Congress authorizes annually the number of personnel that each service  may have at the end of a given fiscal year. OSD Has Not Conducted A Comprehensive, Data-Driven Analysis to Assess Active Personnel Requirements to Implement the Defense Strategy

Our prior work has shown that valid and reliable data about the number of  employees an agency requires are critical in preventing shortfalls that  threaten its ability to economically, efficiently, and effectively perform its  missions. OSD has not placed an emphasis  on reviewing active military personnel requirements, focusing instead on  limiting personnel costs in order to fund competing priorities such as  transformation. The quadrennial review of the defense program planned for 2005  represents an opportunity for a systematic analysis and reevaluation of  personnel levels to ensure that they are consistent with the defense  strategy. OSD provides policy and budget guidance to the services on balancing the  costs of active personnel with other funding priorities, such as  transformation. OSD coordinates with the services on active personnel levels throughout  the department’s planning and budgeting cycle, but it has not established a  process that would enable it to periodically examine the requirements for  the active military personnel and ensure that decisions are driven by data  that establish links between active military personnel levels and key  missions required by the national defense strategy. Further, it cannot  ensure that it has a sufficient basis for understanding the risks associated  with different levels of active military personnel. OSD Does Not Have Comprehensive Plans to Manage Near- and Long-Term Initiatives to Increase the Proportion of Active Personnel in Warfighting Positions

OSD hopes to avert the need to increase active personnel levels by making  more efficient use of the current active military personnel within each  service, although it does not have a comprehensive plan for how it will  accomplish this and progress in implementing initiatives designed to make  more efficient use of active military is lagging behind goals. Sustained  leadership and a plan for implementing initiatives and measuring progress  can help decision makers determine if initiatives are achieving their  desired results. However, without a  comprehensive plan to manage implementation of its initiatives and assess  their results, OSD may be unable to determine whether the initiatives have  the desired effect of providing more military personnel for warfighting  duties, thus averting the need for more active personnel. Military-to-Civilian Position Conversion and Active and Reserve Component Rebalancing Initiatives Are Not Meeting Expected Goals or Time Frames

While the services are in the process of implementing OSD’s initiatives to  use active personnel more efficiently in the near term, such as converting  military positions to civilian or contractor performance and rebalancing  the active and reserve component skills, the initiatives are not meeting  planned goals and time frames and are not having the desired results. Such a plan should establish  implementation objectives and time frames, assign responsibility,  identify resources, and develop performance measures to enable DOD  to evaluate the results of the initiatives in allocating a greater  proportion of the active force to warfighting positions. Appendix I: Scope and Methodology

To assess the extent to which the Office of the Secretary of Defense (OSD)  has conducted a data-based analysis of active military personnel needed to  implement the national defense strategy, we identified and examined  relevant laws, presidential documents, and the Department of Defense  (DOD) guidance, reports, and analyses related to active military personnel  and the defense strategy. GAO Comment

1.
Why GAO Did This Study

Congress recently increased active military personnel levels for the Army and the Marine Corps. The Secretary of Defense has undertaken initiatives to use military personnel more efficiently such as rebalancing high-demand skills between active and reserve components. In view of concerns about active personnel, GAO reviewed the ways in which the Department of Defense (DOD) determines personnel requirements and is managing initiatives to assign a greater proportion of active personnel to warfigthing duties. GAO assessed the extent to which the Office of the Secretary of Defense (OSD) (1) has conducted a data-based analysis of active military personnel needed to implement the national defense strategy and (2) has a plan for making more efficient use of active military personnel and evaluating the plan's results.

What GAO Found

Our prior work has shown that valid and reliable data about the number of employees required to meet an agency's needs are critical because human capital shortfalls can threaten the agency's ability to perform missions efficiently and effectively. OSD provides policy and budget guidance on active personnel levels and has taken some steps toward rebalancing skills between active and reserve components, but it has not conducted a comprehensive, data-driven analysis to assess the number of active personnel needed to implement the defense strategy. A key reason why it has not conducted such a comprehensive analysis is that OSD has focused on limiting personnel costs in order to fund competing priorities, such as transformation. OSD conducts some analyses of active personnel, such as monitoring actual personnel levels, and the services have processes for allocating the active personnel they are authorized to key missions. However, OSD does not systematically review the services' processes to ensure that decisions about active personnel levels are linked to the defense strategy and provide required capabilities within acceptable risk. If OSD conducted a data-driven analysis that linked active personnel levels to strategy, it could more effectively demonstrate to Congress a sound basis for the active personnel levels it requests. The quadrennial review of the defense program planned for 2005 represents an opportunity for a systematic reevaluation of personnel levels to ensure that they are consistent with the defense strategy. Although OSD has identified some near- and long-term initiatives for assigning a greater proportion of active personnel to warfighting positions, it has not developed a comprehensive plan to implement them that assigns responsibility for implementation, identifies resources, and provides for evaluation of progress toward objectives. OSD officials told us a key reason why OSD does not have a plan to oversee its initiatives is that they have had to respond to other higher priorities. Sustained leadership and a plan for implementing initiatives and measuring progress can help decision makers determine if initiatives are achieving their desired results. Without such a plan, OSD cannot be sure that initiatives are being implemented in a timely manner and having the intended results. For example, the initiative to convert military positions to civilian or contractor performance is behind schedule. Specifically, OSD's goal was to convert 10,000 positions by the end of fiscal year 2004; however, the services estimate that they had converted only about 34 percent of these positions. By establishing performance metrics and collecting data to evaluate the results of its initiatives, OSD could better determine its progress in providing more active personnel for warfighting duties and inform Congress of its results.