Force Structure: Assessments of Navy Reserve Manpower
Requirements Need to Consider the Most Cost-effective Mix of
Active and Reserve Manpower to Meet Mission Needs (18-OCT-05,
GAO-06-125).
In 2004, the Navy completed a study of how many selected reserve
personnel are needed to support the active force in meeting
current and future mission requirements. The Ronald W. Reagan
National Defense Authorization Act for 2005 mandated that GAO
assess several aspects of the Navy's study. This report addresses
(1) the criteria and process the Navy used to conduct the review
and what limitations affected the Navy's analyses and
implementation plan; and (2) how the recommendations from the
review will affect the reserve's personnel, funding, and command
and control relationship with the active force.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-125
ACCNO: A39877
TITLE: Force Structure: Assessments of Navy Reserve Manpower
Requirements Need to Consider the Most Cost-effective Mix of
Active and Reserve Manpower to Meet Mission Needs
DATE: 10/18/2005
SUBJECT: Cost effectiveness analysis
Defense capabilities
Military forces
Military reserve personnel
Naval reservists
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GAO-06-125
United States Government Accountability Office
GAO
Report to Congressional Committees
October 2005
FORCE STRUCTURE
Assessments of Navy Reserve Manpower Requirements Need to Consider the Most
Cost-effective Mix of Active and Reserve Manpower to Meet Mission Needs
a
GAO-06-125
[IMG]
October 2005
FORCE STRUCTURE
Assessments of Navy Reserve Manpower Requirements Need to Consider the Most
Cost-effective Mix of Active and Reserve Manpower to Meet Mission Needs
What GAO Found
In conducting its review of Selected Reserve personnel requirements, the
Navy established criteria and followed a structured process, but GAO noted
two limitations that could have potentially affected the quality of the
results. The Navy did not analyze the most cost-effective mix of active
and reserve personnel and in some cases used outdated mission documents as
the baseline for analysis. The Department of Defense personnel directive
states that missions should be accomplished using the least costly mix of
personnel. In addition, GAO's prior work has shown that when reserve
forces can successfully meet deployment and operational requirements, they
can perform missions for less cost than active forces, and that decisions
about the number of personnel needed to perform government functions
should be driven by valid and reliable data. The 10 activities'
justification packages GAO reviewed did not indicate if or how commanders
evaluated the cost-effectiveness of using active or reserve personnel. A
key reason why cost-effectiveness was not evaluated is that the Fleet
Forces Command provided no guidance requiring that such an analysis be
conducted or submitted as part of the activities' justification packages.
Additionally, because the Navy had not devoted the resources to update
some of its baseline mission documents prior to the start of the review,
some of the activities' analyses did not start with the best possible
data, which may have resulted in inaccuracies in their determinations
about capabilities and personnel requirements. Including
cost-effectiveness in the criteria for the zero-based review and
documenting such analyses, as well as ensuring data accuracy, could have
better demonstrated a sound basis for the recommended personnel changes
and, in some cases, may have led to different recommendations.
The review's recommendations will result in a change in the force mix,
some cost savings, and the active force assuming greater command and
control over reserve forces. The Chief of Naval Operations approved
personnel changes that would result in a net reduction of over 16,000
reserve positions, a net increase of about 880 positions in the active
force, and a net increase of about 450 civilian personnel positions. The
reasons for these recommended changes varied by activity. The Fleet Forces
Command also initially estimated that the Navy could save approximately
$283.5 million annually by implementing the personnel recommendations,
although this estimate is changing as some activities reexamine their
personnel requirements using more recent data. In addition to total force
personnel changes, the active force is assuming greater command and
control responsibility for the reserve force. For example, the active
force is now responsible for the training and readiness of the reserve
forces and is receiving their status reports. This realignment of
responsibility is consistent with the Chief of Naval Operation's
expectations for creating a more integrated total force.
United States Government Accountability Office
Contents
Letter
Results in Brief
Background
Zero-Based Review Used a Structured and Participatory Process,
but Two Limitations Could Have Impacted Results
Zero-Based Review Results Would Change the Mix of Active and Reserve
Forces, Reduce Manpower Costs, and Change Some Command and Control
Responsibilities
Conclusions
Recommendations for Executive Action
Agency Comments and Our Evaluation
1 3 5
7
12 14 14 15
Appendixes
Appendix I: Scope and Methodology 16
Appendix II: Selected Navy Activities Visited 18
Activity 1: Headquarters, Naval Air Forces, 18
San Diego, California
Activity 2: Headquarters, Naval Submarine
Forces,
Norfolk, Virginia 19
Activity 3: Bureau of Medicine and Surgery, 20
Washington, D.C.
Activity 4: Naval Security Group, Fort Meade, 21
Maryland
Activity 5: Headquarters, Mine Warfare
Command, Corpus Christi,
Texas 22
Appendix III: Comments from the Department of Defense 23
Appendix IV: GAO Contact and Staff Acknowledgments 25
Tables Table 1: Table 2: Table 3: Table 4: Table 5: Table 6:
Planned Changes in Navy Manpower Levels as a Result of
the Zero-Based Review 12
Zero-Based Review Results for Naval Aviation Reserve
Manpower 18
Zero-Based Review Results for Naval Submarine Forces
Reserve Manpower 20
Zero-Based Review Results for Bureau of Medicine and
Surgery Reserve Manpower 20
Zero-Based Review Results for Naval Security Group
Reserve Manpower 21
Zero-Based Review Results for Mine Warfare Command
Reserve Manpower 22
Contents
Figure Figure 1: Department of the Navy's Human Capital Strategy 6
This is a work of the U.S. government and is not subject to copyright
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A
United States Government Accountability Office Washington, D.C. 20548
October 18, 2005
The Honorable John Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate
The Honorable Duncan L. Hunter
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives
The role of the Navy Reserve is to provide mission-capable units and
manpower to support Navy peacetime and wartime operations. In fiscal
year 2004, the Navy Reserve was authorized 85,900 selected reservists, the
primary source of reserve mobilization manpower to support the 369,800
military personnel in the active force.1 The Secretary of Defense noted in
a
July 2003 memorandum2 that the balance of capabilities between the active
and reserve forces was not right to meet future mission requirements. In
response, the Chief of Naval Operations announced an effort to transform
the Navy Reserve and create a more integrated total force in which Navy
Reserve capabilities are tied directly to active units in support of Sea
Power
213 mission requirements. As part of a continuing process to fully
integrate
1The Navy Reserve consists of the Ready Reserve (of which the Selected
Reserve and the Individual Ready Reserve are components), the primary
manpower augmentation pool; the Standby Reserve which consists of
individuals who have a temporary disability or hardship and those who hold
key defense-related positions in their civilian jobs that may be
involuntarily ordered to active duty in case of a full mobilization; and
the Retired Reserve which consists of personnel who are receiving retired
pay as a result of their reserve service, active service, or both and may
be involuntarily ordered to active duty in case of a full mobilization.
2Secretary of Defense Memorandum, Rebalancing Forces (July 9, 2003).
3Sea Power 21 is the Navy's vision of how it will organize, integrate, and
transform its forces to perform missions in the 21st century. Its pillars
are (1) Sea Strike, which is projecting precise and persistent offensive
power; (2) Sea Shield, which is projecting global defensive assurance; and
(3) Sea Basing, which is projecting joint operational independence. Its
ForceNet concept integrates the three pillars.
its active and reserve forces, in August 2004 the Navy completed a
zerobased review of the requirements for Navy selected reservists.4 The
objective of the review was to determine how many selected reserve
personnel are needed to support the active force in meeting current and
future Navy mission requirements.
In the Ronald W. Reagan National Defense Authorization Act for 2005,5
Congress mandated that we assess several issues related to the Navy's
review of selected reserve manpower requirements, including (1) the extent
that the Navy used clearly defined and consistent criteria and a sound
methodology in determining the future mix of active and reserve components
and (2) the extent the Navy's zero-based review process considered
operational concepts and emerging mission requirements. As agreed with
your offices, we provided an interim briefing addressing these objectives
on March 29, 2005. To summarize the results of our work, this final report
addresses the following questions:
1. What criteria and process did the Navy use to conduct its zero-based
review of reserve manpower requirements, and what, if any, limitations
affect the Navy's analyses and implementation plans?
2. How will the recommendations from the zero-based review affect the
reserve's manpower, funding, and command and control relationship with the
active force?
To answer these questions, we analyzed the criteria, process, and guidance
the Fleet Forces Command used to conduct the zero-based review by
reviewing the documentation for selected Navy activities. As part of our
analysis, we examined the review results for 10 Navy activities and
visited the Naval Air Forces Command and four other selected activities to
assess the zero-based review process at the activity level and obtain
detailed information about recommended reserve manpower changes. In
addition, we obtained information from Navy Headquarters and Navy Reserve
Headquarters to determine how the review's results would impact active and
reserve command and control relationships and reviewed planned funding
documents to assess the extent that recommended reserve
4A zero-based review is a review conducted without consideration of
funding requirements, availability of personnel, and organizational
limitations.
5Pub. L. No. 108-375, S: 518 (2004).
manpower changes were reflected in future budgets. We also obtained
information from the Office of the Assistant Secretary of the Navy,
Manpower and Reserve Affairs to determine the relationship between the
Department of the Navy Human Capital Strategy and the Navy's zero-based
review. Except for some outdated mission documents used as the baseline
for manpower requirements, we concluded the data were sufficiently
reliable for the purpose of this report. We conducted our review from
September 2004 through September 2005 in accordance with generally
accepted government auditing standards. A more detailed description of the
scope and methodology used in our review can be found in appendix I.
Results in Brief In conducting its zero-based review of reserve manpower
requirements, the Navy established criteria for its review and
consistently followed a structured process that reassessed requirements in
light of changing mission requirements and strategic goals. However, the
review did not analyze the most cost-effective mix of active and reserve
manpower to perform validated missions or always use updated data in
conducting its analyses. The Department of Defense's directive that covers
manpower management states that missions should be accomplished using the
least costly mix of manpower.6 In addition, our prior work has shown that
when reserve forces can successfully meet deployment and operational
requirements, they can perform missions for less cost than active forces,7
and that decisions about the manpower needed to perform government
functions should be driven by valid and reliable data that clearly link
manpower levels and strategic goals.8 In conducting the zero-based review
of reserve requirements, the Navy's Fleet Forces Command developed
specific criteria and guidance to facilitate a consistent approach by its
subordinate activities that participated in the review. However, we found
that the 10 activities' justification packages we reviewed did not
indicate if or how commanders evaluated the cost-effectiveness of using
active or reserve manpower. A key reason why cost effectiveness was not
evaluated
6Department of Defense Directive 1100.4, Guidance for Manpower Management,
Section 3.2.3 (Feb. 12, 2005).
7GAO, Air Force Bombers: Moving More B-1s to the Reserves Could Save
Millions Without Reducing Mission Capability, GAO/NSIAD-98-64 (Washington,
D.C.: Feb. 26, 1998).
8GAO, Military Personnel: DOD Needs to Conduct a Data-Driven Analysis of
Active Military Personnel Levels Required to Implement the Defense
Strategy, GAO-05-200 (Washington, D.C.: Feb. 1, 2005).
is that Fleet Forces Command did not require that such an analysis be
conducted or submitted as part of the activities' justification packages.
Therefore, while the review enabled the Navy to better align reserve
missions with emerging requirements due to the changing security
environment, its results may not have reflected the most cost-effective
mix of active and reserve manpower. Additionally, because the Navy had not
devoted the resources to update some of its baseline mission documents
prior to the start of the review, some of the activities' analyses did not
start with the best possible data regarding the manpower needed for future
mission requirements. Including cost-effectiveness in the criteria for the
zero-based review and documenting such analyses, as well as ensuring data
accuracy, could have better demonstrated a sound basis for the manpower
changes recommended or in some cases might have led to different
recommendations.
When implemented, the recommendations from the Navy's zero-based review
will result in a changed mix of active and reserve forces, some cost
savings, and the active force assuming greater command and control over
the reserve forces. The Chief of Naval Operations approved manpower
changes recommended by the activities that would result in a net reduction
of over 16,000 reserve positions, a net increase of about 880 positions in
the active force, and a net increase of about 450 civilian personnel
positions. The basis for these recommendations varied by activity. For
example, the Bureau of Medicine and Surgery recommended cutting 2,198
reserve positions because it had reduced the number of fleet hospitals
from three to two and had rarely filled all of its specialized medical
reserve positions in the past. By contrast, the Naval Security Group had a
net increase of 156 manpower positions because the National Security
Agency had a need for two new capabilities (cryptologic linguists and
signal intelligence analysts) totaling 200 new positions, while
anticipated technology improvements allowed it to eliminate 44 reserve
positions. The Fleet Forces Command initially estimated that the Navy
could save approximately $283.5 million annually by implementing the
initial zero-based review manpower recommendations, although this estimate
is changing as some active component activities are reexamining their
manpower requirements using more recent data. For example, the Naval Air
Forces now plans to eliminate 3,120 reserve positions, which is 378 more
than in its original plan, because the Navy now plans to retire more
aircraft due to airframe fatigue problems. In addition to total force
manpower changes, the active force will assume greater command and control
responsibility for the reserve force. For example, the active force will
now be responsible for the training and readiness of the reserve forces
and the reserve forces are
reporting their readiness status to the active force. This realignment of
responsibility is consistent with the Chief of Naval Operation's
expectations for creating a more integrated total force.
To ensure that ongoing and future reserve manpower requirements are based
on up-to-date data and cost-effectiveness is a consideration in
determining the mix of active and reserve manpower, we are recommending
that the Secretary of Defense direct the Secretary of the Navy to (1)
establish guidance to ensure that ongoing and future workforce reviews
include an analysis of cost-effectiveness and that such analysis is
documented and (2) allocate the required resources to maintain current
Navy mission documents that would provide a valid baseline for ongoing and
future workforce reviews. The Department of Defense concurred with our
recommendations.
Background The Navy has 690,000 men and women in the Ready Reserve, the
Standby Reserve, and the Retired Reserve. The Ready Reserve, which at the
time of the zero-based review, consisted of 85,900 members in the Selected
Reserve and 65,066 in the Individual Ready Reserve, is the primary
manpower pool for the Navy Reserve. The Selected Reserve contains those
units and manpower that are most essential to the wartime missions because
it provides mission-capable units and individuals to augment the active
Navy force when required. For example, the Selected Reserve consist of
Naval aviation units, Naval coastal warfare groups, medical personnel, and
submarine forces personnel. The Individual Ready Reserve consists of
individuals who have received training in the active Navy force or
Selected Reserve. Members of the Selected Reserve receive priority over
other reservists for training and equipment and they generally are the
first to be called to active duty by a presidential order.
In August 2003, the Chief of Naval Operations directed the Commander of
the Fleet Forces Command9 to validate the Navy Selected Reserve manpower
requirements and determine the ability of the Navy Reserve to provide
required capabilities to the Navy forces. To accomplish this, the Fleet
Forces Command conducted a zero-based review over a 10-month period, from
October 2003 to August 2004. Based on the review, the Command recommended
reducing the size of the Selected Reserve from
9The Fleet Forces Command is responsible for manning, training, and
equipping naval operating forces.
85,900 authorized positions to about 70,000 by fiscal year 2011-a decrease
of about 16,000 authorized positions. The Chief of Naval Operations
approved the zero-based review results for implementation in August 2004.
The zero-based review is a component of the Navy's ongoing active/reserve
integration initiative. This initiative is an essential element of the
Department of the Navy's Human Capital Strategy, which was announced in
June 2004. According to the Assistant Secretary of the Navy as well as
Navy and Marine Corps manpower officials, accelerating manpower costs,
changes in the global military environment, and evolving military
requirements prompted the Department of the Navy to develop this strategy.
The overall goal of the strategy is to have the best people with the
proper skills, training, and experience in the right jobs. The strategy
serves as high-level guidance for the Navy and Marine Corps to use in
developing their own implementation plans. As shown in figure 1, the
strategy consists of three elements: civilian personnel transformation,
naval military personnel transformation, and Navy active/reserve
integration.
Figure 1: Department of the Navy's Human Capital Strategy
Source: Department of the Navy.
Implementing the National Security Personnel System will facilitate the
Department of Defense's civilian personnel transformation efforts,10 while
the Navy military personnel transformation is driven by the implementation
of the Navy's Sea Warrior Initiative.11 The active/reserve integration
segment of the human capital strategy is aimed at ensuring the proper
balance between the Navy's active and reserve forces. Although the Navy
initiated the zero-based review prior to the announcement of the human
capital strategy, the review is intended to satisfy a major tasking of the
active/reserve integration element-validating the requirements for reserve
manpower.
Zero-Based Review Used a Structured and Participatory Process, but Two
Limitations Could Have Impacted Results
The Navy's zero-based review process included specific criteria and
guidance on how to evaluate the number of reservists needed and involved
consistent reporting and documentation by Navy activities. The Navy's
iterative review process allowed extensive communications between Navy
activities, the Fleet Forces Command, and others to finalize proposals for
reserve manpower requirements and validate the results. However, our
analysis showed two review limitations. First, Navy activities identified
capability gaps by comparing its current active force to mission
requirements, but did not conduct analyses to determine the most
costeffective mix of active and reserve manpower. Second, some activities
used outdated mission documents which were critical for determining the
manpower needed to perform missions. These limitations could have
adversely impacted the results of the review.
Structured Process Included The Navy's Fleet Forces Command created a
structured process for Detailed Guidance and performing the zero-based
review by providing detailed guidance and Specific Criteria, and Was
specific criteria to determine the reserve manpower needed to augment the
active forces to perform current and future Navy missions. The
guidanceConsistently Documented was provided to 37 active component
activities, consisting of 664 functions.
10The National Security Personnel System is the Department of Defense's
new human resource management system. The system will govern basic pay,
staffing, classification, performance management, labor relations, adverse
actions, and employee appeals. The department has begun to implement the
system with full implementation scheduled for the July 2007 through
January 2008 time frame.
11The Sea Warrior Initiative is designed to implement the Navy's
commitment to the growth and development of its people and will serve as
the foundation of warfighting effectiveness by ensuring the right skills
are in the right place at the right time.
The criteria for assessing reserve manpower requirements included the
importance of the reserve component to the mission, reserve component's
warfighting capability, current status of the reserves' capability, and
the reserves' warfighting capability role in the Sea Power 21 operational
concept. In following the guidance and applying these criteria, the
functions conducted a capability gap analysis by determining (1) the
extent to which the active forces could meet the mission requirement and
(2) how many reserve personnel would be required to fill any remaining
gaps in the active forces' capability.
The zero-based review guidance also required review results to be reported
and documented in a standardized format. Our review of 10 of 37 activity
packages submitted to the Fleet Forces Command confirmed that each of the
232 functions associated with the 10 activities completed a structured
electronic spreadsheet containing pertinent information about mission
capability requirement, current manpower authorizations, and proposed
manpower changes to justify the reserve manpower needed to perform its
assigned mission. Each function also cited that its mission linked to one
of the pillars of Navy Sea Power 21. For example, all eight of the Naval
Security Group activity's functions linked their missions to Sea Shield,
the pillar that provides sea-based theater and strategic defense. The
functions also considered the manpower needs of emerging mission
requirements. For example, the Naval Coastal Warfare Groups from the Naval
Surface Forces activity identified the need for an additional 1,028
reserve positions to support homeland defense by increasing port security
and harbor defense at our port facilities in the United States and
overseas.
Participatory and Iterative Process Helped the Navy Finalize Proposals and
Validate Results
The zero-based review involved substantial interaction between Navy
activities, the Fleet Forces Command, and outside subject matter experts
to develop the final justification for reserve manpower and perform
multilevel reviews of proposed reserve manpower changes. While the active
component conducted the review, the Navy activities occasionally relied on
the Navy Reserve Command for needed manpower data according to a command
official. The Commander of the Navy Reserve Force also participated in the
high-level review of the proposed reserve manpower changes. The process
allowed multiple two-way communications to finalize proposals for reserve
manpower requirements and validate the results. In instances where the
Fleet Forces Command disagreed with an activity's initial proposal, the
activity revised and resubmitted its proposal or provided additional
justification until the disagreement was resolved. After the Fleet Forces
Command made a
decision about the number of authorized reserve positions, it notified the
activities and allowed them to again officially request reconsideration by
providing additional documentation and support. For example, the Naval Air
Systems Command first submitted justification for 652 reserve positions.
However, after reviewing the justification package, the Fleet Forces
Command recommended eliminating all of the Naval Air Systems Command's
reserve positions because they were not linked to mobilization
requirements. The Naval Air Systems Command resubmitted justification for
226 reserve positions to provide special skills and support for
contingency operations. The justification convinced the Fleet Forces
Command to approve 226 reserve positions.
Within the Fleet Forces Command, the activities' packages were first
reviewed by analysts and an initial review board. A subject matter expert
review board then reviewed the proposals before passing them on to an
executive board of senior officers. After the executive board approved the
results, they were given to the Commander of the Fleet Forces Command, who
also reviewed and approved the results. The criteria the Fleet Forces
Command used for validating the reserve manpower requirements included
whether (1) the particular mission is suitable for the reserve component,
(2) the position is required to be filled by a military person, (3) the
position fills a gap in the active component's capabilities, and (4) the
reserve component can perform the mission. The validation process included
a mission risk assessment by the Fleet Forces Command of how important the
reserve forces were to performing the mission. The Command then assigned a
low, moderate, or high-risk designation as to whether the active component
could perform the mission without the planned contribution from the
reserve component. For example, the Fleet Forces Command assessed that
there was a low risk that the Maritime Patrol Reconnaissance function
could not perform the mission without the reserves' contribution. After
the results were validated, they had to be approved by the Total Force
Flag Steering Group, a group of senior officers, including the Commander
of the Navy Reserve Force, charged with ensuring continued progress in the
integration of Navy active and reserve forces. At the end of the review,
the Fleet Forces Command recommended reserve manpower changes to the Chief
of Naval Operations for his approval.
Two Review Limitations The Navy's zero-based review had two limitations
that could have changed Could Have Adversely the number of active and
reserve manpower recommended to the Chief of Affected Results Naval
Operations. The Navy (1) did not assess the most cost-effective mix
of active and reserve manpower to perform the mission and (2) used
outdated critical mission documents as a baseline for manpower
requirements.
Identifying Capability Gaps in The Navy's zero-based review process
focused on identifying the extent to
the Active Force May Not Have which the active force could perform Navy
missions and then determining
Produced the Most Cost-whether reserve manpower could fill any remaining
gaps, which may not
effective Mix of Active and have resulted in the most cost-effective mix
of active and reserve forces.
Reserve Forces Given the Department of the Navy's affordability challenges
and the Assistant Secretary of the Navy's concern about accelerating
manpower costs, the service must find ways to ensure it is accomplishing
its mission with the most cost-effective mix of active, reserve, and
civilian forces. In his guidance for 2004, the Chief of Naval Operations
stated his commitment to fully integrating the active, reserve, and
civilian forces. However, he also noted the need to minimize the total
number of personnel on payroll and stated, "but we do not want to spend
one extra penny for manpower we do not need." Additionally, the Department
of Defense's directive that covers manpower management states that
missions should be accomplished using the least costly mix of manpower.12
We have shown that when the reserve force can successfully meet deployment
and operational requirements, it can generally perform missions at a lower
cost than the active force because active units have all full-time
personnel assigned whereas reserve units have mostly part-time personnel
assigned.13 By identifying capability gaps in the active force as the
primary criterion for determining the required reserve manpower, the Navy
failed to assess whether the lower cost reserve force could be used to
meet capabilities currently provided by the active force.
While the Fleet Forces Command's general guidance indicated that the
manpower requirements review should consider cost in determining an
adequate return on investment,14 it also stated that the return on
investment should be based on commanders' judgment. However, the Command
did not require the activities to perform cost analyses to determine the
most cost-effective mix of active and reserve forces needed to perform
assigned missions as a basis for proposing the future mix of active and
reserve manpower. If the most cost-effective mix of active and
12DOD Directive 1100.4.
13GAO/NSIAD-98-64.
14The term "return on investment" included consideration of the total
ownership cost of the position.
reserve forces had been a major criterion in the review process, the
results might have been different and the Navy may have been able to
realize additional savings for some activities. For example, our current
analysis of Navy data showed that the manpower costs for a reserve
squadron of nine P-3 Maritime Patrol and Reconnaissance aircraft would be
approximately $20 million annually-about $8 million or 29 percent less
than the estimated manpower cost of $28 million for an active squadron.
Outdated Mission Documents The Navy's use of outdated critical mission
documents as a baseline may
May Have Resulted in Inaccurate have resulted in inaccurate
recommendations about the Navy reserve
Manpower Recommendations manpower needed to perform missions in the
future. According to the Navy's instruction,15 the documents that provide
information about a unit's mission and the specific operating environment
of the units are the most critical element for developing manpower
requirements. Additionally, our prior work has shown that decisions about
the manpower needed to perform government functions should be driven by
valid and reliable data.16 However, in its briefing to the Chief of Naval
Operations, the Fleet Forces Command acknowledged that many of these
critical mission documents were outdated. Our analysis confirmed this
shortcoming. For example, 25 of the 31 functions belonging to the five
activities we visited did not have recently validated mission documents on
which to base their manpower reviews. The Fleet Forces Command stated that
the critical mission documents had not been updated because of the large
amount and rapidity of change and the lack of sufficient manpower analysts
to keep up with changes. According to a Command official, the activities'
commanders generally applied their judgment to update the most recently
approved mission documents before conducting their analyses to mitigate
the risks. However, this official agreed that use of these outdated
mission documents may have increased the likelihood that manning was not
correct in the associated manpower documents. Without validated and
accurate mission documents to serve as a baseline for manpower numbers,
some of the zerobased review's determinations about capabilities and
manpower requirements may have been inaccurate.
15Department of the Navy Instruction 1000.16J, Manual of Navy Total Force
Manpower Policies and Procedures (Washington, D.C.: January 1998).
16GAO-05-200.
Zero-Based Review Results Would Change the Mix of Active and Reserve Forces,
Reduce Manpower Costs, and Change Some Command and Control Responsibilities
Implementation of the Navy's zero-based review's recommendations will
change the mix of active and reserve forces by decreasing the number of
reserve personnel and increasing the number of active and civilian
personnel. Some cost savings are projected as a result of the recommended
changes. The zero-based review's recommendations will also have the active
force assume greater command and control responsibility over the reserve
force.
Number of Reserve The Navy's zero-based review's recommendations will
substantially Personnel Would decrease the number of reserve personnel and
slightly increase the number Substantially Decrease of active and civilian
personnel. As indicated in table 1, the Chief of Naval
Operations approved a net reduction of over 16,000 reserve positions, a
netWhile Number of Active and increase of about 880 positions in the
active force, and a net increase of 450Civilian Personnel Would civilian
personnel positions.17 Increase Slightly
Table 1: Planned Changes in Navy Manpower Levels as a Result of the
Zero-Based Review
Reserve component Active component Civilian personnel positions positions
positions
About
Positions created 4,338 2,626 450 full-time positions
Positions divested 20,356 1,744
Net change (16,018) 882 450
Source: United States Navy.
At the activities we visited, we found that the reasons for these
recommended changes in manpower varied. For example, the Bureau of
Medicine and Surgery recommended cutting 2,198 reserve positions
17Contractors were not assessed as part of the review.
because it had reduced the requirement for the number of fleet hospitals
from three to two and had rarely filled all of its specialized medical
reserve positions in the past. By contrast, the Naval Security Group
expected a net increase of 156 manpower positions because the National
Security Agency had a need for two new capabilities (cryptologic linguists
and signal intelligence analysts) totaling 200 new positions, while
anticipated technology improvements would allow the Naval Security Group
to eliminate 44 reserve positions. The Mine Warfare Command will make its
airborne and surface mine countermeasure units an all active force by
cutting 1,016 reserve positions from their airborne and surface mine
countermeasures mission and converting 537 full-time reserve positions to
active duty positions because the command could not recruit sufficient
manpower to fill its reserve positions. With the additional active duty
positions, the Command stated that the airborne and surface mine
countermeasures missions could be fully accomplished without the reserve
component's participation. The Navy's zero-based review results for the
five activities that we visited are shown in appendix II.
Manpower Changes Would Result in Some Cost Savings
The Fleet Forces Command initially estimated that implementing the
manpower changes recommended by the zero-based review would save
approximately $283.5 million annually. However, these original estimated
savings are changing. Some active component activities are reexamining
their manpower requirements and submitting changes to their original
proposals because of organizational changes and other ongoing refinements
to manpower requirements. For example, the Naval Air Forces now plans to
eliminate an additional 378 reserve positions because the Navy plans to
retire additional P-3 Maritime Patrol and Reconnaissance aircraft due to
airframe fatigue problems. In another case, subsequent to the zero-based
review, the Navy established the Maritime Force Protection Command that
assumed reserve functions that were previously within the Surface Forces
and the Military Sealift Commands. However, upon its establishment, the
Maritime Force Protection Command determined that 5,250 reserve positions
would be needed versus the 5,840 positions the Fleet Forces Command
originally approved.
Although the Chief of Naval Operations approved the zero-based review
results in August 2004, the changes were not included in the Department of
the Navy's fiscal year 2005 budget. The Fleet Forces Command has required
each Navy activity to complete a transition plan and the Navy has included
the recommended manpower changes in the Future Years
Defense Program beginning in fiscal year 2006. All changes resulting from
the zero-based review are to be completed by 2011.
Active Force to Assume Greater Command and Control of Reserve Force
The zero-based review prompted changes in the command and control
relationships between the Navy active and reserve forces, whereby the
active force will assume greater command and control over the reserve
force. Under the recommended changes, the active force will assume
responsibility for the training and readiness of the reserve force. For
example, the Commander, Navy Reserve Force, will now report to the
Commander, Fleet Forces Command, for the training and readiness of the
reserve force. In addition, the Commander, Naval Air Force Reserve, has
physically moved from New Orleans to San Diego to be colocated with the
Commander, Naval Air Forces, to whom he reports for readiness and training
of reserve aviation forces. This realignment of responsibility is
consistent with the Chief of Naval Operations' objective to create a more
integrated total force.
Conclusions The Navy's zero-based review was an important first step in
its overall strategy to assess the role of the Navy reserve in the total
Navy force. The review is also a critical element in helping the Navy
achieve its desire to reduce manpower costs and move toward a more
affordable total force. However, the Navy's approach of using capability
gaps in the active force as the means to determine Navy reserve manpower
requirements was too narrow. Without consideration of manpower
cost-effectiveness as directed by Department of Defense guidance, this
approach did not provide assurance that the Navy will have the most
cost-effective mix of active and reserve forces in the future.
Furthermore, using outdated mission documents as a baseline for
determining manpower requirements substantially reduced assurance that the
Navy activities started with the best data for making quality manpower
assessments. As the Navy continues to update and review its manpower
requirements and identify ways to reduce its manpower costs in order to
make resources available for other investments, it is important that all
future assessments consider the most cost-effective force mix and be based
on current mission documents.
Recommendations for To assist the Navy in meeting its human capital
strategy goals and ensure that ongoing and future Navy active and reserve
manpower requirement
Executive Action assessments result in the most cost-effective force, we
recommend that the
Secretary of Defense direct the Secretary of the Navy to take the
following two actions:
o develop and implement guidance to ensure that (1) ongoing and future
workforce reviews include cost analyses to determine the most
costeffective mix of active and reserve manpower and (2) the methodology
for and results of cost analyses are documented and
o allocate the required resources to maintain current Navy mission
documents that would provide a valid baseline for ongoing and future
workforce reviews.
Agency Comments and In written comments on a draft of this report, the
Department of Defense concurred with our recommendations. The department
provided technical
Our Evaluation comments, which we incorporated as appropriate. The
department's comments are reprinted in their entirety in appendix III.
We are sending copies of this report to the Secretary of Defense, the
Secretary of the Navy, and other interested congressional committees and
parties. 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) 512-4402 or [email protected] if you or your
staff have any questions concerning this report. Contact points for our
Office of Congressional Relations and Public Affairs may be found on the
last page of this report. Major contributors to this report are listed in
appendix IV.
Janet St. Laurent, Director
Defense Capabilities and Management
Appendix I
Scope and Methodology
To determine the criteria and process the Navy used to conduct its
zerobased review of reserve manpower requirements and the limitations that
could affect the Navy's analyses and implementations plans, we obtained
and analyzed the guidance and expectations the Chief of Naval Operations
provided to the Fleet Forces Command concerning the zero-based review. We
also obtained and analyzed detailed information about the guidance and
instructions the Fleet Forces Command provided to Navy activities
concerning (1) the criteria to use for determining the required reserve
manpower, (2) how the activities should report their review results to the
Fleet Forces Command, (3) the review and validation process for the
results reached during the zero-based review, and (4) plans for
implementing the zero-based review results. Additionally, we met with
Fleet Forces Command officials, as well as officials from the five
activities we visited, and analyzed 10 of 37 justification packages the
activities submitted to the Fleet Forces Command to further understand how
the zero-based review was conducted at the different command levels,
identify the extent to which cost-effectiveness of manpower changes was
considered, and assess the consistency with which the activities reported
their review results. Moreover, we analyzed prior GAO reports and
applicable Navy publications for criteria and best practices in conducting
manpower requirement reviews.
To determine how the recommendations from the zero-based review will
affect the reserve's manpower, funding, and command and control
relationships with the active force, we obtained and analyzed the
justification packages submitted by the 10 Navy activities, the
recommended changes in the number of required reserve manpower and the
cost factors used to calculate manpower savings as well as the
corresponding projected funding requirements for reserve manpower. We also
obtained information about, and discussed how the Navy plans to implement
the results from the zero-based review with officials at the Fleet Forces
Command and the five activities we visited. Additionally, we reviewed
communications from the Chief of Naval Operations and discussed how the
zero-based review would change command and control relationships between
the active and reserve forces with officials at the Fleet Forces Command
and the Navy Reserve Command.
We assessed the reliability of pertinent data about information supporting
the activities' proposals for reserve manpower changes and projected
manpower changes. We examined 10 activity justification packages for
consistency in the Navy's validation and reserve manpower requirements
reporting processes. We also verified the manpower budget programming
Appendix I
Scope and Methodology
factors the Navy used to calculate projected manpower savings and
performed a sample calculation to test the reliability of the projections.
Except for the problem with outdated mission documents we noted in the
body of the report, we concluded that the data were sufficiently reliable
for the purpose of this report.
We performed our review from September 2004 through September 2005 in
accordance with generally accepted government auditing standards.
Appendix II
Selected Navy Activities Visited
After performing substantial review work at Navy Headquarters and the
Fleet Forces Command to obtain overall review results and general
information about how the Navy conducted its zero-based review, we visited
five Navy activities to obtain more detailed information: Headquarters,
Naval Air Forces; Headquarters, Naval Submarine Forces; Bureau of Medicine
and Surgery; Naval Security Group; and Headquarters, Mine Warfare Command.
We selected these particular activities because of special interest from
the professional staff of the Senate and House Armed Services Committees
and because the zero-based review results involved major changes to
reserve manpower requirements for these activities. The purpose of our
visits was to understand in detail the review procedures at the activity
level and assess the consistency with which the activities (1) followed
the guidance and criteria provided by the Fleet Forces Command and (2)
reported their review results. During our visits at these activities, we
also discussed with officials the rationale for recommending major changes
to their reserve manpower requirements.
The information below summarizes the results of the zero-based review for
each of the five activities we visited. These summaries are based on the
activities' justification packages and our discussions with Fleet Forces
Command and activity officials about the rationale for their changes to
reserve manpower requirements. All Navy reserve positions have been
approved by the Chief of Naval Operations (CNO) as of August 2004.
Activity 1: Headquarters, Naval Air Forces provides combat-ready and
sustainable
naval air forces that are trained and equipped to operate in an
environmentHeadquarters, Naval that emphasizes safety, interoperability,
and efficient resource Air Forces, San Diego, management. As shown in
table 2, the zero-based review recommended California almost a 25 percent
reduction in naval aviation reserve manpower.
Table 2: Zero-Based Review Results for Naval Aviation Reserve Manpower
Activity's CNO-
Reserve proposed approved Change
positions before reserve reserve (before - Percentage
review positions positions approved) change
11,157 8,843 8,415 (2,742) -24.58%
Sources: United States Navy (data);
GAO (analysis).
GAO-06-125 Force
Page 18 Structure
Appendix II
Selected Navy Activities Visited
Of the 2,742 total decrease in reserve positions in naval aviation forces,
2,242 (82 percent) are from the Maritime Patrol and Reconnaissance (P-3
aircraft), Helicopter, and Aviation Intermediate Maintenance Division
communities. The decreases in these three communities were supported by
different rationales.
First, Naval Air Forces decided to cut 1,323 positions from the Maritime
Patrol and Reconnaissance units because P-3 airframe fatigue problems
caused the Navy to remove some aircraft from the active inventory. To
provide the active force with additional aircraft, the activity
decommissioned four reserve squadrons, totaling 24 aircraft, and formed
three fleet response units, totaling 18 aircraft. As a result, the
activity needed fewer personnel and 6 additional aircraft were provided to
the active force.
Additionally, the activity cut 491 positions from helicopter squadrons to
better provide projected surge capability for the Fleet Response Plan. The
activity combined five reserve helicopter squadrons of 36 aircraft into
three fleet response units of 24 aircraft. As a result, the activity
needed fewer personnel.
Finally, the activity cut 428 positions from the aviation intermediate
maintenance divisions. The Fleet Forces Command decided to eliminate all
reserve positions from functions in which reserve personnel were not able
to meet deployment requirements.
Activity 2: The Naval Submarine Forces provide antisubmarine warfare,
antisurface
ship warfare, precision land strike, mine warfare, intelligence,
surveillanceHeadquarters, Naval and early warning, and special warfare
capabilities to the U.S. Navy, and Submarine Forces, strategic deterrence
capabilities to the U.S. Strategic Command. As shown Norfolk, Virginia in
table 3, the zero-based review recommended more than a 41 percent
reduction in naval submarine forces reserve manpower.
Appendix II
Selected Navy Activities Visited
Table 3: Zero-Based Review Results for Naval Submarine Forces Reserve Manpower
Activity's CNO-
Reserve proposed approved Change
positions before reserve reserve (before - Percentage
review positions positions approved) change
2,669 2,742 1,564 (1,105) -41.40%
Sources: United States Navy (data); GAO (analysis).
Of the total 1,105 decrease in reserve positions in Naval Submarine
Forces, 1,061 (96 percent) resulted from decommissioning a submarine
tender (maintenance support ship) and decreasing reserve positions for
logistics and administrative support operations.
The activity cut 939 positions from an inactive submarine tender because
the Fleet Forces Command decided that this mission was not essential and
could be performed by a contractor. The activity also cut 122 positions
from logistics and administrative support operations because, according to
officials, the reservists' part-time duty status would not allow them to
participate in submarine training deployments.
Activity 3: Bureau of The Bureau of Medicine and Surgery provides health
care to about 700,000
active duty Navy and Marine Corps members and to 2.6 million
familyMedicine and Surgery, members of active duty and retired personnel,
while supportingWashington, D.C. contingency, humanitarian, and joint
operations around the world. As
shown in table 4, the zero-based review recommended almost a 29 percent
reduction in medical reserve manpower.
Table 4: Zero-Based Review Results for Bureau of Medicine and Surgery
Reserve Manpower
Activity's CNO-
Reserve proposed approved Change
positions before reserve reserve (before - Percentage
review positions positions approved) change
7,810 5,619 5,569 (2,241) -28.69%
Sources: United States Navy (data); GAO (analysis).
Appendix II
Selected Navy Activities Visited
Of the total 2,241 decrease in reserve positions for the Bureau of
Medicine and Surgery, 2,198 (98 percent) are from cuts in medical
treatment facilities and fleet hospitals.
The activity cut 1,388 positions from medical treatment facilities because
most of these positions were associated with special medical skills that
were never filled. The activity also cut 810 positions due to a reduction
in the number of fleet hospitals. The Navy reduced the number of fleet
hospitals from three to two because it does not expect to need as many
hospitals to meet mission requirements under new defense planning
guidance.
Activity 4: Naval The Naval Security Group performs cryptologic and
logistics support
functions for the fleet. As shown in table 5, the zero-based
reviewSecurity Group, Fort recommended more than a 16 percent increase in
naval security reserve Meade, Maryland personnel.
Table 5: Zero-Based Review Results for Naval Security Group Reserve
Manpower
Activity's CNO-
Reserve proposed approved Change
positions reserve reserve (before - Percentage
before review positions positions approved) Change
950 1,150 1,106 156 16.42%
Sources: United States Navy (data); GAO (analysis).
The activity had a net increase of 156 reserve positions, which was
achieved through reductions of some positions and additions of other
positions.
The activity added 180 cryptologic linguists and 20 applied research and
development positions. The number of positions for intelligence collection
and analysis increased because the National Security Agency agreed to pay
for the additional positions to meet its operational requirements. At the
same time, the activity cut 44 information operations positions because
anticipated technological advances in telephone and computer security
allowed the activity to reduce the number of personnel.
Appendix II
Selected Navy Activities Visited
Activity 5: The Mine Warfare Command develops and evaluates mine warfare
doctrine, tactics, and equipment to conduct offensive and defensive
mineHeadquarters, Mine warfare operations throughout the world. It is
responsible for removing allWarfare Command, types of mine threats,
providing intelligence on foreign mine capabilities, Corpus Christi, Texas
and developing tactics to counter other nations' mining capabilities. As
shown in table 6, the zero-based review recommended more than a 90
percent decrease in mine warfare reserve manpower.
Table 6: Zero-Based Review Results for Mine Warfare Command Reserve Manpower
Activity's CNO-
Reserve proposed approved Change
positions before reserve reserve (before - Percentage
review positions positions approved) change
1,280 122 122 (1,158) -90.47
Sources: United States Navy (data); GAO (analysis).
Of the total 1,158 decrease in reserve positions for the Mine Warfare
Command, 1,016 (88 percent) were taken from the Airborne and Surface Mine
Countermeasures Units. This decrease was a result of converting reserve
positions to active positions.
The activity cut 541 Airborne Mine Countermeasures positions by
reorganizing its two Airborne Mine Countermeasures squadrons, each of
which consisted of six active aircraft and four reserve aircraft, into two
squadrons of eight active aircraft each. The activity decided to man the
two squadrons with only active manpower because the reserve functions
could not recruit sufficient manpower needed in specific specialties.
The activity also cut 475 Surface Mine Countermeasures positions. The
activity decided to convert all reserve positions authorized for its 15
ships to active positions because it had experienced reduced operational
effectiveness due to the inability to fill the reserve positions.
Appendix III
Comments from the Department of Defense
Appendix III
Comments from the Department of Defense
Appendix IV
GAO Contact and Staff Acknowledgments
GAO Contact Janet St. Laurent, (202) 512-4402 ([email protected])
Acknowledgments Richard G. Payne, Assistant Director; George O. Morse;
Willie J. Cheely, Jr.; Nicole L. Collier; Bethann E. Ritter; Renee S.
Brown; Jonathan Clark; and Rebecca Shea also made significant
contributions to this report.
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