Acquisition Management: Fiscal Year 1995 Waivers of Acquisition Workforce
Requirements (Letter Report, 04/15/96, GAO/NSIAD-96-102).

Pursuant to a legislative requirement, GAO provided information on the
Department of Defense's (DOD) fiscal year (FY) 1995 waivers for
acquisition workforce requirements. GAO found that: (1) DOD agencies
granted 233 waivers for 231 individuals not meeting training, education,
tenure, or experience requirements; (2) 83 percent of the waivers were
for individuals not serving the required 3-year term in critical
acquisition positions; (3) 54 percent of the waivers were for
reassignment, 13 percent for retirement, 6 percent for promotion, and 26
percent for other reasons; (4) the Air Force granted 62 tenure
reassignment waivers, the Navy granted 29, the Army granted 8, and other
DOD agencies granted 6; (5) waivers for acquisition experience declined
by 58 percent; and (6) one waiver was granted for the Program Management
Course and no fulfillment waivers were granted.

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

 REPORTNUM:  NSIAD-96-102
     TITLE:  Acquisition Management: Fiscal Year 1995 Waivers of 
             Acquisition Workforce Requirements
      DATE:  04/15/96
   SUBJECT:  Defense procurement
             Waivers
             Military downsizing
             Military training
             Military personnel
             Education or training
             Hiring policies
             Personnel management
             Personnel evaluation
IDENTIFIER:  DOD Defense Management Review
             DOD Voluntary Separation Incentive Program
             
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Cover
================================================================ COVER


Report to Congressional Committees

April 1996

ACQUISITION MANAGEMENT - FISCAL
YEAR 1995 WAIVERS OF ACQUISITION
WORKFORCE REQUIREMENTS

GAO/NSIAD-96-102

Acquisition Management

(705118)


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

  DOD - Department of Defense
  Rose - x

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


B-271073

April 15, 1996

The Honorable Strom Thurmond
Chairman
The Honorable Sam Nunn
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable Floyd Spence
Chairman
The Honorable Ronald Dellums
Ranking Minority Member
Committee on National Security
House of Representatives

The Defense Acquisition Workforce Improvement Act (10 U.S.C.  1701 et
seq.) was enacted on November 5, 1990.  The act was intended to
professionalize the acquisition workforce of the Department of
Defense (DOD) by establishing specific requirements for education,
training, and experience that were to take effect over a 3-year
period, beginning October 1991.  The act permits DOD officials to
waive specific qualification requirements if (1) unusual
circumstances justify a waiver or (2) an individual's qualifications
obviate the need for meeting the requirements.  Also, it required
that, through 1998, our office annually report on DOD's compliance
with the act's waiver provisions.\1 This is our fifth report on
waivers; one additional report covers DOD's overall implementation of
the act (see list of GAO related reports at the end of this report). 

In conjunction with the waivers, we obtained information on DOD's use
of fulfillments as authorized by an amendment to the act. 
Fulfillments enable individuals to receive credit when they have the
required competencies instead of taking training courses. 


--------------------
\1 P.L.  104-66, Dec.  21, 1995, repealed this reporting requirement
for fiscal years 1996 through 1998.  Therefore, this report on the
fiscal year 1995 waivers will be our final report under the act. 


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

The quality and professionalism of DOD's acquisition workforce have
been issues for over 30 years.  In 1986, the President's Blue Ribbon
Commission on Defense Management (the Packard Commission) described
the DOD acquisition workforce as "undertrained, underpaid, and
inexperienced." In July 1989, DOD's Defense Management Review
reported many of the same problems and recommended a series of
specific management initiatives to improve the acquisition process
and more effectively manage DOD resources. 

The Defense Acquisition Workforce Improvement Act requires the
Secretary of Defense to (1) establish specific education, training,
tenure, and experience requirements for its acquisition workforce,
which is comprised of 11 career areas; (2) provide training and
education to meet these requirements; (3) establish a management
structure along with policies and regulations for implementing the
act's provisions; and (4) enhance civilian opportunities to progress
to senior acquisition positions.  (See app.  I for specific
requirements of the act and app.  II for the listing of
acquisition-related career areas.)

Fiscal year 1994 was the first year all the act's provisions were in
effect.  DOD reported that 114,380 personnel, 86 percent of whom were
civilians, were subject to the requirements of the act at the end of
fiscal year 1995. 

The act also requires each of the services to establish an
acquisition corps consisting of senior civilian and military
personnel who meet specific education, experience, and training
requirements.  According to DOD officials, of the 114,380 personnel
covered by the acts' requirements, 21,626 are the senior acquisition
personnel comprising the services' acquisition corps.  Roughly 73
percent of the corps' personnel are civilian.  Individuals appointed
to critical acquisition positions must (1) be members of the
acquisition corps and (2) be assigned to and remain in these
positions for a minimum 3-year tenure. 

The National Defense Authorization Act for Fiscal Year 1993
authorized the use of fulfillment standards as a substitute to the
act's training requirements.  The Secretary of Defense developed
fulfillment standards in January 1993 to include a formal process for
determining whether an individual has demonstrated competence in the
areas of the mandatory training courses.  The fulfillment standards
are effective retroactively to November 5, 1990, and cease to be in
effect on October 1, 1997. 


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

During fiscal year 1995, the military services and DOD agencies
granted
233 waivers for 231 individuals not meeting the training, education,
tenure, or experience requirements, compared to fiscal year 1994,
when 63 waivers were granted.  Of the waivers granted, 83 percent
(194 of 233) were for individuals not meeting the tenure requirements
(i.e., not serving the required 3-year term in critical acquisition
positions due to retirement, promotion, reassignment, or downsizing). 
Fiscal year 1995 was the first time that tenure waivers outnumbered
all other types of waivers. 

Of the 39 waivers that were not related to tenure requirements,
13 (33 percent) were for membership in the acquisition corps.  By
comparison, 18 individuals received waivers for corps membership in
fiscal year 1994.  Waivers for acquisition experience decreased by 58
percent.  Only one waiver was granted for the required Program
Management Course and no fulfillment waivers were granted. 


   WAIVERS APPROVED
------------------------------------------------------------ Letter :3

Table 1 summarizes the waivers approved by each service and other DOD
agencies and lists the reasons for these waivers. 



                                Table 1
                
                 Summary of Waivers Approved for Fiscal
                               Year 1995

                                                             DOD
                                                          agenci  Tota
Reason for waiver                  Army  Navy  Air Force      es     l
---------------------------------  ----  ----  ---------  ------  ====
Acquisition experience                2     1          3       1     7
Tenure                               14    33        140       7   194
Critical acquisition position         0     2         12       0    14
Acquisition corps qualifications      0     8          0       5    13
Contracting position requirements     0     3          0       1     4
Program Management Course             0     1          0       0     1
======================================================================
Total                                16    48        155      14   233
----------------------------------------------------------------------
For the first time, tenure waivers are the predominant type of
waiver.  According to the act, individuals not serving their full
3-year tenure requirement in a critical acquisition position must be
granted a waiver.  Eighty-three percent (194) of all waivers were for
individuals not meeting tenure requirements.  The Air Force granted
72 percent (140) of the
194 tenure waivers.  Of the total tenure waivers granted throughout
the entire DOD acquisition workforce,

  54 percent (105) were for reassignment,

  13 percent (26) were for retirement,

  6 percent (12) were for promotion, and

  26 percent (51) were for other reasons. 

Consistent with prior fiscal years, the majority of fiscal year 1995
tenure waivers were for reassignment.  The Air Force granted 59
percent (62) of the tenure reassignment waivers.  The Navy ranked a
distant second in granting 29 tenure reassignment waivers, followed
by the Army with 8 and other DOD agencies with 6 waivers. 

The Air Force granted 34 tenure waivers to individuals who left the
service by using the Voluntary Separation Incentive Pay or the
Voluntary Early Retirement Authority.  These waivers were granted
because of the current downsizing efforts in the federal government. 
At the time these individuals decided to use the early out incentive
option, they were occupying critical acquisition positions.  None of
the tenure waivers approved by the Army, the Navy, or DOD agencies
cited this reason for the waiver. 

The Air Force was also the only service to grant waivers to
individuals who participated in a specific development program,
exempting 17 civilian personnel classified as "top rung" from the
3-year tenure requirement for individuals who occupied critical
acquisition positions.  These individuals are viewed as being top
performers and more likely to advance up the management career
ladder. 

In fiscal year 1995, waivers for acquisition experience declined from
12 granted in fiscal year 1994 to 7, or by 58 percent.  Only one
waiver was granted for the required Program Management Course, while
none were granted for this course in fiscal year 1994.  By contrast,
DOD granted a total of 33 such waivers for fiscal years 1992 and
1993.  This trend, if maintained, may indicate that effective
implementation and oversight of this provision of the act have been
achieved (i.e., individuals needing the course are being identified
in a timely manner, the Defense Acquisition University has
established a sufficient number of courses, and courses are made
available as scheduled).  Waivers granted for not meeting the act's
requirements for contracting officer positions declined 60 percent
from 10 to 4.  However, waivers for individuals not meeting all
requirements of the act but serving in critical acquisition positions
or as members of the acquisition corps increased 50 percent from 18
to 27. 


   SIGNIFICANT OVERALL INCREASE IN
   WAIVERS APPROVED
------------------------------------------------------------ Letter :4

The increase in the number of tenure waivers granted from fiscal
years 1993 through 1995 is the specific reason the total number of
waivers increased 400 percent since first reported in 1992 (see fig. 
1).  Tenure waivers increased 840 percent (from 23 to 194) for that
period.  However, because (1) prior to October 1, 1993, the tenure
requirement applied only to program and deputy program managers and
(2) increasing turbulence in the acquisition workforce is occurring
due to acquisition reform and downsizing, it is too soon to ascertain
if this increase will be sustained. 

   Figure 1:  Waivers Approved
   from Fiscal Years 1992 through
   1995

   (See figure in printed
   edition.)

Although the number of tenure waivers increased significantly, the
numbers of other types of waivers declined.  For example, waivers
granted for lack of acquisition experience and the Program Management
Course, predominant in fiscal year 1992, were at seven and one,
respectively, in fiscal year 1995 (see fig.  2). 

   Figure 2:  Reasons for
   Acquisition Corps Waivers

   (See figure in printed
   edition.)

Note:  Acq Exp--Acquisition experience; No PMC--Needs Program
Management Course; Acq Corps--Acquisition corps qualifications; and
Contracting--Contracting position requirements. 

DOD officials believe that in today's acquisition environment, which
is characterized by downsizing and reorganization, tenure waivers are
becoming an ever increasing administrative burden and affect
flexibility in managing the acquisition workforce.  During fiscal
year 1995, DOD requested legislative relief from the 3-year tenure
requirement because it believed that tenure requirements should apply
to only certain key acquisition positions (i.e., program managers,
deputy program managers, program executive officers, all flag/general
officers, and senior executive service) rather than to all critical
acquisition positions.  According to DOD officials, if the requested
legislative relief had already been granted, roughly 80 percent of
fiscal year 1995 tenure waivers would have been unnecessary and the
remaining waivers would have provided more useful information for
decisionmaking regarding the key acquisition positions.  Such
legislative relief was not approved. 


   FULFILLMENTS
------------------------------------------------------------ Letter :5

Fulfillment means that the training requirement has been satisfied
through other means, such as experience.  Individuals seeking
fulfillment approvals must submit fulfillment packages to the
authorized approval authority.  DOD's Office of the Director of
Acquisition Education, Training, and Career Development tracks
fulfillments for two courses:  the Program Management 301 Course and
the Information Resources Management
302 Course.  Unlike fiscal year 1994 when four fulfillment waivers
were granted, no fulfillments were approved for these two courses in
fiscal
year 1995. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

In commenting orally on a draft this report, DOD generally agreed
with the information in this report. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7

Our review covered the Departments of the Army, the Navy, and the Air
Force; the Office of the Secretary of Defense; and the other DOD
agencies.  We obtained documents on the fiscal year 1995 waivers and
fulfillments from the Office of the Director, Acquisition Education,
Training, and Career Development Policy with the Office of the
Secretary of Defense.  For those waivers submitted and approved, we
assessed the justification for the waivers using criteria contained
in the act; DOD Instruction 5000.52, Defense Acquisition Education,
Training, and Career Development Program, dated October 25, 1991; and
the Under Secretary of Defense's October 25, 1991, policy memorandum,
which was superseded by DOD Instruction 5000.58, "Defense Acquisition
Workforce," dated January 14, 1992. 

We performed our review between August 1995 and January 1996 in
accordance with generally accepted government auditing standards. 



---------------------------------------------------------- Letter :7.1

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

Please contact me at (202) 512-4383 if you or your staff have any
questions concerning this report.  Major contributors to this report
were Johnetta Gatlin-Brown, Rae Ann Sapp, Clifton E.  Spruill, and
Myra Watts. 

David E.  Cooper
Associate Director,
Defense Acquisition Issues


DEFENSE ACQUISITION WORKFORCE
IMPROVEMENT ACT
=========================================================== Appendix I

Starting  Specific Requirements
--------  ------------------------------------------------------------
10/1/91   Program managers (newly appointed)
          --Program Management Course (or a comparable course),
          --8 years of acquisition experience (2 in a systems program
          office or similar organization for major defense acquisition
          program),
          --6 years of acquisition experience for significant nonmajor
          programs, and
          --4 years in the position or complete the first major
          milestone of the program and sign a written agreement to
          remain during the period.

10/1/91   Deputy program managers
          --Program Management Course (or a comparable course) and
          --6 years of acquisition experience.

10/1/92   Program executive officers
          --Program Management Course (or a comparable course),
          --10 years of acquisition experience (4 years in a critical
          acquisition position), and
          --previous program manager or deputy program manager.

10/1/92   General and flag officers and civilian equivalents (before
          being assigned to a critical acquisition position),
          --10 years of acquisition experience (4 years in a critical
          acquisition position) and
          --Program Management Course (or a comparable course).

10/1/92   Senior contracting officials (before being assigned to a
          critical acquisition position)
          --4 years contracting experience.

10/1/93   Any person assigned to a critical acquisition position shall
          be assigned to the position for not fewer than 3 years.
          Contracting officers
          --all mandatory contracting courses,
          --2 years contracting experience, and
          --Baccalaureate degree with 24 semester hours in business
          disciplines (or passed an equivalency exam).

10/1/93   All services
          --establish an acquisition corps and
          --establish a management information system.
----------------------------------------------------------------------

ACQUISITION POSITIONS REQUIRING
DESIGNATION BY THE ACT
========================================================== Appendix II

----------------------------------------------------------------------
(1) Program management.

(2) Systems planning, research, development, engineering, and testing.

(3) Procurement, including contracting.

(4) Industrial property management.

(5) Logistics.

(6) Quality control and assurance.

(7) Manufacturing and production.

(8) Business, cost estimating, financial management, and auditing.

(9) Education, training, and career developing.

(10) Construction.

(11) Joint development and production with other government agencies
and foreign countries.
----------------------------------------------------------------------



RELATED GAO REPORTS
=========================================================== Appendix 0

Defense Management:  Implementation of the Defense Acquisition
Workforce Improvement Act (GAO/NSIAD-92-97, Jan 31, 1992). 

Acquisition Management:  Waivers to Acquisition Workforce Training,
Education, and Experience Requirements (GAO/NSIAD-93-128, Mar.  30,
1993). 

Acquisition Management:  Implementation of the Defense Acquisition
Workforce Improvement Act (GAO/NSIAD-93-129, Apr.  26, 1993). 

DOD Acquisition:  Fiscal Year 1993 Waivers to Acquisition Workforce
Requirements (GAO/NSIAD-94-92, Feb.  16, 1994). 

Acquisition Management:  Waivers to Workforce Training, Education,
and Experience Requirements (GAO/NSIAD-95-88, Feb.  1, 1995). 

*** End of document. ***