DOD Personnel: DOD Actions Needed to Strengthen Civilian Human	 
Capital Strategic Planning and Integration with Military	 
Personnel and Sourcing Decisions (28-MAR-03, GAO-03-475).	 
                                                                 
The Department of Defense's (DOD) civilian employees play key	 
roles in such areas as defense policy, intelligence, finance,	 
acquisitions, and weapon systems maintenance. Although downsized 
38 percent between fiscal years 1989 and 2002, this workforce has
taken on greater roles as a result of DOD's restructuring and	 
transformation. Responding to congressional concerns about the	 
quality and quantity of, and the strategic planning for the	 
civilian workforce, GAO determined the following for DOD, the	 
military services, and selected defense agencies: (1) the extent 
of top-level leadership involvement in civilian strategic	 
planning; (2) whether elements in civilian strategic plans are	 
aligned to the overall mission, focused on results, and based on 
current and future civilian workforce data; and (3) whether	 
civilian and military personnel strategic plans or sourcing	 
initiatives were integrated.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-475 					        
    ACCNO:   A06487						        
  TITLE:     DOD Personnel: DOD Actions Needed to Strengthen Civilian 
Human Capital Strategic Planning and Integration with Military	 
Personnel and Sourcing Decisions				 
     DATE:   03/28/2003 
  SUBJECT:   Agency missions					 
	     Civilian employees 				 
	     Human resources utilization			 
	     Labor force					 
	     Personnel management				 
	     Strategic planning 				 
	     DOD Quadrennial Defense Review			 
	     GAO High Risk Series				 
	     Performance and Accountability Series		 
	     2001						 
                                                                 

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GAO-03-475

Report to the Ranking Minority Member, Subcommittee on Readiness,
Committee on Armed Services, House of Representatives

United States General Accounting Office

GAO

March 2003 DOD PERSONNEL DOD Actions Needed to Strengthen Civilian Human
Capital Strategic Planning and Integration with Military Personnel and
Sourcing Decisions

GAO- 03- 475

Generally, civilian personnel issues appear to be an emerging priority
among top leaders in DOD and the defense components. Although DOD began
downsizing its civilian workforce more than a decade ago, it did not take
action to strategically address challenges affecting the civilian
workforce until it issued its civilian human capital strategic plan in
April 2002. Top- level leaders in the Air Force, the Marine Corps, the
Defense Contract Management Agency, and the Defense Finance Accounting
Service have initiated planning efforts and are working in partnership
with their civilian human capital professionals to develop and implement
civilian strategic plans; such leadership, however, was increasing in the
Army and not as evident in the Navy. Also, DOD has not provided guidance
on how to integrate the components* plans with the department- level plan.
High- level leadership is critical to directing reforms and obtaining
resources for successful implementation.

The human capital strategic plans GAO reviewed for the most part lacked
key elements found in fully developed plans. Most of the civilian human
capital goals, objectives, and initiatives were not explicitly aligned
with the overarching missions of the organizations. Consequently, DOD and
the components cannot be sure that strategic goals are properly focused on
mission achievement. Also, none of the plans contained results- oriented
performance measures to assess the impact of their civilian human capital
initiatives (i. e., programs, policies, and processes). Thus, DOD and the
components cannot gauge the extent to which their human capital
initiatives contribute to achieving their organizations* mission. Finally,
the plans did not contain data on the skills and competencies needed to
successfully accomplish future missions; therefore, DOD and the components
risk not being able to put the right people, in the right place, and at
the right time, which can result in diminished accomplishment of the
overall defense

mission. Moreover, the civilian strategic plans did not address how the
civilian workforce will be integrated with their military counterparts or
sourcing initiatives. DOD*s three human capital strategic plans-- two
military and one civilian-- were prepared separately and were not
integrated to form a seamless and comprehensive strategy and did not
address how DOD plans to link its human capital initiatives with its
sourcing plans, such as efforts to outsource non- core responsibilities.
The components* civilian plans acknowledge a need to integrate planning
for civilian and military personnel* taking into consideration
contractors* but have not yet done so. Without an integrated strategy, DOD
may not effectively and efficiently allocate its scarce resources for
optimal readiness. The Department of Defense*s (DOD) civilian employees
play key

roles in such areas as defense policy, intelligence, finance,
acquisitions, and weapon systems

maintenance. Although downsized 38 percent between fiscal years 1989 and
2002, this workforce has taken on greater roles as a result of DOD*s
restructuring and

transformation. Responding to congressional concerns about the quality and
quantity of, and the strategic planning for the civilian workforce, GAO
determined the following for DOD, the military services, and selected
defense

agencies: (1) the extent of top- level leadership involvement in civilian
strategic planning; (2) whether elements in civilian strategic plans are
aligned to the overall mission, focused on results, and based on current
and future civilian workforce data; and (3) whether civilian and military
personnel

strategic plans or sourcing initiatives were integrated. GAO recommends
DOD improve the departmentwide plan to be mission aligned and
resultsoriented;

provide guidance to align component- and department- level human capital
strategic plans; develop data on future civilian workforce needs; and set
milestones for integrating military and civilian workforce plans, taking

contractors into consideration. DOD comments were too late to include in
this report but are included in GAO- 03- 690R.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 475. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Derek B. Stewart at (202) 512- 5559 or stewartd@ gao.
gov. Highlights of GAO- 03- 475, a report to the

Ranking Minority Member, Subcommittee on Readiness, House Committee on
Armed Services March 2003

DOD PERSONNEL

DOD Actions Needed to Strengthen Civilian Human Capital Strategic Planning
and Integration with Military Personnel and Sourcing Decisions

Page i GAO- 03- 475 DOD Personnel Letter 1 Results in Brief 2 Background 4
Leadership Involvement in Strategic Planning for Civilian Personnel Not
Extensive in the Past, but Is Increasing 8 Key Elements of Strategic Plans
for DOD Civilian Personnel Not in

Place 15 Strategic Plans for Civilian Personnel Not Yet Integrated with
Plans for Military Personnel or Sourcing Initiatives 22 Conclusions 26
Recommendations for Executive Action 27 Agency Comments 28 Appendix I
Scope and Methodology 29

Appendix II Key Events Related to Strategic Planning for DOD Civilian
Personnel 33

Appendix III GAO Contacts and Staff Acknowledgments 34

Figures

Figure 1: Civilian Employment by DOD Component as of September 30, 2002
(670,166 Direct Hires) 6 Figure 2: Relationships among Several Key
Elements of a Human

Capital Strategic Plan 16 Figure 3: Key Events Related to Strategic
Planning for DOD Civilian Personnel 33 Contents

Page ii GAO- 03- 475 DOD Personnel Abbreviations

DCMA Defense Contract Management Agency DFAS Defense Finance and
Accounting Service DOD Department of Defense GPRA Government Performance
and Results Act OMB Office of Management and Budget OPM Office of
Personnel Management QDR Quadrennial Defense Review

This is a work of the U. S. Government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. It may contain
copyrighted graphics, images or other materials. Permission from the
copyright holder may be necessary should you wish to reproduce copyrighted
materials separately from GAO*s product.

Page 1 GAO- 03- 475 DOD Personnel March 28, 2003 The Honorable Solomon P.
Ortiz

Ranking Minority Member Subcommittee on Readiness Committee on Armed
Services House of Representatives

Dear Mr. Ortiz: With almost 700,000 civilian employees on its payroll, the
Department of Defense (DOD) is the second largest federal employer of
civilians in the nation. Defense civilian personnel, among other things,
develop policy, provide intelligence, manage finances, and acquire and
maintain weapon

systems. Given the global war on terrorism, the role of DOD*s civilian
workforce is expanding, such as participation in combat support functions
that free military personnel to focus on warfighting duties for which they
are uniquely qualified. Civilian personnel are also key to maintaining
DOD*s institutional knowledge because of frequent military personnel
rotations. However, since the end of the cold war, the civilian workforce
has undergone substantial change, due primarily to downsizing, base
realignments and closures, competitive sourcing initiatives, and changing
missions. For example, between fiscal years 1989 and 2002, DOD reduced its
civilian workforce by about 38 percent, with an additional reduction of
about 55,000 personnel proposed through fiscal year 2007. Some DOD

officials have expressed concern about a possible shortfall of critical
skills because downsizing has resulted in a significant imbalance in the
shape, skills, and experience of its civilian workforce and more than 50
percent of

the civilian workforce becoming eligible to retire in the next 5 years. As
a result, the orderly transfer of DOD*s institutional knowledge is at
risk.

These factors, coupled with the Secretary of Defense*s significant
transformation initiatives, make it imperative for DOD to strategically
manage its civilian workforce within a total force perspective, which
includes civilian personnel as well as active duty and reserve military
personnel and contractor personnel. This strategic management approach
will enable DOD to accomplish its mission by putting the right people, in
the right place, at the right time and at a reasonable cost.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 475 DOD Personnel In April 2002, DOD published a strategic
plan for civilian personnel. 1 In response to your request, we reviewed
strategic planning efforts for

civilian personnel at DOD and selected defense components, including the
four military services and two defense agencies (the Defense Contract
Management Agency and the Defense Finance and Accounting Service). 2
Specifically, we determined (1) the extent to which top- level leadership
is

involved in strategic planning for civilian personnel and (2) whether
strategic plans for civilian personnel are aligned with the overall
mission, results oriented, and based on data about the future civilian
workforce. In

addition, we determined whether the strategic plans for civilian personnel
are integrated with plans for military personnel or sourcing initiatives.
3 (See app. I for a description of our scope and methodology.)

Until recently, top- level leadership 4 at the department and the
component levels has not been extensively involved in strategic planning
for civilian personnel; however, civilian personnel issues appear to be a
higher priority for top- level leaders today than in the past. Although
DOD began downsizing its civilian workforce more than a decade ago, top-
level leadership has not, until recently, developed and directed reforms
to improve planning for civilian personnel. With the exception of the Army
and the Air Force, neither the department nor the components in our review
had developed strategic plans to address challenges affecting the

1 Civilian Human Resources Strategic Plan 2002- 2008. At this time, DOD
also published two strategic plans for military personnel (one addressing
military personnel priorities and one addressing quality of life issues
for servicemembers and their families). In a December 2002 report
(Military Personnel: Oversight Process Needed to Help Maintain Momentum of
DOD*s Strategic Human Capital Planning, GAO- 03- 237), we addressed
aspects of the two plans concerning benefits for active duty military
personnel, noting that the plans were

incomplete and that DOD needed a process to oversee the plans*
implementation. 2 Throughout this report, the term *component* refers to
all services and agencies in DOD. The term *service* refers to the Air
Force, the Army, the Marine Corps, and the Navy. The term *agency* refers
to the Defense Contract Management Agency and the Defense

Finance and Accounting Service. 3 Sourcing initiatives, which are
undertaken to achieve greater operating efficiencies, include such efforts
as public- private competitions under the Office of Management and Budget
Circular A- 76 for commercial activities and functions; direct conversions
(converting positions from one sector to another without public- private
competition); public- private partnerships; and privatization,
divestiture, and reengineering.

4 Top- level leaders include the Secretary of Defense, under or deputy
secretaries, service secretaries, chiefs of staff of the services, and
other DOD senior executive service personnel. Results in Brief

Page 3 GAO- 03- 475 DOD Personnel civilian workforce until 2001or 2002,
which is indicative of civilian personnel issues being an emerging
priority. In addition, top- level leaders in the Air Force, the Marine
Corps, the Defense Contract Management

Agency, and the Defense Finance and Accounting Service have been or are
working in partnership with their civilian human capital professionals to
develop and implement civilian strategic plans; such partnership is
increasing in the Army and not as evident in the Navy. Moreover, DOD*s
issuance of its departmentwide civilian human capital plan 5 begins to lay
a foundation for strategically addressing civilian human capital issues;
however, DOD has not provided guidance on aligning the component- level
plans with the department- level plan to obtain a coordinated focus to
carry out the Secretary of Defense*s transformation initiatives in an
effective manner. High- level leadership attention is critical to
developing and directing reforms because, without the overarching
perspective of such leaders, reforms may not be sufficiently focused on
mission accomplishment, and without their support, reforms may not receive
the resources needed for successful implementation. The human capital
strategic plans we reviewed for the most part were not

fully aligned with the overall mission of the department or respective
components, results oriented, or based on data about the future civilian
workforce. For example, the goals and objectives contained in strategic

plans for civilian personnel were not explicitly aligned with the
overarching missions of the organizations. Consequently, it is difficult
to determine whether DOD*s and the components* strategic goals are
properly focused on mission achievement. In addition, none of the plans
contained results- oriented performance measures that could provide
meaningful data critical to measuring the results of their civilian human
capital initiatives (i. e., programs, policies, and processes). Thus, DOD
and the components cannot gauge the extent to which their human capital
initiatives contribute to achieving their organizations* mission. Also,
for

the most part, the civilian human capital plans in our review did not
contain detailed information on the skills and competencies needed to
successfully accomplish future missions. Without information about what is
needed in the future workforce, it is unclear if DOD and its components
are designing and funding initiatives that are efficient and effective in
accomplishing the mission, and ultimately contributing to force readiness.

5 DOD and its components use the term human resources whereas we use the
term human capital.

Page 4 GAO- 03- 475 DOD Personnel Lastly, the civilian strategic plans we
reviewed did not address how the civilian workforce will be integrated
with their military counterparts or

with sourcing initiatives. At the department level, the strategic plan for
civilian personnel was prepared separately from corresponding plans for
military personnel and not integrated to form a seamless and comprehensive
strategy and did not address how DOD plans to link its human capital
initiatives with its sourcing plans, such as efforts to outsource non-
core responsibilities. For the most part, at the component level, plans
set goals to integrate planning for the total workforce, to include
civilian, military, and contractor personnel. The Air Force and the Army,
in particular, have begun to integrate their strategic planning efforts
for civilian and military personnel, taking contractor responsibilities
into consideration. Without integrated planning, goals for shaping and
deploying civilian, military, and contractor personnel may not be
consistent with and support each other. Consequently, DOD and its
components may not have the workforce with the skills and competencies
needed to accomplish tasks critical to readiness and mission success.

We are making recommendations to the Secretary of Defense to strengthen
civilian human capital planning, including integration with military
personnel and sourcing initiatives. We received comments from the
Department of Defense too late to include them in the final report. These
comments and our evaluation of them, however, were incorporated into a
subsequent report (DOD Personnel: DOD Comments on GAO*s Report on DOD*s
Civilian Human Capital Strategic Planning, GAO- 03- 690R).

DOD*s civilian workforce has undergone a sizeable reduction but remains
critical to DOD*s mission success. Strategic human capital management
provides a framework for maximizing the value added by the civilian
workforce through aligning its civilian human capital initiatives to
support DOD*s overarching mission. Background

Page 5 GAO- 03- 475 DOD Personnel Since the end of the cold war, DOD has
undergone sizable reductions in its civilian workforce. Between fiscal
years 1989 and 2002, DOD*s civilian

workforce shrank from 1,075,437 to 670,166* about a 38 percent reduction.
6 DOD accomplished this downsizing without proactively shaping the
civilian workforce to have the skills and competencies needed to
accomplish future DOD missions. As a result, today*s workforce is older
and more experienced, but 58 percent will be eligible for early or regular
retirement in the next 3 years. Moreover, the President*s fiscal year 2003
budget request projects that DOD*s civilian workforce will be further

reduced by about 55,000 through fiscal year 2007. As shown in figure 1, at
the end of fiscal year 2002, the military departments employed 85 percent
of DOD*s civilians; 15 percent were employed by the other defense
organizations.

6 These numbers do not include indirect hire employees, for example,
persons rendering service to the federal government under agreements or
contracts with a foreign government. Current Size, Distribution, and
Changing Roles of

DOD*s Civilian Workforce

Page 6 GAO- 03- 475 DOD Personnel Figure 1: Civilian Employment by DOD
Component as of September 30, 2002 (670,166 Direct Hires)

Note: GAO*s analysis of DOD data. a Other defense organizations include
defense agencies, DOD field activities, the Joint Chiefs of Staff, Office
of the Inspector General, U. S. Court of Appeals for the Armed Forces, and
the Office of the

Secretary of Defense. b Department of the Navy includes Navy and Marine
Corps personnel.

Furthermore, the 2000 Defense Science Board Task Force report 7 observed
that the rapid downsizing during the 1990s led to major changes in the
roles of and balance between DOD*s civilian and military personnel and
contractor personnel. The roles of the civilians and private- sector
workforce are expanding, including participation in combat functions* as a
virtual presence on the battlefield* and in support duties on both the
domestic and international scenes. These changing roles call for greater
attention to shaping an effective civilian workforce to meet future
demands within a total force perspective. This perspective includes a
clear understanding of the roles and characteristics of DOD*s civilian and
military personnel and the most appropriate source of capabilities*
military, civilian, or contractor.

7 The Defense Science Board Task Force on Human Resources Strategy,
February 2000. The Defense Science Board is a federal advisory committee
established to provide independent advice to the Secretary of Defense.

Page 7 GAO- 03- 475 DOD Personnel The Under Secretary of Defense for
Personnel and Readiness is the principal staff assistant and advisor to
the Secretary and Deputy Secretary

of Defense for total force management as it relates to readiness,
personnel requirements and management, and other matters. The Under
Secretary*s office develops policies, plans, and programs for recruitment,
training,

equal opportunity, compensation, recognition, discipline, and separation
of all DOD personnel, including active, reserve, and retired military and
civilian personnel. This office also analyzes the total force structure as
it relates to quantitative and qualitative military and civilian personnel
requirements. Within this office is the Office of the Deputy Under
Secretary of Defense for Civilian Personnel Policy, which formulates
plans, policies, and programs to manage the DOD civilian workforce. Policy
leadership and human resource programs and systems are provided through
the Civilian Personnel Management Service.

Strategic human capital management involves long- term planning that is
fact based, focused on program results and mission accomplishment, and
incorporates merit principles. Studies by several organizations, including
GAO, have shown that highly successful performance organizations in

both the public and private sectors employ effective strategic management
approaches as a means to prepare their workforce to meet present and
future mission requirements as well as achieve organizational success. In
our 2001 High- Risk Series and Performance and Accountability Series and
again in 2003, we designated strategic human capital as a high- risk area
and stated that serious human capital shortfalls are threatening the
ability of many federal agencies to economically, efficiently, and
effectively perform their missions. 8 We noted that federal agencies,
including DOD and its components, needed to continue to improve the
development of integrated human capital strategies that support the
organization*s strategic and programmatic goals.

In March 2002, we issued an exposure draft of our model of strategic human
capital management to help federal agency leaders effectively lead 8 U. S.
General Accounting Office, High- Risk Series: An Update, GAO- 01- 263
(Washington, D. C.: Jan. 2001); Performance and Accountability Series*
Major Management Challenges and Program Risks: A Governmentwide
Perspective, GAO- 01- 241 (Washington, D. C.:

Jan. 2001); and Major Management Challenges and Program Risks: A
Governmentwide Perspective, GAO- 03- 95 (Washington, D. C.: Jan. 2003).
Strategic Human Capital

Management

Page 8 GAO- 03- 475 DOD Personnel and manage their people. 9 The model is
designed to help agency leaders effectively use their people and determine
how well they integrate human capital considerations into daily decision
making and planning for the

program results they seek to achieve. Similarly, the Office of Management
and Budget (OMB) and the Office of Personnel Management (OPM) have
developed tools that are being used to assess human capital management
efforts. In October 2001, OMB developed standards for success for
strategic human capital management* one of five governmentwide reform
initiatives in the President*s Management Agenda. In December 2001, OPM
released a human capital scorecard to assist agencies in responding to the

OMB standards for success; later, in October 2002, OMB and OPM developed*
in collaboration with GAO* revised standards for success. To assist
agencies in responding to the revised standards, OPM released the Human
Capital Assessment and Accountability Framework. In April 2002, the final
report of the Commercial Activities Panel, 10 mandated by Congress and
chaired by the Comptroller General, sought to elevate attention to human
capital considerations in making sourcing decisions. Federal organizations
are increasingly concerned with sourcing issues because they are being
held accountable for addressing another President*s Management Agenda
initiative that calls for determining their core competencies and deciding
how to build internal capacity or contract out for services.

Until recently, top- level leadership at the department and component
levels has not been extensively involved in strategic planning for
civilian personnel; however, it is of higher priority to top- level
leadership today than it has been in the past. With the exception of the
Air Force, leadership at the component level has not been proactive, but
is becoming more involved in responding to the need for strategic
planning, providing guidance, or supporting and working in partnership
with civilian human capital professionals.

We have previously emphasized that high- performing organizations need
senior leaders who are drivers of continuous improvement and also
stimulate and support efforts to integrate human capital approaches with

9 U. S. General Accounting Office, Exposure Draft: A Model of Strategic
Human Capital Management, GAO- 02- 373SP (Washington, D. C.: Mar. 15,
2002). 10 Commercial Activities Panel, Improving the Sourcing Decisions of
the Government: Final Report (Washington, D. C.: Apr. 2002). Leadership

Involvement in Strategic Planning for Civilian Personnel Not Extensive in
the Past, but Is Increasing

Page 9 GAO- 03- 475 DOD Personnel organizational goals. There is no
substitute for the committed involvement of top leadership. 11 Strategic
planning for the Department of Defense civilian workforce is

becoming a higher priority among DOD*s senior leadership, as evidenced by
direction given in 2001 in the Quadrennial Defense Review (QDR) and the
Defense Planning Guidance and by the Under Secretary of Defense for
Personnel and Readiness to develop a civilian and military human resources
strategic plan. We previously reported that a demonstrated commitment to
change by agency leaders is perhaps the most important element of
successful management reform and that leaders demonstrate this commitment
by developing and directing reform. 12 OMB and OPM have similarly
advocated the need for top leadership to fully commit to strategic human
capital planning. The Defense Science Board reported in 2000 that senior
DOD civilian and military leaders have devoted *far less*

attention to civilian personnel challenges than the challenges of
maintaining an effective military force. 13 In 1992, during the initial
stages of downsizing, DOD officials voiced

concerns about what they perceived to be a lack of attention to
identifying and maintaining a balanced basic level of skills needed to
maintain in- house capabilities as part of the defense industrial base. In
our 2000 testimony, Strategic Approach Should Guide DOD Civilian Workforce
Management, 14 we testified that DOD*s approach to civilian force
reductions was less oriented toward shaping the makeup of the workforce
than was the approach it used to manage its military downsizing. In its
approach to civilian workforce downsizing, the department focused on
mitigating adverse effects (such as nonvoluntary reductions- in- force)
through retirements, attrition, hiring freezes, and base closures. (See
app. II for a time line of key events related to DOD*s civilian workforce
downsizing.)

11 U. S. General Accounting Office, High- Risk Series: Strategic Human
Capital Management, GAO- 03- 120 (Washington, D. C.: Jan. 2003). 12 GAO-
02- 373SP.

13 The Defense Science Board Task Force on Human Resources Strategy. The
report also stated that DOD must give greater priority to the management
of its civilian workforce in order to create the proper civilian force
structure for the future. 14 GAO/ T- GGD/ NSIAD- 00- 120 (Washington, D.
C.: Mar. 9, 2000). Department- level

Leadership Involvement in Strategic Planning for Civilian Personnel Has
Increased in Recent Years

Page 10 GAO- 03- 475 DOD Personnel DOD initiated a more strategic approach
when it published its first strategic plan for civilian personnel
(Civilian Human Resources Strategic

Plan, 2002- 2008) in April 2002. In developing the departmentwide plan,
the Office of the Under Secretary of Defense for Personnel and Readiness
made efforts to work in conjunction with defense components* civilian
human capital communities by inviting their leaders to contribute to
working groups and special meetings and reviewing the services* civilian
human capital strategic plans. However, DOD has yet to provide guidance on
how to integrate component- level civilian human capital strategic plans
with its departmentwide civilian strategic plan. DOD officials said that
full integration would be difficult because of the wide array of human
capital

services and mission support provided at the component level. However, one
of the lessons learned in our previous work on strategic planning in the
defense acquisition workforce was the need for leadership to provide
guidance for planning efforts. 15 Without guidance, defense components may
not be able to effectively function together in support of the
departmentwide plan. For example, DOD*s goal to provide management systems
and departmentwide force planning tools may not be fully or efficiently
achieved without a coordinated effort among all defense components. The
component- level plans we reviewed included goals, objectives, or
initiatives to improve analysis or forecasting of workforce requirements,
but they did not indicate coordination with the departmentwide effort or
with one another.

Civilian human capital planning has emerged as an issue in another DOD-
related forum for top leaders. In November 2002, the Human Resources
Subcommittee of the Defense Business Practice Implementation Board
released its report to DOD*s Senior Executive Council recommending, among
other things, the establishment of a *Human Capital Transformation Team*
to help implement agreed upon changes to transform human capital
management in DOD*s civilian workforce. 16 15 U. S. General Accounting
Office, Acquisition Workforce: Status of Agency Efforts to Address Future
Needs, GAO- 03- 55 (Washington, D. C.: Dec. 18, 2002).

16 Defense Business Practice Implementation Board, Report to the Senior
Executive Council, Department of Defense: Human Resources Task Group
Report FY02- 1,

November 15, 2002.

Page 11 GAO- 03- 475 DOD Personnel Leadership participation in strategic
planning varies among the defense components we reviewed. High- level
leaders in the Air Force, the Marine

Corps, the Defense Contract Management Agency (DCMA), and the Defense
Finance and Accounting Service (DFAS) have provided the impetus for
strategic planning and are partnering with civilian human capital
professionals to develop and implement their strategic plans. Such
partnership is increasing in the Army and not as evident in the Department
of the Navy. Since the mid- 1990s, Air Force leadership has been
relatively active in

strategic planning for civilian human capital. In 1999, high- level Air
Force leadership recognized the need for strategic human capital planning
to deal with the significant downsizing that had occurred over the last
several years. For the civilian workforce, this recognition culminated in
the publication in 2000 of the Civilian Personnel Management Improvement
Strategy White Paper; the Air Force produced an update of this document in
2002. 17 Air Force leadership also has recognized that it must further
enhance its efforts with greater attention to integrated, total force
planning. Air Force leadership has demonstrated this commitment by
incorporating civilian human capital leaders into broader Air Force
strategic planning and resource allocation processes. Air Force leaders
created a human resources board (the Air Force Personnel Board of
Directors) composed of 24 senior civilian and military leaders. The board
convenes semi- annually to address military and civilian human capital
issues in an integrated, total force context. It is fostering integrated
planning with the intent of developing an overarching strategy* holistic,
total force strategy* designed to meet Air Force workforce demands for the
present and the future and intended to encompass the needs of active,
reserve, civilian, and contractor personnel by 2004. Furthermore, the Air
Force began to allocate resources for civilian human capital initiatives
in fiscal year 2002 due to the strong support from Air Force leaders.

In recent years, strategic human capital planning has generally received
increasing top- level leadership support in the Marine Corps, DCMA, DFAS,
and the Army. A Marine Corps official told us that the Commandant of the
Marine Corps and other top Marine Corps leaders became involved with
civilian human capital strategic planning in 2001. The Commandant, in
October 2002, endorsed the civilian human capital strategic plan, which

17 Air Force officials told us that this document and the Vision
Implementation Plan together represent the Air Force*s civilian human
capital strategic plan. Component- level Leadership Involvement in

Strategic Planning for Civilian Personnel Varies

Air Force Leadership Increasingly Proactive on Strategic Planning for
Civilian Personnel

Strategic Planning for Civilian Personnel Is an Emerging Priority in the
Marine Corps, DCMA, DFAS, and the Army

Page 12 GAO- 03- 475 DOD Personnel outlines the Corps* vision, intent,
core values, expected outcomes, and strategic goals for civilian human
capital. Officials are currently

developing an implementation plan, which is expected to contain specific
objectives, milestones, points of accountability, resource requirements,
and performance measures. DCMA began strategic human capital planning in
2000 in response to guidance from the Office of the Under Secretary of

Defense, Acquisition, Technology, and Logistics, and issued its first
human capital strategic plan in 2002. DCMA officials told us that their
human resources director is a member of DCMA*s broader executive
management board and that human capital* civilian and military* is a
standing agenda issue at the board*s monthly meetings. DFAS officials told
us their director includes human capital professionals in DFAS*s
management decisionmaking

processes. Further, human capital is a key element in the DFAS agencywide
strategic plan. DFAS initiated its human capital strategic planning
efforts in 2002, but it has not yet published its plan.

Within the Army, top- level leadership involvement in strategic planning
efforts for civilian human capital has been limited but increasing. The
bulk of such efforts has instead originated in the Army*s civilian human
capital community. The Army*s civilian human capital community recognized
the need for strategic civilian human capital planning in the mid- 1990s
and developed strategic plans. The Army*s civilian human capital community
also initiated, in 2000, an assessment of the civilian workforce situation
and developed new concepts for human resource systems and workforce
planning. 18 Since 2002, Army top- level leadership has become more
explicitly involved in their civilian human capital community*s
initiatives. For example, in January 2003, the Vice Chief of Staff of the
Army formally endorsed the Army*s human capital strategic plan. Also, in
January 2003, Army top leaders endorsed the recommendations of a study to
improve the development and training of the Army*s civilian workforce,
which followed three companion studies with similar objectives for
military personnel. Additionally, as of March 2003, Army top leaders
accepted the rationale and validated the requirement for another
initiative to centrally manage senior civilian leaders by basing selection
and retention decisions

on long- term Army needs rather than on the short- term needs of local
commanders. The Army plans to establish a management office to begin this
effort in fiscal year 2004. Army officials told us that all of these
efforts

18 The Army refers to this effort as the Civilian Personnel Management
System XXI (CPMS XXI). See The Wexford Group International, Army CPMS XXI
Transforming Civilian Workforce Management White Paper (Vienna, Va.,
revised May 11, 2001).

Page 13 GAO- 03- 475 DOD Personnel have not yet been fully funded. Without
the commitment and support of Army top leaders, the Army*s civilian human
capital community has

limited authority to carry out reforms on its own and limited ability to
ensure that its reforms are appropriately focused on mission
accomplishment.

In addition, Army civilian human capital officials* contributions to
broader strategic planning efforts have been increasing. Specifically,
officials told us that while the Army*s civilian human capital community
has a voice in the Army*s resource allocation deliberations, getting
civilian personnel

issues included in top- level Army planning and budgeting documents is
sometimes challenging. Within the past year, however, civilian human
resource issues have been included in the Army- wide strategic readiness
system (a balanced scorecard) and an Army well- being initiative
(balancing the demands and expectations of the Army and its people).

Within the Department of the Navy, top- level leadership involvement in
strategic planning efforts for civilian human capital has been limited.
Department of the Navy leadership invested in studies related to strategic
planning for its civilian workforce, but it has been slow to develop a
strategic plan for its civilian human capital. Two documents published in
August 2000 and May 2001 reported the results of work sponsored by a

personnel task force established by the Secretary of the Navy to examine
facets of the Department of the Navy*s human resources management. One, a
study conducted and published by the National Academy of Public
Administration*s Center for Human Resources Management, focused on
Department of the Navy civilian personnel issues; the other reported on
the rest of the findings of the task force. 19 Department of the Navy
human capital officials told us that they have not implemented the
recommendations of those studies because (1) many require new legislation
and (2) the studies were future oriented, looking as far ahead as 2020,
and it will take time to implement the recommendations. These officials
said that although the Department of the Navy had not yet developed a
strategic plan for its civilian human capital, the Navy major commands
(referred to as claimants) did their own human capital strategic planning
as necessary, adding that they believed these efforts were

19 The 2000 National Academy of Public Administration, Civilian Workforce
2020: Strategies for Modernizing Human Resources Management in the
Department of the Navy (Washington, D. C.: Aug. 18, 2000), and the 2001
Department of the Navy: A Strategic

Human Resource Management System for the 21st Century, Vols. I and II
(Washington, D. C.: May 2001). Navy Leadership Involvement

in Strategic Planning for Civilian Personnel Is Limited

Page 14 GAO- 03- 475 DOD Personnel sufficient. More recently, however,
these officials told us that they are developing (on their own initiative)
a strategic plan for the Department of

the Navy*s civilian workforce. In addition, the Navy has very recently
undertaken other strategic planning efforts. In July 2002, the Navy
established a new organization to develop a consolidated approach to
civilian workforce management that centers on 21 core competency
functional areas. Navy officials view this recent initiative, which
involves senior military and civilian leaders, as the first step in
developing a total force concept (civilian, active and reserve military,
and contract employees). In March 2003, the Department of the Navy
established (1) a new position that will provide a liaison for the Navy
and Marine Corps strategic planning processes and (2) a Force Management
Oversight Counsel, co- chaired by top Navy and Marine Corps officials,
which will develop an overarching framework for Navy and Marine Corps
strategic planning.

With the looming uncertainty of continued downsizing, anticipated
retirements, and increased competitive sourcing of non- core functions,
strategic planning for the civilian workforce will grow in importance. If
high- level leaders do not provide the committed and inspired attention to
address civilian human capital issues (that is, establish it as an
organizational priority and empower and partner with their human capital
professionals in developing strategic plans for civilian human capital),
then future decisions about the civilian workforce may not have a sound
basis.

Page 15 GAO- 03- 475 DOD Personnel For the most part, the strategic plans
we reviewed lacked such key elements as mission alignment, results-
oriented performance measures,

and data- driven workforce planning. 20 Mission alignment is demonstrated
by clearly showing how the civilian workforce contributes to accomplishing
an organization*s overarching mission. It is also evident in descriptions
of how the achievement of human capital initiatives will improve an
organization*s performance in meeting its overarching mission, goals, and
objectives. Results- oriented performance measures enable an organization
to determine the effect of human capital programs and policies on mission
accomplishment. Finally, data on the needed knowledge, skills,
competencies, size, and deployment of the workforce to pursue an
organization*s missions allow it to put the right people, in the right
place, at the right time. The interrelationships of these three key
elements are shown in figure 2. Without adequate alignment, performance

measures, and workforce data, DOD and its components cannot be certain
their human capital efforts are properly focused on mission
accomplishment.

20 This review primarily focused on aspects of leadership and strategic
human capital planning* two of four cornerstones in our model for
strategically managing human capital (GAO- 02- 373SP). We did not focus on
aspects of the other two important cornerstones* (1) acquire, develop,
retain, and deploy the best talent and elicit the best performance for
mission accomplishment and (2) results- oriented organizational cultures
that promote high

performance and accountability (such as individual performance management
that is fully integrated with the organization*s mission and is used as
the basis for managing the organization) and empower and include employees
in setting and accomplishing programmatic goals. Key Elements of

Strategic Plans for DOD Civilian Personnel Not in Place

Page 16 GAO- 03- 475 DOD Personnel Figure 2: Relationships among Several
Key Elements of a Human Capital Strategic Plan

Previously, we emphasized that high- performing organizations align their
human capital initiatives with mission and goal accomplishment.
Organizations* strategic human capital planning must also be results
oriented and data driven, including, for example, information on the
appropriate number and location of personnel needed and their key
competencies and skills. High- performing organizations also stay alert to
emerging mission demands and human capital challenges and reevaluate their
human capital initiatives through the use of valid, reliable, and current
data. 21 The human capital goals and objectives contained in strategic
plans for

civilian personnel were not, for the most part, explicitly aligned with
the overarching missions of the organizations we reviewed. Moreover, none
of the plans fully reflected a results- oriented approach to assessing
progress

toward mission achievement. Human capital strategic plans should be
aligned with (i. e., consistent with and supportive of) an organization*s
overarching mission. Alignment between *published and approved human
capital planning documents* and an organization*s overarching mission is
advised in OPM*s Human Capital Assessment and Accountability

21 GAO- 03- 120. Strategic Plans for Civilian

Personnel Are Not Mission Aligned and Results Oriented

Page 17 GAO- 03- 475 DOD Personnel Framework. With regard to assessing
progress, programs can be more effectively measured if their goals and
objectives are outcome- oriented

(i. e., focused on results or impact) rather than output- oriented (i. e.,
focused on activities and processes), in keeping with the principles of
the Government Performance and Results Act (GPRA). Congress anticipated
that GPRA would be institutionalized and practiced throughout the federal
government; federal agencies are expected to develop performance plans
that are consistent with the act*s approach.

Based on the above criteria, we analyzed the human capital strategic plans
that five of the seven organizations in our review have published 22 for
the following:

 Human capital goals and objectives that explicitly describe how the
civilian workforce helps achieve the overarching mission, goals, and
objectives.  Results- oriented measures that track the success of the
human capital initiatives in contributing to mission achievement.

All of the civilian human capital plans we reviewed referred to their
respective organizations* mission; however, the human capital goals,
objectives, and initiatives did not explicitly link or describe how the
civilian workforce efforts would contribute to the organizations*
overarching mission achievement, and more importantly how the extent of
contribution to mission achievement would be measured. Aspects of

DCMA*s plan, however, demonstrate alignment by including a general
explanation of the overarching mission inclusive of human capital goals,
objectives, and initiatives that further define how its civilian workforce
contributes to achieving the overarching mission. For example:

 DCMA*s overarching mission is to *Provide customer- focused acquisition
support and contract management services to ensure warfighter readiness,
24/ 7, worldwide.* DCMA*s human capital plan demonstrates the alignment of
the agency*s workforce by stating that the agency will accomplish its
overarching mission by *Partner[ ing], or strategically team[ ing] with
customers to develop better solutions, and ensur[ ing] warfighter success
on all missions* and *Providing expertise

22 DOD, Air Force, Army, Marine Corps, and DCMA have published civilian
human capital strategic plans. DFAS and Department of the Navy are in the
process of developing such plans.

Page 18 GAO- 03- 475 DOD Personnel and knowledge throughout the
acquisition life cycle, from cradle to grave; from factory to foxhole and
beyond*. 23  DCMA*s plan contains one human capital goal, among other
agencywide

goals, directed at aligning workforce efforts with mission accomplishment.
The goal is to enable DCMA people to excel by building and maintaining a
work environment that (1) attracts, (2) develops, and (3) sustains a
quality workforce.  Several objectives and initiatives in DCMA*s plan
demonstrate a link to

this human capital goal and to the overarching mission. Examples of these
initiatives include determining ways to (1) making DCMA employment
attractive, (2) establishing a professional development

framework that is integrated and competency- based as well as developing
an advanced leadership program, and (3) sustaining a quality workforce by
ensuring recognition and awards to high- performing personnel. This
alignment of DCMA*s workforce, initiatives, and goals to the overarching
mission helps DCMA ensure that its civilian workforce has the necessary
expertise and knowledge to provide customer- focused acquisition support
and contract management services.

The other plans in our review generally did not demonstrate this degree of
alignment. For example, in the Army civilian human capital strategic plan,
four of the six human resource goals are more narrowly directed toward the
role played by the human resource community and only indirectly tie the
civilian workforce to the achievement of the Army*s overall mission.
However, two goals** systematic planning that forecasts and achieves the
civilian work force necessary to support the Army*s mission* and

*diversity through opportunity* 24 *link more explicitly to the Army*s
overarching mission. Also, DOD*s departmentwide civilian human capital
plan refers to the overarching mission by including broad references to
DOD*s overarching strategic plan. However, the plan is silent about what
role DOD*s civilian workforce is expected to play in achievement of the
mission. The plan recognizes the need for aligning the civilian workforce
with the overarching mission by proposing to develop a human resource
management accountability system to guarantee the effective use of human
resources in achieving DOD*s overarching mission.

23 DCMA Human Capital Strategic Plan.

24 The Army*s goal for diversity through opportunity states: *A civilian
force that is as richly diverse as America itself, and a work environment
that promotes individual respect and encourages collaboration through
sharing of different views and perspectives to improve effectiveness and
quality.*

Page 19 GAO- 03- 475 DOD Personnel Moreover, none of the plans in our
review contained results- oriented goals and measures. For example, DOD*s
strategic goal to *promote focused,

well- funded recruiting to hire the best talent available* is not
expressed in measurable terms (i. e., it does not define *focused, well-
funded, and best talent available*), and the measures for this goal are
process oriented (i. e., developing or publishing a policy or strategy;
reviewing programs) rather than results oriented. DOD*s plan, however,
indicates that mission achievement measures are being developed. At the
component level, the Army, in particular, has developed metrics related to
its personnel transaction processes; although these measures are
important, they are not focused on measuring outcomes related to mission
accomplishment. Army officials recognize the importance of relating
outcomes to mission accomplishment and are presently working to develop
such measures. Without results- oriented measures, it is difficult for an
organization to assess the effectiveness of its human capital initiatives
in supporting its overarching mission, goals, and objectives.

Officials at DOD and the defense components in our review told us they
recognize the importance of alignment and results- oriented measures in
strategic human capital planning. In fact, the Air Force has recently
undertaken an initiative to develop a planning framework aligning
strategy, vision, execution, measurement, and process transformation. Many
human capital officials we spoke with noted they have only recently begun
to transition from their past role of functional experts* focused
primarily on personnel transactions* to partners with top leadership in
strategically planning for their civilian workforce. In their new role,
they expect to make improvements in strategically managing civilian
personnel, including identifying results- oriented performance measures in
future iterations of their plans. Until such elements are in place, it is
difficult to determine if the human capital programs DOD and its
components are funding are consistent with overarching missions or if they
are effectively leading to mission accomplishment.

Page 20 GAO- 03- 475 DOD Personnel The civilian human capital strategic
plans for DOD and its components include goals focused on improving their
human capital initiatives, but

only two components include workforce data that supported the need for
those particular initiatives. GAO and others 25 have reported that it is
important to analyze future workforce needs to (1) assist organizations in
tailoring initiatives for recruiting, developing, and retaining personnel
to meet its future needs and (2) provide the rationale and justification
for obtaining resources and, if necessary, additional authority to carry
out those initiatives. We also stated that to build the right workforce to
achieve strategic goals, it is essential that organizations determine the
critical skills and competencies needed to successfully implement the
programs and processes associated with those goals. To do so, three types
of data are needed: (1) what is available* both the current workforce
characteristics 26 and future availability, (2) what is needed* the
critical workforce characteristics needed in the future, and (3) what is
the difference between what will be available and what will be needed* the
gap. Without this information, DOD cannot structure its future workforce
to support the Secretary of Defense*s initiatives or mitigate the risk of
shortfalls in critical personnel when pending civilian retirements occur.

Of the five organizations in our review that had civilian human capital
strategic plans, 27 two* the Air Force and DCMA* included some information
about the future workforce and indicated the gaps to be addressed by its
civilian human capital initiatives. The Air Force*s plan includes a chart
that illustrates, in terms of years of federal service, the current
workforce compared to a 1989 baseline (prior to the downsizing of its
civilian workforce) and a target workforce for fiscal year 2005. This
information was generally based on data that were readily available but
considered to be a less- than- adequate indicator for level of experience,
and it is not clear how the target workforce data were derived. According

25 GAO- 02- 373SP; National Academy of Public Administration, Building
Successful Organizations: A Guide to Strategic Workforce Planning
(Washington, D. C.: May 2000); International Personnel Management
Association, Workforce Planning Resource Guide for Public Sector Human
Resource Professionals (Summer 2002); and RAND, An Operational Process for
Workforce Planning (Forthcoming).

26 Workforce characteristics are concrete and measurable aspects of a
group of workers that are critical for organizational success and can be
influenced by policy decisions. Examples include occupation; grade level;
experience; academic degree or discipline; certification; leadership;
multifunctional skills; deployment; or military, civilian, and contractor
mix.

27 The Department of the Navy and DFAS do not yet have plans. Strategic
Plans for Civilian Personnel Generally Lack

Data on Workforce Needs

Page 21 GAO- 03- 475 DOD Personnel to the Air Force, its analysis
illustrated the shortfall in the number of civilians with less than 10
years of service when compared to the Air

Force*s long- term requirements. Using this and other analyses, the Air
Force initially developed workforce- shaping activities in four areas*
accession planning, force development, retention/ separation management,
and enabling activities, which included 27 separate initiatives.

DCMA*s plan describes the agency*s workforce planning methodology, which
focuses on identifying gaps between its current and future workforce.
DCMA*s strategic workforce planning team analyzes quantitative data on the
current workforce and employs an interview protocol to gather and analyze
information from DCMA managers and subject matter experts pertaining to
future work and workforce requirements. 28 According to DCMA, this
methodology allows it to link the desired distribution of positions,
occupational series, and skills to organizational outcomes, processes, and
customer requirements and to DOD*s transformation guidance, goals, and
initiatives. Although DCMA has not completely identified or quantified its
future workforce requirements, it identified the following: requirements
for new technical skills, especially software acquisition and integration;
upgrading general skills and maintaining the existing skill base;
correcting imbalances in geographic locations; requirements for hiring
about 990 employees per year through 2009; and obtaining additional
positions to support anticipated increasing procurements.

In contrast to the Air Force and DCMA plans, the DOD, Army, and Marine
Corps plans lack information about future workforce needs. For example,
DOD*s civilian human capital plan contains data on those civilians
eligible for retirement by grade level and by job category. However, the
plan does not address key characteristics such as skills and competencies
that will be needed in the future workforce to support changes being
undertaken by DOD. 29 Without this information and a methodology to
analyze and identify the gaps that exist between what will be available
and what will be

28 DCMA developed this qualitative approach because it does not have (1)
workforce modeling or projection tools that can be used as a basis to
establish the number of future positions and types of future competencies
required and (2) data on current workforce competencies to establish the
baseline needed to assess future competency gaps. 29 Changes include such
initiatives as DOD*s transformation to a capabilities- based organization
and competitive sourcing under OMB Circular A- 76.

Page 22 GAO- 03- 475 DOD Personnel needed, it is not clear that the human
capital initiatives in DOD*s plan will result in the desired future
workforce.

All of the plans we reviewed acknowledge strategic workforce planning
shortfalls by setting goals or initiatives to improve in this area. For
example, DOD*s plan includes a goal to obtain management systems and tools
that support total force planning and informed decision making. DOD has
begun adopting the Army*s Civilian Forecasting System and the Workforce
Analysis Support System for departmentwide use, which will enable it to
project the future workforce by occupational series and grade structure.
However, the systems (which are based on a regression analysis of
historical data) are not capable of determining the size and skill
competencies of the civilian workforce needed in the future. Also, DOD has
not yet determined specifically how this new analytic capability will be
integrated into programmatic decision- making processes. DOD officials
stated that its first step was to purchase the equipment and software,
which was accomplished in 2002. DOD is now analyzing users* needs. As of
December 2002, DOD officials were testing the systems, but they expressed
concerns that the Army systems may not serve the needs of a complex and
diverse organization such as DOD.

The civilian human capital strategic plans we reviewed did not address how
the civilian workforce would be integrated with their military
counterparts or sourcing initiatives to accomplish DOD*s mission. The 2001
QDR states that future operations will not only be joint but also depend
upon the total force* including civilian personnel as well as active duty
and reserve personnel. The QDR also emphasizes that DOD will focus its
*owned* resources in areas that contribute directly to warfighting and
that it would continue to take steps to outsource and shed its non- core

responsibilities. The 2000 Defense Science Board Task Force report states
that DOD needs to undertake deliberate and integrated force shaping of the
civilian and military forces, address human capital challenges from a
total force perspective, and base decisions to convert functions from
military to civilian or to outsource functions to contractors on an
integrated human resource plan. 30 In addition, the National Academy of
Public Administration, in its report on the Navy civilian workforce 2020,
notes that as more work is privatized and more traditionally military
tasks require support of civilian or contractor personnel, a more unified

30 The Defense Science Board Task Force on Human Resources Strategy.

Strategic Plans for Civilian Personnel Not Yet Integrated with Plans for
Military Personnel or Sourcing Initiatives

Page 23 GAO- 03- 475 DOD Personnel approach to force planning and
management will be necessary; serious shortfalls in any one of the force
elements will damage mission

accomplishment. 31 The Academy*s report also states that the trend towards
greater reliance on contractors necessitates a critical mass of civilian
personnel expertise to protect the government*s interest and ensure
effective oversight of contractors* work. Further, the 2002 Commercial
Activities Panel final report indicates that sourcing and human capital
policies should be inextricably linked together, and it calls for federal

sourcing policies to be *consistent with human capital practices designed
to attract motivate, retain, and reward a high performing workforce.* 32
DOD*s overall human capital strategy, however, consists of three separate
plans: one for civilians, one for military personnel, and one for quality
of

life issues for servicemembers and their families. DOD has not integrated
the contractor workforce into these plans. Although DOD officials maintain
that these plans are intended to complement each other, the plans are not
integrated to form a seamless and comprehensive strategy. The civilian
plan was prepared separately from the other two military plans with little
direct involvement of key stakeholders, such as representatives from
military personnel and manpower requirements communities.

Although not reflected in its departmentwide civilian human capital
strategic plan, DOD acknowledged* in its response to the President*s
Management Agenda to accomplish workforce restructuring, reorganizations,
delayering, outsourcing, and reengineered and streamlined processes* that
these efforts could only be accomplished through coordinating and
integrating civilian and military components. The departmentwide civilian
plan includes a longer- term objective to assess the need for and the
capabilities of automated information management tools to primarily
integrate civilian and military personnel and transaction data. We believe
these tools can also provide information for planning and analysis, but
they may not provide DOD with the information needed to proactively shape
the total DOD workforce in response to current changes (i. e., the
Secretary*s transformation of the department, increasing joint operations,
and competitive sourcing initiatives) because (1) contractor data are not
included and (2) the

31 Civilian Workforce 2020: Strategies for Modernizing Human Resources
Management in the Department of the Navy.

32 Improving the Sourcing Decisions of the Government: Final Report.

Page 24 GAO- 03- 475 DOD Personnel projected date for accomplishing this
objective, September 2008, may be too late to effect near- term decisions.
In addition, officials in the Office of

the Under Secretary of Defense for Personnel and Readiness recognize that
integration of the military and civilian plans is important and are
developing an umbrella document that will encompass all three components
of the human capital strategy, but it has not established a time frame for
completion.

Furthermore, DOD*s civilian human capital strategic plan does not address
the role of civilian vis- `a- vis contractor personnel or how DOD plans to
link its human capital initiatives with its sourcing plans, such as
efforts to outsource non- core responsibilities. The plan notes that
contractors are part of the unique mix of DOD resources, but none of the
goals and objectives discusses how DOD will shape its future workforce in
a total force (civilian, military, and contractor) context. 33 We believe
that effective civilian workforce planning cannot be accomplished in
isolation from

planning for military personnel or sourcing initiatives. As the Commercial
Activities Panel report notes, it is particularly important that sourcing
strategies support, not inhibit, the government organization*s efforts to
recruit and retain a high- performing in- house workforce. 34 We also
noted in our High Risk report that careful and thoughtful workforce
planning efforts are critical to making intelligent competitive sourcing
decisions. 35 At the service level, the Air Force*s strategic plans for
civilian personnel

were not initially developed in a total force context, but the current
plans acknowledge the need to integrate strategic planning for civilians
with their military counterparts, as well as taking into account
contractors. For example, the Air Force has set a goal and taken steps to
integrate planning for active, reserve, civilian, and contractor personnel
by 2004. 36 Air Force

officials stated concerns about the significant budgetary consequences
when planning does not take place in a total force context. For example,
when civilian or contractor personnel perform functions previously

33 Officials in the Office of the Under Secretary of Defense for Personnel
and Readiness described a parallel effort to define civilian and
contractor roles as part of identifying activities that are not inherently
governmental as required by the Federal Activities Inventory Reform Act
(P. L. 105- 270).

34 Improving the Sourcing Decisions of the Government: Final Report. 35
GAO- 03- 120. 36 Air Force Personnel Vision Implementation Plan 2002.

Page 25 GAO- 03- 475 DOD Personnel conducted by military personnel, the
defense component involved must obtain additional funds because payment
for civilians and contractors

cannot come from military personnel funds. 37 The Air Force estimates that
these costs could be $10 billion to $15 billion over the next 5 years.

Although a proposed time frame is not provided, the Marine Corps* civilian
plan states the need to forecast military and civilian levels and
workforce requirements based on strategic mission drivers, stratified
workload demand, and business process changes; the requirements for its
civilian marines will take into account the appropriate redistribution of
work among the military, civilian, and contractor communities. 38 The
Army*s civilian human capital plan states that it will have to acquire,
train, and retain its total force in an operational environment that will
place different demands on human capital management. The Army*s human
capital community has an objective to support the Army- wide *Third Wave*
initiative, which focuses on privatization of non- core functions to
better allocate scarce resources to core functions. 39 (The Department of
the Navy does not yet have a civilian human capital strategic plan.)

The defense agencies we reviewed, which have relatively few military
personnel compared to the military services, are taking or plan to take an
integrated approach to strategic planning for their civilian and military
workforces, but they do not indicate how they will integrate these efforts
with their sourcing initiatives. DCMA*s human capital strategic plan
includes both civilian and military personnel. For example, the plan
includes a goal to address the underassignment of military personnel, 40
because their absence further compounds the difficulties caused by the

downsizing of civilian positions and the increasing workload. DFAS is
planning to include both civilian and military personnel in the human

37 U. S. General Accounting Office, DOD Competitive Sourcing: Some
Progress, but Continuing Challenges Remain in Meeting Program Goals, GAO/
NSIAD- 00- 106 (Washington, D. C.: Aug. 8, 2000). 38 U. S. Marine Corps
Civilian Workforce Campaign Plan 2003.

39 The Department of the Army*s Fiscal Year 02- 07 Civilian Human
Resources Strategic Plan and FY03 Army Civilian Human Resources
Operational Plan.

40 In 2002, DCMA was authorized 630 military positions, but it filled 480.
This chronic problem occurs because the services lack military personnel
trained in the acquisition career fields and, therefore, do not have
enough qualified military personnel to fill the DCMA positions. Currently,
this shortage affects the Administrative Contracting and Acquisition
Manager functions.

Page 26 GAO- 03- 475 DOD Personnel capital strategic plan that it is
developing. Like DCMA, military personnel are a small but important part
of the overall DFAS workforce, but they are

projected to be less available in the future. For example, the Air Force
has announced that it is reducing its military personnel presence at DFAS
over the next several years.

Without integrated planning, goals for shaping and deploying military,
civilian, and contractor personnel may not be consistent with and support
each other. Consequently, DOD may not have the workforce it needs to
accomplish tasks critical to readiness and mission success.

DOD has made progress in establishing a foundation for strategically
addressing civilian human capital issues by developing its departmentwide
civilian human capital strategic plan. However, the alignment of human
capital goals with the overarching mission is unclear in DOD*s and the
components* strategic plans for civilian human capital, and
resultsoriented performance measures linked to mission accomplishment are
lacking. Without these key elements, DOD and its components may miss
opportunities to more effectively and efficiently increase workforce
productivity. Also, without greater commitment from and the support of top
leaders, civilian human capital professionals in DOD and the defense
components may design strategic planning efforts that are not
appropriately focused on mission accomplishment and that do not have
adequate support to carry out.

Moreover, DOD top leadership has not provided its components with guidance
on how to align component- level strategic plans with the departmentwide
plan. Without this alignment, DOD*s and its components* planning may lack
the focus and coordination needed (1) to carry out the Secretary of
Defense*s transformation initiatives in an effective manner and (2) to
mitigate risks of not having human capital ready to respond to national
security events at home and abroad.

Although DOD and component officials recognize the critical need for
ensuring that the future workforce be efficiently deployed across their
organizations and have the right skills and competencies needed to
accomplish their missions, their strategic plans lack the information
needed to identify gaps in skills and competencies. As a result, DOD and
its components may not have a sound basis for funding decisions related to
human capital initiatives and may not be able to put the right people in
the right place at the right time to achieve the mission. Conclusions

Page 27 GAO- 03- 475 DOD Personnel Furthermore, as personnel reductions
continue and DOD carries out its transformation initiatives, integrating
planning in a total force context* as

mentioned in the QDR* becomes imperative to ensure that scarce resources
are most effectively used. However, military and civilian human capital
strategic plans* both DOD*s and the components** have yet to be integrated
with each other. Furthermore, the civilian plans do not address

how human capital policies will complement, not conflict with, the
department- level or component- level sourcing plans, such as competitive
sourcing efforts.

To improve human capital strategic planning for the DOD civilian
workforce, we recommend that the Secretary of Defense direct the Under
Secretary of Defense for Personnel and Readiness, to undertake the

following:  Improve future revisions and updates to the DOD
departmentwide

strategic human capital plan by more explicitly aligning with DOD*s
overarching mission, including results- oriented performance measures, and
focusing on future workforce needs. To accomplish this, the revisions and
updates should be developed in collaboration with top DOD and component
officials and civilian and military human capital leaders.

 Direct the military services and the defense agencies to align their
strategic human capital plans with the mission, goals, objectives, and
measures included in the departmentwide strategic human capital plan and
provide guidance to these components on this alignment.

 Define the future civilian workforce, identifying the characteristics
(i. e., the skills and competencies, number, deployment, etc.) of
personnel needed in the context of the total force and determine the
workforce gaps that need to be addressed through human capital
initiatives.

 Assign a high priority to and set a target date for developing a
departmentwide human capital strategic plan that integrates both military
and civilian workforces and takes into account contractor roles and
sourcing initiatives. Recommendations for

Executive Action

Page 28 GAO- 03- 475 DOD Personnel We received comments from the
Department of Defense too late to include them in the final report. These
comments and our evaluation of them, however, were incorporated into a
subsequent report (DOD

Personnel: DOD Comments on GAO*s Report on DOD*s Civilian Human Capital
Strategic Planning, GAO- 03- 690R).

We are sending copies of this report to the appropriate congressional
committees; the Secretary of Defense; the Secretaries of the Air Force,
Army, and Navy; the Commandant of the Marine Corps; and the Directors of
DCMA and DFAS. We will also make copies available to others upon request.
In addition, the report will be available at no charge on the GAO Web site
at http:// www. gao. gov.

Please contact me at (202) 512- 5559 if you or your staff have any
questions concerning this report. Key contributors are listed in appendix
III.

Sincerely yours, Derek B. Stewart Director, Defense Capabilities and
Management Agency Comments

Appendix I: Scope and Methodology Page 29 GAO- 03- 475 DOD Personnel As
requested by the Ranking Minority Member of the House Committee on Armed
Services, Subcommittee on Readiness, we reviewed civilian human

capital strategic planning in the Department of Defense (DOD).
Specifically, the objectives of this report were to assess (1) the extent
to which top- level leadership is involved in strategic planning for
civilian

personnel and (2) whether strategic plans for civilian personnel are
aligned with the overall mission, results oriented, and based on data
about the future civilian workforce. We also determined whether the
strategic plans for civilian personnel are integrated with plans for
military personnel or sourcing initiatives. We focused primarily on
civilian human capital strategic planning undertaken since 1988, when DOD
began downsizing its civilian workforce. Our analyses were based on the
documents that each organization identified as its civilian human capital
strategic planning documents. Several documents had been published or
updated either just prior to or during the time of our review (May 2002 to
March 2003). Also, DOD and component strategic planning for civilian
personnel is a continuous process and involves ongoing efforts. We did not

review the implementation of the human capital strategic plans because
most plans were too recent for this action to be completed.

The scope of our review included examining the civilian human capital
strategic planning efforts undertaken by DOD, its four military services,
and two of its other defense organizations* the Defense Finance and
Accounting Service (DFAS) and the Defense Contract Management

Agency (DCMA). We selected the military services since they account for
about 85 percent of the civilian personnel in DOD. To understand how
civilian human capital strategic planning is being undertaken by other
defense organizations, which account for the other 15 percent of the DOD
civilian workforce, we determined the status of the human capital
strategic planning efforts of 21 other defense organizations through a
telephone survey. We judgmentally selected two defense agencies, DFAS and
DCMA, because of their large size and because they perform different
functions; therefore, they could offer different perspectives on strategic
planning for civilians. DFAS and DCMA account for about 26 percent of the
civilian personnel in other defense organizations. DFAS has about 15,274
civilian employees and more than 1,000 military personnel, performs
finance and accounting activities, and does not have a civilian human
capital strategic plan, although it does have an overall agency strategic
plan that includes human capital as a key element. DCMA has about 11,770
civilian employees and about 480 military personnel, performs acquisition
functions, and has a civilian human capital strategic plan. Appendix I:
Scope and Methodology

Appendix I: Scope and Methodology Page 30 GAO- 03- 475 DOD Personnel To
assess the extent to which top- level leadership is involved in strategic
planning for civilian personnel, we reviewed the civilian human capital
strategic plans for discussions of the methodology used in developing

them that indicated leadership involvement. Further, we compared the
civilian human capital strategic plans publication dates to key events,
such as the issuance of the President*s Management Agenda, which advocates
strategic human capital planning. We discussed top leadership

involvement in the development of human capital strategic plans with the
applicable civilian human capital planning officials. These officials
included representatives from the following offices:

 Department of Defense: Under Secretary of Defense for Personnel and
Readiness, including Deputy Under Secretary of Defense for Civilian
Personnel Policy and Director, Civilian Personnel Management Service. 
Department of Air Force: Assistant Secretary of the Air Force for

Manpower and Reserve Affairs; Assistant Deputy Chief of Staff for
Personnel Headquarters; Director of Strategic Plans and Future Systems,
and Director, Air Force Personnel Operations Agency, Deputy Chief of Staff
for Personnel; and Directorate of Personnel, Air Force Materiel Command. 
Department of the Army: Deputy Chief of Staff, G- 1.  Department of the
Navy: Deputy Assistant Secretary of the Navy for

Civilian Personnel Policy and Equal Employment Opportunity; Deputy Chief
of Naval Operations for Manpower and Personnel; and Deputy Commandant of
the Marine Corps for Manpower and Reserve Affairs.  Defense Contract
Management Agency: Executive Director, Human

Resources; and Director, Strategic Planning, Programming, and Analysis. 
Defense Finance and Accounting Service: Human Resources

Directorate and Resource Management Directorate. To assess whether
strategic plans for civilian personnel are aligned with the overall
mission, results oriented, and contained data about the future civilian
workforce, we compared each plan with the concepts articulated

in our model for strategically managing human capital and similar guidance
provided by the Office of Budget and Management and the Office of
Personnel Management (which are discussed in greater detail in the

Background section of this report). Among the numerous sources we
reviewed, we used the criteria described in our reports on Exposure Draft:
A Model of Strategic Human Capital Management; Human Capital: A

Self- Assessment Checklist for Agency Leaders; High- Risk Series: An

Appendix I: Scope and Methodology Page 31 GAO- 03- 475 DOD Personnel
Update; and Performance and Accountability Series * Major Management
Challenges and Program Risks. 41 Specifically, we looked for

(1) the alignment of human capital approaches to meet organizational
goals, (2) the presence of results- oriented performance measures, and (3)
the references to use of workforce planning data to justify human capital
initiatives (i. e., policies and programs). To ensure consistency with our
application of the criteria in other GAO engagements, we also reviewed
approximately 100 of our reports that addressed their application within
DOD and other federal agencies. Also, to better understand the existing
human capital framework and its relationship to the strategic planning
efforts, we gathered information about policies, programs, and procedures.
Finally, we validated the results of our analyses of the plans with
appropriate agency officials.

To assess whether the strategic plans for civilian personnel are
integrated with plans for military personnel or sourcing initiatives, we
analyzed the civilian human capital strategic plans for (1) references to
military personnel or a total force perspective and (2) discussions about
competitive and strategic sourcing efforts being undertaken in a total
force context. We also collaborated with other GAO staff who reviewed (1)
DOD*s strategic plans for military personnel and quality of life issues
for servicemembers and their families, 42 (2) sourcing initiatives, 43 and
(3) DOD*s acquisition workforce. 44 In addition, we discussed integration
between civilian and military personnel plans with the applicable civilian
human capital planning officials previously mentioned.

41 U. S. General Accounting Office, Exposure Draft: A Model of Strategic
Human Capital Management, GAO- 02- 373SP (Washington, D. C.: Mar. 2002);
Human Capital: A SelfAssessment Checklist for Agency Leaders, GAO/ OCG-
00- 14G (Washington, D. C.: Sept. 2000, Version 1); High- Risk Series: An
Update, GAO- 01- 263 (Washington, D. C.: Jan. 2001); and

Performance and Accountability Series* Major Management Challenges and
Program Risks: Department of Defense, GAO- 03- 98 (Washington, D. C.: Jan
2003). 42 U. S. General Accounting Office, Military Personnel Oversight
Process Needed to Help Maintain Momentum of DOD*s Strategic Human Capital
Planning, GAO- 03- 237 (Washington, D. C.: Dec. 2002).

43 Commercial Activities Panel, Improving the Sourcing Decisions of the
Government: Final Report (Washington, D. C.: Apr. 2002). 44 U. S. General
Accounting Office, Acquisition Workforce: Department of Defense*s Plans to
Address Workforce Size and Structure Challenges, GAO- 02- 630 (Washington,
D. C.: Apr. 30, 2002).

Appendix I: Scope and Methodology Page 32 GAO- 03- 475 DOD Personnel We
conducted our review from May 2002 to March 2003 in accordance with
generally accepted government auditing standards.

Appendix II: Key Events Related to Strategic Planning for DOD Civilian
Personnel Page 33 GAO- 03- 475 DOD Personnel Figure 3 provides a time line
of several key events and dates that affected DOD*s civilian workforce
between 1988 and 2002. It also shows when DOD

and its components published their human capital strategic plans.

Figure 3: Key Events Related to Strategic Planning for DOD Civilian
Personnel

Note: Base Realignment and Closure (BRAC); Government Performance and
Results Act (GPRA); National Defense Panel (NDP); Defense Science Board
(DSB); Department of Defense (DOD); President*s Management Agenda (PMA);
Office of Management and Budget (OMB); Office and Personnel Management
(OPM); Defense Contract Management Agency (DCMA); and Quadrennial Defense
Review (QDR).

Appendix II: Key Events Related to Strategic Planning for DOD Civilian
Personnel

Appendix III: GAO Contacts and Staff Acknowledgments

Page 34 GAO- 03- 475 DOD Personnel Derek B. Stewart (202) 512- 5559
Christine Fossett (202) 512- 2956

In addition to the name above, Daniel Chen, Joel Christenson, Barbara
Joyce, Janet Keller, Shvetal Khanna, Dan Omahen, Gerald Winterlin, Dale
Wineholt, and Susan Woodward made key contributions to this report.
Appendix III: GAO Contacts and Staff

Acknowledgments GAO Contacts Acknowledgments

(350198)

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