its participants by 29%. Under the change
in law, will the Department now recognize graduates from the Challenge
program as Tier 1 graduates? If not, why?
Dr. Rooney. The answer to this question will vary state by state.
The National Guard Youth ChalleNGe program offers many benefits to
youth--and key among those benefits for participants is the opportunity
for a second chance to earn a high school diploma or a GED Certificate.
The law addresses equal treatment for individuals, ``Covered
Graduates,'' who receive a diploma from a legally operating secondary
school or otherwise completes a program of secondary education in
compliance with the education laws of the State in which the person
resides. If a State official attests that a ChalleNGe participant is a
``Covered Graduate,'' then that individual will be given Tier 1
enlistment priority.
______
QUESTIONS SUBMITTED BY MR. JONES
Mr. Jones. I very much appreciate your forthright testimony that I
was told you recently gave before the Military Personnel Subcommittee.
Unfortunately, I was unable to attend. I have great sympathy for the
budget constraints with which our Country finds itself and certainly
with those constraints in the DOD budget. That being said, I am very
concerned about the proposed changes in cost sharing in the TRICARE
pharmacy program.
I strongly believe that TRICARE beneficiaries should not be
discouraged from using their local community pharmacy, but should be
given a fair choice. TRICARE beneficiaries strongly prefer local,
community pharmacies, despite strong incentives that already encourage
the use of mail order. Rather than denying patient choice, I believe
the department should implement many of the best practices in use in
the private sector to manage prescription drug costs, such as
increasing generic utilization and improving medication adherence.
Other than driving beneficiaries to use mail order, can you tell me
what steps the department is taking to control prescription drug costs?
Additionally, I would like to see the cost data that the DOD uses
that shows that mail ordering drugs is more cost effective than
purchasing them from a drug store? Thank you very much for your
consideration and your outstanding service to our Nation.
Secretary Woodson. We agree that TRICARE beneficiaries should have
a choice on where their prescriptions are filled. Beneficiaries
continue to have the option of filling prescriptions at a military
treatment facility (MTF) pharmacy, a retail network pharmacy, through
TRICARE Pharmacy Home Delivery or a non-network retail pharmacy.
Over the last several years, Department of Defense (DOD) has made
significant efforts to control rising pharmacy benefit costs. The
strategies and efforts pursued have been drawn from private sector best
business practices, national trends, Congressional mandates,
professional consultants, and independent studies. Each effort has had
an effect in controlling the rise in pharmacy costs.
The TRICARE pharmacy benefit, by regulation and consistent with
industry practice, has a long standing mandatory generic use policy.
The DOD requires that prescriptions be filled with generic medications
when generics are available. When a generic equivalent exists, the
brand name drug is only dispensed if the prescribing physician provides
clinical justification for use of the brand name drug and approval is
granted. Approximately 71% of prescriptions for DOD beneficiaries are
filled with generics. The remainder prescriptions either have no
generic equivalent or have documented clinical justifications.
Many programs and policies surrounding formulary management within
TRICARE closely mirror what commercial plans do to manage drug
benefits. For example, we have active utilization management programs
to encourage the use of cost effective drug therapy through the tiered
formulary. Other formulary tools common with commercial practices are
step-therapy, mandatory generic use, and prior authorizations. In
addition, the Federal Ceiling Price (FCP) refunds collected for brand
name prescriptions filled through network retail pharmacies are
successful in further lowering drug costs. Substantial additional cost
avoidance, over and above the FCP refunds, is obtained by DOD as a
result of the ongoing negotiations with the pharmaceutical industry for
additional voluntary refunds in return for preferential placement of
their products on the TRICARE Uniform Formulary. The recent copay
changes have also added to our negotiation leverage with the
pharmaceutical manufacturers.
A broad range of Medication Therapy Management (MTM) services are
already provided by DOD. MTM is a component of the Patient Centered
Medical Home (PCMH) model which is being implemented throughout the
MTFs. The PCMH model enables clinical pharmacists to contribute to the
healthcare team through services focused on medication management in
improving patient clinical outcomes while lowering total healthcare
costs. In addition, the TRICARE managed care contractors provide
disease management services and case management services where TRICARE
determines it to be necessary to achieve cost savings along with
desired outcomes.
Based on DOD analysis of maintenance medications, which comprised
19.9M prescriptions filled during 4QFY11 at all three points of service
(MTF, Retail, and Mail), the data show that the mail order and MTF
venues to be more cost effective points of service. The results showed
the mean cost per 90-day supply of a market basket of maintenance
medications was 19% lower through either the mail order program or
military pharmacies, compared to the retail pharmacy network.
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QUESTIONS SUBMITTED BY MS. BORDALLO
Ms. Bordallo. Of the slightly less than 1 million DOD civilians,
how many have volunteered to go into harm's way since 2001 and deployed
in support our men and women in theater; how many DOD civilians are
currently overseas in theater or other forward deployed areas; of the
slightly less than 1 million DOD civilians, how many ``sit behind a
desk''?; and how many DOD civilians fatalities have occurred as a
result of Operations Enduring and Iraqi Freedom? How many wounded?
Dr. Rooney. Since 2001 approximately 52,000 Department of Defense
(DOD) civilian employees have volunteered for deployments in the
Central Command area of responsibility (CENTCOM AOR) to provide support
to our men and women in theater. Currently there are approximately
4,500 civilians deployed in the CENTCOM AOR to support on-going
operations.
The DOD currently employs approximately 750,000 appropriated fund
employees and approximately 130,000 non-appropriated fund employees in
diverse occupations ranging from doctors and nurses to fire fighters,
electricians and mechanics to budget analysts, contracting specialists,
and attorneys. The Department does not maintain the number of primarily
sedentary occupations in any database.
During Operations Enduring Freedom and Iraqi Freedom there have
been 14 DOD civilian fatalities. Twelve of those fatalities occurred in
Iraq (11 appropriated fund employees, 1 non-appropriated fund employee)
and two fatalities occurred in Afghanistan (2 appropriated fund
employees). The Department does not track the manner in which non fatal
injuries occur.
Ms. Bordallo. You mentioned civilian reductions of 7,000 across DOD
yet the Air Force reports that they have nearly 16,000 civilians they
are reducing, and that's just the Air Force. How do you reconcile these
figures? Do you believe that reductions in the civilian workforce
should mirror and be proportionate to those in the uniformed workforce?
How about contractor support to the warfighter? Should reductions in
area be proportionate, based on work and deliverables, to other
reductions in the Total Force?
Dr. Rooney. DOD-wide the aggregate reduction in civilians reflected
in the fiscal year 2013 budget is approximately 7,000. However, in the
Air Force's case, the reductions they are implementing total
approximately 16,500 from the service's fiscal year 2011 baseline as a
result of efficiencies directed in the fiscal year 2012 budget. To
achieve this reduction of approximately 9%, the Air Force conducted a
strategic evaluation of their civilian workforce to realign civilian
resources from lower priority functions to higher priority mission
areas, such as nuclear, intelligence, and cyber. Overall, reductions in
the Total Force are correlated to workload and mission prioritization,
as well as force structure and overseas posture changes. The fiscal
year 2013 budget request reflects our best judgment today and
represents a carefully coordinated approach based on the Department's
strategy and policy that balances operational needs and fiscal reality.
Ms. Bordallo. Why would Congress consider any potential changes to
recruiting and retention incentives such as military retirement and
health care or reductions to essential training accounts when Defense
can't identify the cost of what you pay for in contracted services? So
what are you doing to reduce contracted services and work requirements
instead of just reducing dollars? If you are only reducing dollars then
you are likely setting up conditions to default to contractors in light
of the current civilian personnel constraints.
Dr. Rooney. The Department takes very seriously its commitments to
the All-Volunteer Force, and any proposed reforms to benefits would be
well-reasoned and would be designed to ``keep faith'' with those who
are serving, and have served. Additionally, any proposed reductions to
training accounts are based on proposed changes to the Department's
strategy, overseas posture and commitments, and force structure. The
Department is very committed to increasing visibility and accounting of
contracted services, and reducing spending in areas that are not
directly linked to the strategy, priorities, and force structure of the
Department. To that end, in November 2011, the Department submitted to
the Congressional defense committees a comprehensive plan that
delineated both short- and long-term actions related to the statutorily
required inventory and review of contracts for services. As we
implement this plan, we will be able to better understand what we spend
on contracted services and the true level of effort associated with
those services. Having comprehensive information on contracted services
that can be translated to units of measure that are comparable to the
other elements of our workforce (military and civilian) is critical to
making improved value and planning judgments.
Ms. Bordallo. In November 2011, you co-signed a comprehensive plan
to document contractor FTE and comply with requirements set forth in
title 10 for the inventory of contracts for services. How are those
efforts progressing?
Dr. Rooney. The plan submitted in November 2011 included both
short- and long-term actions. As delineated in that plan, the
Department issued guidance on December 29, 2011 directing the
preparation of the fiscal year 2011 inventory of contracts for
services. That guidance was a significant step forward in meeting the
requirements of title 10, as it broadened the scope of responsibility
to all Components of the Department that rely on contracted support,
and delineated the requirements for reviewing contracted services in
accordance with the statutory requirements. Based on this guidance, we
are working with all DOD organizations towards completion of a more
accurate and comprehensive data set to be submitted this summer.
Additionally, together with the staff of the Department's Deputy
Chief Management Officer, we are working towards implementing the
Army's ``Contractor Manpower Reporting Application'' across the entire
DOD-enterprise in order to leverage established processes, lessons
learned, and best practices to comply with the law in the most cost
effective and efficient manner.
Long-term actions delineated in the November 2011 plan were
contingent on approval of an emergency waiver to the Paperwork
Reduction Act, which the Department submitted to the Office of
Management and Budget in December 2011. As of mid-March, the Department
has not received the emergency waiver and is unable to address efforts
beyond the short-term until a waiver is granted.
Ms. Bordallo. The Department requested emergency relief from the
Paperwork Reduction Act in order to move forward, after four plus years
of non-compliance, with the Inventory of Contracts for Services.
However, OMB has failed to act on that request. What is the impact to
the Department's progress, and the fiscal implications, of not getting
the emergency filing approved?
Dr. Rooney. As of early April, the Department has not received the
emergency waiver to the Paperwork Reduction Act (PRA) as requested from
OMB in December 2011 and is proceeding with the full PRA filing process
that will take an additional 2-3 months. While the Department continues
to press forward and will submit the annual Inventory of Contracts for
Services (ICS) in June as required by statute, this submission will
include contractor full time equivalents (CFTE) calculated from
obligated dollar amounts and an Army factor derived from data reported
by their contractors, as opposed to on actual direct labor hours as
required by statute. Without the emergency waiver to the PRA as
requested, the Department is delayed by at least one more year to
demonstrably improve the ICS, and at least two years from full
compliance with the fiscal year 2011 NDAA changes to section 2330a of
title 10 requiring that CFTE be calculated based on direct labor hours
and other data collected from private sector providers.
Until the PRA waiver is granted, the Department cannot take steps
to modify statements of work to collect the required data. Most DOD
Components had planned to begin modifying statements of work this
fiscal year. As a result of the delay, contracts will likely not begin
being modified until fiscal year 2013, resulting in a delay until
fiscal year 2014 of the first real data collection.
While the fiscal implications are challenging to quantify, they do
exist and are related to Components' ability to improve planning for
increasingly scarce resources. Delays in collecting direct labor hours
prevent the Department from getting an accurate accounting of the level
of effort for contracted services, which would facilitate assessing
those services using a common unit of measure, full-time equivalents.
Without this level of fidelity, making value-based decisions and trade-
offs by distinguishing between direct labor hours supporting the
mission and indirect costs, overhead, and other costs is adversely
impacted. For example, the Army, which has had the necessary PRA waiver
in place for over 5 years, has found that approximately half of all
Army contract dollars in the base budget go to non-labor costs, such as
overhead and profit, rather than direct execution of mission and
workload. Such increased fidelity has enabled the Army to more
appropriately realign limited resources to its more pressing
priorities.
Ms. Bordallo. Secretary Panetta has stated that the Department is
looking at reductions in contracted services as part of the $60B in
savings. Of the $60 billion, how much exactly is associated with
civilian personnel and how much is service support contractors--do you
believe this is an appropriate ratio give then ballooning growth over
the past 10 years in contracted services?
Dr. Rooney. Of the $60 billion, approximately $13.2 billion (22%)
is attributed to better contracting practices and reduced spending on
contracted services. As governance plans for these acquisition
initiatives are fine-tuned, adjustments to these savings may occur. The
total reduction associated with the civilian workforce is approximately
$11.2 billion. Most of this ($10.4 billion or 92%) is attributable to
the adjustment to the civilian workforce pay raise from 2.3 percent to
0.5 percent. The FY 2013 budget reflects a balanced workforce that
decreases spending on military personnel, civilian full-time
equivalents, and spending for contract services. It reflects our best
judgment today and represents a carefully coordinated approach based on
the Department's strategy and policy that balances operational needs
and fiscal reality. The Department remains committed to meeting its
statutory obligations to annually review missions, functions, and
workforce composition, including reliance on contracted services, and
to ensure the workforce is appropriately balanced and aligned to our
most critical priorities.
Ms. Bordallo. Secretary Panetta has stated that the Department
needs to reduce the large numbers of contractors. Personnel & Readiness
is charged with overseeing and implementing the Department's workforce
mix and in-sourcing policies--do you support in-sourcing as one way to
reduce reliance on contractors?
Dr. Rooney. Yes, in-sourcing is one of many tools available to
managers to shape the workforce, including reducing inappropriate or
excessive reliance on contracted services. I support in-sourcing of
contracted services in order to: ensure inherently government, closely
associated, or critical work is performed by government civilians or
military; maintain management control and oversight of key functions
and workload in support of our warfighter; and deliver services in the
most cost efficient manner possible.
Ms. Bordallo. If the Department is holding to FY10 civilian levels
and in fact, the FY13 budget further reduces the civilian workforce,
how can DOD organizations in-source if it is more cost effective? What
recourse, in a particular year of execution, does a manager or
Commander have if he wishes to in-source a contract in order to achieve
fiscal savings?
Dr. Rooney. The Department remains committed to its statutory
obligations under title 10 to annually review contracted services and
ensure that they are being performed in the most cost effective manner
possible. Where appropriate, DOD organizations may immediately in-
source by absorbing work into existing government positions by refining
duties or requirements; establishing new positions to perform
contracted services by eliminating or shifting equivalent existing
manpower resources (personnel) from lower priority activities; or on a
case-by-case basis, requesting an exception to their existing civilian
levels. To ensure increasingly constrained resources are allocated
appropriately and with consideration for organizational mission
priorities, the Department is currently assessing the process by which
the civilian workforce is administered in the year of execution in
order to increase management flexibilities at the mission level.
Ms. Bordallo. What if the work is found to be inherently
governmental or otherwise should be performed by civilians, instead of
contractors? What flexibility is there to immediately convert that work
to civilian performance without having to ask permission to add
civilians or reduce staffing in other equally important missions?
Dr. Rooney. The Department remains committed to its statutory
obligations under title 10 to annually review contracted services and
ensure appropriate performance of functions that are inherently
governmental, closely associated, or otherwise exempted from private
sector performance (to mitigate risk, ensure continuity of operations,
build internal capability, meet and maintain readiness requirements,
etc). Contracted services that meet the necessary criteria should be
immediately divested, if of low priority, or in-sourced to government
performance. Where appropriate, DOD organizations may immediately in-
source by absorbing work into existing government positions by refining
duties or requirements; establishing new positions to perform
contracted services by eliminating or shifting equivalent existing
manpower resources (personnel) from lower priority activities; or on a
case-by-case basis, requesting an exception to their civilian levels.
To ensure increasingly constrained resources are allocated
appropriately and with consideration for organizational mission
priorities, the Department is currently assessing the process by which
the civilian workforce is administered in order to increase management
flexibilities at the mission level.
Ms. Bordallo. How does the DOD's budget request reconcile with
legislative language set forth in Division A, Section 8012 of
Consolidated Appropriations Act of 2012 (P.L. 112-74) which states that
``. . . during fiscal year 2012, the civilian personnel of the
Department of Defense may not be managed on the basis of any end-
strength, and the management of such personnel during that fiscal year
shall not be subject to any constraint or limitation (known as an end-
strength)'', and more specifically, that the fiscal year 2013 budget
request be prepared and submitted to the Congress as if this provision
were effective with regard to fiscal year 2013?
Dr. Rooney. The DOD budget request complies with Section 8012 of
the Consolidated Appropriations Act of 2012 (P.L. 112-74). Defense
civilian personnel are not managed on the basis of end-strength. The
Defense budget is managed based on executive and legislative guidance,
strategic plans, resource levels, workload, and mission requirements.
As required by the Congress, the DOD documents the civilian personnel
levels supported in the budget request in the OP-8 exhibit. The OP-8
reflects the specific funding for civilian personnel, as well as the
number of full-time equivalents (FTEs) and end-strength.
Ms. Bordallo. President Obama has made reducing reliance on
contractors and rebalancing the workforce a major management initiative
of his Administration. Does the Department's FY13 budget request and
reductions in the civilian workforce reflect an opinion that the
Department has achieved an appropriately balanced workforce?
Dr. Rooney. The Department's ``sourcing'' of functions and work
among military, civilian, and contracted services must be consistent
with workload requirements, funding availability, readiness and
management needs. The FY 2013 budget request, and associated civilian
workforce reductions, reflects our best judgment today and represents a
carefully coordinated approach based on the Department's strategy and
policy that balances operational needs and fiscal reality.
Ms. Bordallo. In FY10, the Department added 17,000 new positions as
a result of in-sourcing contracted services. Can you tell us what that
number was in FY2011? And to what extent will in-sourcing continue?
Dr. Rooney. In fiscal year 2011, DOD organizations reported that
they established nearly 11,000 civilian positions as a result of in-
sourcing contracted services. The Department remains committed to
meeting its statutory obligations to annually inventory and review
contracted services and identifying those that are no longer required
or are inappropriately aligned to the private sector. In-sourcing
remains a very effective and critical tool for the Department to
rebalance its workforce, realign inherently governmental and other
critical work to government performance from contract support, and, in
many instances, to generate resource efficiencies.
Ms. Bordallo. We've heard a lot about decreases and reductions in
contracted services, yet when we look at the figures and talk to the
field, what is evident is that reductions in contracts are very
narrowly defined and limited to only a miniscule subset of what the
Department actually purchases in terms of services. Why has the
Department chosen to levy across the board reductions to only military
E/S and civilian personnel without considering wholesale reductions to
more expensive contractors?
Dr. Rooney. The fiscal year 2013 budget reflects a balanced
workforce that decreases spending on military end-strength, civilian
personnel, and spending for contract services. It reflects our best
judgment today and represents a carefully coordinated approach based on
the Department's strategy and policy that balances operational needs
and fiscal reality. Proposed reductions in military end-strength are
not across the board but are linked to declines in our current overseas
commitments; revised strategy, posture and operational planning; and
changes to our force structure. Similarly, the proposed reductions in
civilian personnel and contracted services are predominantly associated
with ongoing organizational assessments and mission/function
prioritization in an effort to reduce administrative workload.
Contracted services are a key enabler of the war-fighter and a source
of overall infrastructure operations, and in many instances provide
cost effective support. The Department remains committed to meeting its
statutory obligations to annually review services provided by contract,
ensuring that they are aligned to our most pressing priorities and
continue to be the most cost effective means of delivering such
support. As part of such reviews, some services may be identified for
in-sourcing because they can be more cost effectively delivered by
government personnel, while some services may be determined to be no
longer required or of low priority and, as such, be eliminated or
reduced in scope. In other instances, continued contracted support may
be the most appropriate and cost effective source of delivering
services.
Ms. Bordallo. What assurances can you give me that as wide-spread
civilian reductions are occurring across the military departments work
is not shifting illegally to contract performance?
Dr. Rooney. Reductions in the civilian workforce are correlated to
workload and mission prioritization. The Department is committed to
ensuring that workload associated with civilian reductions does not
shift to contract but is eliminated or realigned to other civilians. On
December 1, 2011, the Under Secretary of Defense for Personnel and
Readiness issued guidance to the Department reiterating the statutory
prohibition on conversion of work to contracts. This guidance directed
vigilance in preventing the inappropriate conversion of work to
contract performance, particularly as the Department adapted to
declining budgets. Specifically, managers and Commanders were reminded
of their obligations to preclude such illegal shifting of work as they
implemented the results of organizational assessments, continued to
assess missions and functions in terms of priority, and revisited both
their civilian and military force structures. Through the use of our
on-going communications with national labor leadership, the Department
has been able to look into allegations of improper workload shifts and,
if justified, take corrective actions.
In addition, the DOD has established an internal, multi-level
governance process for monitoring implementation of all efficiencies,
to include those resulting in civilian workforce reductions. Any issue,
such as illegal shifting of work, can be addressed via this governance
process for adjudication. If circumstances warrant, an exception
request to increase the civilian workforce to meet workload
requirements can be made.
Long-term, as the Department makes improvements to its Inventory of
Contracts for Services, as required by title 10, we will have increased
visibility and accountability into such contracts. Specifically,
improvements currently underway will enable the Department to more
accurately identify contracted level of effort based on direct labor
hours and associated data. This increased fidelity into contracted
services will serve as another critical tool for the Department to
monitor and preclude possible workload realignment.
Ms. Bordallo. What processes are in place to ensure the workload
associated with reductions being made in the civilian workforce is in
fact ceasing, as opposed to being absorbed by other labor sources such
as contractors or military personnel?
Dr. Rooney. Reductions in the civilian workforce are correlated to
workload and mission prioritization. The Department is committed to
ensuring that workload associated with civilian reductions does not
shift to other sectors of the Total Force, such as military or contract
performance.
To that end, on December 1, 2011, the Under Secretary of Defense
for Personnel and Readiness issued guidance to the Department
reiterating the statutory prohibition on conversion of work to
contracts. This guidance directed vigilance in preventing the
inappropriate conversion of work to contract performance, particularly
as the Department adapted to declining budgets and operating in a
constrained fiscal environment. Specifically, managers and Commanders
were reminded of their obligations to preclude such illegal shifting of
work as they implemented the results of organizational assessments,
continued to assess missions and functions in terms of priority, and
revisited both their civilian and military force structures.
Additionally, on March, 2, 2012, the Under Secretary of Defense for
Personnel and Readiness issued guidance to the Department regarding the
use of ``borrowed'' or ``repurposed'' military manpower. This guidance
is intended to ensure that amidst declining operational tempos for our
military personnel and, as civilian reductions associated with
efficiencies are implemented, military personnel are not
inappropriately utilized, particularly in a manner that may degrade
unit readiness.
Through the use of our on-going communications with national labor
leadership, the Department has been able to look into allegations of
improper workload shifts resulting from civilian workforce reductions
and, if justified, take corrective actions. In addition, the DOD has
established an internal, multi-level governance process for monitoring
implementation of all efficiencies, to include those resulting in
civilian workforce reductions. Any issue, such as inappropriate
shifting of work, can be addressed via this governance process for
adjudication. If circumstances warrant, an exception request to
increase the civilian workforce to meet workload requirements can be
made.
Ms. Bordallo. There was a lot of discussion last year about the
``exceptions'' to the FY10 civilian levels Secretary Gates' mandated.
What role does Personnel & Readiness have in the exceptions process and
is it consistent with statutory requirements set forth for Personnel &
Readiness in title 10?
Dr. Rooney. Personnel and Readiness is a key contributor to the
process of reviewing and making recommendations to the Deputy Secretary
of Defense for approving growth in the civilian workforce. Requests for
civilian growth must be based, in part, on the workforce mix criteria
policy issued by Personnel & Readiness. This workforce mix criteria,
founded in statutory and regulatory considerations, drives the
``sourcing'' determination of work between military, civilian, and
contracted services and is a key factor that justifies civilian growth
across the Department. Such determinations must be consistent with
workload requirements, funding availability, readiness and management
needs, as well as applicable laws and statute. Personnel & Readiness
works together with other elements of the Secretary's and Department's
leadership team to deliver a balanced, flexible, responsive workforce
that: is the appropriate mix of military, civilian, and contracted
support; mitigates risk, ensures continuity of operations, and promotes
organic knowledge base; and ensures mission requirements are met most
cost effectively and efficiently. Where necessary to deliver that
workforce, exceptions to current authorized civilian levels are
considered and, if appropriate, granted.
Ms. Bordallo. To what extent have the existing data sets available
to Department planners, specifically the Department's annual inventory
of inherently governmental and commercial activities, contributed to
the functional streamlining, organizational realignments, workforce
shaping decisions, and civilian personnel reductions reflected in last
year's efficiencies initiative and continued in this year's budget?
Dr. Rooney. The efficiencies initiatives begun under Secretary
Gates, and continued in this year's budget, were implemented based on
guidance to conduct organizational assessments and mission/function
prioritization. This guidance required DOD Components to: baseline
their organizations; assess and prioritize missions; eliminate
duplication; ensure workload distribution; and submit recommendations
for organization restructuring and reallocation of manpower, including
workforce reductions.
While the guidance did not specifically require DOD Components use
their annual inventory of inherently governmental and commercial
activities, it is one of many data sets and workload quantification
sources that DOD Components had available as they conducted their
assessments. The inventory provides DOD Components with visibility into
their respective workforce and organizations based on functional
descriptors, manpower mix criteria, location of services, and specific
units and assignment of billets. The extent to which individual DOD
Components relied on their respective inventories of inherently
governmental and commercial activities to inform their efficiencies and
personnel reductions would vary based on the processes they undertook
and other available data sources.
Ms. Bordallo. In achieving the right mix for the Total Force, how
does the Department use the annual inventory of inherently governmental
and commercial activities, and associated manpower mix determinations,
to identify the civilian workforce reductions reflected in the past two
budgets?
Dr. Rooney. The civilian workforce reductions reflected in the past
two budgets demonstrate the Department's commitment to challenge
workload requirements and more appropriately size its workforce to meet
our most pressing and critical priorities. The reductions also ensure
an appropriate Total Force mix while considering changes in our
overseas commitments and our force structure. The annual inventory of
inherently governmental and commercial activities is one of many data
sets and workload quantification sources that DOD components had
available as they shape their workforces, develop their budget
proposals, and identify proposed reductions. The inventory provides DOD
components with visibility into their respective workforces and
organizations based on functional descriptors, manpower mix criteria,
location of services, and specific units and assignment of billets.
Ms. Bordallo. As civilian personnel reductions are being executed
across the Department, is the workload and functions associated with
those being tracked as eliminated or divested through the annual
inventory of functions?
Dr. Rooney. The Department is tracking Component efficiency
initiatives implementation using the Defense Enterprise Performance
Management System (DEPMS). This includes monitoring compliance with the
direction to maintain, with certain exceptions, civilian full-time
equivalent authorizations at fiscal year 2010 levels and any attendant
civilian personnel reductions. In addition, the Department's guidance
for the annual inventory of inherently governmental and commercial
functions, issued 24 October 2011, required DOD Components to identify
and provide rationale for all major changes, to both civilian and
military workload, ``to include identification of any difference
resulting from the implementation of organizational efficiencies and
budgetary reductions as a result of the Department's efforts to
streamline business operations, reduce redundancies and/or overhead
functions, and maximize shared services.'' DOD Components are required
to submit their data sets for DOD review beginning in April 2012.
Ms. Bordallo. What is the status of DOD's insourcing effort? How
many positions were added to the in-house workforce in FY10 and in
FY11? For each year, how many of the positions were added in order to
save money for taxpayers and how many in order to better serve our
warfighters?
Dr. Rooney. The Department continues to execute its statutory
requirement to review contracted services and identify those that
should be in-sourced to government performance. In-sourcing remains a
very effective and critical tool for the Department to rebalance its
workforce, realign inherently governmental and other critical work to
government performance (from contract support), and, in many instances,
to generate resource efficiencies.
In FY10, the Department added nearly 17,000 new government
positions as a result of in-sourcing. Of those nearly 17,000 positions,
9% were established because the contracted service was found to be
inherently governmental, 41% were because the work was determined to be
exempted from private sector performance (to mitigate risk, ensure
continuity of operations, build internal capability, meet and maintain
readiness requirements, etc.), and 50% were based solely on cost
savings.
In FY11, the Department added nearly 11,000 new government
positions as a result of in-sourcing. Of these, 6% were because the
work was inherently governmental, 13% was because the work was
exempted, and 81% were based solely on cost savings.
Ms. Bordallo. Is DOD's official position that, ``Insourcing has
been, and continues to be, a very effective tool for the Department to
rebalance the workforce, realign inherently governmental and other
critical work to government performance (from contract support), and in
many instances to generate resource efficiencies''?
Dr. Rooney. Yes, and the Department remains committed to using the
process of in-sourcing as an integral part of its Total Force
management strategy to deliver a balanced, flexible, responsive
workforce that is the appropriate mix of military, civilian, and
contracted support while mitigating risk, ensuring continuity of
operations, promoting organic knowledge base, and ensuring mission
requirements are met most cost effectively and efficiently.
Ms. Bordallo. A recent GAO report (12-319) seems to provide some
much need context to a remark made by former Secretary Gates on
insourcing: ``In August 2010, the Secretary of Defense stated that he
was not satisfied with the department's progress in reducing over-
reliance on contractors. Representatives of (Personnel & Readiness) and
(the Comptroller) told us that although DOD avoided $900 million in
costs for contracted support services in fiscal year 2010 due to the
budget decision to reduce funds associated with insourcing, total
spending across all categories of service contracts increased in fiscal
year 2010 by about $4.1 billion''. Is it correct to say that rather
than deprecate insourcing during his press conference, Secretary Gates
was actually lamenting that insourcing, despite savings of almost $1
billion in FY10, could not offset the ever-escalating costs of service
contractors.
Dr. Rooney. I cannot speculate on the message or spirit of
Secretary Gates' remarks. However, in-sourcing was not intended to
offset cost of service contracts, but rather is one process by which
the Department can rebalance its workforce, realign inherently
governmental and other critical work to government performance (from
contract support), and in certain instances, generate resource
efficiencies. Data from across the Department indicates that on a case-
by-case basis, reductions in operating costs or fiscal efficiencies are
gained through in-sourcing certain types of services or functions. As
noted by the GAO, these savings are generally not visible at an
aggregate level but rather materialize in the form of resource
realignment at the field/command level to other priorities or
requirements. Certain commercial functions can be more cost effectively
delivered by the government and are appropriate for in-sourcing, while
in other instances, a cost analysis may demonstrate that continued
contract performance is appropriate.
Ms. Bordallo. Should DOD be denied cost savings from insourcing
where work is being performed by small business contractors, even if
in-house performance would result in savings to taxpayers?
Dr. Rooney. No, if in-sourcing services provided by small business
can generate savings for the Department, then consistent with title 10
obligations and our fiduciary responsibilities to the taxpayer, such
services should be considered for potential in-sourcing. The Department
values the contributions made by small businesses in support of our
mission, and we are committed to meeting our small business goals.
Furthermore, we follow the requirement set forth in Office of Federal
Procurement Policy Letter 11-01, Performance of Inherently Governmental
and Critical Functions, to place a lower priority on reviewing work
performed by small businesses when the work is not inherently
governmental and where continued contract performance does not put the
agency at risk of losing control of its mission or operations. However,
the Department is committed to ensuring its workload is met in the most
cost effective and efficient manner possible and, in some instances,
which may result in the in-sourcing of services performed by small
businesses.
Ms. Bordallo. Do small business contractors currently perform
functions that are inherently governmental, closely associated with
inherently governmental function, or critical? Why should DOD not be
denied the capacity to insource such functions?
Dr. Rooney. Consistent with statute, federal policy, DOD guidance,
and federal acquisition regulations, the Department has processes and
safeguards in place to preclude the contracting of functions that are
inherently governmental or otherwise exempted from private sector
performance (to mitigate risk, ensure continuity of operations, build
internal capability, meet and maintain readiness requirements, etc).
Functions that are determined to be closely associated with inherently
governmental or critical in nature may, under certain circumstances, be
contracted for provided there are sufficient management and contract
oversight mechanisms in place to ensure the agency is not at risk of
losing control of its mission or operations. In instances where
inherently governmental functions, or functions otherwise exempt from
private sector performance, are found to be performed under contract,
that work must be immediately divested or in-sourced to government
performance, regardless of whether that work is performed by a large or
small business. To the maximum extent practical, as dictated by title
10 requirements, the Department is reducing the level of contracted
support performing closely associated with inherently governmental or
critical workload. This may include workload performed by small
businesses; but a lower priority is placed on such work where continued
contract performance does not put the agency at risk of losing control
of its mission or operations.
Ms. Bordallo. Is there evidence to indicate or suggest that DOD's
insourcing is having a disproportionately adverse impact on small
business contractors? Is there anything in the insourcing law or the
DOD regulation carrying out that law that would single out, target, or
disproportionately adversely impact small business contractors?
Dr. Rooney. No, there is currently no data that would indicate a
disproportionate impact on small businesses as a result of in-sourcing.
In fact, as reported by DOD Components, of the nearly 17,000 government
positions established as a result of in-sourcing in fiscal year 2010,
less than 1,000 (approx. 6%) were the result of in-sourcing a
contracted service where the prime contractor was a small business. The
Department values the contributions made by small businesses in support
of our mission, and we are committed to meeting our small business
goals. There is nothing in current law, regulation or DOD policy that
targets small businesses for in-sourcing. In fact, the Department
follows the requirement set forth in Office of Federal Procurement
Policy Letter 11-01, Performance of Inherently Governmental and
Critical Functions, to place a lower priority on reviewing work
performed by small businesses when the work is not inherently
governmental and where continued contract performance does not put the
agency at risk of losing control of its mission or operations.
Ms. Bordallo. What precautions does DOD take to ensure that
insourcing does not have a disproportionate impact on small business
contractors? Is it necessary for an advocate for small business
contractors or even a ``breakout procurement center representative'' to
participate in any session or planning process and reviewing any
documents related to insourcing from a small business contractor in
order to prevent a disproportionately adverse impact on small business
contractors from DOD's insourcing? Are any other interest groups in
sourcing and procurement represented in DOD's decision-making process?
For example, do advocates for or representatives of federal employees
participate in sourcing and procurement decisions that might adversely
affect federal employees?
Dr. Rooney. The Department values the contributions made by small
businesses in support of our mission, and we are committed to meeting
our small business goals. Consistent with requirements set forth in
Office of Federal Procurement Policy Letter 11-01, Performance of
Inherently Governmental and Critical Functions, DOD Components place a
lower priority on reviewing work performed by small businesses when the
work is not inherently governmental and where continued contract
performance does not put the agency at risk of losing control of its
mission or operations. However, the Department remains committed to its
statutory obligations under title 10 to annually inventory and review
contracted services, including those delivered by small businesses. In
doing so, the Department ensures appropriate performance of functions
that are inherently governmental, closely associated, or otherwise
exempted from private sector performance (to mitigate risk, ensure
continuity of operations, build internal capability, meet and maintain
readiness requirements, etc). Where necessary and appropriate,
contracted services may be in-sourced to government performance. This
is a process that requires inputs and collaboration among many
different stakeholders, including the financial management/budget,
manpower, personnel, and procurement/acquisition (including small
business advocacy as appropriate) communities.
Ms. Bordallo. Would Section 302 of H.R. 3893 allow contractors to
litigate agencies' determinations that certain functions should be
insourced for performance reasons, e.g., that the functions are
inherently governmental, ``closely associated'', or critical, i.e., are
too important or sensitive to be performed by contractors? Would there
be any precedents for substituting a court's opinion for that of the
executive branch in such instances? What are the department's views of
such a change? On average, how much longer would decisions whether to
insource, whether for cost or performance reasons, take if Section 302
became law? Do federal employees have legal standing to challenge
agencies' outsourcing decisions in federal court? Do federal employees
have any legal standing to challenge agencies' insourcing decisions in
federal court? Would H.R. 3893 provide federal employees and small
business contractors with the same legal standing in the insourcing
context?
Dr. Rooney. Whether section 302 of HR 3893, if enacted into law,
would allow contractors to litigate agency determinations as described
is a matter of judicial interpretation of both legal standing and
executive agency discretion. The Department cannot speculate on the
judicial branch's potential interpretation of section 302. As a matter
of policy, executive level federal agencies have historically had broad
discretion in determining their own requirements and how these
requirements will be met, whether with government employees or by
contracting for the work. In exercising this discretion, the agency
must make any such decisions in accordance with agency guidelines,
applicable statutes, and federal regulations. If an agency fails to
abide by its own guidelines or the law, then parties with standing
could potentially litigate the actions. Even in instances where the
agency has followed its own guidelines and the law, contractors could
still seek to litigate the agency's determination. Presumably,
contractors with legal standing could be given an opportunity to
challenge a broad range of issues that have historically been based on
executive policy and discretion. This could potentially include in-
sourcing decisions that must be subjective in nature based on a variety
of circumstances and an exercise of discretion, such as determinations
of inherently governmental, closely associated, or critical.
Designations of specific functions as inherently governmental in
judicial decisions would have the force of law, at least within the
jurisdictions where the decisions are precedent and for so long as the
decisions are not overturned. However, to date, the Department has no
knowledge of any court overturning an agency's in-sourcing decision,
and the cases that have been brought have not progressed beyond
preliminary questions like which court has jurisdiction to provide
relief for improper in-sourcing decisions and whether the plaintiff has
standing to bring the challenge. Absent interagency coordination and
clearance by the Office of Management and Budget (OMB), as required by
OMB Circular A-19, the Department may not comment on the proposed
legislation at this time.
The Department cannot predict the effect section 302 may have, if
it were enacted, on the time it takes to in-source a contracted
service. Given standing, a contractor could foreseeably pursue a number
of courses of actions, including recourse to GAO, federal circuit
court, and court of federal claims. Depending on a number of factors
that fall under the jurisdictional purview of those forums, times to
resolve and adjudicate could vary from weeks to years, factoring in
appeals and filings with higher forums.
Under section 3551 of title 31, United States Code, federal
employees have limited standing to file a protest with the GAO related
to outsourcing decisions as part of a public-private competition
conducted under OMB Circular A-76. Representatives of federal employees
may also have standing with the United States Court of Federal Claims
under section 1491 of title 28, United States Code. In both these
instances, the standing afforded federal employee representatives is
related to public-private competition conducted under OMB Circular A-76
and in accordance with section 2461 of title 10, United States Code.
Such public-private competitions are expressly prohibited for the
purposes of in-sourcing determinations per section 2463 of title 10,
United States Code.
Under Article III of the Constitution, plaintiffs have standing if
(1) they allege an injury that is concrete, particularized, and actual
or imminent, instead of conjectural or hypothetical (injury-in-fact);
(2) the alleged injury is sufficiently traceable to the defendant's
challenged action (causal connection); and (3) the requested relief
will likely redress the alleged injury (redressability). In addition to
having the burden of showing Article III standing, under the
Administrative Procedure Act plaintiffs must also demonstrate
prudential standing by establishing that the alleged injury falls
within the zone of interests protected by the statute in question.
Historically, the zone-of-interests test has generally led to the
dismissal of federal employee suits challenging outsourcing decisions.
If the federal employees can show that they are within the zone of
interests protected by the statute in question that governs an in-
sourcing decision, they may be held to have standing to sue.
While H.R. 3893 does not appear to provide federal employees and
small business contractors with the same legal standing in the in-
sourcing context, the Department cannot speculate on the judicial
branch's potential interpretation should this bill, or portions
thereof, be enacted into law.
Ms. Bordallo. H.R. 3893 would prevent insourcing from occurring
until, among other things, has published for comment its insourcing
policy. Has DOD published its outsourcing policy for comment?
Dr. Rooney. DOD's outsourcing of new or expanding work to the
private sector is governed by the Federal Acquisition Regulation, and
Defense supplement, and applicable statutory requirements. The
Department's current policies regarding in-sourcing of existing work,
as well as competitive sourcing of such work, are all publicly
available. The decision to use a sector (public or private) to perform
work must be made in accordance with governing statutes and is a matter
of executive branch policy. Lessons learned and best practices,
including those from both internal and external stakeholders, are
regularly reviewed and considered as policies and procedures are
implemented and refined.
Ms. Bordallo. H.R. 3893 would prevent insourcing from occurring
until, among other things, all decisions are reviewed by advocates for
or representatives of small business contractors. Are DOD's outsourcing
decisions reviewed by advocates for or representatives of federal
employees?
Dr. Rooney. No, decisions to purchase services from the private
sector are not subjected to review by advocates or representatives of
federal employees. In certain instances where existing government work
is competed via a public-private competition under Office of Management
and Budget Circular A-76 and the determination is to procure work from
the private sector, the designated government official (or their
representative) may challenge aspects of the solicitation and
evaluation process, but those rights are not exclusive to the
government and do not differ from those of a private sector entity in
the same process.
Ms. Bordallo. As a result of Section 938 of the FY12 National
Defense Authorization Act, all DOD contractors were given two new
protections in the insourcing process: 1) a requirement that federal
employees be marginally more efficient than contractors in order for
functions to be insourced for cost reasons; 2) special notification
when functions are being considered for insourcing for cost reasons. Do
either or both of these requirements apply when DOD is thinking of
switching from a small business contractor to a large contractor or
when a large DOD contractor is thinking of taking work back from a
small business subcontractor?
Dr. Rooney. No, the requirements pertaining to conversion
differential or timely notification included in section 938 are
specific to the governing statute for in-sourcing contracted services,
section 2463 of United States Code title 10. They do not apply to
shifts in workload between two or more private sector firms, either
large or small.
Ms. Bordallo. Of the slightly less than 1 million DOD civilians,
how many have volunteered to go into harm's way since 2001 and deployed
in support our men and women in theater; how many DOD civilians are
currently overseas in theater or other forward deployed areas; of the
slightly less than 1 million DOD civilians, how many ``sit behind a
desk''?; and how many DOD civilians fatalities have occurred as a
result of Operations Enduring and Iraqi Freedom? How many wounded?
Secretary Woodson. Since 2001 approximately 52,000 Department of
Defense (DOD) civilian employees have volunteered for deployments in
the Central Command area of responsibility (CENTCOM AOR) to provide
support to our men and women in theater. Currently there are
approximately 4,500 civilians deployed in the CENTCOM AOR to support
on-going operations.
The DOD currently employs approximately 750,000 appropriated fund
employees and approximately 130,000 non-appropriated fund employees in
diverse occupations ranging from doctors and nurses to fire fighters,
electricians and mechanics to budget analysts, contracting specialists,
and attorneys. The Department does not maintain the number of primarily
sedentary occupations in any database.
During Operations Enduring Freedom and Iraqi Freedom there have
been 14 DOD civilian fatalities. Twelve of those fatalities occurred in
Iraq (11 appropriated fund employees, 1 non-appropriated fund employee)
and two fatalities occurred in Afghanistan (2 appropriated fund
employees). The Department does not track the manner in which non fatal
injuries occur.
Ms. Bordallo. You mentioned civilian reductions of 7,000 across DOD
yet the Air Force reports that they have nearly 16,000 civilians they
are reducing, and that's just the Air Force. How do you reconcile these
figures? Do you believe that reductions in the civilian workforce
should mirror and be proportionate to those in the uniformed workforce?
How about contractor support to the warfighter? Should reductions in
area be proportionate, based on work and deliverables, to other
reductions in the Total Force?
Secretary Woodson. DOD-wide the aggregate reduction in civilians
reflected in the fiscal year 2013 budget is approximately 7,000.
However, in the Air Force's case, the reductions they are implementing
total approximately 16,500 from the service's fiscal year 2011 baseline
as a result of efficiencies directed in the fiscal year 2012 budget. To
achieve this reduction of approximately 9%, the Air Force conducted a
strategic evaluation of their civilian workforce to realign civilian
resources from lower priority functions to higher priority mission
areas, such as nuclear, intelligence, and cyber. Overall, reductions in
the Total Force are correlated to workload and mission prioritization,
as well as force structure and overseas posture changes. The fiscal
year 2013 budget request reflects our best judgment today and
represents a carefully coordinated approach based on the Department's
strategy and policy that balances operational needs and fiscal reality.
Ms. Bordallo. Why would Congress consider any potential changes to
recruiting and retention incentives such as military retirement and
health care or reductions to essential training accounts when Defense
can't identify the cost of what you pay for in contracted services? So
what are you doing to reduce contracted services and work requirements
instead of just reducing dollars? If you are only reducing dollars then
you are likely setting up conditions to default to contractors in light
of the current civilian personnel constraints.
Secretary Woodson. The Department takes very seriously its
commitments to the All-Volunteer Force, and any proposed reforms to
benefits would be well-reasoned and would be designed to ``keep faith''
with those who are serving, and have served. Additionally, any proposed
reductions to training accounts are based on proposed changes to the
Department's strategy, overseas posture and commitments, and force
structure. The Department is very committed to increasing visibility
and accounting of contracted services, and reducing spending in areas
that are not directly linked to the strategy, priorities, and force
structure of the Department. To that end, in November 2011, the
Department submitted to the Congressional defense committees a
comprehensive plan that delineated both short- and long-term actions
related to the statutorily required inventory and review of contracts
for services. As we implement this plan, we will be able to better
understand what we spend on contracted services and the true level of
effort associated with those services. Having comprehensive information
on contracted services that can be translated to units of measure that
are comparable to the other elements of our workforce (military and
civilian) is critical to making improved value and planning judgments.
Ms. Bordallo. Of the slightly less than 1 million DOD civilians,
how many have volunteered to go into harm's way since 2001 and deployed
in support our men and women in theater; how many DOD civilians are
currently overseas in theater or other forward deployed areas; of the
slightly less than 1 million DOD civilians, how many ``sit behind a
desk''?; and how many DOD civilians fatalities have occurred as a
result of Operations Enduring and Iraqi Freedom? How many wounded?
Ms. Penrod. Since 2001 approximately 52,000 Department of Defense
(DOD) civilian employees have volunteered for deployments in the
Central Command area of responsibility (CENTCOM AOR) to provide support
to our men and women in theater. Currently there are approximately
4,500 civilians deployed in the CENTCOM AOR to support on-going
operations.
The DOD currently employs approximately 750,000 appropriated fund
employees and approximately 130,000 non-appropriated fund employees in
diverse occupations ranging from doctors and nurses to fire fighters,
electricians and mechanics to budget analysts, contracting specialists,
and attorneys. The Department does not maintain the number of primarily
sedentary occupations in any database.
During Operations Enduring Freedom and Iraqi Freedom there have
been 14 DOD civilian fatalities. Twelve of those fatalities occurred in
Iraq (11 appropriated fund employees, 1 non-appropriated fund employee)
and two fatalities occurred in Afghanistan (2 appropriated fund
employees). The Department does not track the manner in which non fatal
injuries occur.
Ms. Bordallo. You mentioned civilian reductions of 7,000 across DOD
yet the Air Force reports that they have nearly 16,000 civilians they
are reducing, and that's just the Air Force. How do you reconcile these
figures? Do you believe that reductions in the civilian workforce
should mirror and be proportionate to those in the uniformed workforce?
How about contractor support to the warfighter? Should reductions in
area be proportionate, based on work and deliverables, to other
reductions in the Total Force?
Ms. Penrod. DOD-wide the aggregate reduction in civilians reflected
in the fiscal year 2013 budget is approximately 7,000. However, in the
Air Force's case, the reductions they are implementing total
approximately 16,500 from the service's fiscal year 2011 baseline as a
result of efficiencies directed in the fiscal year 2012 budget. To
achieve this reduction of approximately 9%, the Air Force conducted a
strategic evaluation of their civilian workforce to realign civilian
resources from lower priority functions to higher priority mission
areas, such as nuclear, intelligence, and cyber. Overall, reductions in
the Total Force are correlated to workload and mission prioritization,
as well as force structure and overseas posture changes. The fiscal
year 2013 budget request reflects our best judgment today and
represents a carefully coordinated approach based on the Department's
strategy and policy that balances operational needs and fiscal reality.
Ms. Bordallo. Why would Congress consider any potential changes to
recruiting and retention incentives such as military retirement and
health care or reductions to essential training accounts when Defense
can't identify the cost of what you pay for in contracted services? So
what are you doing to reduce contracted services and work requirements
instead of just reducing dollars? If you are only reducing dollars then
you are likely setting up conditions to default to contractors in light
of the current civilian personnel constraints.
Ms. Penrod. The Department takes very seriously its commitments to
the All-Volunteer Force, and any proposed reforms to benefits would be
well-reasoned and would be designed to ``keep faith'' with those who
are serving, and have served. Additionally, any proposed reductions to
training accounts are based on proposed changes to the Department's
strategy, overseas posture and commitments, and force structure. The
Department is very committed to increasing visibility and accounting of
contracted services, and reducing spending in areas that are not
directly linked to the strategy, priorities, and force structure of the
Department. To that end, in November 2011, the Department submitted to
the Congressional defense committees a comprehensive plan that
delineated both short- and long-term actions related to the statutorily
required inventory and review of contracts for services. As we
implement this plan, we will be able to better understand what we spend
on contracted services and the true level of effort associated with
those services. Having comprehensive information on contracted services
that can be translated to units of measure that are comparable to the
other elements of our workforce (military and civilian) is critical to
making improved value and planning judgments.
Ms. Bordallo. Of the slightly less than 1 million DOD civilians,
how many have volunteered to go into harm's way since 2001 and deployed
in support our men and women in theater; how many DOD civilians are
currently overseas in theater or other forward deployed areas; of the
slightly less than 1 million DOD civilians, how many ``sit behind a
desk''?; and how many DOD civilians fatalities have occurred as a
result of Operations Enduring and Iraqi Freedom? How many wounded?
Mr. Tamburrino. Since 2001 approximately 52,000 Department of
Defense (DOD) civilian employees have volunteered for deployments in
the Central Command area of responsibility (CENTCOM AOR) to provide
support to our men and women in theater. Currently there are
approximately 4,500 civilians deployed in the CENTCOM AOR to support
on-going operations.
The DOD currently employs approximately 750,000 appropriated fund
employees and approximately 130,000 non-appropriated fund employees in
diverse occupations ranging from doctors and nurses to fire fighters,
electricians and mechanics to budget analysts, contracting specialists,
and attorneys. The Department does not maintain the number of primarily
sedentary occupations in any database.
During Operations Enduring Freedom and Iraqi Freedom there have
been 14 DOD civilian fatalities. Twelve of those fatalities occurred in
Iraq (11 appropriated fund employees, 1 non-appropriated fund employee)
and two fatalities occurred in Afghanistan (2 appropriated fund
employees). The Department does not track the manner in which non fatal
injuries occur.
Ms. Bordallo. You mentioned civilian reductions of 7,000 across DOD
yet the Air Force reports that they have nearly 16,000 civilians they
are reducing, and that's just the Air Force. How do you reconcile these
figures? Do you believe that reductions in the civilian workforce
should mirror and be proportionate to those in the uniformed workforce?
How about contractor support to the warfighter? Should reductions in
area be proportionate, based on work and deliverables, to other
reductions in the Total Force?
Mr. Tamburrino. DOD-wide the aggregate reduction in civilians
reflected in the fiscal year 2013 budget is approximately 7,000.
However, in the Air Force's case, the reductions they are implementing
total approximately 16,500 from the service's fiscal year 2011 baseline
as a result of efficiencies directed in the fiscal year 2012 budget. To
achieve this reduction of approximately 9%, the Air Force conducted a
strategic evaluation of their civilian workforce to realign civilian
resources from lower priority functions to higher priority mission
areas, such as nuclear, intelligence, and cyber. Overall, reductions in
the Total Force are correlated to workload and mission prioritization,
as well as force structure and overseas posture changes. The fiscal
year 2013 budget request reflects our best judgment today and
represents a carefully coordinated approach based on the Department's
strategy and policy that balances operational needs and fiscal reality.
Ms. Bordallo. Why would Congress consider any potential changes to
recruiting and retention incentives such as military retirement and
health care or reductions to essential training accounts when Defense
can't identify the cost of what you pay for in contracted services? So
what are you doing to reduce contracted services and work requirements
instead of just reducing dollars? If you are only reducing dollars then
you are likely setting up conditions to default to contractors in light
of the current civilian personnel constraints.
Mr. Tamburrino. The Department takes very seriously its commitments
to the All-Volunteer Force, and any proposed reforms to benefits would
be well-reasoned and would be designed to ``keep faith'' with those who
are serving, and have served. Additionally, any proposed reductions to
training accounts are based on proposed changes to the Department's
strategy, overseas posture and commitments, and force structure. The
Department is very committed to increasing visibility and accounting of
contracted services, and reducing spending in areas that are not
directly linked to the strategy, priorities, and force structure of the
Department. To that end, in November 2011, the Department submitted to
the Congressional defense committees a comprehensive plan that
delineated both short- and long-term actions related to the statutorily
required inventory and review of contracts for services. As we
implement this plan, we will be able to better understand what we spend
on contracted services and the true level of effort associated with
those services. Having comprehensive information on contracted services
that can be translated to units of measure that are comparable to the
other elements of our workforce (military and civilian) is critical to
making improved value and planning judgments.
______
QUESTIONS SUBMITTED BY MR. LOEBSACK
Mr. Loebsack. In the light of the reduction in end strength
outlined in this budget request and the defense strategy released
earlier this year, what policies are being reviewed to ease transition
between the active, reserve, and civilian components? Do you believe
that easing the transition between the components will help to build in
the reversibility outlined in the new defense strategy by ensuring that
our highly trained and experienced force can be accessed quickly if a
contingency arises? What, if any, legislative authority would you
require to enact policies to ease the transition between the active and
reserve components?
Dr. Rooney. The Department of Defense will structure and pace
reductions in the Nation's forces in such a way that they can surge,
regenerate, and mobilize capabilities needed for any contingency and
focus on building upon the Department's ability as an organization and
the personnel within those organizations to be adaptive. The Department
will ensure a strong foundational force that is designed to adapt to
emergent mission requirements by maintaining readiness standards
sufficient for meeting current operational needs and surging to meet
planned deployment, determining those capabilities that require a long
lead time to produce and are uniquely associated with critical
operational requirements while preserving these capabilities in
sufficient numbers to achieve operational goals and applying
organizational constructs and training strategies that will increase
deployment options and training effectiveness.
Within the active force the Department will make it faster and
easier to generate or regenerate capabilities by etermining those
skills and capabilities that could be drawn down; preserving key
lessons, strategies, and processes learned; determining and preserving
key enablers to surging or regenerating these capabilities.
Within Reserve Affairs, as part of the work on the Commission on
National Guard and Reserve (CNGR), and the ongoing work of the
Comprehensive Review of the Reserve Components, we have partnered with
the Services to examine law and policy as it pertains to transition
between the active and reserve components. The objective is seamless,
facilitated, and unbiased movement between components, and conveyance
of benefits and entitlements as appropriate. This work is ongoing. As
specific requirements necessitate, we have also advocated the Reserve
Component as a ready, cost effective force of choice where appropriate
in execution of the new Defense strategy.
Lastly the Department will coordinate Service efforts to achieve
these policy goals. We will continue to work with the Services to
facilitate Service Member movement within and between Active, Reserve,
and Civilian statuses to increase Total Joint Force Readiness.
Mr. Loebsack. Taking into account co-payments and dispensing fees,
what is the cost to the Department of generic medications dispensed by
retail pharmacies compared to the cost of generic medications dispensed
by the TRICARE Mail Order Program?
Secretary Woodson. Including patient co-payments and dispensing
fees, the average cost of a 30 day equivalent prescription for generic
medication dispensed by retail pharmacies was $21.06 during 1st Quarter
FY12. In comparison, the average cost of generic medication dispensed
by the TRICARE Mail Order Program was $13.92 during 1st Quarter FY12.
Mr. Loebsack. In the light of the reduction in end strength
outlined in this budget request and the defense strategy released
earlier this year, what policies are being reviewed to ease transition
between the active, reserve, and civilian components? Do you believe
that easing the transition between the components will help to build in
the reversibility outlined in the new defense strategy by ensuring that
our highly trained and experienced force can be accessed quickly if a
contingency arises? What, if any, legislative authority would you
require to enact policies to ease the transition between the active and
reserve components?
Ms. Penrod. The Department of Defense will structure and pace
reductions in the Nation's forces in such a way that they can surge,
regenerate, and mobilize capabilities needed for any contingency and
focus on building upon the Department's ability as an organization and
the personnel within those organizations to be adaptive. The Department
will ensure a strong foundational force that is designed to adapt to
emergent mission requirements by maintaining readiness standards
sufficient for meeting current operational needs and surging to meet
planned deployment, determining those capabilities that require a long
lead time to produce and are uniquely associated with critical
operational requirements while preserving these capabilities in
sufficient numbers to achieve operational goals and applying
organizational constructs and training strategies that will increase
deployment options and training effectiveness.
Within the active force the Department will make it faster and
easier to generate or regenerate capabilities by etermining those
skills and capabilities that could be drawn down; preserving key
lessons, strategies, and processes learned; determining and preserving
key enablers to surging or regenerating these capabilities.
Within Reserve Affairs, as part of the work on the Commission on
National Guard and Reserve (CNGR), and the ongoing work of the
Comprehensive Review of the Reserve Components, we have partnered with
the Services to examine law and policy as it pertains to transition
between the active and reserve components. The objective is seamless,
facilitated, and unbiased movement between components, and conveyance
of benefits and entitlements as appropriate. This work is ongoing. As
specific requirements necessitate, we have also advocated the Reserve
Component as a ready, cost effective force of choice where appropriate
in execution of the new Defense strategy.
Lastly the Department will coordinate Service efforts to achieve
these policy goals. We will continue to work with the Services to
facilitate Service Member movement within and between Active, Reserve,
and Civilian statuses to increase Total Joint Force Readiness.
Mr. Loebsack. In the light of the reduction in end strength
outlined in this budget request and the defense strategy released
earlier this year, what policies are being reviewed to ease transition
between the active, reserve, and civilian components? Do you believe
that easing the transition between the components will help to build in
the reversibility outlined in the new defense strategy by ensuring that
our highly trained and experienced force can be accessed quickly if a
contingency arises? What, if any, legislative authority would you
require to enact policies to ease the transition between the active and
reserve components?
Mr. Tamburrino. The Department of Defense will structure and pace
reductions in the Nation's forces in such a way that they can surge,
regenerate, and mobilize capabilities needed for any contingency and
focus on building upon the Department's ability as an organization and
the personnel within those organizations to be adaptive. The Department
will ensure a strong foundational force that is designed to adapt to
emergent mission requirements by maintaining readiness standards
sufficient for meeting current operational needs and surging to meet
planned deployment, determining those capabilities that require a long
lead time to produce and are uniquely associated with critical
operational requirements while preserving these capabilities in
sufficient numbers to achieve operational goals and applying
organizational constructs and training strategies that will increase
deployment options and training effectiveness.
Within the active force the Department will make it faster and
easier to generate or regenerate capabilities by etermining those
skills and capabilities that could be drawn down; preserving key
lessons, strategies, and processes learned; determining and preserving
key enablers to surging or regenerating these capabilities.
Within Reserve Affairs, as part of the work on the Commission on
National Guard and Reserve (CNGR), and the ongoing work of the
Comprehensive Review of the Reserve Components, we have partnered with
the Services to examine law and policy as it pertains to transition
between the active and reserve components. The objective is seamless,
facilitated, and unbiased movement between components, and conveyance
of benefits and entitlements as appropriate. This work is ongoing. As
specific requirements necessitate, we have also advocated the Reserve
Component as a ready, cost effective force of choice where appropriate
in execution of the new Defense strategy.
Lastly the Department will coordinate Service efforts to achieve
these policy goals. We will continue to work with the Services to
facilitate Service Member movement within and between Active, Reserve,
and Civilian statuses to increase Total Joint Force Readiness.
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