oversight

DOD Personnel: DOD Actions Needed to Strengthen Civilian Human Capital Strategic Planning and Integration with Military Personnel and Sourcing Decisions

Published by the Government Accountability Office on 2003-03-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States General Accounting Office

GAO          Report to the Ranking Minority
             Member, Subcommittee on Readiness,
             Committee on Armed Services, House
             of Representatives

March 2003
             DOD PERSONNEL

             DOD Actions Needed
             to Strengthen Civilian
             Human Capital
             Strategic Planning and
             Integration with
             Military Personnel and
             Sourcing Decisions




GAO-03-475
                                               March 2003


                                               DOD PERSONNEL

                                               DOD Actions Needed to Strengthen
Highlights of GAO-03-475, a report to the
Ranking Minority Member, Subcommittee          Civilian Human Capital Strategic Planning
on Readiness, House Committee on
Armed Services                                 and Integration with Military Personnel
                                               and Sourcing Decisions

The Department of Defense’s                    Generally, civilian personnel issues appear to be an emerging priority among
(DOD) civilian employees play key              top leaders in DOD and the defense components. Although DOD began
roles in such areas as defense                 downsizing its civilian workforce more than a decade ago, it did not take
policy, intelligence, finance,                 action to strategically address challenges affecting the civilian workforce
acquisitions, and weapon systems               until it issued its civilian human capital strategic plan in April 2002.
maintenance. Although downsized
                                               Top-level leaders in the Air Force, the Marine Corps, the Defense Contract
38 percent between fiscal years
1989 and 2002, this workforce has              Management Agency, and the Defense Finance Accounting Service have
taken on greater roles as a result of          initiated planning efforts and are working in partnership with their civilian
DOD’s restructuring and                        human capital professionals to develop and implement civilian strategic
transformation. Responding to                  plans; such leadership, however, was increasing in the Army and not as
congressional concerns about the               evident in the Navy. Also, DOD has not provided guidance on how to
quality and quantity of, and the               integrate the components’ plans with the department-level plan. High-level
strategic planning for the civilian            leadership is critical to directing reforms and obtaining resources for
workforce, GAO determined the                  successful implementation.
following for DOD, the military
services, and selected defense                 The human capital strategic plans GAO reviewed for the most part lacked
agencies: (1) the extent of top-level          key elements found in fully developed plans. Most of the civilian human
leadership involvement in civilian
strategic planning; (2) whether
                                               capital goals, objectives, and initiatives were not explicitly aligned with the
elements in civilian strategic plans           overarching missions of the organizations. Consequently, DOD and the
are aligned to the overall mission,            components cannot be sure that strategic goals are properly focused on
focused on results, and based on               mission achievement. Also, none of the plans contained results-oriented
current and future civilian                    performance measures to assess the impact of their civilian human capital
workforce data; and (3) whether                initiatives (i.e., programs, policies, and processes). Thus, DOD and the
civilian and military personnel                components cannot gauge the extent to which their human capital initiatives
strategic plans or sourcing                    contribute to achieving their organizations’ mission. Finally, the plans did
initiatives were integrated.                   not contain data on the skills and competencies needed to successfully
                                               accomplish future missions; therefore, DOD and the components risk not
                                               being able to put the right people, in the right place, and at the right time,
GAO recommends DOD improve                     which can result in diminished accomplishment of the overall defense
the departmentwide plan to be                  mission.
mission aligned and results-
oriented; provide guidance to align            Moreover, the civilian strategic plans did not address how the civilian
component- and department-level                workforce will be integrated with their military counterparts or sourcing
human capital strategic plans;                 initiatives. DOD’s three human capital strategic plans-- two military and one
develop data on future civilian                civilian--were prepared separately and were not integrated to form a
workforce needs; and set mile-                 seamless and comprehensive strategy and did not address how DOD plans to
stones for integrating military and            link its human capital initiatives with its sourcing plans, such as efforts to
civilian workforce plans, taking
contractors into consideration.
                                               outsource non-core responsibilities. The components’ civilian plans
DOD comments were too late to                  acknowledge a need to integrate planning for civilian and military
include in this report but are                 personnel—taking into consideration contractors—but have not yet done so.
included in GAO-03-690R.                       Without an integrated strategy, DOD may not effectively and efficiently
                                               allocate its scarce resources for optimal readiness.
www.gao.gov/cgi-bin/getrpt?GAO-03-475.

To view the full report, including the scope
and methodology, click on the link above.
For more information, contact Derek B.
Stewart at (202) 512-5559 or
stewartd@gao.gov.
Contents


Letter                                                                                   1
               Results in Brief                                                          2
               Background                                                                4
               Leadership Involvement in Strategic Planning for Civilian
                  Personnel Not Extensive in the Past, but Is Increasing                 8
               Key Elements of Strategic Plans for DOD Civilian Personnel Not in
                  Place                                                                 15
               Strategic Plans for Civilian Personnel Not Yet Integrated with Plans
                  for Military Personnel or Sourcing Initiatives                        22
               Conclusions                                                              26
               Recommendations for Executive Action                                     27
               Agency Comments                                                          28

Appendix I     Scope and Methodology                                                    29



Appendix II    Key Events Related to Strategic Planning for DOD
               Civilian Personnel                                                       33



Appendix III   GAO Contacts and Staff Acknowledgments                                   34



Figures
               Figure 1: Civilian Employment by DOD Component as of
                        September 30, 2002 (670,166 Direct Hires)                        6
               Figure 2: Relationships among Several Key Elements of a Human
                        Capital Strategic Plan                                          16
               Figure 3: Key Events Related to Strategic Planning for DOD
                        Civilian Personnel                                              33




               Page i                                             GAO-03-475 DOD Personnel
Abbreviations

DCMA              Defense Contract Management Agency
DFAS              Defense Finance and Accounting Service
DOD               Department of Defense
GPRA              Government Performance and Results Act
OMB               Office of Management and Budget
OPM               Office of Personnel Management
QDR               Quadrennial Defense Review



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Page ii                                                       GAO-03-475 DOD Personnel
United States General Accounting Office
Washington, DC 20548




                                   March 28, 2003

                                   The Honorable Solomon P. Ortiz
                                   Ranking Minority Member
                                   Subcommittee on Readiness
                                   Committee on Armed Services
                                   House of Representatives

                                   Dear Mr. Ortiz:

                                   With almost 700,000 civilian employees on its payroll, the Department of
                                   Defense (DOD) is the second largest federal employer of civilians in the
                                   nation. Defense civilian personnel, among other things, develop policy,
                                   provide intelligence, manage finances, and acquire and maintain weapon
                                   systems. Given the global war on terrorism, the role of DOD’s civilian
                                   workforce is expanding, such as participation in combat support functions
                                   that free military personnel to focus on warfighting duties for which they
                                   are uniquely qualified. Civilian personnel are also key to maintaining
                                   DOD’s institutional knowledge because of frequent military personnel
                                   rotations. However, since the end of the cold war, the civilian workforce
                                   has undergone substantial change, due primarily to downsizing, base
                                   realignments and closures, competitive sourcing initiatives, and changing
                                   missions. For example, between fiscal years 1989 and 2002, DOD reduced
                                   its civilian workforce by about 38 percent, with an additional reduction of
                                   about 55,000 personnel proposed through fiscal year 2007. Some DOD
                                   officials have expressed concern about a possible shortfall of critical skills
                                   because downsizing has resulted in a significant imbalance in the shape,
                                   skills, and experience of its civilian workforce and more than 50 percent of
                                   the civilian workforce becoming eligible to retire in the next 5 years. As a
                                   result, the orderly transfer of DOD’s institutional knowledge is at risk.

                                   These factors, coupled with the Secretary of Defense’s significant
                                   transformation initiatives, make it imperative for DOD to strategically
                                   manage its civilian workforce within a total force perspective, which
                                   includes civilian personnel as well as active duty and reserve military
                                   personnel and contractor personnel. This strategic management approach
                                   will enable DOD to accomplish its mission by putting the right people, in
                                   the right place, at the right time and at a reasonable cost.




                                   Page 1                                               GAO-03-475 DOD Personnel
                   In April 2002, DOD published a strategic plan for civilian personnel.1 In
                   response to your request, we reviewed strategic planning efforts for
                   civilian personnel at DOD and selected defense components, including the
                   four military services and two defense agencies (the Defense Contract
                   Management Agency and the Defense Finance and Accounting Service).2
                   Specifically, we determined (1) the extent to which top-level leadership is
                   involved in strategic planning for civilian personnel and (2) whether
                   strategic plans for civilian personnel are aligned with the overall mission,
                   results oriented, and based on data about the future civilian workforce. In
                   addition, we determined whether the strategic plans for civilian personnel
                   are integrated with plans for military personnel or sourcing initiatives.3
                   (See app. I for a description of our scope and methodology.)


                   Until recently, top-level leadership4 at the department and the component
Results in Brief   levels has not been extensively involved in strategic planning for civilian
                   personnel; however, civilian personnel issues appear to be a higher
                   priority for top-level leaders today than in the past. Although DOD began
                   downsizing its civilian workforce more than a decade ago, top-level
                   leadership has not, until recently, developed and directed reforms to
                   improve planning for civilian personnel. With the exception of the Army
                   and the Air Force, neither the department nor the components in our
                   review had developed strategic plans to address challenges affecting the



                   1
                    Civilian Human Resources Strategic Plan 2002-2008. At this time, DOD also published
                   two strategic plans for military personnel (one addressing military personnel priorities and
                   one addressing quality of life issues for servicemembers and their families). In a December
                   2002 report (Military Personnel: Oversight Process Needed to Help Maintain Momentum
                   of DOD’s Strategic Human Capital Planning, GAO-03-237), we addressed aspects of the
                   two plans concerning benefits for active duty military personnel, noting that the plans were
                   incomplete and that DOD needed a process to oversee the plans’ implementation.
                   2
                    Throughout this report, the term “component” refers to all services and agencies in DOD.
                   The term “service” refers to the Air Force, the Army, the Marine Corps, and the Navy. The
                   term “agency” refers to the Defense Contract Management Agency and the Defense
                   Finance and Accounting Service.
                   3
                    Sourcing initiatives, which are undertaken to achieve greater operating efficiencies,
                   include such efforts as public-private competitions under the Office of Management and
                   Budget Circular A-76 for commercial activities and functions; direct conversions
                   (converting positions from one sector to another without public-private competition);
                   public-private partnerships; and privatization, divestiture, and reengineering.
                   4
                    Top-level leaders include the Secretary of Defense, under or deputy secretaries, service
                   secretaries, chiefs of staff of the services, and other DOD senior executive service
                   personnel.




                   Page 2                                                         GAO-03-475 DOD Personnel
civilian workforce until 2001or 2002, which is indicative of civilian
personnel issues being an emerging priority. In addition, top-level leaders
in the Air Force, the Marine Corps, the Defense Contract Management
Agency, and the Defense Finance and Accounting Service have been or are
working in partnership with their civilian human capital professionals to
develop and implement civilian strategic plans; such partnership is
increasing in the Army and not as evident in the Navy. Moreover, DOD’s
issuance of its departmentwide civilian human capital plan5 begins to lay a
foundation for strategically addressing civilian human capital issues;
however, DOD has not provided guidance on aligning the component-level
plans with the department-level plan to obtain a coordinated focus to carry
out the Secretary of Defense’s transformation initiatives in an effective
manner. High-level leadership attention is critical to developing and
directing reforms because, without the overarching perspective of such
leaders, reforms may not be sufficiently focused on mission
accomplishment, and without their support, reforms may not receive the
resources needed for successful implementation.

The human capital strategic plans we reviewed for the most part were not
fully aligned with the overall mission of the department or respective
components, results oriented, or based on data about the future civilian
workforce. For example, the goals and objectives contained in strategic
plans for civilian personnel were not explicitly aligned with the
overarching missions of the organizations. Consequently, it is difficult to
determine whether DOD’s and the components’ strategic goals are
properly focused on mission achievement. In addition, none of the plans
contained results-oriented performance measures that could provide
meaningful data critical to measuring the results of their civilian human
capital initiatives (i.e., programs, policies, and processes). Thus, DOD and
the components cannot gauge the extent to which their human capital
initiatives contribute to achieving their organizations’ mission. Also, for
the most part, the civilian human capital plans in our review did not
contain detailed information on the skills and competencies needed to
successfully accomplish future missions. Without information about what
is needed in the future workforce, it is unclear if DOD and its components
are designing and funding initiatives that are efficient and effective in
accomplishing the mission, and ultimately contributing to force readiness.




5
 DOD and its components use the term human resources whereas we use the term human
capital.




Page 3                                                   GAO-03-475 DOD Personnel
             Lastly, the civilian strategic plans we reviewed did not address how the
             civilian workforce will be integrated with their military counterparts or
             with sourcing initiatives. At the department level, the strategic plan for
             civilian personnel was prepared separately from corresponding plans for
             military personnel and not integrated to form a seamless and
             comprehensive strategy and did not address how DOD plans to link its
             human capital initiatives with its sourcing plans, such as efforts to
             outsource non-core responsibilities. For the most part, at the component
             level, plans set goals to integrate planning for the total workforce, to
             include civilian, military, and contractor personnel. The Air Force and the
             Army, in particular, have begun to integrate their strategic planning efforts
             for civilian and military personnel, taking contractor responsibilities into
             consideration. Without integrated planning, goals for shaping and
             deploying civilian, military, and contractor personnel may not be
             consistent with and support each other. Consequently, DOD and its
             components may not have the workforce with the skills and competencies
             needed to accomplish tasks critical to readiness and mission success.

             We are making recommendations to the Secretary of Defense to
             strengthen civilian human capital planning, including integration with
             military personnel and sourcing initiatives. We received comments from
             the Department of Defense too late to include them in the final report.
             These comments and our evaluation of them, however, were incorporated
             into a subsequent report (DOD Personnel: DOD Comments on GAO’s
             Report on DOD’s Civilian Human Capital Strategic Planning, GAO-03-
              690R).


             DOD’s civilian workforce has undergone a sizeable reduction but remains
Background   critical to DOD’s mission success. Strategic human capital management
             provides a framework for maximizing the value added by the civilian
             workforce through aligning its civilian human capital initiatives to support
             DOD’s overarching mission.




             Page 4                                              GAO-03-475 DOD Personnel
Current Size, Distribution,   Since the end of the cold war, DOD has undergone sizable reductions in its
and Changing Roles of         civilian workforce. Between fiscal years 1989 and 2002, DOD’s civilian
DOD’s Civilian Workforce      workforce shrank from 1,075,437 to 670,166—about a 38 percent
                              reduction.6 DOD accomplished this downsizing without proactively
                              shaping the civilian workforce to have the skills and competencies needed
                              to accomplish future DOD missions. As a result, today’s workforce is older
                              and more experienced, but 58 percent will be eligible for early or regular
                              retirement in the next 3 years. Moreover, the President’s fiscal year 2003
                              budget request projects that DOD’s civilian workforce will be further
                              reduced by about 55,000 through fiscal year 2007. As shown in figure 1, at
                              the end of fiscal year 2002, the military departments employed 85 percent
                              of DOD’s civilians; 15 percent were employed by the other defense
                              organizations.




                              6
                               These numbers do not include indirect hire employees, for example, persons rendering
                              service to the federal government under agreements or contracts with a foreign
                              government.




                              Page 5                                                      GAO-03-475 DOD Personnel
Figure 1: Civilian Employment by DOD Component as of September 30, 2002
(670,166 Direct Hires)




Note: GAO’s analysis of DOD data.
a
Other defense organizations include defense agencies, DOD field activities, the Joint Chiefs of Staff,
Office of the Inspector General, U.S. Court of Appeals for the Armed Forces, and the Office of the
Secretary of Defense.
b
Department of the Navy includes Navy and Marine Corps personnel.


Furthermore, the 2000 Defense Science Board Task Force report7
observed that the rapid downsizing during the 1990s led to major changes
in the roles of and balance between DOD’s civilian and military personnel
and contractor personnel. The roles of the civilians and private-sector
workforce are expanding, including participation in combat functions—as
a virtual presence on the battlefield—and in support duties on both the
domestic and international scenes. These changing roles call for greater
attention to shaping an effective civilian workforce to meet future
demands within a total force perspective. This perspective includes a clear
understanding of the roles and characteristics of DOD’s civilian and
military personnel and the most appropriate source of
capabilities—military, civilian, or contractor.


7
 The Defense Science Board Task Force on Human Resources Strategy, February 2000.
The Defense Science Board is a federal advisory committee established to provide
independent advice to the Secretary of Defense.




Page 6                                                                GAO-03-475 DOD Personnel
                          The Under Secretary of Defense for Personnel and Readiness is the
                          principal staff assistant and advisor to the Secretary and Deputy Secretary
                          of Defense for total force management as it relates to readiness, personnel
                          requirements and management, and other matters. The Under Secretary’s
                          office develops policies, plans, and programs for recruitment, training,
                          equal opportunity, compensation, recognition, discipline, and separation
                          of all DOD personnel, including active, reserve, and retired military and
                          civilian personnel. This office also analyzes the total force structure as it
                          relates to quantitative and qualitative military and civilian personnel
                          requirements. Within this office is the Office of the Deputy Under
                          Secretary of Defense for Civilian Personnel Policy, which formulates
                          plans, policies, and programs to manage the DOD civilian workforce.
                          Policy leadership and human resource programs and systems are provided
                          through the Civilian Personnel Management Service.


Strategic Human Capital   Strategic human capital management involves long-term planning that is
Management                fact based, focused on program results and mission accomplishment, and
                          incorporates merit principles. Studies by several organizations, including
                          GAO, have shown that highly successful performance organizations in
                          both the public and private sectors employ effective strategic management
                          approaches as a means to prepare their workforce to meet present and
                          future mission requirements as well as achieve organizational success. In
                          our 2001 High-Risk Series and Performance and Accountability Series and
                          again in 2003, we designated strategic human capital as a high-risk area
                          and stated that serious human capital shortfalls are threatening the ability
                          of many federal agencies to economically, efficiently, and effectively
                          perform their missions.8 We noted that federal agencies, including DOD
                          and its components, needed to continue to improve the development of
                          integrated human capital strategies that support the organization’s
                          strategic and programmatic goals.

                          In March 2002, we issued an exposure draft of our model of strategic
                          human capital management to help federal agency leaders effectively lead




                          8
                           U.S. General Accounting Office, High-Risk Series: An Update, GAO-01-263 (Washington,
                          D.C.: Jan. 2001); Performance and Accountability Series—Major Management Challenges
                          and Program Risks: A Governmentwide Perspective, GAO-01-241 (Washington, D.C.:
                          Jan. 2001); and Major Management Challenges and Program Risks: A Governmentwide
                          Perspective, GAO-03-95 (Washington, D.C.: Jan. 2003).




                          Page 7                                                    GAO-03-475 DOD Personnel
                          and manage their people.9 The model is designed to help agency leaders
                          effectively use their people and determine how well they integrate human
                          capital considerations into daily decision making and planning for the
                          program results they seek to achieve. Similarly, the Office of Management
                          and Budget (OMB) and the Office of Personnel Management (OPM) have
                          developed tools that are being used to assess human capital management
                          efforts. In October 2001, OMB developed standards for success for
                          strategic human capital management—one of five governmentwide reform
                          initiatives in the President’s Management Agenda. In December 2001, OPM
                          released a human capital scorecard to assist agencies in responding to the
                          OMB standards for success; later, in October 2002, OMB and OPM
                          developed—in collaboration with GAO— revised standards for success.
                          To assist agencies in responding to the revised standards, OPM released
                          the Human Capital Assessment and Accountability Framework. In April
                          2002, the final report of the Commercial Activities Panel,10 mandated by
                          Congress and chaired by the Comptroller General, sought to elevate
                          attention to human capital considerations in making sourcing decisions.
                          Federal organizations are increasingly concerned with sourcing issues
                          because they are being held accountable for addressing another
                          President’s Management Agenda initiative that calls for determining their
                          core competencies and deciding how to build internal capacity or contract
                          out for services.


                          Until recently, top-level leadership at the department and component
Leadership                levels has not been extensively involved in strategic planning for civilian
Involvement in            personnel; however, it is of higher priority to top-level leadership today
                          than it has been in the past. With the exception of the Air Force,
Strategic Planning for    leadership at the component level has not been proactive, but is becoming
Civilian Personnel        more involved in responding to the need for strategic planning, providing
                          guidance, or supporting and working in partnership with civilian human
Not Extensive in the      capital professionals.
Past, but Is Increasing
                          We have previously emphasized that high-performing organizations need
                          senior leaders who are drivers of continuous improvement and also
                          stimulate and support efforts to integrate human capital approaches with


                          9
                          U.S. General Accounting Office, Exposure Draft: A Model of Strategic Human Capital
                          Management, GAO-02-373SP (Washington, D.C.: Mar. 15, 2002).
                          10
                           Commercial Activities Panel, Improving the Sourcing Decisions of the Government:
                          Final Report (Washington, D.C.: Apr. 2002).




                          Page 8                                                    GAO-03-475 DOD Personnel
                            organizational goals. There is no substitute for the committed involvement
                            of top leadership.11


Department-level            Strategic planning for the Department of Defense civilian workforce is
Leadership Involvement in   becoming a higher priority among DOD’s senior leadership, as evidenced
Strategic Planning for      by direction given in 2001 in the Quadrennial Defense Review (QDR) and
                            the Defense Planning Guidance and by the Under Secretary of Defense for
Civilian Personnel Has      Personnel and Readiness to develop a civilian and military human
Increased in Recent Years   resources strategic plan. We previously reported that a demonstrated
                            commitment to change by agency leaders is perhaps the most important
                            element of successful management reform and that leaders demonstrate
                            this commitment by developing and directing reform.12 OMB and OPM
                            have similarly advocated the need for top leadership to fully commit to
                            strategic human capital planning. The Defense Science Board reported in
                            2000 that senior DOD civilian and military leaders have devoted “far less”
                            attention to civilian personnel challenges than the challenges of
                            maintaining an effective military force.13

                            In 1992, during the initial stages of downsizing, DOD officials voiced
                            concerns about what they perceived to be a lack of attention to identifying
                            and maintaining a balanced basic level of skills needed to maintain
                            in-house capabilities as part of the defense industrial base. In our 2000
                            testimony, Strategic Approach Should Guide DOD Civilian Workforce
                            Management,14 we testified that DOD’s approach to civilian force
                            reductions was less oriented toward shaping the makeup of the workforce
                            than was the approach it used to manage its military downsizing. In its
                            approach to civilian workforce downsizing, the department focused on
                            mitigating adverse effects (such as nonvoluntary reductions-in-force)
                            through retirements, attrition, hiring freezes, and base closures. (See
                            app. II for a time line of key events related to DOD’s civilian workforce
                            downsizing.)



                            11
                             U.S. General Accounting Office, High-Risk Series: Strategic Human Capital
                            Management, GAO-03-120 (Washington, D.C.: Jan. 2003).
                            12
                             GAO-02-373SP.
                            13
                              The Defense Science Board Task Force on Human Resources Strategy. The report also
                            stated that DOD must give greater priority to the management of its civilian workforce in
                            order to create the proper civilian force structure for the future.
                            14
                             GAO/T-GGD/NSIAD-00-120 (Washington, D.C.: Mar. 9, 2000).




                            Page 9                                                        GAO-03-475 DOD Personnel
DOD initiated a more strategic approach when it published its first
strategic plan for civilian personnel (Civilian Human Resources Strategic
Plan, 2002-2008) in April 2002. In developing the departmentwide plan,
the Office of the Under Secretary of Defense for Personnel and Readiness
made efforts to work in conjunction with defense components’ civilian
human capital communities by inviting their leaders to contribute to
working groups and special meetings and reviewing the services’ civilian
human capital strategic plans. However, DOD has yet to provide guidance
on how to integrate component-level civilian human capital strategic plans
with its departmentwide civilian strategic plan. DOD officials said that full
integration would be difficult because of the wide array of human capital
services and mission support provided at the component level. However,
one of the lessons learned in our previous work on strategic planning in
the defense acquisition workforce was the need for leadership to provide
guidance for planning efforts.15 Without guidance, defense components
may not be able to effectively function together in support of the
departmentwide plan. For example, DOD’s goal to provide management
systems and departmentwide force planning tools may not be fully or
efficiently achieved without a coordinated effort among all defense
components. The component-level plans we reviewed included goals,
objectives, or initiatives to improve analysis or forecasting of workforce
requirements, but they did not indicate coordination with the
departmentwide effort or with one another.

Civilian human capital planning has emerged as an issue in another
DOD-related forum for top leaders. In November 2002, the Human
Resources Subcommittee of the Defense Business Practice
Implementation Board released its report to DOD’s Senior Executive
Council recommending, among other things, the establishment of a
“Human Capital Transformation Team” to help implement agreed upon
changes to transform human capital management in DOD’s civilian
workforce.16




15
  U.S. General Accounting Office, Acquisition Workforce: Status of Agency Efforts to
Address Future Needs, GAO-03-55 (Washington, D.C.: Dec. 18, 2002).
16
 Defense Business Practice Implementation Board, Report to the Senior Executive
Council, Department of Defense: Human Resources Task Group Report FY02-1,
November 15, 2002.




Page 10                                                      GAO-03-475 DOD Personnel
Component-level                   Leadership participation in strategic planning varies among the defense
Leadership Involvement in         components we reviewed. High-level leaders in the Air Force, the Marine
Strategic Planning for            Corps, the Defense Contract Management Agency (DCMA), and the
                                  Defense Finance and Accounting Service (DFAS) have provided the
Civilian Personnel Varies         impetus for strategic planning and are partnering with civilian human
                                  capital professionals to develop and implement their strategic plans. Such
                                  partnership is increasing in the Army and not as evident in the Department
                                  of the Navy.

Air Force Leadership              Since the mid-1990s, Air Force leadership has been relatively active in
Increasingly Proactive on         strategic planning for civilian human capital. In 1999, high-level Air Force
Strategic Planning for Civilian   leadership recognized the need for strategic human capital planning to
Personnel                         deal with the significant downsizing that had occurred over the last several
                                  years. For the civilian workforce, this recognition culminated in the
                                  publication in 2000 of the Civilian Personnel Management Improvement
                                  Strategy White Paper; the Air Force produced an update of this document
                                  in 2002.17 Air Force leadership also has recognized that it must further
                                  enhance its efforts with greater attention to integrated, total force
                                  planning. Air Force leadership has demonstrated this commitment by
                                  incorporating civilian human capital leaders into broader Air Force
                                  strategic planning and resource allocation processes. Air Force leaders
                                  created a human resources board (the Air Force Personnel Board of
                                  Directors) composed of 24 senior civilian and military leaders. The board
                                  convenes semi-annually to address military and civilian human capital
                                  issues in an integrated, total force context. It is fostering integrated
                                  planning with the intent of developing an overarching strategy—holistic,
                                  total force strategy—designed to meet Air Force workforce demands for
                                  the present and the future and intended to encompass the needs of active,
                                  reserve, civilian, and contractor personnel by 2004. Furthermore, the Air
                                  Force began to allocate resources for civilian human capital initiatives in
                                  fiscal year 2002 due to the strong support from Air Force leaders.

Strategic Planning for Civilian   In recent years, strategic human capital planning has generally received
Personnel Is an Emerging          increasing top-level leadership support in the Marine Corps, DCMA, DFAS,
Priority in the Marine Corps,     and the Army. A Marine Corps official told us that the Commandant of the
DCMA, DFAS, and the Army          Marine Corps and other top Marine Corps leaders became involved with
                                  civilian human capital strategic planning in 2001. The Commandant, in
                                  October 2002, endorsed the civilian human capital strategic plan, which



                                  17
                                    Air Force officials told us that this document and the Vision Implementation Plan
                                  together represent the Air Force’s civilian human capital strategic plan.




                                  Page 11                                                      GAO-03-475 DOD Personnel
outlines the Corps’ vision, intent, core values, expected outcomes, and
strategic goals for civilian human capital. Officials are currently
developing an implementation plan, which is expected to contain specific
objectives, milestones, points of accountability, resource requirements,
and performance measures. DCMA began strategic human capital planning
in 2000 in response to guidance from the Office of the Under Secretary of
Defense, Acquisition, Technology, and Logistics, and issued its first human
capital strategic plan in 2002. DCMA officials told us that their human
resources director is a member of DCMA’s broader executive management
board and that human capital—civilian and military—is a standing agenda
issue at the board’s monthly meetings. DFAS officials told us their director
includes human capital professionals in DFAS’s management decision-
making processes. Further, human capital is a key element in the DFAS
agencywide strategic plan. DFAS initiated its human capital strategic
planning efforts in 2002, but it has not yet published its plan.

Within the Army, top-level leadership involvement in strategic planning
efforts for civilian human capital has been limited but increasing. The bulk
of such efforts has instead originated in the Army’s civilian human capital
community. The Army’s civilian human capital community recognized the
need for strategic civilian human capital planning in the mid-1990s and
developed strategic plans. The Army’s civilian human capital community
also initiated, in 2000, an assessment of the civilian workforce situation
and developed new concepts for human resource systems and workforce
planning.18 Since 2002, Army top-level leadership has become more
explicitly involved in their civilian human capital community’s initiatives.
For example, in January 2003, the Vice Chief of Staff of the Army formally
endorsed the Army’s human capital strategic plan. Also, in January 2003,
Army top leaders endorsed the recommendations of a study to improve
the development and training of the Army’s civilian workforce, which
followed three companion studies with similar objectives for military
personnel. Additionally, as of March 2003, Army top leaders accepted the
rationale and validated the requirement for another initiative to centrally
manage senior civilian leaders by basing selection and retention decisions
on long-term Army needs rather than on the short-term needs of local
commanders. The Army plans to establish a management office to begin
this effort in fiscal year 2004. Army officials told us that all of these efforts



18
 The Army refers to this effort as the Civilian Personnel Management System XXI (CPMS
XXI). See The Wexford Group International, Army CPMS XXI Transforming Civilian
Workforce Management White Paper (Vienna, Va., revised May 11, 2001).




Page 12                                                    GAO-03-475 DOD Personnel
                                have not yet been fully funded. Without the commitment and support of
                                Army top leaders, the Army’s civilian human capital community has
                                limited authority to carry out reforms on its own and limited ability to
                                ensure that its reforms are appropriately focused on mission
                                accomplishment.

                                In addition, Army civilian human capital officials’ contributions to broader
                                strategic planning efforts have been increasing. Specifically, officials told
                                us that while the Army’s civilian human capital community has a voice in
                                the Army’s resource allocation deliberations, getting civilian personnel
                                issues included in top-level Army planning and budgeting documents is
                                sometimes challenging. Within the past year, however, civilian human
                                resource issues have been included in the Army-wide strategic readiness
                                system (a balanced scorecard) and an Army well-being initiative
                                (balancing the demands and expectations of the Army and its people).

Navy Leadership Involvement     Within the Department of the Navy, top-level leadership involvement in
in Strategic Planning for       strategic planning efforts for civilian human capital has been limited.
Civilian Personnel Is Limited   Department of the Navy leadership invested in studies related to strategic
                                planning for its civilian workforce, but it has been slow to develop a
                                strategic plan for its civilian human capital. Two documents published in
                                August 2000 and May 2001 reported the results of work sponsored by a
                                personnel task force established by the Secretary of the Navy to examine
                                facets of the Department of the Navy’s human resources management.
                                One, a study conducted and published by the National Academy of Public
                                Administration’s Center for Human Resources Management, focused on
                                Department of the Navy civilian personnel issues; the other reported on
                                the rest of the findings of the task force.19 Department of the Navy human
                                capital officials told us that they have not implemented the
                                recommendations of those studies because (1) many require new
                                legislation and (2) the studies were future oriented, looking as far ahead as
                                2020, and it will take time to implement the recommendations. These
                                officials said that although the Department of the Navy had not yet
                                developed a strategic plan for its civilian human capital, the Navy major
                                commands (referred to as claimants) did their own human capital strategic
                                planning as necessary, adding that they believed these efforts were


                                19
                                 The 2000 National Academy of Public Administration, Civilian Workforce 2020:
                                Strategies for Modernizing Human Resources Management in the Department of the
                                Navy (Washington, D.C.: Aug. 18, 2000), and the 2001 Department of the Navy: A Strategic
                                Human Resource Management System for the 21st Century, Vols. I and II (Washington,
                                D.C.: May 2001).




                                Page 13                                                     GAO-03-475 DOD Personnel
sufficient. More recently, however, these officials told us that they are
developing (on their own initiative) a strategic plan for the Department of
the Navy’s civilian workforce.

In addition, the Navy has very recently undertaken other strategic planning
efforts. In July 2002, the Navy established a new organization to develop a
consolidated approach to civilian workforce management that centers on
21 core competency functional areas. Navy officials view this recent
initiative, which involves senior military and civilian leaders, as the first
step in developing a total force concept (civilian, active and reserve
military, and contract employees). In March 2003, the Department of the
Navy established (1) a new position that will provide a liaison for the Navy
and Marine Corps strategic planning processes and (2) a Force
Management Oversight Counsel, co-chaired by top Navy and Marine Corps
officials, which will develop an overarching framework for Navy and
Marine Corps strategic planning.

With the looming uncertainty of continued downsizing, anticipated
retirements, and increased competitive sourcing of non-core functions,
strategic planning for the civilian workforce will grow in importance. If
high-level leaders do not provide the committed and inspired attention to
address civilian human capital issues (that is, establish it as an
organizational priority and empower and partner with their human capital
professionals in developing strategic plans for civilian human capital),
then future decisions about the civilian workforce may not have a sound
basis.




Page 14                                             GAO-03-475 DOD Personnel
                      For the most part, the strategic plans we reviewed lacked such key
Key Elements of       elements as mission alignment, results-oriented performance measures,
Strategic Plans for   and data-driven workforce planning.20 Mission alignment is demonstrated
                      by clearly showing how the civilian workforce contributes to
DOD Civilian          accomplishing an organization’s overarching mission. It is also evident in
Personnel Not in      descriptions of how the achievement of human capital initiatives will
                      improve an organization’s performance in meeting its overarching mission,
Place                 goals, and objectives. Results-oriented performance measures enable an
                      organization to determine the effect of human capital programs and
                      policies on mission accomplishment. Finally, data on the needed
                      knowledge, skills, competencies, size, and deployment of the workforce to
                      pursue an organization’s missions allow it to put the right people, in the
                      right place, at the right time. The interrelationships of these three key
                      elements are shown in figure 2. Without adequate alignment, performance
                      measures, and workforce data, DOD and its components cannot be certain
                      their human capital efforts are properly focused on mission
                      accomplishment.




                      20
                        This review primarily focused on aspects of leadership and strategic human capital
                      planning—two of four cornerstones in our model for strategically managing human capital
                      (GAO-02-373SP). We did not focus on aspects of the other two important cornerstones—
                      (1) acquire, develop, retain, and deploy the best talent and elicit the best performance for
                      mission accomplishment and (2) results-oriented organizational cultures that promote high
                      performance and accountability (such as individual performance management that is fully
                      integrated with the organization’s mission and is used as the basis for managing the
                      organization) and empower and include employees in setting and accomplishing
                      programmatic goals.




                      Page 15                                                       GAO-03-475 DOD Personnel
                               Figure 2: Relationships among Several Key Elements of a Human Capital Strategic
                               Plan




                               Previously, we emphasized that high-performing organizations align their
                               human capital initiatives with mission and goal accomplishment.
                               Organizations’ strategic human capital planning must also be results
                               oriented and data driven, including, for example, information on the
                               appropriate number and location of personnel needed and their key
                               competencies and skills. High-performing organizations also stay alert to
                               emerging mission demands and human capital challenges and reevaluate
                               their human capital initiatives through the use of valid, reliable, and
                               current data.21


Strategic Plans for Civilian   The human capital goals and objectives contained in strategic plans for
Personnel Are Not              civilian personnel were not, for the most part, explicitly aligned with the
Mission Aligned and            overarching missions of the organizations we reviewed. Moreover, none of
                               the plans fully reflected a results-oriented approach to assessing progress
Results Oriented               toward mission achievement. Human capital strategic plans should be
                               aligned with (i.e., consistent with and supportive of) an organization’s
                               overarching mission. Alignment between “published and approved human
                               capital planning documents” and an organization’s overarching mission is
                               advised in OPM’s Human Capital Assessment and Accountability


                               21
                                GAO-03-120.




                               Page 16                                               GAO-03-475 DOD Personnel
Framework. With regard to assessing progress, programs can be more
effectively measured if their goals and objectives are outcome-oriented
(i.e., focused on results or impact) rather than output-oriented (i.e.,
focused on activities and processes), in keeping with the principles of the
Government Performance and Results Act (GPRA). Congress anticipated
that GPRA would be institutionalized and practiced throughout the federal
government; federal agencies are expected to develop performance plans
that are consistent with the act’s approach.

Based on the above criteria, we analyzed the human capital strategic plans
that five of the seven organizations in our review have published22 for the
following:

•    Human capital goals and objectives that explicitly describe how the
     civilian workforce helps achieve the overarching mission, goals, and
     objectives.
•    Results-oriented measures that track the success of the human capital
     initiatives in contributing to mission achievement.

All of the civilian human capital plans we reviewed referred to their
respective organizations’ mission; however, the human capital goals,
objectives, and initiatives did not explicitly link or describe how the
civilian workforce efforts would contribute to the organizations’
overarching mission achievement, and more importantly how the extent of
contribution to mission achievement would be measured. Aspects of
DCMA’s plan, however, demonstrate alignment by including a general
explanation of the overarching mission inclusive of human capital goals,
objectives, and initiatives that further define how its civilian workforce
contributes to achieving the overarching mission. For example:

•    DCMA’s overarching mission is to “Provide customer-focused
     acquisition support and contract management services to ensure
     warfighter readiness, 24/7, worldwide.” DCMA’s human capital plan
     demonstrates the alignment of the agency’s workforce by stating that
     the agency will accomplish its overarching mission by “Partner[ing], or
     strategically team[ing] with customers to develop better solutions, and
     ensur[ing] warfighter success on all missions” and “Providing expertise



22
  DOD, Air Force, Army, Marine Corps, and DCMA have published civilian human capital
strategic plans. DFAS and Department of the Navy are in the process of developing such
plans.




Page 17                                                     GAO-03-475 DOD Personnel
      and knowledge throughout the acquisition life cycle, from cradle to
      grave; from factory to foxhole and beyond”.23
•     DCMA’s plan contains one human capital goal, among other agency-
      wide goals, directed at aligning workforce efforts with mission
      accomplishment. The goal is to enable DCMA people to excel by
      building and maintaining a work environment that (1) attracts,
      (2) develops, and (3) sustains a quality workforce.
•     Several objectives and initiatives in DCMA’s plan demonstrate a link to
      this human capital goal and to the overarching mission. Examples of
      these initiatives include determining ways to (1) making DCMA
      employment attractive, (2) establishing a professional development
      framework that is integrated and competency-based as well as
      developing an advanced leadership program, and (3) sustaining a
      quality workforce by ensuring recognition and awards to
      high-performing personnel. This alignment of DCMA’s workforce,
      initiatives, and goals to the overarching mission helps DCMA ensure
      that its civilian workforce has the necessary expertise and knowledge
      to provide customer-focused acquisition support and contract
      management services.

The other plans in our review generally did not demonstrate this degree of
alignment. For example, in the Army civilian human capital strategic plan,
four of the six human resource goals are more narrowly directed toward
the role played by the human resource community and only indirectly tie
the civilian workforce to the achievement of the Army’s overall mission.
However, two goals—“systematic planning that forecasts and achieves the
civilian work force necessary to support the Army’s mission” and
“diversity through opportunity”24 —link more explicitly to the Army’s
overarching mission. Also, DOD’s departmentwide civilian human capital
plan refers to the overarching mission by including broad references to
DOD’s overarching strategic plan. However, the plan is silent about what
role DOD’s civilian workforce is expected to play in achievement of the
mission. The plan recognizes the need for aligning the civilian workforce
with the overarching mission by proposing to develop a human resource
management accountability system to guarantee the effective use of
human resources in achieving DOD’s overarching mission.



23
    DCMA Human Capital Strategic Plan.
24
 The Army’s goal for diversity through opportunity states: “A civilian force that is as richly
diverse as America itself, and a work environment that promotes individual respect and
encourages collaboration through sharing of different views and perspectives to improve
effectiveness and quality.”



Page 18                                                         GAO-03-475 DOD Personnel
Moreover, none of the plans in our review contained results-oriented goals
and measures. For example, DOD’s strategic goal to “promote focused,
well-funded recruiting to hire the best talent available” is not expressed in
measurable terms (i.e., it does not define “focused, well-funded, and best
talent available”), and the measures for this goal are process oriented
(i.e., developing or publishing a policy or strategy; reviewing programs)
rather than results oriented. DOD’s plan, however, indicates that mission
achievement measures are being developed. At the component level, the
Army, in particular, has developed metrics related to its personnel
transaction processes; although these measures are important, they are
not focused on measuring outcomes related to mission accomplishment.
Army officials recognize the importance of relating outcomes to mission
accomplishment and are presently working to develop such measures.
Without results-oriented measures, it is difficult for an organization to
assess the effectiveness of its human capital initiatives in supporting its
overarching mission, goals, and objectives.

Officials at DOD and the defense components in our review told us they
recognize the importance of alignment and results-oriented measures in
strategic human capital planning. In fact, the Air Force has recently
undertaken an initiative to develop a planning framework aligning
strategy, vision, execution, measurement, and process transformation.
Many human capital officials we spoke with noted they have only recently
begun to transition from their past role of functional experts—focused
primarily on personnel transactions—to partners with top leadership in
strategically planning for their civilian workforce. In their new role, they
expect to make improvements in strategically managing civilian personnel,
including identifying results-oriented performance measures in future
iterations of their plans. Until such elements are in place, it is difficult to
determine if the human capital programs DOD and its components are
funding are consistent with overarching missions or if they are effectively
leading to mission accomplishment.




Page 19                                              GAO-03-475 DOD Personnel
Strategic Plans for Civilian   The civilian human capital strategic plans for DOD and its components
Personnel Generally Lack       include goals focused on improving their human capital initiatives, but
Data on Workforce Needs        only two components include workforce data that supported the need for
                               those particular initiatives. GAO and others25 have reported that it is
                               important to analyze future workforce needs to (1) assist organizations in
                               tailoring initiatives for recruiting, developing, and retaining personnel to
                               meet its future needs and (2) provide the rationale and justification for
                               obtaining resources and, if necessary, additional authority to carry out
                               those initiatives. We also stated that to build the right workforce to
                               achieve strategic goals, it is essential that organizations determine the
                               critical skills and competencies needed to successfully implement the
                               programs and processes associated with those goals. To do so, three types
                               of data are needed: (1) what is available—both the current workforce
                               characteristics26 and future availability, (2) what is needed—the critical
                               workforce characteristics needed in the future, and (3) what is the
                               difference between what will be available and what will be needed—the
                               gap. Without this information, DOD cannot structure its future workforce
                               to support the Secretary of Defense’s initiatives or mitigate the risk of
                               shortfalls in critical personnel when pending civilian retirements occur.

                               Of the five organizations in our review that had civilian human capital
                               strategic plans,27 two—the Air Force and DCMA—included some
                               information about the future workforce and indicated the gaps to be
                               addressed by its civilian human capital initiatives. The Air Force’s plan
                               includes a chart that illustrates, in terms of years of federal service, the
                               current workforce compared to a 1989 baseline (prior to the downsizing of
                               its civilian workforce) and a target workforce for fiscal year 2005. This
                               information was generally based on data that were readily available but
                               considered to be a less-than-adequate indicator for level of experience,
                               and it is not clear how the target workforce data were derived. According


                               25
                                 GAO-02-373SP; National Academy of Public Administration, Building Successful
                               Organizations: A Guide to Strategic Workforce Planning (Washington, D.C.: May 2000);
                               International Personnel Management Association, Workforce Planning Resource Guide for
                               Public Sector Human Resource Professionals (Summer 2002); and RAND, An Operational
                               Process for Workforce Planning (Forthcoming).
                               26
                                 Workforce characteristics are concrete and measurable aspects of a group of workers
                               that are critical for organizational success and can be influenced by policy decisions.
                               Examples include occupation; grade level; experience; academic degree or discipline;
                               certification; leadership; multifunctional skills; deployment; or military, civilian, and
                               contractor mix.
                               27
                                The Department of the Navy and DFAS do not yet have plans.




                               Page 20                                                        GAO-03-475 DOD Personnel
to the Air Force, its analysis illustrated the shortfall in the number of
civilians with less than 10 years of service when compared to the Air
Force’s long-term requirements. Using this and other analyses, the Air
Force initially developed workforce-shaping activities in four
areas—accession planning, force development, retention/separation
management, and enabling activities, which included 27 separate
initiatives.

DCMA’s plan describes the agency’s workforce planning methodology,
which focuses on identifying gaps between its current and future
workforce. DCMA’s strategic workforce planning team analyzes
quantitative data on the current workforce and employs an interview
protocol to gather and analyze information from DCMA managers and
subject matter experts pertaining to future work and workforce
requirements.28 According to DCMA, this methodology allows it to link the
desired distribution of positions, occupational series, and skills to
organizational outcomes, processes, and customer requirements and to
DOD’s transformation guidance, goals, and initiatives. Although DCMA has
not completely identified or quantified its future workforce requirements,
it identified the following: requirements for new technical skills, especially
software acquisition and integration; upgrading general skills and
maintaining the existing skill base; correcting imbalances in geographic
locations; requirements for hiring about 990 employees per year through
2009; and obtaining additional positions to support anticipated increasing
procurements.

In contrast to the Air Force and DCMA plans, the DOD, Army, and Marine
Corps plans lack information about future workforce needs. For example,
DOD’s civilian human capital plan contains data on those civilians eligible
for retirement by grade level and by job category. However, the plan does
not address key characteristics such as skills and competencies that will
be needed in the future workforce to support changes being undertaken by
DOD.29 Without this information and a methodology to analyze and identify
the gaps that exist between what will be available and what will be



28
 DCMA developed this qualitative approach because it does not have (1) workforce
modeling or projection tools that can be used as a basis to establish the number of future
positions and types of future competencies required and (2) data on current workforce
competencies to establish the baseline needed to assess future competency gaps.
29
 Changes include such initiatives as DOD’s transformation to a capabilities-based
organization and competitive sourcing under OMB Circular A-76.




Page 21                                                        GAO-03-475 DOD Personnel
                          needed, it is not clear that the human capital initiatives in DOD’s plan will
                          result in the desired future workforce.

                          All of the plans we reviewed acknowledge strategic workforce planning
                          shortfalls by setting goals or initiatives to improve in this area. For
                          example, DOD’s plan includes a goal to obtain management systems and
                          tools that support total force planning and informed decision making.
                          DOD has begun adopting the Army’s Civilian Forecasting System and the
                          Workforce Analysis Support System for departmentwide use, which will
                          enable it to project the future workforce by occupational series and grade
                          structure. However, the systems (which are based on a regression analysis
                          of historical data) are not capable of determining the size and skill
                          competencies of the civilian workforce needed in the future. Also, DOD
                          has not yet determined specifically how this new analytic capability will be
                          integrated into programmatic decision-making processes. DOD officials
                          stated that its first step was to purchase the equipment and software,
                          which was accomplished in 2002. DOD is now analyzing users’ needs. As
                          of December 2002, DOD officials were testing the systems, but they
                          expressed concerns that the Army systems may not serve the needs of a
                          complex and diverse organization such as DOD.


                          The civilian human capital strategic plans we reviewed did not address
Strategic Plans for       how the civilian workforce would be integrated with their military
Civilian Personnel        counterparts or sourcing initiatives to accomplish DOD’s mission. The
                          2001 QDR states that future operations will not only be joint but also
Not Yet Integrated        depend upon the total force—including civilian personnel as well as active
with Plans for Military   duty and reserve personnel. The QDR also emphasizes that DOD will focus
                          its “owned” resources in areas that contribute directly to warfighting and
Personnel or Sourcing     that it would continue to take steps to outsource and shed its non-core
Initiatives               responsibilities. The 2000 Defense Science Board Task Force report states
                          that DOD needs to undertake deliberate and integrated force shaping of
                          the civilian and military forces, address human capital challenges from a
                          total force perspective, and base decisions to convert functions from
                          military to civilian or to outsource functions to contractors on an
                          integrated human resource plan.30 In addition, the National Academy of
                          Public Administration, in its report on the Navy civilian workforce 2020,
                          notes that as more work is privatized and more traditionally military tasks
                          require support of civilian or contractor personnel, a more unified


                          30
                           The Defense Science Board Task Force on Human Resources Strategy.




                          Page 22                                                 GAO-03-475 DOD Personnel
approach to force planning and management will be necessary; serious
shortfalls in any one of the force elements will damage mission
accomplishment.31 The Academy’s report also states that the trend towards
greater reliance on contractors necessitates a critical mass of civilian
personnel expertise to protect the government’s interest and ensure
effective oversight of contractors’ work. Further, the 2002 Commercial
Activities Panel final report indicates that sourcing and human capital
policies should be inextricably linked together, and it calls for federal
sourcing policies to be “consistent with human capital practices designed
to attract motivate, retain, and reward a high performing workforce.”32

DOD’s overall human capital strategy, however, consists of three separate
plans: one for civilians, one for military personnel, and one for quality of
life issues for servicemembers and their families. DOD has not integrated
the contractor workforce into these plans. Although DOD officials
maintain that these plans are intended to complement each other, the
plans are not integrated to form a seamless and comprehensive strategy.
The civilian plan was prepared separately from the other two military
plans with little direct involvement of key stakeholders, such as
representatives from military personnel and manpower requirements
communities.

Although not reflected in its departmentwide civilian human capital
strategic plan, DOD acknowledged—in its response to the President’s
Management Agenda to accomplish workforce restructuring,
reorganizations, delayering, outsourcing, and reengineered and
streamlined processes—that these efforts could only be accomplished
through coordinating and integrating civilian and military components.
The departmentwide civilian plan includes a longer-term objective to
assess the need for and the capabilities of automated information
management tools to primarily integrate civilian and military personnel
and transaction data. We believe these tools can also provide information
for planning and analysis, but they may not provide DOD with the
information needed to proactively shape the total DOD workforce in
response to current changes (i.e., the Secretary’s transformation of the
department, increasing joint operations, and competitive sourcing
initiatives) because (1) contractor data are not included and (2) the


31
  Civilian Workforce 2020: Strategies for Modernizing Human Resources Management in
the Department of the Navy.
32
 Improving the Sourcing Decisions of the Government: Final Report.




Page 23                                                  GAO-03-475 DOD Personnel
projected date for accomplishing this objective, September 2008, may be
too late to effect near-term decisions. In addition, officials in the Office of
the Under Secretary of Defense for Personnel and Readiness recognize
that integration of the military and civilian plans is important and are
developing an umbrella document that will encompass all three
components of the human capital strategy, but it has not established a
time frame for completion.

Furthermore, DOD’s civilian human capital strategic plan does not address
the role of civilian vis-à-vis contractor personnel or how DOD plans to link
its human capital initiatives with its sourcing plans, such as efforts to
outsource non-core responsibilities. The plan notes that contractors are
part of the unique mix of DOD resources, but none of the goals and
objectives discusses how DOD will shape its future workforce in a total
force (civilian, military, and contractor) context.33 We believe that effective
civilian workforce planning cannot be accomplished in isolation from
planning for military personnel or sourcing initiatives. As the Commercial
Activities Panel report notes, it is particularly important that sourcing
strategies support, not inhibit, the government organization’s efforts to
recruit and retain a high-performing in-house workforce.34 We also noted in
our High Risk report that careful and thoughtful workforce planning
efforts are critical to making intelligent competitive sourcing decisions.35

At the service level, the Air Force’s strategic plans for civilian personnel
were not initially developed in a total force context, but the current plans
acknowledge the need to integrate strategic planning for civilians with
their military counterparts, as well as taking into account contractors. For
example, the Air Force has set a goal and taken steps to integrate planning
for active, reserve, civilian, and contractor personnel by 2004.36 Air Force
officials stated concerns about the significant budgetary consequences
when planning does not take place in a total force context. For example,
when civilian or contractor personnel perform functions previously



33
  Officials in the Office of the Under Secretary of Defense for Personnel and Readiness
described a parallel effort to define civilian and contractor roles as part of identifying
activities that are not inherently governmental as required by the Federal Activities
Inventory Reform Act (P.L. 105-270).
34
 Improving the Sourcing Decisions of the Government: Final Report.
35
 GAO-03-120.
36
 Air Force Personnel Vision Implementation Plan 2002.




Page 24                                                         GAO-03-475 DOD Personnel
conducted by military personnel, the defense component involved must
obtain additional funds because payment for civilians and contractors
cannot come from military personnel funds.37 The Air Force estimates that
these costs could be $10 billion to $15 billion over the next 5 years.

Although a proposed time frame is not provided, the Marine Corps’ civilian
plan states the need to forecast military and civilian levels and workforce
requirements based on strategic mission drivers, stratified workload
demand, and business process changes; the requirements for its civilian
marines will take into account the appropriate redistribution of work
among the military, civilian, and contractor communities.38 The Army’s
civilian human capital plan states that it will have to acquire, train, and
retain its total force in an operational environment that will place different
demands on human capital management. The Army’s human capital
community has an objective to support the Army-wide “Third Wave”
initiative, which focuses on privatization of non-core functions to better
allocate scarce resources to core functions.39 (The Department of the Navy
does not yet have a civilian human capital strategic plan.)

The defense agencies we reviewed, which have relatively few military
personnel compared to the military services, are taking or plan to take an
integrated approach to strategic planning for their civilian and military
workforces, but they do not indicate how they will integrate these efforts
with their sourcing initiatives. DCMA’s human capital strategic plan
includes both civilian and military personnel. For example, the plan
includes a goal to address the underassignment of military personnel,40
because their absence further compounds the difficulties caused by the
downsizing of civilian positions and the increasing workload. DFAS is
planning to include both civilian and military personnel in the human



37
 U.S. General Accounting Office, DOD Competitive Sourcing: Some Progress, but
Continuing Challenges Remain in Meeting Program Goals, GAO/NSIAD-00-106
(Washington, D.C.: Aug. 8, 2000).
38
 U.S. Marine Corps Civilian Workforce Campaign Plan 2003.
39
 The Department of the Army’s Fiscal Year 02-07 Civilian Human Resources Strategic
Plan and FY03 Army Civilian Human Resources Operational Plan.
40
 In 2002, DCMA was authorized 630 military positions, but it filled 480. This chronic
problem occurs because the services lack military personnel trained in the acquisition
career fields and, therefore, do not have enough qualified military personnel to fill the
DCMA positions. Currently, this shortage affects the Administrative Contracting and
Acquisition Manager functions.




Page 25                                                         GAO-03-475 DOD Personnel
              capital strategic plan that it is developing. Like DCMA, military personnel
              are a small but important part of the overall DFAS workforce, but they are
              projected to be less available in the future. For example, the Air Force has
              announced that it is reducing its military personnel presence at DFAS over
              the next several years.

              Without integrated planning, goals for shaping and deploying military,
              civilian, and contractor personnel may not be consistent with and support
              each other. Consequently, DOD may not have the workforce it needs to
              accomplish tasks critical to readiness and mission success.


              DOD has made progress in establishing a foundation for strategically
Conclusions   addressing civilian human capital issues by developing its departmentwide
              civilian human capital strategic plan. However, the alignment of human
              capital goals with the overarching mission is unclear in DOD’s and the
              components’ strategic plans for civilian human capital, and results-
              oriented performance measures linked to mission accomplishment are
              lacking. Without these key elements, DOD and its components may miss
              opportunities to more effectively and efficiently increase workforce
              productivity. Also, without greater commitment from and the support of
              top leaders, civilian human capital professionals in DOD and the defense
              components may design strategic planning efforts that are not
              appropriately focused on mission accomplishment and that do not have
              adequate support to carry out.

              Moreover, DOD top leadership has not provided its components with
              guidance on how to align component-level strategic plans with the
              departmentwide plan. Without this alignment, DOD’s and its components’
              planning may lack the focus and coordination needed (1) to carry out the
              Secretary of Defense’s transformation initiatives in an effective manner
              and (2) to mitigate risks of not having human capital ready to respond to
              national security events at home and abroad.

              Although DOD and component officials recognize the critical need for
              ensuring that the future workforce be efficiently deployed across their
              organizations and have the right skills and competencies needed to
              accomplish their missions, their strategic plans lack the information
              needed to identify gaps in skills and competencies. As a result, DOD and
              its components may not have a sound basis for funding decisions related
              to human capital initiatives and may not be able to put the right people in
              the right place at the right time to achieve the mission.



              Page 26                                             GAO-03-475 DOD Personnel
                      Furthermore, as personnel reductions continue and DOD carries out its
                      transformation initiatives, integrating planning in a total force context—as
                      mentioned in the QDR—becomes imperative to ensure that scarce
                      resources are most effectively used. However, military and civilian human
                      capital strategic plans—both DOD’s and the components’—have yet to be
                      integrated with each other. Furthermore, the civilian plans do not address
                      how human capital policies will complement, not conflict with, the
                      department-level or component-level sourcing plans, such as competitive
                      sourcing efforts.


                      To improve human capital strategic planning for the DOD civilian
Recommendations for   workforce, we recommend that the Secretary of Defense direct the Under
Executive Action      Secretary of Defense for Personnel and Readiness, to undertake the
                      following:

                      •   Improve future revisions and updates to the DOD departmentwide
                          strategic human capital plan by more explicitly aligning with DOD’s
                          overarching mission, including results-oriented performance measures,
                          and focusing on future workforce needs. To accomplish this, the
                          revisions and updates should be developed in collaboration with top
                          DOD and component officials and civilian and military human capital
                          leaders.

                      •   Direct the military services and the defense agencies to align their
                          strategic human capital plans with the mission, goals, objectives, and
                          measures included in the departmentwide strategic human capital plan
                          and provide guidance to these components on this alignment.

                      •   Define the future civilian workforce, identifying the characteristics
                          (i.e., the skills and competencies, number, deployment, etc.) of
                          personnel needed in the context of the total force and determine the
                          workforce gaps that need to be addressed through human capital
                          initiatives.

                      •   Assign a high priority to and set a target date for developing a
                          departmentwide human capital strategic plan that integrates both
                          military and civilian workforces and takes into account contractor
                          roles and sourcing initiatives.




                      Page 27                                             GAO-03-475 DOD Personnel
                  We received comments from the Department of Defense too late to
Agency Comments   include them in the final report. These comments and our evaluation of
                  them, however, were incorporated into a subsequent report (DOD
                  Personnel: DOD Comments on GAO’s Report on DOD’s Civilian Human
                  Capital Strategic Planning, GAO-03-690R).


                  We are sending copies of this report to the appropriate congressional
                  committees; the Secretary of Defense; the Secretaries of the Air Force,
                  Army, and Navy; the Commandant of the Marine Corps; and the Directors
                  of DCMA and DFAS. We will also make copies available to others upon
                  request. In addition, the report will be available at no charge on the GAO
                  Web site at http://www.gao.gov.

                  Please contact me at (202) 512-5559 if you or your staff have any questions
                  concerning this report. Key contributors are listed in appendix III.

                  Sincerely yours,




                  Derek B. Stewart
                  Director, Defense Capabilities
                  and Management




                  Page 28                                            GAO-03-475 DOD Personnel
             Appendix I: Scope and Methodology
Appendix I: Scope and Methodology


             As requested by the Ranking Minority Member of the House Committee on
             Armed Services, Subcommittee on Readiness, we reviewed civilian human
             capital strategic planning in the Department of Defense (DOD).
             Specifically, the objectives of this report were to assess (1) the extent to
             which top-level leadership is involved in strategic planning for civilian
             personnel and (2) whether strategic plans for civilian personnel are
             aligned with the overall mission, results oriented, and based on data about
             the future civilian workforce. We also determined whether the strategic
             plans for civilian personnel are integrated with plans for military
             personnel or sourcing initiatives. We focused primarily on civilian human
             capital strategic planning undertaken since 1988, when DOD began
             downsizing its civilian workforce. Our analyses were based on the
             documents that each organization identified as its civilian human capital
             strategic planning documents. Several documents had been published or
             updated either just prior to or during the time of our review (May 2002 to
             March 2003). Also, DOD and component strategic planning for civilian
             personnel is a continuous process and involves ongoing efforts. We did not
             review the implementation of the human capital strategic plans because
             most plans were too recent for this action to be completed.

             The scope of our review included examining the civilian human capital
             strategic planning efforts undertaken by DOD, its four military services,
             and two of its other defense organizations—the Defense Finance and
             Accounting Service (DFAS) and the Defense Contract Management
             Agency (DCMA). We selected the military services since they account for
             about 85 percent of the civilian personnel in DOD. To understand how
             civilian human capital strategic planning is being undertaken by other
             defense organizations, which account for the other 15 percent of the DOD
             civilian workforce, we determined the status of the human capital
             strategic planning efforts of 21 other defense organizations through a
             telephone survey. We judgmentally selected two defense agencies, DFAS
             and DCMA, because of their large size and because they perform different
             functions; therefore, they could offer different perspectives on strategic
             planning for civilians. DFAS and DCMA account for about 26 percent of
             the civilian personnel in other defense organizations. DFAS has about
             15,274 civilian employees and more than 1,000 military personnel,
             performs finance and accounting activities, and does not have a civilian
             human capital strategic plan, although it does have an overall agency
             strategic plan that includes human capital as a key element. DCMA has
             about 11,770 civilian employees and about 480 military personnel,
             performs acquisition functions, and has a civilian human capital strategic
             plan.



             Page 29                                            GAO-03-475 DOD Personnel
Appendix I: Scope and Methodology




To assess the extent to which top-level leadership is involved in strategic
planning for civilian personnel, we reviewed the civilian human capital
strategic plans for discussions of the methodology used in developing
them that indicated leadership involvement. Further, we compared the
civilian human capital strategic plans publication dates to key events, such
as the issuance of the President’s Management Agenda, which advocates
strategic human capital planning. We discussed top leadership
involvement in the development of human capital strategic plans with the
applicable civilian human capital planning officials. These officials
included representatives from the following offices:

•   Department of Defense: Under Secretary of Defense for Personnel and
    Readiness, including Deputy Under Secretary of Defense for Civilian
    Personnel Policy and Director, Civilian Personnel Management Service.
•   Department of Air Force: Assistant Secretary of the Air Force for
    Manpower and Reserve Affairs; Assistant Deputy Chief of Staff for
    Personnel Headquarters; Director of Strategic Plans and Future
    Systems, and Director, Air Force Personnel Operations Agency, Deputy
    Chief of Staff for Personnel; and Directorate of Personnel, Air Force
    Materiel Command.
•   Department of the Army: Deputy Chief of Staff, G-1.
•   Department of the Navy: Deputy Assistant Secretary of the Navy for
    Civilian Personnel Policy and Equal Employment Opportunity; Deputy
    Chief of Naval Operations for Manpower and Personnel; and Deputy
    Commandant of the Marine Corps for Manpower and Reserve Affairs.
•   Defense Contract Management Agency: Executive Director, Human
    Resources; and Director, Strategic Planning, Programming, and
    Analysis.
•   Defense Finance and Accounting Service: Human Resources
    Directorate and Resource Management Directorate.

To assess whether strategic plans for civilian personnel are aligned with
the overall mission, results oriented, and contained data about the future
civilian workforce, we compared each plan with the concepts articulated
in our model for strategically managing human capital and similar
guidance provided by the Office of Budget and Management and the Office
of Personnel Management (which are discussed in greater detail in the
Background section of this report). Among the numerous sources we
reviewed, we used the criteria described in our reports on Exposure Draft:
A Model of Strategic Human Capital Management; Human Capital: A
Self-Assessment Checklist for Agency Leaders; High-Risk Series: An




Page 30                                            GAO-03-475 DOD Personnel
Appendix I: Scope and Methodology




Update; and Performance and Accountability Series – Major
Management Challenges and Program Risks.41 Specifically, we looked for
(1) the alignment of human capital approaches to meet organizational
goals, (2) the presence of results-oriented performance measures, and
(3) the references to use of workforce planning data to justify human
capital initiatives (i.e., policies and programs). To ensure consistency with
our application of the criteria in other GAO engagements, we also
reviewed approximately 100 of our reports that addressed their
application within DOD and other federal agencies. Also, to better
understand the existing human capital framework and its relationship to
the strategic planning efforts, we gathered information about policies,
programs, and procedures. Finally, we validated the results of our analyses
of the plans with appropriate agency officials.

To assess whether the strategic plans for civilian personnel are integrated
with plans for military personnel or sourcing initiatives, we analyzed the
civilian human capital strategic plans for (1) references to military
personnel or a total force perspective and (2) discussions about
competitive and strategic sourcing efforts being undertaken in a total force
context. We also collaborated with other GAO staff who reviewed
(1) DOD’s strategic plans for military personnel and quality of life issues
for servicemembers and their families,42 (2) sourcing initiatives,43 and
(3) DOD’s acquisition workforce.44 In addition, we discussed integration
between civilian and military personnel plans with the applicable civilian
human capital planning officials previously mentioned.




41
 U.S. General Accounting Office, Exposure Draft: A Model of Strategic Human Capital
Management, GAO-02-373SP (Washington, D.C.: Mar. 2002); Human Capital: A Self-
Assessment Checklist for Agency Leaders, GAO/OCG-00-14G (Washington, D.C.: Sept. 2000,
Version 1); High-Risk Series: An Update, GAO-01-263 (Washington, D.C.: Jan. 2001); and
Performance and Accountability Series—Major Management Challenges and Program
Risks: Department of Defense, GAO-03-98 (Washington, D.C.: Jan 2003).
42
 U.S. General Accounting Office, Military Personnel Oversight Process Needed to Help
Maintain Momentum of DOD’s Strategic Human Capital Planning, GAO-03-237
(Washington, D.C.: Dec. 2002).
43
  Commercial Activities Panel, Improving the Sourcing Decisions of the Government:
Final Report (Washington, D.C.: Apr. 2002).
44
  U.S. General Accounting Office, Acquisition Workforce: Department of Defense’s Plans
to Address Workforce Size and Structure Challenges, GAO-02-630 (Washington, D.C.:
Apr. 30, 2002).




Page 31                                                     GAO-03-475 DOD Personnel
Appendix I: Scope and Methodology




We conducted our review from May 2002 to March 2003 in accordance
with generally accepted government auditing standards.




Page 32                                        GAO-03-475 DOD Personnel
               Appendix II: Key Events Related to Strategic
Appendix II: Key Events Related to Strategic
               Planning for DOD Civilian Personnel



Planning for DOD Civilian Personnel

               Figure 3 provides a time line of several key events and dates that affected
               DOD’s civilian workforce between 1988 and 2002. It also shows when DOD
               and its components published their human capital strategic plans.

               Figure 3: Key Events Related to Strategic Planning for DOD Civilian Personnel




               Note: Base Realignment and Closure (BRAC); Government Performance and Results Act (GPRA);
               National Defense Panel (NDP); Defense Science Board (DSB); Department of Defense (DOD);
               President’s Management Agenda (PMA); Office of Management and Budget (OMB); Office and
               Personnel Management (OPM); Defense Contract Management Agency (DCMA); and Quadrennial
               Defense Review (QDR).




               Page 33                                                       GAO-03-475 DOD Personnel
                  Appendix III: GAO Contacts and Staff
Appendix III: GAO Contacts and Staff
                  Acknowledgments



Acknowledgments

                  Derek B. Stewart (202) 512-5559
GAO Contacts      Christine Fossett (202) 512-2956


                  In addition to the name above, Daniel Chen, Joel Christenson, Barbara
Acknowledgments   Joyce, Janet Keller, Shvetal Khanna, Dan Omahen, Gerald Winterlin, Dale
                  Wineholt, and Susan Woodward made key contributions to this report.




(350198)
                  Page 34                                          GAO-03-475 DOD Personnel
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