oversight

Army Reservists: Peacetime Screening to Identify Key Civilian Employees Is Inadequate

Published by the Government Accountability Office on 1990-02-12.

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

     ,




-7
         ‘cir~ itc~cl S ta te s   General   A c c o u n tin g   O ffice

         R e p o rt to th e C h a irm a n , S u b com m itte e
 GAO     o n R e a d in e s s , C o m m itte e o n A r m e d              -’
         S e rvice s , H o u s e o f R e p r e s e n ta tive s



         A R M Y R E S E R V IS T S
         P e a cetim e S cre e n i n g to
         Id e n tify K e y C ivilia n
         E m p loyees Is
         In a d e q u a te
                   United States
                   General Accounting Office
                   Washington, D.C. 20648

                   National Security and
                   International Affairs Division

                   B-236144
                   February 12,199O

                   The Honorable Earl Hutto
                   Chairman, Subcommittee on Readiness
                   Committee on Armed Services
                   House of Representatives

    I              Dear Mr. Chairman:
                   In September 1988, the former Subcommittee Chairman asked us to
                   determine whether the Army’s peacetime screening process identifies
                   Ready Reservists who have civilian occupations that would be critical to
                   the war effort or private sector operations. Mobilization of such individ-
                   uals could adversely affect the civilian sector’s preparedness. We
                   reviewed the Army’s screening process to determine whether it effec-
                   tively identifies such individuals and complies with legal requirements.
                   Title 10, section 271, of the U.S. Code requires the military services to
                   conduct continuous occupational screening for Ready Reservists, and
                   Department of Defense (DOD) Directive 1200.7 implements this statute to
                   provide for the screening of all Ready Reservists, including those who
                   work for nonfederal employers. Peacetime screening is designed, in part,
                   to identify reservists whose mobilization would seriously impair the
                   operations of their employers. The objective of screening is to enable
                   government and business to plan for the loss of these reservists so that
                   their operations can continue to function effectively.

                   Our objectives, scope, and methodology are presented in appendix I.

                   The Army’s peacetime screening policy does not ensure that Ready
Redults in Brief   Reservists who have critical civilian occupations are properly screened
                   prior to mobilization. Though federally employed reservists are rou-
                   tinely screened for key employment, they make up only about 9 percent
                   of Army Reservists, and those who are otherwise employed are not
                   screened.
                   We found that many civilian employers lack an awareness of their
                   screening opportunity or even the military status of their employees.
                   For example, all six contractors we interviewed were unaware of the
                   screening process and their opportunity to plan for the loss of mobilized
                   employees. At our request, five of these contractors were able to screen
                   their reservist employees by identifying those who had taken military


                   Page   1                     GAO/NSLAD80-56   Peacetime   Screening   of Army   Reservists
B-236144




leave. Of those they identified as reservists, these contractors consid-
ered 13 percent to be key to their operations.
At present, the Army has no such information on its nonfederally
employed reservists. In fact, it has no way of knowing whether reserv-
ists have told employers of their military status because it lacks a pro-
cess to obtain feedback from reservists regarding their communication
with employers. Thus, the Army has no way of determining whether or
to what extent conflict between civilian and military needs will arise in
a national emergency.

During a general mobilization, the Army will depend heavily upon its
reservists, who make up more than half of its combat forces and a
greater portion of its support forces. At the end of fiscal year 1988,
Army reservists who could be mobilized numbered more than 1.3 mil-
lion, most of whom were from the Ready Reserve (the National Guard,
the Army Reserve, and the Individual Ready Reserve). Many of these
reservists will deploy within 30 days of a general mobilization, leaving
their employers little time to adjust to their departure. Mobilization of
the reserves thus presents a manpower dilemma-how to attain a maxi-
mum military force yet maintain effective functioning of government
and private sectors. Some reservists hold jobs of key importance to the
civilian work force, and their mobilization could mean serious hardship
to the organizations for which they work. If they hold vital positions in
defense industries, mobilization could affect military supplies and ser-
vices as well.
To mitigate the effect of a general mobilization on essential operations
of government, commerce, and the war effort, the Congress has directed
the military to set up a system to continuously screen its Ready Reserve
(10 USC. 271). This provision was enacted as part of the Reserve
Forces Act of 1966 because (1) at the time of the Korean call-up there
was no adequate screening of the reservists who were ordered to active
duty and (2) there was no screening program in operation during the
years prior to the Korean call-up. According to the statute’s legislative
history, there were many mistakes that could have been prevented by a
continuous screening program carried on before the call-up.

The screening process includes reviewing reservists to identify those
who hold civilian jobs that will be critical to employers during mobiliza-
tion Responsibility for managing and controlling the overall Ready
Reserve screening program rests with the Assistant Secretary of


Page   2                    GAO/NSIAD-90-56   Peacetime   Screening   of Army   Reservists
B-286144




Defense for Reserve Affairs. To carry out that responsibility, DOD has
issued Directive 1200.7, which prescribes uniform policies and proce-
dures governing the peacetime management of and preparation for
mobilization, This Directive is also published in the Code of Federal
Regulations, 32 C.F.R. part 44. Procedures that provide nonfederal
employers the opportunity to identify key employees and, when applica-
ble, request their transfer from the Ready Reserve are contained in both
32 C.F.R. part 44 and in 44 C.F.R. part 333, which is published by the
Federal Emergency Management Agency.
DOD has also delegated screening responsibilities to the Secretaries of the
military services, each of whom must design and administer screening
programs for Ready Reservists. Army Regulation 135-133 assigns the
Commanding General of Forces Command and the Commander of the
Army Reserve Personnel Center (ARPERCEN) responsibility for imple-
menting and administering screening procedures for the Army Reserve.
Similar responsibilities for the Army National Guard are assigned to the
Chief of the National Guard Bureau.
The responsibility for initial screening resides with ARPERCEN for mem-
bers of the Individual Ready Reserve (IRR) and with unit commanders
for soldiers in reserve units. ARPERCEN is required to question IRR mem-
bers through the mail to determine their availability for mobilization;
unit commanders, during annual briefings, are required to ask individ-
ual reservists whether they know of any obligations that could affect
their availability during mobilization. Unit commanders also are to
instruct reservists to inform employers of their mobilization status.

One purpose of DOD Directive 1200.7 is to facilitate the identification of
reservists whose mobilization could impair essential operations, so that
employers can plan in peacetime how to keep operating smoothly during
mobilization despite the loss of these people. According to title 10, sec-
tion 271, of the US, Code, reservists who have critical civilian skills
should not be retained in the Ready Reserve beyond the numbers the
Army needs for those skills. Employers may request that the Army
transfer their reserve employees from the Ready Reserves to the
Standby’ or Retired Reserves or discharge them if two conditions are
met: (1) the reservists are key to operations, and (2) alternatives such as
replacement or cross-training are not practical. Requests must be made
‘Standby Reserves may be mobilized in time of war or national emergency declared by the Congress
but only if the military service Secretary concerned determines that there are not enough qualified
soldiers in the Ready Reserves or inactive National Guard in the required category who are readily
available.



Page 3                                GAO/NSIAD-90-56     Peacetime   Screening   of Army   Reservists
                                                                                                             ,


                         B-236144




                         in peacetime, since, according to federal regulation, no transfer due to
                         occupational screening will be granted once mobilization occurs.
                         According to Army officials, requests by employers for the transfer of
                         key reservists are to be sent through the Army’s chain of command for
                         review. If the final approving authority denies a request, it can be adju-
                         dicated by the Federal Emergency Management Agency on appeal by the
                         employer.


                         vices shall screen, at least annually, all Ready Reservists to ensure their
                         immediate availability for active duty. To implement this Directive, each
thiz Military Services   year DOD screens reservists who work for the federal government. Using
                         data from the Office of Personnel Management, DOD annually informs
to Screen for            federal agencies that they must report the number of reservist employ-
Nonfederal Key           ees who fill “key” positions and that they can request that these
Employment               employees be transferred to the Standby or Retired Reserve or dis-
                         charged. In 1987, about 9 percent (145,000) of all the military services’
                         1.6 million Ready Reservists were federally employed; of these, about
                         2,700 were reported as “key” to agency operations.

                         In contrast to this process for federal employees, DOD provides no spe-
                         cific process or guidance for the services to screen reservists for
                         nonfederal key employment. DOD Directive 1200.7 does encourage
                         nonfederal employers-particularly      those in the fields of public health,
                         safety, and defense support industries-to screen their reservist
                         employees and, when necessary, to request their transfer from the
                         Ready Reserve.


  -
Defense  Contractors     conflicts that would arise from the mobilization of reservists holding
Are Unaware of           key positions in nonfederal occupations. At the time of our fieldwork,
Screening                the only reference to nonfederal employers’ opportunity to request
                         transfers of key employees from the Army’s Ready Reserve was con-
Opportunities            tained in DOD Directive 1200.7 and the Code of Federal Regulations.
                         Therefore, nonfederal employers we visited were not aware of the
                         screening process.
            Y
                         We interviewed headquarters officials at two of the five Continental
                         Armies-the 1st and the 2nd. They told us that, in the last 15 years,



                         Page 4                       GAO/NSIAD-90-66   Peacetime   Screening   of Army   Reservists
B-238144




they had received no request for the transfer of key nonfederal employ-
ees from the Ready Reserve. Likewise, an official of the command
responsible for the Individual Ready Reserve could not recall receiving
any transfer requests in the last 3 years. Yet we found that some
employers who could be critical to a war effort and who employ reserv-
ists they believe are key to their operations knew nothing of a screening
program or the opportunity to request transfers.
We interviewed 6 of the top 100 defense contractors (for fiscal year
1987) concerning screening. All six contractors were unaware of screen-
ing and the opportunity to plan for the loss of mobilized employees.
None had received information from any Army source regarding the
screening process. Nor did most of these contractors readily know how
many reservists were in their employ.2 Consequently, they did not know
what effect mobilization would have on their production of war materi-
als, such as Harpoon m issiles, F-15 and F/A-18 aircraft, communication
systems, guided-missile vertical launch systems, and cargo tankers. Sev-
eral employers said that it is in the best interests of their operations and
of national preparedness to plan in peacetime for the mobilization of
their key employees.
At our request, five defense contractors were able to identify reservist
employees by using m ilitary leave as an index. One contractor found
29 reservists in his employ whom he considers key to his operations.
These 29 reservists represented all the m ilitary services and included
several high ranking officers (among them a general) whose loss could
have adverse effects on their employer. In all, the contractors identified
655 reservists on their payrolls and considered 87, or 13 percent, key
employees whose mobilization could adversely affect their production of
war materials.3 One contractor, for example, said that many of his
employees must have security clearances to work with classified data.
He has found that it takes at least 6 months to obtain security clear-
ances, so unplanned replacement of these employees could seriously
slow down his operations.



ZAccording to a recent study, Joint Telecommunication Industry Mobilization (TIM), by the Joint
Industry-Government TIM Group (NCS 622/3, Nov. 6,1987), employers are reluctant to maintain
records on their workers’ military status for fear of litigation or of appearing to discriminate.

‘IOne contractor has a succession plan for potential employee losses, but this plan does not consider
attrition due to mobilization. As a result of our visit, this contractor decided to expand his succession
plan to incorporate screening objectives.



Page 6                                  GAO/NSIAD-90-66      Peacetime   Screening   of Army   Reservists
                             B-236144




                             For fiscal year 1987, more than 90 percent of the Army’s Ready
Scieening in the             Reservists were employed in the nonfederal sector. However, as previ-
N&federal Sector Is          ously indicated, many employers may be unaware of their screening
Haknpered by Several         opportunity. This may be because until recently Army Regulation 135
                             133 did not directly address the occupational screening of reservists
Problems                     who are nonfederal employees, Also, the screening process is dependent
                             upon reservists, who may not be motivated to implement it.


Ar+y Regulation Only         Until July 1989, Army Regulation 135-133 did not mention the screening
Reqently Addressed           opportunity for nonfederal employers to request that their employees be
                             transferred from the Ready Reserve. Consequently, Ready Reserve com-
Scrpening for Nonfeder -al   mands we visited had not notified nonfederal employers of their screen-
Key Employment               ing opportunity or received transfer requests for nonfederal key
                             employment. Some of these commands regarded such activity as
                             unauthorized.
                             ARPERCEN,   for example, is responsible for screening 300,000 IRR mem-
                             bers, but it had not notified nonfederal employers of their screening
                             opportunity. In fact, according to the Chief of its Transfer Branch,
                             ARPERCEN would not have accepted key employment as justification for
                             transferring any IRR member who worked for a nonfederal employer.
                             Since, in ARPERCEN'S view, the regulation provided no authority to do
                             otherwise, it would have denied any transfer request from any employer
                             other than a federal agency. According to the Chief, ARPERCEN does not
                             maintain records of transfer requests made by nonfederal employers.
                             The Army’s July 1989 revision to its screening regulation does address
                             nonfederal employers’ opportunity to conduct screening and provides
                             transfer authority. The regulation encourages nonfederal employers to
                             adopt screening procedures and suggests that employers use federal
                             guidelines to determine “key position designations” and request trans-
                             fers on such grounds.
                             Until recently, Army regulations specifically exempted the screening
                             process from the Army’s internal control system. O fficials could not tell
                             us why the screening process had been so exempted. In 1988, the Army
                             made the screening process subject to its internal control system and
                             announced plans to begin using internal control checklists during fiscal
                             years 1990 or 1991.




                             Page 6                      GAO/NSIAD-90-56   Peacetime   Screening   of Army   Reservists
Army Lacks an Effectj .ve   Before it was revised, the Army’s screening regulation asked reservists
Procedure to Notify         only to inform nonfederal employers of their military status; there was
                            no requirement for reservists to inform employers about screening. The
Nonfederal Employers        July 1989 revision to the screening regulation encourages reservists to
                            inform employers about their screening opportunity. However, reserv-
                            ists may not be the best choice to provide notification.

                            Some reservists may not want to convey information to their employers
                            that may result in their removal from the reserves. According to Army
                            officials, most civilians are in the Ready Reserves because they want to
                            be there, for any of a variety of reasons-out of patriotism or a desire
                            for adventure or financial and retirement benefits. In addition, Army
                            officials told us that some civilians keep their employers unaware of
                            their reservist status, fearing that their military membership could
                            adversely affect their careers. For example, officials indicated that some
                            reservists use annual leave instead of military leave for their yearly
                            2-week reserve exercises so as not to alert employers of their military
                            status, Moreover, the Army lacks a means to tell whether reservists
                            actually provide employers with information on their reserve status and
                            employers’ screening opportunity.

                            The Army’s screening process does not ensure that Ready Reservists
Corjclusions                who hold critical positions with nonfederal employers are properly
                            screened prior to mobilization. Though federally employed reservists are
                            routinely screened for key employment, those who are otherwise
                            employed are not. DOD has not provided guidance to the military services
                            on how to screen reservists for nonfederal key employment, and the
                            Army’s reliance on reservists to inform their employers of their screen-
   ,                        ing opportunity does not in itself constitute a consistent, reliable screen-
                            ing process for at least two reasons, First, some reservists may not
                            convey information to an employer that may result in their removal
                            from the reserves. Second, the Army lacks a procedure to obtain feed-
                            back from reservists on their communications with employers and,
                            therefore, has no assurance that the screening process is working. Con-
                            sequently, some of the Army’s Ready Reservists may have occupations
                            that if vacated during mobilization, could adversely affect their employ-
                            ers’ operations.
                            The Army’s recent inclusion of the screening process in its internal con-
                            trol system should enable management to better assess its implementa-
                            tion. However, in the absence of any explicit requirement upon the
                            Army itself to ensure that nonfederal employers of Ready Reservists are


                            Page   7                    GAO/NSIAD-90-66   Peacetime   Screening   of Army   Reservists
                      B-236144




                      notified of their screening opportunity, potential for conflict between
                      employment and mobilization requirements remains.

                      We recommend that the Secretary of Defense provide guidance to the
Rebommendations       military services on how to fulfill their screening responsibility for
                      Ready Reservists employed in the nonfederal sector. In this regard, the
                      Secretary should examine the feasibility of implementing a system to
                      directly notify nonfederal employers of Ready Reservists of their
                      screening opportunity. Such a system should at a minimum notify
                      employers in the fields of public health, safety, and defense support
                      industries.
                      If the Secretary of Defense determines that direct notification is not fea-
                      sible, we recommend that the Secretary of the Army require Army com-
                      mands to establish procedures to obtain feedback from reservists on
                      whether nonfederal employers have been informed of their screening
                      opportunity.

                       In its official comments on a draft of this report, which we include as
Agency Comments and    appendix II, DOD generally agreed with our audit findings. It did not
Our Evaluation         agree, however, with our recommendations. DOD stated that, while there
                       is no statutory requirement to notify or provide employers the opportu-
                       nity to designate key positions, DOD’S and the Federal Emergency
                       Management Agency’s publication of policies and procedures in the
                       Federal Register and the Code of Federal Regulations is an appropriate
                       and cost-effective means of such notification. DOD cited 44 U.S.C. 1507,
                       chapter 16, which states that publication of a document in the Federal
                       Register is sufficient notice of the document’s contents to persons sub-
                      ject to or affected by the document.4
                      As our report shows, defense contractors we visited were not aware of
                      the screening process and their role in it. We believe that, from a practi-
                      cal standpoint, notification through the Code of Federal Regulations and
                      the Federal Register was not sufficient notice to these employers.

                      DOD stated that a system to directly notify nonfederal employers of
                      Ready Reservists about the screening process was neither feasible nor
                      necessary. It referred to a number of studies conducted by DOD and

                      41f a published document is an agency rule or regulation it is normally codified in the Code of Federal
                      Regulations.



                      Page 8                                 GAO/NSlAD-90-M       Peacetime   Screening   of Army   Reservists
others that indicated that mobilization would have a limited impact on
the capacity of employers to perform. On the basis of these studies, DOD
concluded that the relatively small percentage of the nation’s work force
having reserve obligations and the existing screening process have
together helped to limit the potential impact of mobilization.
We believe that qualitative screening is necessary because the loss of
even a small number of key or special-occupation employees could cre-
ate critical shortages. For example, DOD’S study of the impact of mobili-
zation on police departments indicated that the concentration of but a
few reservists in special occupations, such as bomb disposal, could cre-
ate critical shortages, even though the occupations represented small
percentages.
The studies cited by DOD to support its position are based largely on out-
dated information, some of it going back to 1975. Our work used more
current data (for 1987 through 1989), which indicates that reserve and
work force demographics have changed greatly since the time of DOD’S
reports. For example, 1987 DOD statistics indicated an increase of over
500 percent in the number of federally employed reservists who had
been designated as key employees compared to the number so identified
in a 1980 DOD study.” Similar demographic changes might have occurred
in the nonfederal employment sector. According to DOD, its 1982 study of
three major aerospace defense contractors indicated that all reservists
could be mobilized without impairing operations.” Our work, conducted
during 1989, included one of these three contractors-McDonnell
Douglas, McDonnell Aircraft Company, St. Louis, Missouri. According to
company representatives, 52 reservists among its nearly 500 reservist
employees could be key to operations; their mobilization could impair
the company’s defense work.
The telecommunications study to which                   DOD   referred in its comments
concluded that




“Screening Ready Reservists Employed by the Federal Government, 1980 Report to the House
Appropriations Committee, Office of the Deputy Assistant Secretary of Defense (Reserve Affairs),
November 1980.
“Screening Ready Reservists Employed by the Federal Government, 1982 Report to the House
Appropriations Committee, Office of the Deputy Assistant Secretary of Defense (Reserve Affairs),
December 1982.



Page 9                                GAO/NStAD-96-66     Peacetime   Screening   of Army   Reservists
   Is226144




   “
        a military mobilization
       . . .                    call-up would not significantly affect the telecommunica-
   tions work force in the Short and Mid-term from either a qualitative    or quantitative
   perspective.“7

  This conclusion was based on estimates that only 2 percent of the indus-
  try’s work force would be affected by the mobilization of reservists.
  However, the study indicated that among the small number of facilities
  surveyed (1) demographic differences within the work force could
  affect operations of each facility differently and (2) some facilities could
  incur losses of 10 percent or more of their personnel by the mobilization
  of their reservist employees. In addition, our work with six defense con-
  tractors showed that employers did not maintain records on their
  employees’ reserve obligation status and, therefore, did not know how
  they might be affected by a mobilization.

  DOD credited its screening program with helping to limit the potential
  impact of mobilization on the nonfederal work force. We disagree with
  DOD’S assessment of the efficacy of the existing screening program. In
  our view, the program has not identified or resolved a number of prob-
  lems concerning nonfederally employed reservists who hold jobs of key
  importance to the civilian work force. The following examples demon-
  strate the program’s shortcomings:

. DOD has acknowledged in its 1980 and 1982 reports to the House
  Committee on Appropriations     that nonfederally employed reservists
  had not been screened for employment.
. Our work at five defense contractors showed that they were unaware of
  the screening process. However, when informed of the process, the con-
  tractors identified 87, or 13 percent, of 655 reservists as key employees
  whose mobilization could impair their production of wartime materials.
. Two Army Audit Agency reports, which covered 14 reserve units, found
  no evidence that these units had either screened their members for criti-
  cal civilian occupations or counseled them about conflict between occu-
  pations and mobilization status.8 According to the reports, the
  mobilization of some of these reservists could adversely affect the
  health, safety, or welfare of their communities.



  7M. L. Coben and D. E. Jones, Teleaxnmunications Industry Mobilization: Personnel Issues,
  MTRWWOO243 (The MITRE brporation: McLean, Virginia, 1988).
  %eport of Audit, 220th Military Police Brigade, Gaitbersburg, Maryland, EZ 88-3, December 16,
  1989; Report of Audit., Virginia Army National Guard, Richmond, Virginia, EC 86-9, September 30,
  1986.



  Page         10                      GAO/NSIAIHO4%       Peacetime   Screening   of Army   Reservists
  B-230144




. A 1987 report by the Army Inspector General, which covered 37 reserve
  units, concluded that ‘I...procedures for identification and disposition of
  key personnel are generally m isunderstood or ignored.“9
  DOD stated that it did not agree that Army commands should obtain
  feedback from reservists on whether they had informed their employers
  about screening. DOD commented that it did not regard such notification
  as an appropriate responsibility for reservists. However, this position
  contradicts the Army’s July 1989 revision to its screening regulation,
  which encourages reservists to inform their employers of screening
  opportunities.
  DOD  did agree that reservists may be reluctant to inform employers of
  their m ilitary service obligations. Consequently, DOD said that it will
  revise its regulations to ensure that the m ilitary services’ procedures
  require feedback from reservists that they have notified employers of
  their service obligations.

  As arranged with your office, unless you publicly announce its contents
  earlier, we plan no further distribution of this report until 15 days from
  the date of its issue. At that time, we will send copies to the Chairmen,
  Senate Committee on Armed Services, House and Senate Committees on
  Appropriations, House Committee on Government Operations, and
  Senate Committee on Governmental Affairs; the Office of Management
  and Rudget; and the Secretaries of Defense and the Army. We will also
  make copies available to other parties upon request.
  Please call me at (202) 275-4141 if you or your staff have any questions.
  Major contributors to this report are listed in appendix III.
  Sincerely yours,




  Richard Davis
  Director, Army Issues


  %pecial Inspection of Total Army Mobilization, Army Inspector General Agency Report, April 1987.



  Page 11                              GAO/NSIAD-SO-66    Peacetime   Screening   of Army   Reservists
                                                                                                                 ,        r




contents


Letter
Appendix I
Objectives, Scope, and
Me$hodology


Department of
Defense
    /
Apbendix III                                                                                                         25
Major Contributors   to
This Report




                          Abbreviations

                          ARPERCEN        Army Reserve Personnel Center
                          DOD             Department of Defense
                          GAO             General Accounting Office
                          IRR             Individual Ready Reserve


                          Page 12                        GAO/TVS~90-66    Peacetime   screening   of Army   Reservists
Page   13   GAO/NSIAD-9O-6t3   Peacetime   Screening   of Army   Reservisti
                                                                                                         ,        ”
Appendix I

O;bjectives, Scope, and Methodology


                      At the request of the former Chairman of the Subcommittee on
                      Readiness of the House Committee on Armed Services, we reviewed the
                      Army’s screening process to determine whether it identifies Ready
                      Reservists who have civilian occupations that would be critical to the
                      war effort or private sector operations. To make this determination, we
                      examined the compliance of the Army’s screening policy with relevant
                      laws and regulations and assessed the effectiveness of both the screen-
                      ing process itself and the controls over that process.

                      We limited our review to Army Ready Reservists who work for employ-
                      ers other than the federal government for two reasons: these reservists
                      represent the vast majority of Ready Reservists, and DOD is conducting a
                      review to determine the effectiveness of the screening process for DOD
                      employees.

                      We performed the review from September 1988 to June 1989 in accord-
                      ance with generally accepted government auditing standards, In the
                      course of our review, we obtained documents and interviewed numerous
                      officials representing the following private industries, federal agencies,
                      the Office of the Secretary of Defense, and several Army commands.
                      DOD'S official comments on a draft of this report”a$)peat: as appendix II.


                      Allied-Signal Aerospace Company, Baltimore, Maryland
Civilian Industries   Contel Corporation, Atlanta, Georgia, and its Federal Systems Sector,
                      Fairfax, Virginia
                      E-Systems Corporation, Falls Church, Virginia
                      Lockheed-Georgia Company, Marietta, Georgia
                      McDonnell Douglas, McDonnell Aircraft Company, St. Louis, Missouri
                      Martin Marietta Corporation, Baltimore, Maryland




                      Page   14                   GAO/NSLAD96-66   Peacetime   Screening   of Army   Reservists
                      Appendix    I
                      Objectives,   Scope, and Methodology




                      Department of Commerce
Federal Civilian      Denartment of Labor
Departments and       Federal Emergency Management Agency
Agencies              Selective Service System
(Wr&shington, D.C.)
   II                 Office of the Secretary of Defense, Mobilization Planning and
                      Requirements
                      Office of the Assistant Secretary of Defense, Reserve Affairs
(Washington, D.C.)    Office of the Inspector General



Department of the     Affairs
Armv                  Office of the Deputy Chief of Staff for Personnel
(Waihington, DC.)     Office of the Chief of the Army Reserve



                      US. Forces Command, Atlanta, Georgia
and National Guard    Continental U.S. Army
                      . 1st Army Headquarters, Fort Meade, Maryland
                      . 2nd Army Headquarters, Fort Gillem, Georgia

                      Headquarters, 81st Army Reserve Command, East Point, Georgia
                      Headquarters, 96th Army Reserve Command, Salt Lake City, Utah
                      National Guard Bureau, Washington, D.C.
                      National Guard Personnel Center, Alexandria, Virginia
                      Office of the State Adjutant General
                      . Atlanta, Georgia
                      . Richmond, Virginia
                      l  Salt Lake City, Utah




                      Page   15                              GAO/NSIAD-96-66   Peacetime   Screening   of Army   Reservists
                       Appendix    I
                       Objectives,   Scope, and Methodology




        \
Arrhy Reserve Units    449th Quartermaster Company, Fort Douglas, Utah
                       61 lth Supply Company, Baltimore, Maryland
                       818th Medical Unit, Fort Gillem, Georgia
                       Headquarters, 449th Support Group (Theater Army) (General Support),
                       Forest Park, Georgia
                       Headquarters Company, 5 10th Theater Army Support Group, Baltimore,
                       Maryland

                       1st Battalion, 11 lth Field Artillery, Norfolk, Virginia
National Guard Units   Headquarters Company, 141st Military Intelligence Linguistics
                       Battalion, Draper, Utah
                       Company C, 142nd Military Intelligence Battalion, Draper, Utah
                       Headquarters Company, 265th Engineering Group, Marietta, Georgia
                       124th Public Affairs Detachment, Atlanta, Georgia.
                       170th Military Police Battalion, Ft. Gillem, Georgia




                       Page   16                              GAO/NSIALh96-66   Peacetime   Screening   of Army   Reservists
From the Depaxtment of Defense



                                   ASSISTANT          SECRETARY          OF DEFENSE




   Mr. Frank         C. Conahan
   Assistant         Comptroller         General
   National         Security       and
      International            Affairs      Division,
   U.S.     General        Accounting       Office
   Washington,          D.C.       20548
   Dear      Mr.      Conahan:

           This        is   the DOD response      to the GAO Draft       Report   ARMY
   RESERVISTS:            "Peacetime   Screening     to Identify     Key Civilian
   Employees           Is Inadequate,"      dated   October     13, 1989,     (GAO Code
   393315/OSD            Case 8148.)

             While     the DOD generally           concurs      with the GAO findings,                             the
   Department          does not agree        with     the GAO recommendations           to
   establish         a system    for    providing        specific    notice    to nonfederal
   employers         of their    opportunity          to designate       key positions.                            The
   Department          does not believe          that    such a program      is either
   feasible        or necessary.
                 There     is no statutory           requirement          to notify      employers    that
   they    may designate             key positions          or to allow        employers       the
   opportunity           to designate         key positions.             Nevertheless,         the DOD
   and the Federal              Emergency       Management        Agency     have provided          a
   system        to allow       designation        of key positions            in nonfederal
   employment.             This    policy     is published           in the Federal        Register     and
   set out in the Code of Federal                       Regulations.           The DOD believes
   that     this      system     of providing          general      notice     to nonfederal
   employers          is reasonable         and appropriate.

             While       the Department              agrees       that      some employers             in the
   private         sector       may be unaware              of the screening                opportunity           which
   is now provided,                numerous          studies        indicate         that     the impact          on
   industry         and state          and local           governments           at mobilization              would
   not adversely              affect       essential          services         or industry.              This     is in
   part      because        of the existing                screening         program,         and in part
   because        of the relatively                  small      percentage           of the nation's
   workforce          with      Reserve       obligations.                Studies        of the impact           of
   mobilization             on employers             have focused            upon the aerospace
   industry,          fire      and police           departments,            other       occupations          and
   industries            and,     more recently,              in 1988,         the telecommunications
   industry.             These     studies        generally           indicate         that     (1) Reservists
   are only         a small        percentage           of the total             workforce         and (2) there
   would      be a limited            impact        on the capacity                of employers           to
   function         during        a mobilization.                Nevertheless,              the Department




          Page   17                                   GAO/NSIAD-96-66         Peacetime     Screening    of Army     Reservists
            Appendix   Kl
            Comments    From   the Department    of Defense




                                                                                                       2

considers          the screening         of the Ready Reserve       as a very               important
function         and will       improve       its guidelines  to the Military                  Services
to help        ensure      that    Reservists       do inform their   employers                of their
Reserve        obligation.

        The detailed          Department          comments  on the report    findings       and
recommendations            are provided           in the enclosure.     The DOD
appreciates       the      opportunity          to comment    on the GAO draft      report.

                                                 Sincerely,


                                                --7-
                                                  e
                                                 Stephen      M.     Duncan
Enclosure:
As Stated




        Page 16                                    GAO/NSIAD-96-66       Peacetime   Screening   of Army   Reservists
                                    Appendix      II
                                    Comments        From the Department            of Defense




                                             GAO Draft            Report  - Dated   October                      13,      1989
                                                   (GAO           Code 393315)    OSD Case                     8148
                                                   ARMY RESERVIST,     "Peacetime                        Screening
                                                    to Identify    Key Civilian                         Employees
                                                                Is Inadequate"

                                                         DEPARTMENT            OF DEFENSE             COMMENTS
                                                                              *****

                                                                               FINDINGS
                       FINDING        A:       Background:                Screenino           of Reservists:                    The GAO
                    observed           that,        during        a general           mobilization,                the Army will
                    depend        heavily           upon its          Reservists,             who make up more                    than      half       of
                    its     combat         forces         and a greater               portion          of its         support         forces.
                    The GAO noted                 that,       at the end of FY 1988,                         Army Reservists,                    who
                    could       be mobilized,                 numbered          more than           1.3 million--most                     of whom
                    were      from       the Ready Reserve                    (the     National            Guard,         the Army
                    Reserve,          and the Individual                      Ready Reserve).                    The GAO explained
                    that      many of these                 Reservists           will       deploy         within         30 days of a
                    general         mobilization,                 leaving        their        employers            little         time      to
                    adjust        to their            departure.              The GAO pointed                  out that           mobilization
                    of the Reserves                   thus      presents         a manpower              dilemma--how               to attain
                    the maximum              military           force       yet maintain              effective             functioning             of
                    government             and private              sectors.           According             to the GAO, some
                    Reservists             hold       jobs      of key importance                   to the civilian                   workforce
                    and their           mobilization                could       mean serious               hardship           to the
                    organizations                 for which           they      work.         The GAO observed                    that,       if
                    they      hold      vital         positions           in defense            industries,               mobilization
                    could       affect        military            supplies         and services                as well.
                    The GAO reported                    that,       to deal        with       the dilemma,                the Congress
                    directed          the military                to set up a system                     to continuously                  screen
                    its    Ready        Reserve           to mitigate            the effect              of a general
                    mobilization              on essential                operations            of Government,                  commerce,          and
                    the war effort                  (10 U.S.C.            271).        According             to the GAO, this
                    provision           was enacted               as part        of the Reserve                  Forces         Act of 1955
                    because         (1) at the time                   of the Korean               call-up          there        was no
                    adequate          screening             of the reservists                   who were ordered                    to active
                    duty      and (2) there                 was no screening                 program           in operation              during
                    the years           prior         to the Korean              call-up.             The GAO explained                     that
                    the legislative                   history         of the statute               noted         there       were many
                    mistakes          that       could        have been prevented                     by a continuous                   screening
Now   on pp. 2-4.   program         carried           on before          the call-up.                  (pp.      2-5/GAO         Draft
                    Report)
                    DOD COMMENT:                 Concur.
                    FINDING     B:      The DOD Does Not Prescribe              a Process         for     the Militarv
                    Sriet:          0      r                                                          The GAO
                    observed      the DOD Directive        1200.7      provides      that       the Secretaries
                    of the Military          Services   shall     screen,       at least        annually,         all
                    Ready    Reservists       to ensure    their     immediate       availability             for




                                   Page    19                                         GAO/NSIAIHW66              Peacetime       Screening     of Army      Reservists
                                                                                                                                                 .


                          Appendix     II
                          Comments       From the Department          of Defense




                                                                                                                                       2

               active     duty.       The GAO noted            that,       to implement        this     Directive,
               each year        DOD screens          Reservists         who work      for    the Federal
               Government.           The GAO explained               that,      using   data     from     the Office
               of Personnel         Management,          the DOD annually             informs       Federal
               agencies       that    (1) they        must report            the number      of Reservist
               employees        who fill       "key"     positions           and (2) they        can request         that
               these     employees        be transferred             to the Standby          or Retired          Reserve
               or discharged.             According        to the GAO, in 1989,                about      9 percent
               (145,000)        of 1.6 million           Ready Reservists             were Federally
               employed--and,           of these,        about       2,700      were reported         as "key"       to
               agency     operations.
               The GAO pointed           out that,        in contrast         to this         process       for  Federal
               employees,        the DOD provides           no specific           process        or guidance        for
               the Military         Services        to screen      Reservists           for nonfederal
               employment.          According         to the GAO,       the DOD Directive                 1200.7    does,
               however,       encourage        nonfederal       employers       --particularly             those    in
               the fields        of public        health,     safety,      and defense             support
               industries--to           screen      their   Reservist        employees           and,    when
               necessary,        to request         their   transfer       from the Ready Reserve.
Nowonp.   4.   (pp.     1-2,   pp. 5-6/GAO          Draft   Report)

               DOD COMMENT:                Concur.           It is true             that      the DoD does not prescribe
               a process           for     the Military              Services           to notify           State      and local
               government            and private            employers             of their          opportunity            to
               designate           key positions.                  DOD Directive                1200.7        implements           the
               provisions            of section            271 and several                  other       related        sections        of
               title       10, United           States         Code,       and Executive                Order       11190.         Under
               the DOD Directive,                   the Secretaries                   of the Military                 Departments
               have specific               responsibilities                   for ensuring              that      Ready      Reservists
               will      be immediately               available             for active            duty.         All    Ready
               Reservists            are required              to inform            their       employers           of their
               military          obligation           and their            military           personnel           records       must be
               annotated           to incorporate                information              on any factor               which     would
               limit       their       mobilization              availability.                  These       screening
               procedures            are set out at part                      44 (Screening               of the Ready
               Reserve)          of chapter           1, (Office              of Secretary              of Defense),            title
               32, Code of Federal                    Regulations.                  The above           referenced
               authorities             define       what a key position                       is and provide               procedures
               for     determining            which       positions             are key.
               Procedures         which     provide      employers       the opportunity                to identify
               key positions           are set out at part              333 (Peacetime            Screening)             of
               chapter       1 (Federal        Emergency       Management        Agency),         title         44, Code
               of Federal         Regulations.           Just   as provisions           regarding             key
               positions        in Federal         Departments        and Agencies           are established                 in
               title     32 of the Code of Federal                  Regulations,          title         44 provides
               procedures         for State        and local       governments        and private               industry
               to identify          key employees.            Where these        employees           are members            of
               the Ready Reserve,              procedures        to assess       the potential                impact       on
               their     organization          of a call-up         of Reservists            and to reduce               or
               avoid     such impacts          are identified.             Under    part       333,       the




                         Page 20                                        GAO/NSIAD-90-66           Peacetime     Screening     of Army       Reservists
                                     Appendix      II
                                     Comments        From the Department         of Defense




                                                                                                                                                  3

                              Department        of Labor            is identified             as available             to advise       and
                              assist     with     respect           to essential            civilian         positions         and,    where
                              conflicts       continue            to exist,       the       Federal         Emergency        Management
                              Agency     has authority                to adjudicate              differences           between      the DOD
                              and the employers.

                              FI DI G 6            Defense     Contractors            Are Unaware            of Scree ninq
                              U.                         The GAO found            the process            for    screening        Ready
                              Reservists         does not surface             potential          conflicts          that    would       arise
                              from    the mobilization              of Reservists            holding         key positions           in
                              nonfederal         occupations.            According         to the GAO, at the time                      of its
                              field      work,     the only       reference         to nonfederal              employees       from       the
                              Army Ready Reserve              was contained             in DOD Directive                1200.7     and the
                              Code of Federal            Regulations:           therefore,           nonfederal          employers          were
                              not aware        of the screening             process.

                              The GAO interviewed               headquarters             officials       at two of the five
                              continental         Armies--the            1st and the 2nd.              According        to the GAO,
                              these      headquarters         officials         stated          that,  in the last          15 years,
                              they     had received         no request          for the transfer             of key nonfederal
                              employees        from    the Ready Reserve.                    The GAO found,         however,      that
                              some employers,            who could           be critical           to a war effort          and who
                              employ      Reservists        they       believe       are key to their            operations,        knew
                              nothing       of a screening             program       or the opportunity             to request
                              transfers.
                              The GAO interviewed                  six of the top 100 defense                        contractors            (for
                              FY 1987)        concerning           screening          and found         that     all     six contractors
                              were      unaware       of screening            process        and the opportunity                  to plan        for
                              the loss        of mobilized            employees.             According         to the GAO, none of
                              the contractors               had received            information           from any Army source
                              regarding         the screening             process--nor            did most         of these
                              contractors           readily        know how many Reservists                      were      in their
                              employ.         The GAO concluded                 that     the contractors               did     not know what
                              effect       mobilization            would      have on their             production           of war
                              materials,          such as guided-missiles,                      the F-15         and     F/A-18       aircraft,
                              communications              systems,        guided-missile              vertical         launch       systems,
                              and cargo         tankers.           The GAO pointed              out several            of the employers
                              said     that     it is in the best                 interests         of their         operations           and of
                              the national            preparedness            to plan        in peacetime            for     the
                              mobilizations             of their        key employees.

                              At    the request           of the GAO, five               defense       contractors             were able          to
                              identify        Reservists            employees         by using        military          leave       as an
                              Index.        The GAO reported                  that    one contractor              identified           29
                              reservists          in his        employ        who he considers               key to his          operations.
                              According         to the GAO, these                  29 employees            included         several       high
                              ranking       officers          (among        them a general)            whose        loss      could      have
                              adverse       effects         on their          employer.         The GAO observed                 that,      in
                              all,      the contractors               identified          655 Reservists              on their         payrolls
                              and considered              87 (or 13 percent)                 to be key employees,                    whose
                              mobilization            could        adversely        affect      their        production          of war
Now   on pp.   1 and   4-5.   materials.             (pp.     l-2,      pp. 6-8/GAO          Draft     Report)




                                     Page 21                                       GAO/NSIAWO-66            Peacetime     Screening     of Army    Reservists
                Appendix      II
                CemmentaFromtheDepartmentofDefense




                                                                                                                                4

    DOD:                         Partially          concur.             As discussed              in the DOD response
    to Finding             B, the notification                     of the opportunity                     to designate
    key positions                is published              in the Federal                  Register         and set out in
     the Code of Federal                     Regulations.                 Section          1507,      chapter          15, title
     44, United            States        Code,      states         that       a notice          in the Federal
    Register          is sufficient               notice         to persons              subject        to or affected
    by the notice.                   The Department                agrees         that      some      private          sector
    employers           may still            be unaware            of their            opportunity            to designate
    key positions,                 but a number              of studies             conducted           by the DOD and
    others        indicate           that      employers           in such potentially                      critical
    industries             and service            occupations               areas        as aerospace,               health      and
    protective            services           are aware           that       they      would       lose      employees          to a
    mobilization              and consider               that      the potential                impact        would       be
    minimal.            A study          of employees              in government                and private
    employment            in several            occupations               (summarized             in the 1980 Report
    to the House Appropriations                              Committee,              "Screening           Ready
    Reservists            Employed          by the         Federal          Government")              found        no
    occupational              areas        where       mobilization               of Ready Reservists                     would
    have a severe               impact.           Airline          pilots         and mechanics,                 the medical
    profession,             and municipal                police         and fire          departments              were among
    the occupational                   areas.          The 1982 Report                  to the House
    Appropriations                 Committee           summarized             the results            of a DOD study                 of
    the aerospace               industry.              Three       of the largest                 100 aerospace
    defense         contractors             were chosen              for      study:        the Boeing             Company,
    McDonnell           Douglas          Company,          and General              Dynamics         Corporation.                The
    study       found       no occupational                  areas        where       there       would       be a severe
    impact        from      the mobilization                   of Reservist               employees           of these
    aerospace           defense          contractors.                The findings               from      studies
    conducted           earlier          in this        decade          are echoed            by a MITRE
    Corporation             study        of the telecommunications                            industry           released        in
    July      1988.         The study           concluded             ' . ..that        a military            mobilization
    call-up         would       not significantly                    affect         the telecommunications
    work     force        in the short              and mid-term                from either             a qualitative               or
    quantitative              perspective."

    The fact          that      the studies            conducted        have consistently                  found     that
    a mobilization                would     not have a widespread                    or significant               impact
    on defense            industries,           civilian         protective           services         or other
    industries            or occupations               which     would      be critical            in wartime          does
    not mean that               peacetime         screening          is not important.                   It does
    indicate,           however,         that     the combination              of the DOD "Screening                     the
    Ready Reserve"                Program,        under      which      Reservists           must communicate
    their        Reserve        status      to nonfederal              employers          and attest          to their
    availability              for mobilization,                and the general               notice        provided        to
    employers           in the Federal              Register         is a cost-effective                   way to
    ensure         (1) there          would     be no significant                attrition           from Reserve
    units        and (2) there             would       be no significant                impact       on civilian
    occupations             and industries.

    FINDING        D:     Screenina     in the Nonfederal       Sector   is Hamoered    bv
    Several        Problems.        The GAO found    that,    for    FY 1987,   more than                                       90
    percent        of the Army Ready Reservists            were employed      in the

Y




                Page22                                           GAO/NSIAD-96-56            PeacetimeScreeningofArmy                 Reservists
                                          Appendix     II
                                          Commenta       From the Department        of Defense




                                                                                                                                                    5
                              nonfederal        sector.        The GAO concluded,          however,        that    many
                              employers          may not be aware       of their     screening        opportunity.          The
                              GAO attributed            this   to the fact      that   until     recently,         Army
                              Regulation        135-133      did not directly        address       the occupational
                              screening       of Reservists          who are nonfederal         emplOyee5.            The GAO
                              also    pointed      out that       the screening      is dependent            upon
                              Reservists      --who       may not    be motivated      to implement            the process.

                              The GAO observed              that,      until       July      1989,  Army Regulation               135-133
                              did     not mention         the screening              opportunity         for   nonfederal
                              employer5        to request          that      their       employees      be transferred             from    the
                              Ready Reserve.              The GAO also             found       that prior       to its      recent
                              revision,        the Army's          screening           regulation        asked     Reservists         only
                              to inform        nonfederal          employers           of their     military         status--there
                              was no requirement                for Reservists              to inform        employers        about
                              screening.          The GAO noted              that      the July      1989 revision            to the
                              screening        regulation          encourages            Reservists        to inform        employers
                              about      their    screening          opportunity.

                              However,         the    GAO questioned                 the decision             of making         the Reservists
                              be responsible              for the notification.                         The GAO is concerned                 that
                              some Reservists               may not          want to convey               information           to their
                              employers          that     may result            in      their     removal         from     the Reserves.
                              The GAO indicated                 that       according            to Army officials,                some
                              Reservists           keep their            employers            unaware       of their         Reservist
                              status--fearing               that       their       military         membership          could      adversely
                              affect       their      careers.             The GAO also             found       that     the Army lacks            a
                              means      to tell       whether           Reservists            actually         provide       employers        with
                              information           on their           Reserve          status      and available             screening
Now on pp. l-2 and 6.6.       opportunity.              (pp.      l-2,       pp. 8-ll/GAO             Draft       Report)

                              DOD COMMENT:             Partially       concur.         Under     DoD           Directive          1200.7,       all
                              Ready Reservists               shall   inform      their     employer                of the Reserve
                              military       obligation.           While      it is possible                   that      some Reservists
                              may not wish           to inform       their      employers        of          their       military       status,
                              this     does not relieve            them of the responsibility                             to do so.
                              Moreover,        as discussed          in the DOD response                       to Finding          B, the
                              responsibility             and opportunity           for designation                    of "key positions"
                              is clearly         set out in the Federal                 Register               notice        and codified           in
                              title      44 of the Code of Federal                   Regulations.


                                                                                  *****
                                                                             RECOMMENDATIONS

                              RECOMMENDATION     1:     The GAO recommended        that    the Secretary        of
                              Defense  provide     guidance    to the Military        Services       on how to
                              fulfill  their   screening     responsibility        for Ready Reservists
Now on p. 8.                  employed   in the nonfederal        sector.      (p. 12/GAO      Draft    Report)

                          Y




                                       Page 23                                        GAO/NSIAD-9066           Peacetime     Screening    of Army       Reservists
                                                                                                                                           I




                           Appendix II
                           Comments From the Department             of Defense




                                                                                                                                 6

                DOD COMMENT:          Nonconcur.           There    is no statutory        requirement                      to
                provide     employers       an opportunity            to designate     key positions.                          The
                opportunity       has been established,                 however,   and is set out                      in    the
                Code of Federal          Regulations.            The DOD believes        this     is an
                appropriate       and cost       effective        way to provide       notice       to
                nonfederal      employers.
                RECOMMENDATION            2:     The GAO recommended           that   the Secretary    of
                Defense     should       examine         the feasibility       of implementing      a system
                to directly        notify        nonfederal       employers      of Ready Reservists       of
Now cbn p, 8.   their    screening          opportunity.           (p.   12/GAO Draft     Report)

                DOD COMMENT:     Nonconcur.      The                 DOD does        not    believe        such     a system
                is either feasible      or necessary.
                RECOMMENDATION         3:   The GAO recommended           that    the Secretary        of the
                Army require        Army commands      to establish         procedures       to obtain
                feedback       from Reservists     on whether       nonfederal         employers     have
                been    informed     of their   screening      opportunity.
                QQQ COMMENT:            Partially         concur.        The DOD will             revise        paragraph        5b
                of DOD Directive              1200.7      to ensure       that     Military           Service
                procedures       are in effect              to require        feedback          from Reservists              that
                they      have notified           employers       of their       military           obligation.
                Notification         to employers             of their      screening           opportunity            is not,
                however,       an appropriate             responsibility           for      individual           Reservists.




                          Page   24                                    GAO/NSIAD-90-56        Peacetime    Screening    of Army       Reservists
Aipebdix   III

Major Contributors to This Report


                        Charles Bonanno, Assistant Director
National Security and
International Affairs
Division, Washington,
D.C.
                        Ray S. Carroll, Regional Management Representative
Notifolk Regional       Norman L. Jessup, Jr., Evaluator-in-Charge
Office                  Raul S. Cajulis, Site Senior
                        Dawn J. Roberts, Evaluator




(%%3316)                Page 26                    GAO/NSIAD-90-56   Peacetime   Screening   of Army   Reservists