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Civilian Downsizing: Unit Readiness Not Adversely Affected, but Future Reductions A Concern (Briefing Report, 04/22/96, GAO/NSIAD-96-143BR).

Pursuant to a congressional request, GAO reviewed civilian downsizing at
the Department of Defense (DOD), focusing on: (1) the extent to which
the civilian workforce has been downsized and whether it has affected
military readiness and functions; and (2) whether the Office of the
Secretary of Defense (OSD) and the services had comprehensive strategies
for managing civilian downsizing.

GAO found that: (1) between fiscal years (FY) 1987 and 1995, DOD
eliminated 284,000 civilian jobs, about 25 percent of its total civilian
workforce; (2) civilian downsizing has not affected the readiness of
combat units; (3) the functions of the affected civilian personnel
include base operations, maintenance and supply, and recreational and
family activities; (4) military personnel have replaced civilian
personnel; (5) Army officials are concerned that transferring military
personnel out of their units to replace civilian personnel could damage
unit cohesiveness and cause long-term readiness problems; (6) some
military officials believe that the effects of the civilian downsizing
could be minimized if DOD had more flexibility to manage the civilian
workforce; (7) in 1996, DOD planned to further reduce its civilian
workforce by 26 percent between FY 1993 and 2001; (8) civilian
downsizing has been based on independent decisions of command and
installation officials, not comprehensive strategies to determine
civilian workforce requirements; and (9) between 1993 and 1999, the
civilian personnel, procurement, and finance functions will lose 31,000
civilian jobs.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-96-143BR
     TITLE:  Civilian Downsizing: Unit Readiness Not Adversely Affected, 
             but Future Reductions A Concern
      DATE:  04/22/96
   SUBJECT:  Personnel management
             Defense operations
             Reductions in force
             Military downsizing
             Civilian employees
             Military personnel
             Defense cost control
             Combat readiness
IDENTIFIER:  DOD Bottom-Up Review
             
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Cover
================================================================ COVER


Briefing Report to the Chairman, Subcommittee on Military Readiness,
Committee on National Security, House of Representatives

April 1996

CIVILIAN DOWNSIZING - UNIT
READINESS NOT ADVERSELY AFFECTED,
BUT FUTURE REDUCTIONS A CONCERN

GAO/NSIAD-96-143BR

Civilian Downsizing

(703107)


Abbreviations
=============================================================== ABBREV

  BRAC - Base Realignment and Closure
  DOD - Department of Defense
  JCS - Joint Chief of Staff
  OSD - Office of the Secretary of Defense

Letter
=============================================================== LETTER


B-271642

April 22, 1996

The Honorable Herbert H.  Bateman
Chairman, Subcommittee on Military Readiness
Committee on National Security
House of Representatives

Dear Mr.  Chairman: 

As requested, we reviewed civilian downsizing across the Department
of Defense (DOD).  Specifically, we determined (1) the extent of
civilian workforce reductions, (2) whether civilian downsizing has
affected readiness and functions at military installations, and (3)
whether the Office of the Secretary of Defense (OSD) and the services
had comprehensive strategies for managing civilian downsizing.  On
April 1, 1996, we briefed your staff on the results of our review. 
This report discusses the information presented at that briefing. 


   BACKGROUND
------------------------------------------------------------ Letter :1

DOD is the largest federal agency.  In fiscal year 1995, it employed
a total workforce of about 3.3 million personnel, about 26 percent of
whom were civilians.  DOD's 849,164 civilian workers represented
about 42 percent of executive branch civilian workers. 

Civilians are an integral part of DOD's support infrastructure,
performing work in the 4 military services; 16 defense agencies, such
as the Defense Finance and Accounting Service; 9 field activities,
such as the Washington Headquarters Service; 5 defense support
activities, such as the Defense Manpower Data Center; and other
defense organizations, such as the Inspector General, Joint Staff,
and OSD.  As of fiscal year 1995, about 83 percent of DOD civilians
were in the four military services.  These civilians maintain and
repair equipment and weapon systems; provide research, medical,
communications, and logistics support; and operate and maintain
military installations.  The Marine Corps had the fewest civilians,
with just over 18,000, and the Army had the most, with almost 267,000
civilians. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

DOD began streamlining its operations and downsizing its military and
civilian workforces, associated infrastructure, and overall budget in
fiscal year 1988.  Between fiscal years 1987 and 1995, DOD reduced
its civilian workforce by approximately 25 percent, or about 284,000
personnel.  DOD's active and reserve military components decreased by
approximately 26 percent, or about 861,000 troops.  By the time it
finishes current downsizing plans in fiscal year 2001, DOD will have
reduced its civilian workforce to about 728,300 personnel, almost 35
percent below the 1987 end strength and about 16 percent below the
1995 end strength. 

Civilian downsizing has not adversely affected military readiness at
the installations we visited.  A review of DOD's unit readiness
reporting system did not disclose readiness problems resulting from
civilian downsizing.  Further, unit commanders and officials told us
that civilian reductions had not affected their units' availability
to train, even when soldiers had been tasked to perform civilian
functions that were understaffed.  The commanders also said that
civilian reductions had not disrupted maintenance of
mission-essential equipment.  Air Force, Marine Corps, and Navy
officials said that civilian downsizing has had virtually no effect
on operational units.  Army officials said that readiness had not
been affected because the Army's staffing priorities were for
functions critical to combat capabilities.  However, Army officials
expressed concern that future civilian reductions could adversely
affect military readiness if the process was not managed carefully. 

Army installation officials raised concerns about the effects of
civilian downsizing on civilian functions and services.  They told us
that civilian downsizing has affected functions on Army
installations, such as public works and repair and maintenance. 
Civilian downsizing has affected the amount of time it takes to
repair noncritical equipment.  Air Force and Army officials said that
civilian downsizing has resulted in reductions to recreational and
family services.  Officials at all installations told us they were
concerned about the effect of downsizing on civilian workforce morale
due to limited career and promotion opportunities, job insecurity,
and longer working hours. 

OSD and the services have various initiatives underway to downsize
the civilian workforce and reduce infrastructure costs.  OSD
developed broad plans for streamlining the civilian workforce in 1993
and 1994 that were based on (1) contracting out or consolidating
functions, (2) employing better business practices, and (3)
downsizing specific work groups.  OSD's approach has been to rely on
the services and DOD agencies to make reduction decisions.  The
services have used a variety of approaches to downsize civilians,
such as reducing personnel while preserving functions, consolidating
or streamlining functions, and implementing Base Realignment and
Closure recommendations.  However, the approaches to achieve civilian
reductions were not guided by comprehensive, servicewide downsizing
strategies.  Service commands do not have a long-term road map to
guide civilian reduction decisions to meet future mission
requirements.  The services are developing comprehensive strategies
to better determine future civilian workforce requirements.  By the
time these strategies are in place, however, most of the civilian
reductions will have occurred. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

We reviewed DOD and service instructions, procedures, and plans for
civilian downsizing and interviewed key officials from OSD and the
four military services on how civilian reductions were determined and
managed.  Within each of the services, we visited major installations
that had downsized civilians and had combat units.  Army
installations we visited housed units that are part of the Army's
early deployment forces.  These units included the 101st Airborne
Division (Air Assault) at Fort Campbell, Kentucky; the 10th Infantry
Division (Light) at Fort Drum, New York; the 1st Cavalry Division at
Fort Hood, Texas; and the 24th Infantry Division (Mechanized) at Fort
Stewart, Georgia.  While at Fort Hood, we also spoke with officials
from the 4th Infantry Division. 

In the Air Force, we visited Air Mobility Command installations at
Scott Air Force Base, Illinois, and Travis Air Force Base,
California, because each had experienced civilian reductions since
1990 that exceeded reductions at other Air Force installations with
combat units.  We visited Langley Air Force Base, Virginia, because
it is the headquarters of the Air Combat Command, the largest U.S. 
Air Force command. 

For the Navy, we selected the two U.S.  Atlantic Fleet bases with
large percentages of civilian reductions--the Oceana Naval Air
Station and the Little Creek Naval Amphibious Base, Norfolk,
Virginia.  We also spoke with officials at the U.S.  Atlantic Fleet
Headquarters, Norfolk, Virginia.  For the Marine Corps, we visited
the U.S.  Marine Forces Atlantic and spoke with officials from the
2nd Marine Division and the 2nd Force Service Support Group at Camp
Lejeune, North Carolina, and the 2nd Marine Aircraft Wing located at
Marine Corps Air Station, Cherry Point, North Carolina. 

We reviewed the Joint Chiefs of Staff (JCS) Status of Resources and
Training System database to determine whether any readiness problems
were associated with civilian downsizing.  On the basis of the
database's indicators and other measures that, according to JCS,
provide an indication of readiness, we asked installation officials
to comment on four readiness indicators:  civilian and military
personnel strength, including the size and scope of civilian
reductions; use of military personnel assigned to civilian functions
and the effect on unit training; equipment availability and workload
backlogs; and workforce morale. 

We did not obtain written agency comments on this report.  However,
we provided a draft of this report to OSD and service officials and
incorporated their comments where appropriate.  We conducted our work
from August 1995 to April 1996 in accordance with generally accepted
government auditing standards. 


---------------------------------------------------------- Letter :3.1

We are sending copies of this report to other interested
congressional committees and Members of Congress and the Secretaries
of Defense, the Air Force, the Army, and the Navy.  We will also make
copies available to others on request. 

If you or your staff have any questions concerning this report,
please contact me on (202) 512-5140.  Major contributors to this
report are listed in appendix I. 

Sincerely yours,

Mark E.  Gebicke
Director, Military Operations and
 Capabilities Issues


BRIEFING SECTION I EXTENT OF
CIVILIAN REDUCTIONS
============================================================== Letter 


   CIVILIAN AND MILITARY FORCE
   LEVELS--FISCAL YEARS 1987-95
------------------------------------------------------------ Letter :4



   (See figure in printed
   edition.)


The Department of Defense (DOD) began streamlining operations and
downsizing its military force structure, associated infrastructure,
and overall budget beginning in fiscal year 1988.  Between fiscal
years 1987 and 1995, DOD reduced its total civilian workforce by
approximately 25 percent, or almost 284,000 civilians, and its
military strength--including active and reserve components--by 26
percent, or about 861,000 troops.  Civilian reductions since 1987
were achieved through separation incentive programs, limited hiring,
and attrition. 


BRIEFING SECTION II OFFICIALS'
VIEWS ON THE IMPACT OF CIVILIAN
DOWNSIZING
============================================================== Letter 


   OFFICIALS' VIEWS ON EFFECTS OF
   CIVILIAN DOWNSIZING ON UNIT
   READINESS
------------------------------------------------------------ Letter :5



   (See figure in printed
   edition.)


According to commanders and officials at military installations we
visited, civilian downsizing has not affected the readiness of combat
units.  Furthermore, Air Force, Marine Corps, and Navy officials
generally did not view civilian downsizing as an area of concern. 
Officials at Army installations, however, expressed concern that
civilian downsizing must be managed to minimize adverse effects on
combat units. 

At Navy installations we visited, officials told us that combat units
were generally unaffected by civilian downsizing.  Transient or
unassigned military personnel were available in large numbers to
perform civilian functions.  In addition, military downsizing and
associated workload reductions made some civilian functions obsolete,
such as maintenance for Navy combat aircraft squadrons that were
downsized.  Air Force officials told us that they staffed functions
critical to combat capability, such as aircraft maintenance, and
downsized noncritical functions, such as general installation
maintenance. 

The effects on civilian downsizing at Army installations centered on
the Army directorate staff, which is largely composed of civilian
workers responsible for performing the day-to-day operations of the
installation, such as public works and repair and maintenance.  When
the Army began downsizing its workforce about 8 years ago, civilian
reductions were generally distributed equally across commands and
functions.  Civilians were downsized in various functions, but the
mission and workload remained.  The reduced civilian workforce tried
to provide the same level of service, but functions began to
experience workload delays.  For example, since civilian downsizing
began, the average time to perform vehicle maintenance at Fort Drum
has doubled from 20 to 40 days.  Officials attributed the increase in
repair time to civilian downsizing. 

To minimize the effects of civilian downsizing, Army officials told
us they have begun to manage civilian reductions by reducing or
eliminating functions not critical to operational readiness, such as
recreational activities.  Functions critical to supporting Army
combat capabilities, such as repair of weapon systems, received
priority resourcing.  Officials emphasized that civilian downsizing
must be carefully managed to minimize adverse effects on units. 


   OFFICIALS' COMMENTS ON EFFECTS
   OF CIVILIAN DOWNSIZING ON
   FUNCTIONS
------------------------------------------------------------ Letter :6



   (See figure in printed
   edition.)


Military installations have downsized civilian positions in various
functions and activities, such as base operations, maintenance and
supply, and recreational and family activities.  To realize civilian
personnel savings, civilian functions have been reduced, contracted
out, transferred, consolidated, and eliminated.  At Army
installations, officials told us that civilian reductions have caused
delays in repairing noncritical items and diminished recreational
activities. 

The logistics function, which provides installation maintenance and
supply, has significantly reduced its civilian workforce.  At Army
installations we visited, the logistics function has been downsized
between 18 and 31 percent since fiscal year 1990.  To minimize the
effect of civilian downsizing on combat units, the Army logistics
function prioritizes its workload.  Maintenance repair time for items
critical to combat, such as the M1A1 tank, artillery pieces, radar,
and tactical vehicles, has not been affected by civilian downsizing. 
Maintenance repair time for noncritical items, such as generators,
fork lifts, road graders, and snow plows has been affected by
civilian downsizing.  The logistics function is also responsible for
handling excess supply, such as equipment no longer required. 
Installation officials told us that millions of dollars of excess
inventory had not been processed because the function lacks the
civilian workers to manage the workload.  The central issue facility
at Fort Drum takes longer to issue equipment for field training, such
as helmets and canteens, due to civilian downsizing. 

At Air Force and Army installations, officials said that civilian
downsizing has affected family support and recreational community
activities, such as arts and crafts.  Various Air Force and Army
installations reduced the operating hours of gymnasiums, libraries,
and swimming pools.  Since 1990, Fort Hood reduced the number of its
installation libraries from six to one.  In response to recent
civilian downsizing, Hunter Army Air Field, part of Fort Stewart,
closed its library and contracted with the local county to provide
library services. 


   OFFICIALS' VIEWS ON EFFECTS OF
   CIVILIAN DOWNSIZING ON
   FUNCTIONS
------------------------------------------------------------ Letter :7



   (See figure in printed
   edition.)


At the Air Force, the Army, and the Navy installations we visited,
military personnel were tasked to perform civilian and military work
in various units and functions.  None of the Air Force or the Navy
officials we spoke with, however, indicated any adverse effects
resulting from the use of military personnel to perform work in
civilian functions on the installation.  Army officials, on the other
hand, told us that tasking military personnel to perform work outside
their assigned unit presented a long-term potential readiness problem
because soldiers could not train as part of a unit. 

Army officials told us they have worked to limit the use of military
to perform functions outside of assigned units by closely reviewing
requests for military assistance, limiting the length of time
soldiers are tasked away from their units, and limiting the number of
soldiers tasked.  Army installations we visited assigned military
personnel to various functions usually for a few weeks but sometimes
for up to 1 year.  Military personnel were assigned, for example, to
recreation and maintenance centers as clerks and warehouse supply
workers.  In 1994, Fort Hood assigned approximately 800 to 900
soldiers, representing about 2 percent of troop strength, to various
installation functions.  Fort Hood has reduced the number of soldiers
assigned outside taskings to less than 1 percent of troop strength. 
Officials at Army installations told us they worked to keep outside
taskings to less than 1 percent of troop strength. 

Air Force, Army, and Navy installation officials expressed concerns
about the effect of civilian downsizing on the morale of the civilian
workforce.  Officials cited limited career and promotion
opportunities, job insecurity, and longer working hours as examples
of factors adversely affecting civilian workforce morale.  According
to Air Force installation officials, current downsizing trends risk
the loss of workers with the necessary skills for the long term. 
Army combat unit officials said civilian downsizing had not adversely
affected soldier morale. 


   OFFICIALS' VIEWS ON MINIMIZING
   POTENTIAL EFFECTS OF CIVILIAN
   DOWNSIZING
------------------------------------------------------------ Letter :8



   (See figure in printed
   edition.)


Installation officials told us their greatest concern was the need
for more flexibility to manage the civilian workforce to meet the
workload.  They cited various provisions contained in DOD
authorization legislation that they thought limited the ability of
installation managers to have the necessary flexibility.  Legislation
established ceilings on the number of staff that could be allocated
to particular activities or locations.  Other provisions limited the
amount of DOD work that could be contracted out and prohibited
selected workforce elements from falling below specific levels. 

Title 10 U.S.C.  2465 prohibits DOD from contracting the firefighting
function at military installations.  Installation officials said that
they would like to contract out the firefighting function, but they
are prohibited from doing so.  Furthermore, officials said that they
were not allowed to downsize medical personnel below a baseline
established by section 718 of the National Defense Authorization Act
for Fiscal Years 1992 and 1993 (P.L.  102-190).  Officials also
discussed the Office of Management and Budget Circular A-76,
Performance of Commercial Activities, and 10 U.S.C.  2461, which
requires cost comparison studies before contracting out functions
performed by 46 or more civilians.  Officials at some Army
installations we visited said that if the requirement to conduct cost
comparison studies were streamlined, more functions could be
contracted out.  Officials said the current study process can take up
to 2 years to complete. 

Officials at installations we visited generally approved of the
provision contained in section 1031 of the National Defense
Authorization Act for Fiscal Year 1996 (P.L.  104-106) that allows
DOD to manage its civilian workforce based on funding and not on
workforce constraints, such as a maximum number of employees.  Fort
Drum officials told us that this change should allow them to manage
more economically and hire more workers to meet higher workloads, for
example, if that would be less costly than contracting the function. 


BRIEFING SECTION III DOD
MANAGEMENT OF THE CIVILIAN
DRAWDOWN
============================================================== Letter 


   HISTORY OF DOD CIVILIAN
   DOWNSIZING
------------------------------------------------------------ Letter :9



   (See figure in printed
   edition.)


In 1993, DOD conducted a comprehensive study, called the Bottom-Up
Review, of national defense strategy and resource requirements to
meet post-Cold War missions.  As part of this effort, DOD found that
civilian personnel comprised a significant part of infrastructure
costs.  According to the study, approximately 40 percent of
infrastructure costs is tied to the force structure, such as
training, supply, and transportation.  The other 60 percent is
independent of force structure changes, such as funding for military
installations, family housing, military base operations, and depot
maintenance.  The study also found that civilian workforce reductions
trailed military personnel reductions and that cost savings could be
achieved through privatization and consolidation of civilian
functions. 

In response to the study's findings, DOD decided to downsize the
civilian workforce commensurate with military and overall funding
reductions and minimize infrastructure cost increases driven by the
civilian component.  The Office of the Secretary for Defense (OSD)
directed the services to develop plans to downsize the civilian
workforce and programmed an additional 19-percent reduction to the
total DOD civilian workforce between fiscal years 1993 and 1999. 



   (See figure in printed
   edition.)


In September 1993, the White House released its Report on the
National Performance Review, which recommended downsizing the federal
civilian workforce by at least 12 percent by the end of fiscal year
1999.  The report recommended that selected workforce components and
occupational groups be the primary focus for achieving federalwide
civilian reductions.  Specifically, the report recommended
concentrating civilian downsizing among supervisors, headquarters
staff, personnel specialists, budget analysts, procurement
specialists, accountants, and auditors.  The report also recommended
that federal agencies double the current ratio of
1 manager or supervisor for every 7 employees to a ratio of 1 to 14
by 1999.  The report directed that federal agencies consider
reengineering, or reinvention, of government through streamlining to
achieve personnel and fiscal savings.  The downsizing recommendations
excluded civilian workers indirectly hired by the federal government;
that is, foreign nationals employed by the federal government through
contractual arrangements with overseas nations.  Of DOD's 1995
workforce, about 43,000 indirectly hired civilian workers, or 5
percent, were excluded from civilian downsizing actions. 



   (See figure in printed
   edition.)


In response to the recommendation from the National Performance
Review to reduce the size of the federal civilian workforce, DOD
planned to downsize its civilian workforce by 18 percent, or 165,200
civilians, by the end of fiscal year 1999.  DOD exceeded the National
Performance Review recommendation of a 12-percent reduction because
DOD had already programmed the civilian reductions. 

OSD focused civilian reductions on selected work groups, as
recommended by the National Performance Review.  OSD established
separate downsizing targets for civilians in the finance, personnel,
and procurement functions and among headquarters staff and
supervisors.  OSD established the targets based on a fixed-percentage
reduction to the number of civilians in each work group as of fiscal
year 1993.  DOD limited downsizing in targeted work groups to 4
percent per year to minimize the potential for adverse personnel
actions, such as reductions in force.  For example, the Army's 1996
target for civilians in its finance work group is 10,229, and the Air
Force's 1996 target for the same group is 6,208.  These targets
represent a 4-percent reduction per year from each service's fiscal
year 1993 baseline workforce of 11,119 and 6,748, respectively.  To
reduce DOD's supervisory ratio, OSD established targets for each
service and DOD agency based on doubling the service's and agency's
fiscal year 1993 baseline ratio. 



   (See figure in printed
   edition.)


By January 1994, DOD reduced its civilian workforce below the
projected level for the fiscal year.  Unanticipated personnel savings
resulted from decreased workloads and various streamlining
initiatives, such as consolidating the civilian personnel specialist
function.  As a result, OSD revised its downsizing plan during fiscal
year 1994.  The revised plan accelerated planned reductions to 22.4
percent between fiscal years 1993 and 1999.  In 1995 and again in
1996, OSD revised planned civilian reductions based on DOD's budget
review process.  DOD's 1996 plan is to achieve a 26-percent reduction
to the civilian workforce from fiscal years 1993 to 2001. 


   PLANNED CIVILIAN
   REDUCTIONS--FISCAL YEARS 1993
   TO 2001
----------------------------------------------------------- Letter :10



   (See figure in printed
   edition.)

The current DOD plan is to reduce its civilian workforce by 26
percent, or about 241,900 civilians, between fiscal years 1993 and
2001.  As of fiscal year 1995, OSD reported that the services and DOD
agencies were ahead of their downsizing targets by about 12,000
civilians. 


   PROPORTION OF PLANNED
   REDUCTIONS EXPECTED FROM BRAC
----------------------------------------------------------- Letter :11



   (See figure in printed
   edition.)

Service officials told us that Base Realignment and Closure (BRAC)
actions were expected to yield civilian reductions, which would be
counted toward achieving OSD downsizing targets.  Of the 90,500 Navy
and Marine Corps civilian reductions targeted for fiscal years 1993
through 2001, the Navy estimates that BRAC actions will yield about
31,790, or about 35 percent of planned civilian reductions. 
Similarly, the Army expects 14 percent and the Air Force expects 9
percent of planned civilian reductions to result from BRAC actions. 


   NO COMPREHENSIVE GUIDANCE TO
   MANAGE CIVILIAN DOWNSIZING
----------------------------------------------------------- Letter :12



   (See figure in printed
   edition.)


OSD and the services have various initiatives underway to downsize
the civilian workforce and achieve efficiencies.  OSD developed broad
plans for streamlining the civilian workforce in 1993 and 1994 that
were based on (1) contracting out or consolidating functions, (2)
employing better business practices, and (3) downsizing specific work
groups.  The plans identified several broad functional areas eligible
for contracting, such as base operations support and maintenance and
repair.  DOD has consolidated some missions based on BRAC actions and
expects to consolidate some functions, such as headquarters
management and supervisory functions.  Better business practices are
tools DOD uses to increase operating efficiencies, such as the
reengineering efforts underway in base management and operations. 
The plans also discussed OSD initiatives to streamline certain work
groups, such as personnel specialists. 

These initiatives, however, were not being guided by a comprehensive
management or downsizing strategy.  OSD's approach has been to rely
on the services and DOD agencies to make reduction decisions.  The
services have used a variety of downsizing approaches, such as
reducing civilians evenly across all installation functions,
consolidating installation functions, and implementing BRAC
recommendations.  Most of these approaches were undertaken by major
commands and installations and were not guided by comprehensive,
servicewide downsizing strategies. 

The services have downsized the civilian workforce by reducing
personnel while preserving functions.  This resulted in delays in
repairing noncritical items at Army installations we visited.  Other
installations made downsizing decisions based on workloads, which
provided civilian work years for redistribution to remaining
functions and workloads. 

Even though the services are developing comprehensive strategies to
determine civilian workforce requirements, civilian reductions
continue based on the independent decisions of command and
installation officials.  As a result, service commands do not have a
long-term road map to guide downsizing decisions and shape the
civilian workforce to meet future mission requirements.  The majority
of civilian reductions will have likely been made before such
strategies are in place. 


   ARMY
----------------------------------------------------------- Letter :13



   (See figure in printed
   edition.)


According to Army officials, the Army does not have a consistent,
servicewide system for relating personnel and workload.  The Army is
reviewing whether to implement a new workforce requirements program
servicewide.  This program, undergoing final study, is not a strategy
to manage downsizing, but it would allow decisionmakers to balance
downsizing with workloads and budget constraints.  The program
involves a 12-step process to validate workforce requirements for
support functions based on factors such as mission, tasks, and
resources.  An Army official stated that between 1991 and 1995, the
Army used the program to study the workloads and resources of 72 Army
units and organizations with nearly 64,000 positions--about 13
percent of the Army's military and civilian support workforce. 

The Army Materiel Command is currently working to establish its
workforce requirements in response to an Army audit, which found the
Command determined workforce requirements based on available funding
and not on workload.  Subsequently, on the basis of information
provided in the Army audit, the House Armed Services Committee became
concerned about the Army's rationale for civilian downsizing.  The
Committee directed the Secretary of the Army to develop a program for
determining staffing needs based on workload. 


   AIR FORCE
----------------------------------------------------------- Letter :14



   (See figure in printed
   edition.)








In June 1994, the Secretary of the Air Force directed the development
of a comprehensive implementation strategy to downsize the Air Force
civilian workforce.  The strategy was to be based on a review of
programs, workload, structure and organization to ensure that
civilian reductions did not adversely affect readiness.  Six working
groups were established to review civilian functional areas, such as
installation support and management headquarters, for downsizing
potential.  The working groups developed various proposals to
streamline civilian support functions.  The majority of the proposals
were process improvements.  By January 1996, however, limited
progress had been made on a downsizing strategy.  Of the roughly 54
proposals under review, an Air Force official estimated that about 12
had potential for significant civilian personnel savings. 


   NAVY
----------------------------------------------------------- Letter :15



   (See figure in printed
   edition.)








The Navy is refining its methodology to determine total workforce
requirements, to include the civilian workforce.  Navy officials told
us the revised methodology was expected to better link and integrate
workforce requirements to workload.  Although still in the concept
stage, the Navy's methodology is based on workload requirements for
conditions ranging from peacetime to mobilization and is aimed at
addressing the Navy's total workforce.  The methodology is not a tool
to downsize the civilian workforce, but it is expected to help the
Navy to establish its civilian workforce requirements based on
workload.  The Navy expects this methodology to be available around
1999 to better identify civilian personnel requirements.  To test an
alternative methodology, the Navy conducted initial studies in
October 1995 at two naval air stations, comparing missions,
functions, tasks, and personnel allocation.  The studies identified
functions for potential consolidation and elimination. 


   MARINE CORPS
----------------------------------------------------------- Letter :16



   (See figure in printed
   edition.)







In 1995, the Marine Corps began a detailed study of current service
processes to implement the Commandant's planning guidance.  The
Commandant's guidance directed that civilian reductions must be
carefully managed to minimize adverse effects on combat units.  As
part of its study effort, the Marine Corps is evaluating the role of
civilians in core functions to identify opportunities to streamline,
consolidate, and contract out.  Marine Corps officials told us that
headquarters staff members were also working on servicewide plans to
downsize civilians in targeted work groups.  The study effort is
expected to be completed in the summer of 1996, and results of the
study are expected to identify areas in which the Marine Corps can
streamline, consolidate, and contract out civilian functions. 


   INITIATIVES TO DOWNSIZE
   SPECIFIC FUNCTIONS
----------------------------------------------------------- Letter :17



   (See figure in printed
   edition.)


In 1994, OSD directed that the three offices with primary functional
responsibility for the civilian personnel, procurement, and finance
work groups manage efforts to streamline these functions DOD-wide. 
In response to the Report of the National Performance Review, OSD has
targeted almost 31,000 civilian workforce reductions in these three
functional areas, representing almost 15 percent of civilian
reductions planned for fiscal years 1993 through 1999.  The following
are DOD-wide streamlining efforts that are either under review or
beginning implementation.  These efforts are expected to improve
processes and functions or provide personnel or fiscal savings. 

  -- The Assistant Secretary of Defense for Force Management Policy
     is responsible for streamlining the civilian personnel
     specialist function.  DOD's restructuring effort, which centers
     on the establishment of regional personnel centers and
     modernization, is expected to be completed around 2001. 
     Officials said they expected their reengineering efforts to
     achieve the target reduction of about 6,000 civilians. 

  -- The Under Secretary of Defense for Acquisition and Technology is
     responsible for streamlining the procurement function.  OSD
     officials said that several ongoing reengineering and reform
     initiatives were expected to achieve the target reduction of
     about 12,500 by 1999.  However, service officials told us that
     OSD does not have a DOD-wide strategy to downsize civilians
     working in the procurement function. 

  -- The Under Secretary of Defense, Comptroller, is responsible for
     streamlining the finance function.  OSD has various ongoing
     initiatives to reform the finance function, but these
     initiatives are not expected to reduce the number of personnel. 
     However, personnel savings of about
     8,000 civilian positions is expected to come from consolidating
     various finance functions.  OSD is evaluating the potential to
     privatize up to 8,000 civilian positions in functions such as
     debt and claims management.  An OSD official told us his office
     expected to achieve the total target reduction of almost 13,000
     by 1999.  A DOD-wide strategy to downsize civilians working in
     the finance function, however, has not been developed. 
The services are implementing some of the OSD streamlining
initiatives while pursuing their own streamlining efforts.  Army
commands, for example, identified 175 initiatives to reduce costs and
personnel, streamline organizations, and improve productivity. 


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix I

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

Sharon A.  Cekala, Associate Director
William E.  Beusse, Assistant Director
Christine D.  Frye, Evaluator-in-Charge
Laura L.  Talbott, Evaluator

DALLAS FIELD OFFICE

Robert D.  Malpass, Evaluator

KANSAS CITY FIELD OFFICE

Gregory J.  Symons, Evaluator

NORFOLK FIELD OFFICE

Hugh Brady, Jr., Evaluator
Harry E.  Taylor, Jr., Evaluator

SAN FRANCISCO FIELD OFFICE

John M.  Schaefer, Evaluator
Leo G.  Acosta, Evaluator


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