Military Personnel: General and Flag Officer Requirements Are	 
Unclear Based on DOD's 2003 Report to Congress (21-APR-04,	 
GAO-04-488).							 
                                                                 
The Fiscal Year 2003 National Defense Authorization Act directed 
the Department of Defense (DOD) to assess whether general and	 
flag officer authorizations were sufficient to meet all 	 
requirements. GAO's objectives were to determine whether DOD (1) 
fully disclosed the results of its study in its March 2003 report
to Congress and explained the rationale for any recommendations, 
(2) used an established methodology to meet the objectives of its
study, and (3) incorporated lessons learned from a GAO review of 
DOD's 1997 general and flag officer study. The 2003 act also	 
directed DOD to review legislation affecting general and flag	 
officer management. DOD included the results of its review in the
March 2003 report, making several recommendations. GAO plans a	 
separate review of these issues and recommendations.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-488 					        
    ACCNO:   A09821						        
  TITLE:     Military Personnel: General and Flag Officer Requirements
Are Unclear Based on DOD's 2003 Report to Congress		 
     DATE:   04/21/2004 
  SUBJECT:   Evaluation criteria				 
	     Evaluation methods 				 
	     Military officers					 
	     Military policies					 
	     Officer personnel					 
	     Personnel classification				 
	     Personnel management				 
	     Reporting requirements				 

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GAO-04-488

United States General Accounting Office

GAO

                       Report to Congressional Committees

April 2004

MILITARY PERSONNEL

General and Flag Officer Requirements Are Unclear Based on DOD's 2003 Report to
                                    Congress

GAO-04-488

Highlights of GAO-04-488, a report to congressional committees

The Fiscal Year 2003 National Defense Authorization Act directed the
Department of Defense (DOD) to assess whether general and flag officer
authorizations were sufficient to meet all requirements. GAO's objectives
were to determine whether DOD (1) fully disclosed the results of its study
in its March 2003 report to Congress and explained the rationale for any
recommendations, (2) used an established methodology to meet the
objectives of its study, and (3) incorporated lessons learned from a GAO
review of DOD's 1997 general and flag officer study. The 2003 act also
directed DOD to review legislation affecting general and flag officer
management. DOD included the results of its review in the March 2003
report, making several recommendations. GAO plans a separate review of
these issues and recommendations.

GAO recommends that DOD take the following actions: (1) clarify the
magnitude and impact of the gap between DOD's validated requirements for
general and flag officers and congressional authorizations, (2)
periodically update its general and flag officer requirements, (3) enhance
the precision and usefulness of the study results, and (4) incorporate the
results of an ongoing study to assess civilian conversion of general and
flag officer positions. In commenting on a draft of this report, DOD
agreed with the recommendations.

www.gao.gov/cgi-bin/getrpt?GAO-04-488.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact Derek Stewart at (202)
512-5559 or [email protected].

April 2004

MILITARY PERSONNEL

General and Flag Officer Requirements Are Unclear Based on DOD's 2003 Report to
Congress

DOD's March 2003 report to Congress did not fully disclose the results of
the general and flag officer study or explain its recommendation not to
seek additional authorizations (people) to meet validated requirements
(positions). The general and flag officer study validated requirements for
general and flag officer positions that exceeded congressional
authorizations for both the active and reserve components. However, the
validated requirements data generated by the study were not disclosed in
the March 2003 report to Congress. In its report, DOD did not address the
magnitude of the gap between validated requirements of 1,630 positions and
congressional authorizations of 1,311-a difference of 319. DOD's report
also did not address the impact of "workarounds" used to fill the gap
between requirements and authorizations, such as the practice of assigning
colonels and Navy captains to general and flag officer positions. Fully
disclosing the study results and discussing the implications of these
findings in the March 2003 report to Congress would have provided a more
complete picture of DOD's general and flag officer requirements and may
have helped to explain its recommendation not to seek additional
authorizations.

DOD used an established methodology to conduct a position-by-position
validation of general and flag officer requirements. This methodology,
known as job evaluation, has been widely used in the United States. Job
evaluation, however, has numerous subjective features, including the
selection of factors used for measurement. In addition, it is not designed
to project emerging needs, such as those that could result from
transformation efforts. Periodic updates could capture changes in
requirements. Such limitations do not invalidate DOD's methodology;
however, an explicit acknowledgment and assessment of these limitations
would have provided more context for the study results. In addition, the
study did not clearly account for dual-hatted positions (where one
individual holds more than one position simultaneously) or assess how each
service's authorizations were affected by the need to contribute general
and flag officers to fill external (joint) positions. Addressing these
issues could have enhanced the precision and usefulness of DOD's study. In
addition, we noted that while Congress directed DOD to ensure the Reserve
Forces Policy Board participated in development of the report's
recommendations, the Board played a minimal role in producing DOD's 2003
report. The Board registered strong objections to DOD's recommendation not
to seek additional authorizations now to meet validated requirements and
to the limited role it played in the process.

DOD, in conducting its 2003 general and flag officer study, incorporated
some of the lessons learned from a GAO review of DOD's 1997 general and
flag officer study. DOD recognized the need to identify general and flag
officer positions that could conceivably be converted from the military
ranks to the civilian workforce, although it deferred this assessment
until after the general and flag officer study was complete. DOD is
currently assessing civilian conversion of general and flag officer
positions.

Contents

  Letter

Results in Brief
Background
Results of General and Flag Officer Study Were Not Fully

Disclosed in DOD's March 2003 Report to Congress DOD Used an Established
Methodology, but Precision and Usefulness of Results Could Be Enhanced DOD
Incorporated Lessons Learned From GAO's Review of DOD's

1997 General and Flag Officer Study Conclusions Recommendations for
Executive Action Agency Comments and Our Evaluation Scope and Methodology

                                       1

                                      2 4

                                       6

12

21 24 25 25 26

Appendix I	Sixteen Factors Used to Validate General and Flag Officer
Requirements

Appendix II	Adjustments Made to General and Flag Officer Requirements
After LMI's Scoring Assessment

Appendix III Comments From the Department of Defense

  Tables

Table 1: Pay Grade, Title, and Insignia Worn at General and Flag Officer
Ranks 4 Table 2: Validated Requirements for General and Flag Officer
Positions in the Active Component 7 Table 3: Validated Requirements for
General and Flag Officer Positions in the Reserve Component 8 Table 4:
Congressional Authorizations for General and Flag Officers by Service 9
Table 5: Service Contributions to External (Joint) General and Flag

Officer Requirements in the Active Component

(as of December 2002) 19

Table 6: Service Contributions to External (Joint) General and Flag
Officer Requirements in the Reserve Component (as of December 2002) 19

Table 7: Pay Grade Adjustments Approved by the Senior Panel and Requested
by Service and Joint Staff Senior Leadership 32

  Figure

Figure 1: Gap Between General and Flag Officer Authorizations and
Requirements

Abbreviations

DOD Department of Defense
LMI Logistics Management Institute

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separately.

United States General Accounting Office Washington, DC 20548

April 21, 2004

The Honorable John W. Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable Duncan Hunter
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives

Congress places specific legislative limits on the military services'
general
and flag officers, including ceilings on the maximum number of general
and flag officers each service is authorized. In the Fiscal Year 2003
National Defense Authorization Act, Congress directed the Secretary of
Defense to study general and flag officer authorizations and to provide an
assessment of whether authorizations were sufficient to meet all general
and flag officer requirements. The mandate directed the Secretary of
Defense to submit the results of this study in a report to Congress. The
Department of Defense (DOD) conducted a study to validate general and
flag officer requirements and subsequently submitted a report to Congress
in March 2003. The 2003 act required GAO to evaluate DOD's study. As
agreed with your offices, our objectives were to determine whether DOD
(1) fully disclosed the results of the general and flag officer study in
its
March 2003 report to Congress and explained the rationale for any
recommendations, (2) used an established methodology to meet the
objectives of its study, and (3) incorporated lessons learned from a GAO
review of DOD's 1997 general and flag officer study. The 2003 act also
directed DOD to review legislation affecting the management of general
and flag officers. DOD included the results of its review in the March
2003
report and made several recommendations. We plan to conduct a separate
review of these management issues and recommendations; we do not
address them in this report.

To conduct our review, we reviewed the results of DOD's general and flag
officer requirements study, supporting documentation, and the March 2003

  Results in Brief

report to Congress. We also discussed the study methodology with DOD
officials in the Office of the Under Secretary of Defense for Personnel
and Readiness, the military services, the Joint Staff, and others. We
conducted our review from October 2003 to March 2004 in accordance with
generally accepted government auditing standards. More information on our
scope and methodology is provided at the end of this letter.

DOD officials worked with a contractor to support the study effort and
participated in developing and refining the study methodology, gathering
and validating the data, and reviewing and approving the study results.
The study results were also vetted through the service and Joint Staff
senior leadership before being finalized. For DOD's general and flag
officer study, "authorizations" were defined as the number of general and
flag officers allowed under the law (people) and "requirements" as billets
the DOD components claim should be filled by a general or flag officer
(positions).

DOD's March 2003 report to Congress did not fully disclose the results of
the general and flag officer study or explain its recommendation that
authorizations not be increased to meet validated requirements. The
general and flag officer study validated requirements for general and flag
officer positions that exceeded congressional authorizations for both the
active and reserve components. However, the validated requirements data
generated by the study were not disclosed in the March 2003 report to
Congress. DOD did not address the magnitude of the gap between validated
requirements of 1,630 general and flag officer positions and congressional
authorizations of 1,311 general and flag officers-a difference of 319. DOD
also did not address the impact of "workarounds" used to fill the gap
between validated requirements and congressional authorizations, such as
the practice of assigning colonels and Navy captains to general and flag
officer positions. Although DOD's March 2003 report makes several
recommendations concerning management of general and flag officers, the
report did not recommend additional authorizations until other options
could be explored for more effectively managing its senior leadership.
However, the report did not explain what these other options might be or
otherwise provide a convincing case that current congressional
authorizations were sufficient in light of the study results. Fully
disclosing the study results and discussing the implications of these
findings in the March 2003 report to Congress would have provided a more
complete picture of DOD's general and flag officer requirements and may
have helped to explain DOD's recommendation not to seek additional
authorizations.

DOD used an established methodology to conduct a position-by-position
validation of general and flag officer requirements. This methodology,
known as job evaluation, has been widely used in the United States. Job
evaluation, however, has numerous subjective features, including the
selection of factors used for measurement. In addition, it is not designed
to project emerging needs, such as those that could result from
transformation efforts. Periodic updates could capture changes in
requirements. Such limitations do not invalidate DOD's methodology;
however, an explicit acknowledgement and assessment of these limitations
would have provided more context for the study results. In addition, the
study did not clearly account for dual-hatted positions (where one
individual holds more than one position simultaneously) or assess how each
service's authorizations were affected by the need to contribute general
and flag officers to fill external (joint) positions. Addressing these
issues could have enhanced the precision and usefulness of DOD's study. In
addition, we noted that while Congress directed DOD to ensure the Reserve
Forces Policy Board participated in development of the report's
recommendations, the Board played a minimal role in producing DOD's 2003
report. The Board registered strong objections to DOD's recommendation not
to seek additional authorizations now to meet validated requirements and
to the limited role it played in the overall process.

DOD, in conducting its 2003 general and flag officer study, incorporated
some of the lessons learned from a GAO review of DOD's 1997 general and
flag officer study. A notable improvement was the use of a single
methodology and set of factors in the 2003 study to evaluate general and
flag officer positions across all the services and the joint community.
DOD also improved its tracking and documentation of adjustments made to
study results. Finally, DOD recognized the need to identify general and
flag officer positions that could conceivably be converted from the
military ranks to the civilian workforce, although it deferred this
assessment until after the general and flag officer study was complete.
DOD is currently assessing civilian conversion of general and flag officer
positions.

This report contains recommendations to DOD aimed at clarifying the
magnitude and the impact of the gap between validated requirements for
general and flag officer positions and congressional authorizations,
updating general and flag officer requirements on a periodic basis,
enhancing the precision and usefulness of the study results, and
incorporating the results of the ongoing study to assess civilian
conversion of general and flag officer positions. In its comments on a
draft of this report, DOD agreed with the report's recommendations.

Background

General and Flag Officer Congress has established four military ranks
above the rank of colonel (for

Ranks 	the Army, Air Force, and Marine Corps) and captain (for the Navy).
Table 1 displays the pay grade designation, title of rank, and insignia
worn by officers at general and flag officer ranks.

Table 1: Pay Grade, Title, and Insignia Worn at General and Flag Officer
Ranks

                                 Title of rank

          Pay grade      Army, Air Force, Marine                Navy Insignia 
                                           Corps                     
               O-10                      General             Admiral 4 stars  
                O-9           Lieutenant General        Vice Admiral 3 stars  
                O-8                Major General        Rear Admiral 2 stars  
                O-7                              Rear Admiral (lower  1 star  
                               Brigadier General               half) 

                      Sources: Title 10 U.S. Code and DOD.

                           Roles and Responsibilities

Within the Office of the Under Secretary of Defense for Personnel and
Readiness, the Officer and Enlisted Personnel Management office is
responsible for general and flag officer matters, including the
application of related legislation. Each of the services and the Joint
Staff has a general officer matters office that is responsible for
management of general and flag officers within their organization.
Management of reserve component general and flag officers falls under the
service general officer matters offices, the service reserve chiefs, and
the National Guard Bureau. Their responsibilities include managing the
selection, promotion, assignment, and retirement of general /flag officers
in addition to coordination with other DOD and non-DOD organizations.

The Reserve Forces Policy Board, acting through the Assistant Secretary of
Defense for Reserve Affairs, is the principal policy adviser to the
Secretary of Defense on matters relating to the reserve components. The
Board was created by an act of Congress in 1952. Among its duties, the
Board evaluates proposals by its members or other agencies for changes to
existing laws and policies and recommends appropriate actions. The Board
is composed of 24 members, including a civilian chairman and the assistant
secretaries of the Army, Navy, and Air Force responsible for reserve
components.

    Congressional Mandates in 1997 and 2003 to Review Authorizations

The Fiscal Year 1997 National Defense Authorization Act directed the
Secretary of Defense to review existing statutory general and flag officer
authorizations and submit a report to Congress. The act also directed GAO
to evaluate DOD's study. The military services and Joint Staff conducted
their own studies. On the basis of these study results, DOD developed a
draft report; however, it never issued a final report. We testified on
DOD's study in April 1997 and issued a report in June 1997 that discussed
the draft DOD report.1 Congress included similar mandate language in the
Fiscal Year 2003 National Defense Authorization Act. As in 1997, the
Secretary of Defense was directed to review existing statutory general and
flag officer authorizations and submit a report to Congress.2 The report
was to include any recommendations (together with the rationale)
concerning revision of the limitations on general and flag officer grade
authorizations. The act also stated that certain provisions of the Fiscal
Year 1997 National Defense Authorization Act would apply.3 One of the
applicable provisions from the 1997 act directed GAO to evaluate DOD's
study.4

    DOD's Study of General and Flag Officer Requirements and the March 2003
    Report to Congress

To respond to the 2003 mandate, the Office of the Secretary of Defense
contracted with the Logistics Management Institute (LMI) to assess and
validate general and flag officer requirements. The results of the
requirements study were expected to serve as a baseline of validated
general and flag officer positions and provide a basis for future efforts,
such as identifying innovative ways to manage senior leadership. The
Assistant Secretary of Defense (Force Management Policy)5 established a
working panel and a senior panel to support LMI's review. The working
panel was chaired by the Director, Officer and Enlisted Personnel
Management, and included representatives from the military services' and
Joint Staff's general and flag officer management offices and from the

1 U.S. General Accounting Office, General and Flag Officers: DOD's Draft
Study Needs Adjustments, GAO/T-NSIAD-97-122 (Washington, D.C.: Apr. 8,
1997) and U.S. General Accounting Office, General and Flag Officers:
Number Required Is Unclear Based on DOD's Draft Report, GAO/NSIAD-97-160
(Washington, D.C.: June 16, 1997).

2 Public Law 107-314, section 404(c).

3 Public Law 107-314, section 404(c)(2) and corresponding provision in
Public Law 104-201, sections 1213(b) through (e).

4 Public Law 104-201, section 1213 (e).

5 This position has been replaced by the Principal Deputy Under Secretary
of Defense (Personnel and Readiness).

Office of the Secretary of Defense. The senior panel was chaired by the
Deputy Assistant Secretary of Defense for Military Personnel Policy, with
participation by the service personnel chiefs, the Joint Staff's Director
for Manpower and Personnel, and representatives from the Office of the
Secretary of Defense. The general and flag officer study was completed in
March 2003. DOD subsequently submitted its report to Congress on March 31,
2003.6

    Previous DOD Studies of General and Flag Officer Requirements

  Results of General and Flag Officer Study Were Not Fully Disclosed in DOD's
  March 2003 Report to Congress

DOD has conducted several previous reviews of its general and flag officer
requirements. In the 1997 draft report, DOD identified a need for 1,472
general and flag officers, including 1,018 active component and 454
reserve component officers. According to DOD, the 1997 study was the first
to integrate active and reserve component requirements. A 1988 DOD study
found a requirement for 1,436 general and flag officer positions. A 1978
DOD study identified a requirement for 1,419 general and flag officers. In
1972, DOD identified a requirement for 1,304 general and flag officers.
Congressional authorizations for general and flag officers typically have
been lower than requirements identified in DOD's studies.

The general and flag officer study validated total requirements for 1,630
general and flag officer positions. Congress, since fiscal year 1996, has
authorized the services a total of 1,311 general and flag officers, a
difference of 319. DOD, in the March 2003 report to Congress, recommended
no additional authorizations to meet validated requirements. DOD did not
explain its rationale for keeping authorizations at current levels, except
to say that other options for managing general and flag officers were
being considered. The report also did not provide the requirements data
generated by the general and flag officer study, nor did it address the
magnitude or the impact of the gap between requirements and
authorizations.

6 Office of the Under Secretary of Defense (Personnel and Readiness),
Review of Active Duty and Reserve General and Flag Officer Authorizations
(Washington, D.C.: March 2003).

DOD Study Validated The general and flag officer study validated
requirements for a total of Requirements for 1,630 general and flag
officer positions, including 1,039 validated 1,630 General and Flag
requirements in the active component and 591 validated requirements in
Officer Positions the reserve component. Tables 2 and 3 display results
from DOD's study.

Table 2: Validated Requirements for General and Flag Officer Positions in
the Active Component

  Service/external (joint) Army Air Force Navy Marine Corps External (joint)a
                                     Total

By grade

       O-7             145    104       133       27       115    
       O-8             101    82        52        40       65     
       O-9              34    31        33        12       30     
       O-10              6     8         6        2        13     
      Total            286    225       224       81       223          1,039 

                               By functional area

         Operations           97       92      56      38     78    
     Combat development       70       20      13      14      8    
          Material            52       40      60      6      22    
     Headquarters staff       44       54      72      22     113   
        Special staff         23       19      23      1       2    
            Total            286      225      224     81     223       1,039 

Source: GAO analysis of DOD data.

aIn the general and flag officer study, internal (service-specific)
positions were separated from external (joint) positions.

 Table 3: Validated Requirements for General and Flag Officer Positions in the
  Reserve Component Service/external (joint) Army Air Force Navy Marine Corps
                            External (joint)a Total

By grade

O-7 163 15747 5 28

O-8 70 6618 7 30

Total 233 223 65 12 58

                               By functional area

          Operations             98         67        18       10       8     
      Combat development         79         10        1        0        4     
           Material              22         16        10       0        5     
      Headquarters staff         16        106        24       2        40    
         Special staff           18         24        12       0        1     
             Total              233        223        65       12       58    

Source: GAO analysis of DOD data.

aIn the general and flag officer study, internal (service-specific)
positions were separated from external (joint) positions.

Title 10 of the U.S. Code establishes service-specific ceilings for active
duty general and flag officers that total 877.7 Title 10 also authorizes
12 general and flag officer positions to be allocated by the Chairman of
the Joint Chiefs of Staff to the services for joint duty positions. These
authorizations, called the "Chairman's 12," do not count against the
service ceilings.8 In addition, DOD is authorized a maximum of 422 reserve
component general and flag officers. Title 10 of the U.S. Code establishes
service ceilings for reserve component general and flag officers.9
Congress last revised service ceilings in fiscal year 1996. Table 4
displays congressional authorizations for general and flag officers.

7 10 U.S.C., section 526.

8 10 U.S.C., section 526(b).

9 10 U.S.C., section 12004. The provision excludes from these ceilings
officers serving in certain positions, including those serving as
adjutants general or assistant adjutants general of a state, those serving
in the National Guard Bureau, and others.

 Table 4: Congressional Authorizations for General and Flag Officers by Service

Active component

      Service      Service ceiling  Chairman's 12a  Reserve component   Total 
        Army                    302               5        207         
     Air Force                  279               3        157         
        Navy                    216               4         48         
    Marine Corps                 80               0         10         
       Total                    877              12        422          1,311 

Sources: Title 10 U.S. Code and DOD.

aThe Chairman's 12 are not associated with specific positions. As a matter
of policy, the Chairman of the Joint Chiefs of Staff has allocated these
positions to the services (Chairman of the Joint Chiefs of Staff
Instruction 1331.01B). The Marine Corps was not allocated any Chairman 12
positions because it lacked sufficient general and flag officers at the
O-9 and O-10 levels to contribute to this pool.

    DOD Did Not Explain the Rationale for Keeping Authorizations at Current
    Levels

On the basis of the general and flag officer study results, DOD found that
the number of validated requirements for general and flag officer
positions exceeded the number of general and flag officers currently
authorized under law. DOD concluded in its March 2003 report to Congress
that all current authorizations for active and reserve general and flag
officers were needed. Although DOD's report made several recommendations
concerning management of general and flag officers,10 DOD recommended no
change to the authorized number of general and flag officers or their
grades at this time.

DOD, in the March 2003 report, did not explain its rationale for keeping
general and flag officer authorizations at current levels. DOD's stated
rationale for not requesting additional authorizations was that before the
department considers proposing a legislative increase in authorizations,
it must look at other innovative ways to meet these requirements. DOD did
not specify the options it would consider except to say that it intended
to review its overall senior leadership needs, including both civilian and
military leaders, and might seek authority to manage senior leaders under
an overall ceiling. DOD stated that until this review was complete, the
services would continue to meet their internal and external general and

10 For example, the report recommends that legislation limiting the number
of active officers who may serve above the grade of O-7 to no more than 50
percent of the total number of general and flag officers be repealed.

flag officer requirements using available management tools as
"workarounds," such as use of individuals selected for promotion to higher
grades and frocking authority.11 DOD did not state when this review would
be complete.

In the March 2003 report, DOD did not address the magnitude or the impact
of the gap between validated requirements and authorizations. The general
and flag officer study summarized the validated requirements by active and
reserve component, by service, and by grade. More detailed data was
provided in a database of validated requirements that was developed as
part of the study. However, the March 2003 report did not disclose this
data or address the magnitude of the gap between validated requirements
and authorizations. The total gap between validated requirements and
authorizations was 319. In the active component, the study validated
requirements for 1,039 general and flag officer positions, compared with
889 authorizations (a difference of 150). In the reserve component, the
study validated requirements for 591 general and flag officer positions,
compared with 422 authorizations (a difference of 169). These gaps are
illustrated in figure 1.

11 10 U.S.C., section 777(d) authorizes the services to allow up to 55
colonels/Navy captains to wear the insignia of brigadier general/rear
admiral (lower half) prior to promotion, a practice known as "frocking."
An officer may be frocked only after the Senate has approved the
promotion, and the officer is serving in or has received orders to serve
in a position for which the grade to which the officer has been approved
for promotion is authorized. 10 U.S.C., section 777(b).

Figure 1: Gap Between General and Flag Officer Authorizations and
Requirements

While the March 2003 report noted that the services would continue to use
frocking and other "workarounds" to meet requirements, it did not address
the impact of these workarounds. Following are examples of workaround
issues that DOD did not address in its report:

o  	How do the services determine which positions to fill with an officer
at a lower grade? Are some validated requirements going unfilled
altogether?

o  	Do officers at lower pay grade levels have legal authority to carry
out all duties required of a general and flag officer position?

o  	Does the practice of assigning lower grade officers to general and
flag officer positions affect the ability of an organization to perform
its mission?

o  	What is the impact of these workarounds on the overall management of
general and flag officers and of officers in lower grades?

o  	Are there benefits to using these workarounds, such as providing
developmental opportunities for officers in lower grades? Do the benefits
outweigh any negative effects of using these workarounds?

o  To what extent have each of the services used these workarounds?

  DOD Used an Established Methodology, but Precision and Usefulness of Results
  Could Be Enhanced

DOD used an established methodology known as job evaluation to assess
general and flag officer requirements. Job evaluation methodologies have
been widely used in the United States to assess job value and rank one job
against another. One limitation of job evaluation is that it has numerous
subjective features, including the selection of job factors to be
assessed. The factors used in DOD's study were subject to differing
interpretations. Another limitation is that the methodology is based on an
existing organizational structure at a designated point in time. The
methodology is not designed to capture new or emerging needs, such as
those resulting from DOD transformation efforts or other changes in the
department. Periodic updates could capture changes in requirements. Such
limitations do not invalidate DOD's methodology; however, an explicit
acknowledgment and assessment of these limitations would have provided
more context for the study results. In addition, the study did not clearly
account for dual-hatted positions or assess how each service's
authorizations were affected by the need to contribute general and flag
officers to fill external (joint) positions. Addressing these issues could
have enhanced the precision and usefulness of DOD's study. In addition, we
noted that while Congress directed DOD to ensure the Reserve Forces Policy
Board participated in development of the report's recommendations, the
Board played a minimal role in producing the DOD 2003 report. The Board
registered strong objections to DOD's recommendation not to seek
additional authorizations now to meet validated requirements and to the
limited role it played in the overall process.

    DOD Used Job Evaluation Methodology to Assess General and Flag Officer
    Requirements

To assess and validate general and flag officer requirements, DOD applied
an established methodology known as job evaluation. Job evaluation
methodologies have been widely used in the United States and were used in
past general and flag officer studies, including the 1997 and 1988
studies. Job evaluation is a formal procedure for hierarchically ordering
a set of jobs in terms of their value or worth to the organization. No
universally accepted approach to job evaluation exists, and several types
of job evaluation methodologies may be used. DOD's 2003 study was not
explicit about the type of job evaluation methodology used but appeared to
be a point-factor system. While point-factor systems may vary, the basic
steps involved are gathering job descriptions for all jobs, selecting the
factors to be used for measurement, identifying benchmarks for comparing
jobs in a similar industry or field, assigning weights to the factors,
assigning numerical values to the selected factors, and establishing a
rank band. DOD's study included all of these steps in its job evaluation
methodology except for identifying benchmarks. Benchmarks

are typically used when the purpose of the evaluation is to determine
appropriate compensation.

The steps in the general and flag officer study were as follows:

o  	At LMI's request, the services and the Joint Staff submitted data on
all of their general and flag officer positions and on a sample of colonel
and Navy captain positions.

o  	The working panel established five functional groups to categorize the
positions to be assessed. These five groups were operations, combat
development, material, headquarters staff, and special staff. The working
panel and LMI selected factors to be used in the assessment and weighted
the factors for each functional group.

o  	LMI placed the submitted positions into the five functional groups.
The senior panel validated the functional groups, the factors, and the
weighting.

o  	For the positions to be assessed, the services and the Joint Staff
gathered, validated, and entered information about each factor into a
database created by LMI.

o  	Using the database information, nine LMI scorers assessed each
position by assigning numerical values to the factors and rank-ordered the
positions within their functional groups. The LMI scorers were retired
military officers representing a cross section of the military services,
as well as the active and reserve components. They were divided into three
panels of three members each.

o  	The senior panel reviewed and validated the LMI scoring, including the
breakpoints between pay grades (for example, between O-7s and O-8s).
Results were then vetted through the service and Joint Staff senior
leadership.

    Job Evaluation Methodology Has Certain Limitations

A basic aim of job evaluation methodologies is to interject objectivity
into what is inherently a subjective process-assigning the relative value
of work to an organization. Nevertheless, subjectivity is commonly a part
of job evaluation. For example, the factors selected for measurement and
the weighting of the factors are based on subjective judgment. Also, the
process of scoring jobs is subjective, as are management adjustments to
the study results.

A second limitation of job evaluation methodology is an assumption that an
existing organizational structure can serve as an adequate starting point
for the assessment. The methodology reviewed current positions and was not
designed to capture new or emerging needs. According to the Joint Staff,
the study methodology, as well as time constraints, did not give them

the opportunity to identify unresourced general and flag officer
requirements. DOD efforts to reorganize the Army, alter the overseas
presence of U.S. troops, and transfer thousands of military jobs to the
civilian workforce, if implemented, could change requirements for general
and flag officers. Such changes could be captured through periodic updates
to the requirements. According to an official in the Office of the Under
Secretary of Defense for Personnel and Readiness, the services and Joint
Staff have been asked to submit new general and flag officer requirements
to keep the data current. We agree that identifying new requirements is a
necessary step to keep the data up-to-date; however, these new
requirements are not going through the kind of job evaluation assessment
and validation DOD used in its study.

We found that neither the DOD study nor the March 2003 report to Congress
addressed the limitations in the methodology selected. For instance,
neither document specified the subjective features of the methodology or
the assumptions underlying the study. In addition, they did not explicitly
state the steps taken to test the reliability or validity of the study.
These issues do not invalidate the results of the general and flag officer
study, but an explicit acknowledgement and assessment of these issues
would have provided more context for the study results.

    Factors Used to Measure Job Value Open to Differing Interpretations

A critical step in job evaluations is the selection of factors to be
measured. Because the factors are used to assess job value, the selection
of these factors can influence the study results. LMI reviewed the factors
used in the 1997 general and flag officer study and found similarities
among them that could be traced to a set of 16 factors that predated the
1997 study. The origin of the 16 factors, however, is unclear. According
to the general and flag officer study, the 16 factors originated in the
deliberations of the Bolte commission in the late 1950s.12 An LMI official
told us neither LMI nor the services could locate the original source
document for the 16 Bolte factors; hence, LMI used a secondary service
source to identify these factors. Two service regulations-Marine Corps
Order 5311.4, dated September 30, 1986, and OPNAV Instruction 5420.87A,

12 The Department of Defense Ad Hoc Committee to Study and Revise the
Officer Personnel Act of 1947, chaired by General Charles L. Bolte, USA
(retired), was established to study the basic laws, regulations, and
practices pertaining to the career management pattern of officer
personnel. In 1960, the committee issued its report, A Concept of Career
Management for Officer Personnel of the Armed Services (Washington, D.C.:
Dec. 16, 1960). We did not find any mention of the 16 factors in the
published Bolte report.

dated February 12, 1981-listed the 16 factors. (See app. I for a list of
the 16 factors.)

The working panel made minor adjustments to the wording of the factors,
and the senior panel approved their use for the study. DOD officials told
us that the factors were broad enough to cover the significant aspects of
general and flag officer positions, although one service official
expressed concern that nuances between the services were not captured. The
services and the Joint Staff were responsible for gathering the data on
the factors for the positions and for entering this data into a database.
The services and Joint Staff asked other offices (such as major commands
and reserve component offices) and individuals (including general and flag
officers) to provide the needed information.

This decentralized process left the factors open to differing
interpretations. We selected a small number of similar general and flag
officers and, comparing the information provided, noted inconsistencies in
how the services and Joint Staff applied the factors. For example, the
superintendents of the three service academies (the U.S. Military Academy,
the U.S. Naval Academy, and the U.S. Air Force Academy) have the same
function (combat development and training of future officers), the same
rank (O-9), and oversee roughly similar numbers of personnel. However, the
position descriptions for the superintendents vary greatly, even in terms
of quantitative criteria like the magnitude of personnel and physical
resources. In one case, overall dollar figures are given; in the second
case, a budget breakdown is provided; and in the last case, the number and
type (but not value) of equipment is provided. Information ranged from
vague ("the Superintendent currently has sufficient authority to make
decisions and commit resources within the scope of his position") to
detailed ("formulates and directs the execution of policies, procedures,
and programs required to accomplish the [academy's] mission-cadet leader
development system; cadet honor system and honor code; academic
curriculum, military and physical programs; strategic vision, planning,
and communications; [and] manpower and resource allocation").

Other Methodological During our review, we noted other issues concerning
the methodology Issues used to conduct the requirements study.

o  	The methodology did not allow for clear-cut differentiation between
O-6 and O-7 positions and between O-7 and O-8 positions. Differentiation
among the higher grades was more clear-cut. One service official said the
factors were easier to apply to the higher grades.

o  	Factors were weighted identically for a diverse array of general and
flag officer positions. The functional groups contained between 123 and
562 positions, with the result that the same weighting was applied to a
diverse array of positions. For example, the same weighting was applied to
the following Army positions in the special staff functional group: the
Deputy Chief of Chaplains, the Assistant Judge Advocate General for
Military Law and Operations, and the Dean of the Academic Board at the
U.S. Military Academy.

o  	Several service officials expressed concern about the short time frame
for conducting the study. Officials from one service told us they had not
had time to verify the information submitted for all the service's general
and flag officer positions and instead did spot checks of the information.

    2003 Study Did Not Clearly Account for Dual-Hatted Positions

Some general and flag officers are dual-hatted, simultaneously holding
more than one position. One goal of the general and flag officer study was
to identify dual-hatted positions and assess them as a single position.
When LMI initially requested information on each position, it asked the
military services and the Joint Staff to identify whether any other
dual-hatted titles were associated with the position. LMI created a
separate field-other titles (if dual hatted)-to capture this information
in the requirements database. Our analysis of the 1,630 positions in the
database showed that 113 positions were listed in this field as having
other titles. For assessment purposes, each dual-hatted pair was
considered as a single position and categorized as either an Army, an Air
Force, a Navy, a Marine Corps, or an external (joint) position.

Our review showed that despite these efforts, the study did not clearly
account for dual-hatted positions. First, the study did not distinguish
whether positions were dual-hatted for organizational efficiencies or due
to limited manpower. Separate studies of general officers conducted for
the Army and Marine Corps under the 1997 mandate stated that dual-hatted
positions may be created to increase efficiency of operations or
administration. On the other hand, they may also be created to maximize
leadership or management within the constraint of available authorization
ceilings. The Marine Corps study stated that "sorting out these two
different reasons is an important part of any study which purports to
determine requirements, rather than to accommodate to scarcities."13 The
general and flag officer study did not address these

13 Kapos Associates Inc, Analysis of U.S. Marine Corps General Officer
Billet Requirements, KAI 152-96F (Washington, D.C.: July 31, 1996).

different reasons for dual-hatting. As a result, requirements for general
and flag officers could be different than the study data showed.

Second, we found a small number of dual-hatted positions that were counted
as separate requirements. Although an LMI official acknowledged that one
pair of dual-hatted positions was double-counted, our analysis of the 113
positions listed as dual-hatted showed that at least 6 pairs of positions
were counted separately in the requirements database. Three pairs of
positions were internal to the Marine Corps, two pairs were Army/external
(joint) positions, and one pair was internal to the Army.

o  	In the Marine Corps, the following dual-hatted positions were included
as separate positions: the Deputy Commanding General, 1st Marine
Expeditionary Force, and the Commanding General, 1st Marine Expeditionary
Brigade; the Deputy Commanding General, 2nd Marine Expeditionary Force,
and the Commanding General, 2nd Marine Expeditionary Brigade; and the
Deputy Commanding General, 3rd Marine Expeditionary Force, and the
Commanding General, 3rd Marine Expeditionary Brigade.

o  	The Army/external (joint) dual-hatted positions that were included as
separate positions were the Deputy Commanding General, Eighth U.S. Army,
and C-3/J-3, United Nations Command/Combined Forces Command/U.S. Forces
Korea; and the Deputy Assistant Chief of Staff C/J-4, United Nations
Command/Combined Forces Command/U.S. Forces Korea and Deputy Commanding
General (Support), Eighth U.S. Army.

o  	In the Army, the Program Executive Office for the Army's Air and
Missile Defense and the Deputy Commanding General (Acquisition), U.S. Army
Space and Missile Defense Command, were dual-hatted but included as
separate positions.

A third problem was a lack of consistency in identifying dual-hatted
positions. Although the requirements database had the other titles (if
dual-hatted) data field, we identified at least 37 positions that listed
nothing under this field but included one or more dual-hatted titles
elsewhere in their position descriptions. Thus, while the database
identified 113 dual-hatted positions, other dual-hatted positions included
in the database were not clearly identified as such.

    External (Joint) Requirements Were Not Tracked Back to Each Service's
    Authorizations

DOD's general and flag officer study did not assess how each service's
authorizations were affected by the need to contribute general and flag
officers to fill external (joint) positions. As a result, direct
comparisons between the requirements generated by the study and
congressional authorizations are difficult. Without knowing how many
general and flag officers each service contributes to the external (joint)
community, we cannot be certain of the exact number of personnel each
service needs to meet all of its commitments, internal and external. As
shown in table 4, Congress establishes authorizations by service. Congress
does not provide separate authorizations for external (joint)
requirements, except for the Chairman's 12 exemptions from the overall
service ceilings. External (joint) requirements are filled from service
authorizations.

In the general and flag officer study, internal (service-specific)
positions were separated from external (joint) positions. However, the
study did not show the extent to which each service contributed general
and flag officers from their authorizations to fill external (joint)
requirements. While service contributions to external (joint) requirements
fluctuate due to the rotational nature of these assignments, service
contributions can be determined at a given point in time. We used Joint
Staff data from December 2002 to determine which service was filling each
of the 223 active component external (joint) requirements (see table 5)
and each of the 58 reserve component external (joint) requirements (see
table 6) validated by the general and flag officer study.

Table 5: Service Contributions to External (Joint) General and Flag
Officer Requirements in the Active Component (as of December 2002)

     Grade      Army  Air Force    Navy  Marine Corps   No service a    Total 
      O-10         3      5           3              2              0 
      O-9          7      9           7              3              4      30 
      O-8         24     23           9              5              3      64 
    O-7/O-8b       0      0           0              0              1 
      O-7         32     40         24c              7      10d           113 
      O-6          0      0           0              0       2e             2 
     Total        66     77          43             17       20       

Source: GAO analysis of DOD data.

aThe Joint Staff data did not identify the service filling some external
(joint) positions.

bThe Joint Staff data identifies positions that may be filled by an
officer at either the O-7 or O-8 grade level.

cOne position (a Navy O-7 position) was listed as a reserve component
position in the requirements database but an active component position in
the Joint Staff data. We have included this position as a reserve
component position.

dOne position (an O-7 position with no service identified) was listed as a
reserve component position in the requirements database but an active
component position in the Joint Staff data. We have included this position
as a reserve component position.

eThese positions were submitted as O-6 positions and validated as O-7
positions in the general and flag officer study.

Table 6: Service Contributions to External (Joint) General and Flag
Officer Requirements in the Reserve Component (as of December 2002)

     Grade      Army  Air Force    Navy  Marine Corps   No service a    Total 
      O-8         11      8           3              0              4      26 
    O-7/O-8b       8      2           0              0              2 
      O-7          5      9          3c              0       3d            20 
     Total        24     19           6              0              9 

Source: GAO analysis of DOD data.

aThe Joint Staff data did not identify the service filling some external
(joint) positions.

bThe Joint Staff data identifies positions that may be filled by an
officer at either the O-7 or O-8 grade level

cOne position (a Navy O-7 position) was listed as a reserve component
position in the requirements database but an active component position in
the Joint Staff data. We have included this position as a reserve
component position.

dOne position (an O-7 position with no service identified) was listed as a
reserve component position in the requirements database but an active
component position in the Joint Staff data. We have included this position
as a reserve component position.

The data in tables 5 and 6 allow for a more direct comparison between
requirements and authorizations. For example, the Army's authorization for
active duty generals is 302 plus the Army's 5 exemptions for the
Chairman's 12, for a total of 307 authorized general officers. According
to DOD's requirements data, the Army needs 286 general officers to meet
its internal active component requirements. Based on the data in table 5,
Army general officers also filled 66 external (joint) requirements in the
active component. As a result, the Army had total active component
requirements-including internal and external-of 352 general officers,
compared with active component authorizations for 307 generals, a
difference of 45 generals. Using these calculations for the other
services, active component requirements exceeded active component
authorizations by 20 for the Air Force, 47 for the Navy, and 18 for the
Marine Corps. The actual differences between individual service
requirements and authorizations may be greater because the Joint Staff
data did not identify the service filling 20 of the external (joint)
active component requirements.

    Reserve Forces Policy Board Had Minimal Role in Producing DOD's 2003 Report

The Fiscal Year 1997 National Defense Authorization Act directed the
Secretary of Defense to include the Reserve Forces Policy Board in the
department's general and flag officer study. This same provision applied
in 2003. Subsection 1213(d) of the 1997 act states:

"The Secretary of Defense shall ensure that the Reserve Forces Policy
Board participates in the internal Department of Defense process for
development of the recommendations of the Secretary contained in the
report under subsection (a)."

We noted during our review that the Reserve Forces Policy Board played a
minimal role in producing the DOD 2003 report. The Board was not involved
with the preparation of the general and flag officer study but was given
the opportunity to comment on the study and the draft DOD report prior to
its submission to Congress. The Board provided written comments on the
report in April 2003 concurring with DOD's conclusion that all current
congressional authorizations for general and flag officers were needed,
but registering strong objections to DOD's recommendation not to seek
additional authorizations now to meet validated requirements and to the
limited role it played in the overall process.

The Reserve Forces Policy Board had a more active role in DOD's 1997
general and flag officer study. In a memorandum to the Secretary of
Defense, the Chairman of the Reserve Forces Policy Board at that time
indicated the Board was pleased with its level of participation in the
1997

  DOD Incorporated Lessons Learned From GAO's Review of DOD's 1997 General and
  Flag Officer Study

study. The Chairman stated, "We believe our `independent voice' is
captured in this report and trust our views will be appropriately
considered. We are pleased to share with you that [the Office of the
Secretary of Defense] and the Services wholeheartedly embraced our
participation. We were well represented at all levels of participation and
our views were objectively considered.... In our view, this report was
truly a Total Force effort."

DOD, in conducting its 2003 general and flag officer requirements study,
incorporated some of the lessons learned from a GAO review of DOD's 1997
study. A notable improvement was the use of a single methodology and set
of factors in the 2003 study to evaluate general and flag officer
positions across all the services and the joint community. DOD also
improved its tracking of study results and its documentation of
adjustments made by the services and the Joint Staff. As in 1997, DOD did
not identify and assess general and flag officer positions that could
conceivably be converted to the civilian workforce. However, DOD has begun
this assessment and expects to have results by July 2004.

    2003 Study Assessed General and Flag Officer Requirements Using a Single
    Methodology

In 1997, the services and Joint Staff each conducted separate reviews of
their general and flag officer requirements and, in doing so, used
different job evaluation methodologies and factors. We noted in our review
of the 1997 study that differing methodologies made cross-service
comparisons difficult, even when comparing similar positions from one
service to another. The separate service reviews together created at least
24 different definitions of a general or flag officer. At the time, the
Office of the Secretary of Defense stated that it permitted the services
to use their own methodologies for three reasons: (1) The methodology
selected had to recognize the unique mission and structure of each
service. (2) There was no single definition of a general and flag officer
and no one way to conduct job evaluations. The different methodologies
were deemed valid. (3) Using existing methodologies and recently completed
studies saved time. We stated that a single methodology, consistently
applied, would have been a better approach than using different
methodologies.

In 2003, DOD used a single methodology and one set of factors to assess
all general and flag officer positions. The Office of the Secretary of
Defense, the services, and the Joint Staff representatives on the working
and senior panels worked together with LMI to conduct the study. DOD
officials we interviewed generally agreed with the approach of using a
single methodology and set of factors. One official who had also

participated in the 1997 study said the services had to spend time
defending their service-specific methodologies and findings. The use of a
single methodology in the 2003 study avoided this problem. The process
promoted interaction and discussion among the organizations represented on
the working and senior panels.

    DOD Improved Tracking and Documentation of Adjustments to Study Results

In job evaluations, judgments and decisions by executives about job value
and study results are expected to be made as part of the process.
Adjustments made to study results on the basis of executive judgment
should be explained. In our review of DOD's 1997 study, we found that
there were discrepancies between what the service secretaries recommended
and what their own service studies found and that these discrepancies were
not explained in DOD's draft 1997 report. The service secretaries
recommended, in the aggregate, a total number of authorizations that was
123 less than the number of requirements identified by the service studies
(995 recommended authorizations compared with 1,118 requirements). When
the service secretaries developed their recommendations, they did not
explain the basis for their adjustments to the study results. We
recommended that the Secretary of Defense modify the draft 1997 report to
include an explanation of the criteria used by the service secretaries to
modify the results of the services' studies.

For the 2003 study, we found that DOD tracked the adjustments made to the
requirements at each step in the process, from the time the positions were
originally submitted through final vetting by service and Joint Staff
senior leadership. DOD's study showed the number of general and flag
officer positions originally submitted by the services and Joint Staff
(1,625),14 the number as assessed by LMI scorers (1,627), the number
approved by the senior panel (1,629), and the final study results
following a review by service and Joint Staff senior leadership (1,630).
While net adjustments in the total number of requirements were minimal (a
net increase of five positions), adjustments to the grades of individual
positions were made at each step in the process. These adjustments were
tracked in the requirements database.

14 The services and Joint Staff also submitted a select number of O-6
positions to be included in the study.

Our analysis of the requirements database showed that LMI scorers made
adjustments to a total of 74 positions. Of these 74 positions, 20 had been
submitted as O-7/O-8 positions. LMI scored these 20 positions as belonging
at one grade or the other, with 8 positions being assessed as O-8 and 12
positions being assessed as O-7. The other 54 positions represented "grade
inversions," where LMI scorers assessed the position at a pay grade level
different from that submitted. Of the 54 grade inversions, 47 were
downgrades (that is, for example, going from an O-8 to an O-7), and 7 were
upgrades. The senior panel then had an opportunity to adjust the results
of LMI's scoring, and service and Joint Staff senior leadership vetted the
requirements and made their own adjustments before the study results were
finalized. The senior panel and the service and Joint Staff senior
leadership made adjustments to a total of 38 positions. All but 1 of these
38 adjustments involved positions scored as grade inversions by the LMI
scorers. (See app. II for more information on these 38 adjustments.)

We found that, in contrast with the 1997 study, the reasons for adjusting
the LMI scoring results were documented in most cases. DOD was able to
produce documentation, such as a spreadsheet and e-mail messages, to
explain most of the adjustments. Our review of this documentation showed
that an explanation was provided for 34 of the 38 adjustments and was
lacking for the other 4 adjustments. In a few cases, the documented
explanation was brief. For instance, the senior panel upgraded an Army
reserve position from O-7 (LMI's scoring assessment) back to O-8 (the
grade as originally submitted). The panel's rationale was as follows:
"Keep as O-8; important info left out; Dep Vice Cmdr for Homeland Defense;
$900m budget." In other cases, the explanation for the adjustment was more
detailed. For example, the senior panel upgraded the President of the
Naval War College from O-8 (LMI's scoring assessment) back to O-9 (the
grade as originally submitted). To support this adjustment, the Navy
submitted a 2-page addendum to expand upon the original position
description.

    DOD Deferred an Evaluation of General and Flag Officer Positions That Might
    Be Considered for Civilian Conversion

In 1997, we found that the services had not fully evaluated the potential
for military to civilian conversions as part of their general and flag
officer studies. We noted that the need for additional general and flag
officers could be reduced by converting general and flag officer positions
that do not require a uniformed servicemember to civilian status. At that
time, we recommended that the Secretary of Defense modify the draft 1997
report to include an evaluation of the potential to convert nonmilitary
essential general and flag officer positions to civilian status.

As part of its 2003 study, DOD did not consider which positions could
conceivably be converted from the military ranks to the civilian
workforce. DOD stated in its March 2003 report to Congress that following
completion of the general and flag officer review, DOD would look at its
senior leadership requirements-military and civilian. "We must look at the
entire pool of senior leaders, to include DOD civilians, to assess how
many we need overall to effectively manage the Department," the report
stated. "Once we have agreement on an overall number, we will seek
additional flexibility to manage within an overall ceiling and assign the
best qualified individual where needed."

In July 2003, DOD approved a contract with LMI to assess general and flag
officer positions for potential civilian conversion. The statement of work
calls for LMI to perform a "billet-by-billet assessment of each validated
general and flag officer requirement to determine whether the position
could be filled by a senior civilian." DOD has commissioned separate
studies to assess Senior Executive Service requirements. An official in
the Office of the Secretary of Defense said the LMI civilian conversion
study will pave the way for analysis of future legislative and policy
proposals. LMI is to provide study results within a year of the contract
date.

                                  Conclusions

DOD's March 2003 report to Congress did not provide complete information
on whether general and flag officer authorizations were sufficient to meet
all requirements. Specifically, DOD's 2003 report to Congress did not
fully disclose the results from its general and flag officer study or
address the magnitude or the impact of the gap between requirements and
authorizations. Fully disclosing the study results and discussing the
implications of its findings would help to explain DOD's recommendation
not to seek additional authorizations. In addition, the methodology used
in the study was not designed to capture new or emerging needs that could
result from DOD transformation efforts or other changes in the department.
Such changes could be captured through periodic updates to the
requirements validated through the 2003 study. In the absence of periodic
updates, the validated requirements could become out-of-date. DOD also
could enhance the precision of the requirements data by more clearly
accounting for dual-hatted positions and could enhance the usefulness of
the results by assessing the impact of external (joint) requirements on
service authorizations. Finally, the requirements data could be improved
by incorporating the results of the ongoing civilian conversion study.

Addressing these issues would help DOD establish a solid baseline of
validated general and flag officer requirements that will assist DOD as it
assesses senior leadership (civilian/military) requirements and manages
general and flag officers. In addition, clarification of DOD's
requirements would assist congressional decision makers in making
adjustments to the maximum number of general and flag officers authorized
to each service.

Recommendations for 	We recommend that the Secretary of Defense direct the
Under Secretary of Defense for Personnel and Readiness to take the
following four actions:

  Executive Action

o  	Clarify the magnitude and impact of the gap between DOD's validated
requirements for general and flag officers and congressional
authorizations. This assessment should include (1) an analysis of the
impact caused by the workarounds DOD uses to fill the gap between
requirements and authorizations and (2) a more complete explanation of its
recommendation not to seek additional authorizations in light of the study
results showing that requirements exceeded authorizations.

o  	Update general and flag officer requirements periodically by
identifying, assessing, and validating new general and flag officer
requirements that emerge from DOD transformation efforts or other changes
in the department.

o  	Take steps to enhance the precision and usefulness of the general and
flag officer requirements. At a minimum, DOD should more clearly account
for all dual-hatted positions in terms of whether each position is
dual-hatted for efficiency or out of necessity due to shortages in general
and flag officer authorizations. Positions that are dual-hatted out of
necessity should be treated as separate positions for purposes of
identifying requirements. In addition, to the extent possible, DOD should
track service contributions of general and flag officers to external
(joint) requirements to assess whether each service's authorizations are
sufficient to meet both internal and external requirements.

o  Incorporate the results of the ongoing civilian conversion study in a
future

  Agency Comments
  and Our Evaluation

update of general and flag officer requirements.

DOD provided written comments on a draft of this report. In its comments,
DOD concurred with our recommendations and indicated that it will (1)
address the impact of the gap in requirements and the use of workarounds
in a separate study on alternative methods for dealing with the gap in
requirements, (2) review all dual-hatted positions and add the additional
information to the established requirements database, and (3) incorporate
the results of the ongoing civilian conversion study in a future update of
general and flag officer requirements. Regarding our

recommendation to periodically update general and flag officer
requirements, DOD indicated that its current procedures were adequate.
However, as we stated in our report, these additional requirements are not
going through the kind of job evaluation assessment and validation DOD
used in its study. DOD could use the methodology developed for the
baseline study to ensure that any additional requirements are validated.
As we noted in our report, the assessment process resulted in validated
requirements that in some cases differed from the requirements originally
submitted by the services and the Joint Staff. Regarding our
recommendation that DOD track the military services' contributions of
general and flag officers to external (joint) requirements, DOD stated
that it will closely monitor service participation in this arena and that
current safeguards mitigate the impact of joint participation. We continue
to believe that an assessment of whether general and flag officer
authorizations are sufficient to meet all requirements necessitates the
inclusion of both internal service as well as external (joint)
requirements. Furthermore, this assessment should be made at the service
level because Congress has established service-specific authorization
levels. DOD's comments are reprinted in their entirety in appendix III.
DOD also provided technical comments, which we have incorporated as
appropriate.

To determine whether DOD fully disclosed the results of its general and
flag officer study in its March 2003 report to Congress and explained the
rationale for any recommendations, we obtained and analyzed the results of
the general and flag officer study, the database of validated
requirements, supporting documentation, and the March 2003 report. We also
reviewed laws and regulations pertaining to general and flag officers. We
discussed the study with, and obtained documentation from, representatives
of the Under Secretary of Defense for Personnel and Readiness, the Office
of General Counsel (Office of the Secretary of Defense), LMI, and the
military services' and Joint Staff's general officer matters offices. We
also reviewed the Reserve Forces Policy Board's comments on the general
and flag officer study, met with Board staff, and obtained documentation
concerning the Board's involvement in the study. The scope of our review
did not include an assessment of recommendations made by DOD concerning
the management of general and flag officers. We plan to conduct a separate
review of these management issues and recommendations.

To assess the methodology used in the 2003 study, we reviewed prior DOD
studies of general and flag officer requirements and the results of our
review of DOD's 1997 study, for which we had conducted an extensive

  Scope and Methodology

literature review on job evaluation methods. We also reviewed a study by a
public policy research contractor,15 contacted another outside researcher
who was familiar with the study, and reviewed other literature on job
evaluation. We reviewed the steps used to conduct the 2003 study and the
origin and application of factors used in the assessment. We discussed the
methodology with DOD and LMI officials. We also determined how the study
accounted for dual-hatted positions and external (joint) requirements.
Regarding dual-hatted positions, we examined selected positions from the
requirements database. We also compared dual-hatted positions in the
database with service and DOD-wide rosters of general and flag officers.
Regarding external (joint) requirements, we examined Joint Staff data to
determine the services' contributions to meeting validated external
(joint) general and flag officer requirements. We did not review the study
findings to determine whether requirements for individual positions were
validated appropriately through the study.

To determine whether DOD incorporated lessons learned from our review of
DOD's 1997 general and flag officer study, we reviewed the findings and
recommendations from our 1997 review and compared these lessons learned to
the approach used in the 2003 study. To assess the tracking and
documentation of adjustments made to study results, we analyzed the
requirements database. We then obtained from DOD documentation concerning
adjustments that were made to the study results by the senior panel and
the service and Joint Staff senior leadership. We also reviewed DOD's
plans for a follow-on study concerning conversion of general and flag
officer positions to the civilian workforce.

We are sending copies of this report to the Secretary of Defense and the
Director, Office of Management and Budget. In addition, the report will be
available at no charge on GAO's Web site at http://www.gao.gov.

15 RAND National Defense Research Institute, Job Evaluation Methods,
PM-638-OSD (Jan. 1997). This study was prepared for the Office of the
Secretary of Defense.

If you or your staff have any questions regarding this report, please
contact me at (202) 512-5559 ([email protected]) or Brenda S. Farrell at
(202) 512-3604 ([email protected]). Major contributors to this report were
Thomas W. Gosling, J. Paul Newton, and Bethann E. Ritter.

Derek B. Stewart
Director, Defense Capabilities and Management

Appendix I: Sixteen Factors Used to Validate General and Flag Officer
Requirements

                             Nature of the Position

1. Characteristics of function

a. Type (e.g., command, general or coordinating staff, special staff,
manager, deputy, specialist, etc.)

b. Scope (e.g., operational command, training command, installation
command, personnel management, officer personnel management, legal
affairs, information, etc.)

c. Level of function (e.g., national, secretarial, service, theater, field
command, etc.)

2. Grade and position of

a. superior

b. principal subordinates

c. lateral points of coordination

(relative position within the military or governmental structure within
which the position's function is performed)

3. Supervision over position

a. Proximity (remoteness or closeness of supervision)

b. Degree (independence of operation)

4. Official relations with U.S. and foreign governmental officials and
with the public

a. Nature (e.g., reports to, works for, keeps informed, provides liaison,
etc.)

b. Extent (e.g., primary function, frequent requirement, continuous
additional duty, occasional requirement, etc.)

c. Level of official relations with U.S. and foreign governmental
officials and with the public (e.g., governmental department or agency,
national or local government, civil organizations, industry, press,
non-governmental organizations [NGO], private volunteer organizations
[PVO], etc.)

Appendix I: Sixteen Factors Used to Validate General and Flag Officer
Requirements

Magnitude of Responsibilities

5. Reflection of national emphasis and determination (relation of position
to national objectives and programs, special conditions under which the
position was first established or other reasons why the position reflects
national will)

6. Special qualifications required by the position (any special
qualifications such as advanced education, or particular training or
experience, which are essential to the proper execution of positional
responsibilities)

7. Mission(s) of organization and the special requirements of the position
as it relates to the mission(s) (the nature of the responsibilities that
are associated with the position and the need for multidimensional
"executive skills." The mission of the organization is the key, day-to-day
activities that are accomplished.)

8. Number, type, and value of resources managed and employed. Data should
be displayed within three categories: operational control, administrative
control, and immediate staff within each subsection.

a. Military forces (number and type of forces normally assigned or
programmed for planned or special operations)

b. Personnel (number of personnel by officer and warrant officer,
enlisted, and civilian)

c. Value of equipment and properties (total value of equipment, supplies,
and real property displayed in millions)

d. Total obligation authority

e. Foreign resources (scope and type of foreign resources involved, if
any)

f. Other important resources

9. Geographical area of responsibilities (the size, location, and, if
appropriate, the criticality of the land, sea, or air spaces involved)

10. Authority to make decisions and commit resources (the scope of the
position with respect to specific authority delegated to or withheld from
the position in either routine or emergency situations)

Appendix I: Sixteen Factors Used to Validate General and Flag Officer
Requirements

11. Development of policy (involvement in the development of policy within
the specific functional areas associated with the position, e.g., budget,
program, communications, or manpower)

12. National commitment to international agreements (authority to make
commitments to foreign nations or involvement in negotiating such
commitments for the United States)

13. Auxiliary (supporting) authorities and responsibilities inherent in
the position (inherent requirements charged to the position by virtue of
situation, location, proximity, tradition, etc.)

  Significance of Actions and Decisions

14. Impact on national security or other national interests (effect of
mission accomplishment or position performance on the protection of
national interests or the advancement of national programs)

15. Importance to present and future effectiveness and efficiency of the
national defense establishment (effect on the force structure, operational
capabilities, status of combat readiness, quality of personnel and
equipment, cost effectiveness, command and control means, management
procedures and techniques, responsiveness to national needs, or other
factors)

16. Effect on the prestige of the nation or the armed forces (how
effectiveness or accomplishment reflects on the stature of the nation and
its armed forces, and influences the credibility of national aims and
capabilities)

Appendix II: Adjustments Made to General and Flag Officer Requirements After
LMI's Scoring Assessment

This appendix lists the 38 general and flag officer positions where
adjustments were made after the Logistics Management Institute (LMI)
scorers conducted their assessment. The Department of Defense (DOD)
components (the military services and Joint Staff) submitted the pay grade
level for each general and flag officer position reviewed. LMI scorers
assessed the positions to validate the grade level. The senior panel
reviewed the results of LMI's scoring assessment, made adjustments, and
approved the validated requirements. The requirements were then vetted
through the senior leadership of the services and the Joint Staff, who
requested further adjustments. With these adjustments, the study results
were finalized. Table 7 shows, for each of the 38 positions, the
adjustments to the position's pay grade as approved by the senior panel
and vetted through the senior leadership.

  Table 7: Pay Grade Adjustments Approved by the Senior Panel and Requested by
              Service and Joint Staff Senior Leadership Pay grade

Position DOD component (military service or external-joint)

                             ... as submitted originally by the DOD component

                                     ... as

assessed by LMI scorers

        ... as approved by the senior panel ... as vetted through service and
                                                Joint Staff senior leadership

                       Active component Reserve component

       President, Naval War College           Navy        O-9  O-8  O-9  
        Commandant, Naval District            Navy        O-8  O-7  O-8  
                Washington                                               
       Director Marine Corps Staff,       Marine Corps    O-8  O-7  O-8  
      Headquarters/U.S. Marine Corps                                     
      Commanding General, U.S. Army           Army        O-8  O-7  O-8  
     Military District of Washington                                     
     Deputy Chief of Staff, UNC/USFK,   External (joint)  O-8  O-7  O-8  
         U.S. PACOM/UNC/CFC/USFKa                                        
    Director, Customer Support Office,  External (joint)  O-7  O-6  O-7  
       National Imagery and Mapping                                      
                  Office                                                 
        Assistant Wing Commander,         Marine Corps    O-6  O-6  O-6   O-7 
         1st Marine Aircraft Wing                                        

     Mobilization Assistant (MA) to        Air Force      O-8  O-7  O-8   O-8 
       Commander, Air Force Space                                        
                 Command                                                 
          Deputy Commander for          External (joint)  O-8  O-7  O-8   O-8 
    Mobilization and Reserve Affairs,                                    
          U.S. Southern Command                                          

Appendix II: Adjustments Made to General and Flag Officer Requirements
After LMI's Scoring Assessment

                                   Pay grade

... as vetted

DOD component ... as submitted ... as ... as approved through service

(military service originally by the assessed by by the senior and Joint
Staff Position or external-joint) DOD component LMI scorers panel senior
leadership

Deputy Commander for External (joint) O-8 O-7 O-8
Mobilization and Reserve Affairs,
U.S. Special Operations Command

MA to Commander, U.S. Strategic External (joint) O-8 O-7 O-8
Command (Air Force)

MA to Commander, U.S. Strategic External (joint) O-8 O-7 O-8
Command (Navy)

MA to Deputy Commander in External (joint) O-8 O-7 O-8
Chief, U.S. Transportation
Command

Deputy Commander for Army O-8 O-7 O-8
Mobilization and Reserve Affairs,
U.S. Army Pacific Command

MA to Commander, U.S. Pacific External (joint) O-8 O-7 O-8
Command

MA to Director, Intelligence, Air Force O-8 O-7 O-8
Surveillance, and
Reconnaissance, AF/XO

Deputy Commander, U.S. Pacific Navy O-8 O-7 O-8
Fleet

Assistant to the Commander, Air Force O-8 O-7 O-8
Air Force Space Command

Assistant to the Commander, Air Force O-8 O-7 O-8
Air Combat Command

Assistant to the Commander, Air Force O-8 O-7 O-8
Air Mobility Command

Assistant to the Commander, Air Force O-8 O-7 O-8
Pacific Air Force

Assistant to the Commander, Air Force O-8 O-7 O-8
U.S. Air Forces Europe

Assistant to the Commander, Air Force O-8 O-7 O-8
U.S. Pacific Command

Deputy Commander for Resources Navy O-8 O-7 O-8 O-8
and Readiness, U.S. Naval Forces
Europe

Deputy Commanding General, Army O-8 O-7 O-8 O-8
U.S. Army Pacific

MA to Director, Aerospace Air Force O-8 O-7 O-7 O-8
Operations, Air Combat Command

MA to Director, Operations, Air Force O-8 O-7 O-7 O-8
Air Mobility Command

Appendix II: Adjustments Made to General and Flag Officer Requirements
After LMI's Scoring Assessment

                                   Pay grade

... as vetted

DOD component ... as submitted ... as ... as approved through service

(military service originally by the assessed by by the senior and Joint
Staff Position or external-joint) DOD component LMI scorers panel senior
leadership

Assistant Vice Commander, Air Force O-8 O-7 O-7
Air Force Reserve Command

MA to Deputy Chief of Staff, Air Force O-8 O-7 O-7
Air and Space Operations, AF/XO

MA to Deputy Chief of Staff, Plans Air Force O-8 O-7 O-7
and Programs, AF/XP

MA to Deputy Chief of Staff, Air Force O-8 O-7 O-7
Installations and Logistics, AF/IL

MA to Deputy Chief of Staff, Air Force O-8 O-7 O-7
Warfighting Integration, AF/XI

MA to Commander, Air Force Air Force O-8 O-7 O-7
Reserve Command

MA to Director, Legislative Liaison, Air Force O-8 O-7 O-7
SAF/LL

Deputy Director of Naval Reserve, Navy O-7 O-8 O-7
N095B, OPNAV/RPN

Deputy Commander, Naval Navy O-7 O-6 O-7
Air Force Pacific

Director of C4, State Headquarters Air Force O-7 O-6 O-7

MA to Commander, Air Intelligence Air Force O-7 O-6 O-7
Agency

Source: GAO analysis of DOD data.

aUnited Nations Command/U.S. Forces Korea, U.S. Pacific Command/United
Nations Command/Combined Forces Command/U.S. Forces Korea.

Appendix III: Comments From the Department of Defense

Appendix III: Comments From the Department of Defense

                                 Now on p. 25.

                                 Now on p. 25.

Appendix III: Comments From the Department of Defense

                                 Now on p. 25.

                                 Now on p. 25.

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