[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
[H.A.S.C. No. 112-147]
CIVILIAN WORKFORCE REQUIREMENTS--
NOW AND ACROSS THE FUTURE YEARS
DEFENSE PROGRAM
__________
HEARING
BEFORE THE
SUBCOMMITTEE ON READINESS
OF THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
HEARING HELD
JULY 26, 2012
[GRAPHIC] [TIFF OMITTED] CONGRESS.#13
SUBCOMMITTEE ON READINESS
J. RANDY FORBES, Virginia, Chairman
MIKE ROGERS, Alabama MADELEINE Z. BORDALLO, Guam
JOE HECK, Nevada SILVESTRE REYES, Texas
AUSTIN SCOTT, Georgia JOE COURTNEY, Connecticut
FRANK A. LoBIONDO, New Jersey DAVE LOEBSACK, Iowa
CHRIS GIBSON, New York LARRY KISSELL, North Carolina
VICKY HARTZLER, Missouri BILL OWENS, New York
BOBBY SCHILLING, Illinois TIM RYAN, Ohio
JON RUNYAN, New Jersey COLLEEN HANABUSA, Hawaii
TIM GRIFFIN, Arkansas JACKIE SPEIER, California
STEVEN PALAZZO, Mississippi
MARTHA ROBY, Alabama
Jamie Lynch, Professional Staff Member
Vickie Plunkett, Professional Staff Member
Nicholas Rodman, Staff Assistant
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2012
Page
Hearing:
Thursday, July 26, 2012, Civilian Workforce Requirements--Now and
Across the Future Years Defense Program........................ 1
Appendix:
Thursday, July 26, 2012.......................................... 33
----------
THURSDAY, JULY 26, 2012
CIVILIAN WORKFORCE REQUIREMENTS--NOW AND ACROSS THE FUTURE YEARS
DEFENSE PROGRAM
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Bordallo, Hon. Madeleine Z., a Delegate from Guam, Ranking
Member, Subcommittee on Readiness.............................. 3
Forbes, Hon. J. Randy, a Representative from Virginia, Chairman,
Subcommittee on Readiness...................................... 1
WITNESSES
Farrell, Brenda, Director, Defense Capabilities and Management,
Military and DOD Civilian Personnel Issues, U.S. Government
Accountability Office.......................................... 7
Vollrath, Frederick E., Principal Deputy Assistant Defense
Secretary for Readiness and Force Management, U.S Department of
Defense........................................................ 5
APPENDIX
Prepared Statements:
Farrell, Brenda.............................................. 50
Forbes, Hon. J. Randy........................................ 37
Vollrath, Frederick E........................................ 39
Documents Submitted for the Record:
[There were no Documents submitted.]
Witness Responses to Questions Asked During the Hearing:
Mr. Forbes................................................... 73
Mr. Palazzo.................................................. 74
Mr. Runyan................................................... 74
Questions Submitted by Members Post Hearing:
Ms. Bordallo................................................. 84
Mr. Forbes................................................... 79
Ms. Hanabusa................................................. 98
Mr. Loebsack................................................. 97
Mr. Schilling................................................ 100
Ms. Speier................................................... 99
CIVILIAN WORKFORCE REQUIREMENTS--NOW AND ACROSS THE FUTURE YEARS
DEFENSE PROGRAM
----------
House of Representatives,
Committee on Armed Services,
Subcommittee on Readiness,
Washington, DC, Thursday, July 26, 2012.
The subcommittee met, pursuant to call, at 1:00 p.m., in
room 2212, Rayburn House Office Building, Hon. J. Randy Forbes
(chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE
FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON READINESS
Mr. Forbes. I want to welcome all of our members and our
distinguished witnesses to today's hearing that will focus on
civilian workforce requirements now and across the future
years' defense program.
I particularly want to thank our witnesses for their
patience during this series of votes, and we apologize to you
for the delay.
The civilian workforce provides an invaluable contribution
to the DOD [Department of Defense] mission, both at home and
abroad, frequently deploying to the combat zones alongside
military and contractor personnel.
I welcome this discussion today and the opportunity to
better understand how the Department of Defense is forecasting
its future workforce requirements and balancing the critical
skills required across all components of its workforce.
Additionally, I want to understand the impact of directed
reductions.
Right now, there are two possible reductions that could
negatively impact the civilian workforce in the short term:
sequestration, and the proposed Senate NDAA [National Defense
Authorization Act] language.
Let us start with the Senate committee-passed language that
directs civilian and service contractor workforce reductions
commensurate with military end-strength through fiscal year
2017, which would be expected to be in excess of 5 percent.
Based on the numbers provided in fiscal year 2013, simple
math would suggest that more than 39,000 civilian full-time
equivalents would be eliminated.
Next, we have sequestration. Nobody wants it to happen,
most especially not me. But we have been talking about it for a
while and it appears that there is little to no planning
associated with this legislative mandate.
Assuming an exemption for military personnel, we calculate
there would be an approximate 11.3 percent reduction across all
other counts. Again, simple math would suggest that an
additional 89,000 civilians would be eliminated.
When you add the two figures, we are talking about more
than 128,000 people. And informally, some in the Pentagon have
indicated that sequestration alone could be as high as a
quarter of the total civilian workforce or almost 200,000
people.
The result of any such cuts, particularly without
analytical underpinning, would be long-term irreversible damage
to the workforce. And let us not forget the costs that would
have to be calculated to implement, and the sunk cost from the
first quarter of the year.
Fundamentally, I have opposed any effort without the
necessary details that support the proposal.
In the case of the Senate reductions and the mindless
implementation of sequestration, both appear to lack any basis
in fact or reason. That is why I believe the more prudent
approach to managing the civilian and contractor workforce is
to assess the requirement and then to shape the workforce to
meet those decisions.
I look forward to discussing all of these issues later in
this hearing.
So where does that leave us?
Well, according to the statutory requirement in 10 U.S.C.
1597 [Title 10 United States Code 1597], any involuntary
reductions in force require notification both to Congress and
the employee. So if sequestration were to take effect in
January, DOD would be required to notify us at the end of
September.
In light of potential reductions, what generally concerns
me is the Department of Defense is planning for its future
workforce requirements and negotiating the appropriate balance
among civilian contractor military personnel.
Since 2001, GAO [Government Accountability Office] has
listed Federal human capital management as a government-wide
high-risk area because of the need to address current and
emerging critical skill gaps that are undermining agencies'
abilities to meet their vital missions.
And we know that approximately 30 percent of the DOD
workforce and 90 percent of its senior leaders, are eligible
for retirement as early as 2015.
I look forward to hearing about what analysis DOD has
undertaken to identify and document critical skills and
competencies required in each component of the workforce,
particularly should directed reductions occur, and what
recommendations GAO has for that DOD process.
We were also recently notified that the Department just
extended its civilian personnel cap through fiscal year 2018.
Does that presume that budget is driving DOD workforce
requirements or vice versa?
And I look forward to clarification of how this cap is not
in direct contradiction to the statutory requirement set forth
in 10 U.S.C. 129 [Title 10 United States Code 129], which
clearly precludes any constraint or limitation in terms of
maximum number of employees.
We, in Congress, and namely this subcommittee have
exercised great oversight of civilian workforce issues to
ensure DOD best plans for its requirements.
Total force management in particular directs a holistic
perspective of workforce requirements across civilian,
military, and contractor personnel. However, I am not convinced
that we even have perfect knowledge into our civilian
requirements.
I look forward to our discussions today and delving into
these topics further. We need to exercise appropriate oversight
of the process to ensure that sequestration, or other
reductions, do not blindside our workforce. They deserve to
know what lies ahead and it is our job to ensure the public is
informed.
Joining us today to discuss the DOD civilian workforce are
two distinguished witnesses: Mr. Frederick Vollrath, Principal
Deputy Assistant Secretary of Defense for Readiness and Force
Management at the Department of Defense; and Ms. Brenda
Farrell, Director of Defense Capabilities and Management at the
U.S. Government Accountability Office.
We thank you both for being here. We are looking forward to
your testimony.
I would now like to recognize my friend, the ranking
member, Ms. Bordallo, for any remarks she may have.
[The prepared statement of Mr. Forbes can be found in the
Appendix on page 37.]
STATEMENT OF HON. MADELEINE Z. BORDALLO, A DELEGATE FROM GUAM,
RANKING MEMBER, SUBCOMMITTEE ON READINESS
Ms. Bordallo. Thank you very much, Mr. Chairman.
And I welcome our witnesses today. And we appreciate your
testimony before the subcommittee.
The Department of Defense----
Testing.
The Department of Defense civilian personnel workforce
provides a critical support to our warfighters. The civilian
workforce is essential to making our country's military so
effective.
The civilian workforce provides experience. They provide
expertise and continuity. I personally value continuity of
staff within programs and offices at DOD.
I cannot emphasize enough how important the civilian
workforce is to our Nation's defense.
Management of the civilian workforce is especially
important in an era of austere budgets. Strategic human capital
management is slowly evolving in the Department of Defense, but
too slowly, in my opinion.
Congress has made it very clear that we want requirements-
based management of the total force to include military,
civilian, and contractor personnel. In fact, the National
Defense Authorization Act for Fiscal Year 2006 called for DOD
to develop a strategic plan for managing its civilian workforce
to include analysis of any gaps in capability.
As late as last year in the fiscal year 2012 NDAA, Congress
further refined the requirements of this report to provide
guidance for DOD in regard to total force management.
The most current strategic workforce plan was submitted by
DOD in March of this year. And GAO will complete its review of
the most current plan by next month.
Congress has provided the DOD the statutory tools necessary
to shape the workforce, but it is going to take continued
leadership on this matter to make sure that it is done right.
Having clear requirements-based civilian personnel
management in place avoids the pitfalls that come with
arbitrarily cutting the workforce.
I appreciate that Ms. Farrell, in her testimony,
highlighted the risks associated with the last civilian
workforce downsizing. And that was in 1990.
Those cuts to personnel were void of any requirements-based
decisions. And as such, DOD took significant risk with its
civilian workforce, supporting certain capabilities.
This was never more evident than in the downsizing of the
acquisition workforce and the problems that DOD faced with
acquisitions during the middle of the wars in Iraq and
Afghanistan.
In sequestration, cuts to civilian personnel would need to
be requirements-based so that we don't assume more risks than
is absolutely necessary. We know that the current budget
situation will require the Department of Defense to downsize
the civilian workforce. But this process must be rational and
not arbitrary.
As such, I hope that our witnesses this afternoon will
touch on the Senate's proposed language in their version of
this year's Defense Authorization Bill that calls for arbitrary
cuts to the civilian workforce and what impact or risk is
associated with this approach.
I also hope that our witnesses can touch on the lessons
learned from former Secretary Gates' efficiencies initiative,
the impacts of which are still being felt in terms of caps on
hiring and targeted civilian personnel reductions.
What has been learned from these initiatives and having
those lessons being incorporated into the revised strategic
workforce plan?
I am concerned that cuts to the civilian workforce have
been focused on meeting budget targets rather than a
comprehensive analysis of requirements and capabilities that
need to be retained in DOD.
Finally, before we see any further arbitrary cuts in the
civilian workforce, it is imperative that the Department of
Defense provide Congress with the inventory of contractor
services that are supporting the Department.
We need more information to make the difficult decisions
that will be required with our current budget situation. Total
force management is only successful when good planning, good
information, and solid leadership are in place to manage human
capital.
And again, I look forward to this discussion with our
witnesses.
And I thank you, Mr. Chairman, for yielding this time.
Mr. Forbes. Thank you for those remarks, Madeleine.
And as we discussed prior to the hearing, I ask unanimous
consent that it be made in order to depart from regular order,
so that members may ask questions that follow the train of
thought from the preceding member. I think this will provide a
roundtable type forum and will enhance the dialogue on these
very important issues.
Without objection, that is so ordered.
Now, Mr. Vollrath, we would love to hear your opening
comments.
STATEMENT OF FREDERICK E. VOLLRATH, PRINCIPAL DEPUTY ASSISTANT
DEFENSE SECRETARY FOR READINESS AND FORCE MANAGEMENT, U.S
DEPARTMENT OF DEFENSE
Mr. Vollrath. Thank you.
Good afternoon, Chairman Forbes, Ranking Member Bordallo,
and other members of the subcommittee.
Mr. Forbes. Mr. Vollrath, you might want to put that
microphone up a little closer. Sometimes they are a little
finicky.
Thank you.
Mr. Vollrath. Thank you.
The civilian workforce must be addressed within the larger
context, as you all have mentioned, of the Department's total
force of the Active and Reserve military, the civilians and the
contracted service.
As we look to the future we must continue to strive to
achieve the most effective, efficient, and appropriate mix of
our workforce.
The Department's current plans, reflected in the
President's budget request for fiscal year 2013, represent a
carefully coordinated approach that addresses operational
needs, satisfies mission requirements and recognizes the fiscal
constraints.
Our future plans require us to align capabilities and costs
for all elements of the total force. As discussed in greater
detail in my written statement, these elements cannot be
managed in isolation if we are to avoid the hollow force and
unnecessary expense.
Total force management is complex. It is a lifecycle
process used to ensure the Department's capabilities are
enabled by a mix of military, civilian, and contracted support
to deliver the requisite readiness, while minimizing the costs.
During this period of constrained defense budgets, the
Department must ensure that a sufficient number of Federal
civilian personnel are available to meet the support needs of
our military forces.
The Department must also prioritize and reduce less
critical missions while we ensure that military and civilian
personnel are performing all inherently governmental jobs, and
that there are sufficient numbers to perform critical
oversight, management, and readiness functions.
The Department sourcing decisions must be made on the basis
of law, cost, policy, and risk. And we are committed to
ensuring those decisions are made consistent with title 10
requirements regarding workforce management.
To achieve these objectives, we must ensure decisionmakers
have access to relevant information and data. We must also have
the flexibility and tools necessary to appropriately align
workload and balance the Department's workforce.
In an effort to significantly reduce excess overhead costs
and apply the savings to warfighting capability, force
structure and modernization and readiness, the Department
carried out a number of initiatives, beginning in fiscal year
2011, including directing components to maintain civilian
personnel at fiscal year 2010 levels.
The fiscal year 2013 President's Budget Request reflects an
objective and reasonable approach that decreases spending on
all components of the total force. However, we recognize that
we operate in a dynamic and changing environment, and therefore
must retain the flexibility to adapt our workforce accordingly.
The current budget request continues to fund the civilian
workforce at fiscal year 2010 levels, with some exceptions.
While we continue to deliver a flexible, responsive
civilian workforce that mitigates risk and ensures continuity
of operations; promotes the organic knowledge that we need to
retain, and ensures mission requirements are met most cost-
effectively and efficiently; given the strategic direction of
the Department, the planned reductions among the uniformed
force; and in order to meet the requirements of the Budget
Control Act, the funding for civilian positions is currently
planned to decline by approximately 2 percent over the next 5
fiscal years.
We continue to assess whether further reductions and
realignment of civilian personnel can be made in the context of
adjustments to the total force and the new defense strategy.
And we will keep this subcommittee informed of the results.
The Department, however, is keenly aware that our civilian
workforce is extremely talented and critical to success in
meeting our strategic goals, performing key enabling functions
for the operating force, and delivering vital services that
support our uniformed men and women.
Changes in the civilian workforce must be done in a way
that preserves mission-essential skills and abilities over the
long term, and in a manner that enables us to recruit and
retain the most talented individuals.
We also recognize the need to review and assess levels of
contracted support in order to ensure appropriate and cost-
effective utilization of such support.
Additionally, with the possibility of sequestration looming
on the horizon, we cannot yet say precisely how bad the damage
would be.
But as Secretary Panetta noted earlier this year, it is
clear that sequestration could risk hollowing out our force and
reducing military options available to the Nation.
In summary, the Department has programs in place to address
our needs for an effective and appropriately resourced total
force. We continue today to discuss GAO's observations on DOD's
civilian personnel requirements.
DOD's Federal civilian workforce consists of approximately
783,000 personnel and performs a wide variety of duties,
including cus on lifecycle management for the civilian
workforce by integrating strategic workforce planning,
competency management, and workforce professional development
initiatives to ensure that plans support the development of a
ready civilian workforce.
Mr. Chairman, this concludes my statement.
I thank you and the members of this subcommittee for the
opportunity to address you and help work on the Nation's
issues.
I stand by for your questions, sir.
[The prepared statement of Mr. Vollrath can be found in the
Appendix on page 39.]
Mr. Forbes. Thank you, Mr. Vollrath.
Ms. Farrell.
STATEMENT OF BRENDA FARRELL, DIRECTOR, DEFENSE CAPABILITIES AND
MANAGEMENT, MILITARY AND DOD CIVILIAN PERSONNEL ISSUES, U.S.
GOVERNMENT ACCOUNTABILITY OFFICE
Ms. Farrell. Thank you, Mr. Chairman.
Mr. Chairman, Ranking Member Bordallo, members of the
subcommittee, thank you for the opportunity to be here today to
discuss GAO's observations on DOD's civilian personnel
requirements.
DOD's Federal civilian workforce consists of approximately
783,000 personnel, and performs a wide variety of duties,
including some traditionally performed by military personnel.
In 2001, GAO placed strategic human capital management
across the entire Federal Government on our high-risk list. And
it remains there today.
We did so because of the longstanding lack of leadership in
the area, and in part because critical skill gaps could
undermine agencies' abilities to accomplish their missions.
With the long-term fiscal challenges facing the Nation,
reductions to the civilian workforce may be considered to
achieve cost savings. Human capital has remained a critical
missing link in reforming and modernizing the Federal
government's managing practices.
GAO has observed that the Federal Government has often
acted as if people were costs to be cut, rather than assets to
be valued.
My main message today is that strategic workforce planning
is critical to help ensure that DOD has the right number of
civilian personnel, with the right skills at the right time, to
carry out their mission.
My statement today is based on GAO's reports issued from
March 1992 through June 2012.
My written statement is divided into two parts. The first
part addresses DOD's prior experience with civilian workforce
downsizing.
DOD's prior efforts in the 1990s were not oriented towards
shaping the make-up of the force, resulting in significant
imbalances in terms of shape, skills, and retirement
eligibility.
DOD's efforts in the 1990s to reduce its Federal civilian
workforce levels below that of 1987 were hampered by incomplete
data and a lack of a clear strategy for avoiding skill
imbalances and other adverse effects of downsizing.
For example, DOD used incomplete and inconsistent data
related to workers, workload data, and projected force
reductions. Further, DOD's approaches had unintended
consequences.
The use of voluntary attrition, hiring freezes, and
financial separation incentives mitigated some adverse effects
of workforce reductions, but were less oriented towards shaping
the makeup of the civilian workforce.
For DOD, this was especially true of its acquisition
workforce. DOD was put on the verge of a retirement-driven
talent drain in this workforce after 11 consecutive years of
downsizing. Now, DOD is trying to rebuild that workforce.
In 2001, we concluded that considering the enormous changes
the DOD civilian workforce had undergone, and the external
pressures and demands faced by the Department, taking a
strategic approach to human capital would be crucial to
organizational results.
As I will discuss next, this is no less true today than it
was in 2001.
The second part of my written statement addresses DOD's
current strategic human planning efforts.
DOD has taken positive steps to identify its critical
skills. In 2006 as noted earlier, Congress required DOD to have
a strategic workforce plan that included specific elements.
GAO has closely monitored DOD's efforts in this area. We
have found that DOD has identified 22 mission-critical
occupations, such as contracting, accounting, and information
technology management that it identifies as critical skills.
However, DOD has not conducted competency gap analyses for the
majority of their mission-critical occupations.
Gap analysis is critical to develop specific strategies to
address the workforce needs for today and the future.
For example, gap analysis enables a department to determine
where they need to grow, and where they could possibly cut
back.
We remain concerned that DOD lacks critical information it
needs to effectively plan for the workforce requirements.
Mr. Chairman, the last point I wish to make is that DOD's
workforce includes military personnel, Federal employees, and
contractors. And changes made to one of these groups may impact
the others.
Thank you, that concludes my opening remarks.
Be happy to take questions.
[The prepared statement of Ms. Farrell can be found in the
Appendix on page 50.]
Mr. Forbes. Let me thank you both for your testimony, and
also for your written statements, which we will make a part of
the record.
And, Mr. Vollrath, we are delighted to have you today.
As I mentioned at the outset, you are the Principal Deputy
Assistant Secretary of Defense for Readiness and Force
Management at the Department of Defense. So you bring with you
a great deal of responsibility on your shoulders and expertise.
And we thank you for that.
All of us are concerned about sequestration. We are 5
months from that coming into place.
And as I look at the statute, it says that the same
percentage sequestration shall apply to all programs, projects,
and activities within a budget account; with programs, projects
and activities as delineated in the appropriation act or
accompanying report for the relevant fiscal year covering that
account; or for accounts not included in appropriation acts.
Basically, we are talking about across-the-board cuts is
essentially what we are looking at.
Now, noting that sequestration is the current law, noting
that we are about 5 months out from when that comes into play,
what will be the impact on the civilian workforce when
sequestration hits?
Mr. Vollrath. Mr. Chairman, I wish I could give you a
definitive answer, but I can't, because there are some
decisions that could be made relative to the military
workforce.
And if sequestration were to be a fact, the civilian
workforce money is in the O&M [Operations and Maintenance]
account. And defense and other agencies could make decisions
about where the priorities would be placed within that account.
For example, other things that are affected would be things
like fuel, training support dollars, et cetera.
And so some decisions would have to be made as to where the
priorities are placed. But they would also have to be relative
to what the overall objective is if sequestration hit. We would
have to make some decisions about priorities on national
defense.
Once those are made, we could begin to make reasoned
decisions that would affect our civilian workforce, as well as
the military. When that would happen, we clearly would have to
take a look at the military, the support our civilian workforce
provides to it, and then the impact of the contract services.
There are the three moving parts. And so I can't answer the
question with any direction. I wish I could. But there are that
many moving parts to this problem.
Mr. Forbes. Mr. Vollrath, we know that sequestration is the
law. It is not just something that could happen. It is
currently the law. Unless it is changed, it is going to be
there no different than if we passed a budget.
Can you tell me what specific steps you are taking now to
prepare for it, to answer the questions that you say are a
number of moving parts that need to be answered?
Mr. Vollrath. The Secretary of Defense is still suggesting
that this needs to be addressed. We need to work with Congress
to understand what the impacts of this could be.
I don't have details about that. I know that Deputy
Secretary of Defense Carter is slated to appear before the
Armed Services Committee on the first of August to address more
robustly the potential impacts of sequestration.
I do not have enough information to give you a
straightforward answer.
The implications, of course, if sequestration were to
happen, are significant.
First of all, when the decisions are made in terms of the
impacts and where they are taken, if you translate that and
bring it back into the Government civilian workforce, you
mentioned that we have a certain legal requirement in terms of
process to notify. We also have other things that we would have
to deal with.
We have our labor partners and contracts with them that we
would have to work. On the contract for services side, there
are contracts that we would have to adjust.
And given the other authorities, okay, to reduce the
workforce and shape it intelligently, we, for sure, would have
to be back with you and other members of Congress to get some
changes to the laws and internal to the Department of Defense
on the policies in order to shape the force appropriately, so
that we do, in fact, avoid the kinds of problems that were
alluded to in the 1990s.
I have to just tell you, I lived that dream in the 1990s of
trying to downsize the force, take the peace dividend, and
shape. And it was not, okay, an easy task then.
It is not going to be an easy task under sequestration.
That is for sure. That is for sure.
Mr. Forbes. Mr. Vollrath, we heard Ms. Farrell say that the
Department has been criticized for using incomplete data. And,
as I recall, it was a lack of a comprehensive strategic plan in
terms of the workforce.
Can you walk me through the RIF [Reduction in Force]
process and the timeliness requirements that are going to be
required?
Because, as you know, again, I come back to the fact
sequestration is not just some pipe dream out there. It is the
law. It is on the books. It is scheduled to take place in
January.
Can you tell me what the RIF process is, and kind of walk
us through that and the timeliness generally of that?
Mr. Vollrath. A normal RIF process would begin by an
intelligent review of requirements. But in terms of timing and
notification----
Mr. Forbes. Let us start with the intelligent review of the
requirements.
How long would that take?
Mr. Vollrath. I would estimate the best case would be at
least 3 to 4 months. And I say that because an intelligent
review has to be mission-based.
Mr. Forbes. If it would take 3 to 4 months and we only have
5 months, does it surprise you that we haven't started and
undergone that process yet?
Mr. Vollrath. No, because I don't think anybody has been
able to come to grips yet with the severity of what
sequestration means.
Mr. Forbes. Is it your opinion that people in the
Department of Defense do not understand that this is the law.
And it is going to take place in January?
Mr. Vollrath. Mr. Chairman, they understand that it is the
law.
Mr. Forbes. If it is the law, what I don't understand is,
if it is going to take us a minimum of 4 months to do the
analytical review, has anybody instructed you to begin that
process or has anyone instructed you not to plan for
sequestration?
Mr. Vollrath. Neither.
Mr. Forbes. Then why would your Department not have begun
this analysis if you know it is scheduled to take place in
January, and you know it is going to take 4 months at least to
do the analysis before you even begin the process?
Mr. Vollrath. Well, as the Secretary of Defense has said,
he intends to continue to work with Congress to address the
effects of sequestration. And I believe a much more robust
discussion can be had around that question when the Deputy
Secretary of Defense appears on the first of August.
Mr. Forbes. Mr. Vollrath, I don't disagree that we need to
have a robust discussion. We have been trying to have it for a
year now.
But you have heard the Senate say that they are not going
to taking any action. You have heard the President say he would
veto any action regarding sequestration.
It is the law. It is coming.
This is what is baffling me. If we had a budget that was
coming on line with these kind of major cuts, I would think
that your office would have already been doing some kind of
analysis, so that they just don't hit us blindsided in January.
And it baffles me that we have undergone no process at all
to do the kind of analysis that Ms. Farrell says is crucial for
us to do before these cuts take place.
Is it because the Department of Defense just continues to
just hope it is going to get changed?
Mr. Vollrath. I don't believe that it is a hope that it
gets changed. I believe there is a lot of work to try to
address the problem.
Mr. Forbes. Can you tell me any proposal that you have seen
floating right now that would suggest that it is going to be
addressed?
Mr. Vollrath. Personally, I have not.
Mr. Forbes. Who would make the decision within your
Department to start this analysis?
Mr. Vollrath. That would have to start with the Secretary
of Defense.
Mr. Forbes. And the Secretary of Defense has given you no
instruction at all to begin that analysis to date?
Mr. Vollrath. I personally do not have that kind of
instruction.
Mr. Forbes. But you would know if that was going to take
place based on your position, would you not?
Mr. Vollrath. Not necessarily, because this is a large
strategic movement.
Mr. Forbes. So then as the Principal Deputy Assistant
Secretary of Defense for Readiness and Force Management at the
Department of Defense, if you wouldn't know, who would know
above you?
Mr. Vollrath. At this stage, I would defer to the Secretary
of Defense and to the President, and where they intend to----
Mr. Forbes. Well, the President and the Secretary of
Defense aren't going to do the actual planning. They would have
to give that instruction.
But who would know in the Department if such instructions
have been given to begin the planning, if you wouldn't know?
Could this planning take place if you didn't know it?
Mr. Vollrath. Probably not.
Mr. Forbes. So then you would know it if the planning was
going to take place?
Mr. Vollrath. I am not aware of any planning. But that does
not mean that there is no planning.
Mr. Forbes. Well, help me with this.
It is your testimony that if the planning were taking
place, you would know it. Then you said you don't know it. But
then you said the planning could still be taking place.
Mr. Vollrath. If there were any planning taking place that
had any specificity to it, I would anticipate that I would be
aware of that.
Mr. Forbes. And today in your testimony, you are not aware
of that.
Is that your testimony?
Mr. Vollrath. That is correct.
Mr. Forbes. Are you aware that anyone has told you not to
do the planning?
Mr. Vollrath. No one has told me not to do planning.
Mr. Forbes. And the only way the planning could be
generated would be for the Secretary of Defense to begin that.
Is that your testimony?
Mr. Vollrath. I believe that to be correct, because there
would have to be some decisions, as I mentioned before, about
the force and its shape and decisions relative to that.
Mr. Forbes. Walk me through the timeline, if you would,
regarding the 45-day notification, 60-day notification, et
cetera, that we have to give for a RIF process.
Mr. Vollrath. Once a decision is made, and it is a decision
made, then we would give the employees, that would be affected,
a 60-day notice. Prior to those employees being notified, we,
by law, must notify Congress of our intent to conduct a
reduction in force.
And so that is a minimum of a lead-time of 105 days in
order to conduct a reduction in force.
Mr. Forbes. And that date, as I understand it, from January
4th would be September 21st?
Is that to the best of your knowledge?
Mr. Vollrath. To the best of my knowledge, I will agree
with that date.
In my mind, I peg it somewhere around the 18th of
September, but clearly the middle of September.
Mr. Forbes. Middle of September.
Mr. Vollrath. Right.
Mr. Forbes. But at this particular point in time, you have
done no analysis to determine what that would be.
Is that correct?
Mr. Vollrath. That is correct because there is----
Mr. Forbes. Now, assuming that we do not reduce the
workforce, doesn't that mean we would have a disproportionate
impact on our other accounts?
You mentioned two of them, fuel and training specifically.
Would it not stand to reason that if it is going to take 4
months to do this analysis, and we haven't done the analysis,
and if you would have to give the notices out by September
21st, 18th, somewhere thereabout, that we wouldn't be able to
make that timeframe.
Doesn't it mean sequestration would have a disproportionate
impact on other accounts such as fuel and training?
Mr. Vollrath. It could.
Mr. Forbes. How could it not?
Mr. Vollrath. By other decisions that would be made.
Mr. Forbes. Give me one.
Mr. Vollrath. Where you take that impact in the O&M
account.
Mr. Forbes. But it would have to be somewhere other than
personnel, correct?
Mr. Vollrath. That is correct.
Mr. Forbes. And if it is somewhere other than personnel,
that means we would have to put more on some other accounts
somewhere else.
Mr. Vollrath. Potentially. It is clearly, as you stated, a
zero-sum game.
Mr. Forbes. Okay. Thank you, Mr. Vollrath.
I have got a few more questions I will ask at the end.
Ms. Farrell, I will have some for you at the end.
But I am going to go now to Ms. Bordallo. We would love to
hear her questions.
Ms. Bordallo.
Ms. Bordallo. Thank you. Thank you very much, Mr. Chairman.
I have a couple of questions here, Ms. Farrell, and also to
you, Mr. Vollrath.
Can you please comment on the risks associated with the
Senate's proposed arbitrary cuts to the civilian workforce?
What risks might be associated with their approach if it
were enacted into law?
And also with that question, today, what is the percentage
of the civilian workforce that carry out duties not available
today with the military workforce?
I don't--if you can give me some idea. Because I know for
sure that there are particular positions and duties that the
civilian workforce carry out today that the military do not.
Ms. Farrell. Yes, ma'am.
Let me begin with, we don't comment on proposed
legislation. But we can draw from our body of work of what we
have seen that might be useful to you, as well as to DOD, in
the face of reductions.
And we would encourage DOD to look at their workforce
planning. Specifically, you start with critical skills and
competencies. And we have discussed that DOD has identified
critical skills in their mission-critical occupations--22--and
that is their starting point for workforce planning.
First, you identify your needs. Then you identify the
competencies that are associated with those. Measure that
against your existing workforce. Measure that against your
future workforce.
And that way you can determine gaps or where you might have
some overages or where you might have a workforce that is not
aligned with your strategic planning.
So that would be my first encouragement based on the body
of work we have done to look at the workforce planning and
starting with those mission-critical occupations.
As far as the percentages of civilians doing military
personnel jobs, if I understand you correctly, that would be
difficult.
We have looked at insourcing. We have looked at
outsourcing. The numbers, as you know, are not clear in terms
of a contractor inventory.
We have looked at work regarding civilians deployed in Iraq
and Afghanistan. And we are constantly monitoring that. We know
that there is a number of civilians that do serve in those
positions rather than the military force.
But I would have to do further research to give you a more
specific number unless my colleague can.
Ms. Bordallo. I think you have partially answered it.
What I mean is that if you were downsizing the civilian
workforce today, certainly there must be positions. Because,
you know, when you go into the military, you are there for
combat duty mainly.
So there must be a great number of positions, particular
positions, in the civilian workforce that are not being held by
military.
And I just wondered, what are these critical positions
that, if you were to downsize today, we would be in a heap of
trouble.
Ms. Farrell. Well, currently, DOD does not have a strategy
for the appropriate mix of personnel--that being military,
civilians and the contractor force. That was a legislative
requirement to DOD to include an assessment of the appropriate
mix of personnel in their overall strategic human capital plan.
When we last issued our report looking at that, we did note
that DOD had taken some steps in terms of providing guidance as
to use the least costly mix of personnel to achieve the mission
using the military requirements.
As you may know, there is also a mandate to GAO to look
more closely at that guidance, and do an assessment of the
methodology that makes that determination of the least costly
way to go about making that determination. But there is not a
strategy or definite numbers that is in the strategic human
capital plans that we have reviewed.
Ms. Bordallo. Mr. Vollrath.
Mr. Vollrath. Let me try to--I can't give you finite
numbers. But let me try to at least address what I believe to
be your point and the question.
The question, if I have it right, is what positions or jobs
or skills do our Government civilians perform that are more
aligned with what they would be doing versus what the military
would be doing.
Ms. Bordallo. That is correct.
Mr. Vollrath. In a simple statement, it would be, many of
the base support requirements, acquisition requirements, RDT&E
[Research, Development, Testing, and Evaluation] requirements.
When I talk about base and support requirements, the way
that I look at the strategic management of the workforce is
once you decide what the military's strength is going to be,
and where it is going to be, you then bring in the next look
from a strategic perspective, the Government civilian workforce
that is necessary to support that.
And then last you bring on the contract for services where
there would be cost-savings and things are not inherently
governmental.
Let me go back to the base support.
Another strategic way that we take a look at shaping this
force is, if you look at a base, it could be Army, it could be
Air Force. But we tend to talk in terms of power projection
platforms.
We look at that installation as a way to get off to war,
because we are not going to engage in combat, we hope, there.
So that we use the civilian workforce to support that power
projection platform, and so we look for any military skills
that might have been siphoned into that base support, and try
to move them back into that warfighting capability.
And we have, I think, done a very reasonable job of that in
the last several years.
Now when we take that idea, and we move it into contract
services, that is a supplement to both of those. And some of
that can be ramped up or it can be ramped down depending on
what our direction is and use of our national strategy.
And so combining all three is what we believe to be the
strategic look at the workforce. But it is fundamental to
supporting that military.
Now, we have put out guidance, very recently again. But as
the components and the Services start to work their fiscal year
2014 budget, and look at the out-years, that they be very
attuned to the shaping of the force so as not to make decisions
that could result in borrowed military manpower.
So if you overextend, or don't properly identify the
civilian workforce that you need, the probability goes up that
military might be siphoned off to take care of that gap. So we
are keenly aware of the historic problems that have been around
when we do these kinds of downsizing.
So right now, the strategic look is, start with the
military, build in behind it. The Government civilians who are
inherently Government work, and then use contracts for
services.
Ms. Bordallo. Thank you.
There is one other question for the two of you.
What lessons were learned from former Secretary Gates'
efficiencies initiative that could be helpful in developing the
requirements-based workforce management plan?
And how are issues associated with that initiative
addressed in the strategic workforce plan?
Let us start with you.
Ms. Farrell. Yes. We have work under way looking at the
current DOD overall----
Ms. Bordallo. Can you come a little closer to the mic,
please?
Ms. Farrell. We have work--can you hear me now?
Ms. Bordallo. Yes.
Ms. Farrell. We have work looking at the current overall
DOD strategic workforce plan. And we are looking at that
against certain requirements that Congress put in law for DOD,
as well as events that may have taken place in the last couple
of years, such as the Secretary's initiatives. But we are not
in a position at this time to comment on that.
I would say that these initiatives were of a much smaller
scale, and may serve as some lessons learned for DOD in the
event that there are much more significant reductions.
Ms. Bordallo. Mr. Secretary.
Mr. Vollrath. What we have learned from that is that we
need to expand, and are expanding, some of the information
tools to help guide us better.
For example, the inventory of contract services was not
robustly supported in the past. We now believe that we have
that built, along with information technology support, to get a
much better handle on what we are getting for those contracts
for services that we have left.
We also have, as you have heard, we have improved and
expanded the strategic workforce plan and the support
mechanisms to get greater fidelity in there for the civilian
workforce.
Now, that strategic workforce plan has in it also a
military component. But the real focus, frankly, is to get a
better handle on the civilian workforce and its projected
requirements.
Now, I would not sit here and tell you that we will have
this totally figured out and it will be done in 2015, because
it is a moving target. It always changes.
But we believe that as a result of the past efforts we have
much better tools in place, or about to be in place, that will
help us shape the force better than we have been able to ever
do in the past.
Ms. Bordallo. In your opinion, Mr. Secretary, why has it
taken so long for DOD to develop its strategic workforce plan?
Mr. Vollrath. Because of its complexity. Because of its
complexity. A strategic workforce plan, it depends on how you
want to look at what a strategic workforce plan is.
The big problem has been to try to get all three components
clearly identified and, if you will, in a box that you can take
a look at it together. And so it has taken time to shape those
tools to get them all in one holistic look, and I believe,
frankly, GAO has helped us immensely, okay, with their look at
our work and our progress, and their suggestions to make this
better.
It is not going to ever be, I emphasize again, a thing of
beauty because it has so many moving parts. As I mentioned, it
is three workforces: military, Government civilians, contract.
It is spread across four Services.
There are sets of laws associated with each one of them.
The force is disbursed over the globe, literally.
And then you have the dollar dimension that is added every
year, that has to be taken into consideration. And then there
is time.
And so those are a complex set of things that have to be
considered in the strategy of managing the workforce.
For example, cyber--if you took a look at the strategic
workforce plan, if you went back about 5 years, cyber was
barely a term. It has now come to the front. And so we are now
looking at cyber and the skills required for that.
And in the civilian workforce component, what does that
mean? What are the competencies?
As a matter of fact, in looking at cyber, the Government
civilian workforce is a real opportunity for us, because we can
hire into the mid-grades people with those kinds of skills.
On the military side, if we want to build that kind of
competency, we don't have the ability to hire mid-grade. We
bring them in, we train them, and we grow over time.
So the civilian workforce of the Department of Defense is
critical to national defense to give us that flexibility to get
the job done.
Ms. Bordallo. Mr. Secretary, just cutting back on the
original question, what do you think about the Senate proposal
on the cuts?
Mr. Vollrath. I would recommend against having any
particular arbitrary number. Because if we ever do that, I
don't know how you do good strategic planning.
Now, that is not to say that you don't, for the sake of
looking at potential impacts, take a look at cuts or dollar
cuts in the budget. That is what we get paid to do to try to
shape that force. We cannot do it in a vacuum.
We would prefer to have the flexibility to manage the force
in a more strategic do. But whether any--you know, if Congress
decides that we need to move in a slightly different direction,
that is up to you all.
It would probably be better expressed in terms of a budget
number for our flexibility.
Ms. Bordallo. Thank you, Mr. Secretary.
Thank you, Mr. Chairman.
Mr. Forbes. Thank you, Madeleine.
The gentleman from New Jersey is recognized for 5 minutes.
Mr. Runyan. I thank the chairman.
And thank both of you for your testimony.
And I want to--it is in the wheelhouse. I am going to talk
about civilian workforce, but not as it relates to
sequestration. Because personally--not even personally, I think
there are many other bases around the country that have a very
similar problem I have that actually came out of the 2005 BRAC,
and a lot of it is pay parity.
And it is a huge pay parity issue in the civilian workforce
which they are asking us to help support our warfighters.
The base I have is Joint Base McGuire-Dix-Lakehurst. When
it was made a joint base in the 2005 BRAC [Base Closure and
Realignment], the McGuire-Dix side was in a Philadelphia wage
and the Lakehurst side was in New York wage.
And it still currently sits there for the wage grade
employees. The General Service employees went over to the New
York wage grade.
So it is a huge inequity that is out there left over from
that. And we have addressed that in this committee in both the
fiscal year 2012 and the fiscal year 2013 NDAA.
And, really, what I am looking for as we ask how we are
going to do whatever we have to do when and if sequestration
hits, we have another looming issue out there if you are going
to--maybe it might come to the fact where you have to backfill
a lot of this stuff with more civilian workers. But yet we
still have this looming issue hanging out there.
And I would, Mr. Secretary, I would like your comment on
what the DOD is doing to help try to correct a situation like
this. And I know it is not just at Joint Base McGuire-Dix-
Lakehurst. It is at other ones.
Mr. Vollrath. Unfortunately, I don't know specifically
about, you know, McGuire-Dix and the wage grade. So I will take
that question get you an answer for the record.
[The information referred to can be found in the Appendix
on page 74.]
Mr. Vollrath. But let me take that and go a step further.
Because you mentioned base closure and the sequestration and
the effects that it has on the workforce.
Clearly if sequestration were to happen, that is just
another dimension of the decision process, you know, that we
would have to go through. There are other dimensions.
You talked about the workforce at that installation. We
would have to do more work in terms of seniority. We would have
to--you know, who stays, who goes.
We would have to be very careful in how we manage that
downsizing the workforce, so that we retain enough flexibility
in that workforce for our future okay.
As the chairman mentioned we have a very senior force,
eligible for retirement. We are very cognizant of the fact that
we have to work on bringing more into the middle and more into
the bottom in order to mitigate that potential effect.
Same would be true during sequestration. It would be a
disaster to do a salami slice for anything that way.
We would be paying for that sequestration for years to
come.
So I understand the question about wage grade. I don't have
a specific answer for you. But I will take it for the record--
--
Mr. Runyan. I would appropriate that.
And we have been working with OPM [Office of Personnel
Management] on it a lot. And it is really at that level of OPM
and anything we can do to do that.
Because when you go back and interact with these--with
civilian employees, majority of them are our veterans also. And
we are in that world of, you know, taking care of the men and
women that take care of us and it falls right back in line with
that.
So I thank you.
And Mr. Chairman, I yield back.
Mr. Forbes. I thank the gentleman.
The gentleman from Iowa, Mr. Loebsack, is recognized for 5
minutes.
Mr. Loebsack. Thank you, Mr. Chairman and Ranking Member
Bordallo for doing this event today, this hearing today.
And I want to thank both of you for being there, as well.
I think all of us understand and certainly accept that the
civilian workforce performs critical work on behalf of our
troops and our national security.
At the Rock Island Arsenal, which I am very familiar with,
they work every day to build the equipment that keeps our
troops safe on the battlefield. And when called upon to do so
they have produced equipment. And they have really done their
job.
They have gotten to our troops in the field when needed,
and when no one else is able to. I think that is important to
keep in mind, as well.
When armor was needed, for example, for the Stryker
vehicles to protect our troops, the men and women at the Rock
Island Arsenal worked 24 hours a day, 7 days a week to produce
the lifesaving ballistic shield kits that our troops needed at
that time.
And I know that those workers are very proud of the work
that they did, as well, because they have told me many, many
times how proud of that work they are.
And it is because of examples like this, of what our
civilian workforce does every day on behalf of our service
members that I am, of course, like everyone here, I think,
extremely concerned about any proposals, as was mentioned, that
arbitrarily cut the workforce without regard of the effect
possibly on our critical missions and our capabilities.
I think we are all in agreement about that.
Mr. Vollrath, Secretary Panetta has repeatedly highlighted
the importance of protecting the defense industrial base, which
in response to questions from me and other members of this
committee, he has said includes both organic and private sector
facilities and capabilities.
It appears that the Senate Armed Services Committee
attempted to protect some elements of the industrial base from
the cuts mandated in their bill, but failed to include organic
manufacturing facilities such as Army arsenals.
What assurances, if any, can you provide that DOD
leadership will protect the remaining organic defense
industrial base, or critical Army arsenals from cuts that would
undermine our essential capabilities and reduce efficiency?
And would the Department have the ability to base decisions
regarding the reductions on readiness and critical
capabilities? Or would the Department have to take an across-
the-board approach across facilities and DOD offices?
Mr. Vollrath. Sir, is your question relative to
sequestration or how we manage the force?
Mr. Loebsack. How we manage it, but it could be
sequestration. It could be other cuts that come down the pike.
Mr. Vollrath. As you correctly point out, we need to make
reasoned decisions and set priorities as we execute, quote--
``strategic human capital management,'' or workforce
management.
In terms of process there are guidances given in the
development of the coming budget and the projected years--
normally out 5 years in the POM [Program Objective Memorandum]
process.
That guidance is generally focused on those key and
critical functions, particularly where the civilian workforce
is the backbone. So as the process occurs that guidance is
developed.
I am just not current on the guidance for that particular
element that you highlight. I do know that we have guidance in
the development for our next budget and for the POM out, to
ensure that we take care of that part of it that has to do with
reset.
Mr. Loebsack. Yes, I am concerned, obviously, about some of
the cuts that the Senate has been talking about--what they have
approved. And so that is why I am asking that question.
I have got a number of other questions. In the interest of
time, I think I am going to cut myself off here just a little
bit early, which almost never happens in Congress, obviously.
I think I have about four other questions. And if I may,
Mr. Chair, I am going to submit those for the record to you.
And to you, Ms. Farrell, as well, we have at least one for you,
if that is okay with you, Mr. Chair.
Mr. Forbes. Without objection, that will be fine, Mr.
Loebsack.
Mr. Loebsack. Thank you very much. And I yield back the
balance of my time.
Thank you, Mr. Chair.
Mr. Forbes. Thank you.
And the gentleman from Mississippi is recognized for 5
minutes.
Mr. Palazzo. Thank you, Mr. Chairman.
And I thank our witnesses for being here today.
I just have some questions. When I think of DOD civilians,
think the Department of Defense. And typically I think of the
military.
Can you tell me how many of your DOD civilians actually
have veteran status or have served in the military?
I know they may not have their 20 years, but----
Mr. Vollrath. I cannot, but I will be glad to take that,
because I know we have that information. I just don't know it.
So if I can take that for the record, I will absolutely
give you the answer for that.
[The information referred to can be found in the Appendix
on page 74.]
Mr. Vollrath. A large portion--I will just tell you. A
large portion of our civilian workforce has veteran status.
And in the hiring process veterans have some preference in
hiring. And, frankly, we need some of that talent that was
developed over those many years in the military to move into
our civilian workforce.
That is in many respects how we fill that middle
requirement in our civilian workforce.
Mr. Palazzo. I agree with you 100 percent. I think veterans
coming off and the experience that they have gleaned over
whether it is 10 years, 20 years, or 30 years. Being able to
come in and sit next to a true civilian who has never worn the
uniform or been in a combat situation or boot camp-like
scenario can help.
He will bring his skillset. He will kind of bridge the gap
between the civilian and the military.
And there is definitely a culture that the military and DOD
should not, you know, kind of mold itself to the civilians. But
that civilian employee needs to understand the military culture
because that is what makes our military so great, and has kept
our country so strong for so long.
Mr. Vollrath. The Administration--just to follow up on
that--has a very robust program across all of the Federal
departments to hire veterans. I sit on that committee. And we
report out regularly how each one of the various different
agencies is doing to focus on those veterans.
Mr. Palazzo. Can DOD civilians unionize?
Mr. Vollrath. The answer is yes. They may unionize.
Mr. Palazzo. Just out of curiosity, how many DOD civilians
have been fired in the past year?
I am sure you might not have that number in your head,
but----
Mr. Vollrath. I don't have a number in my head. I would
have to--define fired, okay?
Mr. Palazzo. Terminated, but----
Mr. Vollrath. Terminated for cause is one way. And I can
get back to you again--and take that--others, but terminated
because of a reduction in the last year, meaning a RIF?
Mr. Palazzo. Not a RIF.
Mr. Vollrath. All right. I do not know that number, but
if----
Mr. Palazzo. Unproductive, insubordinate, you know, typical
things that will get you----
Mr. Vollrath. I don't know. Relatively----
Mr. Palazzo [continuing]. In the military----
Mr. Vollrath. I understand.
Mr. Palazzo. Okay.
Mr. Vollrath. In terms of percentage of the workforce, it
is going to be relatively small. But with your agreement, I
will take it for the record, Mr. Chairman, and get back.
[The information referred to can be found in the Appendix
on page 75.]
Mr. Palazzo. What sort of tax breaks would DOD civilians
get for serving in combat zones?
I know a lot of them have been serving in Iraq and
Afghanistan, Djibouti and pretty much everywhere there is
military personnel.
Mr. Vollrath. I do not know, other than the standard tax
breaks that you would get. I am not up on exactly what
additional tax breaks they get that are unique to that Service
in the CEW [Civilian Expeditionary Workforce] workforce.
It is a voluntary workforce but----
[The information referred to can be found in the Appendix
on page 75.]
Mr. Palazzo. It is probably more hazard pay as opposed to a
tax----
Mr. Vollrath. Again, I don't know--I don't know----
Mr. Palazzo [continuing]. It used to be 1 day--if you step,
1 day, in a combat zone, during the month, for military----
Mr. Vollrath. For military----
Mr. Palazzo. A whole month up to a certain cap based on
rank?
Mr. Vollrath. Correct. Correct.
Mr. Palazzo. Okay. Also, I was reading your bio and I
noticed that you are responsible for all matters related to
civilian and military personnel, readiness of the force,
military community, and family policy, and so forth and so on.
I was just curious. Are military personnel banned from
attending political events in uniform?
Mr. Vollrath. Yes.
Mr. Palazzo. Okay.
There seems to have been an exception to that policy this
past couple of weeks where uniformed military personnel were
allowed to march in a political parade in California.
Did that decision come from your area, readiness and force
management?
Mr. Vollrath. It did not come from my area. But I am not
sure that we correctly characterize that as a political event.
I mean, it was a unique event. But I am not sure there was
a clear, political----
Mr. Palazzo. There must have been some concern that it was
political or could be perceived as political, because it was
very quickly noticed, oh, this is a one-time exception.
Do you all have any internal discussions on who authorized
that?
And do you think it actually went through the proper chain
of command?
Because I would think that would be under your area of
responsibility, and not maybe some public affairs or general
council?
Mr. Vollrath. It was made by the right--the people that
made it had the right authorities to do that. And it is a one-
time exception, clearly, because we do need to assess follow-on
impacts potentially to that. But it was not ill advised or
taken lightly. Let us put it that way.
Mr. Palazzo. Well, I see my time is over.
Tradition is one thing that has served the military
extremely well from the days our country was founded. And
breaking with tradition, I don't think, is a good thing to do
at this time.
Thank you for your testimony.
Mr. Forbes. I thank the gentleman for his questions.
And, Mr. Vollrath, how can you say that the proper people
and the proper authorities made the decision when you don't
know who made the decision?
Mr. Vollrath. I know who made the decision.
Mr. Forbes. Can you tell us who made the decision?
Mr. Vollrath. It was in the public affairs part of the
Department of Defense.
Mr. Forbes. But it wasn't with the Joint Chiefs or any of
the chairmen of the Joint Chiefs, was it?
Mr. Vollrath. I don't know.
Mr. Forbes. Then you don't know?
Mr. Vollrath. I would have to get----
Mr. Forbes. But they didn't know about it?
Mr. Vollrath. I do not know that.
Mr. Forbes. Okay.
The gentlelady from Hawaii is recognized for 5 minutes.
Ms. Hanabusa. Thank you. Thank you, Mr. Chairman.
Both Mr. Vollrath and Ms. Farrell, I have sat in this
committee, as well as in the major committee, and have asked
many people, including all the chiefs and the joint chiefs, a
very simple question, in my mind, which is what is the military
of the future going to look like?
And to my surprise, no one knows.
As a matter of fact, I think General Chiarelli said it best
when he said, ``All I can tell you is that we have been 100
percent correct in not being able to predict it at all.''
I am basically summarizing it.
And now that is why I come back to what both of you have
said, Ms. Farrell in her written testimony, you in your
statement, is you talked about a new defense strategy in terms
of the civilian workforce. And Ms. Farrell talks about, on page
eight, mission-critical occupations.
So my question to both of you is, when you both say that,
what, Mr. Secretary, is that new defense strategy that you are
looking to the civilian workforce, our workforce, to get to?
And, Ms. Farrell, when you talk about your mission-critical
occupations, what is the definition of mission, and what makes
it critical?
So beginning with you, Mr. Secretary.
Mr. Vollrath. Thank you.
When I talk about this as a strategy, it is a framework for
a strategy. As I mentioned before, several years ago--define
that, maybe, as 5 or 6, cyber would not have been on the table.
It is now.
What I am trying to convey is that, in the strategic
workforce planning, we have now put inside the capability to
have greater visibility of contracts for services, the civilian
workforce in the military, side by side. That is a markedly
different approach than we have historically pursued.
I do not want to leave you with the impression that,
because of that, we have this now greatly improved ability to
look out 8 years and see what that workforce is going to be.
We do not. But we do, in this process, try to push the
limits out as far as we can.
For example, I mentioned cyber. One way is to say, well, we
will just grow the military and that will take a long time.
The other is to say can we complement that with the
civilian workforce?
The answer, as I gave you before, is yes, we can. We can
input that talent much faster and at a higher level, in order
to accomplish the change that is coming.
Now, we aren't any better because of the processes in
divining what is going happen 6 years from now. We are paid to
try to do that.
We are paid to come up with systems that would assist us in
doing that. And frankly, as we get better at this, we are going
to make some guesses, and they may not turn out to be exactly
right.
But the good news is we are now in that position to start
taking that professional look further out, with more
information on which to make those types of decisions.
Ms. Hanabusa. Ms. Farrell.
Ms. Farrell. Yes. It is in the National Defense
Authorization Act for 2010 that requires DOD to include its
critical skills for its existing workforce, as well as for the
future.
The 2010 was an amendment--actually, they have been
required since to develop such a plan.
So DOD chose to use what they call mission-critical
occupations to identify their critical skills. They came up
with those occupations through discussions at very senior
levels, and with the functional community managers. That is our
understanding.
The NDAA requires DOD to report their critical skills and
competencies for the year that they are issuing, as well as 7
years out. So it is not 10 or 20 or 30 years in the future.
It is 7 years from the issuance date of the plan. And the
plan is required through this year. There will be another plan
that will be, for example, 2012, and then we will project for 7
years out.
Ms. Hanabusa. So, Ms. Farrell, would you agree with me that
basically what you were studying was basically their best guess
at what we would need?
Ms. Farrell. They are not our identification. We are----
Ms. Hanabusa. I understand that.
What you are doing your analysis on is their best guess,
DOD's best guess of what we are going to need in terms of
workforce for the next 7 years.
Ms. Farrell. We are looking for what decisions they are
making that are data-driven. There are ways to identify skills
and competencies to gather data, including what are emerging
issues and information technology management.
Ms. Hanabusa. But it is still based on their best guess. If
they don't know, that is what----
Ms. Farrell. No, there could be data that they could
collect from functional community managers, as well as doing
surveys to identify what those critical skills and competencies
that are needed today, as well as what is on the horizon.
Ms. Hanabusa. Mr. Chairman, I will ask to be able to follow
up in writing. Thank you.
Mr. Forbes. Let me just, if I can, close a couple of the
gaps.
Mr. Vollrath, you mentioned that you wanted to accomplish
the change that was coming.
What is that change?
Mr. Vollrath. I am not sure that I can recall what that was
about. I want to accomplish the change?
Mr. Forbes. You said you wanted to prepare in order to
accomplish the change that is coming, that was I thought you
said. Maybe I misunderstood you.
That is okay. Let me move on.
You also mentioned that the Department would prefer a
modification to sequestration to more effectively implement the
negative consequence associated with sequestration.
Do you recall that?
Mr. Vollrath. In the context of what the Secretary of
Defense has been looking for in terms of relief, yes.
Mr. Forbes. Now, considering the implementation deadline is
early January, when does the Administration intend on providing
that legislative proposal?
Mr. Vollrath. In this case I would defer to Secretary
Carter and the work that he will do with the committee on the
first of August.
Mr. Forbes. Have you seen any such a proposal?
Mr. Vollrath. I have not.
Mr. Forbes. What would the negative consequences be
expected without this legislative proposal?
Mr. Vollrath. A compressed timeframe to make some very
significant decisions that affect the lives of the fine men and
women that defend our Nation.
Mr. Forbes. Ms. Farrell, based on GAO's previous work, do
you believe that the Department of Defense has analyzed and
documented the critical skills and competencies in its
workforce, civilian, contractor and military to identify their
requirements and gaps in the existing workforce?
Ms. Farrell. Well, I have noted earlier that DOD has mixed
results from their strategic human capital plans. And we are
currently reviewing their latest that was issued March of this
year.
Last time we did the review we noted that they did not meet
the legislative requirement to assess the appropriate mix of
military, civilians and contractors.
They have taken some steps, as you may know, to better
identify the contractor inventory, for example. They have
issued guidance to determine the least costly mix of personnel
needed to meet military requirements.
But at this time there is not a strategy or an assessment
of the appropriate mix.
Mr. Forbes. The report that you are talking about that was
filed in March, to be released as I understand it in September,
what timeframe was that for?
Ms. Farrell. That was their 2010 human capital plan.
And then it was based looking 7 years out from that date
that was issued in March of this year.
Mr. Forbes. So essentially the plan that has been filed,
which was in March of 2012, was for 2010. And it has still not
yet been released. It will be released in September.
Ms. Farrell. It has been released to us. We are currently
reviewing it.
You are correct, though. It was issued this year but it is
actually 2 years old to begin with. And we are looking to see
if it does take into account things as the Secretary's
initiatives, which did affect the civilian workforce.
Mr. Forbes. Is a plan that is 2 years old before it is
submitted, is that timely enough to be used in a competent
fashion for planning strategically with our workforce?
Ms. Farrell. We would hope that DOD would continue to work
on their workforce planning whether GAO was looking at what
they are doing or not.
I know that they are already thinking about the next
workforce plan that will be due. And we would encourage them to
move forward and not wait for any legislative requirement.
Mr. Forbes. Based upon your analysis, do you feel that DOD
is in a good position to properly prepare for downsizing in the
workforce now?
Ms. Farrell. Well, again, I probably sound like a broken
record, but it is workforce planning, workforce planning. That
is where we feel that an organization should look to determine
what their needs are.
And then if they are in a position, such as what DOD may be
facing, that that is the starting point.
We did work back in the mid 1990s looking at organizations
outside of DOD that were considered to be successful during
their downsizing periods. Those were, I believe, 17 private
organizations, about 5 states and about 3 foreign governments.
And each organization had to tailor its approach for
downsizing. But each of them had a common theme, and that was
that workforce planning was essential for their downsizing
efforts.
They all felt that without the workforce planning, they
would have lost more critical people than they did. And it
would have definitely impacted their ability to meet their
mission.
Mr. Forbes. And you are being polite in saying that we need
to do this and we need to do it better.
But what we need to determine as this committee is, is DOD
in a position today, with the workforce planning that they have
done, to properly do the downsizing it needs for its workforce.
Ms. Farrell. Yes. Again, I know I sound like a broken
record, but we still have the impact of across-the-board
reductions that if an agency does not know what their needs are
and what the impact is, there could be severe harm.
But we have not looked, let me be clear, we have not looked
at the sequestration impact. Our analysis is based on lessons
learned or observations that we have from the 1990s, and
organizations that went through the downsizing efforts outside
of DOD.
Mr. Forbes. Mr. Vollrath, 10 U.S. Code 129 [Title 10 United
States Code Section 129] prohibits any constraint or limitation
in terms of maximum number of employees.
Based on that, how is DOD able to impose a cap on civilian
personnel at fiscal year 2010 levels and extend that cap
through fiscal year 2018?
Mr. Vollrath. That is a good question. Let me try to put it
in a context.
First of all, from my perspective, and I think I have this
correct, these were set as targets with exceptions. Now, let me
try to explain this because it needs to be in a context.
And that goes back to how can you best manage a force. And
I am back to three pillars of the support of national defense:
the military, the Government civilians, and the contract-for-
services people.
In the case of the military, the military workforce is
defined annually in terms of end-strength. Army, at the end of,
will have 520,000. The Reserves will have X.
And so that is a finite number. There is a dollar. There is
a budget behind that. But it is a finite number.
On the contract-for-services side, we now have a capability
to measure the contract-for-services in terms of contract FTEs
[full-time equivalent] for comparison purposes. With your
guidance and help, we have instituted that far more robustly
than we ever have.
So on the military side we look at end-strength. On the
contract-for-services side we now are able to account for that.
It is still dollar-driven.
And so when we want to have an intelligent discussion about
the future, we need to include the number of Government
civilians in that mix.
When it comes to execution, it clearly, as in the other
three areas, will be impacted by the budget. But let me give
you an example in my office.
As you heard in testimony yesterday from the Secretary of
Defense and the Veterans Affairs and also from the President,
we are standing up and implementing a new veterans transition
program, the new and improved, to try to properly take care of
our transitioning veterans.
In my office, we have overall responsibility for that
program. We sat down some time ago and said what do we think it
would take to properly manage this program from the defense
level. And when we----
Mr. Forbes. That is a difference between saying these are
what we are projecting and between putting caps on, is it not?
Mr. Vollrath. I don't think so.
Because if in my office, for example, we said
unconstrained, we would like to have 21 people to do this,
unconstrained. But then we have to bring it back into the
reality of how many people do we have, and what could we
possibly afford.
Mr. Forbes. But----
Mr. Vollrath. That then becomes a discussion----
Mr. Forbes. The statute says specifically, the management
of such personnel in any physical year shall not be subject to
any constraint or limitation in terms of man-years, end-
strength, full-time equivalent positions or maximum number of
employees.
Based on that, how was DOD able to impose a cap on civilian
personnel at fiscal year 2010 levels? And----
Mr. Vollrath. I do not believe that we have imposed a cap.
We have put it out in terms of a target, with exceptions to
have that intelligent discussion.
I don't know how else you do that, frankly. If we just give
a dollar value, I am not sure what that means.
I have to, in terms of deciding the number of people that
it takes to prosecute the mission, I need to have a way to look
at that and some reasonable management effort. We have not told
the Services that they may not increase their civilian
workforce.
As a matter of fact, the exceptions are there. We are
looking at exceptions--language training, in order to support
that. That is the most current one that has been working.
Mr. Forbes. So you feel that when it says that you can't
impose any constraint, that you feel that you can impose
whatever constraints you want as long as you have exceptions to
that.
Mr. Vollrath. In part I would agree, but I keep coming back
to we need to have a reasonable basis on which to have the
discussion.
Mr. Forbes. I don't think anybody would challenge the fact
that we need to have reasonable basis to have discussion. I
think what they would challenge is whether or not we are
complying with the intent, either the letter or the spirit of
that law.
Let me take you back to some of our force structure
reductions.
It is my understanding that should DOD undertake a
reduction in force, that a determination regarding which
individuals to retain is based on essentially two things.
You talked about longevity in service. And yet if you are
looking at longevity in service, we are talking about a
situation where 90 percent of the senior leadership is going to
be retirement age in 2015, and about 30 percent of the DOD
workforce is going to be in retirement age by 2015.
Then the other criteria you talked about to the gentleman
from Mississippi was the veterans preferences that you had in
there.
If you have those two pincers, basically, that are coming
into your workforce, how are you going to possibly be analyzing
and look at skills and capability gaps?
Mr. Vollrath. As we take a look in this strategic workforce
planning, one of the critical elements that we look at is the
age of the force, the retirement eligibility of the force, and
also the ability to hire. And so when we do that strategic
planning, and we look for those skills and gaps that have been
discussed, those are the types of things that we look at.
Mr. Forbes. Okay, now, let me just ask you this.
Have you done that strategic planning now to look at those
skills and capabilities, and what we need projecting out in the
future?
Mr. Vollrath. We are in the process of doing that.
Mr. Forbes. When did you start?
Mr. Vollrath. I would say we started in earnest in 2011
with creating this ability to get the visibility to do that.
Mr. Forbes. But right now, we don't have any analysis to
say what those critical skills and capabilities are.
Is that true?
Mr. Vollrath. No, that is not correct. We have started
that. We have done it for at least 22 now.
What we are doing now is driving it further and further
down the workforce and broader and broader now.
Mr. Forbes. Okay.
Ms. Farrell.
Ms. Farrell. It is true that DOD has identified their
critical skills for the existing workforce.
The area that we have been trying to steer them toward is
the gap analysis that we talked about earlier. That once you
determine what your mission-critical occupations are, as DOD
refers to them, their critical skills, then the next step is to
measure those against the existing workforce in order to
determine where your gaps are in some cases.
And it always has to be tailored to what is going on in
that particular field. In some fields, you have to consider how
long it takes to train someone up. And in that case, retirement
eligibility may become more of a factor in your strategy to
fill those positions.
In other cases, you may look at an emerging field and see
that it is just going up and down each year and it is not very
steady. In those cases, that is when you may want to develop a
strategy that may rely more upon contractors if it is not for a
position that is inherently governmental.
But we would like to see more gap analyses.
DOD did have a plan to have gap analyses completed for
their 22 mission-critical occupations by 2015. We would
encourage them to expedite those analyses.
Mr. Forbes. So Mr. Vollrath, right now we have not done
that gap analysis.
Is that a fair conclusion?
Mr. Vollrath. We have not completed it. We have started
that process.
Mr. Forbes. Well, if you have started the process, the
process doesn't do you any good until you have completed it,
does it?
Mr. Vollrath. I am not sure I would agree with that. As we
will learn as we go along. And we will have--we are doing it--
--
Mr. Forbes. Can you give to this committee today anything
that we can look at to see what those gaps are?
Mr. Vollrath. I believe we can give you in some instances,
yes, because we have started that. We have not completed it.
Mr. Forbes. Well, will you supply to us whatever that you
have in terms of that gap analysis now?
Mr. Vollrath. Certainly.
[The information referred to can be found in the Appendix
on page 73.]
Mr. Forbes. And have you looked at how sequestration is
going to impact that gap analysis?
Mr. Vollrath. Have not.
Mr. Forbes. If it has taken you a year or more to just get
to where you are now, why are we waiting when we only have 5
months left before sequestration before we look at these
impacts?
Mr. Vollrath. I will have to defer to Secretary Carter
and----
Mr. Forbes. Do you think that is reasonable to wait?
Mr. Vollrath. At this point, I don't know. I know what the
rules are. I know what potential implications could be.
Mr. Forbes. But you don't know whether it is reasonable or
not for the Department of Defense 5 months out from a $\1/2\
trillion of cuts across the board to not be doing any planning
on what kind of gap analysis we would have should sequestration
hit?
Mr. Vollrath. Again, I will defer to Secretary Carter and
testimony on the first of August.
Mr. Forbes. But you don't have any opinion on that?
Mr. Vollrath. I don't have any opinion other than that
which I expressed in terms of how the mechanics would have to
work.
Mr. Forbes. Madeleine.
Ms. Bordallo. Thank you, Mr. Chairman.
I have just a couple of questions here.
First, to Mr. Vollrath.
How does the strategic workforce plan inform the workforce
on budget decisions in DOD, if at all?
Mr. Vollrath. It does inform the leadership on the budget.
Again, in that analysis, supported by the strategic workforce
plan, we have in there a look at the military, a look at the
Government civilian. And when we also have on top of that what
is called the ICS [Inventory of Contract Services] to look at
the contracted services.
That is used every cycle to try to get the best mix
possible for the next budget submit and for, I will use the
term normalization or rationalization of a look 5 years out as
to what we believe we need to ask for in the 5-year strategic
look.
And so we are using that product and that process today.
Ms. Bordallo. So in your opinion, then, the workforce would
be adequately informed.
Mr. Vollrath. The need for a workforce and what that
workforce is, I believe we have good information to make
reasoned decisions. We do not normally use that to, quote--
``inform the workforce,'' meaning public announcements, et
cetera, because that is not what it is designed for, if I am
getting your question proper.
Ms. Bordallo. Right. Okay.
My second question is, how does the DOD synchronize,
separate, and discrete civilian military and contractor funding
decisions and ensure that proposed savings from reducing one
category of manpower are not offset by increases in other
categories of manpower?
Mr. Vollrath. A very good question.
The first answer to that is we have drawn a line and said
you may not outsource those functions which are inherently
governmental. We also have guidance in law that says we may not
increase the dollars spent on contracts for services above the
fiscal year 2010 level, as indicated in the President's budget
submit for fiscal year 2010.
And so there is a relatively bright line for that right
now.
In terms of Government workers and military, what we have
said in terms of planning guidance, as I mentioned earlier, is
be careful, commanders, as you build your workforce, to make
sure that you don't create the situation where you are forced
into the position of having to use borrowed military manpower.
If you have a legitimate reason-need, for which you have no
other choice but Government civilians, then that is the answer.
And you should ask appropriately. And if exceptions are
required, then you have that responsibility to ask for those
exceptions.
We need to make the right decisions for the people, and in
the context of national defense and the budgets that drive it.
Ms. Bordallo. Well, thank you. You have made that very
clear.
Ms. Farrell, what observations can you offer regarding
DOD's efforts to plan for its civilian workforce requirements?
And in your estimation, is the implementation of total
force management helping to identify the core requirements by
workforce type, civilian, military and personnel?
And what improvements could be made in the process to
determine requirements and critical skills across the
workforce?
Ms. Farrell. I would like to talk about the civilian
workforce plan to begin with.
We bounced it around quite a bit. And I think we all agree
that it is key.
But the overall civilian strategic human capital plan that
we looked at in 2010 was far from being mature enough to make
informed decisions regarding the mix of personnel or the cost
or the trade-offs that we are discussing today.
There has been an update to that plan. And we are looking
at that. But I think it is probably safe to assume that DOD has
not progressed at the rate we all would like to see in terms of
the competency-based gap analysis.
I keep coming back to that. Gap analysis is very key to
determine what you need today and what you need in the future.
And that is what we would like to see the decisions based on.
Again, the plan is based on leading principles that OPM and
GAO identified that were key to developing human capital
management.
DOD had been reluctant to develop such a plan in 2000,
2002, 2004. And then in 2006 Congress stepped in and mandated.
These are the elements from leading practices. This is what
we would like to see for your overall strategic human capital
plan.
And then as well, the single leader workforce, which is the
senior executive service, and those that are at the top
leadership in the intelligence community, and then there are
very specific requirements again, that are based on leading
practices of how to develop such a plan for the acquisition
workforce.
The plan includes appendices that address different
subcomponents, information management technology, medical. And
these plans, subcomponents, are in different levels of
maturity.
But again the overall plan that we have reviewed is not
mature enough to make informed decisions.
Ms. Bordallo. I just want a direct answer on this one.
In your opinion then is DOD driving manpower decisions by
resources or by requirements in critical skills required across
its workforce?
Ms. Farrell. Well again, we refer to workforce planning as
a way to determine what the size of the workforce should be,
and what the makeup of the workforce should be. And there are
principles that can help you obtain the data and do the
analysis to come up with that.
Now at a certain point, management may have to come in and
make tradeoffs. But we would encourage DOD to have data-driven
analysis in their human capital plan to make such decisions.
Ms. Bordallo. All right.
Thank you, Mr. Chairman. I have no further questions.
Mr. Forbes. I would like to thank the members and our
witnesses. And members certainly can submit any questions we
would like.
Gentlemen,--Mr. Vollrath, thank you for being here.
Ms. Farrell, thank you.
Both of you for your service to our country and for your
willingness to be here and your expertise, and I think you can
see whether we are Republicans or Democrats here, we are very
concerned about this issue.
We are united and being concerned about the fact that, Mr.
Vollrath, as you come in here with all of your expertise that
we appreciate and respect so much as the Principal Deputy
Assistant Secretary of Defense for Readiness and Force
Management for the United States Department of Defense, that
today it is our understanding in this committee that we really
do not have a gap analysis today to show us the gaps that we
have in our critical skills and our competencies today.
And that is before sequestration hits, which is just 5
months out from today. And at that particular point in time we
don't even have an opinion of whether or not we think it is
reasonable or unreasonable that we should be preparing for
that.
And, you know, that is a message that I just hope you will
take back to your friends at the Pentagon. And just say, you
know, again, we are united as this committee in saying, as Ms.
Farrell said, that we think it is absolutely crucial that we do
a workforce analysis that we have some planning instead of just
pulling these numbers out of the air and moving forward with
those.
And so for all of your help and expertise, all the members
who were here today, and for my friend from Guam, we want to
thank you for being here.
And with that, we are adjourned.
[Whereupon, at 2:35 p.m., the subcommittee was adjourned.]
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A P P E N D I X
July 26, 2012
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=======================================================================
PREPARED STATEMENTS SUBMITTED FOR THE RECORD
July 26, 2012
=======================================================================
Statement of Hon. J. Randy Forbes
Chairman, House Subcommittee on Readiness
Hearing on
Civilian Workforce Requirements--Now and
Across the Future Years Defense Program
July 26, 2012
I want to welcome all of our members and our distinguished
witnesses to today's hearing that will focus on ``Civilian
Workforce Requirements--Now and Across the Future Years Defense
Program.''
The civilian workforce provides an invaluable contribution
to the DOD mission both at home and abroad, frequently
deploying to combat zones alongside military and contractor
personnel. I welcome this discussion today and the opportunity
to better understand how the Department of Defense is
forecasting its future workforce requirements and balancing the
critical skills required across all components of its
workforce.
Additionally, I want to understand the impact of directed
reductions. Right now, there are two possible reductions that
could negatively impact the civilian workforce in the short
term--sequestration, and the proposed Senate NDAA language.
Let's start with the Senate committee-passed language that
directs civilian and service contractor workforce reductions
commensurate with military end strength through FY17 which
would be expected to be in excess of 5%. Based on the numbers
provided in FY13, simple math would suggest that more than
39,000 civilian Full Time Equivalents would be eliminated.
Next, we have sequestration. Nobody wants it to happen,
most especially not me. We have been talking about it for
awhile, but, it appears there is little to no planning
associated with this legislative mandate. Assuming an exemption
for military personnel, we calculate there would be an
approximate 11.3% reduction across all other accounts. Again,
simple math would suggest that an additional 89,000 civilians
would be eliminated. When you add the two figures, we are
talking about more than 128,000 people. And, informally, some
in the Pentagon have indicated that sequestration alone could
be as high as a quarter of the total civilian workforce, or
almost 200,000 people. The result of any such cuts,
particularly without analytical underpinning, would be long-
term, irreversible damage to the workforce. And, let us not
forget the costs that would have to be calculated to implement,
and the sunk costs from the first quarter of the year.
Fundamentally, I have opposed any effort without the
necessary details that support the proposal. In the case of the
Senate reductions and the mindless implementation of
sequestration, both appear to lack any basis in fact or reason.
That is why I believe the more prudent approach to managing the
civilian and contractor workforce is to assess the requirement
and then to shape the workforce to meet these decision. I look
forward to discussing all of these issues later in this
hearing.
So, where does that leave us? Well, according to the
statutory requirement in 10 U.S.C 1597, any involuntary
Reductions In Force require notification--both to Congress and
the employee. So, if sequestration were to take effect in
January, DOD would be required to notify us at the end of
September.
In light of potential reductions, what genuinely concerns
me is the Department of Defense's planning for its future
workforce requirements, and negotiating the appropriate balance
among civilian, contractor and military personnel. Since 2001,
GAO has listed Federal human capital management as a
Government-wide, high-risk area because of a need to address
current and emerging critical skill gaps that are undermining
agencies' abilities to meet their vital missions. And, we know
that approximately 30% of the DOD workforce and 90% of its
senior leaders are eligible for retirement as early as 2015.
I look forward to hearing about what analysis DOD has
undertaken to identify and document critical skills and
competencies required in each component of the workforce,
particularly should directed reductions occur. And, what
recommendations GAO has for that DOD process.
We were also recently notified that the Department just
extended its civilian personnel cap through Fiscal Year 2018.
Does that presume that budget is driving DOD workforce
requirements, or vice versa? And, I look forward to
clarification of how this cap is not in direct contradiction to
the statutory requirement set forth in 10 U.S.C. 129 which
clearly precludes any ``constraint or limitation in terms of .
. . maximum number of employees.''
We in Congress, and namely this Subcommittee, have
exercised great oversight of civilian workforce issues to
ensure DOD best plans for its requirements. Total Force
Management in particular directs a holistic perspective of
workforce requirements across civilian, military, and
contractor personnel. However, I am not convinced that we even
have perfect knowledge into our civilian requirements.
I look forward to our discussions today and delving into
these topics further. We need to exercise appropriate oversight
of the process to ensure that sequestration or other reductions
do not blindside our workforce. They deserve to know what may
lie ahead and it is our job to ensure the public is informed.
Joining us today to discuss the DOD's civilian workforce
are two distinguished witnesses:
LMr. Frederick Vollrath, Principal Deputy
Assistant Secretary of Defense for Readiness and Force
Management at the Department of Defense; and
LMs. Brenda Farrell, Director of Defense
Capabilities and Management at the U.S. Government
Accountability Office.
We thank you both for being here. We are looking forward to
your testimony.
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?
=======================================================================
WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
July 26, 2012
=======================================================================
RESPONSE TO QUESTION SUBMITTED BY MR. FORBES
Mr. Vollrath. The Department is committed to improving its
strategic workforce planning capabilities in order to fully meet the
requirements of section 115b of title 10, United States Code by fiscal
year (FY) 2015. A key challenge is normalizing data and requirements
across the military and civilian workforces, as well as contracted
support, in order to accurately assess and project future needs. The
Department has made considerable progress in developing and
implementing practical tools and strategies to make data-driven
decisions in managing mission-critical skills.
The current FY10-18 DOD Strategic Workforce Plan (SWP) was
delivered to Congress in March 2012. The plan provides details on the
steps already taken and the way ahead to meet the 2015 goal (see
summary table below). Following are some specific examples of steps
taken since FY10 to improve the SWP and institutionalize use of the
plan for workforce shaping decisions.
The Department expanded its functional communities from 12 to 23 to
cover all major occupations in the workforce versus only the Mission
Critical Occupations (MCOs) covered in previous plans.
DOD led a Federal-wide initiative to develop new government-wide
criteria for determining MCOs based on mission goals and priorities,
and determining high-risk skills based on staffing and competency gaps.
As a result, 33 DOD MCOs, including three high-risk MCOs, were
identified in March 2012 based on the new criteria.
In October 2011, the Department issued guidance on reframing the
DOD SWP and issued additional guidance in November 2011 on the
enterprise competency management framework.
A new governance structure for strategic human capital management
was also implemented providing integrated decisions between functional
community and component leaders in the expanded functional community
construct.
The Department implemented standard competency taxonomy for
identifying and assessing occupational competencies across the
workforce. Competency models for all DOD MCOs will be in place by the
end of 2012, and a DOD-wide tool for assessing employee competency gaps
is planned for deployment in 2013.
Additional initiatives are underway to improve total force data and
requirements needed for a comprehensive approach to assess total force
mix, implement more robust enterprise planning tools for use across the
Department, and strengthen and mature workforce planning capability and
results. [See page 28.]
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RESPONSE TO QUESTION SUBMITTED BY MR. RUNYAN
Mr. Vollrath. The Office of Personnel Management (OPM) has
authority to redefine Federal Wage System (FWS) wage areas and to
assign geographic designations to a specific wage area. The Federal
Prevailing Rate Advisory Committee (FPRAC), comprised of labor and
management members, makes recommendations for wage area changes to the
Director of OPM. The FPRAC majority recently made a recommendation to
the Director of OPM to realign many wage areas. [See page 17.]
RESPONSES TO QUESTIONS SUBMITTED BY MR. PALAZZO
Mr. Vollrath. As of June 30, 2012, the number of DOD civilians with
prior military experience or veteran status is 336,229, representing
42.99% of the total DOD civilian workforce. [See page 20.]
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Mr. Vollrath. In Fiscal Year (FY) 2012, as of June 30, the
Department of Defense has removed or terminated 1,936 civilian
employees out of a total workforce of 782,029 civilian employees due to
unacceptable or unsatisfactory performance, misconduct, or delinquency.
This figure represents 0.24% of the total workforce (less than 1%). In
FY 2011, the Department removed or terminated 2,587 civilian employees
for similar reasons. [See page 21.]
Mr. Vollrath. Federal civilian employees do not receive combat zone
income tax exclusion. Section 112 of title 26, United States Code
provides tax benefits for military members serving in combat zones, but
there is currently no comparable provision for Federal civilians. [See
page 21.]
?
=======================================================================
QUESTIONS SUBMITTED BY MEMBERS POST HEARING
July 26, 2012
=======================================================================
QUESTIONS SUBMITTED BY MR. FORBES
Mr. Forbes. How is DOD managing its future force structure
requirements in light of the reductions in military personnel as you
draw down in Iraq and Afghanistan? And, specifically, is the DOD
expecting to reduce its civilian and contractor workforce commensurate
with the military personnel reductions? If not, why not?
Mr. Vollrath. Currently proposed reductions in military end-
strength are linked to declines in our current overseas commitments;
expiration of the temporary end-strength increases associated with
Operations Iraqi and Enduring Freedom; revised strategy, posture and
operational planning; and changes to our force structure. The military
reductions currently planned for ensure that the Active Duty end-
strength of the Department is nearly the same as it was prior to
September 11, 2001. Under the current budget plan, ground force
capabilities within the Army and Marine Corps will remain at slightly
above 2011 levels, while Navy and Air Force levels decrease. These
decreases are attributable to reductions in ship and aircraft
inventories and modernization of the respective fleets.
The Department's FY 2013 budget reflects a balanced workforce that
reflects our best judgment, representing a carefully coordinated
approach based on the Department's strategy and policy that balances
operational needs and fiscal reality without placing national security
and our overall defense posture at risk.
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, as
well as applicable laws and guidance. Even during this period of
constrained defense budgets, we must ensure that we have a sufficient
number of Federal civilian personnel to meet the support needs of our
military forces. We must also be sure that military or Federal
civilians are performing all inherently governmental jobs, and that
sufficient levels of civilians are available to perform critical
oversight, management, and readiness functions of the Department.
The Department also recognizes that we operate in a dynamic and
changing environment and must retain the flexibility to adapt our
workforces accordingly.
Mr. Forbes. What analysis has DOD undertaken to identify workforce
levels based on requirements? Or, are the number of personnel driven by
fiscal constraints and budgetary imperatives?
Mr. Vollrath. The Fiscal Year (FY) 2013 President's Budget request
reflects an objective and reasonable approach to all components of the
Total Force: military, Government civilians, and contracted services.
During this period of constrained defense budgets, the Department must
ensure that a sufficient number of Federal civilian personnel are
available to meet the support needs of our military forces and deliver
operational readiness. The Department must also prioritize and reduce
less critical missions. In an effort to significantly reduce excess
overhead costs the Department carried out a number of initiatives
beginning in FY 2011 including directing Components to maintain
civilian personnel, with certain exemptions and exceptions, at FY 2010
levels. Components were directed to make trade-offs and separate core
mission workload and requirements from less compelling support needs
based on organizational assessments and mission/function
prioritization. This reflects a commitment to challenge workload
requirements and size our workforce to meet our most pressing and
critical priorities. Exceptions to this have been granted on a case by
case basis, where justified by workload or other specific rationales.
Mr. Forbes. What analyses has the DOD completed in order to
determine the core or critical functions that would be most
appropriately performed by each category--civilian, military, and
contractor workforce? And, what analyses has the DOD done to ensure
that it has the right mix of people with the right skills in order to
perform these critical functions?
Mr. Vollrath. The many Components of the Department execute a wide-
range of missions and functions, and as such, have varying skill and
capability requirements. These requirements are mission and workload
driven, and are affected by operating environment, risk levels, local
labor market conditions, and other factors. The Department's
``sourcing'' of functions and work between military and civilians, or
through contracted services, must be consistent with workload
requirements, readiness, and management needs, as well as applicable
laws and statute. There are many tools and processes available to help
inform such decisions. These include, but are not limited to, the
Strategic Workforce Planning construct of functional communities and
mission-critical occupations; the inherently governmental and
commercial activities inventory; the inventory of contracts for
services; and force and infrastructure classifications.
Accordingly, the Department remains committed to ensuring and
delivering a balanced, flexible, responsive workforce with the right
skills and competencies that: is the appropriate mix of labor;
mitigates risk, ensures continuity of operations, and promotes an
organic knowledge base; delivers core and critical functions necessary
to maintain operational readiness; and ensures mission requirements are
met most cost effectively and efficiently. DOD Components request
funding and manpower resources based on workload requirements,
including the most critical functions necessary to meet their
respective missions.
Mr. Forbes. Why has the DOD extended its civilian workforce cap
through 2018, and what savings do you expect to garner as a result of
which? And, how does DOD reconcile the workforce cap with current law
and statute in 10 U.S.C. 129 which precludes such limitations by number
of employees?
Mr. Vollrath. The Department does not have a cap on its civilian
workforce. As part of its budget building process for the past few
years, the Department directed that components maintain fiscal year
2010 civilian levels as a departure point for prioritizing and shaping
its workforce, and in an effort to ensure resources are applied to our
most compelling requirements. DOD organizations may exceed their fiscal
year 2010 civilian workforce levels as needed to meet mission and
workload requirements, consistent with section 129 of title 10, United
States Code. Where necessitated by mission and workload, exceptions to
fiscal year 2010 civilian levels may be granted. Those decisions will
be reflected in the FY 2014 President's Budget.
Mr. Forbes. How do you expect that sequestration will impact the
civilian workforce, and when would DOD be required to notify personnel
of an impending Reduction in Force?
Mr. Vollrath. We believe that civilian RIFs would result in added
costs, or at most only small savings in FY13, so RIFs are not a viable
tool for accommodating that FY13 sequester. To accommodate sequester in
FY13, we would need to focus more on eliminating temp hires, hiring
freezes, and perhaps unpaid furloughs. All of these would harm
readiness and our ability to support military operations.
RIFs also do long term damage in the workforce because they are
based primarily on length of service as opposed to maintaining a
workforce that is responsive to mission needs. RIFs also take time.
Involuntary separations conducted under Reduction in Force rules
require a 45-day congressional notification followed by a 60-day
notification to employees. This can further be complicated by the need
to bargain with individual unions. For all these reasons, RIFs are not
a viable tool to accommodate sequester.
Mr. Forbes. In light of the fact that 30% of the civilian workforce
is eligible to retire in 2015, and 90% of your senior management, how
is the DOD managing its workforce and developing critical skills to
ensure a viable workforce in the future with the requisite skills?
Mr. Vollrath. At the enterprise level, the Department manages its
workforce through a functional community construct. The Department
forecasts retirements and other losses through the DOD Strategic
Workforce Plan (SWP).
DOD and its Components work together to track and manage skill gaps
and to develop and implement recruitment, retention, and development
strategies to close projected skill gaps due to retirement and other
losses.
Current DOD workforce data shows that 20.6% of the overall
workforce (GS 1-15 and equivalent) and 51.3% of the senior leader
workforce are eligible to retire by the start of 2015. DOD monitors and
tracks retirement eligibility in mission-critical occupations (MCOs) on
an ongoing basis as part of its SWP process. The goal is to ensure
strategies are in place to manage knowledge transfer and succession for
critical skills and competencies needed.
Mr. Forbes. How does the Strategic Workforce Plan inform workforce
and resource allocation decisions in DOD, if at all?
Mr. Vollrath. The DOD Strategic Workforce Plan (SWP) serves as a
guide for managing civilian positions across the Department within
functional communities and components. The SWP is informed by validated
missions. DOD Components request funding and civilian full-time
equivalents based on validated workload. By focusing on specific
strategies for closing mission-critical and high-risk skills gaps, the
SWP guides leaders in making workforce decisions to meet changing
mission strategies, environmental and labor market conditions, and
budget constraints. Allocated resources then are aligned by DOD
Components to their most critical missions/priorities, informed by
workforce gaps identified in the DOD-wide SWP.
Mr. Forbes. How does the DOD synchronize separate and discrete
civilian, military and contractor funding decisions and ensure that
proposed savings from reducing one category of manpower are not offset
by increases in other categories of manpower?
Mr. Vollrath. Departmental guidance on manpower management is
intended to ensure that Components align the best manpower mix to
missions, tasks, and functions and requires associated risk mitigation
and consideration of costs. Components prioritize their manpower
requirements/funding requests in developing their annual program and
budget submissions and may make adjustments within the Total Force mix.
Their priorities are a reflection of their requirements, which are
driven in part by the National Military Strategy, the Secretary's
Defense Planning Guidance, Quadrennial Defense Reviews, and Combatant
Command operational planning documents. Once requirements are submitted
as part of initial budget submissions, a corporate review is conducted
to assess and prioritize requirements in a holistic manner. Where
necessary, resource and manpower trade-offs are identified and
recommended courses of action are presented to the Secretary of Defense
for final decision. Adjustments to manpower requirements, and their
mix, can be a result of changes in force structure, mission
prioritization, and workload.
Mr. Forbes. What steps is the DOD taking to improve the visibility
of contracted services to ensure that such services get the same
scrutiny as civilian and military workforce end strengths?
Mr. Vollrath. In November 2011, the Department submitted a plan to
the Congressional defense committees delineating both short- and long-
term actions to fully implement the requirements of section 2330a of
title 10, United States Code. As a result of this plan, and subsequent
guidance issued in December, the Department will have increased
visibility and accountability into contracted services. Specifically,
improvements currently underway will enable the Department to more
accurately identify contracted level of effort based on direct labor
hours and associated data collected from private sector providers.
Additionally, DOD Component heads must now certify, in writing, that
they have completed comprehensive reviews of their contracted services
to ensure appropriate utilization, cost effectiveness, and alignment to
mission need and priority. Along with restrictions on contract spending
included in the Fiscal Year 2012 National Defense Authorization Act,
these reviews will help inform subsequent budget requests, and ensure
that requests for contracted services receive scrutiny similar to that
afforded civilian personnel levels and military end-strength.
Mr. Forbes. What would be the impact of the SASC NDAA reductions of
civilian and contractor workforce by 5% over the next 5 years? And, has
the DOD assessed the critical skills it needs to retain in each
workforce? If so, what are some examples?
Mr. Vollrath. Given the planned decreases to force structure, the
streamlined new strategic direction of the Department, and continued
fiscal pressures, the Department continues to evaluate the size of our
Total Force, including our civilian and contracted services workforces.
Any changes must be done in a holistic, analytically based, and
responsible manner that is consistent with the Department's
responsibilities under sections 129 and 129a of title 10, United States
Code.
The Department's civilian and contracted support workforces perform
key enabling functions for the operating forces, such as critical
training, equipment modernization and reset, medical care, family
support, and base operating and infrastructure services--all vital
services that support our men and women in uniform. Within these
functional communities, the Department has identified 33 mission-
critical occupations (MCOs). The DOD's Strategic Workforce Plan
forecasts future MCO requirements and provides recruitment, retention,
and development strategies to close workforce gaps ensuring that
critical skills are maintained in each.
Furthermore, 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, as well as applicable laws and guidance. Even during this period
of constrained defense budgets, we must ensure that we have a
sufficient number of Federal civilian personnel to meet the support
needs of our military forces. We must also be sure that military or
Federal civilians are performing all inherently governmental jobs, and
that sufficient levels of civilians are available to perform critical
oversight, management, and readiness functions of the Department.
Mr. Forbes. In the past, GAO has stated that across-the-board cuts
could have an adverse effect on essential programs if the DOD does not
take a strategic view of ensuring that those employees with the
critical skills needed to perform the DOD's critical functions are not
arbitrarily cut. What recommendations would you offer based on previous
GAO analysis for how the DOD could best manage that process?
Ms. Farrell. While we have not evaluated the potential impact of
across-the-board cuts on the Department of Defense's (DOD) current
workforce, since 2008 we have reviewed DOD's Strategic Human Capital
Workforce Plans and identified opportunities for improvement. \1\ Our
reviews of those plans have found that DOD addressed the requirement to
assess its critical skills. Specifically, the overall civilian
workforce plan identified 22 mission-critical occupations, which,
according to DOD, represent the Department's assessment of critical
skills. However, we also found that DOD's plan lacked such key elements
as competency gap analysis and monitoring of progress. Our prior work
has identified competency gap analyses and monitoring progress as two
key elements in the strategic workforce planning process. Specifically,
competency gap analyses enable an agency to develop specific strategies
to address workforce needs and monitoring progress demonstrates the
contribution of workforce planning to the achievement of program goals.
As we have reported, without a competency gap analysis, DOD will
continue to rely on incomplete information concerning the size,
composition, and needs of its civilian workforce. Inclusion of these
elements in an agency's strategic workforce planning efforts can help
the agency design and fund the best strategies to fill their talent
needs through recruiting and hiring and make appropriate investments to
develop and retain the best possible workforce. \2\
---------------------------------------------------------------------------
\1\ GAO, Human Capital: Further Actions Needed to Enhance DOD's
Civilian Strategic Workforce Plan, GAO-10-814R (Washington, D.C.: Sept.
27, 2010); Human Capital: Opportunities Exist to Build on Recent
Progress to Strengthen DOD's Civilian Human Capital Strategic Plan,
GAO-09-235 (Washington, D.C.: Feb. 10, 2009); The Department of
Defense's Civilian Human Capital Strategic Plan Does Not Meet Most
Statutory Requirements, GAO-08-439R (Washington, D.C.: Feb. 6, 2008).
\2\ GAO, DOD Civilian Workforce: Observations on DOD's Efforts to
Plan for Civilian Workforce Requirements, GAO-12-962T (Washington, D.C:
July 26, 2012).
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Mr. Forbes. What observations can you offer regarding DOD's efforts
to plan for its civilian workforce requirements? In your estimation, is
the implementation of Total Force Management helping to identify the
core requirements by workforce type--civilian, military and personnel?
And, what improvements could be made in the process to determine
requirements and critical skills across the workforce?
Ms. Farrell. We have reviewed DOD's mandated Strategic Human
Capital Workforce Plans since 2008, and found that DOD's earlier
efforts did not meet many of the mandated requirements. \3\ In our
assessment of DOD's original plan, which was submitted to Congress on
November 6, 2007, we found that it partially addressed two of the eight
statutory requirements. \4\ For example, while DOD's plan listed
current critical skills that DOD called enterprisewide mission-critical
occupations, \5\ it lacked a ``gap analysis''--an assessment of the
difference between the existing and future critical skills and
competencies of the civilian workforce. We recommended that DOD provide
Congress a plan that addressed all of the legislative requirements. DOD
disagreed, noting that its response to the congressional reporting
requirements reflected a centralized enterprisewide strategic
perspective--as opposed to providing the information specified by law
such as recruiting and retention goals. We noted in our 2009 review of
DOD's update to the plan that the Department had made progress in
implementing the eight statutory requirements in the National Defense
Authorization Act for Fiscal Year 2006 when compared with its first
plan; however, the 2008 update only partially addressed each of the
eight requirements. For example, the update still did not include an
assessment of its future enterprisewide mission-critical occupations
that cover a 10-year period, as was then required by law. The statutory
requirements governing DOD's strategic human capital plans \6\ have
been amended several times in the intervening period, and we have
continued to closely monitor DOD's efforts to address the statutory
requirements. In our September 2010 review of DOD's 2009 update to its
human capital strategic plan we found that, although DOD had addressed
additional legislative requirements, several key elements continued to
be missing from the process--including such elements as competency gap
analyses and monitoring of progress. Regarding total force management,
our September 2010 review also found that the Department had issued a
directive stating that missions should be accomplished using the least
costly mix of personnel (military, civilian, and contractors)
consistent with military requirements and other needs. However, as our
report noted, the Department's workforce plan did not provide an
assessment of the appropriate mix of military, civilian, and contractor
personnel capabilities.
---------------------------------------------------------------------------
\3\ DOD is required by law to develop periodic strategic human
capital plans containing certain specific elements, which have changed
over time. The current plan requirement is codified at 10 U.S.C.
Sec. 115b.
\4\ GAO-08-439R.
\5\ According to DOD officials, enterprisewide mission-critical
occupations are used in DOD's updated strategic plan to refer to both
critical skills and competencies.
\6\ GAO-12-962T and GAO-10-814R.
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Mr. Forbes. In your opinion, is DOD driving manpower decisions by
resources or by requirements and critical skills required across its
workforce?
Ms. Farrell. Both requirements and resources help to shape DOD's
workforce decisions. We have previously reported on DOD's efforts to
strategically manage its civilian workforce, but have noted that
opportunities exist for further improvement. For instance, we reported
in 2010 \7\ that DOD's 2009 strategic workforce plan assessed the
Department's critical skills and identified 22 mission-critical
occupations, such as acquisition and financial management. However,
DOD's plan only discussed competency gap analyses for 3 of its 22
mission-critical occupations. We have reported that competency gap
analyses are key to enabling an agency to develop specific strategies
to address workforce needs. For example, we found that DOD had not
conducted a competency gap analysis for its financial management
workforce, and we remain concerned that DOD lacks critical information
it needs to effectively plan for its workforce requirements. We are
currently reviewing DOD's latest strategic workforce plan, which was
released in March 2012. The results of our review are expected to be
released in September 2012. \8\
---------------------------------------------------------------------------
\7\ GAO-10-814R.
\8\ GAO-12-962T.
---------------------------------------------------------------------------
Mr. Forbes. Based on previous GAO analysis, what recommendations
would you offer for the best practices to manage civilian workforce
downsizing?
Ms. Farrell. Our prior work \9\ has found that workforce planning
is essential in identifying positions to be eliminated and pinpointing
specific employees for potential separation. We have reported that in
organizations where planning did not occur or was not effectively
implemented, difficulties arose in the downsizing. For example, a lack
of effective planning for skills retention can lead to a loss of
critical staff, and an organization that simply reduces the number of
employees without changing work processes will likely have staffing
growth recur eventually. \10\ More specifically, simply reducing staff
does not make the work that they were doing go away, and may be costly,
indiscriminate, and inconsistent with continuing productive work flow
with fewer staff. However, with proper planning, downsizing can be
targeted to specific skills the organization no longer needs in its
revised structure. Our work has also found that an important lesson
learned is for organizations undergoing downsizing to carefully examine
their functions and identify needed structural changes and other
revisions to traditional methods of operation as a precursor to making
decisions on where and to what extent workforce cuts are appropriate.
However, a number of factors may constrain organizations' use of
downsizing strategies, such as public sentiment, budget limitations,
legislative mandates to maintain certain programs, and personnel laws.
---------------------------------------------------------------------------
\9\ GAO, Workforce Reductions: Downsizing Strategies Used in
Selected Organizations, GAO/GGD-95-54 (Washington, D.C.: Mar. 13,
1995).
\10\ GAO-12-962T.
---------------------------------------------------------------------------
Mr. Forbes. If sequestration were to occur, what recommendations
would you offer DOD to consider now to best manage its directed
manpower reductions? And, what, in your opinion, would be the impact of
sequestration on the DOD workforce--civilian, contractor and military
personnel?
Ms. Farrell. GAO has not conducted the work necessary to make
recommendations related to or analyzing the impact of a sequestration.
However, our prior work \11\ has found that workforce planning is
essential in identifying positions to be eliminated and pinpointing
specific employees for potential separation. We have also reported that
in organizations where planning did not occur or was not effectively
implemented, difficulties arose in the downsizing. For example, a lack
of effective planning for skills retention can lead to a loss of
critical staff, and an organization that simply reduces the number of
employees without changing work processes will likely have staffing
growth recur eventually. \12\
---------------------------------------------------------------------------
\11\ GAO/GGD-95-54.
\12\ GAO-12-962T.
---------------------------------------------------------------------------
Mr. Forbes. Ms. Farrell, in your statement, you devote a portion to
discussing DOD's downsizing efforts of the early 1990s. Specifically,
you note that DOD's approach to its civilian workforce reductions was
not focused on shaping the makeup of the workforce--as it typically
does when managing its military downsizing--which resulted in
significant imbalances in terms of shape, skills, and retirement
eligibility of the civilian workforce. Could you elaborate on whether
or not DOD had a strategy guiding that downsizing and what the effect
of that downsizing was on the civilian workforce?
Ms. Farrell. As noted in my statement, \13\ DOD's civilian
workforce downsizing efforts in the 1990s were not oriented toward
shaping the makeup of the workforce, which resulted in significant
imbalances in terms of shape, skills, and retirement eligibility of its
workforce. Specifically, in our reviews \14\ of these efforts, we found
that DOD's efforts in the 1990s to reduce its Federal civilian
workforce to levels below that of 1987 were hampered by incomplete data
and lack of a clear strategy for avoiding skill imbalances and other
adverse effects of downsizing. For instance, in 1992, GAO found that
DOD used incomplete and inconsistent data related to workers, workload,
and projected force reductions. Further, the approaches DOD has
previously relied on to accomplish downsizing have sometimes had
unintended consequences. The use of voluntary attrition, hiring
freezes, and financial separation incentives allowed DOD to mitigate
some adverse effects of civilian workforce reductions, but were less
oriented toward shaping the makeup of the workforce than was the
approach the Department used to manage its military downsizing. For
DOD, this was especially true of the civilian acquisition workforce.
Our work has also found that use of strategies such as financial
separation incentives makes it difficult to document or estimate the
actual cost savings of Government downsizing efforts, especially in
cases where the work previously performed by the eliminated personnel
continues to be required. For example, if the work continues to be
required, it may need to be contracted out to private companies and
contract costs should be considered in determining whether net savings
will result from workforce reductions.
---------------------------------------------------------------------------
\13\ GAO-12-962T.
\14\ GAO, Defense Force Management: Expanded Focus in Monitoring
Civilian Force Reductions Needed, GAO/T-NSIAD-92-19 (Washington, D.C.:
Mar. 18, 1992); and Defense Force Management: Challenges Facing DOD as
It Continues to Downsize Its Workforce, GAO/NSIAD-93-123 (Washington,
D.C.: Feb. 12, 1993).
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QUESTIONS SUBMITTED BY MS. BORDALLO
Ms. Bordallo. The National Defense Authorization Act for Fiscal
Year 2012 directed the Department of Defense to take a more holistic
approach to its manpower requirements in order to achieve the
appropriate balance in its total workforce, rather than simply managing
to budgetary targets. The Secretary was required to develop a total
force management plan that would provide the means to establish the
appropriate mix of manpower to perform the Department's mission,
whether by military (Active or Reserve), civilian, or contractor
personnel. The committee is concerned, however, that the budget request
does not reflect this holistic approach. What steps is the Department
taking to help ensure that the budget request reflects a more holistic
approach?
Mr. Vollrath. The Department has extensive guidance regarding
manpower management and workforce mix. Consistent with this guidance
and applicable statutory requirements, including those included in the
Fiscal Year 2012 National Defense Authorization Act, DOD Components
identify the requisite manpower and resources needed to execute their
missions, tasks, and functions. The Department remains committed to
ensuring and delivering a balanced, flexible, responsive workforce with
the right skills and competencies that: is the appropriate mix of
labor; mitigates risk; ensures continuity of operations; promotes an
organic knowledge base that delivers core and critical functions
necessary to maintain operational readiness; and ensures mission
requirements are met cost effectively and efficiently. Through the
program and budget review process, Component manpower and resource
requests are prioritized and trade-offs are made in a manner that
ensures a holistic, analytically based, and responsible allocation of
limited resources to our highest priorities.
Ms. Bordallo. Why has it taken so long for the Department of
Defense to develop its Strategic Workforce Plan? Further, I am
concerned that the current plan uses data from 2010 and may not provide
DOD with the right type of requirements-based gap analysis that is
really needed. Does the Department of Defense have the tools,
leadership and data it needs to make strategic decisions? Is there
something impeding the timely development of this plan?
Mr. Vollrath. In May 2011, using 2010 baseline on-board data, DOD
drafted the current Fiscal Year (FY) 10-18 Strategic Workforce Plan
(SWP), which was submitted to Congress in March 2012. The SWP planning
process is extensive in scope and complexity, covering a workforce of
over 780,000 employees across multiple functional communities, the
military departments, and defense agencies and activities. The normal
planning cycle is 12 months. Efficiency reviews and major budget shifts
during the planning cycle can delay planning requiring changes in
workforce planning targets and forecasts. The SWP considered major
budget decisions that were made before the final draft was approved.
Budget shifts since then are now being assessed against the baseline
set by the current SWP.
Per the National Defense Authorization Act for FY2012 (Public Law
112-81), the Department is now on a biennial planning cycle, allowing
time for implementation and progress evaluation before developing the
next plan. Each SWP starts with baseline on-board data from the current
year, identifies targets for future years based on budgeted manpower
requirements, then forecasts hiring and attrition to identify current
and projected skill gaps. The FY12-18 SWP which is currently under
development will follow this approach using 2012 baseline data. The
next biennial SWP development began in May for the FY12-18 planning
cycle, which corresponds with the budget established in the Future
Years Defense Program. This plan is expected to be delivered to
Congress in 2013.
Ms. Bordallo. DOD's 2010 Strategic Workforce Plan states that most
of the Department's civilian mission-critical occupations are
projecting some growth through 2018, roughly 4%. With regard to the
current fiscal environment and caps on the civilian workforce at the
2010 strength level, how does the Department expect to maintain as well
as grow these mission-critical occupations without having a negative
impact on other missions or personnel requirements?
Mr. Vollrath. The Department does not have a cap on its civilian
workforce. As part of its budget building process for the past few
years, the Department has directed that components use Fiscal Year 2010
civilian levels as a departure point for prioritizing and shaping its
workforce in an effort to make sure resources are applied to our most
compelling needs. Components are asked to make trade-offs, ensuring
civilian personnel are aligned to the most critical missions and
requirements. Where trade-offs are not achievable, and where
necessitated by mission and workload, exceptions to Fiscal Year 2010
civilian have and will continue to be granted. Where appropriate, this
will include those mission-critical occupations covered by the
Department's Strategic Workforce Plan.
Ms. Bordallo. As we have seen in the past, across-the-board,
arbitrary cuts of thousands of civilian employees could have an adverse
effect on essential programs if the Department does not take a
strategic view of ensuring that those employees with the critical
skills needed to perform the Department's critical functions are not
arbitrarily cut. How does the Department plan to help ensure that
reductions in civilian employees will be done with the assurance of
maintaining those skills critical to the Department's mission?
Mr. Vollrath. Changes in the civilian workforce must be made in a
way that preserve mission essential skills and abilities over the long
term and in a manner that enables DOD to recruit and retain the most
talented individuals consistent with mission requirements and
priorities. As currently programmed reductions are implemented, DOD
will continue to focus on ensuring the appropriate mix of skill sets
and competencies needed to execute our mission.
In fiscal year (FY) 2012, the Department identified mission-
critical occupations (MCOs) and high-risk skills in the Strategic
Workforce Plan (SWP) based on new Federal-wide criteria and staffing
gap data. This data-driven, systematic method aligns strategic mission
goals and priorities to mission-critical occupations and assesses
staffing gap risks. As a result, recruitment, retention, and
development strategies can be targeted to reduce skill gaps in MCOs.
In addition, the Department has implementing a standard competency
taxonomy for identifying and assessing occupational competencies across
the workforce. Competency models for MCOs will be in place by the end
of 2012 and a DOD-wide tool for assessing employee competency gaps is
planned for deployment in 2013. These tools will give DOD far more
insight into employee skills--including strengths, gaps, and future
needs--to improve workforce planning and decisions in a fiscally
constrained environment.
Ms. Bordallo. How many civilian personnel positions does the
Department intend to eliminate between FY12 and FY17, broken down by
years? How many civilian personnel positions would the Department have
to eliminate between FY12 and FY17, if Section 341 of S. 3254 is
enacted? Would such cuts be in addition to cuts in civilian personnel
planned by the Department? Would such cuts be in addition to those that
might be required by sequestration?
Mr. Vollrath. The President's Budget request for Fiscal Year 2013
reflected an approximate 2% decrease in the Department's civilian
workforce (excluding foreign nationals) by Fiscal Year 2017. This
equals 13,668 civilian positions--from 751,172 in Fiscal Year 2012 to
737,504 in Fiscal Year 2017. Annual levels through Fiscal Year 2017 are
as follows: FY12--751,172; FY13--743,815; FY14--738,880; FY15--739,561;
FY16--738,440; and FY17--737,504. As currently written, section 341
would not require a specific reduction in civilian workforce levels.
Legislatively directing reductions in selected elements of the
workforce simply because well-reasoned reductions are being taken in
other elements would preclude the Department from appropriately sizing
its workforce to meet its mission workload.
In terms of sequestration, the Secretary's focus remains on
precluding, not planning, for sequestration. If sequestration does
occur, it would have across the board impacts on the Department's
readiness and capabilities, including critical missions and tasks
performed by DOD civilian employees.
Ms. Bordallo. In which functional areas has the Department added
personnel since FY09, broken down by numbers of positions and by years,
and why are these increases necessary? To what extent, if at all, are
these increases related to changes in military end-strength? In which
functional areas does the Department anticipate adding civilian
personnel, between FY12 and FY17, broken down by numbers of positions
and by years, and why are these increases necessary? To what extent, if
at all, are these increases related to changes in military end-
strength?
Mr. Vollrath. Across the Department of Defense, civilian personnel
levels have increased in a number of mission-critical occupations and
functional communities since Fiscal Year 2009. These increases reflect
the Department's appropriate response to changing missions, needs, and
requirements. These increases include, but are not limited to,
personnel performing critical acquisition oversight, intelligence,
cyber operations, information technology, security, medical care, and
financial management functions. In some instances these increases are
tied to operational tempo, end-strength levels, and military force
structure. The Department's current budget request calls for an overall
decrease in civilian personnel of approximately 2% by Fiscal Year 2017.
However, some functional capabilities (e.g. IT, cyber and medical) will
likely see some limited growth during that time to adapt to missions
and workload.
Ms. Bordallo. How many civilian positions are included in each of
the following four items: the Mission Critical Occupations as defined
by the Civilian Human Capital Strategic Plan of the Department of
Defense, the Acquisition Workforce Plan of the Department of Defense,
personnel employed at facilities providing core logistics capabilities,
and the Office of the Inspector General? Please indicate which
functional areas and the numbers of civilian personnel who perform such
functions would not be included in those four categories. Please also
indicate the GS and WG status of the civilian personnel who would not
be included in those four aforementioned categories.
Mr. Vollrath. The Fiscal Year 2010-2018 (FY10-18) Strategic
Workforce Plan delivered to Congress in March 2012 covered 22 mission-
critical occupations (MCOs). DOD has expanded the functional community
construct to cover ALL major occupations in the civilian workforce
across 23 functional communities, including Acquisition and Logistics
communities. The table below provides a current overview and
representation of the Department's current 23 functional communities,
the occupations and number of employees associated with each, and the
33 current DOD mission-critical occupations, including Wage Grade
occupations.
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Ms. Bordallo. Has the Department determined that the functions
excluded from cuts by Senate FY13 NDAA Section 341 need not be reviewed
for efficiencies? Do the exclusions mean that for purposes of complying
with Section 341 that non-excluded functions will have to be reduced in
excess of what the Department had planned? Will the Department be
reviewing those excluded functions for efficiencies, regardless of
whether Section 341 is enacted?
Mr. Vollrath. The Department has not undertaken any planning
specifically related to the provision in the Senate Armed Services
Committee mark-up of the fiscal year 2013 National Defense
Authorization Act. Legislatively directing reductions (and possible
exclusions from such reductions) to the civilian workforce would
preclude the Department from most appropriately, effectively, and
efficiently sizing its Total Force to meet mission and workload. We are
committed to ensuring all aspects of the civilian workforce are aligned
to workload, consistent with mission priorities, and that we execute
such workload as efficiently and effectively as possible and in
compliance with sections 124 and 129a of title 10, United States Code.
Ms. Bordallo. Do civilian personnel perform functions related to
the maintenance and repair of military equipment but who are not
employed at facilities providing core logistics capabilities? Section
341 would exclude from cuts those contractor ``personnel performing
maintenance and repair of military equipment''. Is that contractor
workforce comparable in terms of functional areas to the civilian
workforce that provides core logistics capabilities pursuant to 10 USC
2464? If the former includes functional areas not included in the
latter, which ones would they be and how many civilian employees
perform those functional areas that are not included?
Mr. Vollrath. The Department does have both civilian and contractor
personnel performing functions related to the maintenance and repair of
military equipment some of whom are not employed at facilities
providing core logistics capabilities. The contracted skill sets are
comparable to those within the civilian workforce in terms of the
functional areas needed to perform the required maintenance and repair.
Ms. Bordallo. Are all civilian positions related to the provision
of medical and financial audit services included within the Mission
Critical Occupations as defined by the Civilian Human Capital Strategic
Plan of the Department of Defense and the Acquisition Workforce Plan of
the Department of Defense? If not, which positions and how many
positions are not included for each function?
Mr. Vollrath. There are five occupations in the Medical Functional
Community and four occupations in the Financial Management Functional
Community designated as Mission Critical Occupations (MCO). The table
below lists all the occupations in these communities, including those
designated as MCOs and high-risk occupations. Functional communities
are based on the occupational series assigned to civilian positions.
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Ms. Bordallo. What process did the Department undertake to
determine the extent to which military end-strength should be reduced?
Did it arbitrarily assign a percentage in determining how much military
end-strength should be reduced? Or did it first engage in thoughtful
analysis?
Mr. Vollrath. The currently planned for reductions in military end-
strength are the result of extensive planning and thoughtful analysis,
including a comprehensive review of the Nation's military and defense
strategies called for by the President of the United States, and are
not based on an arbitrarily assigned percentage reduction. Military
end-strength reductions are based on changes to our overall force
structure; reduced operational tempos and commitments associated with
Operations Iraqi and Enduring Freedom; and a shift in our strategic
priorities to the Asia-Pacific area of operations.
Ms. Bordallo. Within the last eight months, Personnel and Readiness
has issued three different guidances to prevent work performed by
civilian employees from being illegally and inappropriately converted
to performance by contractors and military personnel.
a) What role did the cap play in the issuance of these guidances?
b) It is our understanding that while Personnel and Readiness
attempts to follow up on credible reports of violations of those
guidances that it is ultimately powerless to prevent components from
carrying them out. Is that true?
c) In the Army's March 29 HSGAC testimony, it was written ``When
faced with hiring decisions, people are therefore being placed in the
unenviable position of having to decide whether to comply with the
civilian cap, or to comply with the other statutes governing the
workforce . . . '' That seems to be an implicit acknowledgement that
the cap compels commanders to violate the law. Does that testimony
accurately describe why commanders may feel compelled to defy Personnel
and Readiness' guidances?
d) What additional power does Personnel and Readiness need to
enforce the guidances and the underlying laws?
e) House report language directed the Department to make it clear
that the guidances also covered functions performed by Non-Appropriated
Fund employees. Has this been done? If not, why?
f) Will the imposition of an arbitrary cut in civilian employees,
as proposed by the Senate, make it more difficult to enforce laws
against direct conversions and the Department's guidances to enforce
those laws?
Mr. Vollrath. Each question within the broader question is answered
individually:
a) The guidance was issued in order to remind Commanders and
managers of their obligations under title 10 and DOD policies to ensure
that efficient and workforce mix. The guidance focused our efforts in
the context of the efficiencies initiatives eliminating low priority
workload and limiting resources for overhead and administrative
functions in order to sustain core mission capabilities due, in part,
to the changing budgetary landscape.
b) The Office of the Under Secretary of Defense for Personnel and
Readiness (OUSD (P&R)) provides policy and guidance. In cases where
there have been reported instances of workload re-alignment that are
potentially in contradiction to statutory requirements or established
policies, OUSD (P&R) has engaged with Components, based on Secretary of
Defense authority, to ensure that appropriate component leadership
attention is given to those reports.
c) I cannot speak to the Army's testimony to the HSGAC. However,
DOD decisionmakers must make daily decisions based on mission workload,
resource availability, and risk mitigation. These decisions often
require consideration for multiple policies, statutes, and directives
and will result in trade-offs and workload prioritization. OUSD (P&R),
as a policy and oversight office, works with those decisionmakers to
ensure compliance with appropriate statutory requirements and internal
policies.
d) OUSD (P&R) does not require any additional power or authorities
beyond those currently provided for in law and as prescribed by the
Secretary of Defense.
e) No, the Department has not yet issued clarifying guidance
regarding the application of these statutory sourcing provisions to
Non-Appropriated Fund (NAF) employees. While we appreciate the concerns
expressed in the House report the Department is currently assessing the
application of our workforce sourcing policies, in the context of
statutory requirements, and reconciling them with the personnel
management policies for NAF employees and the policies that govern the
day-to-day operations of NAF instrumentalities. Existing policies will
be updated as needed.
f) Any arbitrary reduction in civilian employees, whether
legislatively directed or internally executed, would create challenges
with regard to appropriate and effective workforce mix and workload
alignment. 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, as well as applicable laws and guidance. Legislatively directing
reductions in selected elements of the workforce simply because well-
reasoned reductions are being taken in others would preclude the
Department from appropriately sizing its workforce to meet its mission
workload. Even during this period of constrained defense budgets, we
must ensure that we have a sufficient number of Federal civilian
personnel to meet the support needs of our military forces. We must
also be sure that military or civilian personnel are performing all
inherently governmental jobs, and that sufficient levels of civilian
personnel are available to perform critical oversight, management, and
readiness functions of the Department. The Department is committed to
ensuring all aspects of the civilian workforce are aligned to workload,
consistent with mission priorities, and that we execute such workload
as efficiently and effectively as possible.
Ms. Bordallo. Does the Department have the same sort of visibility
and control over service contract spending as it does over civilian
personnel spending? Is it easier to cut and actually enforce cuts in
civilian personnel spending than in service contract spending because
of the absence of an inventory of service contracts that has been
integrated into the budget? Is it accurate to say that the Department
is far more likely to realize the arbitrary cuts in civilian personnel
imposed by Section 341 than the arbitrary cuts in service contract
spending? The Comptroller claims that one of the principal reasons that
the Department doesn't have better cost information on service
contractors is that it is not possible to distinguish between base and
OCO spending. However, the Army, which is recognized as the leader on
the contractor inventory insists that the two categories of spending
can be substantially distinguished. Who's right?
Mr. Vollrath. The Department does not have the same visibility into
service contract spending as it does over civilian personnel spending.
However, in November 2011, the Department submitted a plan to Congress
delineating both short- and long-term actions to fully implement the
requirements of section 2330a of title 10, United States Code. As a
result, the Department will have better fidelity, visibility, and
accountability into contracted services. Improvements currently
underway will enable the Department to more accurately assess
contracted workload based on direct labor hours and associated data
collected from private sector providers. Additionally, DOD Components
must now certify that they have completed comprehensive reviews of
their contracted services to ensure appropriate utilization, cost
effectiveness, and alignment to mission need and priority.
Ms. Bordallo. The Department has claimed significant savings from
insourcing. According to testimony, the Army's once robust insourcing
program was significantly responsible for a dramatic drop in service
contracting costs. Unfortunately, the insourcing effort came to a halt
as a result of the imposition of the FY10 cap on the civilian
workforce. Will the Department be forced to leave inherently
governmental and other important/sensitive functional areas in the
hands of contractors due to the collapse of the insourcing effort? (The
Army has told the GAO that one of the reasons it can't insource
inherently governmental functions is the FY10 cap on the civilian
workforce.) Will the Department fail to generate cost savings from
insourcing because of the cap on the civilian workforce? (The Army has
testified that service contracting costs increased when the imposition
of the cap on the civilian workforce all but killed off insourcing.)
Will the imposition of arbitrary cuts in civilian employees make it
even more difficult to use insourcing to save money and reassert public
control over important and sensitive functions?
Mr. Vollrath. The Department does not have a cap on its civilian
workforce. As part of its budget building process for the past few
years, the Department directed that components maintain Fiscal Year
2010 civilian levels as a departure point for prioritizing and shaping
its workforce, and in an effort to ensure resources are applied to our
most compelling requirements. DOD organizations may request to exceed
their Fiscal Year 2010 civilian workforce levels as needed to meet
mission and workload requirements.
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; otherwise exempted from private sector performance (to
mitigate risk, ensure continuity of operations, build internal
capability, meet and maintain readiness requirements, etc); and in the
most cost effective manner possible. Contracted services that meet the
necessary criteria should be in-sourced to Government performance.
Where appropriate, DOD organizations may in-source, and in fact
continue to do so, 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 requesting an exception to their civilian levels.
Ms. Bordallo. Section 341 includes ``Section (d) Limitation on
Transfers of Functions''. Work performed by civilian employees is
already being illegally directly converted to contractor performance
because of the arbitrary caps the Department has imposed on the
civilian workforce. Imposition of an additional arbitrary cut in the
civilian workforce will surely exacerbate this problem. What impact if
any will this ``Limitation on Transfer of Functions'' language have in
stopping illegal direct conversions caused by arbitrary constraints and
cuts in the civilian workforce? Will this language prevent the
Department from insourcing work for cost reasons, even if in-house
performance would be cheaper?
Mr. Vollrath. If section 341, as contained in the Senate Armed
Services Committee mark-up of the fiscal year 2013 National Defense
Authorization Act, were to be enacted and become public law, paragraph
(d), regarding the limitation on transfers of functions, would
reinforce the Department's current policies. Namely, reductions in
civilian workforce must be tied to reductions in workload and mission
and cannot result in either the transfer of work to contract
performance (consistent with section 2461 of title 10, United States
Code and existing legislative prohibitions on the use of public-private
competitions); or the transfer of non-military essential work to
military personnel performance (consistent with DOD policies concerning
military essentiality and the alignment of workload). Similarly,
reductions in contracted services must also be tied to reductions in
mission and workload, unless the work is appropriately transferred from
contract to civilian performance (in-sourcing). In-sourcing is
appropriate in instances where contracted work was determined to be
inherently governmental, critical, or so closely associated with
inherently governmental as to pose risk to Government operations; or
more cost effectively performed by Government personal. Such workload
realignment, or in-sourcing, would be justified under the language in
paragraph (d) of section 341 as proposed and consistent with existing
statutory authorities in section 2463 of title 10, United States Code.
Ms. Bordallo. In order to make more strategic decisions about the
right workforce mix of military, civilian, and contractor personnel,
and to better align resource needs through the budget process to
achieve that mix, DOD needs adequate information on the appropriate mix
of these three groups. Based on GAO's reviews of DOD's Strategic
Workforce Plan, does DOD have a strategy for assessing the appropriate
mix of military, civilian, and contractor personnel capabilities?
Ms. Farrell. Our September 2010 review of DOD's 2009 strategic
workforce plan found that although the Department had issued a
directive stating that missions should be accomplished using the least
costly mix of personnel (military, civilian, and contractors)
consistent with military requirements and other needs, the Department's
2009 plan did not provide an assessment of the appropriate mix of these
capabilities. \15\ We currently have ongoing work assessing DOD's 2010-
2018 Strategic Workforce Plan, which the Department released in March
2012. The results of our review are expected to be released in
September 2012.
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\15\ GAO-10-814R.
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Ms. Bordallo. In your statement, you devote a portion to discussing
DOD's downsizing efforts of the early 1990s. Specifically, you note
that DOD's approach to its civilian workforce reductions was not
focused on shaping the makeup of the workforce--as it typically does
when managing military manpower downsizing--resulting in significant
imbalances in terms of shape, skills, and retirement eligibility of the
civilian workforce. Could you elaborate on whether or not DOD had a
strategy guiding that downsizing and what the effect of that downsizing
was on the civilian workforce?
Ms. Farrell. As noted in my statement, \16\ DOD's civilian
workforce downsizing efforts in the 1990s were not oriented toward
shaping the makeup of the workforce, which resulted in significant
imbalances in terms of shape, skills, and retirement eligibility of its
workforce. Specifically, in our reviews \17\ of those efforts, we found
that DOD's efforts in the 1990s to reduce its Federal civilian
workforce to levels below that of 1987 were hampered by incomplete data
and lack of a clear strategy for avoiding skill imbalances and other
adverse effects of downsizing. For instance, in 1992, GAO found that
DOD used incomplete and inconsistent data related to workers, workload,
and projected force reductions. Further, the approaches DOD has
previously relied on to accomplish downsizing have sometimes had
unintended consequences. The use of voluntary attrition, hiring
freezes, and financial separation incentives allowed DOD to mitigate
some adverse effects of civilian workforce reductions, but were less
oriented toward shaping the makeup of the workforce than was the
approach the Department used to manage its military downsizing. For
DOD, this was especially true of the civilian acquisition workforce.
Our work has also found that use of strategies such as financial
separation incentives makes it difficult to document or estimate the
actual cost savings of Government downsizing efforts, especially in
cases where the work previously performed by the eliminated personnel
continues to be required. For example, if the work continues to be
required, it may need to be contracted out to private companies and
contract costs should be considered in determining whether net savings
will result from workforce reductions.
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\16\ GAO-12-962T.
\17\ GAO/T-NSIAD-92-19 and GAO/NSIAD-93-123.
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Ms. Bordallo. What are the risks associated with both the Senate's
proposed arbitrary cuts to the civilian workforce and the cuts that
would be imposed on thousands of DOD civilians by sequestration?
Ms. Farrell. GAO has not conducted the work necessary to comment on
the Senate's proposal or the effects of a sequestration. However, as
our prior work \18\ has noted, strategic workforce planning is an
integral part of human capital management and helps organizations to
determine if they have staff with the necessary skills and competencies
to accomplish their strategic goals. To facilitate effective workforce
planning, we and the Office of Personnel Management have identified six
leading principles such workforce plans should incorporate, including:
1) aligning workforce planning with strategic planning and budget
formulation; 2) involving managers, employees, and other stakeholders
in planning; 3) identifying critical skills and competencies and
analyzing workforce gaps; 4) employing workforce strategies to fill the
gaps; 5) building the capabilities needed to support workforce
strategies through steps to ensure the effective use of human capital
flexibilities; and 6) monitoring and evaluating progress toward
achieving workforce planning and strategic goals. \19\ Specifically,
with regard to critical skills and competencies and analyzing workforce
gaps, we have found \20\ that DOD's Strategic Workforce Plan identified
22 mission-critical occupations \21\ that, according to the Department,
represent the results of its assessment of critical skills. However,
our work also found that DOD's plan only discussed competency gap
analysis for 3 of its 22 mission-critical occupations. Further, DOD was
in the initial stages of assessing competency gaps for its senior
leader workforce, but it had not completed the analysis needed to
identify gaps. Without including analyses of gaps in critical skills
and competencies as part of its strategic workforce planning efforts,
DOD and the components may not be able to design and fund the best
strategies to fill their talent needs through recruiting and hiring or
to make appropriate investments to develop and retain the best possible
workforce. Further, DOD leadership may not have information necessary
to make informed decisions about future workforce reductions, should
further reductions to its workforces become necessary.
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\18\ GAO-10-814R.
\19\ GAO-12-962T.
\20\ GAO-12-962T and GAO-10-814R.
\21\ DOD has identified 24 enterprisewide mission-critical
occupations; 22 of these occupations are associated specifically with
the overall civilian workforce and are discussed in the strategic
workforce plan, while, the remaining 2 are acquisition-related
occupations--contracting and quality assurance--and are discussed in
the Defense Acquisition Workforce Improvement Strategy (published as a
separate report).
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Ms. Bordallo. What lessons were learned from former Secretary
Gates' efficiencies initiative that could be helpful in developing a
requirements-based workforce management plan? How are issues associated
with that initiative addressed in the Department's strategic workforce
plan?
Ms. Farrell. Our prior work reviewing former Secretary Gates's
efficiencies initiative found that the Department does not have
complete and reliable major DOD headquarters activity data available
for use in making efficiency assessments and decisions because the
Department continues to have challenges in identifying and tracking
personnel and other resources devoted to headquarters. According to our
internal control standards, an agency must have relevant, reliable, and
timely information in order to run and control its operations. \22\ In
addition, we have previously identified key practices from Federal and
state efficiency initiatives, which include 1) using change management
practices to implement and sustain efficiency initiatives, such as
setting implementation goals and a timeline; 2) targeting both short-
term and long-term efficiency initiatives by identifying efficiency
initiatives that can generate immediate returns as well as more
substantive changes to operating procedures, programs, and
organizational structures; and 3) building capacity for improving
efficiency through the use of a department-level office to standardize
guidance and training and facilitate sharing best practices. \23\ These
key practices from Federal and state efficiency initiatives may help
guide DOD's strategic workforce planning efforts. We are currently
reviewing DOD's latest strategic workforce plan, which was released in
March 2012. The results of this review are expected to be released in
September 2012. \24\
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\22\ GAO, Standards for Internal Control in the Federal Government,
GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).
\23\ GAO, Streamlining Government: Key Practices from Select
Efficiency Initiatives Should Be Shared Governmentwide, GAO-11-908
(Washington, D.C.: Sept. 30, 2011).
\24\ GAO-12-962T.
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Ms. Bordallo. In which functional areas has the Department added
personnel since FY09, broken down by numbers of positions and by years,
and why are these increases necessary? To what extent, if at all, are
these increases related to changes in military end-strength? In which
functional areas does the Department anticipate adding civilian
personnel, between FY12 and FY17, broken down by numbers of positions
and by years, and why are these increases necessary? To what extent, if
at all, are these increases related to changes in military end-
strength?
Ms. Farrell. GAO has not conducted a detailed review of DOD's past
or planned personnel growth or determined the extent to which any
growth can be attributed to changes in military end-strength.
Ms. Bordallo. Do civilian personnel perform functions related to
the maintenance and repair of military equipment but who are not
employed at facilities providing core logistics capabilities? Section
341 would exclude from cuts those contractor ``personnel performing
maintenance and repair of military equipment''. Is that contractor
workforce comparable in terms of functional areas to the civilian
workforce that provides core logistics capabilities pursuant to 10 USC
2464? If the former includes functional areas not included in the
latter, which ones would they be and how many civilian employees
perform those functional areas that are not included?
Ms. Farrell. GAO has reviewed various aspects of DOD functions
related to maintenance and repair of military equipment, but has not
conducted a detailed review of DOD's civilian personnel performing
functions related to the maintenance and repair of military equipment
that are not employed at facilities providing core logistics
capabilities. Starting in 2012, section 2464 of Title 10 of the United
States Code requires DOD to submit to Congress biennial and annual
reports on its core depot-level maintenance and repair capability
requirements. The statute also requires GAO to review DOD's reports for
completeness and compliance and provide findings and recommendations to
the congressional defense committees not later than 60 days after the
report is submitted to Congress. The statute does not require specific
reporting on civilian personnel performing maintenance and repair.
Ms. Bordallo. Are dollars for contracted workload constrained or
limited to the same degree as are dollars for OMA funded civilians?
(The Army has testified that for every one dollar cut from service
contracting, ten dollars are cut from civilian personnel.) Service
contracting expenses more than doubled in the Department over the last
ten years, while civilian personnel expenses held steady. Given that
most if not almost all of that immense growth in service contracting
was premised on it being short-term and non-recurring, should both
civilian personnel spending and service contract spending be cut by the
same percentage, as would be required by Section 341?
Ms. Farrell. We have not conducted work that would enable us to
comment upon the appropriate level of potential reductions in civilian
personnel or service contract spending.
Ms. Bordallo. The Army testified at a March 29 HSGAC subcommittee
hearing that the civilian workforce cap ``has the unintended
consequence of limiting the flexibility of the Army in managing its
workforce. Cost-effective workforce management decisions ought to be
based on allowing for the hiring of civilians to perform missions,
rather than contractors, if the civilians will be cheaper.'' Do you
agree with the Army's assessment of the cap--that it is preventing DOD
from using civilian employees even when they'd be cheaper? Do you think
such cap-generated inflexibilities and inefficiencies are limited to
the Army? The Department claims that there is an exceptions process to
the civilian personnel cap. Given that it is so forbidden and
cumbersome, do you really think that there actually is a viable and
workable exceptions process to the cap? We understand that when the
Department is assigned new functions that must be performed by civilian
employees that comparable numbers of civilian employee positions
elsewhere must be eliminated to offset any overall increases to the
civilian workforce. How can that possibly be justified? Surely, that is
evidence that there is not a viable and workable exceptions process to
the cap? Are there comparable constraints on service contract spending?
For example, does the Department require that new contracts and
increases in existing contracts be offset by comparable reductions
elsewhere?
Ms. Farrell. To date, GAO has not issued any work on the Department
of Defense's or the Department of the Army's efforts to cap its
civilian workforce that would allow us to comment on the Army's
experience with implementing the cap.
Ms. Bordallo. Within the last eight months, Personnel and Readiness
has issued three different guidances to prevent work performed by
civilian employees from being illegally and inappropriately converted
to performance by contractors and military personnel. What role did the
cap play in the issuance of these guidances? It is our understanding
that while Personnel and Readiness attempts to follow up on credible
reports of violations of those guidances that it is ultimately
powerless to prevent components from carrying them out. Is that true?
In the Army's March 29 HSGAC testimony, it was written ``When faced
with hiring decisions, people are therefore being placed in the
unenviable position of having to decide whether to comply with the
civilian cap, or to comply with the other statutes governing the
workforce . . . '' That seems to be an implicit acknowledgement that
the cap compels commanders to violate the law. Does that testimony
accurately describe why commanders may feel compelled to defy Personnel
and Readiness' guidances? What additional power does Personnel and
Readiness need to enforce the guidances and the underlying laws? House
report language directed the Department to make it clear that the
guidances also covered functions performed by Non-Appropriated Fund
employees. Has this been done? If not, why? Will the imposition of an
arbitrary cut in civilian employees, as proposed by the Senate, make it
more difficult to enforce laws against direct conversions and the
Department's guidances to enforce those laws?
Ms. Farrell. To date, GAO has not issued any work on the Department
of Defense's efforts to cap its civilian workforce that would allow us
to comment on DOD's or the Department of the Army's experience with
implementing the cap.
Ms. Bordallo. Does the Department have the same sort of visibility
and control over service contract spending as it does over civilian
personnel spending? Is it easier to cut and actually enforce cuts in
civilian personnel spending than in service contract spending because
of the absence of an inventory of service contracts that has been
integrated into the budget? Is it accurate to say that the Department
is far more likely to realize the arbitrary cuts in civilian personnel
imposed by Section 341 than the arbitrary cuts in service contract
spending? The Comptroller claims that one of the principal reasons that
the Department doesn't have better cost information on service
contractors is that it is not possible to distinguish between base and
OCO spending. However, the Army, which is recognized as the leader on
the contractor inventory insists that the two categories of spending
can be substantially distinguished. Who's right?
Ms. Farrell. Congress has mandated that DOD use the inventory of
contracted services and the associated review process to help DOD
ensure that contractors are performing work that is appropriate, to
support development of DOD's annual strategic workforce plan, and to
specify the number of contractor full-time equivalents included in
DOD's annual budget justification materials. For example, the National
Defense Authorization Act for Fiscal Year 2010 added section 235 to
Title 10 of the U.S. Code, which requires DOD to include information in
its annual budget justification materials regarding the procurement of
contracted services. Specifically, the legislation requires each budget
account to identify clearly and separately (1) the amount requested for
the procurement of contract services for each DOD component,
installation, or activity, and (2) the number of contractor FTEs
projected and justified for each DOD component, installation, or
activity based on the inventory and associated reviews. DOD's fiscal
year 2013 budget guidance to DOD components requires the budget
estimates to be informed by the fiscal year 2010 inventory of
contracted services. While we did not assess DOD's implementation of
this requirement as part of our April 2012 report, we did find that
DOD, with the exception of the Army, has much further to go in
addressing the requirements for compiling and reviewing the inventories
of contracted services. \25\ For example, DOD continued to rely on the
Federal Procurement Data System--Next Generation for the inventory for
most defense components other than the Army. As such, DOD acknowledged
a number of factors that limited the utility, accuracy and completeness
of the inventory data.
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\25\ GAO, Defense Acquisitions: Further Actions Needed to Improve
Accountability for DOD's Inventory of Contracted Services, GAO-12-357
(Washington: D.C.: Apr. 6, 2012).
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Ms. Bordallo. The Department has claimed significant savings from
insourcing. According to testimony, the Army's once robust insourcing
program was significantly responsible for a dramatic drop in service
contracting costs. Unfortunately, the insourcing effort came to a halt
as a result of the imposition of the FY10 cap on the civilian
workforce. Will the Department be forced to leave inherently
governmental and other important/sensitive functional areas in the
hands of contractors due to the collapse of the insourcing effort? (The
Army has told the GAO that one of the reasons it can't insource
inherently governmental functions is the FY10 cap on the civilian
workforce.) Will the Department fail to generate cost savings from
insourcing because of the cap on the civilian workforce? (The Army has
testified that service contracting costs increased when the imposition
of the cap on the civilian workforce all but killed off insourcing.)
Will the imposition of arbitrary cuts in civilian employees make it
even more difficult to use insourcing to save money and reassert public
control over important and sensitive functions?
Ms. Farrell. While we have not issued any work on the civilian
workforce cap to date, in February 2012 we reported \26\ that DOD
stated in its fiscal year 2010 budget submission to Congress that it
expected to save $900 million in fiscal year 2010 from in-sourcing. In
August 2010, the Secretary of Defense stated he was not satisfied with
the Department's progress in reducing its over-reliance on contractors.
Also, representatives from the Offices of the Under Secretary of
Defense (Personnel and Readiness) and the Under Secretary of Defense
(Comptroller) told us that DOD avoided some contracted support services
costs due to the budget decision associated with in-sourcing, although
total spending across all categories of service contracts increased in
fiscal year 2010 by about $4.1 billion. To accelerate the process and
achieve additional savings, the Secretary directed a 3-year reduction
in funding for service support contracts categorized by DOD as
contracted support services. He also directed a 3-year freeze on the
level of DOD civilian authorizations at OSD, the defense agencies, and
the Combatant Commands, and stated that with regard to in-sourcing, no
full-time OSD civilian authorizations would be created after the then-
current fiscal year to replace contractors, except for urgent needs. We
also noted that the statutory requirement to regularly consider in-
sourcing contracted services remains in effect, and DOD officials told
us that, accordingly, in-sourcing continues in the Department, though
on a more limited basis.
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\26\ GAO, Defense Workforce: DOD Needs to Better Oversee In-
sourcing Data and Align In-sourcing Efforts with Strategic Workforce
Plans, GAO-12-319 (Washington, D.C.: Feb. 9, 2012).
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Our report also found that--under DOD's policy for determining the
appropriate mix of military and DOD civilians and contractor support--
risk mitigation shall take precedence over cost savings when necessary
to maintain appropriate control of Government operations and missions.
This policy provides manpower mix criteria for assessing which
functions warrant performance by military or civilian personnel due to
their associated risks, and which functions will therefore be
considered exempt from performance by contractor support.
Ms. Bordallo. How is the Senate's proposed arbitrary cut in funding
for civilian personnel different from the sequestration that would
result from the Budget Control Act? Aren't both arbitrary cuts in
funding that would mindlessly eliminate defense industrial base jobs
and undermine our economic recovery?
Ms. Farrell. GAO has not conducted the work necessary to analyze
the Senate's proposal or the impact of a sequestration.
Ms. Bordallo. Section 341 includes ``Section (d) Limitation on
Transfers of Functions''. Work performed by civilian employees is
already being illegally directly converted to contractor performance
because of the arbitrary caps the Department has imposed on the
civilian workforce. Imposition of an additional arbitrary cut in the
civilian workforce will surely exacerbate this problem. What impact if
any will this ``Limitation on Transfer of Functions'' language have in
stopping illegal direct conversions caused by arbitrary constraints and
cuts in the civilian workforce? Will this language prevent the
Department from insourcing work for cost reasons, even if in-house
performance would be cheaper?
Ms. Farrell. We have not assessed the implications of implementing
Section 341 of S. 3254, a bill for the National Defense Authorization
Act for Fiscal Year 2013 that was reported out of the Senate Armed
Services Committee in June 2012. The proposed bill has been placed on
the Senate Legislative Calendar, but no further action has been taken.
QUESTIONS SUBMITTED BY MR. LOEBSACK
Mr. Loebsack. In their version of the FY13 National Defense
Authorization Act, the Senate Armed Services Committee attempted to
protect some elements of the industrial base from the civilian
personnel cuts mandated in their bill, but failed to include organic
manufacturing facilities such as Army arsenals. What assurances can you
provide that DOD leadership will protect the remaining Army arsenals
from cuts that would undermine essential capabilities and reduce
efficiency? Would the Department have the ability to base decisions
regarding the reductions required by the Senate Armed Services
Committee's bill on readiness and critical skills and capabilities or
would the Department have to make across-the-board cuts across
facilities and DOD offices? How would those critical skills and
capabilities be determined?
Mr. Vollrath. The Department has not done an assessment based on
the SASC NDAA provision requiring reductions to civilian and contractor
workforces. The DOD will determine how best to implement any reductions
included in the 2013 National Defense Authorization Act.
Mr. Loebsack. If the Senate Armed Services Committee's proposed
reductions were enacted, would they be carried out in addition to the
cap on the civilian workforce and reductions that have already been
announced by the Department? Or would the already announced caps and
reductions be applied to meet the cuts mandated by the Senate Armed
Services Committee?
Mr. Vollrath. The Department has not undertaken any planning
specific to section 341, as contained in the Senate Armed Services
Committee mark-up of the Fiscal Year 2013 National Defense
Authorization Act. The Department does not have a cap on its civilian
workforce. As part of its budget building process for the past few
years, the Department has directed that components use Fiscal Year 2010
civilian levels as a departure point for prioritizing and shaping its
workforce in an effort to make sure resources are applied to our most
compelling needs. DOD organizations may, and have, by exception
exceeded their Fiscal Year 2010 civilian workforce levels as needed to
meet mission and workload requirements. If the section 341 were to be
enacted as proposed and became public law, it would require reductions
in the civilian workforce from Fiscal Year 2012 to Fiscal Year 2017.
The current budget request includes estimated Fiscal Year 2012 levels
that reflect reductions taken as a result of efficiencies in Fiscal
Years 2010, 2011, and 2012. This includes the direction to maintain
2010 civilian levels with exceptions.
Mr. Loebsack. How does DOD determine what the right mix of
military, civilian, and contractor personnel is? What analysis is
performed to ensure that it is the right mix and how does the
Department determine what work is done by each group? In addition, when
reductions in one area are made, is it determined whether the work
being done by that group will have to be transferred to another group?
If so, is a cost-benefit analysis performed to determine whether the
reduction will actually result in cost savings?
Mr. Vollrath. The Strategic Workforce Planning construct of
functional communities and mission-critical occupations; the inherently
governmental and commercial activities inventory; the inventory of
contracts for services; and force and infrastructure classifications
are among the tools and processes used to determine appropriate
workforce mix. Departmental guidance on manpower management is intended
to ensure that Components apply the best workforce mix (military,
civilian, or contract support) to missions, tasks, and functions; and
requires associated risk mitigation and consideration of costs.
Reductions in elements of the Department's Total Force of military,
civilian, and contract support is based on a change in mission and
associated reduction in workload, or an outright elimination of lower
priority functions. If warranted, workload may be realigned from one
sector of the workforce to another consistent with existing statutory
and legislative requirements, as well as Departmental policies. These
adjustments require that unless otherwise justified by mission or
nature of work (e.g., inherently governmental, critical to mission
readiness, maintain Government oversight and control), a cost benefit
analysis must justify workload realignment. In all cases, under
currently enacted laws, the realignment of workload from civilian to
contract performance is currently prohibited regardless of any
potential cost benefit.
QUESTIONS SUBMITTED BY MS. HANABUSA
Ms. Hanabusa. In page five of your testimony, you say that
``Changes in the civilian workforce must be done in a way that
preserves mission essential skills and abilities over the long term.''
In regards to this statement I have some questions:
What constitutes how you determine ``mission essential''?
Specific example, would maintenance on a Virginia class submarine
be essential? How would this be preserved during cuts to the workforce?
During sequestration?
Mr. Vollrath. Mission essentiality will vary dependent on each
organization's missions, tasks, and functions. Moreover, work, tasks,
and functions (and associated skills) essential to mission success in
the Navy will differ from those in the other military services or those
in Defense-wide agencies or activities, such as DOD Education Activity
or the TRICARE Management Activity.
In the specific example of Virginia class submarine maintenance,
the Naval shipyard mission is to accomplish maintenance on ships and
submarines, ensuring operational readiness by returning them back to
the fleet on time, within budget, safely and with high quality
workmanship. In order to sustain readiness, the Department of the Navy
will balance essential requirements with available resources.
Ms. Hanabusa. In your testimony, when asked if your workforce
management plan was based on the ``best guess'' of DOD, you stated that
the plan was data driven. Yet, Mr. Vollrath stated repeatedly at the
hearing that their gap analysis was incomplete, and you yourself stated
that DOD has not progressed on a competent gap analysis. If this is the
case, then what specific data are you using to plan?
Ms. Farrell. At this time, we have work underway reviewing DOD's
mandated 2010-2018 Strategic Workforce Plan. The results of our review
will be released in September 2012. GAO's assessments are based on the
data that DOD provides to us related to how the Department developed
its own plan. We found \27\ in a September 2010 report that DOD's
workforce plans to date had mixed results. In that report, which
assessed DOD's 2009 plan, we found that DOD had demonstrated some
progress in addressing the legislative requirements related to its
Civilian Human Capital Strategic Workforce Plan, but several key
elements continued to be missing from the process--including such
elements as competency gap analyses and monitoring of progress.
Competency gap analyses enable an agency to develop specific strategies
to address workforce needs and monitoring progress demonstrates the
contribution of workforce planning to the achievement of program goals.
For example, at the time of our review, because the plan discussed
competency gap analyses for only 3 of the 22 mission-critical
occupations and did not discuss competency gaps for the other 19
mission-critical occupations, we determined that the requirement was
only partially addressed.
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\27\ GAO-10-814R.
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QUESTIONS SUBMITTED BY MS. SPEIER
Ms. Speier. What data does the Government need to make accurate
assessments of the costs of the Federal civilian versus the Federal
contractor workforce? Please also specify whether this data should or
should not include: costs of whether the work is performed on
Government property; the total amount billed by contractors for the
services provided; the total amount billed that is attributable to
overhead costs of the contractor and of subcontractors of the
contractor at any tier, and the percentage of total billing that is
attributable to such overhead costs; the total costs to the Government
if the services had been performed by Government employees, in
accordance with Department of Defense cost-comparisons models, pursuant
to section 129a(a) of Section 2330a of title 10; and the number of
employees used by the prime contractor and by subcontractors of the
contractor at any tier.
Mr. Vollrath. Comparisons of costs to perform work can be
influenced by any number of criteria and factors. The Department
recognizes that numerous studies have been conducted both inside and
outside of the Government related to such comparisons and what criteria
are most appropriate. The data elements specified in the question can,
in some instances, be useful to make an accurate cost comparison. There
may be instances, based on other variables, where these elements may
not be determined necessary for well-reasoned comparison. The
Department is working with the Office of Management and Budget (OMB) on
its effort to develop guidance and tools, including cost comparisons,
to help agencies determine where rebalancing of work can save money.
Ms. Speier. What do you attribute the disparity among our forces in
implementation of effective cost analysis modeling? Do you believe that
the approach the Army has taken would work for the other forces? How
long would it take to implement across the Department?
Mr. Vollrath. The Department has had a standardized set of business
rules in place since January 2010 regarding the estimating of military,
civilian, and contracted support performance of functions. A
complementary cost modeling software solution has been under
development, is undergoing final beta testing, and will soon be
available Department-wide. The fielding of this software, and updated
guidance that incorporates best practices and lessons learned from
Department-wide cost analysis experiences, will ensure a more
standardized implementation.
Ms. Speier. What are DOD's current requirements for implementing
effective cost analysis modeling to compare the costs of service,
Federal, and contractor employees? What efforts does DOD have in place
to improve these cost analyses? Are any of these improvements also
seeking consistent cost modeling?
Mr. Vollrath. The Department's requirements are contained within
Directive Type Memorandum (DTM) 09-007, Estimating & Comparing the Full
Costs of Civilian & Military Manpower & Contract Support. The policies
and requirements contained within this DTM are currently being
institutionalized in a DOD Instruction that incorporates lessons
learned and best practices. To support this issuance, the Department is
also preparing to field a costing software solution, the Full Cost of
Manpower Tool, which is currently under final beta testing.
Ms. Speier. What data does the Government need to make accurate
assessments of the costs of the Federal civilian versus the Federal
contractor workforce? Please also specify whether this data should or
should not include: costs of whether the work is performed on
Government property; the total amount billed by contractors for the
services provided; the total amount billed that is attributable to
overhead costs of the contractor and of subcontractors of the
contractor at any tier, and the percentage of total billing that is
attributable to such overhead costs; the total costs to the Government
if the services had been performed by Government employees, in
accordance with Department of Defense cost-comparisons models, pursuant
to section 129a(a) of Section 2330a of title 10; and the number of
employees used by the prime contractor and by subcontractors of the
contractor at any tier.
Ms. Farrell. The executive branch encourages Federal agencies to
obtain commercially available services from the private sector when
doing so is cost effective and when the work is not inherently
governmental. To make accurate assessments of the costs of the Federal
civilian versus the Federal contractor workforce, it is important to
have reliable and accurate data. The Office of Management and Budget's
Circular A-76 provides agency management with a structured process for
comparing the public and private sector approaches and costs of
performing commercial activities.
Although we have not conducted work that addresses all of the costs
in the question, we have issued reports on the costs and other issues
related to civilian- and contractor-performed work. For example, in
March 2008, we reported that the Army Contracting Agency's Contracting
Center of Excellence paid up to almost 27 percent more for its
contractor-provided contract specialists than for similarly graded
Government employees but that the contractor employees had on average
more contracting experience than the recent Government hires. \28\ We
considered a variety of costs, including overhead and whether the work
was performed on Government property. In March 2010, we reported that
for three of the four task orders awarded by the State Department for
security in Iraq that we examined, the cost of using Federal employees
would be greater than using contractors. \29\ We considered a range of
costs and estimated the total cost to the Government if the work had
been performed by a Federal employee or contractor. In addition, in
September 2011, we assessed DOD's review of various aspects of its
public-private competition policies and found that the Department's
review met statutory reporting requirements on public-private
competitions. \30\ We reiterated our prior finding that the overhead
rate used in the costs comparisons did not have a sound analytical
basis, which leaves some uncertainty about whether that rate may be
understated or overstated for any given public-private competition.
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\28\ GAO, Defense Contracting: Army Case Study Delineates Concerns
with Use of Contractors as Contract Specialists, GAO-08-360
(Washington, D.C.: Mar. 26, 2008).
\29\ GAO, Warfighter Support: A Cost Comparison of Using State
Department Employees versus Contractors for Security Services in Iraq.
GAO-10-266R (Washington, D.C.: Mar. 4, 2010).
\30\ GAO, DOD Met Statutory Reporting Requirements on Public-
Private Competitions, GAO-11-923R (Washington, D.C.: Mar. 4, 2010).
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More generally, we reported that in making the decision to use
contractors, agencies have experienced challenges such as: determining
which functions and activities should be contracted out and which
should not to ensure institutional capacity; developing a total
workforce strategy to address the extent of contractor use and the
appropriate mix of contractor and Government personnel; identifying and
distinguishing the roles and responsibilities of contractors and
civilian and military personnel; and ensuring appropriate oversight,
including addressing risks, ethics concerns, and surveillance needs.
\31\
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\31\ GAO, Defense Management: DOD Needs to Reexamine Its Extensive
Reliance on Contractors and Continue to Improve Management and
Oversight, GAO-08-572T (Washington, D.C.: Mar. 11, 2008).
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Ms. Speier. What do you attribute the disparity among our forces in
implementation of effective cost analysis modeling? Do you believe that
the approach the Army has taken would work for the other forces? How
long would it take to implement across the Department?
Ms. Farrell. GAO has not conducted the work necessary to respond to
this question.
Ms. Speier. What are DOD's current requirements for implementing
effective cost analysis modeling to compare the costs of service,
Federal, and contractor employees? What efforts does DOD have in place
to improve these cost analyses? Are any of these improvements also
seeking consistent cost modeling?
Ms. Farrell. GAO has not conducted the work necessary to respond to
this question.
QUESTIONS SUBMITTED BY MR. SCHILLING
Mr. Schilling. What are the workforce requirements that the U.S.
needs in order to ensure there is not a single point of failure in our
defense manufacturing capabilities?
Mr. Vollrath. The Department successfully maintains and manages,
within acceptable and manageable risk levels, our defense manufacturing
capabilities. Given the future outlook of defense requirements, it is
likely the Department will see a further contraction and consolidation
of commercial and organic manufacturing. In order to mitigate risk, a
Government workforce of highly trained personnel in armaments and
ammunition manufacturing, among other things, is essential. Such a
workforce is increasingly relevant if more production is privatized. A
highly skilled workforce, which captures historic knowledge, will help
ensure continuity of operations.
Mr. Schilling. In your strategic plan you mentioned the need for a
highly skilled civilian workforce. Does this include the organic
manufacturing base?
Mr. Vollrath. The DOD Strategic Workforce Plan (SWP) focuses on
mission-critical occupations at the enterprise level. In addition, the
next iteration SWP that is currently under development will also assess
overall workforce health of each DOD functional community, including
occupations supporting logistics and manufacturing work, through
functional community managers at the Office of the Secretary of
Defense, Military Departments and Defense Agencies. The organic
manufacturing base does require a highly skilled civilian workforce to
maintain continuity of operations and strategically plan for the future
of the Department. For example, the ammunition supplied by the organic
industrial base is critical to meeting the needs of the warfighter and
requires highly skilled scientists, engineers, and acquisition
professionals who have knowledge in armaments manufacturing.
Maintaining a highly skilled civilian workforce to manage the organic
manufacturing base reduces the risk that critical processes and the
lessons learned from their implementation are lost.
Mr. Schilling. How do you determine the definition of mission
essential skills in the organic base, specifically arsenals?
Mr. Vollrath. Mission essential skills in the organic industrial
base that are specific to arsenals should be determined based on the
unique capabilities and/or processes performed by the individual
arsenals. In the circumstance of the Army's three ammunition production
arsenals (Pine Bluff Arsenal, Rock Island Arsenal and Watervliet
Arsenal), the highly skilled scientists, engineers and acquisition
professionals that are necessary to operate, maintain and manage the
armaments manufacturing process have mission essential skills. Mission
essential skills at these locations may include knowledge of chemical/
biological defense production and repair, knowledge of prototyping and
manufacturing, integration, testing and logistics, as well as
procurement and product assurance for cannons, howitzers, mortars, and
associated armaments for weapon systems.
Mr. Schilling. What are the workforce requirements that the U.S.
needs in order to ensure there is not a single point of failure in our
defense manufacturing capabilities?
Ms. Farrell. GAO has reported on the challenges that DOD faces in
managing the defense industrial base, but has not specifically reviewed
the workforce requirements for maintaining defense manufacturing
capabilities. \32\ DOD, through its Annual Industrial Capabilities
Report to Congress, reports on the health of various defense sectors,
including the extent to which they face workforce challenges. For
example, in the most recent report in September 2011, DOD cited
concerns about the challenges faced by the aviation industry with an
aging workforce and a decreased likelihood that a younger engineering
workforce will remain in the industry due to the lack of new challenges
and interesting things to do. Based on this, DOD recommended that
adequate funding be identified to encourage innovation and to mitigate
risk taking through company sponsored independent research and
development activities. It also identified a growing need to address
shortages in specific critical-skill sets, such as structural analysis,
systems integration, and other critical military unique skills. The
report also cites that efforts are underway through the current
administration, private industry, and DOD programs to revitalize the
U.S. Science, Technology, Engineering and Mathematics education, but
does not specifically identify those efforts. In addition, DOD's Office
of Under Secretary of Defense for Acquisition, Technology and
Logistics, Office of Manufacturing and Industrial Base Policy is
conducting a comprehensive sector by sector study of U.S. industry to
guide the Department in sustaining the health, vibrancy, and efficiency
of the industrial base, which may identify additional workforce
challenges.
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\32\ GAO, DOD Assessments of Supplier-Base Availability for Future
Defense Needs, GAO-10-317R (Washington, D.C.: Jan. 27, 2010) and
Department of Defense: A Departmentwide Framework to Identify and
Report Gaps in the Defense Supplier Base Is Needed, GAO-09-5
(Washington, D.C.: Oct. 7, 2008).
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Mr. Schilling. Do you believe that arsenals are being included as
they should be in the workforce requirements of DOD?
Ms. Farrell. Since 2008, we have reviewed DOD's Strategic Human
Capital Workforce Plans. \33\ Our reviews of those plans have found
that DOD addressed the requirement to assess its critical skills. More
specifically, the overall civilian workforce plan identified 22
mission-critical occupations, \34\ which according to DOD represent the
Department's assessment of critical skills. Given that each agency has
its own set of unique challenges and its own approach for handling
those challenges, we believe that the Department is in the best
position to determine its critical skills and which segments of its
workforce should be included as part of its determination of critical
skills.
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\33\ GAO-10-814R; GAO-09-235; and GAO-08-439R.
\34\ DOD has identified 24 enterprisewide mission-critical
occupations; 22 of these occupations are associated specifically with
the overall civilian workforce and are discussed in the strategic
workforce plan, while the remaining 2 are acquisition-related
occupations--contracting and quality assurance--and are discussed in
the Defense Acquisition Workforce Improvement Strategy (published as a
separate report).
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