General and Flag Officers: DOD's Draft Study Needs Adjustments

Published by the Government Accountability Office on 1997-04-08.

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

                     United States General Accounting Office

GAO                  Testimony
                     Before the Subcommittee on Military Personnel,
                     Committee on National Security, House of Representatives

For Release at
2:00 pm, EST
                     GENERAL AND FLAG
April 8, 1997

                     DOD’s Draft Study Needs
                     Statement of Mark E. Gebicke, Director, Military
                     Operations and Capabilities Issues, National Security and
                     International Affairs Division

                   Mr. Chairman and Members of the Subcommittee:

                   I am pleased to provide the preliminary results of our review of DOD’s draft
                   general and flag officer requirements report. I will discuss the process DOD
                   and the services used to do their respective studies and areas where we
                   believe the resulting draft DOD report and recommendations could be
                   improved. DOD’s draft report asks for more new active and reserve
                   component general and flag officer positions above their current
                   authorizations. I should stress the recommendations are preliminary and
                   do not represent DOD’s official position at this time.

                   Most of my remarks will deal with the results of the study of active
                   component requirements. DOD has delayed release of its draft report until
                   sometime after the release of the Quadrennial Defense Review (QDR)
                   report, which is scheduled for May 15, 1997. We hope DOD views the delay
                   as an opportunity to adjust its draft report to address our concerns. With
                   that introduction, let me provide a brief overview of those concerns and
                   then go back and discuss each of them in a little more detail.

                   Variations of two job evaluation methodologies were readily available and
Results in Brief   were used on the 1997 general and flag officer studies. Both
                   methodologies are based on subjective judgments about positions
                   reviewed and allow management to subjectively override the results. To
                   save time, the Office of the Secretary of Defense (OSD) permitted each of
                   the services and the Joint Staff to independently and individually study its
                   own general and flag officer requirements with the methodology they
                   selected. Although using one methodology would have been a more
                   consistent and comparable approach than using different methodologies,
                   the individual study results would not necessarily have been much
                   different with a single methodology, due to the inherent subjectivity
                   involved. Accordingly, we do not believe that much would be gained by
                   redoing the services’ and Joint Staff’s studies. We think that some
                   adjustments to DOD’s draft report are in order, however.

                   We have three concerns about DOD’s draft report recommendations. We
                   are concerned that (1) actual requirements are unknown since the service
                   secretaries adjusted their respective service study recommendations on
                   general and flag officer requirements without explanation, (2) 35 general
                   and flag officer requirements were counted twice when OSD developed its
                   draft consolidated recommendations, and (3) the service studies did not

                   Page 1                                                     GAO/T-NSIAD-97-122
             fully consider the potential to convert military positions to civilian
             positions that may not be military-essential.

             If Congress provided the additional general and flag officer positions that
             DOD’s draft recommendations call for, the estimated increase in cost would
             be about $1.2 million annually for compensation paid to the new general or
             flag officers and assistants, a relatively small amount for the one-time
             purchase of new office furniture and other items, and $713,000 annually
             for the 12 new general and flag officers provided to the Marine Corps in
             1996. Our estimate is conservative because DOD provided no information
             about nine new active component general or flag officer positions and
             incomplete information about new reserve positions. In its draft report,
             DOD committed to eliminating as many colonels’/Navy captains’ positions
             as it is creating for brigadier generals/rear admirals (lower half), although
             there is no mechanism that would cause that substitution to occur

             General and flag officer authorizations had remained constant from fiscal
Background   year 1981 to 1991, even as troop strength has changed. In 1981, with the
             defense build-up underway, general and flag officer authorizations
             dropped by 46 to 1,073. They remained at 1,073 for a decade even as the
             build-up continued and peaked, and as the drawdown began. In the
             National Defense Authorization Act for Fiscal Year 1991, Congress
             required DOD to reduce its general and flag officer positions in two
             increments, first to 1,030 by the end of fiscal year 1994 and secondly to 858
             by the beginning of fiscal year 1995. That number was subsequently
             changed to 865. General and flag officer authorizations are set forth in title
             10 of the U.S. Code.

             In fiscal year 1996, a contractor studied Marine Corps general officer
             requirements and concluded that the Marine Corps had requirements for
             between 104 and 118 general officers (compared to the 68 authorized for
             the Marine Corps at that time). Using the study as justification, the Marine
             Corps requested 14 new general officer authorizations and Congress
             granted 12 (in the National Defense Authorization Act for Fiscal Year
             1997), raising the DOD-wide ceiling to 877 general and flag officers.

             Congress has actually authorized more than 877 for fiscal year 1997. First,
             Congress has added 12 general and flag officer positions above the 877 and
             specified that they must be used for joint duty. These positions are
             controlled by the Chairman of the Joint Chiefs of Staff for allocation to the

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                       services and are commonly referred to as the “Chairman’s 12.” Also,
                       Congress has permitted the services to “frock”—elevate the person in rank
                       but not immediately provide the accompanying compensation
                       increase—up to 75 colonels or Navy captains to the rank of brigadier
                       general or rear admiral (lower half). Thus, in total, the title 10 active duty
                       authorization, Chairman’s 12, and current frocking ceiling together provide
                       for 964 general and flag officer positions. This total will drop to 912 by
                       fiscal year 1999 because the Chairman’s 12 is a temporary authority that
                       expires on October 1, 1998, and the frocking ceiling is scheduled to drop
                       by 20 to 55 on October 1, 1997, and by another 20 to 35 on October 1, 1998.

                       I would like to make one other point about current authorizations. The
                       joint community does not need congressional approval to change the
                       number of general and flag officers it needs, it merely levies its
                       requirements on the services. To help the services cope with the mandated
                       reduction in general and flag officers in the early 1990s, the Chairman of
                       the Joint Chiefs of Staff reduced joint community general and flag officer
                       requirements from 280 to 218. However, in 1996, the joint community
                       added 11 new general and flag officer positions, and in 1997, the joint
                       community added another 15, for a total of 244. Since 1996, only the
                       Marine Corps has been granted any new general and flag officer
                       authorizations, and of the 12 positions authorized, the Marine Corps plans
                       to commit only 4, or one-third, to joint activities. Thus, of the 26 new joint
                       general and flag officers, the Army, Navy, and Air Force will have to
                       provide 22 from existing authorizations.

                       Since the mid-1980s, a number of studies of general and flag officer
The Services Used      requirements have been done DOD-wide, for a specific service, or for the
Various Approaches     joint community. These studies have been done using one of two job
to Study General and   evaluation methodologies.

Flag Officer           The first methodology was developed by the Hay Group, Incorporated, and
Requirements           is proprietary. This methodology is most commonly used for studies of
                       compensation practices in organizations, according to company literature.
                       The Hay methodology requires panels of officials from the organization
                       whose positions are being reviewed to score positions on the job factors
                       of “know-how,” “problem solving,” and “accountability.” The
                       methodology’s developers believe that these factors are the most
                       significant in distinguishing among jobs. Using the panel scores, positions
                       are ranked from most to least important. Hay Group officials told us that

                       Page 3                                                      GAO/T-NSIAD-97-122
“natural cut points” usually become apparent and that these are the
thresholds between ranks of the positions evaluated.

The other methodology was developed by Kapos Associates, Incorporated.
The Kapos methodology groups positions into categories of positions with
similar responsibilities (in effect creating different definitions of a general
and flag officer for each group) and looks for up to 25 different attributes
of a general or flag officer in each position evaluated. These attributes
include the (1) rank of the official to whom the position reports,
(2) number of personnel and commands under the position, (3) inventories
controlled, and (4) duties involving representation before Congress.

To conduct its mandated study of general and flag officer requirements in
1997, DOD used a four-level study structure. The levels consisted of a
Working Committee based in OSD; a Steering Committee made up primarily
of the service personnel chiefs; an Executive Committee made up of senior
civilian leaders in DOD; and the Secretary of Defense, who was the final
approval authority. At DOD’s invitation, we attended meetings of the
Steering and Executive Committees as observers.

DOD’s approach to its study had six steps—five of which have been
completed. First, each service (including the joint community) did, or
contracted for, a study of requirements. The Air Force used a version of
the Hay methodology. The Joint Staff simply reported the number of joint
community requirements determined by the Hay Group in 1994 and 1996,
and supplemented that number by scoring additional positions on its own.
The Army used a version of the Kapos methodology to do its study. The
Navy contracted with Kapos in 1997 for its study. The Marine Corps
reported the results of a Kapos-conducted study of Marine Corps
requirements completed in 1996. Second, the service secretaries adjusted
the study results and forwarded recommendations to the Working
Committee. Third, the Working Committee compiled overall
recommendations and wrote a draft consolidated report. Fourth, the
Steering Committee accepted the draft report and forwarded it to the
Executive Committee. Fifth, the Executive Committee approved the draft
report and forwarded it to the Secretary of Defense. The process has
stopped at this point while DOD awaits the recommendations of the QDR.
DOD may adjust its recommendations for general and flag officer positions
in light of QDR recommendations and complete the sixth and final step of
approving and issuing the report at some time in the future.

Page 4                                                      GAO/T-NSIAD-97-122
                       Job evaluation is an inherently subjective process, and the use of job
                       evaluation methodologies cannot overcome subjectivity. In our review of
                       the scholarly literature on job evaluation techniques, the theme of
                       subjectivity was repeated in a number ways. For example, the factors
                       selected for measurement are based on subjective judgment, and the
                       factors chosen can influence the results. The process of scoring the
                       positions is subjective, as is the overriding of the results by management.
                       Judgment comes into play throughout the process. As a result, while we
                       believe that a single methodology, consistently applied, would have been a
                       better approach than using different methodologies, we have no reason to
                       believe that the recommendations would have been much different.
                       Accordingly, we do not believe that the services and Joint Staff necessarily
                       need to redo their studies.

                       The service and joint community study results do not track to the
The Service            recommendations made by the service secretaries, and the discrepancies
Secretaries Adjusted   are unexplained in DOD’s draft report. Overall, the service studies
Their Respective       concluded in the aggregate that 1,118 general and flag officers were
                       needed to meet service-specific and joint needs. However, the service
Recommendations        secretaries recommended only 995 general and flag officers be authorized,
Without Explanation    a difference of 123.

                       The service secretaries respectively overrode their service’s study results
                       in developing their recommendations but did not explain the basis for the
                       adjustments. For example, Kapos Associates concluded that the Navy had
                       flag officer requirements of 328 (compared with the 220 currently
                       authorized1) but the Secretary of the Navy only recommended 2492 flag
                       officers be approved. DOD’s draft report and other documents that we had
                       access to indicated that “pragmatic decisions” were made to reduce the
                       service studies’ recommendations because it would be difficult to
                       convince Congress that so many general and flag officers were needed.
                       The unexplained adjustments raise questions regarding the services’ actual

                       The service secretaries and Chairman of the Joint Chiefs of Staff
Some Requirements      developed their recommendations and provided them to the Working
Were Counted Twice     Committee. Once the Working Committee had the five reports and

                        Section 526 of title 10 authorizes 216 flag officers for the Navy and the Navy has 4 of the Chairman’s
                        The Navy recommended a title 10 ceiling of 240 plus frocking authority of 9.

                       Page 5                                                                           GAO/T-NSIAD-97-122
recommendations, it had to compile them into a single DOD report and set
of consolidated recommendations. However, the manner in which the
consolidated draft report handled the recommended new title 10 ceiling,
Chairman’s 12, and frocking, led to the double-counting of 35 positions.

First, the Working Committee accepted the service secretaries’ title 10
ceiling recommendations without modification, which in effect made them
the draft DOD recommendations on title 10 ceilings.

Second, the service studies, assuming the repeal of the Chairman’s 12,
created 12 new requirements. Their logic was that if the Chairman’s 12 was
repealed and the services still had to fill these joint positions, they had to
ask for more general and flag officer positions and did so by including
them in their recommended respective title 10 ceilings. However, DOD’s
draft proposed legislative changes did not recommend repeal of the
Chairman’s 12 at the time that the first recommendation on the title 10
ceiling would be adopted. Without concurrent repeal, the services would,
in effect, have increased their title 10 ceilings to account for the loss of the
Chairman’s 12, and the Chairman’s 12 would remain available until
expiration on October 1, 1998. To avoid double counting, either the
Chairman’s 12 would have to be repealed at the time title 10 authority is
increased, or the new ceilings would have to become effective on or after
October 1, 1998. We briefed the Working Committee on our observation
that 12 positions had been double counted. We were told that the count
was an oversight and DOD would recommend repeal of the Chairman’s 12
in the final proposed legislative change to avoid double counting. Because
DOD has not finalized its recommendations, we do not know whether the
repeal has been included.

Finally, the Army has handled the frocking ceiling differently from the
other services. Only the Army recommended that the DOD-wide frocking
ceiling be frozen at 75 to avoid the loss of 17 of its authorizations over the
next 2 years and developed its recommended title 10 ceiling with that in
mind. On the other hand, the other services made no recommendations on
frocking and would have permitted the DOD total to drop to 35 on schedule,
a loss of 23 frocking authorizations from the Navy, Air Force, and Marine
Corps. With the reduction in frocking ceilings in mind, the Air Force and
Navy (in 1997) and Marine Corps (in 1996) recommended increasing their
title 10 active component ceiling to counteract the loss. The Working
Committee had to reconcile the Army’s recommendation to maintain the
frocking ceiling at 75 with the other services’ willingness to let frocking
drop to 35 and make up the difference with higher title 10 ceilings. The

Page 6                                                       GAO/T-NSIAD-97-122
                                          Working Committee opted to recommend that frocking be maintained at
                                          75 but did not adjust the Navy’s, Air Force’s, or Marine Corps’
                                          recommended title 10 ceiling downward to account for the greater
                                          frocking authority they would have under the recommendation. Therefore,
                                          OSD’s frocking recommendation counts 23 positions twice because the
                                          Navy, Air Force, and Marine Corps had recommended new title 10 ceilings
                                          to account for the loss of 23 frocking authorizations, while OSD’s draft
                                          recommendations would prevent the loss of the 23 frocking
                                          authorizations, if accepted by Congress.

                                          Table 1 displays current general and flag officer limits, the services’ study
                                          results, service secretaries’ recommendations, and DOD’s

Table 1: Breakdown of General and Flag Officer Requirements Under Current and Proposed Levels
                            Current title 10 ceiling
                                   of 877 plus the
                               Chairman’s 12 and
                             current frocking limit         Results of the     Service secretaries’                            DOD’s draft
Service                                       of 75      services’ studies      recommendations                           recommendations
Army                                           336                            353                            355                           355
Navy                                           242                            328                            249                           262
Air Force                                      299                            319                            308                           314
Marine Corps                                       87                         118                             83                               87
Total                                          964                          1,118                            995                         1,018
                                          Note: If all of OSD’s draft recommendations were adopted as currently written, DOD would
                                          actually have 1,030 general and flag officers until October 1, 1998, due to double counting of the
                                          Chairman’s 12, and 1,018 on and after that date.

                                          The services also studied reserve component general and flag officer
                                          requirements. DOD’s draft recommendations would increase reserve
                                          component general and flag officers by 35 to 457, excluding those serving
                                          as state adjutants general, assistant adjutants general, or serving in the
                                          National Guard Bureau. Congress has exempted general officers serving in
                                          those positions from the ceilings, allowing for another 178 general officers,
                                          as of March 1997. We did not find evidence of double counting of reserve
                                          requirements. It should be pointed out that frocking and other exemptions
                                          available for active force management are not available in the reserves.

                                          Page 7                                                                        GAO/T-NSIAD-97-122
                       The services may be able to reduce their need for new general and flag
Some Positions Could   officer authorizations by converting some non military-essential positions
Be Candidates for      to civilian status and transferring the incumbents to military-essential jobs.
Military-to-Civilian   A number of positions that we examined may be candidates for
                       conversion. In 1996, we examined the possible military-to-civilian
Conversion             conversion of officers in the ranks of colonel and Navy captain and below
                       and developed criteria to use for our evaluation.3 Our criteria were closely
                       based on DOD Directive 1100.4, which provides the characteristics of
                       military-essential positions.

                       Using our criteria, we identified 12 general and flag officer positions for
                       conversion opportunities. For example, the position of the Army’s Director
                       of the Center for Military History is filled with a brigadier general. Using
                       our criteria, we believe that position may be a candidate for conversion.
                       The other services have similar positions but use civilians to fill them.
                       Also, the Army, Navy, Air Force, and Defense Finance and Accounting
                       Service together use seven general and flag officers ranked as high as
                       major general or rear admiral (upper half) in various financial
                       management positions, that are potential candidates for conversion based
                       on the criteria. We asked the services and Joint Staff why these positions
                       are military essential. The explanations ranged from military
                       regulations—but no laws—requiring the position be military to the
                       individual’s travelling to foreign countries periodically on official business.
                       But military regulations are not impediments to conversion because the
                       military issues its own regulations and can modify or repeal them.
                       Likewise, the need for foreign travel on official business is not an
                       impediment. Federal civilian employees and contractors routinely travel to
                       foreign destinations on official business.

                       The Army was the only service that identified positions for conversion.
                       The Army converted three positions in the acquisition area and one in base
                       operations at its Training and Doctrine Command. Other general and flag
                       officer positions in all the services and the joint community may also be
                       conversion candidates.

                       DOD Force Mix Issues: Converting Some Support Officer Positions to Civilian Status Could Save
                       Money (GAO/NSIAD-97-15, Oct. 23, 1996).

                       Page 8                                                                     GAO/T-NSIAD-97-122
                         We estimate that the annual cost increase will be about $1.2 million if the
DOD’s Draft              Congress accepts all of DOD’s draft recommendations plus about $713,000
Recommendations          annually for the 12 new general officers already provided to the Marine
and Actions Already      Corps. The annual cost includes (1) an increase in military compensation
                         for the new general or flag officers; (2) compensation for officer aides and
Taken Would Cost         civilian assistants such as secretaries; and (3) entertainment (to which
About $1.9 Million       some but not all general or flag officers are entitled). In addition, the joint
                         community would incur one-time costs for the purchase of office furniture
                         and other equipment. Our estimate is conservative because DOD provided
                         no information for nine new joint general and flag officer positions.

                         Our total cost estimate assumes that the services would reduce the
                         number of colonels’/Navy captains’ positions by the same number of
                         added general and flag officer positions, as DOD’s draft report said would
                         happen. If not, added costs could be much higher. For example, the
                         Marine Corps retained 12 colonel positions and deleted 6 first lieutenant’s,
                         5 captain’s, and 1 major’s positions to account for its 12 new general
                         officer positions in 1996. The Marine Corps will incur additional military
                         compensation costs of about $713,000 per year with 12 new general
                         officers over what it would have been with the 12 lower ranked officers.
                         As demonstrated by the Marine Corps example, the promised decrease in
                         colonels/Navy captains is not automatic. The numbers of colonels/Navy
                         captains are governed by limits in the Defense Officer Personnel
                         Management Act (P.L. 96-513, Dec. 12, 1980) and are related to the overall
                         size of the commissioned officer corps, not the number of general and flag
                         officers. Thus in the absence of a mechanism that would cause a
                         one-to-one substitution for existing colonels/Navy captains to occur
                         automatically, the services would have to take specific action to reduce
                         the colonel/Navy captain positions.

                         It should be noted that permitting a higher frocking ceiling, rather than
                         increasing title 10 ceilings, would not cost additional money because
                         frocked officers do not receive the pay of the higher grade until promoted.

                         The services’ force structure, roles and missions, deployment strategies,
Waiting for the QDR      and other matters are periodically reassessed and changed to meet
Before Changing          emerging threats and missions. For example, the bottom-up review
General and Flag         strategy has led to changes in the force structure that were projected, at
                         the time, to take up to 6 years to implement, although general and flag
Officer Authorizations   officer authorizations did not change in response. More recently, Congress
Is Prudent               required DOD to conduct the QDR and issue a report by May 15, 1997. The

                         Page 9                                                       GAO/T-NSIAD-97-122
                      report is mandated to include (1) the threats examined in doing the QDR,
                      (2) the defense strategy and force structure needed to execute the
                      strategy, (3) the effect on the force structure of participation in peace
                      operations and operations other than war, (4) the anticipated roles of the
                      reserves, and (5) the appropriate ratio of combat-to-support forces and a
                      number of related issues. As with the bottom up review, the QDR may
                      recommend changes in roles and missions, force structure, and other
                      defense strategies. Such changes could result in a change in the numbers
                      or ranks of general or flag officers needed to lead military organizations.
                      Thus, we concur with DOD’s decision to wait until the QDR results are
                      known before submitting a final report on general and flag officer
                      requirements. This will allow DOD flexibility to adjust its draft
                      recommendations in light of QDR recommendations. It also provides DOD an
                      opportunity to address the areas of concern that we have raised. To that
                      end, we offer the following recommendations.

                      Before the final report on general and flag officer requirements is sent to
Recommendations       the Congress, we recommend the Secretary of Defense modify the current
                      draft report to include

                  •   an explanation of the criteria used by the service secretaries to modify the
                      results of the services’ studies, and a statement about whether the
                      numbers represent the actual requirements for general and flag officers,
                  •   an adjustment to the consolidated draft recommendations to eliminate
                  •   an evaluation of the potential to convert non military-essential general and
                      flag officer positions to civilian status, and
                  •   an explanation of the mechanism to ensure that the number of
                      colonel’s/Navy captain’s positions are reduced by the same number of
                      added general and flag officers.

                      This concludes my statement and I would be pleased to answer your

(703177)              Page 10                                                   GAO/T-NSIAD-97-122
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