National Oceanic and Atmospheric Administration: Issues on the
Civilianization of the Commissioned Corps (Testimony, 10/29/97,
GAO/T-GGD-98-22).
The National Oceanic and Atmospheric Administration (NOAA) Corps is a
uniformed service whose offices carry out various navigational and
scientific duties and whose members are covered by a military-like
compensation system. An earlier GAO report (GAO/GGD-97-10, Oct. 1996)
addressed (1) issues concerning the NOAA Corps as a uniformed services
with military-like pay, allowances, and benefits and (2) what the costs
would be if federal civilian employees carried out the Corps' functions.
This testimony discusses the findings of that report.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-GGD-98-22
TITLE: National Oceanic and Atmospheric Administration: Issues on
the Civilianization of the Commissioned Corps
DATE: 10/29/97
SUBJECT: Officer personnel
Civilian employees
Atmospheric research
Oceanographic research
Military compensation
Fringe benefits
Comparative analysis
Defense contingency planning
Mobilization
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Cover
================================================================ COVER
Before the Committee on Commerce, Science, and Transportation, U.S.
Senate
For Release on Delivery
Expected at
9:30 a.m., EST
Wednesday
Oct. 29, 1997
NATIONAL OCEANIC AND ATMOSPHERIC
ADMINISTRATION - ISSUES ON THE
CIVILIANIZATION OF THE
COMMISSIONED CORPS
Statement by L. Nye Stevens
Director, Federal Management and Workforce Issues
General Government Division
GAO/T-GGD-98-22
GAO/GGD-98-22T
(410224)
Abbreviations
=============================================================== ABBREV
NOAA - x
EPA - x
DOD - x
NATIONAL OCEANIC AND ATMOSPHERIC
ADMINISTRATION: ISSUES ON THE
CIVILIANIZATION OF THE
COMMISSIONED CORPS
====================================================== Chapter SUMMARY
The National Oceanic and Atmospheric Administration (NOAA) Corps is a
uniformed service whose officers carry out a variety of navigational
and scientific functions and whose members are covered by a
military-like compensation system. In October 1996, GAO issued a
report on the results of its limited review of (1) issues concerning
the NOAA Corps as a uniformed service with military-like pay,
allowances, and benefits and (2) what would be the comparative cost
of using civilian employees, rather than uniformed officers, to carry
out the NOAA Corps' functions.
GAO reported the following:
-- In the 1800s, the Coast and Geodetic Survey--the organization
that eventually became NOAA--relied on personnel from the
Departments of the Army and Navy to augment its civilian
complement that was charged with surveying the then uncharted
U.S. shoreline. By the outbreak of World War I, both
departments had withdrawn their detailed personnel. However,
ships and men qualified to operate them were needed immediately
for the war effort. It was then that Congress passed
legislation authorizing the president to transfer the Coast and
Geodetic Survey's ships and men to the Navy and War Departments
for the duration of the war and to give military rank to those
Survey field officers who served in the military. In 1920, the
Joint Service Pay Act extended the Navy's pay, allowances, and
retirement system to members of the Survey who held Navy ranks.
-- NOAA Corps officers receive virtually the same pay and benefits
as military personnel. However, the Corps carries out civilian
rather than military functions. Although NOAA describes the
essential functions of the Corps to be deck officers aboard NOAA
ships and a mobile cadre of professionals who can be assigned
wherever needed, often in hazardous conditions, civilian
employees in other agencies are often assigned to similar
duties. Further, the Corps is not subject to the Uniform Code
of Military Justice, which underlies military personnel
management, and the Department of Defense's war mobilization
plans did not envision a role for the Corps.
-- Using the estimate of a contractor hired by NOAA to determine
the comparative costs of using civilian employees rather than
Corps officers to carry out NOAA Corps functions, and GAO's
adjustment for a more complete comparison, GAO estimated that
the cost to the government would have been about $661,000 lower
from July 1994 through June 1995 if civilian employees had
carried out the Corps' work. GAO's estimate compared two
alternative ways of staffing the existing NOAA Corps functions
and did not factor in the costs of transitioning to civilian
staff. No transition plan existed at the time of GAO's review,
and the details of such a plan could materially affect such
costs.
NATIONAL OCEANIC AND ATMOSPHERIC
ADMINISTRATION: ISSUES ON THE
CIVILIANIZATION OF THE
COMMISSIONED CORPS
==================================================== Chapter STATEMENT
Madam Chairwoman and Members of the Committee:
I am pleased to be here today to discuss a report that we completed
last year on the National Oceanic and Atmospheric Administration's
(NOAA) Commissioned Corps.\1 The NOAA Corps is a uniformed service
whose officers carry out a variety of navigational and scientific
functions, such as charting and oceanographic research, and whose
members are covered by a military-like compensation system. Our
report, prepared at the request of Representatives Lamar Smith and
John Kasich, was issued in October 1996 and provided information on
(1) issues concerning the NOAA Corps as a uniformed service with
military-like pay, allowances, and benefits and (2) what the costs
would be if federal civilian employees carried out the Corps'
functions.
As these objectives suggest, ours was a limited review. Generally,
we developed information on why the NOAA Corps exists and what the
Corps officers' duties are; how the Corps is similar to and different
from the military services; and what would be the comparative costs
of using civilian employees versus uniformed officers to carry out
the Corps' functions. As described later in this statement, our
review did not include an examination of Corps functions or
restructuring or any potential savings related thereto. Also, our
cost estimate was developed, in part, on the basis of a cost
comparison done by Arthur Andersen LLP. Like its cost estimate, our
estimate compared two alternative ways of staffing the existing NOAA
Corps function and did not factor in the costs of transitioning to
civilian staffing.
--------------------
\1 Federal Personnel: Issues on the Need for NOAA's Commissioned
Corps (GAO/GGD-97-10, Oct. 31, 1996).
BACKGROUND
-------------------------------------------------- Chapter STATEMENT:1
The organization that became NOAA was established in 1807 and became
known officially as the Coast Survey in 1836. The Coast Survey
dispatched technical and scientific teams to survey the uncharted
U.S. shoreline and relied on the Departments of the Army and Navy to
supply personnel to augment the organization's civilian employees.
After the Civil War, the Army withdrew from the Coast Survey's work.
The Navy withdrew during the Spanish-American War, leaving the work
to be done solely by the employees of the newly named Coast and
Geodetic Survey.
At the outbreak of World War I, when ships and men who were qualified
to operate the ships were needed immediately to augment the military
forces, Congress passed legislation authorizing the president to:
(1) transfer the Coast and Geodetic Survey's ships and men to the
Navy and War Departments for the duration of the war and (2)
officially to give military rank to Survey field officers when these
officers were serving in the Army or Navy. The Joint Service Pay Act
of 1920 extended the Navy's pay, allowances, and retirement system to
members of the Coast and Geodetic Survey who held ranks equivalent to
Navy officers. In 1965, the Coast and Geodetic Survey became the
Environmental Science Services Administration, and, in 1970, it
became part of the newly formed NOAA. Currently, NOAA has both
civilian employees and CORPS officers.
NOAA CORPS' SIMILARITIES TO AND
DIFFERENCES FROM THE MILITARY
SERVICES
-------------------------------------------------- Chapter STATEMENT:2
The NOAA Corps carries out civilian functions, rather than military
functions. NOAA Corps officers operate and manage NOAA's research
and survey ships that collect the data needed to support fishery
management plans, oceanographic and climate research, and
hydrographic surveys. NOAA Corps officers also fly and manage NOAA's
aircraft that are used to penetrate hurricanes for research and to
carry out surveys for forecasting floods and mapping changing U.S.
shorelines. They are assigned to work in all offices of NOAA.\2
According to Corps officials, NOAA Corps officers can expect to serve
one-third of their careers in each of the following work categories:
(1) sea duty; (2) shore duty that involves responsibilities in marine
centers, vessel support, geodetic surveys, or aircraft operations;
and (3) shore duty that involves management and technical support
throughout NOAA. Although NOAA Corps officers who serve at sea have
few civilian employee counterparts at NOAA, other agencies use
federal civilian employees or contractors to carry out duties similar
to the functions NOAA assigns to the Corps.
Corps officials said that the essential functions of the uniformed
Corps are to serve as deck officers aboard NOAA ships and to be a
mobile cadre of professionals who can be assigned with little notice
to any location and function where their services are necessary,
often in hazardous or harsh conditions. We found that some Corps
assignments are of this nature, but civilian employees in other
agencies are often assigned to duties similar to those of the Corps.
For example, the Environmental Protection Agency (EPA), the National
Transportation Safety Board, and the Federal Emergency Management
Agency use civilian employees to respond quickly to disasters and
other emergency situations. Moreover, we found that EPA and the Navy
used ships operated by civilian employees or contractors in
conducting their oceanic research. Also, NOAA ships have been
operated on occasion by Wage Marine (civilian) deck officers, and
NOAA officials termed this approach successful.\3
Although NOAA Corps officers perform civilian functions, they receive
virtually the same pay and benefits as members of the military.
Corps members' entitlement to military ranks and military-like
compensation, including eligibility for retirement at any age after
20 years of service, was an outgrowth of their temporary service with
the armed forces during World Wars I and II. The NOAA Corps has not
been incorporated into the armed forces since World War II, and we
were told that the Department of Defense's (DOD) war mobilization
plans envisioned no role for the Corps in the future.
In a 1984 report,\4 DOD provided a detailed discussion of the
criteria and principles used to justify the military compensation
system. According to this report, the main purpose of the military
compensation system is to ensure the readiness and sustainability of
the armed forces. The NOAA Corps is not considered an armed service,
and Corps officers are not subject to the Uniform Code of Military
Justice, which underlies how military personnel are managed.\5
Accordingly, NOAA cannot press criminal charges or pass sentence
against an officer who disobeys orders, and Corps officers can quit
the Corps without legal sanctions.
--------------------
\2 NOAA is composed of five line offices--(1) the National Marine
Fisheries Service; (2) the Office of Oceanic and Atmospheric
Research; (3) the National Weather Service; (4) the National Ocean
Service; and (5) the National Environmental Satellite, Data, and
Information Service--and the Office of the Administrator.
\3 A Wage Marine is an employee paid under the prevailing rate pay
system in the excepted service who serves as a master or mate on NOAA
ships. A prevailing rate employee generally is an individual
employed in a recognized skilled mechanical trade or craft. The
excepted service consists of civil service positions that are neither
part of the competitive service nor the Senior Executive Service.
\4 The Fifth Quadrennial Review of Military Compensation, Department
of Defense, January 1984.
\5 Under a 1917 statute, the president can incorporate the NOAA Corps
into the military service in the event of a national emergency.
Since all military personnel are subject to the Uniform Code of
Military Justice, Corps officers, after being incorporated into the
military, would be subject to the code. This situation has not
occurred since World War II.
COMPARATIVE COST OF USING
CIVILIAN EMPLOYEES OR CORPS
OFFICERS
-------------------------------------------------- Chapter STATEMENT:3
NOAA contracted with Arthur Andersen LLP to determine the comparative
costs of using civilian employees rather than Corps officers to carry
out the Corps' functions. The contractor's report was issued August
30, 1995.\6 We examined the contractor's approach and methodology and
generally found them to be similar to those we would have used.
Thus, other than making an adjustment we believed was necessary for a
more complete comparison, we accepted the contractor's estimates of
the comparative costs of using Corps officers and civilian employees.
On the basis of the contractor's report and the adjustment that we
made, we estimated that the cost to the government would have been
about $661,000 lower during July 1994 through June 1995, if civilian
employees had been used.\7
The contractor's report concluded that if civilians rather than Corps
officers had been used to carry out the Corps' functions in the year
ending June 30, 1995, costs would have been $573,000 higher. This
estimate was based on actual costs incurred during the year ending
June 30, 1995, and on a Corps strength of 384 officers. However, the
report did not include in its comparison the federal income tax
advantage that Corps officers receive from their housing and
subsistence allowances. Like members of the military, NOAA Corps
officers pay no federal income taxes on these allowances.\8 The
"cost" to the government arising from this tax advantage comes in the
form of a loss to the U.S. Treasury of the federal income taxes that
otherwise would have been paid if the allowances were taxable.
Federal civilian employees receive no such tax advantage; they must
pay their living expenses from their fully taxable salaries.
According to its report, Arthur Andersen LLP did not include the
Corps members' tax advantage as a cost of maintaining the Corps
because it did not represent "costs incurred by the Federal
Government." However, because the tax advantage represents a revenue
loss to the government and is of considerable monetary value to Corps
members, we believe that it should be included in any cost
comparison. Since NOAA Corps officers receive the same base pay and
housing and subsistence allowances as military officers at the same
ranks, we used the DOD's tax advantage estimates to determine the tax
advantage afforded to Corps members. We estimated that the annual
tax advantage associated with the housing and subsistence allowance
amounts used in the Arthur Andersen LLP study would be $1,234,000 a
year. Adjusting the Arthur Andersen LLP study results by the
estimated tax advantage amount results in a total government cost for
the Corps of $30,942,000 for the year, compared with the estimated
$30,281,000 cost of using civilian employees--a difference of
$661,000.
In presenting our cost comparison figure, I would like to emphasize
that this was a 1-year cost comparison prepared in 1996. It was
based on a Corps staff of 384 and used the pay rates and benefit
costs that existed at the time. Since then, the Corps staff has been
reduced to about 270 and pay rates and benefit costs also have
changed. As a result, it is likely that any estimated cost savings
based on a comparison of the use of civilian employees rather than
Corps officers made today would be different. Further, if a decision
were made to civilianize the NOAA Corps, whether there would be any
actual cost reductions would depend, in part, on the manner in which
a transition to civilian employment would be carried out, including
the period over which the transition would occur and what retirement
benefits or credits for service would be given. We did not estimate
transition costs because no transition plan existed and the details
of such a plan could materially affect such costs. In addition, we
did not examine whether NOAA Corps functions or the number of persons
used to accomplish those functions were necessary or could be changed
as a result of civilianization. Thus, the report did not address
issues such as whether civilianization of the Corps could present
opportunities for possible savings through restructuring or
consolidating NOAA operations. Neither did the report examine the
possibility of contracting with private companies, rather than using
civilian employees, to carry out the Corps' current functions.
This concludes my prepared statement. I would be pleased to answer
any questions the Committee may have.
--------------------
\6 National Oceanic and Atmospheric Administration Commissioned
Officer Corps: Comparison of NOAA Corps versus Federal Employees,
Arthur Andersen LLP, August 30, 1995.
\7 The actual net cost reduction would vary, depending on various
factors, including the method by which any changes are implemented,
the applicability of 1994 costs to future years, and the accuracy of
the underlying assumptions concerning Corps and civilian personnel
costs.
\8 A major component of military and Corps compensation is termed
"Regular Military Compensation." This component includes basic pay,
nontaxable housing and subsistence allowances, and the tax advantage
accorded to members through the nontaxable allowances.
*** End of document. ***