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Appendix I
GOVERNMENT PERFORMANCE AND RESULTS ACT

GOVERNMENT PERFORMANCE AND RESULTS ACT

OVERVIEW OF THE DOD STRATEGIC PLAN

Since the founding of the Republic, the United States has embraced several fundamental and enduring objectives. Principal among these are maintaining the sovereignty, political freedom, and independence of the United States with its values, institutions, and territory intact; protecting the lives and personal safety of Americans, both at home and abroad; and providing for the well–being and prosperity of the nation and its people.

Achieving these basic objectives in an increasingly interdependent world requires fostering an international environment in which critical regions are stable, at peace, and free from domination by hostile powers; the global economy and free trade are growing; democratic norms and respect for human rights are widely accepted; nuclear, biological, and chemical weapons and other potentially destabilizing technologies are minimized; and the international community is willing and able to prevent and, if necessary, respond to calamitous events. The United States seeks to play an international leadership role by working closely and cooperatively with nations that share its values and goals and by influencing those that can affect U.S. national well–being.

These fundamental objectives provide the foundation for the national security strategy and for U.S. defense policy and planning. It is from them that the mission, strategic vision, and corporate goals of the Department of Defense (DoD) derive.

DoD Mission

The mission of the Department of Defense is to support and defend the Constitution of the United States; to provide for the common defense of the nation, its citizens, and its allies; and to protect and advance U.S. interests around the world. To accomplish this mission, the Department maintains trained forces ready to respond to threats to U.S. security arising anywhere on the globe.

In peacetime, the United States works with friends and allies to promote a stable world that supports economic growth and provides opportunities for emerging democracies. The routine deployment of U.S. forces overseas, combined with the maintenance of ready forces at home, promotes stability and deters the use of force against U.S. interests. The same military forces that help shape the international environment can also respond quickly to threats to U.S. security when crises arise.

DoD Vision

In support of its basic mission, the Department of Defense:

· Fields the best trained, best equipped, best prepared fighting force in the world.

· Supports alliances and security relationships that protect and advance U.S. security interests.

· Furthers national interests by working effectively with other federal agencies, Congress, and the private sector.

· Serves as a model of effective, efficient, innovative management and leadership.

DoD Corporate–Level Goals

DoD has established two corporate–level goals:

· Goal 1. Shape the international security environment and respond to the full spectrum of crises by providing appropriately sized, positioned, and mobile forces.

· Goal 2. Prepare now for an uncertain future by pursuing a focused modernization effort that maintains U.S. qualitative superiority in key warfighting capabilities. Transform the force by exploiting the Revolution in Military Affairs and reengineer the Department to achieve a 21st century infrastructure.

The Department’s corporate goals are fully consistent with the objectives articulated in the 1997 Quadrennial Defense Review (QDR). The QDR report described the results of a definitive, overarching program evaluation undertaken by the Department, the fourth such comprehensive review conducted since the end of the Cold War. The QDR refined the force and policy analyses begun in the 1991 Base Force Review, the 1993 Bottom–Up Review, and the 1995 study by the Commission on Roles and Missions of the Armed Forces. By examining America’s defense needs from 1997 to 2015—the potential threats the nation might face and the strategy, force structure, readiness, infrastructure, and modernization programs needed to cope with them—the QDR provided a blueprint for a balanced and affordable defense program.

THE ANNUAL PERFORMANCE PLAN AND REPORT

GPRA Requirements

The Government Performance and Results Act (GPRA) seeks to improve government–wide program effectiveness, government accountability, and, ultimately, public confidence by requiring agencies to identify measurable annual performance goals, against which actual achievements can be compared. The approach taken by GPRA to linking expenditures to performance is consistent with how the Department of Defense applies its internal management process—the Planning, Programming, and Budgeting System (PPBS)—to guide the implementation of QDR decisions. The DoD budget has one principal output: military forces that are ready to go to war. Because these forces are intended to deter potential adversaries, the outcome of the Department’s efforts in any given year is partially subject to global developments and political decisions. Nonetheless, the Department has developed a methodology that allows it to present output–oriented goals and accompanying measures within the context of GPRA.

As stated above, DoD’s two corporate goals guide the annual implementation of the QDR through the PPBS. The corporate goals form the basis for using GPRA as a management tool, and they serve as strategic goals for the Department. The document that implemented them, the May 1997 Report of the Quadrennial Defense Review, is the Department’s strategic plan. The strategic plan will remain in effect until revised by the next QDR in 2001, as mandated by Section 402 of the National Defense Authorization Act for FY 2000 (Public Law 106–65).

Linking Plans to Performance

The Department’s annual performance plan plots a short–term course toward achieving its multiyear strategic plan. Annual performance goals establish a measurable path to incremental achievement of the corporate goals articulated in the strategic plan. Performance goals are supported and evaluated by quantifiable output, which is assessed using performance measures or indicators. Normally, a given performance goal encompasses several performance measures and indicators. For that portion of the performance goal which they evaluate, performance measures are sufficient in themselves to judge results. Performance indicators are not sufficient to gauge the success of a program; rather, they provide meaningful insights for qualitative assessments. Together, performance measures and indicators quantify the output of defense programs for key metrics associated with providing a ready force and preparing for the future.

The Department’s FY 2000 performance plan and revised FY 1999 plan, published in the February 1999 Annual Report to the President and Congress, established seven annual performance goals (see Table I–1). The FY 1999 and FY 2000 performance targets and metrics addressed in this report come from that document. For FY 2001, the Department has added an eighth performance goal, focusing on financial and information management. Performance against that goal will be assessed initially in the FY 2001 report, to be published in February 2002.

Evaluating Annual Performance

The Department evaluates success in achieving the performance goals established for its budget on two levels. At a lower level of aggregation, individual performance measures and indicators are scored at the end of each fiscal year to determine how performance compared to numeric targets set when the budget was submitted. As noted earlier, each set of measures and indicators supports a common annual performance goal; it is at this level that performance against the targets is reported and discussed in subsequent sections of this appendix.

At the higher level, annual performance goals are evaluated in two ways. First, results for each of the subordinate measures and indicators are evaluated within the context of overall program performance. Second, a determination is made as to whether a shortfall in expected performance for any single metric, or for any set of supporting metrics, will put at risk achievement of the associated corporate goal. This subjective determination is trend–based and is inherently cumulative: a single year of poor performance may not signal that a corporate goal is at risk, although several years of unsatisfactory performance almost certainly will.

Linkage of Corporate Goals to Annual Performance Goals

Table I–1

Corporate Goal 1:
SHAPE AND RESPOND
Corporate Goal 2:
PREPARE

1.1 Support U.S. regional security alliances through military–to–military contacts and the routine presence of ready forces overseas, maintained at force levels determined by the QDR.

2.1 Recruit, retain, and develop personnel to maintain a highly skilled and motivated force capable of meeting tomorrow’s challenges.

1.2 Maintain ready forces and ensure they have the training necessary to provide the United States with the ability to shape the international security environment and respond to a full spectrum of crises.

2.2 Transform U.S. military forces for the future.

1.3 Maintain the capability to move military forces from the United States to any location in the world in response to aggression, using a combination of airlift, sealift, and prepositioned equipment.

2.3 Streamline the DoD infrastructure by redesigning the Department’s support structure and pursuing business practice reforms.

2.4 Meet combat forces’ needs smarter and faster, with products and services that work better and cost less, by improving the efficiency of DoD’s acquisition processes.

2.5 Improve DoD financial and information management  (New Goal for FY 2001)

Clearly, performance shortfalls due to internal management factors may receive higher priority for remedial action than those resulting from external events (such as international crises or contingencies), where performance shortfalls often can be overcome by restoring diverted resources or reinstating disrupted training schedules. However, repeated disruptions due to unexpected contingencies, resulting in consecutive years of performance shortfalls, could lead the Department to adjust its performance expectations.

Establishing Performance Targets and Analyzing Performance Data

The metrics incorporated in the Department’s performance plan derive from the goals established for implementing the QDR. They represent key criteria used by the Secretary of Defense in evaluating program proposals put forward by the military services and defense agencies during the Department’s annual program and budget reviews. A DoD–wide working group—composed of representatives from the Office of the Secretary of Defense (OSD), the Joint Staff, the Services, and defense agencies—helps draft annual updates to the GPRA performance plan, consistent with how the Department monitors QDR implementation through the PPBS process. The group also reviews verification and validation (V&V) data supporting individual performance metrics for accuracy and completeness.

In June 1999, the DoD Comptroller designated a primary OSD sponsor for each GPRA annual performance goal. The sponsors are responsible for reporting on annual performance and documenting V&V information.

The remaining sections of this report assess the Department’s progress in meeting its FY 1999 performance goals and identify performance goals for FY 2001. The presentation for each performance goal starts with a general discussion of the goal’s intent, its relationship to the corporate goal that it supports, and any major changes to the goal for FY 2001 and beyond. Next, an evaluation of FY 1999 performance is presented, followed by a discussion of the subordinate metrics. The discussions:

· Describe how the individual metrics contribute to the associated performance goal.

· Summarize the V&V methodology supporting each metric, including weaknesses and areas for improvement.

· Highlight factors that shaped FY 1999 performance.

· Restate the FY 2000 performance targets (from the FY 2000 GPRA plan).

· Predict, where applicable, how FY 1999 performance might affect the ability of the Department to achieve its performance targets in FY 2000.

· Set FY 2001 performance targets.

Although no metrics from the FY 2000 GPRA plan have been discontinued, several have been renumbered to reflect a more logical grouping for reporting performance. Specifically, last year’s Performance Measure 2.4.8 has been redesignated as measure 2.3.9 in this year’s report. All other changes merely reorder metrics under their original annual performance goal.

PERFORMANCE GOAL 1.1 – SUPPORT REGIONAL SECURITY ALLIANCES

U.S. armed forces promote regional stability in many ways that support the national security strategy. In regions where the United States has vital and important interests, the routine presence of U.S. forces helps bolster the security of allies and friends. At the same time, interactions between forward–deployed forces and regional militaries serve to strengthen and adapt core alliances and coalitions to meet evolving security demands. In addition, the U.S. military often serves as a preferred means of engagement with countries that are neither staunch friends nor confirmed foes. Such contacts build constructive security relationships. They help promote the development of democratic institutions today and prevent these countries from becoming adversaries tomorrow. Through both example and enforcement, U.S. forces encourage adherence to international norms and regimes that provide a foundation for peace and stability around the globe.

Evaluation of FY 1999 Performance

The Department met or exceeded its FY 1999 overseas presence targets for Air Force and Army forces. For the Navy and Marine Corps, presence objectives were exceeded in Southwest Asia at the expense of deployments in Europe and the Pacific region. The increased naval presence in Southwest Asia was intended to ensure that U.S. involvement in Operation Allied Force would not be interpreted by Iraq as signifying a lack of commitment to U.S. allies and interests in that region. The Department expects to meet all of its overseas presence targets for FY 2000.

The Department canceled 37 of 191 overseas exercises planned for FY 1999. Twenty–two exercises were dropped because of the diversion of airlift assets, equipment, and personnel to support Operation Allied Force; the remaining 15 exercises were forgone in order to free funding for Y2K operational evaluations directed by Congress, for which no additional resources were provided. Five new exercises conducted in FY 1999 partially offset those canceled.

The difference between planned and actual exercise performance in FY 1999 is consistent with recent experience. For example, in FY 1995 and FY 1996, the exercise program was revised to account for deployments to Bosnia, just as the FY 1999 program was adjusted to accommodate the Kosovo operation. In each case, the loss of overseas exercises was mitigated by the experience gained from actual combined operations with foreign militaries in support of humanitarian missions or crisis operations.

The number of overseas exercises has increased slightly over the past two years and is expected to remain within a range of 195 to 205 annually through FY 2002. Despite the increased pace of overseas exercises, the Department is reducing total man–days devoted to the exercise program by limiting participation to only the most essential units and personnel, shortening exercise durations to the minimum required to meet training goals, and increasing the use of simulations. These measures will strengthen military–to–military contacts while reducing deployment demands on U.S. forces.

Some difficulties may be experienced in meeting exercise targets for FY 2000. The total appropriation for exercise programs in FY 2000 represented a reduction of $34 million from the President’s budget request. Additionally, the overseas exercise schedule remains vulnerable to perturbations from world events. Because some exercises must be planned two to three years in advance and others are scheduled for a particular season of the year, it is often impossible to delay an exercise in response to a contingency. In such cases, exercises must be canceled and the associated training forgone.

Supporting Metrics: FY 1999 Performance Report and FY 2001 Performance Plan

Performance Goal 1.1 is supported by five metrics: Army, Navy, Air Force, and Marine Corps overseas presence and the overseas exercise program.

Regional Security Metrics

 

Performance Measure 1.1.1 – Army Overseas Presence
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Mechanized Divisions in Pacific Region

1 1 1 1 1 1

Divisions with Elements in Europe

2 2 2 2 2 2

 

Metric Description. The Army maintains a mechanized division in the Asian–Pacific region and two divisions with selected command, combat, and support elements in Europe. The forces stationed in Europe affirm the United States’ leadership role in NATO and reinforce bilateral relations with key partners. Forward–deployed Army units in the Asian–Pacific region underscore the U.S. commitment to remain a stabilizing influence and to deter aggression on the Korean peninsula and elsewhere in the region.

V&V Methodology. The Army provides data on its forces for each revision of the Department’s Future Years Defense Program (FYDP) database. (For more details on the FYDP system and PPBS process, see the Related Issues section at the end of this appendix.) The number of Army units deployed is obtained from major commands and is reviewed at least twice yearly by the geographic commanders in chief (CINCs) as part of their input to the PPBS management process.

Actual and Projected Performance. The Department met its FY 1999 performance targets for Army overseas presence. No shortfalls are projected for FY 2000.

Performance Measure 1.1.2 – Naval Overseas Presence
(Percentage of time regions are covered by an aircraft carrier battle group)
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Pacific

100 67 100 81 100 100

Europe

65 40 75 56 75 75

Southwest Asia

80 82 75 100 75 75

 

Performance Measure 1.1.3 – Marine Corps Overseas Presence
(Percentage of time regions are covered by a Marine expeditionary
unit/amphibious ready group)
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Pacific

100 100 100 83 100 100

Europe

92 82 80 100 80 80

Southwest Asia

46 50 50 68 50 50

 

Metric Description. Performance Measures 1.1.2 and 1.1.3 record the percentage of time that a U.S. Navy carrier battle group (CVBG) or a Marine expeditionary unit (MEU) and amphibious ready group (ARG) is deployed in each of three regions—the Pacific, Europe, and Southwest Asia. In combination, these measures gauge the ability of naval air, land, surface, and submarine forces to rapidly respond to crises as well as engage in exercises, military–to–military contacts, and other activities in support of regional alliances.

V&V Methodology. Data for these measures are derived from two sources: Navy deployment schedules for CVBGs, MEUs, and ARGs, as reflected in Global Naval Force Presence (GNFP) messages issued periodically by the Chairman of the Joint Chiefs of Staff (CJCS); and OPNOTES, a text–based tactical data exchange system maintained by the Department of the Navy that documents specific data and times for the arrival and departure of CVBGs and ARGs into or out of each region. OPNOTES depicts the position of underway and deployed naval forces. In–port and homeport forces are not typically included. The system is updated daily.

Data are verified by comparing planned deployment schedules (the Chairman’s GNFP message) against actual force presence (as documented by the arrival and departure dates recorded in OPNOTES). Data also are reviewed for accuracy at each Quarterly Fleet Scheduling Conference. This metric does not account for multiple CVBG or MEU coverage in a theater of operations.

Actual and Projected Performance. The Department met its FY 1999 performance goals for Navy and Marine Corps presence in Southwest Asia. Deployments in the Pacific fell slightly short of objectives, due to the diversion of forces to support contingency operations in Europe and Southwest Asia. While targets for ARG/MEU presence in Europe were met, the CVBG objective for that theater was not reached, due to ongoing Southwest Asian contingency deployments. Assuming a return to routine deployment patterns in Southwest Asia and absent further unanticipated requirements, the Navy and Marine Corps expect to meet their overseas presence goals in FY 2000.

Performance Measure 1.1.4 – Air Force Overseas Presence (In FWEs)
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Pacific

2 2 2 2 2 2

Europe

2 2 2 2 2 2

Southwest Asia

1 1 1 1 1 1

NOTE: FWE = fighter wing–equivalent.

 

Metric Description. The Air Force keeps five FWEs forward deployed in the Pacific, Europe, and Southwest Asia in support of regional engagement and crisis response missions outlined in the QDR.

V&V Methodology. The Air Force provides data on the location of its forces for each update of the FYDP database. Unit deployment data are maintained by the major commands and are reviewed at least twice annually by the geographic CINCs as part of their input to the PPBS process.

Actual and Projected Performance. The Air Force met its FY 1999 performance targets for overseas presence. No shortfalls are projected for FY 2000.

Performance Measure 1.1.5 – Number of Overseas Exercises
  FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Number of Joint and Combined Exercises

183a 191a 159 198a 204

a This metric has been reformatted to match actual management practice. The Joint Training Master Plan (JTMP) includes both joint (interservice) and combined (U.S. and foreign military) exercises. The FY 2000 GPRA performance plan, by contrast, considered only combined exercises (which account for most of the training exercises conducted overseas). To bring the GPRA metric into alignment with the JTMP’s coverage, Performance Measure 1.1.5 has been recast to encompass both joint and combined exercises.

 

Metric Description. The overseas exercise program demonstrates U.S. resolve and the ability to project forces to locations abroad in support of national interests and commitments to allies. The program provides joint force training that emphasizes interoperability, joint warfighting doctrine, and rapid deployment. Such training, conducted in conjunction with allied or friendly militaries, provides opportunities to test and evaluate U.S. and host nation systems, lines of communication, and support agreements.

V&V Methodology. This metric is a simple count of joint and combined exercises completed. Its utility is ensured by rigidly defining what does (and does not) constitute a joint exercise. CJCS Manual 3500.03, Joint Training Manual for the Armed Forces of the United States, establishes standards for joint training in four phases: establishment of requirements; planning; execution; and assessment of results. The manual standardizes procedures for each phase of the joint training cycle and establishes criteria for reporting and evaluating performance data.

Actual and Projected Performance. Operation Allied Force resulted in the cancellation of 22 combined exercises; 15 other exercises were superseded by Y2K operational evaluations mandated by Congress. Countries affected by the cancellation of exercises due to Operation Allied Force were Latvia, Bahrain, Turkey, Poland, Jordan, Oman, Spain, Greece, the United Kingdom, Singapore, Romania, the Former Yugoslav Republic of Macedonia, and Germany. Countries affected by the elimination of exercises due to Y2K evaluations were Israel, the United Arab Emirates, and Canada. Five new exercises, in Central America, partially offset those canceled. Since many combined exercises in the Western Hemisphere provide disaster relief training, the exercises added after Hurricane Mitch became the basis for actual relief missions.

Absent similar unanticipated requirements, the Department expects to meet its overseas exercise goal for FY 2000.

PERFORMANCE GOAL 1.2 – MAINTAIN TRAINED AND READY FORCES

The force structure objectives established in the QDR reflect the need for balance between investments in existing forces and adequate preparation for the future. Today’s security environment presents the same pressing need for military forces that existed when the QDR was conducted. The force level objectives for FY 2001 are, therefore, essentially the same goals set in the QDR. The intent is to have forces that can fight and win two major theater wars nearly simultaneously. At the same time, the goals reflect the need for the United States to respond to smaller–scale contingencies. Although the latter deployments are much less demanding than a major theater war, they can become a high priority for the United States. That is particularly true when swift intervention of military forces is needed to contain, resolve, or mitigate the consequences of a crisis or contingency that could otherwise become far more costly and deadly.

The Department monitors the day–to–day readiness of forces through two senior forums: the Joint Monthly Readiness Review (JMRR) and the Senior Readiness Oversight Council (SROC). The JMRR provides the CJCS a tool for monitoring the overall readiness of U.S. forces. It identifies and tracks specific areas of concern for each of the CINCs, combat support agencies, and Services. JMRR assessments, as well as other DoD–wide readiness issues, are presented monthly to the SROC. Chaired by the Deputy Secretary of Defense, the SROC includes as members the Under Secretaries of Defense; the Vice Chairman of the Joint Chiefs of Staff; the Under Secretaries of the Army, Navy, and Air Force; the Chief of Staff of the Army; the Chief of Naval Operations; the Commandant of the Marine Corps; and the Chief of Staff of the Air Force. The SROC provides a forum for the Department’s senior civilian and military leaders to consult on standing or emerging readiness concerns.

The readiness assessments presented to the SROC are summarized four times a year in the Quarterly Readiness Report to Congress (QRRC). The QRRC allows the Department to inform Congress of issues related to near–term readiness. It includes sections on readiness indicators, force tempo trends, and unit readiness ratings.

Evaluation of FY 1999 Performance

The Department failed to meet some training and operational tempo targets in recent years, due largely to the demands of contingency response missions such as Operation Allied Force. Training and tempo goals reflect the Department’s efforts to monitor the effects of increased peacetime deployment levels and overseas operations on smaller, post–Cold War military forces. While high tempo is not in itself a cause for concern, it serves to focus management attention on those particular units and skill groups that are repeatedly in demand for contingency operations. More frequent deployments place greater stress on individuals and families, which may ultimately affect retention. Specific deployment thresholds, to be exceeded only on approval of the Secretary of Defense, are set for low–density/high–demand units in the Department’s Global Military Force Policy. The Department has implemented a variety of initiatives for FY 2000 and FY 2001 to mitigate the effects of several years of persistently high operational tempos and to avoid any long–term degradation in force readiness. Details on these initiatives are provided in Chapter 4.

Training results exhibited a more positive trend, although the Army failed to achieve its tank–mile targets and some reserve component flying–hour targets. Tank–mile training—the performance benchmark for Army ground forces—exhibited an improvement, however, over FY 1998 results for the active Army and continues to demonstrate an upward trend. Army reserve component performance for tank miles declined relative to FY 1998 levels; National Guard flying hours were about 15 percent below objectives but were improved over 1998 levels. Army execution shortfalls were the result of unexpected funding requirements in the budget year that forced the Army to divert resources from training to other programs (such as real property maintenance) that are funded through the Operation and Maintenance (O&M) account. The Army expects to meet its tank–mile goals for FY 2000 by more accurately managing O&M accounts, thus reducing the need for funding migration.

It is important to note that the Army’s tank–mile program is especially sensitive to the timing as well as the availability of funding. The Army conducts battalion– and brigade–level unit training at the few installations in the United States (and the single facility in Europe) large enough to accommodate maneuvering forces. Commanders must reserve training time at these scarce maneuver areas more than a year in advance. Thus, while O&M funds used to support contingency deployments may subsequently be restored by Congress in supplemental appropriations, it might not be possible to reschedule training activities for units that have missed their preplanned drill periods.

Overall, the Department was able to meet or exceed its FY 1999 training targets, despite disruptions to the peacetime training schedule caused by Operation Allied Force. In particular, participation in Operation Allied Force skewed Air Force flying–hour program results. U.S. Air Forces in Europe and the Air Mobility Command exceeded their flying–hour targets by 16 and 19 percent, respectively, while commands in the United States generally flew fewer hours than planned. Overall, the Air Force fell slightly short of its aggregate flying–hour objective for FY 1999; no shortfalls are projected for FY 2000.

Supporting Metrics: FY 1999 Performance Report and FY 2001 Performance Plan

Key metrics for gauging training and readiness include active and reserve force levels, deployment frequencies (for training or operations), and specific readiness indicators and trends. GPRA metrics describing unit readiness trends by Service are reported separately in the Quarterly Readiness Report to Congress. The October–to–December QRRC serves as a combined GPRA plan and report for these classified measures.

Training and Readiness Metrics

Performance Measure 1.2.1 – Army Force Levels
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Active Corps

4 4 4 4 4 4

Divisions (Active/National Guard)

10/8 10/8 10/8 10/8 10/8 10/8

Active Armored Cavalry Regiments

2 2 2 2 2 2

Enhanced Brigades (National Guard)

15 15 15 15 15 15


Performance Measure 1.2.2 – Naval Force Levels
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Aircraft Carriers (Active/Reserve)

11/1 11/1 11/1 11/1 11/1 12

Air Wings (Active/Reserve)

10/1 10/1 10/1 10/1 10/1 10/1

Amphibious Ready Groups

12 12 12 12 12 12

Attack Submarines

73 65 57 57 56 55

Surface Combatants (Active/Reserve)

115/10 116/10 106/10 106/10 108/8 108/8

 

Performance Measure 1.2.3 – Air Force Force Levels
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Fighter Wings (Active/Reserve)

13/7 13/7.2 12.6/7.6 12.6/7.6 12.6/7.6 12.6/7.6

Air Defense Squadrons (Reserve)

10 6 4 4 4 4

Bombers (Active/Reserve)

175/25 158/27 158/27 163/27 163/27 163/27

 

Performance Measure 1.2.4 – Marine Corps Force Levels
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Marine Expeditionary Forces

3 3 3 3 3 3

Divisions (Active/Reserve)

3/1 3/1 3/1 3/1 3/1 3/1

Air Wings (Active/Reserve)

3/1 3/1 3/1 3/1 3/1 3/1

Force Service Support Groups (Active/Reserve)

3/1 3/1 3/1 3/1 3/1 3/1

 

Metric Descriptions. The QDR established a requirement for four active Army corps, 10 active divisions (including six heavy and four light divisions), and two active armored cavalry regiments. The Total Army Analyses for FY 2003 and FY 2005 identified adjustments to the support needed to sustain Army combat forces across the range of military operations. As a result, the Army is implementing plans to convert lower–priority support and combat units to higher–priority support units. Pending the completion of Total Army Analysis FY 2007, the Army will continue to work with its reserve component to refine options for reconfiguring appropriate reserve units so that they mirror active units and are more relevant to national needs.

Consistent with the QDR, the Navy maintains 12 aircraft carrier battle groups and 12 amphibious ready groups. The number of carrier air wings stands at 10 active and one reserve. Surface combatant ships have decreased from the 1997 level of 125 to 116 as newer and more capable systems have entered service. Reflecting changes in requirements, the attack submarine force is slated to decline from 57 boats in FY 1999 to 55 by FY 2001.

The Air Force plans for a standing force of just over 12 active FWEs, eight reserve FWEs, four air defense squadrons (0.8 FWEs), and 190 bombers (142 of which are assigned to operational units).

V&V Methodology. The Services submit data on the stationing of their forces three times a year, in conjunction with updates of the Future Years Defense Program. In addition, unit deployments are reviewed at least twice yearly by the regional CINCs as part of their input to the PPBS process.

Actual and Projected Performance. The Department met its FY 1999 performance targets for military force structure. No significant changes to force structure goals are projected for FY 2000. The FY 2001 budget supports a force of 12 fully deployable aircraft carriers. One of these ships, the J.F. Kennedy, has been serving as a reserve/training asset and conducting some active deployments. Starting in FY 2001, the J.F. Kennedy will be redesignated as an active carrier, allowing it to be fully integrated into the deployment cycle.

Performance Indicator 1.2.5 – Army Deployment Tempo
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Number of Units With Soldiers Who Deploy
More Than 120 Days per Year

N/Aa 18 0 43 0 0

Number of Individual Units Deploying
More Than 179 Days per Year

N/Aa 6 0 48 0 0

a The Army tempo indicator took effect in 1998.

 

Performance Indicator 1.2.6 – Navy Personnel Tempo
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Units Not Meeting Personnel Tempo Goal

2 2 0 2 0 0

 

Performance Indicator 1.2.7 – Air Force Tempo
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Percentage of Personnel Assigned to Combat Systems Who Are Deployed Under 120 Days TDY per Yeara

87 77 100 75 100 100

Average Number of Days Deployed for Those Personnel Exceeding 120 Days TDY per Year

145 142 N/A 148 N/A N/A

a TDY = temporary duty. TDY is a measure of the time that a service member is deployed away from his or her home station. It includes personnel in occupational specialties directly associated with the operation of aircraft, weaponry, or other systems required for deployments.

 

Performance Indicator 1.2.8 – Marine Corps Deployment Tempo
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Units Deploying More Than 180 Days per Year Over a 36–Month Scheduling Period

N/Aa 1 0 0 0 0

a The Marine Corps tempo indicator took effect in 1998.

 

Metric Description. The mechanisms used to ensure force readiness vary across the Services. The specific approaches adopted are a function of multiple factors, including Service–unique force characteristics, wartime and contingency response requirements, peacetime presence levels, the availability of training infrastructure, perishable skills, and the need for flexibility. Less tangible factors—such as morale, leadership development, and team building—also are considerations. The Army strives to attain the highest possible state of readiness in its first–to–fight units, while maintaining the ability to deploy later–arriving units within prescribed timelines. The Navy and Marine Corps maintain a cyclical readiness posture, tied to the deployment schedules of their forces. When in home port, Navy and Marine units are engaged in training, maintenance, and resupply activities in preparation for their next rotational deployment. The Air Force maintains a high state of overall readiness, reflecting the rapid–response requirements of air assets in both crises and war.

Each Service has established a threshold for indicating when the pace of operations may begin to impair operational readiness, quality of life, or retention. For the Army, this statistic is the number of units deploying more than 179 days per year or the number of units containing soldiers who individually deploy more than 120 days. The Air Force uses as an indicator the percentage of personnel assigned to combat systems who are deployed more than 120 days a year. The Navy employs a combination metric for personnel tempo. To meet the Navy goal, a unit must deploy for no more than six months at a time, spend twice as much time nondeployed as deployed, and spend 50 percent of its time in home port over a five–year cycle. The Marine Corps metric is similar but sets the reporting threshold at the number of units deploying more than 180 days per year over a 36–month scheduling period.

V&V Methodology. Army deployment data, drawn from Unit Status Reports, are incorporated in the Status of Resources and Training System (SORTS) database, which is maintained by the Joint Staff. Unit tempo rates are calculated using a mathematical formula defined in Army Regulation 220–1, Unit Status Reporting, which takes the tempo for the reported month and projects it one month ahead of the reporting date. After tempo data are input into SORTS, these statistics can be accessed and reviewed at all levels, from individual units up to and including the Chairman of the Joint Chiefs of Staff.

Navy data are collected quarterly at the unit level. The data are relayed from unit commanders to fleet headquarters, which pass the messages on to Navy headquarters. The data are reviewed for accuracy at each level in the reporting chain. Navy Instruction 300.13A, Navy Personnel Tempo for Operations, defines standards for the assessment and evaluation of tempo data. Marine Corps data are maintained in an automated database at Marine Corps headquarters. Operating units report deployment activity on a semi–monthly basis; the data are recorded quarterly in the Marine Corps Training, Employment, and Exercise Plan.

The Air Force records temporary duty and duty–status changes in its automated Personnel Data System (PDS); these data are continuously updated. A January 1998 assessment by the Air Force Studies and Analysis Agency found historical PDS data to be 94 percent accurate; the TDY history file matched by 90 percent the tempo reported by operational units.

Actual and Projected Performance. The Department exceeded its deployment ceilings for Army units in FY 1999, due mainly to contingency operations in support of Operation Allied Force. As a result of follow–on activities and training, the Army will likely surpass deployment thresholds again in FY 2000. Operation Allied Force resulted in two Navy units failing to meet tempo goals in FY 1999. The Marine Corps met its FY 1999 goal, despite the increased pace of operations. Within the Air Force, 25 percent of personnel assigned to combat systems were deployed over 120 days in FY 1999; the transition to the Aerospace Expeditionary Force concept will allow the Air Force to temper the impact of contingency operations on its forces in FY 2000.

As it reconstitutes forces following Operation Allied Force, the Department will strive to meet its FY 2000 tempo goals.

Performance Indicator 1.2.9 through 1.2.12 – Army, Navy, Air Force, and Marine Corps Classified Readiness Indicators

Results for these metrics can be found in the October–to–December 1999 Quarterly Readiness Report to Congress. The metrics track readiness, by Service, in the areas of personnel, equipment, training, and combat enablers. The annual statistics provide an overall picture of the readiness of military units to accomplish the specific missions assigned to them.

 

Performance Measure 1.2.13 – Flying Hours
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Army

           

Active

14.1 14.0 14.1 14.5 14.5 14.5

Reserve

7.2 7.3 8.3 8.3 9.5 9.0

National Guard

7.1 5.4 7.3 6.3 9.0 9.0

Navy and Marine Corps

           

Active

27 20.2 22.1 23 22.3 22.3

Reserve

N/A 11.0a 11.0a 11.0a 11.0 11.0

Air Force

           

Fighter/Attack

           

Active

N/A 17.0 17.7 17.7 17.2 17.2

Reserve

N/A 10.8 10.7 10.7 11.1 11.1

National Guard

N/A 11.6 11.6 11.6 11.6 11.6

Bombers

           

Active

N/A 19.3 17.9 17.9 15.8 15.8

Reserve

N/A 16.5 16.0 17.6 17.2 17.2

National Guard

N/A 19.7 19.7 19.7 19.7 19.7

NOTE: Data reflect monthly flying hours per aircrew, except for FY 1997–1999 figures for the active Army, which represent aircraft flying hours per month.

a Naval Reserve only.

 

Metric Description. This metric reflects the flying hours per month required by each Service to maintain pilot and crew proficiency (including training and maintenance activities) in the active and reserve components.

V&V Methodology. Army flying–hour data are collected monthly in electronic format by each Army major command; the data are reviewed quarterly at Department of Army headquarters. In addition, independent reviews of flying–hour data are periodically conducted by the U.S. Army Aviation Safety Center and the U.S. Army Cost and Economic Analysis Center.

Navy and Marine Corps data are recorded at the unit level in flight logs. The unit data are reported through the chain of command each month and are used to determine aircraft maintenance schedules. The Navy verifies these data through an independent internal review process (similar to the Army’s), under which the Navy Office for Flying Hours and Aviation Safety, within the Air Warfare Directorate (N–88), verifies and validates Certified Execution Reports provided by field elements.

The Air Force uses an automated database, the Reliability and Maintenance Information System (REMIS), to compare the flying–hours flown by operational units over the course of a fiscal year with projections derived from flying–hour models at the start of the year. Flying–hour data are extracted monthly from REMIS and distributed to Air Force major commands, via the Internet, for review and validation. The Department of the Air Force headquarters staff reviews flying–hour data twice annually.

Flying–hour data for each Service are assessed during the Department’s annual program and budget reviews. Details on unit readiness ratings, which are classified, are provided to Congress in the QRRC.

Actual and Projected Performance. The Department met most of its FY 1999 flying–hour targets; the exception was the Army National Guard, which improved upon its 1998 performance but still fell about 15 percent below target levels. No shortfalls are projected for FY 2000.

Performance Measure 1.2.14 – Number of Tank Miles per Year
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Army (Active)

575a 676a 800 681a 800 800

Army National Guard
(Enhanced Separate Brigades)

211 207 288 160 310b 248c

a Includes annual mileage for the National Training Center.

b Includes annual mileage for individual tank crew and squad training, platoon–level training, Combat Training Center programs, and transit to and from training areas.

c Reflects a programmed decrease in transit miles to and from training areas.

 

Metric Description. Tank miles represent the average level of peacetime activity—including in–field training, combat simulations, and equipment maintenance—needed to achieve wartime proficiency standards, as defined by Army doctrine.

V&V Methodology. Army tank–mile data are compiled quarterly from field unit reports. The data are transmitted electronically to the U.S. Army Logistics Support Activity and the U.S. Army Cost and Economic Analysis Center, which review them for accuracy and integrity and then forward them to Department of Army headquarters for management review.

Actual and Projected Performance. Due to the diversion of resources to support other Army O&M programs, the Department did not fully meet its FY 1999 performance goals for tank miles. No shortfalls are projected for FY 2000, pending receipt of supplemental funding.

Performance Measure 1.2.15 – Number of Steaming Days per Quarter
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Navy (Active Deployed)

N/A 50.5 50.5 50 50.5 50.5

Navy (Reserve Deployed)

N/A 50.5 50.5 50.5 50.5 50.5

Navy (Active Nondeployed)

N/A 26.8 28 28 28.0 28.0

Navy (Reserve Nondeployed)

N/A 18.0 18 18 18.0 18.0

 

Metric Description. This metric tracks the total number of steaming days (days at sea) per quarter for active and reserve component naval vessels.

V&V Methodology. Steaming days are planned and budgeted as fuel costs for ships. Actual steaming days are derived from fuel budget execution.

Actual and Projected Performance. The Navy effectively met its steaming–day goal for FY 1999 (the shortfall was less than 1 percent). No shortfalls are projected for FY 2000.

PERFORMANCE GOAL 1.3: STRATEGIC MOBILITY

Projection forces—airlift, sealift, and equipment prepositioning—ensure that the nation has the ability to respond, with appropriate numbers and types of forces, to crises worldwide. As in its assessment of combat force levels and readiness, the QDR recognized that mobility forces must be able to respond across the spectrum of operations, from peacetime engagements to major theater wars. Further, the QDR reaffirmed the baseline requirements for an intertheater airlift capability of approximately 50 million ton–miles per day (MTM/D) and a surge sealift capacity of 10 million square feet of cargo space. (Surge sealift refers to seaborne transport capacity that can be brought to bear at the outset of a crisis. It does not include ships routinely used for prepositioning purposes, covered under Performance Measure 1.3.3.) Programmed aircraft and ship acquisitions will enable the Department to reach its goals for airlift and sealift in FY 2004 and FY 2002, respectively. The Department plans to purchase additional C–17s in the coming years to ensure that U.S. mobility forces possess the flexibility to respond to the full range of crises.

The prepositioning of military equipment and supplies near potential conflict regions reduces response time in contingencies. With materiel stored on land or afloat at overseas locations, only troops and a relatively small amount of equipment need to be airlifted to a theater early in a crisis. Objectives for prepositioning are based on those forces required very early in a conflict to halt an enemy’s advance.

Evaluation of FY 1999 Performance

The Department met its FY 1999 goals for sealift and airlift, but the continued use of prepositioning sets to support contingency operations has caused stockage levels to fall below the objectives for some items. Overall, strategic mobility assets support the Department’s ability to prosecute two nearly simultaneous major theater wars.

The major airlift and sealift acquisition programs—the C–17 transport aircraft and the new fleet of large medium–speed roll–on/roll–off (LMSR) ships—are both approximately half complete. These programs add significantly to the Department’s capability and flexibility to respond to contingencies. Missions undertaken in support of Operation Allied Force demonstrated the C–17’s ability to carry outsize loads and to land on short, austere airfields. Two LMSRs moved U.S. Army combat equipment from Germany to Greece in support of the Balkans deployment. It would have taken four to six older ships half–again as long to make this same delivery.

The airlift metric (1.3.1) tracks the growth of airlift capacity over time but does not capture short–term degradations in operational capability. Currently, the high tempo of contingency operations and maintenance problems with the C–5 are causing mission–capable rates to drop below the planning factors used to compute Performance Measure 1.3.1.

Air Force bare–base sets (equipment for establishing operations at unimproved airfields) are less ready to support combat operations than the rest of the prepositioned equipment addressed in Performance Measure 1.3.3. The continued use of these sets for contingencies and exercises has exceeded the resources allocated to reconstitute them. Thus, the Department requested, and Congress approved, $72 million in FY 1999 to restore the Air Force sets over the next few years. Since the bare–base sets are required early in a conflict, both their current condition and each future decision to use them for small–scale contingencies poses risks for executing a major theater war.

The three brigade sets of Army material prepositioned in Europe were not filled or maintained to the same standards in FY 1999 as Army material prepositioned in Southwest Asia, Korea, or afloat. However, because the European sets are not critical to the early phases of a major war, their lower level of fill and maintenance does not increase risk appreciably.

Supporting Metrics: FY 1999 Performance Report and FY 2001 Performance Plan

Key metrics for strategic mobility are airlift capacity, sealift capacity, and equipment prepositioning.

Strategic Mobility Metrics

Performance Measure 1.3.1 – Airlift Capacity (Million–Ton–Miles Per Day)
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001/2004
Goal

MTM/D (military)

26 27 26 26 26 26/29

MTM/D (military and CRAF)

46 47 46 46 46 46/50

NOTE: CRAF = Civil Reserve Air Fleet

 

Metric Description. The FY 2004 goal of 50 MTM/D represents the minimum combined civil and military airlift capability that U.S. forces would need to fight and win two major theater wars at an acceptable level of risk. This goal was established by the 1995 Mobility Requirements Study Bottom–Up Review Update. Military airlift is required for carrying outsize loads (such as Patriot missile systems, tanks, and helicopters) and for unloading cargo rapidly, particularly at airfields lacking materiel–handling equipment. MTM/D is an aggregate measure of airlift capacity used as a top–line comparative metric. It combines measures such as aircraft flight hours per day, speed, and payload. Typical or average values are selected for each of these measures for each aircraft type in order to compute MTM/D. These average values, called planning factors, are used in developing military operation plans. Thus, changes in MTM/D values reflect changes in the number and type of airlift aircraft.

V&V Methodology. The status of primary authorized aircraft (PAA)—that is, the immediate availability of various types of transport aircraft—is recorded and tracked in the Programming Data System, maintained by the Air Force Office of Plans and Programs. Other data used to calculate airlift capacity include aircraft block speeds, average payloads, utilization rates, and productivity factors. PAA data are updated three times annually. Air Force Pamphlet 10–1403, Air Mobility Planning Factors, defines broad planning factors for peacetime and wartime airlift operations. The factors are intended to help Service, joint, and combined planners make gross estimates about mobility requirements in the early stages of the planning process. They cover intertheater airlift, aerial refueling, and aeromedical evacuation. Airlift data are verified in periodic reviews, conducted by the Air Mobility Command, of the MTM/D capabilities of the CRAF. The Air Force uses capacity models to determine PAA levels, crew ratios, and associated factors for each budget year, based on long–term programming requirements established in the QDR.

Actual and Projected Performance. The Air Force met its FY 1999 performance targets for airlift capacity. No MTM/D shortfalls are projected for FY 2000. As noted earlier, the continued high tempo of contingency operations, combined with C–5 maintenance problems, has caused mission–capable rates to drop below the planning factors used in computing this metric. Thus, in the near term, somewhat less airlift capacity is available for routine operations than indicated by the metric.

Performance Measure 1.3.2 – Surge Sealift (Million Square Feet)
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Organic Surge Sealift

7.3 7.3 7.7 7.7 8.7 9.2

NOTE: Reflects capacity contributed by DoD–owned or chartered vessels. Excludes additional capacity provided by commercial ships that could be made available for military use in a major deployment.

 

Metric Description. Square footage serves as an aggregate measure of ship capacity. It is computed from ship deck plans by the Maritime Administration (MARAD) or the Military Sealift Command (MSC) and is tracked as a planning consideration by the United States Transportation Command (USTRANSCOM). Square footage is the preferred capacity measure for roll–on/roll–off ships. For containerships and breakbulk ships, the standard measures (number of containers or volumetric capacity) are converted to square footage, based on each vessel’s ability to carry equivalent military cargo.

V&V Methodology. The Department’s primary source for ship capacity performance data is actual vessel deck plans tabulated in several different databases. Ship capacity data are collected and consolidated by MARAD and the MSC and sent to USTRANSCOM for review. The data are updated at working levels on a daily or weekly basis.

Data on ships entering the Ready Reserve Force (RRF) and on vessels under construction or conversion are collected on an as–needed basis. The Department of the Navy reviews these data quarterly for accuracy; the Office of the Secretary of Defense and the Joint Staff conduct detailed reviews at each step in the budget cycle. Program viability is tested annually through the unannounced, no–notice activation of two or more RRF ships to prove operability and to assess the vessels’ ability to meet activation schedules.

Actual and Projected Performance. The Department met its performance goals for organic surge sealift in FY 1999 and expects to meet its targets for FY 2000. However, projections point to an expected shortfall of 400,000 square feet by the end of FY 2001, relative to the original long–term goal of 10 million square feet. The shortfall will result primarily from a delay, from FY 2001 to FY 2002, in delivery of the nineteenth LMSR. Surge sealift capacity will, therefore, fall short of the 10–million–square–foot target in FY 2001; the goal will be reached a year or two later, in FY 2002 or 2003.

The Congress added funds to the FY 2000 budget to procure a twentieth LMSR. This ship will be used to free an older, smaller vessel for employment with the Maritime Prepositioning Force, with a net increase in surge capacity. Because the construction of the new ship and the conversion and transfer of the other vessel have yet to be scheduled, these force structure adjustments are not reflected in the FY 2001 goal.

Performance Measure 1.3.3 – Forces Supported by Land– and Sea–Based Prepositioning
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Army Heavy Brigades

           

Land–based

5 5 5 5 6 6

Afloat

1 1 1 1 1 2

Marine Expeditionary Forces (MEFs)

           

Land–based

Partiala Partiala Partiala Partiala Partiala Partiala

Afloat

3 3 3 3 3 3

a Material is prepositioned only for the lead elements of a MEF.

 

Metric Description. Land–based prepositioning programs are maintained in Europe, Southwest Asia, and the Pacific region. These programs are complemented by sea–based prepositioning, which provides the flexibility to move equipment within and between theaters of operation. Additional prepositioning programs, not covered by Performance Measure 1.3.3, provide base, fuel, and medical support.

V&V Methodology. Service–specific prepositioning data are updated with each revision of the FYDP database. Ship inventory data are updated monthly and can be viewed on the Military Sealift Command (MSC) web page. Global Status of Resources and Training System (GSORTS) data, maintained by the Joint Staff, are updated by the respective Services every three years for shipboard sets and monthly for sets stored ashore.

Actual and Projected Performance. DoD met its FY 1999 performance targets for prepositioning and expects to achieve its goal for FY 2000. However, because some prepositioned supplies were used during FY 1999 for contingency operations (mainly Air Force supplies not directly captured in this metric), the level of readiness for these sets, as reported in GSORTS, may decline.

PERFORMANCE GOAL 2.1 – RECRUIT, RETAIN, AND DEVELOP PERSONNEL

No amount of technological sophistication will enable the U.S. military to respond to future challenges if it fails to maintain the quality of its personnel or to make the investments necessary to develop them to their full potential. The Department is committed to recruiting high–quality service members, providing robust training for them, and improving the quality of life of its military personnel and their families.

The measures for Performance Goal 2.1 address recruiting and retention. The recruiting metrics focus on enlisted personnel, where the Department’s major challenges lie. Officer recruitment is monitored annually. The primary management challenge with respect to the officer corps is maintaining the proper mix of occupational specialties. For example, the Navy has recently had difficulty in recruiting naval flight officers (non–pilot officer aircrew personnel) and nuclear propulsion officers and in retaining aviation, surface, and nuclear specialists. Legislative initiatives to expand specialty pay have been developed to help remedy this situation. At the end of FY 1999, the Air Force had a shortfall of 1,267 pilots, concentrated primarily in the fighter and theater airlift specialties. Despite actions to increase the size of pilot training classes and other management initiatives, the shortage is projected to grow over the next several years. The Air Force has lengthened the time pilots are required to serve on active duty following flight training, yet long–term challenges remain.

Evaluation of FY 1999 Performance

As noted above, the Department did not fully meet its military manpower goals for FY 1999. While retention rates and recruit quality remained steady or declined only slightly, the overall number of recruits fell short of objectives. The major factors inhibiting recruiting performance were the robust economy and continued record low unemployment. In the short term, the Department remains able to meet all operational requirements, but continued recruiting shortfalls could, over time, jeopardize the maintenance of QDR–mandated force levels and readiness standards.

The Department is acutely aware of the need to sustain QDR–directed levels of manning and therefore monitors annual gains and losses closely. For FY 2000, a number of tools and incentives have been implemented to assist in achieving recruiting targets.

Shortfalls in retention are of particular concern, since reenlistment shortages are the costliest in terms of the impact on long–term readiness and the overall well–being of the force. Shortfalls in first– and second–term reenlistments often result in occupational and skill–level mismatches within units, exacerbating problems caused by high overseas deployment rates. Thus, recent and significant changes in benefits and reenlistment incentives have been targeted at this group of service members. Still, current retention challenges are expected to continue, due to the combined effects of the 1990s force drawdown, an extended period of low domestic unemployment, changing employee attitudes and expectations, and increased uncertainty associated with worldwide force commitments.

In addition to the discussion presented below, Chapters 4 and 10 review issues related to force readiness and quality of life, including challenges facing the Department in reaching recruiting and retention goals.

Supporting Metrics: FY 1999 Performance Report and FY 2001 Performance Plan

Four metrics support Performance Goal 2.1: enlisted recruiting, recruit quality benchmarks, active retention rates, and reserve attrition rates.

Personnel Metrics

Performance Measure 2.1.1 – Enlisted Recruiting
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Active Force

197,081 186,150 194,500 186,600 203,700 205,248

Selected Reserve

155,702 141,052 158,722 140,070 151,600 156,253

 

Metric Description. The Department–wide goals set for enlisted recruiting represent the projected number of new personnel needed each year to maintain statutorily–defined military end–strengths and the proper distribution by rank, allowing for discharges, promotions to higher rank, and anticipated retirements. As personnel trends change throughout the year, the monthly and yearly recruiting objectives must be adjusted. This process yields a revised DoD–wide annual goal against which recruiting is evaluated.

V&V Methodology. Each Service captures recruiting information at the time of enlistment in a dedicated computer system. Automated reports, produced monthly, are used to track progress in meeting recruiting targets and to set new monthly goals. Data flow and V&V strategies are summarized, by Service, in Table I–2.

Data Flow for Enlisted Recruiting (Active Components) Table I–2
  Input Cross–Check Aggregate V&V

Army

REQUEST database

Against manually–assembled reports that the Army Recruiting Command provides to Army headquarters

HQDA Decision Support System

Automated data and manually–compiled reports are compared monthly by Army headquarters.

Navy

PRIDE database

Recruit Training Center databases

Military Enlistment Processing Command Integrated Reporting System

PRIDE database

The Office of the Chief of Naval Personnel reviews monthly. (PRIDE is being improved following a recent evaluation of its performance by the accounting firm of Price Waterhouse Coopers.)

Air Force

PROMIS database

Air Force Recruiting Information System (AFRIS)

PROMIS database

The commander of the recruiting station reviews daily.

Monthly data reviews and periodic audits by the Air Force Recruiting Command.

Marine Corps

ARMS database

The commanding officer of each recruiting district verifies data reported on a standard form.
The forms are sent to Marine headquarters, where they are manually checked against ARMS data.

ARMS database

District and region personnel manually review monthly reports.

Marine Corps Recruiting Command manually matches monthly reports to ARMS database.

 

Actual and Projected Performance. Performance trends for enlisted recruiting are summarized in Table I–3.

Enlisted Recruiting: FY 1999 Performance and Implications for FY 2000 Table I–3

Service Component

Performance in FY 1999

Implications for FY 2000

Army
Active Force

Fell short of goal by 6,291

To help make up the shortfall in FY 2000, the Army is increasing the number of recruiters, expanding advertising budgets, and providing enhanced enlistment incentives.

Army
Selected Reserve

Army Reserve: Fell short of goal by 10,300

Army National Guard: Exceeded goal by 132

Same initiatives as for the active force

Navy
Active Force

Exceeded goal by 100

None anticipated

Navy
Selected Reserve

Fell short of goal by 4,740

The FY 2000 goal will be a challenge to meet. To help achieve the goal, the Naval Reserve is offering incentive programs and is taking steps to curb attrition.

Marine Corps
Active Force

Met goal

None anticipated

Marine Corps
Selected Reserve

Exceeded goal by 101

None anticipated

Air Force
Active Force

Fell short of goal by 1,732

The pool of newly enlisted personnel awaiting induction under the Delayed Entry Program is below optimum levels for the start of FY 2000. This is an indication of how hard recruiting will be in FY 2000. To help achieve the FY 2000 numeric goal, the Air Force is increasing recruiter manning, sponsoring TV ads, offering enhanced enlistment bonuses, and expanding the Prior Service Program.

Air Force
Selected Reserve

Air Force Reserve: Fell short of goal by 3,723

Air National Guard: Fell short of goal by 122

FY 2000 recruiting requirements are being expanded to offset the FY 1999 shortfall, making end–strength achievement even more challenging.

 

Performance Indicator 2.1.2 – Quality Benchmarks for Enlisted Recruits (In percents)
 

FY 1997
Actual
(Active/
Reserve)

FY 1998
Actual
(Active/
Reserve)

FY 1999



FY 2000
Goal
a



FY 2001
Goal
a



Goal
a
Actual
(Active/
Reserve)

Recruits Holding High School Diplomas

94/90 94/89 >90 93/90 >90 >90

Recruits in AFQT Categories I–IIIA

69/66 68/64 >60 66/68 >60 >60

Recruits in AFQT Category IV

0.9/2 0.9/2 <4 0.9/1.0 <4 <4

NOTE: AFQT = Armed Forces Qualification Test. The AFQT is a subset of the standard aptitude test administered to all applicants for enlistment. It measures math and verbal aptitude and has proven to correlate closely with trainability and on–the–job performance.

a Goals are the same for both the active and reserve component.

 

Metric Description. The quality benchmarks for recruiting were established in 1992, based on a study conducted jointly by DoD and the National Academy of Sciences. The results produced a model linking recruit quality and recruiting resources to the job performance of enlistees. The model illuminates the relationships among costs associated with recruiting, training, attrition, and retention. It uses as a standard the performance levels demonstrated by junior servicemen and women who served in the Gulf War. The Department has adopted recruiting targets derived from this model—90 percent high school diploma graduates and 60 percent top–half aptitude personnel (AFQT categories I–IIIA)—as its minimum acceptable quality thresholds. Adhering to these benchmarks will reduce personnel and training costs, while ensuring that the force meets high performance standards.

V&V Methodology. Data collected as part of the enlistment process are routed, reviewed, and managed using the same mechanisms employed for Performance Measure 2.1.1.

Actual and Projected Performance. The Department exceeded its goal for recruit quality in FY 1999 and expects to meet or exceed the FY 2000 target.

Performance Measure 2.1.3A – Active Component Enlisted Retention Rates
 
FY 1997

FY 1998

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal
 

Number of Personnel

Armya

 

First Term

24,312 21,672 20,200 20,843 20,000 20,000b

Second Term

30,209 22,912 23,000 24,174 24,700 24,700 b
 

Percentage of Eligible Population

Navy

 

First Term

30.8 30.5 32 28.2 30.5 33

Second Term

48.4 46.3 48 43.8 45 48

Air Force

           

First Term

56 54 55 49 55 55

Second Term

71 69 75 69 75 75

Marine Corps

           

First Term

19.2 21.6 23 23.8 26 23 b

Second Term

56.6 57.7 N/Ac 56.5 N/Ac N/Ac

a The Army has historically managed retention by setting a firm numeric goal for the number of personnel expected to reenlist; the other Services express retention goals as a percentage of the eligible population.

b Preliminary; final goal will be established during the fourth quarter of FY 2000.

c The Marine Corps, while monitoring trends, does not set management goals for second–term retention.

 

Metric Description. The post–Cold War drawdown of U.S. military forces affected retention goals for nearly a decade. The Services gave some members early retirement and released others from active duty to achieve force reduction targets. Since retention rates are based on required staffing in each paygrade, retention goals were relaxed while the military was decreasing in size. The drawdown is now effectively over, and personnel levels are stabilizing.

V&V Methodology. The V&V methodology used for Performance Measure 2.1.3A is summarized in Table I–4.

Data Flow for Active Retention Table I–4

Service

Input System
Aggregate
System

V&V

Army

Reenlistment, Reclassification, and Assignment System (RETAIN)

Standard Installation/Division Personnel System (SIDPERS)

Active Army Military Management Program (AAMMP)

Personnel commands report data weekly to Deputy Chief of Staff for Personnel (DCSPER).

Major commands process data via the RETAIN system and report it to DCSPER quarterly.

RETAIN data and SIDPERS updates are used to verify AAMMP assumptions and develop changes in policy if necessary.

Navy

Navy Enlisted System (NES) Officer Personnel Information System (OPINS)

NES/OPINS

Data for enlisted personnel are reported monthly.

Data for officer personnel are gathered quarterly. Functional managers, analysts, and policymakers review the data to verify accuracy and monitor trends.

Air Force

Personnel Data System maintained by Headquarters, Air Force Personnel Command (HQ AFPC/DPS)

Personnel Data System

(HQ AFPC/DPS)

Air Force staff reviews retention programming code and data aggregation methods annually.

Marine Corps

Total Force Retention System (TFRS)—used by commanders to request permission to reenlist individual Marines.

Marine Corps Total Force System (MCTFS)—transmits headquarters’ decisions on TFRS requests to the respective commands and, for those requests that are approved, relays reenlistment data back to headquarters.

MCTFS

TFRS cross–checks MCTFS.

Written guidance for TFRS is provided to field units.

Use of data elements in MCTFS is standardized throughout the Marine Corps.

Actual and Projected Performance. Performance trends for enlisted recruiting are shown in Table I–5.

Enlisted Retention: FY 1999 Performance and Implications for FY 2000 Table I–5
Service
Component


Performance in FY 1999


Implications for FY 2000

Army

Slightly exceeded goal (when third–term retention is factored in). This helped mitigate the FY 1999 recruiting shortfall.

Retention is becoming a concern in some specialty career fields, such as linguists and computer system operators. Shortages are also projected in key leadership positions, including captains and noncommissioned officers.

Navy

Showed a positive trend, but goals were not met. At–sea manning gaps dropped from a high of 22,000 to less than 12,000.

To improve retention, the Navy will reduce the interdeployment training cycle workload and enhance at–sea manning.

Marine Corps

Met goal

None anticipated

Air Force

Fell 4.5 percent short of goal

The Air Force has implemented DoD initiatives to increase retention for FY 2000. These initiatives include a 4.8 percent pay raise, pay table reform, retirement reform, continued reenlistment bonuses, and annual bonuses for key enlisted skills. To mitigate the FY 1999 shortfall, the Air Force will prioritize manpower needs, ensuring critical billets are filled and operational billets receive priority over staff billets.

 

Performance Measure 2.1.3B – Selected Reserve Enlisted Attrition Rates (in percents)
 
FY 1997
Actual

FY 1998
Actual

FY 1999
Actual

FY 1999
Goal
FY 2000
Goal
(Ceiling)
FY 2001
Goal
(Ceiling)

Army National Guard

18.5 18.3 18.5

Establish Attrition Goals for FY 2000

18.0 18.0

Army Reserve

35.4 32.6 27.2 28.6 28.6

Naval Reserve

31.3 26.3 29.8 36.0 36.0

Marine Corps Reserve

28.4 29.6 30.5 30.0 30.0

Air National Guard

10.4 11.1 11.7 12.0 12.0

Air Force Reserve

19.7 13.6 14.2 18.0 18.0

 

Metric Description. In assessing retention trends in the reserve components, DoD employs attrition rates rather than reenlistment rates. Attrition is computed by dividing total losses for a fiscal year by average personnel strength for that year. This metric is preferable to reenlistment rates because only a small portion of the reserve population is eligible for reenlistment during any given year. In addition to monitoring attrition, the Department has decided to create attrition ceilings in order to enhance reserve personnel management. The Department’s FY 1999 objective was to set formal performance goals for attrition, starting with FY 2000. Attrition goals represent the maximum number of losses deemed acceptable in a given fiscal year—that is, they establish a ceiling for personnel departures.

V&V Methodology. Monthly updates of individual reserve component personnel databases feed the Reserve Component Common Personnel Data System (RCCPDS), maintained by the Defense Manpower Data Center (DMDC). DMDC is tasked with monitoring data quality. Quarterly workshops, sponsored by the Office of the Assistant Secretary of Defense for Reserve Affairs, provide a forum for reviewing the data and recommending ways to improve attrition.

Actual and Projected Performance. The Department established attrition ceilings for FY 2000. It is anticipated that each reserve component will finish FY 2000 near or below its attrition ceiling.

PERFORMANCE GOAL 2.2 – TRANSFORM U.S. MILITARY FORCES FOR THE FUTURE

Fielding modern and capable forces in the near to mid–term requires aggressive action today. Sustained, adequate spending on the modernization of U.S. forces is essential to ensure that tomorrow’s forces continue to dominate across the spectrum of military operations. The procurement objectives established by the Department strike a balance between the need to devote continued resources to the operation and maintenance of existing forces and the need to sustain a high level of performance through the replacement of aging equipment.

To ensure U.S. military preeminence in the long term, the Department must continue to focus investments on new generations of defense technologies. The Defense Science and Technology Strategy, with its supporting Basic Research Plan, Joint Warfighting Science and Technology Plan, and Defense Technology Area Plan, is the foundation of the science and technology (S&T) program. The Office of the Secretary of Defense, the Joint Staff, the military departments, and the defense agencies collaboratively develop the S&T program.

The Department’s commitment to transforming U.S. military forces requires robust and stable funding for the S&T program. S&T expenditures support basic research as well as focused investments guided by defense technology objectives (DTOs). DTOs provide a framework for S&T efforts by identifying:

· What specific technologies will be developed and/or demonstrated.

· What specific milestones are to be reached, using what approaches.

· Which customers will benefit.

· What specific benefits the customers will gain.

· What level of funding will be programmed and from what sources.

· What quantitative metrics will indicate progress.

Joint experimentation is critical to gaining insights into new operational concepts and validating the ability of these concepts to meet future battlefield requirements. The Department is committed to an aggressive program of joint experimentation that integrates Service efforts and fosters innovation and the rapid fielding of new joint concepts and capabilities. With the June 1998 designation of the United States Joint Forces Command (USJFCOM) as DoD’s executive agent for joint experimentation, the Department has taken a major step toward realizing the integrated military capabilities described in Joint Vision 2010.

For a more complete discussion of the Revolution in Military Affairs and Joint Vision 2010, see Chapter 11.

Evaluation of FY 1999 Performance

The Department met each of the performance targets for this goal in FY 1999, and anticipates meeting all but one of the targets in FY 2000. Because the metric on annual procurement spending is a leading indicator, results for FY 2000 are already known. Relative to the FY 1999 level of approximately $49 billion, funding for modernization will rise to almost $54 billion in FY 2000, an increase of more than 8 percent. With the FY 2001 President’s Budget, the Department has fulfilled its QDR commitment to increase annual procurement spending to at least $60 billion by FY 2001, supporting investment in new technologies and capabilities.

More than 94 percent of DTOs were executed successfully in FY 1999, further demonstrating the Department’s commitment to maintaining its military preeminence through modernization.

In FY 1999, the Department took a major step toward transforming U.S. forces for 21st century operations by establishing a robust program of joint concept development and experimentation. USJFCOM conducted its first major joint experiment as a proof–of–process event. Additional information regarding the Department’s ongoing activities and future plans for the transformation of the military force can be found in Chapter 11.

Supporting Metrics: FY 1999 Performance Report and FY 2001 Performance Plan

Three metrics support Performance Goal 2.2: annual procurement spending, status of defense technology objectives, and joint experiments.

Transformation Metrics

Performance Measure 2.2.1 – Annual Procurement Spending
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal/Actual

FY 2001
Goal

President’s Budget

38.9 42.6 48.7a 48.7b 54.0a 53.0b 60.0

Amount Appropriated

44.3 44.9 N/A 50.9 N/A 54.2 N/A

a QDR–projected funding level.

b Does not include supplemental requests.

 

Metric Description. To achieve an appropriate balance between modernization investments and O&M expenditures, the QDR called for a substantial increase in funding for modernization. The Department’s procurement spending goals are closely linked to its plan to exploit the Revolution in Business Affairs. Implementing the recommendations of the QDR and the Defense Reform Initiative will help reduce cost growth in the operating accounts, which causes the migration of funds from investment accounts.

Performance Measure 2.2.1 is an investment metric designed to track the Department’s commitment to force modernization in its budget process. Annual goals are set in advance of the budget process, and performance is judged across the entire process (i.e., did the President’s Budget request to Congress meet the Department’s investment goal?). Annual appropriation amounts are included in the table for this metric in order to account for supplemental requests and congressional changes to the Administration’s budget requests.

V&V Methodology. This measure relies entirely on the Department’s budgetary process to develop data. At each step of the budget process, Service procurement plans are reviewed against the Department’s annual expenditure goal, to allow for necessary adjustments prior to submission of the President’s Budget. While input goals are generally less predictive of performance than output or outcome goals, the Department feels confident in the validity of this measure. Simply put, it is good business practice to track and report the level of capital improvements being made to operating systems.

The annual procurement funding targets were established by the 1997 QDR, which serves as the Department’s strategic plan. The next QDR, to be conducted in 2001, will assess inventory modernization requirements for the first part of the century and establish annual investment targets, as appropriate.

Actual and Projected Performance. DoD essentially met its intermediate goals for procurement in FY 1999 and FY 2000 and, with the FY 2001 President’s Budget, has reached the long–term QDR goal of $60 billion.

Performance Indicator 2.2.2 – Status of Defense Technology Objectives as Judged by Technology Area Review Assessments
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Percent of DTOs Judged Green (on track)

93 96a

³ 70

94

³ 70

³ 70

Total Number of DTOs

286 352 N/A 347 N/A N/A

a Corrected from preliminary figure given in the FY 2000 GPRA performance plan.

 

Metric Description. Each DTO is reviewed every two years. Half of the DTOs are evaluated one year and the other half the following year. Independent peer review panels, called Technology Area Review and Assessment (TARA) teams, conduct the reviews.

V&V Methodology. Each TARA team includes 10 to 12 members, at least two–thirds of whom come from outside DoD. The non–DoD members include experts in relevant fields from other U.S. government agencies, private industry, and academia. S&T stakeholders (e.g., senior S&T officials, the Joint Staff, and technology customers) attend the reviews as observers. The TARA teams assess DTOs in terms of three factors—budget, schedule, and technical performance—and assign the programs a Red, Yellow, or Green rating based on how well they are progressing toward their goals. The following criteria are used in assigning ratings:

· Green – Progressing satisfactorily toward goals.

· Yellow – Generally progressing satisfactorily, but some aspects of the program are proceeding more slowly than expected.

· Red – Doubtful that any of the goals will be attained.

The DTO ratings are semi–quantitative metrics, reflecting the opinions of independent experts. This method of peer review is accepted and endorsed by the S&T stakeholders. Adjustments are made to program plans and budgets based on the ratings awarded.

Actual and Projected Performance. The Department met its FY 1999 performance goal for DTOs. No shortfall is projected for FY 2000.

Performance Indicator 2.2.3 – Joint Experiments
  FY 1997
Actual

FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Number of Joint Experiments Conducted

N/A

Establish
Program

Program
Established

14 24

 

Metric Description. The Joint Experimentation Office, established by USJFCOM in 1999, oversees the Department’s joint experimentation program. The program is proceeding in building–block fashion from simple to more complex experiments, with initial joint experiments piggybacking on planned Service experiments. While the initial experiments are being conducted, new doctrine is being written and scheduled for testing in the future. As with all experiments, both successes and failures will occur. The results, whether successful or not, provide insights leading to the new capabilities envisioned in the RMA. Ultimately, large stand–alone experiments are anticipated.

V&V Methodology. USJFCOM drafts the Department’s annual joint experimentation report to Congress. The report describes plans for joint and combined exercises developed by the Joint Battlelab Center, the Service battlelab system, and the Joint Warfighting Center. USJFCOM collects results from the Services and other participants as experiments are conducted. Semiannually, the Secretary of Defense, the Chairman of the Joint Chiefs of Staff, and the USJFCOM Commander appraise the status of the joint experimentation program.

Actual and Projected Performance. The FY 1999 objective of establishing a detailed experimentation plan was accomplished. The FY 2000 goal, which calls for conducting 14 experiments, was derived from preliminary plans developed in 1998. The Department now expects to conduct 17 joint experiments in FY 2000, exceeding the target.

PERFORMANCE GOAL 2.3 – STREAMLINE INFRASTRUCTURE THROUGH BUSINESS REFORM

U.S. military forces and operations are changing dramatically in response to evolving security demands and advances in technology. The forces contemplated by Joint Vision 2010 and the RMA will require a radically different support structure. Effecting these changes will necessitate steadily increasing investments that can best be offset by increased efficiencies in support operations. Just as combat forces will become more agile and capable, the changes in infrastructure are designed to produce an increasingly responsive support structure.

The 1999 DoD Logistics Strategic Plan identified areas of opportunity for reducing the total cost of logistics—throughout the full life cycle—for supported personnel, weapons, and equipment. Goals for increased efficiency in this area are covered by measures of logistics response time and the ability to track items in the supply channel. Faster delivery and worldwide visibility of assets will allow the Department to reduce supply inventories. More detailed information on logistics metrics can be found in OSD Operation and Maintenance Overview, FY 2000 Amended Budget Estimates (February 1999).

As inventory requirements lessen, it is important to make corresponding reductions in stockpiles. Such adjustments recognize the inherent cost of holding any property. Inventory must be warehoused; inventory and real estate must be protected and maintained. Inventory reduction and consolidation of unneeded real assets is a sound business practice. The performance measures for this area therefore assess progress in reducing inventories and eliminating excess real property.

Evaluation of FY 1999 Performance

The Department continued to make steady progress in streamlining infrastructure in FY 1999. The largest successes were in the logistics reform area. While efforts to reduce infrastructure were highly successful (in some cases showing the best results since the implementation of the QDR), performance in this area was slightly below the ambitious annual targets. The importance of realizing savings from infrastructure as a key means of modernizing the force cannot be understated, and the Department will continue to set and reach for challenging goals.

Since FY 1997, the Department has reduced its supply inventory by more than $7 billion, better aligning inventories to the needs of a smaller, post–Cold War force. In FY 1999 alone, DoD cut inventories by more than $2.5 billion, meeting its FY 2000 inventory reduction goal a year early. Performance also exceeded expectations in the areas of asset visibility and accessibility: in FY 1999, 97 percent of the Department’s warehouse inventory could be tracked in real time by the Services or defense agencies (up 3 percentage points from FY 1998). FY 1999 also saw a 12 percentage–point increase (from 82 to 94 percent) over FY 1998 levels in the accessibility of inventory to integrated materiel managers (IMMs). The Department shaved 14 days off the FY 1998 logistics response time for customers—improving on the FY 1999 performance target by about 25 percent. Adopting commercial billing practices has also dramatically increased the ability of the Department to process transportation vouchers, billings, and associated documents. The FY 2000 DoD Logistics Strategic Plan (http://www.acq.osd.mil/log/sci/exinfo/exinfo.htm) outlines further logistics initiatives proposed for FY 2000.

Infrastructure reduction initiatives are also on track. During FY 1999, the Department implemented a new program called strategic sourcing. This program provides for the conduct of functional assessments, designed to determine if processes can be eliminated, improved, or streamlined, regardless of whether the activities are inherently governmental or commercial in nature. This approach has allowed the Department to open more than 55,000 manpower positions to competitive or strategic sourcing—a 6 percent increase over the FY 1999 performance target. FY 1999 also saw the biggest single–year reductions in the National Defense Stockpile. However, due to deflated worldwide commodity prices and market demand, coupled with revenue limitations on specific commodities and quantities of materials authorized for disposal by Congress, the Department fell 10 percent short of its aggressive performance target for FY 1999.

Finally, although the Department is on track for targets related to disposing of excess land and demolishing unused buildings, the DoD base structure is still too large, and additional base realignment and closure (BRAC) rounds are needed to achieve QDR goals. To get a complete picture of how the Department is reshaping its infrastructure, it is necessary to understand how the efficiency of routine operations is monitored. For example, FY 1999 performance targets for Performance Indicator 2.3.2, Unfunded Depot Maintenance, allow the Department to limit maintenance backlogs to levels that do not jeopardize overall force readiness, while giving the Services enough flexibility to provide optimal throughput for their portions of the military depot system. Similarly, the performance indicators for the Defense Working Capital Fund and the percentage of DoD investments devoted to infrastructure provide senior officials visibility (through the PPBS) into how these funds are managed and allow the Department to initiate improvements as needed. In FY 1999, no significant problems were identified by these performance metrics. The Department will continue to closely monitor infrastructure trends in FY 2000.

DWCF NOR results for FY 1999 were generally lower than planned at depot maintenance facilities, due to the execution of fewer direct labor hours than anticipated, coupled in many cases with a lack of parts to repair. In the case of the Air Force, material costs were higher than projected. FY 1999 improvements in the supply business areas reflect the impact of Kosovo operations on requirements (which resulted in an increase in orders relative to projections), along with the provision of additional funds by Congress for procurement of parts (which helped make up supply shortfalls). NOR at USTRANSCOM was lower than planned due to a change in the mix of flight operations resulting from Kosovo and other contingency deployments.

Chapter 15 discusses the Department’s ongoing efforts to reduce infrastructure. Appendix K provides more detailed infrastructure data.

Supporting Metrics: FY 1999 Performance
and FY 2001 Performance Targets

Nine metrics support Performance Goal 2.3: infrastructure budget shares, unfunded depot maintenance, public–private competitions, logistics response time, total asset visibility, disposal of excess property, disposal of excess real property, net operating results for the Defense Working Capital Fund, and defense transportation documentation.

Streamlining Metrics

Performance Indicator 2.3.1 – Percentage of the DoD Budget Spent on Infrastructure
  FY 1997
Actual
a
FY 1998
Actual
a

FY 1999
Goal/Actual
a

FY 2000
Goal
a
FY 2001
Goal
a

Infrastructure Spendingb

N/A N/A N/A N/A N/A N/A

a Values for past and projected performance targets may differ slightly from values published in previous performance plans, due to normalization.

b Data will be submitted as part of the update to Appendix L of this report.

 

Metric Description. The Department has developed a definition of infrastructure based on the categories of funding reflected in the FYDP. Since FYDP data extend more than a decade into the past, this metric is a useful indicator, but not a precise measure, of infrastructure trends.

Defense infrastructure is defined as activities that support or provide control over military forces from fixed installations. Real property maintenance, environmental compliance, test ranges, and some logistics depots are part of the infrastructure that supports military facilities and equipment. Also included are personnel support costs (such as recruiting, pilot training, and the Defense Health Program) as well as command and control elements (such as CINC headquarters and air traffic control systems).

Because there is no single benchmark for this indicator, actual and projected budget shares are presented in lieu of a goal. A downward trend in this metric would indicate that the balance is shifting toward less infrastructure and more combat forces.

V&V Methodology. This metric is updated each time the FYDP database is revised. The Institute for Defense Analyses, a federally funded research and development center, reviews and normalizes the data to adjust for the effect of FYDP accounting changes that might mask true content changes. The normalization process converts all data to execution–year dollars (FY 1999 dollars for this report). It is therefore possible for past–year percentages of infrastructure to shift slightly when expressed in execution–year dollars, since different parts of the DoD budget are subject to different rates of inflation.

Actual and Projected Performance. The Department continued to reduce its infrastructure in FY 1999, in accordance with QDR guidance. Further reductions are planned in FY 2000. Exact values for past and projected targets will vary slightly from previously published values, due to normalization. Revised infrastructure values will be submitted with the update to Appendix L of this report.

Performance Indicator 2.3.2 – Unfunded Depot Maintenance Requirements ($ in Millions)
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal
a

Army

457 543 440b 454a 191b 254

Navy

782 608 585b 630a 779b 917

Air Force

226 270.5c 187.8b 104a 339b 223

a Preliminary figures. Final values will be included in the President’s FY 2001 budget submission (databook).

b Reflects adjustments to the goal identified in the FY 2000 GPRA performance plan, which did not account for final revisions to the FY 2000 budget request.

c Revised. The figure given in the FY 2000 GPRA performance plan—$218 million—applied to the active component only. When the Air National Guard and Air Force Reserve are included, the requirement increases to $270.5 million.

 

Metric Description. Unfunded depot maintenance is the difference, in dollars, between Service estimates of depot maintenance expenditures needed to keep all equipment fully operational and the amount of maintenance actually funded in the budget. The FY 2001 goals reflect the outcome of budget decisions made during the PPBS process.

The Services determine annual maintenance requirements from projected usage rates of equipment. Service funding requests are generally lower than forecast requirements, but the unfunded portion of the requirement does not necessarily mean that maintenance will be forgone. Inspections accomplished prior to and during depot maintenance sometimes identify overhaul options that would be less costly to carry out than those reflected in the original workload projections. Moreover, unscheduled repairs often satisfy depot maintenance requirements. Performance Indicator 2.3.2 permits the comparison of unfunded requirements over time. An upward trend indicates a higher likelihood (but not a certainty) that needed maintenance will not be accomplished.

Performance Indicator 2.3.2 is not intended to measure the success of the depot maintenance program in any given year. Annual performance of depot maintenance programs is captured under Performance Indicator 2.3.8, Defense Working Capital Fund. In turn, that metric’s evaluation of each working capital fund is supported by underlying cost, timeliness, and quality objectives.

V&V Methodology. Service requirements are reviewed annually through the PPBS process. The intent of these reviews is to ensure the Department has in place an executable program that will prevent maintenance backlogs from growing substantially over time. The reviews also provide a means of verifying that Service–proposed expenditures for depot maintenance protect assigned readiness levels in the budget year.

Actual and Projected Performance. The Department effectively met its performance target for unfunded maintenance in FY 1999. While the Army fell 3 percent short of its goal, the Navy and Air Force exceeded their goals by 24 percent and 45 percent, respectively. No significant shortfalls are projected for FY 2000.

Performance Measure 2.3.3 – Public–Private Sector Competitions
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Number of Positions Subject to A–76 Competitions or Strategic Sourcing Reviews

26,095 39,500a 52,000 55,800 (preliminary)a 53,400 37,331

a Preliminary data are collected at the end of the fiscal year and are reviewed and updated by the third quarter of the nextyear. Therefore, the FY 1998 figure reflects a revision of the result reported in the FY 2000 GPRA performance plan, and the FY 1999 figure will be subject to revision in the Department’s FY 2001 submission.

 

Metric Description. As part of its efforts to reduce infrastructure, the Department conducts regular reviews of various functions and their associated billets. As a result of these reviews, some functions are retained in–house, others are outsourced, and still others are reengineered.

The Department relies upon competitive sourcing and the powers of the marketplace to directly and indirectly generate efficiencies and savings for functions that are commercial in nature. Direct competition between the public and private sectors is governed by the competitive process established by Office of Management and Budget Circular A–76, Performance of Commercial Activities.

Not all support functions can be outsourced. Consequently, the Department is pursuing a pilot project called strategic sourcing to evaluate inherently governmental functions for internal reorganization or consolidation along the lines of commercial best practices.

Performance Measure 2.3.3 tracks the number of positions associated with functions that are reviewed either through the A–76 process or through strategic sourcing.

V&V Methodology. A January 1999 review of DoD’s military and civilian workforce, conducted by the Deputy Under Secretary of Defense for Installations, identified infrastructure functions that are commercial in nature and could be considered for competition. The new master plan developed from this review includes a provision allowing the Department to pursue strategic sourcing as an added venue to realize savings as the pool of positions eligible for A–76 review diminishes. In order to monitor the overall progress of these reviews, the Department will require components to report annually on the number of A–76 competitions and strategic sourcing evaluations they plan to conduct during each of the subsequent five years.

Since these reviews are directly funded, they are tracked—from budget development to execution—through financial management systems.

Actual and Projected Performance. The Department met its goals for reviewing civilian and military support positions in FY 1999. Of the 55,800 positions assessed, 42,000 were subject to A–76 competitions and 13,800 were addressed by strategic sourcing. The Department expects to meet or exceed its FY 2000 target for this metric.

Performance Measure 2.3.4 – Logistics Response Time
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Logistics Response Time (Days)

35 32 24 18 18 15

 

Metric Description. Logistics response time is the elapsed time (in days) from customer requisition to receipt of material ordered from the DoD wholesale system. Reducing delivery time improves the readiness of operational units, while lowering inventories and costs. In addition to reducing order–to–receipt time, DoD is moving aggressively to reduce cycle times across all elements of the supply chain. Such efforts include placing greater reliance on electronic contracting (to shorten administrative lead–time) and on flexible manufacturing (to reduce production lead–time). In 1997, DoD began measuring the performance of the wholesale logistics pipeline in a uniform manner, using the Logistics Metrics Analysis Reporting System (LMARS). This reporting system allows the Department to identify and correct causes of delay and to build predictability, hence customer confidence, into the wholesale delivery system. Future enhancements to logistics response time measurement include efforts to capture retail transactions, local commercial purchases, and use of government purchase cards.

The Department is studying alternative measures of customer service that could improve the overall management of logistics performance. Consequently, the current metric may be refined, augmented, or replaced during the next reporting cycle.

V&V Methodology. Data are collected monthly from logistics transactions as they pass through the Defense Automated Addressing System and are fed into the LMARS. LMARS arrays data by a fixed set of business rules, agreed to by the DoD components whose transactions are being measured. This methodology ensures consistent treatment of data and valid comparisons across components.

Actual and Projected Performance. The Department exceeded its performance target for logistics response time in FY 1999, achieving the FY 2000 goal a year early.

Performance Measure 2.3.5 – Visibility and Accessibility of DoD Materiel Assets
  FY 1996
Baseline
FY 1997/1998
Actuals

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Materiel Asset Visibility and Accessibility

50 60/82 80 94 90 94

 

Metric Description. The goal of the Total Asset Visibility (TAV) program is to provide DoD users with timely, accurate information on the location, movement, status, and identity of military assets (units, equipment, and supplies) and the capability to perform transactions using that information. The objectives for TAV capability will be achieved in large part by integrating existing and evolving business systems employed by the Services and defense agencies.

Asset visibility is defined as the percentage of DoD’s worldwide inventory that is both visible (in databases) and accessible to IMMs (available to process orders against). IMMs are the DoD organizations assigned wholesale management responsibility for given assets or classes of assets Department–wide. Since Performance Measure 2.3.5 tracks inventory visibility, it does not take into account the visibility of items in transit (i.e., items that have been shipped from warehouses to customers).

V&V Methodology. The Services and the Defense Logistics Agency (DLA) derive data to support this metric from various sources, including the Supply System Inventory Report and databases such as the Army Total Asset Visibility System. The Office of the Principal Deputy Under Secretary of Defense for Logistics reviews the data quarterly to identify trends requiring management attention.

Actual and Projected Performance. At the end of FY 1999, 97 percent of DoD’s worldwide inventory was visible to Service or defense agency tracking systems and 94 percent was accessible by the appropriate IMMs. This represents a significant increase over FY 1998, when the figures were 94 and 82 percent, respectively. The gains achieved in FY 1999 have enabled the Department to reach its FY 2000 steady–state goal one year early.

Performance Measure 2.3.6 – Disposal of Excess National Defense Stockpile (NDS)
Inventory and Reduction of Supply Inventory ($ in Billions)
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

NDS Inventory Disposeda

0.6 0.524 0.6 0.550 0.5 0.427

Supply Inventory (FY 1995 dollars)

62.0 57.5 59 55 56 53

a Figures for FY 2000 and prior years are expressed in FY 1996 dollars. From FY 2001 on, budget–year dollars serve as the measure.

 

Metric Description. This performance measure includes two related but distinct metrics. The first tracks reductions in the NDS, which is composed of general commodities and raw materials. The second measures the supply system inventory of repair parts and finished goods.

The NDS inventory contains strategic and critical materials needed to meet military, industrial, and essential civilian demands during a national emergency, when domestic and foreign supplies are likely to be insufficient. The baseline value of the stockpile was $6.1 billion in 1996. Since prices of individual commodities in the stockpile are subject to market fluctuations, the total value of the stockpile is also subject to large changes. For this reason, the value of material disposed of, rather than stocks remaining, serves as the metric. The Department’s initial goal was to reduce the value of the NDS inventory through the disposal of $2.2 billion (FY 1996 dollars) worth of excess stockpile materials by the end of FY 2000. Beginning in FY 2001, the goal will shift from a cumulative target to an annual objective, expressed in budget–year dollars.

Excess NDS materials are disposed of through public sales, using competitive contracting procedures or, where no market exists, other disposal methods. DoD coordinates with the Departments of State and Commerce and other interested parties through a cross–cutting process to ensure that stockpile sales do not skew prices on world markets. A portion of the revenue from NDS sales is used to fund high–priority DoD programs, including those financed through the O&M accounts.

The Defense National Stockpile Center (DNSC) within the Defense Logistics Agency compiles data on NDS sales. There are no known deficiencies with regard to DNSC data–collection means. The DNSC is planning to downsize both storage sites and personnel as the sales program reduces the inventory of stockpiled materials. The long–term goal is to shut down DNSC operations as a separate field activity of the DLA by 2007.

The supply inventory is larger than required to support the current force structure. Since 1995, the Department has planned to reduce supply inventories in line with the downsizing of the force. The goal is to cut holdings from an FY 1989 high of $107 billion to $56 billion by FY 2000 and $48 billion by FY 2003. The key metric associated with this goal is the value of the supply inventory, measured in constant FY 1995 dollars. Surprisingly, some logistics reforms may tend to slow the real or perceived rate of inventory reduction. For example, improvements in total asset visibility (Performance Measure 2.3.5) may cause documented inventory to increase. Moreover, selective inventories of some items (notably aircraft parts) are being increased in response to operational requirements.

The Department will pursue its inventory reduction objectives through improved business practices. The Services and DLA are reducing their supply inventories by:

· Improving equipment reliability.

· Reducing logistics response times and other cycle times (see Performance Measure 2.3.4).

· Improving requirements–generation processes.

· Selectively outsourcing weapons support and other functions.

· Having vendors ship stock directly to end users.

· Promptly disposing of supply stocks when the associated weapon systems are retired from U.S. or allied inventories.

V&V Methodology. NDS disposals are usually counted (valued) upon contract award to commercial buyers. Noncommercial disposals are counted/valued as NDS inventory is transferred or disposed of, with the values determined on the basis of market–pricing data (if available) or economic analyses. The DNSC compiles data on NDS disposals.

Supply inventory is tracked using a Web–based inventory projection model developed by the Defense Department in 1994. The model is updated continuously. For example, active inventory estimates are adjusted as the force structure and personnel levels change. In addition, estimates of active inventory can be reduced by adjusting for the effects of planned management improvements and by comparing trends in inactive to active inventory over 10 years to derive high and low estimates of future use. Secondary inventory data are compiled and managed by the Services and DLA; these data are reviewed routinely as part of the Department’s program and budget development process.

Actual and Projected Performance. The Department did not meet its NDS disposal goal for FY 1999, but expects to meet its FY 2000 sales goal. The FY 1999 Defense Appropriations Act introduced revenue limitations on specific commodities and quantities of materials that are authorized for disposal, reducing NDS sales authority by approximately $68 million. This statutory limitation, combined with a decrease in demand for commodities, may also affect the Department’s ability to meet its cumulative disposal goal of $2.2 billion (FY 1996 dollars) by the end of FY 2000. The Department reduced the value of its supply inventory to $55 billion in FY 1999. With this reduction, it not only achieved its target for FY 1999 but met its FY 2000 objective one year early.

Performance Measure 2.3.7 – Disposal of Excess Real Property
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Excess Acreage Remaining for Disposal

234,000 205,000 182,000a 182,000 146,000a N/A

Acres Disposed of During the Fiscal Year

59,000 29,000 N/A 23,000 N/A 20,000a

Cumulative Square Feet (Millions) Disposed of in the Fiscal Year

N/A 16.2 25 30.6 41 57.7

Cost ($) per Cumulative Square Foot Disposed in the Fiscal Year

N/A 9.2 <11 9.9 <11 <11

a For FY 1999 and FY 2000, the goal shows the number of excess acres projected to remain at the end of the fiscal year. For FY 2001, the goal reflects the number of acres to be disposed of during the fiscal year.

 

Metric Description. Maintaining excess property places a drain on resources that could be applied to force modernization and readiness. Through BRAC, DoD has closed or will close 97 major bases, realigned 55 major bases, and taken action on 235 minor closure and realignment decisions, at a net cost savings of approximately $14.5 billion during implementation. The excess–acres metric tracks land on bases that have been authorized for closure by BRAC decisions but are still under DoD control. The excess acreage is reduced through direct transfers to other federal agencies and by deed conveyances through public benefit transfers, economic development transfers, and market sales. The Department intends to achieve a 50 percent reduction in excess acreage, relative to the revised FY 1996 baseline, by the end of FY 2000. The FY 1996 baseline was reported in error as 291,000 acres in the Department’s FY 2000 performance plan. The correct figure—293,000 acres—was incorporated into the baseline during a 1997 review of property awaiting disposal.

The excess–acreage metric has been modified through the removal from consideration of certain properties. Three parcels from Jefferson Proving Ground, Indiana (51,638 acres), Adak, Alaska (73,923 acres), and Sierra Army Depot, California (Honey Lake, consisting of 60,108 acres) were excluded from the metric due to their large size or to technical complications associated with the presence of unexploded ordnance. Therefore, the 50 percent goal has been applied to the remaining 293,000 acres (adjusted baseline) associated with the installations approved for closure under BRAC. The goal of eliminating 50 percent of the surplus property equates to a reduction of 146,000 acres. Congress appropriated $672 million in FY 2000 to support BRAC. The Department is requesting an appropriation of $1.12 billion for the BRAC program in FY 2001.

While the problem of excess bases has captured media and public attention through the actions of the Base Realignment and Closure Commission, there is a lesser but real problem of excess and obsolete structures on bases the Department does not desire to close. On these bases, installation commanders report they are often forced to retain obsolete and excess facilities because they lack the funds to demolish or dispose of the properties. This excess inventory wastes O&M monies needed elsewhere and presents serious safety concerns. To ameliorate this situation, the Department has undertaken a Defense Reform Initiative to demolish and dispose of 80 million square feet of excess space at military facilities by FY 2003. This action will support the RMA by streamlining the facilities infrastructure and reducing the potential for migration of funding from investment to operating accounts. For each Service, the Department has established a separate group of budget program elements and has provided funding sufficient to meet both the annual targets and the overall goal.

V&V Methodology. For the excess–acreage metric, statistics on property disposals are obtained from base transition coordinators, verified by the appropriate Service, and then fed into a database maintained by the Office of Economic Adjustment within the Office of the Deputy Under Secretary of Defense for Installations. The number of acres approved for transfer is updated as property transactions are completed. The properties are well defined, since they are connected to BRAC actions. Data are verified by conducting real estate surveys. For the facility–demolition metric, major commands report annually to Service headquarters on the number of buildings demolished over the past year. The Services, in turn, report on the status of building demolition projects during the Department’s annual program review.

Actual and Projected Performance. The Department met its goal for disposing of excess acreage in FY 1999 and expects to meet, by the target date of FY 2000, its original mid–term goal of a 50 percent reduction from the revised FY 1996 baseline.

The Department exceeded its FY 1999 goal for disposing of excess buildings. No shortfalls are expected in FY 2000.

Performance Indicator 2.3.8 – DWCF Net Operating Results ($ in Millions)
 

FY 1997
Goal/Actual

FY 1998
Goal/Actual

FY 1999
Goal/Actual

FY 2000
Goal

FY 2001
Goal

Army

               

Supply Maintenance

–13.0 –27.9 9.8 21.9 –4.9 47.6 –3.3 –27.7

Depot Maintenance

47.6 –136.3 18.3 133.7 9.6 71.1 –26.7 6.0

Navy

               

Supply Maintenance

–69.4 –209.5 87.5 26.3 65.9 –102.1 42.7 –68.3

Aviation Depot Maintenance

–10.3 18.7 –21.8 –18.3 –13.8 –40.7 +1.2 28.9

Shipyard Maintenance

30.8 –3.4 83.1 83.4 4.0 –22.5 –9.9 3.5

Air Force

               

Supply Maintenance

21.1 28.6 36.6 316.7 –216.2 –13.1 –169.5 –129.5

Depot Maintenance

156.3 –236.3 200.1 –34.6 133.2 43.4 –79.5 –34.4

USTRANSCOM

               

Transportation

42.7 –18.2 80.7 287.8 8.7 –61.7 –155.3 23.9

NOTE: DWCF = Defense Working Capital Fund.

 

Metric Description. Defense working capital funds are used to finance selected DoD activities. Customers purchase products and services at prices that reflect all the direct and indirect costs of a given DWCF budget activity. Customer accounts are financed through direct appropriations, at a level commensurate with expected purchases from the respective fund. In addition to selling products and services to customers, DWCF budget activities may make purchases from one another, using sales revenue. As the DWCFs cover widely differing areas of the Department’s business operations, they each have unique management goals, which are reflected in their budget submissions.

Net operating result (NOR) is a management measure common to all working capital funds. NOR is the difference between an individual fund’s revenue and its costs. During the PPBS process, NOR goals are created to cancel out any shortages or surpluses from previous years. An NOR that is higher than the assigned goal indicates that a fund may have exceeded expectations; conversely, one that is lower suggests a fund may have been less efficient than desired. If the NOR target for a working capital fund is not met, the unique supporting measures for that fund (Table I–6) provide insights into the underlying causes.

DWCF Supporting Measures Table I–6
Activity Group Timeliness Cost

Quality

Army Supply Management

UMMIPS standards set in DoD policy instruction

-Unit costretail, wholesale

-NOR

Fill rate

Army Depot Maintenance

Schedule conformance

-Unit cost per DLH

-NOR

Percentage of quality defects

Navy Supply Management

UMMIPS standards set in DoD policy instruction

-Unit costretail, wholesale

-NOR

Fill rate

Navy Depot Maintenance

Schedule conformance

-Unit cost per DLH

-NOR

Percentage of quality defects

Navy Shipbuilding

Schedule conformance

-Unit cost per DLH

-NOR

Percentage of quality defects

Air Force Supply Management

UMMIPS standards set in DoD policy instruction

-Unit costretail, wholesale

-NOR

Fill rate

Air Force Depot Maintenance

Schedule conformance

-Unit cost per DLH

-NOR

Percentage of quality defects

USTRANSCOM

UMMIPS standards set in DoD policy instruction

-NOR

-Variety of unit costs

On–time arrivals and departures

NOTE: DLH = direct labor hour; UMMIPS = Uniform Material Movement Issue and Priority System.

 

V&V Methodology. The Department obtains the data needed to calculate NOR from the financial records for the DWCF maintained by the military services and defense agencies. The Department’s NOR calculations conform to the auditing requirements established by DoD Regulation 7000.14, the Department of Defense Financial Management Regulation, and by the Chief Financial Officers Act of 1990. NOR information is consolidated Service– and agency–wide, then sent to the respective headquarters for review. The Office of the DoD Comptroller checks the consolidated reports monthly for accuracy, comparing results to target amounts. During quarterly execution reviews, senior financial and logistic managers from the DoD Comptroller and Service staffs jointly examine the data to identify positive or negative trends in productivity and to monitor operational and cost–efficiency trends.

Actual and Projected Performance. NOR was generally lower than planned at depot maintenance facilities and in the transportation fund in FY 1999 due to smaller–than–expected workloads. The supply business areas had greater–than–expected returns due largely to the impact of contingency operations.

Performance Indicator 2.3.9 - Qualitative Assessment of Defense Transportation Documentation

This metric (formerly designated Performance Indicator 2.4.8) tracks implementation of the defense reform initiative on transportation. The goal of the initiative is to eliminate DoD–unique documentation requirements, improve data accuracy, decrease documentation process costs, reduce payment cycle times, and increase the effectiveness of transportation movement and financial processes. Through such enhancements, the Department seeks to increase transportation efficiency and reduce infrastructure costs for it and its commercial partners.

 

Metric Description. Means and strategies for accomplishing this goal include using commercial rather than government–unique transportation documentation, reducing data requirements, using purchase cards to pay for both commercial and intragovernmental transportation services, and prototyping concepts in four modes of transportation (airlift, sealift, truckload/less–than–truckload, and express carrier) to validate concepts and identify and resolve issues.

A number of supporting metrics are tracked to evaluate performance in implementing this initiative. Examples include:

· The number and dollar value of transportation transactions processed for DoD by a commercial bank (U.S. Bank PowerTrack system) as opposed to those processed by the Defense Finance and Accounting Service (DFAS).

· Timeliness of commercial carrier payments.

· Number of carriers using PowerTrack.

· Number of DoD shippers using PowerTrack.

· Number/dollar value of late payments from DFAS to U.S. Bank per month.

· Government–unique transportation documents eliminated.

As the initiative matures year to year, the number and weighting of the supporting quantitative metrics will change. Therefore, in FY 2000 and FY 2001, the Department will continue to use qualitative assessments to evaluate progress toward achieving a more responsive and affordable transportation system.

V&V Methodology. Data for the supporting metrics will be derived from the financial records of U.S. Bank and DFAS. The data are considered highly reliable due to the accounting standards established by commercial institutions.

Qualitative Assessment of FY 1999 Performance and Implications for FY 2000. During two quarters of FY 1999, there was a 93 percent decrease in the number of payments made by DFAS for the areas of transportation services covered by this initiative. The decline resulted from the fact that PowerTrack pays and combines multiple vendor bills, submitting aggregate statements and bills to DFAS. Processing by this commercial system results in payments that are 27 to 87 days faster than services billed individually to DFAS. Direct DoD savings will take several years to realize as lower annual workloads reduce Department staffing requirements.

For FY 2000, this initiative will be broadened to include use of the PowerTrack system to pay for shipping that is provided by DoD–owned transportation assets and billed under the Transportation Working Capital Fund. This will allow DoD customers to use a single billing system for both organic and commercial transportation services. Additionally, in FY 2000 the Department will test operations with third–party logistics firms—that is, firms that determine transportation needs and hire and pay transportation subcontractors directly. The tests will address the potential savings from, operational limits on, and wartime mobilization implications of doing business with third–party firms.

PERFORMANCE GOAL 2.4 – IMPROVE ACQUISITION

The QDR stressed the need to exploit the Revolution in Business Affairs (RBA) to radically reengineer defense infrastructure and defense support activities. The RBA calls for reducing overhead and streamlining infrastructure; taking maximum advantage of acquisition reform; outsourcing and privatizing a wide range of support activities; leveraging commercial and dual–use technology; reducing unneeded standards and specifications; using integrated processes and product development; and increasing cooperative development programs with allied nations. Performance Goal 2.3 included those aspects of the RBA that involve management of services and physical property held by DoD. Performance Goal 2.4 addresses acquisition reform and defense reform initiatives involving the acquisition of new property, systems, and services. The ultimate purpose of all business efficiency efforts in the Department is to shift resources to the operating forces.

This goal echoes the themes of modern procurement practices: minimizing product introduction times and cost growth, while simplifying the purchase process through the adoption of modern practices, such as purchase cards and electronic commerce.

Evaluation of FY 1999 Performance

Overall, despite some setbacks in managing acquisition cost growth, the Department made solid progress during FY 1999 toward improving acquisition support for U.S. military forces. The gains realized in this area have moved the Department steadily closer to its long–term objective of becoming the premier organization for effective and efficient purchasing practices.

In FY 1999, the Department held cycle time for major acquisition programs to 95 months for the second year in a row, down from a high of 132 months. During FY 2000, the Department will continue to pursue initiatives to speed the requirements–generation and budgeting processes. The Department will also introduce a method for measuring the success of operational tests.

Other performance targets supporting this goal were met or exceeded. For example, manpower associated with overhead functions continued to decrease at planned rates. The Department also exceeded its FY 1999 micropurchase goal by 11 percent, increasing performance over FY 1998 levels by almost 5 percent. Performance in each of these areas is expected to show continued improvement in FY 2000.

Unfortunately, the Department fell significantly short of its performance target for reducing cost growth: the aggregate cost of major acquisition programs grew 3 percent in FY 1999, which was triple the target value for the year. FY 1999 performance fell short of the goal due primarily to unexpected increases in costs associated with developmentally high–risk ballistic missile defense programs—notably the Army’s Theater High–Altitude Area Defense system. Although long–term cost trends remain on a downward path, the Under Secretary of Defense for Acquisition, Technology, and Logistics will establish a special working group to closely monitor Service cost–management efforts during FY 2000.

Chapter 14 provides more details on DoD acquisition and logistics reform initiatives.

Supporting Metrics: FY 1999 Performance and FY 2001 Performance Targets

Seven metrics support Performance Goal 2.4: cost growth in major defense acquisition programs (MDAPs), MDAP cycle time, weapon system testing, use of government purchase cards, paperless transactions, acquisition workforce reductions, and disposal of government property held by contractors.

Acquisition Metrics

Performance Measure 2.4.1 – Major Defense Acquisition Program Cost Growth (In percents)
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

MDAP Cost Growth

+0.1 –0.3 <1.0 +3.1 <1.0 <1.0

 

Metric Description. Cost growth is the difference between MDAP program costs in the current–year budget and the previous year’s budget, divided by the program costs for the previous year.

Only MDAPs continuing from the previous year are included in this metric; adjustments are made for inflation and for changes in quantities ordered. Cost growth can arise for various reasons, including technical risk, schedule slips, and overly optimistic cost estimating. Acquisition reform seeks to reduce cost growth from all sources, providing an output goal for the procurement manager of an individual system, as well as for an entire Service. Managerial responses are expected to include both specific cost–control initiatives and process changes. The objective is to keep the metric to an increase of 1 percent or less each year.

V&V Methodology. Data on MDAP cost growth are collected from the annual Selected Acquisition Reports (SARs). SAR data provide a means to verify and validate the measured values. There are no known SAR data deficiencies. It is important to emphasize that this metric is not an absolute measure of research, development, and procurement costs. Some growth in MDAP costs is unavoidable due to program changes; such increases may occur as a result of best management practices. When the 1 percent goal is exceeded, the SAR reports provide data useful in isolating specific causes. Standards for SAR data are set by DoD Instruction 5000.2, Defense Acquisition Management Policy and Procedures.

Actual and Projected Performance. The Department did not meet its FY 1999 performance target for MDAP cost growth. FY 1999 saw the largest increase in MDAP costs in a decade; major contributors were programs managed by the Department of the Army and the Ballistic Missile Defense Organization. The Department does not predict any shortfall in achieving its goal for FY 2000.

Performance Indicator 2.4.2 – MDAP Cycle Time
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Average Months from Program Start to Initial Operational Capability

97 95 <99 95 <99 <97

 

Metric Description. During the 1960s, a typical acquisition took seven years to complete. By 1996, the same acquisition required 11 years from program start to initial operational capability. Recent efforts to reverse this trend include advanced concept technology demonstrations; improved management oversight afforded by integrated product teams; and more extensive use of commercially–derived items.

The Department is starting to impose the same rigor it applies to performance and cost analyses to development and production schedules. Rapid development and fielding of weapon systems enables U.S. forces to stay ahead of potential adversaries in fielding new technologies.

DoD has established the objective of delivering new MDAPs to the field in 25 percent less time than was the case for programs initiated prior to 1992.

V&V Methodology. The key measure for this goal is the average elapsed time from program start to initial operational capability, measured in months, for all MDAPs in development during a given calendar year. The 1996 baseline is 132 months, representing the average cycle time for 58 MDAPs begun before 1992. Average cycle time is computed using schedule estimates or data drawn from SARs and Acquisition Program Baselines. The Department also monitors MDAPs through the Defense Acquisition Executive Summary reporting system and the Defense Acquisition Board review process. In FY 1998, the Department began to evaluate cycle times of new MDAPs as well as schedule changes during the PPBS process.

Actual and Projected Performance. The Department met its MDAP cycle–time target for FY 1999 and expects to meet the target in FY 2000. At the end of FY 1999, those MDAPs initiated since 1992 had a projected cycle time of 95 months. Without continued management improvements, however, average cycle times could grow beyond 99 months. In order to maintain progress toward the FY 2000 performance goal, the Department will seek to achieve short cycle times for new acquisition programs and work to keep existing programs on schedule.

In an effort to achieve further reductions, the Department has established a goal of cutting average cycle time by 50 percent (i.e., to 66 months) for acquisition programs started after 1998. (Because Performance Indicator 2.4.2 is a weighted average of active MDAPs started in various years, the annual targets for this metric will lag the 66–month goal.) In support of the 50 percent reduction target, the Department is making comprehensive changes in its acquisition management and requirements–generation processes. The Department also is reviewing ways of further integrating cycle–time management into the PPBS process.

Performance Measure 2.4.3 – Successful Completion of System
Operational Test and Evaluation (OT&E) Events
 
FY 1997
Actual

FY 1998
Actual


FY 1999
Goal/Actual


FY 2000
Goal
FY 2001
Preliminary
Goal

Percentage of OT&E Events Successfully Completed

N/A N/A

Establish Methodology

Methodology Established

100 100a

a Subject to revision based on FY 2000 performance.

 

Metric Description. Test and evaluation programs aim to ensure that U.S. forces are provided with weapon systems and equipment that are effective and suitable for the missions they are designed to accomplish. Future U.S. combat systems will be increasingly interoperable and interdependent; new systems entering service will have to function effectively not only with other systems in the U.S. inventory but also with weaponry and equipment operated by allied and coalition forces. The increased complexity of modern warfare demands rigorous operational assessments and testing throughout the acquisition cycle. The purpose of these assessments is to learn, at the earliest possible time, how a new system or technology will perform from an operational perspective. The OT&E program is designed to support decision makers in maintaining program schedules (Performance Measure 2.4.2) and costs (Performance Measure 2.4.1) by providing operational assessments at the earliest practical time.

Operational testing and evaluation entails numerous tests and assessments of new weapon systems, designed to simulate the needs of, and conditions expected to be faced by, combat forces. Through the OT&E program, data are collected on the effectiveness, performance, suitability, and survivability of new systems.

Performance Measure 2.4.3 monitors the success of the test and evaluation infrastructure in collecting the types and quantities of data needed to fulfill specified learning objectives (measures of effectiveness or performance). Whether a weapon system passes or fails its tests is not a criterion for success under this measure; rather, the metric focuses on the structure of the testing program and its efficacy in evaluating the weapon system in question. There is also an expectation to communicate findings, when required, to support acquisition milestone reviews and decision points identified in Test and Evaluation Master Plans.

V&V Methodology. The Office of the Director for Operational Test and Evaluation tracks learning objectives for OT&E and live–fire events associated with acquisition programs on the OSD Test and Evaluation Oversight List. Action officers are provided an implementation guide outlining procedures for entering data on learning–objective accomplishment into the Program Summary Database. Using criteria set forth in the guide, the action officers report the results of testing activities, usually within six weeks of the events. On a quarterly basis, the Director of OT&E tracks the progress of testing programs and monitors their quality.

Actual and Projected Performance. The Department met its FY 1999 performance goal to establish a methodology for this metric. The goal for the first year of the metric’s use, FY 2000, is 100 percent. The Director of OT&E will evaluate the results at the end of the fiscal year and adjust the goal for FY 2001, if necessary, to reflect lessons learned in using this new management tool. Thereafter, goals for the metric will be set each year in the Department’s GPRA performance plan.

Performance Indicator 2.4.4 – Purchase Card Micropurchases (In percents)
  FY 1996/
1997 Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Percentage of Purchases Made by
Purchase Card

52/71 86 80 91 90 90

 

Metric Description. The Army Audit Agency estimates savings of $92 per transaction when supplies or services are procured using government purchase cards. Under the traditional acquisition process, a requisition document is forwarded sequentially to various functional elements, such as the purchasing component’s resource management office (for commitment of funds) and supply manager (to screen for local or national inventories). If a requirement cannot be filled through the component’s supply system, a purchase request is forwarded to a local contractor. Use of government purchase cards for micropurchases virtually eliminates this entire workload. Micropurchases are supplies or services (other than construction) valued at less than $2,500. Through purchase card use, the Department has already realized sizable manpower–related savings, which it has redirected to mission elements of the force.

Since 1997, all contracting officers have been required to use purchase cards for micropurchases except in narrowly defined circumstances. The military departments and defense agencies have likewise been directed to abolish nonessential technical screening requirements and to reduce the categories of items that require such screening controls for purchases made with government cards.

Performance relative to the goal is measured by dividing purchase card transactions within the micropurchase threshold by the total number of micropurchases. These data, which are provided to the Federal Procurement Data System and reported on Defense Department Form 1057 (DD–1057), are used to verify and validate the measured values.

V&V Methodology. The major data source for this measure is commercial bank statements for purchase card activities. Data on purchase card transactions maintained by commercial banks are considered to be highly reliable due to the accounting standards established by these institutions. The transactions are compared with non–purchase–card micropurchase transactions reported monthly on form DD–1057. Components conduct periodic procurement management reviews to verify DD–1057 data.

Actual and Projected Performance. The Department has exceeded its FY 1999 micropurchase goal and met its FY 2000 goal early.

Performance Indicator 2.4.5 – Percentage of DoD Paperless Transactions
  FY 1997
Actuala
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

2.4.5A - DRI Goals

 

Purchase Requests

71 83 85 96 90 90

Funding Documents

69 86 80 97 90b 90

Solicitations

49 66 70 89 90 90

Awards/Modifications

21 48 65 89 90 90

Receipts

16 55 50 83 90 90

Payments/Invoices

13 28 50 56 90 90

2.4.5B - NPR Goal

 

Total Electronic Contracting and Payment Transactions

27 45 55c 64 64c 90

NOTE: DRI = Defense Reform Initiative; NPR = National Partnership for Reinventing Government.

a Erroneously listed as FY 1998 actuals in the FY 2000 GPRA performance plan.

b Revised from original goal of 80 percent in the FY 2000 GPRA performance plan due to positive FY 1999results.

c Corrected goal. The FY 2000 GPRA performance plan mistakenly displayed DRI goals under metric 2.4.5B.The revised figures reflect the NPR goals.

 

Metric Description. Performance Indicator 2.4.5 is composed of two metrics that draw upon the same underlying data to quantify the Department’s progress toward its goal of reducing paper–based transactions. Performance Indicator 2.4.5A reflects the DRI goal of conducting 90 percent of selected transactions electronically by FY 2000. Indicator 2.4.5B supports the NPR goal of achieving a 50 percent reduction (relative to a 1997 baseline) in the number of paper–based transactions by FY 2000.

Through FY 2000, the DRI goals establish a higher overall standard of performance. Since both the DRI and the NPR goals were slated to be reached by FY 2000, the higher DRI goal is carried forward for both metrics in FY 2001. The actual performance shown for Indicator 2.4.5B is based on the weighted average of the six categories of paperless transactions encompassed in Performance Indicator 2.4.5A.

The Department is committed to employing contemporary information technology and commercial best practices to reinvent its contracting processes. Contracting, particularly that related to high–cost weapon systems, consumes a large portion of the defense budget and employs a significant portion of the DoD workforce. To inject information technology and best practices into all contracting processes, the Paperless Contracting Defense Reform Initiative is reengineering and standardizing the Department’s contracting and payment practices. Over time, paperless contracting will contribute to reducing acquisition cycle times (Performance Measures 2.3.4 and 2.4.2) and streamlining the acquisition workforce (Performance Measure 2.4.6). Use of government purchase cards (Performance Measure 2.4.4) will be the primary means of achieving paperless contracting for small purchases. The Services and defense agencies, under the auspices of the Defense Reform Initiative, will employ Internet technologies, workflow systems, electronic commerce/electronic data interchange transactions, and digital signature/public key encryption capabilities to accomplish this goal. For more information on this program and other elements of the DRI, see Chapter 12.

V&V Methodology. The Services and defense agencies compile quarterly reports on transactions in each area covered by Performance Indicator 2.4.5, using data gathered from field operating sites. Heuristics have been developed to validate these statistics with data generated by formal DoD reporting systems.

Additionally, the DoD Paperless Contracting Working Integrated Process Team (PC–WIPT) collects monthly and quarterly reports from each Service and defense agency. The group submits a quarterly progress report to the Deputy Secretary of Defense through an oversight panel composed of senior executives with responsibility for implementing the paperless contracting initiative.

Verification is achieved through rigorous standard definitions of metrics and through data–collection templates and written guidance provided to the Services and defense agencies. The PC–WIPT reviews inputs and data trends and pursues anomalous data back to the source data system. Validation is accomplished by an oversight panel that not only reviews the implications of the data but ensures that appropriate types of data are being collected.

Actual and Projected Performance. DoD exceeded its targets for paperless transactions in FY 1999 and expects to meet its FY 2000 targets. The lack of widespread acceptance of digital signature and paperless Web–based transactions, both within and outside DoD, remains the largest impediment to achieving this objective.

Performance Indicator 2.4.6 – Reductions in the Acquisition Workforce (In percents)
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Reduction from FY 1997 Workforce

Baseline Year

5.8 11.3 13.8 15 22

 

Metric Description. The Department is making an active effort to reduce and restructure its acquisition workforce. The goal is to eliminate duplicative functions, consolidate organizations, simplify procedures, improve professionalism, streamline processes, and increase efficiency throughout the Department. Initiatives in this area also contribute to the reduction of defense infrastructure, discussed under Performance Goal 2.3 and Performance Indicator 2.3.1.

V&V Methodology. Annual reports are based on budgeted manpower, which is adjusted annually through the PPBS process. Quarterly, DoD components report personnel levels to the Defense Manpower Data Center, which analyzes the data and provides assessments to the Director for Acquisition Education, Training, and Career Development. The Personnel Data Reporting System is used to cross–check trends in the manpower data supporting this metric. The data are reviewed within the PPBS process, which provides a framework for ensuring their validity.

Actual and Projected Performance. The Department exceeded its FY 1999 goal for acquisition workforce reductions and expects to achieve its target for FY 2000.

Performance Measure 2.4.7 – Disposal of Unneeded Government Property Held by Contractors
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

Cumulative Value of Tooling and Equipment
Disposed of ($B)

1.1 2.5 3.0a 4.57 N/Ab 4.75

a To be achieved by December 31, 1999.

b No FY 2000 goal was set because the original disposal objective of $3 billion in contractor–held material was programmed to be achieved in December 1999. The property disposal target has since been revised upward, to$4.75 billion; this more aggressive objective is expected to be reached in FY 2001.

 

Metric Description. Between FY 1986 and FY 1997, the acquisition value of DoD property in the possession of defense contractors rose to $91 billion, despite repeated efforts to curb growth. The military buildup of the 1980s and the renewed emphasis on developing new weapon systems under cost–reimbursement contracts were factors in that increase.

In order to reverse the property growth trend and reduce the amount of government–owned tooling and equipment in contractors’ possession, the Department will either dispose of property no longer needed for contract performance or directly fund its storage separately from acquisition contracts. The key measurement for this performance goal will be the current dollar value of special tooling, special test equipment, and other equipment and material disposed of relative to the total value of such materials in the possession of DoD contractors as of September 30, 1997. DoD contractors are required to report this information on a fiscal–year basis. Reports for the prior year are due during the first quarter of each fiscal year.

The baseline excludes military property (typically provided to contractors for repair or test and evaluation purposes) and real property. There are millions of items in the baseline, some acquired more than 25 years ago. Therefore, it is impractical to convert the acquisition cost for each item to constant dollars. Data are based on contractor reports of excess and underutilized property. There are no known deficiencies in the data–collection process.

V&V Methodology. The disposition of property is tracked by the individual Services and reported to the Defense Logistics Agency. DLA then combines the Service data with data that it collects to arrive at a consolidated DoD position. The information is reviewed quarterly by the Director of Defense Procurement.

Actual and Projected Performance. At the end of the third quarter of FY 1999, the Department had disposed of $3.87 billion in unneeded government property held by contractors, achieving the original reduction goal.

PERFORMANCE GOAL 2.5 – IMPROVE FINANCIAL AND INFORMATION MANAGEMENT

Management systems support informed decision making. The Department continually strives to provide more accurate, timely, and meaningful information to decision makers by improving the performance of its management tools. Two particularly critical areas supporting DoD’s management of limited resources are financial and information technology systems. Each of these areas has its own performance improvement plan. The DoD Financial Management Improvement Plan, discussed in Chapter 13, is the Department’s road map for improving financial systems. Likewise, Appendix J discusses the Department’s plan to improve the management systems used to support information technology decisions in accordance with the Clinger–Cohen Act of 1996. The metrics supporting this goal measure progress toward improving DoD management systems.

Supporting Metrics: FY 2001 Performance Targets

The metrics that support Performance Goal 2.5 seek to improve the quality of DoD finance and accounting systems, financial statements, and information management.

Management Metrics

Performance Measure 2.5.1 – Reduce the Number of Noncompliant Accounting and Finance Systems
  FY 1991
Baseline
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Goal
FY 2001
Goal

FY 2005
Goal

Number of Accounting Systems

197 91 20 13 5 2 0

Number of Finance Systems

127 18 6 4 2 1 0

Total

324 109 26 17 7 3 0

 

Metric Description. The Department has embarked upon a major streamlining of its accounting and finance systems. The elimination of noncompliant financial systems represents the largest single reform of financial management systems in the history of the Department.

The objective of the Department’s initiative is not simply to reduce the number of accounting and finance systems, however. The consolidation, standardization, and modernization of DoD accounting and finance systems is meant to enable the Department to eliminate its outdated, noncompliant accounting and finance systems and replace them with systems that provide more accurate, timely, and meaningful financial information to decision makers. (Accounting and finance systems are compliant when they substantially meet federal financial management system requirements, adhere to applicable federal accounting standards, and use the U.S. Standard General Ledger at the transaction level.) The Department tracks its progress in reducing the number of noncompliant accounting and finance systems through the DoD Financial Management Improvement Plan.

V&V Methodology. The number of noncompliant accounting and finance systems is reported annually in the DoD Financial Management Improvement Plan. This plan is reviewed by both the General Accounting Office and the Office of the DoD Inspector General.

Notes on Actual and Projected Performance. The Department reduced the number of noncompliant accounting and finance systems from 324 in FY 1991 to 17 in FY 1999. This represents a 95 percent reduction from the FY 1991 baseline.

 

Performance Measure 2.5.2 – Achieve Unqualified Opinions on Financial Statements
  FY 1997
Actual
FY 1998
Actual

FY 1999
Goal/Actual

FY 2000
Actual
FY 2001
Goal

Number of Financial Statements with at Least a Qualified Opinion

1 1 1 1 1 3

Total

1 1 1 1 1 3

 

Metric Description. An unqualified audit opinion is a determination by independent auditors that DoD financial statements present fairly, in all material respects, the financial position of the Department as of the date of the statements, as well as the results of departmental operations for the year then ended. The auditor’s opinion results from the inspection of the Department’s financial records to determine compliance with generally accepted accounting principles.

Obtaining unqualified opinions on the Department’s financial statements is a difficult challenge. The Department must put in place policies, systems, and practices that enable it to produce consolidated, DoD–wide financial statements, plus statements for various organizational elements. Approximately 80 percent of the information needed to prepare DoD financial statements originates in feeder systems that input data into the Department’s financial systems. Thus, achieving a clean audit opinion on financial statements is an effort that involves all DoD functional communities—financial, acquisition, logistics, personnel, medical, and others—and is a DoD–wide management challenge.

The Chief Financial Officer Act of 1990 requires audited financial statements from federal agencies. The Federal Financial Management Improvement Act of 1996 mandates the use of government–wide accounting standards. Unlike many federal agencies, which have only a few appropriation accounts, DoD has numerous such accounts, managed by the three military departments and by selected defense agencies and other organizations. While the number may vary over time, in any given fiscal year the Department may have as many as 500 or more appropriations that must be encompassed within its financial statements.

V&V Methodology. Financial statements must be reviewed by an independent audit organization, either the General Accounting Office, the Office of the Inspector General, or a commercial audit firm. The conduct of such reviews, whether they produce an unqualified opinion or not, serves to validate this metric.

Notes on Actual and Projected Performance. The Department has obtained an unqualified opinion on its financial statement for the Military Retirement Trust Fund each year since FY 1995. The Department expects to continue to receive unqualified opinions for this trust fund in future years. In addition, by FY 2001, the Department expects to obtain unqualified opinions on the financial statements for two other organizational elements: the Army Corps of Engineers (Civil Works) and the Defense Finance and Accounting Service. The Department recognizes that it is not likely to achieve, by FY 2001, an unqualified opinion on each of the remaining financial statements that it, and each of its components, is required to prepare. However, various components within the Department are striving to obtain unqualified opinions on portions of their financial statements by FY 2001. Achievement of such partial results would represent important, noticeable progress toward the ultimate goal of an unqualified opinion on all of the statements required of each of the applicable components of the Department.

Performance Measure 2.5.3 – Qualitative Assessment of Reforming Information Technology Management

Performance Indicator 2.5.3 is a qualitative assessment of the Department’s progress in implementing the objectives of Goal 3 of the DoD Information Management Plan. Goal 3 calls on the Department to reform its information technology management processes in order to increase their efficiency and enhance their contribution to DoD missions.

As resources decline, information and information technology must be managed as a strategic resource, from a DoD–wide perspective. The Department must base information and information technology decisions on the contribution of information technologies to the effectiveness and efficiency of military missions and supporting business functions. Consequently, investments in information technologies need to be linked to mission goals, strategies, and architectures, using various analytic tools. Specific goals, objectives, and strategies for improving DoD’s management of information can be found in the Information Management Strategic Plan (http://www.c3i.osd.mil), discussed in Appendix J.

Metric Description. Performance Indicator 2.5.3 is a qualitative assessment of DoD’s progress in reforming information technology management processes. It evaluates, in particular, performance in achieving three key objectives:

· Institutionalization of the provisions of the Clinger–Cohen Act of 1996 (formally titled the Information Technology Management Reform Act).

· Institutionalization of fundamental information technology management reforms.

· Improvements in the DoD information technology workforce.

Qualitative Assessment of FY 1999 Performance and Implications for FY 2000. This is a new measure, and results will be assessed for the first time in DoD’s FY 2000 GPRA performance report.

RELATED ISSUES

FYDP Database

The Future Years Defense Program (FYDP) database enables decision makers to manage the allocation of the Department’s resources by delineating the relationship between those resources and the missions they support. The FYDP contains information about the personnel and fiscal resources apportioned to each program element over time—including prior years, the current year, a second biennial budget year (if applicable), and four years following the biennial budget years. (For example, the FYDP associated with the FY 2001 President’s Budget presents personnel and financial resource projections through FY 2005.) The FYDP also identifies the numbers of units and quantities of equipment needed to support DoD programs. These projections extend seven years beyond the second year of each biennial budget. (Thus, the FYDP associated with the FY 2001 President’s Budget contains unit and equipment estimates through FY 2008.)

The FYDP is a versatile tool for decision makers in that it is capable of portraying both the appropriations that support a given program and the programs that derive funding from a particular appropriation. DoD provides a FYDP report to Congress each year, as a supplement to the President’s budget submission. The FYDP is updated, for internal DoD use, after the planning and programming phases of each annual planning, programming, and budgeting cycle. Thus, the FYDP provides information to DoD decision makers and their staffs at each stage of the Department’s annual resource allocation process. In 1997, as part of the Defense Reform Initiative, the FYDP was reengineered with the latest information technology to support modern business practices throughout DoD headquarters.

Planning, Programming, and Budgeting System

The Planning, Programming, and Budgeting System (PPBS) is the process employed by the Department of Defense to ensure that its strategic plan—the QDR—is implemented in its budget. Through the PPBS, the Department apportions resources annually in support of the corporate goals articulated in the QDR, consistent with the DoD vision statement presented earlier in this appendix.

Each year, the Department issues detailed planning guidance based upon the results of previous years’ budget execution as well as on changes in defense policy. The Deputy Secretary of Defense supplements this programmatic guidance by providing fiscal guidance to each of the Services and defense agencies. The Services and defense agencies then use the planning and fiscal guidance to adjust their individual programs. The product of these adjustments is a Program Objective Memorandum (POM) prepared by each of the military departments and defense agencies, outlining the programs they propose to pursue over the FYDP period to achieve the Department’s goals. The Department evaluates the combined Service and agency POMs to ensure they properly implement the planning and fiscal guidance. Alternative approaches for implementing the guidance are defined and resolved through a process known as the Program Review. During the Program Review, the Department selects those alternatives most consistent with its corporate goals.

With this programmatic guidance in hand, the Services and defense agencies have a clear road map to use in preparing their Budget Estimate Submissions (BES). The BES funding profiles collectively reflect the financial strategy the Department will follow to achieve its corporate goals. The combined BES submissions are vetted through a Budget Review conducted by the staffs of the Department’s Comptroller and the Office of Management and Budget. During the Budget Review, the Department’s ability to accomplish its goals at the planned funding levels is carefully examined. Following the Budget Review, the Deputy Secretary approves either the estimates from the BES submissions or alternative estimates developed by the Comptroller. Taken together, these decisions constitute a financial blueprint for achieving the corporate goals derived from the Department’s strategic plan. With the issuance of these decisions, the process of preparing the defense portion of the President’s Budget is complete.

In sum, the PPBS process is an effective mechanism for the Department to match the national military strategy with the appropriate budgetary resources in a fiscally constrained environment. At every step of the way, senior leaders have visibility into those issues that could threaten the Department’s ability to properly match means to ends as expressed in the QDR. The end result of PPBS execution is an annual budget that fully supports the Department’s corporate goals.

Cross–Cutting Functions

Throughout the United States’ history, U.S. armed forces have been called upon to respond to a variety of national needs other than waging wars. Today, military forces may be used to support civil authorities in executing missions such as civil works, disaster relief, and domestic crises. In addition, the Department works with other agencies to ensure a coordinated response to the threats posed by terrorism, proliferation of weapons of mass destruction, and illegal drug trafficking. DoD plays a supporting role in these processes in accordance with applicable law and Presidential Decision Directives (PDDs).

In the area of emergency preparedness, the Federal Emergency Management Agency coordinates federal responses to civil disasters, such as storms, earthquakes, fires, and floods. The Federal Bureau of Investigation is the lead agency for managing emergency measures in response to acts of terrorism committed within the United States. The war on drugs is coordinated by the Director of the White House Office of National Drug Control Policy. Responsibility for protecting the nation’s critical infrastructure, including those physical and information systems necessary to the efficient functioning of societal, commercial, and governmental institutions, is shared by several government agencies. Table I–6 provides more detail on the allocation of responsibilities among federal agencies in these respective areas.

Contractor Assistance

The firm of Arthur Andersen, LLP, provided management consulting services in the development of this combined GPRA performance plan and report. Arthur Andersen assisted DoD offices in the following areas:

· Developing data maps to enhance accuracy and reproducibility.

· Educating offices that consolidate data on GPRA requirements and DoD GPRA practices.

· Advising on verification and validation methodologies.

· Introducing offices responsible for individual metrics to related commercial practices.

Federal Interagency Responsibilities for Key National Security Issues Table I–6
Emergency Preparedness
P.L. 93–288, as amended)

Reference: Federal Response Plan
· Lead agency: FEMA
· Army Corps of Engineers – Public works and engineering

In addition, DoD provides support for functions carried out by the following agencies:

· USDA – Food and fire fighting (National Forest Service)
· FEMA – Information and planning; urban search and rescue
· DoE – Energy
· EPA – Hazardous materials
· American Red Cross – Mass care
· HHS – Health and medical care
· GSA – Resource support
· DoT – Transportation
Terrorism and Weapons of Mass Destruction
(PDD–39, PDD–62)

Reference: Terrorism Incident Annex to the Federal Response Plan
· Lead agency for threats in the United States: FBI
· FBI – Crisis management
· FEMA – Consequences management; maintains Rapid Response Information System database
· DoD – Provides technical operational capabilities to support responses to weapons of mass destruction threats
· DoE – Provides nuclear–incident response capabilities
· HHS – Coordinates health and medical responses
· EPA – Provides environmental responses, including coordination of the National Oil and Hazardous Substances Pollution Contingency Plan
· National Coordinator for Security, Infrastructure Protection, and Counterterrorism – Advises on related budget requests
Counternarcotics
(PDD 14; 10 USC Sec 124;
P.L. 105–150, Sec 1004,
as amended; 32 USC Sec 112)
· Lead agency: White House Office of National Drug Control Policy
· DoJ – Drug Enforcement Agency; Border Patrol
· DoD – Supports surveillance of high–intensity drug–trafficking areas; provides air reconnaissance, intelligence, and National Guard support
· DoEd – Sponsors drug prevention education
· HHS – Oversees substance abuse treatment and youth anti–drug and anti–alcohol programs
· DoS – Provides support for source–nation interdiction efforts
Critical Infrastructure
(PDD–63)
· National Coordinator for Security, Infrastructure Protection, and Counterterrorism chairs group coordinating efforts of the various lead agencies

Lead agencies by sector:

· Government – GSA
· Banking/Finance – Treasury
· Telecommunications – DoC/DoD
· Power generation/distribution – DoE
· Transportation – DoT
· Water service – EPA
· Emergency services – FEMA
· Public services – HHS
· R&D – OSTP

Lead agencies by functional area:

· Law enforcement – DoJ
· International cooperation – DoS
· Intelligence – DCI
· National defense – DoD

NOTE: DCI = Director of Central Intelligence; DoC = Department of Commerce; DoE = Department of Energy;
DoEd = Department of Education; DoJ = Department of Justice; DoS = Department of State; DoT = Department of Transportation; EPA = Environmental Protection Agency; FBI = Federal Bureau of Investigation; FEMA = Federal
Emergency Management Agency; GSA = General Services Administration; HHS = Department of Health and Human
Services; OSTP = White House Office of Science and Technology Policy; USDA = Department of Agriculture.

The Importance of Human Resources

Previous sections of this appendix have stressed the critical importance of military personnel and DoD civilians in achieving the Department’s performance goals. Because personnel issues have been presented within the context of individual goals and metrics, it is possible that significant overall aspects of DoD’s human resource strategy may have been obscured. The following paragraphs therefore highlight important goals and objectives related to DoD’s workforce and direct the reader to more detailed discussions found in various chapters of this annual report.

ESTABLISHING MANNING LEVELSs

DoD’s military manning levels are set by statute and are based on the force structure determined by the QDR. Likewise, civilian manning requirements are structured to support the military force. The various business reforms the Department has undertaken seek to realize efficiencies, eliminate redundancies, and outsource functions where appropriate to reduce total DoD military and civilian manning. For more information on personnel reductions related to reform efforts, see Chapters 12, 13, and 14. Any savings attained through these changes are used to underwrite force modernization and transformation, as described in Chapter 11.

MAINTAINING A QUALITY WORKFORCE

U.S. military forces are the best in the world primarily because of the quality of the nation’s soldiers, sailors, airmen, and marines. To maintain a skilled and capable force, the Department must continue to compete successfully with private industry for new talent, and it must strive to retain key mid–career personnel. The robust national economy presents challenges in attracting and retaining high–quality people. Chapter 4 discusses the difficulties the Department faces in this regard and describes initiatives being pursued to ensure a properly sized and structured force. Chapter 10 examines challenges the Department has encountered in recruiting and retaining military personnel.

DoD’s civilian employees provide essential support to combat forces. While continuing to downsize its civilian workforce, the Department is also stressing increased training and professional development among its civilian employees. Chapter 10 provides more details regarding civilian personnel management.

MAINTAINING THE PROPER MIX OF SKILLS

Recruiting and retaining sufficient numbers of personnel is only part of the challenge: the military must also maintain a proper mix of key personnel skills. Shortages of pilots and other specialties, such as Navy surface warfare officers and Air Force crew chiefs, are cause for concern. These shortages are particularly acute within high–demand, high–tempo units. Thus, properly managing tempo remains essential to maintaining the Department’s skill base. Chapter 10 provides an in–depth discussion of this and other force management concerns.

TRAINING THE FORCE

A properly sized workforce equipped with the right mix of skills is the foundation for readiness; however, quality training is equally essential to generating combat power. As individual units execute their training programs, commanders challenge, prepare, and motivate the members of their units. Commanders are required to judge their units’ performance against previously established training goals that support overall readiness objectives. These evaluations are summarized in classified unit–level readiness ratings reported in the GPRA annex to the Quarterly Readiness Report to Congress.

Training is also indispensable in areas of the Department that carry out business–like functions, such as financial and information management. In these areas, the reforms underlying the RBA require an ever more highly trained workforce. The success of acquisition reform, financial management reform, and information management reform will be determined in large part by the attainment of ambitious training objectives.

IMPROVING QUALITY OF LIFE

A decent quality of life is essential to attracting personnel to the military, retaining them, and motivating them to maintain the highest levels of readiness. DoD quality–of–life programs are discussed in Chapter 10. During FY 1999, the Department took a number of steps to enhance service members’ overall compensation, including a 4.8 percent pay raise and retirement reform. Making military life more predictable, reducing tempo, and supporting the families of deployed personnel are also top priorities in this area.

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