Military Personnel: DOD Needs to Provide a Better Link between	 
Its Defense Strategy and Military Personnel Requirements	 
(30-JAN-07, GAO-07-397T).					 
                                                                 
The war in Iraq along with other overseas operations have led to 
significant stress on U.S. ground forces and raised questions	 
about whether those forces are appropriately sized and		 
structured. In 2005, the Department of Defense (DOD) agreed with 
GAO's recommendation that it review military personnel		 
requirements. The Office of the Secretary of Defense (OSD)	 
concluded in its 2006 Quadrennial Defense Review (QDR) that the  
number of active personnel in the Army and Marine Corps should	 
not change. However, the Secretary of Defense recently announced 
plans to increase these services' active end strength by 92,000  
troops. Given the long-term costs associated with this increase, 
it is important that Congress understand how DOD determines	 
military personnel requirements and the extent of its analysis.  
GAO has issued a number of reports on DOD's force structure and  
the impact of ongoing operations on military personnel, 	 
equipment, training, and related funding. This statement, which  
draws on that prior work, focuses on (1) the processes and	 
analyses OSD and the services use to assess force structure and  
military personnel levels; (2) the extent to which the services' 
requirements analyses reflect new demands as a result of the	 
changed security environment; and (3) the extent of information  
DOD has provided to Congress to support requests for military	 
personnel.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-397T					        
    ACCNO:   A65385						        
  TITLE:     Military Personnel: DOD Needs to Provide a Better Link   
between Its Defense Strategy and Military Personnel Requirements 
     DATE:   01/30/2007 
  SUBJECT:   Armed forces abroad				 
	     Defense capabilities				 
	     Force planning					 
	     Force structure					 
	     Military forces					 
	     Military personnel 				 
	     Military personnel deployment			 
	     Military policies					 
	     Personnel management				 
	     Policy evaluation					 
	     Requirements definition				 
	     Strategic forces					 
	     Strategic planning 				 

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GAO-07-397T

   

     * [1]Summary
     * [2]Background
     * [3]Determination of Force Structure and Military Personnel Requ

          * [4]The Army Has a Biennial Process to Assess Force Structure an
          * [5]The Marine Corps Conducts a Variety of Analyses to Assess Fo

     * [6]New Demands on Services Have Not Been Fully Reflected In Rec

          * [7]Army's Most Recent Biennial Analysis Did Not Fully Consider
          * [8]The Marine Corps Is Also Facing New Demands That May Not Hav

     * [9]DOD Has Not Clearly Demonstrated the Basis For Military Pers
     * [10]Contacts and Acknowledgments
     * [11]Related GAO Products

          * [12]Order by Mail or Phone

Testimony

Before the Subcommittee on Military Personnel, Committee on Armed
Services, House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 2:00 p.m. EST

Tuesday, January 30, 2007

MILITARY PERSONNEL

DOD Needs to Provide a Better Link between Its Defense Strategy and
Military Personnel Requirements

Statement of Janet A. St. Laurent, Director Defense Capabilities and
Management

GAO-07-397T

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss the Department of Defense's (DOD)
processes for determining force structure and military personnel
requirements for the Army and Marine Corps. The war in Iraq, along with
continuing operations in Afghanistan and elsewhere in the world, have led
to significant stress on U.S. ground forces and have raised questions
about whether they are appropriately sized and structured to meet the
demands of the new security environment. Units are being tasked to stay in
theater longer than anticipated, and some personnel are now embarking on
their third overseas deployment since 2001. Although the department's 2006
Quadrennial Defense Review (QDR) concluded that the Army and Marine Corps
should plan to stabilize at a level of 482,400 and 175,000 active military
personnel respectively, the Secretary of Defense recently announced plans
to permanently increase the size of the active Army and Marine Corps by a
total of 92,000 troops over the next 5 years. Given the significant long-
term costs associated with such an increase, it is important to understand
how DOD determines military personnel requirements and the extent to which
requirements are based on rigorous analysis. As our prior work has shown,
valid and reliable data about the number of personnel required to meet an
agency's needs are critical because human capital shortfalls can threaten
an organization's ability to perform missions efficiently and effectively.
This is particularly true for the DOD, where the lack of rigorous analysis
of requirements could have significant consequences for military personnel
called upon to execute military missions or, alternatively, could lead to
inefficiencies in allocating funds within the defense budget.

My testimony today will focus on three issues: (1) the processes and
analyses used by the Office of the Secretary of Defense (OSD) and the Army
and Marine Corps to assess force structure and military personnel levels;
(2) the extent to which the services' recently completed requirements
analyses reflect new demands resulting from the changed security
environment; and (3) the extent of information provided to Congress to
support the department's requests for military personnel. In light of the
recent proposal to permanently increase the size of the Army and Marine
Corps, my comments will focus largely on requirements for active
personnel, although the service requirements process I will be discussing
apply to both the active and reserve components, and our prior work has
shown that ongoing operations have taken a toll on the reserve components
as well. A congressionally-mandated commission has been tasked to conduct
a comprehensive examination of how the National Guard and Reserve are used
in national defense. This commission's work is still ongoing.

My testimony today is based primarily on our past work on Army and Marine
Corps force structure and military personnel issues as well as our work on
human capital and military personnel issues defensewide. A list of our
past reports can be found in the Related GAO Products section at the end
of this statement. We updated some of our information during recent
discussions with Army and Marine Corps officials. To obtain these updates
we interviewed officials and obtained documents from Headquarters,
Department of the Army; the U.S. Army Center for Army Analysis;
Headquarters Marine Corps, Manpower and Reserve Affairs; and the Marine
Corps Combat Development Command. To assess the processes and analyses
used by the Office of the Secretary of Defense and the Army and Marine
Corps to assess force structure and military personnel levels, we relied
on our past reports on these subjects, as well as updated information from
Total Army Analysis 08-13 and Marine Corps force structure plans from the
sources noted. To assess the extent to which the services' recently
completed requirements analyses reflect new demands resulting from the
changed security environment, we relied on our past work, DOD's February
2006 Quadrennial Defense Review report, the Secretary of Defense's
congressional testimony announcing his proposal to increase Army and
Marine Corps force levels, and Total Army Analysis 08-13 and Marine Corps
force structure plans. To assess the extent of information provided to
Congress to support the department's requests for military personnel, we
relied on our past reporting on human capital and end strength issues.

Summary

Both OSD and the military services play key roles in determining force
structure and military personnel requirements and rely on a number of
complex and interrelated processes and analyses--rather than one clearly
documented process. Decisions reached by OSD in the QDR, and in budget and
planning guidance, often set the parameters within which the services can
determine their own force structure requirements and allocate military
personnel to meet operational and institutional needs. For example, the
2006 QDR determined that the Army would have 42 active combat brigades and
482,400 active military personnel, and these numbers are a "given" in the
Army's biennial force structure analysis. A major purpose of the Army's
biennial analysis is to determine the number and types of support forces,
such as transportation companies and military police units, to support
combat forces. Also, if total support force requirements exceed available
military personnel levels approved by OSD, the process helps the Army
determine where to accept risk. The Army's most recent biennial force
structure analysis indicated that its total requirements and available
military personnel levels (for all components) were about equal, although
the Army decided to reallocate many positions to create more high-demand
units, such as military police, and reduce numbers of lesser needed units.
Similarly, the Marine Corps uses a number of modeling, simulation, and
other analytical tools to identify gaps in its capabilities to perform its
missions, to identify the personnel and skills needed to provide the
capabilities using professional judgment, and to assess where to accept
risk. The Marine Corps has also made changes to the composition and mix of
its units as a result of its analyses.

Both the Army and Marine Corps are coping with additional demands that may
not have been fully reflected in the 2006 QDR or in recent service
analyses that were based on OSD guidance. These analyses predate the
Secretary of Defense's recent announcement to increase Army and Marine
Corps forces by 92,000. However, some of this work, and our own
assessments, are only months old and should provide a useful baseline for
helping the committee understand what has changed since the 2006 QDR and
service analyses were completed. First, the Army's most recent analysis
did not fully consider the impact of converting from a division-based
force to modular brigades. The Army's recent analysis recognized that
modular units would require greater numbers of combat forces than its
prior division-based force and assumed this could be accomplished by
reducing military positions in the Army's institutional forces, such as
its command headquarters and training base, rather than increasing the
size of the active force. In September 2006, we questioned whether the
Army could reduce sufficient numbers of military positions in the
institutional force and meet all of its modular force requirements with
the QDR-directed active end strength of 482,400. Second, the Army's
analysis assumed that the Army would be able to provide 18 to 19 brigades
at any one time (including 14 active and 4 to 5 National Guard brigades)
to support worldwide operations. However, the Army's global operational
demand for forces is currently 23 brigades and Army officials believe this
demand will continue for the foreseeable future. The Marine Corps is also
supporting a high pace of operations that may not have been fully
reflected in its recent analyses. For example, the 2006 QDR directed the
Marine Corps to stand up a Special Operations Command requiring about
2,600 military personnel, but did not increase the size of the Marine
Corps to reflect this new requirement. The Marines also are experiencing a
higher operational tempo than anticipated and standing up specialized
units to train Iraqi forces, which may not have been fully envisioned in
their earlier analyses.

Our past work has also shown that DOD has not provided a clear and
transparent basis for its military personnel requests to Congress that
demonstrates how these requests are linked to the defense strategy. We
believe that it will become increasingly important to demonstrate a clear
linkage as Congress confronts looming fiscal challenges facing the nation
and DOD attempts to balance competing priorities for resources in
personnel, operations, and investments accounts. DOD's February QDR 2006
report did not provide much insight into the basis for its conclusion that
the size of today's forces is appropriate to meet current and projected
operational demands. Further, the Marine Corps' decision to initiate a new
study to assess its active military requirements shortly after the QDR
report was issued is an indication that the QDR did not achieve consensus
on required military personnel levels. In evaluating DOD's proposal to
permanently increase active Army and Marine Corps personnel levels by
92,000 over the next 5 years, Congress should carefully weigh the
long-term costs and benefits. While the Army and Marine Corps are
currently experiencing a high operating tempo, increasing personnel levels
will entail billions of dollars for both start-up and recurring costs, not
just for the personnel added to the force, but for related equipment and
training. Given the significant implications of this request, DOD should
be prepared to fully explain and document the basis for the proposed
increases and how the additional positions will be used. To help
illuminate the basis for DOD's request, Congress may wish to consider
requiring DOD to answer the following questions: What analysis has been
done to demonstrate how the proposed increases are linked to the defense
strategy? How will the additional personnel be allocated to combat units,
support forces, and institutional personnel, for functions such as
training and acquisition? What are the initial and long-term costs to
increase the size of the force and how does DOD plan to fund this
increase? Do the services have detailed implementation plans to manage
potential challenges, such as recruiting additional personnel, providing
facilities, and procuring new equipment? Our prior work on recruiting and
retention challenges, along with our prior reports on challenges in
equipping modular units, identify some potential challenges that could
arise in implementing an increase in the size of the Army and Marine Corps
at a time when the services are supporting ongoing operations in Iraq and
Afghanistan.

Background

The 2005 National Defense Strategy provided the strategic foundation for
the 2006 QDR and identified an array of traditional, irregular,
catastrophic, and disruptive challenges that threaten U.S. interests. To
operationalize the defense strategy, the 2006 QDR identified four priority
areas for further examination: defeating terrorist networks, defending the
homeland, shaping the choices of countries at strategic crossroads, and
preventing hostile state and non-state actors from acquiring or using
weapons of mass destruction. These areas illustrated the types of
capabilities and forces needed to address the challenges identified in the
defense strategy and helped DOD to assess that strategy and review its
force planning construct. Changes in the security environment and the
force planning construct may require DOD and the services to reassess
force structure requirements--how many units and of what type are needed
to carry out the national defense strategy. Likewise, changing force
structure requirements may create a need to reassess active end
strength---the number of military personnel annually authorized by
Congress which each service can have at the end of a given fiscal year.

The services allocate their congressionally authorized end strength among
operational force requirements (e.g., combat and support force units),
institutional requirements, and requirements for personnel who are
temporarily unavailable for assignment. Operational forces are the forces
the services provide to combatant commanders to meet mission requirements,
such as ongoing operations in Iraq and Afghanistan. Institutional forces
include command headquarters, doctrine writers, and a cadre of acquisition
personnel, which are needed to prepare forces for combat operations.
Personnel who are temporarily unavailable for assignment include
transients, transfers, holdees, and students.

The Secretary of Defense's recent proposal to permanently increase the
size of the Army and Marine Corps represents a significant shift in DOD's
plans, as reflected in the 2006 QDR. In fiscal year 2004, the Army's
authorized end strength was 482,400 active military personnel. Since that
time, the Army has been granted authority to increase its end strength by
30,000 in order to provide flexibility to implement its transformation to
a modular force while continuing to deploy forces to overseas operations.
Rather than return the Army to the 482,400 level by fiscal year 2011, as
decided in the 2006 QDR, DOD's new proposal would increase the Army's
permanent end strength level to 547,000 over a period of 5 years. DOD's
plans for Marine Corps end strength have also changed. In fiscal year
2004, the Marine Corps' was authorized to have 175,000 active military
personnel. For the current fiscal year, Marine Corps end strength was
authorized at 180,000, although DOD's 2006 QDR planned to stabilize the
Marine Corps at the 175,000 level by fiscal year 2011. The Secretary's new
proposal would increase permanent Marine Corps end strength to a level of
202,000 over the next 5 years. In terms of funding, DOD is currently
authorized to pay for end strength above 482,400 and 175,000 for the Army
and Marine Corps, respectively, with emergency contingency reserve funds
or from supplemental funds used to finance operations in Iraq and
Afghanistan. Until Congress receives the President's budget request, it is
unclear how DOD plans to fund the proposed increases.

In 2004, the Army began its modular force transformation to restructure
itself from a division-based force to a modular brigade-based force--an
undertaking it considers the most extensive reorganization of its force
since World War II. This initiative, according to Army estimates, will
require an investment exceeding $52 billion through fiscal year 2011. The
foundation of the modular force is the creation of standardized modular
combat brigades in both the active component and National Guard. The new
modular brigades are designed to be self-sufficient units that are more
rapidly deployable and better able to conduct joint and expeditionary
operations than their larger division-based predecessors. The Army planned
to achieve its modular restructuring without permanently increasing its
active component end strength above 482,400, in accordance with a decision
reached during the 2006 QDR. The February 2006 QDR also specified that the
Army would create 70 active modular combat brigades in its active
component and National Guard.

According to the Army, the modular force will enable it to generate both
active and reserve component forces in a rotational manner. To do this,
the Army is developing plans for a force rotation model in which units
will rotate through a structured progression of increased unit readiness
over time. For example, the Army's plan is for active service members to
be at home for 2 years following each deployment of up to 1 year.

Determination of Force Structure and Military Personnel Requirements Is A
Complex Process Involving Both OSD And The Services

Both OSD and the military services play key roles in determining force
structure and military personnel requirements and rely on a number of
complex and interrelated process and analyses--rather than on one clearly
documented process. Decisions made by OSD can have a ripple effect on the
analyses that are conducted at the service level, as I will explain later.

OSD is responsible for the QDR--the official strategic plan of DOD--and
provides policy and budget guidance to the services on the number of
active personnel. The QDR determines the size of each services'
operational combat forces based on an analysis of the forces needed to
meet the requirements of the National Defense Strategy. For example, the
2006 QDR specified the Army's operational force structure would include 42
active Brigade Combat Teams and that the Army should plan for an active
force totaling 482,400 personnel by fiscal year 2011. The QDR also
directed the Marine Corps to add a Special Operations Command and plan for
an active force totaling 175,000 military personnel by fiscal year 2011.

In order to provide a military perspective on the decisions reached in the
QDR, Congress required the Chairman of the Joint Chiefs of Staff to
conduct an assessment of the review including an assessment of risk. In
his assessment of the 2006 QDR, the Chairman concluded that the Armed
Forces of the United States stood "fully capable of accomplishing all the
objectives of the National Defense Strategy." In his risk assessment, he
noted that the review had carefully balanced those areas where risk might
best be taken in order to provide the needed resources for areas requiring
new or additional investment.

Another area where the Office of the Secretary of Defense plays an
important role is in developing various planning scenarios that describe
the type of missions the services may face in the future. These scenarios
are included in planning guidance that the Office of the Secretary of
Defense provides the services to assist them in making more specific
decisions on how to allocate their resources to accomplish the national
defense strategy. For example, these scenarios would include major combat
operations, stability operations, domestic support operations, and
humanitarian assistance operations.

GAO examined whether DOD had established a solid foundation for
determining military personnel requirements. While we are currently
reviewing the plans and analyses of the 2006 QDR, our February 2005
assessment of DOD's processes identified several concerns that, if left
uncorrected, could have hampered DOD's QDR analysis.^1 First, we found
that DOD had not conducted a comprehensive, data-driven analysis to assess
the number of active personnel needed to implement the defense strategy.
Second, OSD does not specifically review the services' requirements
processes to ensure that decisions about personnel levels are linked to
the defense strategy. Last, a key reason why OSD had not conducted a
comprehensive analysis was that it has sought to limit personnel costs to
fund competing priorities such as transformation.

^1 GAO, Military Personnel: DOD Needs to Conduct a Data-Driven Analysis of
Active Military Personnel Levels Required to Implement the Defense
Strategy, [13]GAO-05-200 (Washington, D.C.: Feb. 1, 2005).

The Army Has a Biennial Process to Assess Force Structure and Allocate Military
Personnel Positions to Units

The Army uses a biennial, scenario-based requirements process to estimate
the number and types of operational and institutional forces needed to
execute Army missions. This process involves first determining the number
and type of forces needed to execute the National Military Strategy based
on OSD guidance, comparing this requirement with the Army's present force
structure, and finally reallocating military positions to minimize the
risks associated with any identified shortfalls. Taken together, this
process is known as "Total Army Analysis." The Army has conducted this
analysis for many years and has a good track record for updating and
improving its modeling, assumptions, and related processes over time, as
we noted in our last detailed analysis of the Army's process.^2 Active and
reserve forces are included in this analysis in order to provide a total
look at Army requirements and the total end strength available to resource
those requirements. Also, the number of combat brigades is specified by
OSD in the QDR and is essentially a "given" in the Army's requirements
process. The Army's process is primarily intended to assess the support
force structure needed to meet the requirements of the planning scenarios,
and to provide senior leadership a basis for better balancing the force.

In the first phase of the Army's requirements determination process, the
Army uses several models, such as a model to simulate warfights using the
scenarios provided by OSD and the number of brigades OSD plans to use in
each scenario. The outcomes of the warfighting analyses are used in
further modeling to generate the number and specific types of units the
Army would need to support its brigade combat teams. For example, for a
prolonged major war, the Army needs more truck companies to deliver
supplies and fuel to front line units. For other types of contingencies,
the Army may use historical experience for similar operations to determine
requirements since models are not available for all contingencies. The
Army also examines requirements for the Army's institutional force, such
as the Army's training base, in order to obtain a total bottom line
requirement for all the Army's missions.

In the second phase of the Army's process--known as the "resourcing
phase"-- the Army makes decisions on how to best allocate the active and
reserve military personnel levels established by OSD against these
requirements. In order to provide the best match, the Army will develop a
detailed plan to eliminate lower priority units, and stand up new units it
believes are essential to address capability gaps and meet future mission
needs. For example, in recent years, the Army has made an effort to
increase units needed for military police, civil affairs, engineers, and
special operations forces. These decisions are implemented over the
multiple years contained in DOD's Future Years Defense Program. For
example, the intent of the Army's most recent analysis was used to help
develop the Army's budget plans for fiscal years 2008-2013.

^2 GAO, Force Structure: Projected Requirements for Some Army Forces Not
Well Established, [14]GAO-01-485 (Washington, D.C.: May 11, 2001).

Historically, the Army has had some mismatches between the requirements it
estimated and its available military personnel levels. When shortfalls
exist, the Army has chosen to fully resource its active combat brigades
and accept risk among it support units, many of which are in the reserve
component.

The Marine Corps Conducts a Variety of Analyses to Assess Force Structure and
Military Personnel Requirements

The Marine Corps uses a number of modeling, simulations, spreadsheet
analyses, and other analytical tools to periodically identify gaps in its
capabilities to perform its missions, and identify the personnel and
skills needed to provide the capabilities based largely on the
professional judgment of manpower experts and subject-matter experts. The
results are summarized in a manpower document, updated as needed, which is
used to allocate positions and personnel to meet mission priorities. This
document is an assessment of what core capabilities can and cannot be
supported within the authorized end strength, which may fall short of the
needed actual personnel requirements. For example, in 2005, we reported
that the Marine Corps analysis for fiscal year 2004 indicated that to
execute its assigned missions, the Corps would need about 9,600 more
personnel than it had on hand. At the time of this analysis, OSD fiscal
guidance directed the Marine Corps to plan for an end strength of 175,000
in the service's budget submission.

New Demands on Services Have Not Been Fully Reflected In Recent Requirements
Analyses

Both the Army and Marine Corps are coping with additional demands that may
not have been fully reflected in the QDR or their own service requirements
analyses, which have been based on OSD guidance. While the Army's most
recent analysis, completed in 2006, concluded that Army requirements were
about equal to available forces for all three components, this analysis
did not fully reflect the effects of establishing modular brigades--the
most significant restructuring of the Army's operational force structure
since World War II. In addition, OSD-directed planning scenarios used by
the Army in its analysis to help assess rotational demands on the force
may not have reflected real-world conditions such as those in Iraq and
Afghanistan. While the requirements phase of the Army's analysis,
completed in the mid-2005 time frame, may have been based on the best
information available at the time, the Army's transformation concepts have
continued to evolve and the mismatch between the planning scenarios and
actual operations are now more apparent. The Marine Corps is also
undergoing a high pace of operations, as well as QDR-directed changes in
force structure. This has caused the Marine Corps to initiate a new
post-QDR analysis of its force structure requirements.

The service analyses I am about to discuss all preceded the Secretary of
Defense's announcement of his intention to increase Army and Marine Corps
end strength by 92,000. However, some of GAO's reporting on these plans is
only months old and should provide a baseline to help the committee
understand what has changed since the 2006 QDR and service analyses were
completed.

Army's Most Recent Biennial Analysis Did Not Fully Consider Requirements for
Modular Units and Force Rotation Demands

The Army's most recent requirements analysis, which examined force
structure and military personnel needs for fiscal years 2008 through 2013,
considered some of the Army's new transformation concepts, such as the
Army's conversion to a modular force. However, the Army did not consider
the full impact of this transformation in its analysis, in part because
these initiatives were relatively new at the time the analysis was
conducted. The Army's recent analysis recognized that modular units would
require greater numbers of combat forces than its prior division-based
force and assumed this could be accomplished by reducing military
positions in the Army's institutional forces, such as its command
headquarters and training base, rather than increasing the size of the
active force. However, in our September 2006 report discussing the Army's
progress in converting to a modular force, we questioned whether the Army
could meet all of its modular force requirements with a QDR-directed,
active component end strength of 482,400.^3 Under its new modular force,
the Army will have 42 active brigades compared with 33 brigades in its
division-based force. In total, these brigades will require more military
personnel than the Army's prior division-based combat units. Therefore, as
figure 1 illustrates, the Army planned to increase its active component
operational force--that is, its combat forces--from 315,000 to 355,000
personnel to fully staff 42 active modular brigade combat teams. To
accomplish this with an active end strength level of 482,400, the Army had
hoped to substantially reduce the size of its active component
institutional force--that is, its training base, acquisition workforce,
and major command headquarters--from 102,000 to 75,000 military personnel.
The Army also planned to reduce the number of active Army personnel in a
temporary status at any given time, known as transients, transfers,
holdees, and students, or TTHS. In fiscal year 2000, this portion of the
force consisted of 63,000 active military personnel and the Army planned
to reduce its size to 52,400.

^3 GAO, Force Structure: Army Needs to Provide DOD and Congress More
Visibility Regarding Modular Force Capabilities and Implementation Plans,
[15]GAO-06-745 (Washington, D.C.: Sept. 6, 2006).

Figure 1: A Comparison of Active Army End Strength Allocations before and
after the Modular Force Conversion

Before modular conversion--fiscal year 2000 After modular
conversion--fiscal year 2013

While the Army has several initiatives under way to reduce active military
personnel in its institutional force, our report questioned whether those
initiatives could be fully achieved as planned. The Army had made some
progress in converting some military positions to civilian positions, but
Army officials believed additional conversions to achieve planned
reductions in the noncombat force would be significantly more challenging
to achieve and could lead to difficult trade-offs. In addition, cutting
the institutional force at a time when the Army is fully engaged in
training forces for overseas operations may entail additional risk not
fully
anticipated at the time the initiatives were proposed. Last, we noted that
the Army is still assessing its modular unit concepts based on lessons
learned from operations in Iraq and Afghanistan and other analyses led by
the Army's Training and Doctrine Command, and the impact on force
structure requirements may not yet be fully known.

We should note that, at the time of our report, the Army did not agree
with our assessment of its personnel initiatives. In written comments on a
draft of our report, the Army disagreed with our analysis of the
challenges it faced in implementing its initiatives to increase the size
of the operational force within existing end strength, noting that GAO
focused inappropriate attention on these challenges. The Army only
partially concurred with our recommendation that the Secretary of the Army
develop and provide the Secretary of Defense and Congress with a report on
the status of its personnel initiatives, including executable milestones
for realigning and reducing its noncombat forces. The Army stated that
this action was already occurring on a regular basis and another report on
this issue would be duplicative and irrelevant. However, the reports the
Army cited in its response were internal to the Army and the Office of the
Secretary of Defense. The comments did not address the oversight needs of
Congress. We stated in our report that we believe that it is important for
the Secretary of Defense and Congress to have a clear and transparent
picture of the personnel challenges the Army faces in order to fully
achieve the goals of modular restructuring and make informed decisions on
resources and authorized end strength.

Another factor to consider is that the Army's most recent requirements
analysis was linked to planning scenarios directed by OSD and did not
fully reflect current operational demands for Iraq and Afghanistan. The
Army's analysis assumed that the Army would be able to provide 18 to 19
brigades at any one time (including 14 active and 4 to 5 National Guard
brigades) to support worldwide operations. However, the Army's global
operational demand for forces is currently 23 brigades and Army officials
believe this demand will continue for the foreseeable future.

The Marine Corps Is Also Facing New Demands That May Not Have Been Fully
Reflected in Recent Requirements Analyses

The Marine Corps is also experiencing new missions and demands as a result
of the Global War on Terrorism. However, these new requirements do not
appear to have been fully addressed in its requirements analyses. The
following is a summary of the principal analyses that were undertaken to
address Marine Corps force structure personnel requirements in the past
few years.

           o In 2004, the Marine Corps established a Force Structure Review
           Group to evaluate what changes in active and reserve capabilities
           needed to be created, reduced, or deactivated in light of
           personnel tempo trends and the types of units in high demand since
           the Global War on Terrorism. As a result of this review, the
           Marine Corps approved a number of force structure changes
           including increases in the active component's infantry,
           reconnaissance, and gunfire capabilities and decreases in the
           active component's small-craft company and low-altitude air
           defense positions. However, this review was based on the
           assumption that the Marine Corps would need to plan for an end
           strength of 175,000 active personnel. As a result, the Marine
           Corps' 2004 review focused mostly on rebalancing the core
           capabilities of the active and reserve component rather than a
           bottom-up review of total personnel requirements to meet all 21st
           century challenges.
           o In March 2006, shortly after the QDR was issued, the Marine
           Corps Commandant formed a Capabilities Assessment Group to assess
           requirements for active Marine Corps military personnel. One of
           the group's key tasks was to determine how and whether the Marine
           Corps could meet its ongoing requirements while supporting the QDR
           decision to establish a 2,600 personnel Marine Corps Special
           Operations Command. The group was also charged with identifying
           what core capabilities could be provided at a higher end strength
           level of 180,000. We received some initial briefings on the scope
           of the group's work. Moreover, Marine Corps officials told us that
           the group completed its analysis in June 2006. However, as of
           September 2006 when we completed our work, the Marine Corps had
           not released the results of its analysis. Therefore, it is not
           clear whether and to what extent this review formed the basis for
           the President's recent announcement to permanently expand the size
           of the active Marine Corps.
			  
			  DOD Has Not Clearly Demonstrated the Basis For Military Personnel
			  Requests

           Our past work has also shown that DOD has not provided a clear and
           transparent basis for its military personnel requests to Congress,
           requests that demonstrate a clear link to military strategy.
           Ensuring that the department provides a sound basis for military
           personnel requests and can demonstrate how they are linked to the
           military strategy will become increasingly important as Congress
           confronts looming fiscal challenges facing the nation. During the
           next decade, Congress will be faced with making difficult
           trade-offs among defense and nondefense-related spending. Within
           the defense budget, it will need to allocate resources among the
           services and their respective personnel, operations, and
           investment accounts while faced with multiple competing priorities
           for funds. DOD will need to ensure that each service manages
           personnel levels efficiently since personnel costs have been
           rising significantly over the past decade. We have previously
           reported that the average cost of compensation (including cash,
           non-cash, and deferred benefits) for enlisted members and officers
           was about $112,000 in fiscal year 2004.^4 The growth in military
           personnel costs has been fueled in part by increases in basic pay,
           housing allowances, recruitment and retention bonuses, incentive
           pay and allowances, and other special pay. Furthermore, DOD's
           costs to provide benefits, such as health care, have continued to
           spiral upward.

           As noted earlier, we have found that valid and reliable data about
           the number of personnel required to meet an agency's needs are
           critical because human capital shortfalls can threaten an agency's
           ability to perform its missions efficiently and effectively.
           Data-driven decisionmaking is one of the critical factors in
           successful strategic workforce management. High-performing
           organizations routinely use current, valid, and reliable data to
           inform decisions about current and future workforce needs. In
           addition, they stay alert to emerging mission demands and remain
           open to reevaluating their human capital practices. In addition,
           federal agencies have a responsibility to provide sufficient
           transparency over significant decisions affecting requirements for
           federal dollars so that Congress can effectively evaluate the
           benefits, costs, and risks.

           DOD's record in providing a transparent basis for requested
           military personnel levels can be improved. We previously reported
           that DOD's annual report to Congress on manpower requirements for
           fiscal year 2005 broadly stated a justification for DOD's
           requested active military personnel, but did not provide specific
           analyses to support the justification. In addition, DOD's 2006 QDR
           report did not provide significant insight into the basis for its
           conclusion that the size of today's forces--both the active and
           reserve components across all four military services--is
           appropriate to meet current and projected operational demands.
           Moreover, the Marine Corps' decision to initiate a new study to
           assess active military personnel requirements shortly after the
           2006 QDR was completed is an indication that the QDR did not
           achieve consensus in required end strength levels.

           In evaluating DOD's proposal to permanently increase active Army
           and Marine Corps personnel levels by 92,000 over the next 5 years,
           Congress should carefully weigh the long-term costs and benefits.
           It is clear that Army and Marine Corps forces are experiencing a
           high pace of operations due to both the war in Iraq and broader
           demands imposed by the Global War on Terrorism that may provide a
           basis for DOD to consider permanent increases in military
           personnel levels. However, it is also clear that increasing
           personnel levels will entail significant costs that must be
           weighed against other priorities. The Army has previously stated
           that it costs about $1.2 billion per year to increase active
           military personnel levels by 10,000. Moreover, equipping and
           training new units will require billions of additional dollars for
           startup and recurring costs.

           DOD has not yet provided a detailed analysis to support its
           proposal to permanently increase the size of the Army and Marine
           Corps. Given the significant implications for the nation's ability
           to carry out its defense strategy along with the significant costs
           involved, additional information will be needed to fully evaluate
           the Secretary of Defense's proposal.

           To help illuminate the basis for its request, DOD will need to
           provide answers to the following questions:

           o What analysis has been done to demonstrate how the proposed
           increases are linked to the defense strategy? To what extent are
           the proposed military personnel increases based on supporting
           operations in Iraq versus an assessment of longer-term
           requirements?
           o How will the additional personnel be allocated to combat units,
           support forces, and institutional personnel, for functions such as
           training and acquisition?
           o What are the initial and long-term costs to increase the size of
           the force and how does the department plan to fund this increase?
           o Do the services have detailed implementation plans to manage
           potential challenges such as recruiting additional personnel,
           providing facilities, and procuring new equipment?

           Our prior work on recruiting and retention challenges, along with
           our prior reports on challenges in equipping modular units,
           identify some potential challenges that could arise in
           implementing an increase in the size of the Army and Marine Corps
           at a time when the services are supporting ongoing operations in
           Iraq and Afghanistan. For example, we have reported that 19
           percent of DOD's occupational specialties for enlisted personnel
           were consistently overfilled while other occupational specialties
           were underfilled by 41 percent for fiscal years 2000 through
           2005.^5 In addition, we have reported that the Army is
           experiencing numerous challenges in equipping modular brigades on
           schedule, in part due to the demands associated with meeting the
           equipment needs of units deploying overseas.^6 Such challenges
           will need to be carefully managed if Congress approves the
           Secretary of Defense's proposal.

           Mr. Chairman and members of the subcommittee, this concludes my
           prepared remarks. I would be happy to answer any questions you may
           have.
			  
^4 GAO, Military Personnel: DOD Needs to Improve the Transparency and
Reassess the Reasonableness, Appropriateness, Affordability, and
Sustainability of its Military Compensation System, [34]GAO-05-798
(Washington, D.C.: July 19, 2005).

^5 GAO, Military Personnel: DOD Needs Action Plan to Address Enlisted
Personnel Recruitment and Retention Challenges, [35]GAO-06-134
(Washington, D.C.: Nov. 17, 2005).

^6 [36]GAO-06-745 .			  
			  
			  Contacts and Acknowledgments

           For questions about this statement, please contact Janet St.
           Laurent at (202) 512-4402. Other individuals making key
           contributions to this statement include: Gwendolyn Jaffe,
           Assistant Director; Kelly Baumgartner; J. Andrew Walker; Margaret
           Morgan; Deborah Colantonio; Harold Reich; Aisha Cabrer; Susan
           Ditto; Julie Matta; and Terry Richardson.
			  
			  Related GAO Products

           Force Structure: Army Support Forces Can Meet Two-Conflict
           Strategy With Some Risks. [16]GAO/NSIAD-97-66 . Washington, D.C.:
           Feb. 28, 1997.

           Force Structure: Army's Efforts to Improve Efficiency of
           Institutional Forces Have Produced Few Results.
           [17]GAO/NSIAD-98-65 . Washington, D.C.: Feb. 26, 1998.

           Force Structure: Opportunities Exist for the Army to Reduce Risk
           in Executing the Military Strategy. [18]GAO/NSIAD-99-47 .
           Washington, D.C.: Mar. 15, 1999.

           Force Structure: Army is Integrating Active and Reserve Combat
           Forces, but Challenges Remain. [19]GAO/NSIAD-00-162 . Washington,
           D.C.: July 18, 2000.

           Force Structure: Army Lacks Units Needed for Extended Contingency
           Operations. [20]GAO-01-198 . Washington, D.C.: Feb. 15, 2001.

           Force Structure: Projected Requirements for Some Army Forces Not
           Well Established. [21]GAO-01-485 . Washington, D.C.: May 11, 2001.

           Military Personnel: DOD Needs to Conduct a Data-Driven Analysis of
           Active Military Personnel Levels Required to Implement the Defense
           Strategy. [22]GAO-05-200 . Washington, D.C.: Feb. 1, 2005.

           Force Structure: Preliminary Observations on Army Plans to
           Implement and Fund Modular Forces. [23]GAO-05-443T . Washington,
           D.C.: Mar. 16, 2005.

           Force Structure: Actions Needed to Improve Estimates and Oversight
           of Costs for Transforming Army to a Modular Force. [24]GAO-05-926
           . Washington, D.C.: Sep. 29, 2005.

           Force Structure: Capabilities and Cost of Army Modular Force
           Remain Uncertain. [25]GAO-06-548T . Washington, D.C.: Apr. 4,
           2006.

           Force Structure: DOD Needs to Integrate Data into Its Force
           Identification Process and Examine Options to Meet Requirements
           for High-Demand Support Forces. [26]GAO-06-962 . Washington, D.C.:
           Sep. 5, 2006.

           Force Structure: Army Needs to Provide DOD and Congress More
           Visibility Regarding Modular Force Capabilities and Implementation
           Plans. [27]GAO-06-745 . Washington, D.C.: Sep. 6, 2006.
			  
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www.gao.gov/cgi-bin/getrpt?GAO-07-397T .

To view the full product, click on the link above. For more information,
contact Janet A. St. Laurent at (202) 512-4402 or [email protected].

Highlights of [38]GAO-07-397T , a testimony before the Subcommittee on
Military Personnel, Committee on Armed Services, House of Representatives

January 30, 2007

MILITARY PERSONNEL

DOD Needs to Provide a Better Link between Its Defense Strategy and
Military Personnel Requirements

The war in Iraq along with other overseas operations have led to
significant stress on U.S. ground forces and raised questions about
whether those forces are appropriately sized and structured. In 2005, the
Department of Defense (DOD) agreed with GAO's recommendation that it
review military personnel requirements. The Office of the Secretary of
Defense (OSD) concluded in its 2006 Quadrennial Defense Review (QDR) that
the number of active personnel in the Army and Marine Corps should not
change. However, the Secretary of Defense recently announced plans to
increase these services' active end strength by 92,000 troops. Given the
long-term costs associated with this increase, it is important that
Congress understand how DOD determines military personnel requirements and
the extent of its analysis.

GAO has issued a number of reports on DOD's force structure and the impact
of ongoing operations on military personnel, equipment, training, and
related funding. This statement, which draws on that prior work, focuses
on (1) the processes and analyses OSD and the services use to assess force
structure and military personnel levels; (2) the extent to which the
services' requirements analyses reflect new demands as a result of the
changed security environment; and (3) the extent of information DOD has
provided to Congress to support requests for military personnel.

Both OSD and the military services play key roles in determining force
structure and military personnel requirements and rely on a number of
complex and interrelated analyses. Decisions reached by OSD during the QDR
and the budget process about planning scenarios, required combat forces,
and military personnel levels set the parameters within which the services
can determine their own requirements for units and allocate military
positions. Using OSD guidance and scenarios, the Army's most recent
biennial analysis, completed in 2006, indicated that the Army's total
requirements and available end strength were about equal. The Marine
Corps' most recent assessment led to an adjustment in the composition and
mix of its units.

Both the Army and Marine Corps are coping with additional demands that may
not have been fully reflected in OSD guidance, the QDR, or in recent
service analyses. First, the Army's analysis did not fully consider the
impact of converting from a division-based force to modular units, partly
because modular units are a new concept and partly because the Army made
some optimistic assumptions about its ability to achieve efficiencies and
staff modular units within the QDR-directed active military personnel
level of 482,400. Second, the Army's analysis assumed that the Army would
be able to provide 18 to 19 brigades at any one time to support worldwide
operations. However, the Army's global operational demand for forces is
currently 23 brigades and Army officials believe this demand will continue
for the foreseeable future. The Marine Corps' analyses reflected some new
missions resulting from the new security environment. However, the
Commandant initiated a new study following the 2006 QDR partly to assess
the impact of requirements for a Special Operation Command.

Prior GAO work has shown that DOD has not provided a clear and transparent
basis for military personnel requests that demonstrates how they are
linked to the defense strategy. GAO believes it will become increasingly
important to demonstrate a clear linkage as Congress confronts looming
fiscal challenges facing the nation and DOD attempts to balance competing
priorities for resources. In evaluating DOD's proposal to permanently
increase active Army and Marine Corps personnel levels by 92,000 over the
next 5 years, Congress should carefully weigh the long-term costs and
benefits. To help illuminate the basis for its request, DOD will need to
provide answers to the following questions: What analysis has been done to
demonstrate how the proposed increases are linked to the defense strategy?
How will the additional personnel be allocated to combat units, support
forces, and institutional personnel, for functions such as training and
acquisition? What are the initial and long-term costs to increase the size
of the force and how does DOD plan to fund this increase? Do the services
have detailed implementation plans to manage potential challenges such as
recruiting additional personnel, providing facilities, and procuring new
equipment?

References

Visible links
  13. http://www.gao.gov/cgi-bin/getrpt?GAO-05-200
  14. http://www.gao.gov/cgi-bin/getrpt?GAO-01-485
  15. http://www.gao.gov/cgi-bin/getrpt?GAO-06-745
  16. http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-97-66
  17. http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-98-65
  18. http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-99-47
  19. http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-00-162
  20. http://www.gao.gov/cgi-bin/getrpt?GAO-01-198
  21. http://www.gao.gov/cgi-bin/getrpt?GAO-01-485
  22. http://www.gao.gov/cgi-bin/getrpt?GAO-05-200
  23. http://www.gao.gov/cgi-bin/getrpt?GAO-05-443T
  24. http://www.gao.gov/cgi-bin/getrpt?GAO-05-926
  25. http://www.gao.gov/cgi-bin/getrpt?GAO-06-548T
  26. http://www.gao.gov/cgi-bin/getrpt?GAO-06-962
  27. http://www.gao.gov/cgi-bin/getrpt?GAO-06-745
  38. http://www.gao.gov/cgi-bin/getrpt?GAO-07-397T
*** End of document. ***