United States Government Accountability Office Report to the Committee on Armed Services, House of Representatives January 2015 DEFENSE HEADQUARTERS DOD Needs to Reassess Personnel Requirements for the Office of Secretary of Defense, Joint Staff, and Military Service Secretariats GAO-15-10 Report Documentation Page Form Approved OMB No. 0704-0188 Public reporting burden for the collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington VA 22202-4302 Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to a penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number 1. REPORT DATE 3. DATES COVERED JAN 2015 2. REPORT TYPE 00-00-2015 to 00-00-2015 4. TITLE AND SUBTITLE 5a. CONTRACT NUMBER Defense Headquarters: DOD Needs to Reassess Personnel Requirements 5b. GRANT NUMBER for the Office of Secretary of Defense, Joint Staff, and Military Service Secretariats 5c. PROGRAM ELEMENT NUMBER 6. AUTHOR(S) 5d. PROJECT NUMBER 5e. TASK NUMBER 5f. WORK UNIT NUMBER 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 8. PERFORMING ORGANIZATION U.S. Government Accountability Office,441 G Street REPORT NUMBER NW,Washington,DC,20548 9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSOR/MONITOR’S ACRONYM(S) 11. SPONSOR/MONITOR’S REPORT NUMBER(S) 12. DISTRIBUTION/AVAILABILITY STATEMENT Approved for public release; distribution unlimited 13. SUPPLEMENTARY NOTES 14. ABSTRACT 15. SUBJECT TERMS 16. SECURITY CLASSIFICATION OF: 17. LIMITATION OF 18. NUMBER 19a. NAME OF ABSTRACT OF PAGES RESPONSIBLE PERSON a REPORT b ABSTRACT c THIS PAGE Same as 90 unclassified unclassified unclassified Report (SAR) Standard Form 298 (Rev. 8-98) Prescribed by ANSI Std Z39-18 Contents Letter 1 Background 6 Authorized Positions at DOD Headquarters Organizations We Reviewed Have Generally Increased since Fiscal Year 2001, and Plans for Future Reductions are Not Finalized 8 DOD Headquarters Organizations in Our Review Do Not Systematically Determine or Periodically Reassess Their Personnel Requirements 19 Conclusions 31 Recommendations for Executive Action 32 Matter for Congressional Consideration 33 Agency Comments and Our Evaluation 33 Appendix I Prior GAO Work on DOD Headquarters 40 Appendix II Objectives, Scope, and Methodology 44 Appendix III Resources of the Office of the Secretary of Defense (OSD). 51 Appendix IV Resources of the Joint Staff 55 Appendix V Resources of the Headquarters, Department of the Army 58 Appendix VI Resources of the Offices of the Secretary of the Navy and Chief of Naval Operations 64 Appendix VII Resources of the Headquarters, U.S. Marine Corps 70 Page i GAO-15-10 Defense Headquarters Appendix VIII Resources of the Headquarters, Department of the Air Force 73 Appendix IX Comments from the Department of Defense 78 Appendix X GAO Contact and Acknowledgments 83 Tables Table 1: Statutory Limits of Headquarters Organizations Personnel, and Percentage by Which Statutory Limits Would Be Exceeded in Fiscal Year 2013 in the Absence of a Waiver 21 Table 2: Fiscal Year 2013 Authorized Military and Civilian Positions and Estimated Contractor Full-Time Equivalents within the Office of the Secretary of Defense 51 Table 3: Fiscal Year 2013 Authorized Military and Civilian Positions within the Joint Staff 55 Table 4: Fiscal Year 2013 Authorized Military and Civilian Positions and Estimated Contractor Full-Time Equivalents within the Office of the Secretary of the Army and the Office of the Chief of Staff of the Army 58 Table 5: Fiscal Year 2013 Authorized Military and Civilian Positions by Selected Organization within the Offices of the Secretary of the Navy and Chief of Naval Operations 64 Table 6: Fiscal Year 2013 Authorized Military and Civilian Positions within Headquarters, U.S. Marine Corps 70 Table 7: Fiscal Year 2013 Authorized Military and Civilian Positions in the Offices of the Secretary of the Air Force and the Air Force Chief of Staff 73 Figures Figure 1: Number of Authorized Military and Civilian Positions for the Office of the Secretary of Defense (OSD) and the Joint Staff for Fiscal Years 2001 through 2013 10 Page ii GAO-15-10 Defense Headquarters Figure 2: Percentage of Authorized Military and Civilian Positions and Estimated Contractor Full-Time Equivalents in the Office of the Secretary of Defense (OSD), Fiscal Year 2013 12 Figure 3: Number of Authorized Military and Civilian Positions for the Secretariats and Staffs of the Military Services for Fiscal Years 2001 through 2013 15 Figure 4: Number of Authorized Positions for the Army Secretariat and Army Staff versus the Army Field Operating Agencies 23 Figure 5: Authorized Military and Civilian Positions in the Office of the Secretary of Defense (OSD), Fiscal Years 2001 through 2013 53 Figure 6: Office of the Secretary of Defense (OSD) Headquarters Support Costs for Fiscal Years 2008 through 2013 54 Figure 7: Authorized Military and Civilian Positions in the Joint Staff, Fiscal Years 2005 through 2013 56 Figure 8: Joint Staff Headquarters Support Costs for Fiscal Years 2003 through 2013 57 Figure 9: Percentage of Authorized Military and Civilian Personnel and Estimated Contractor Full-Time Equivalents in the Army Secretariat and Staff, Fiscal Year 2013 60 Figure 10: Authorized Military and Civilian Positions in the Office of the Secretary of the Army, Fiscal Years 2001 through 2013 61 Figure 11: Authorized Military and Civilian Positions in the Office of the Chief of Staff of the Army, Fiscal Years 2001 through 2013 62 Figure 12: Army Secretariat and Army Staff Headquarters Support Costs for Fiscal Years 2002 through 2013 63 Figure 13: Authorized Military and Civilian Positions in the Office of the Secretary of the Navy, Fiscal Years 2003 through 2013 66 Figure 14: Office of the Secretary of the Navy Headquarters Support Costs for Fiscal Years 2001 to 2013 67 Figure 15: Authorized Military and Civilian Positions in the Office of the Chief of Naval Operations, Fiscal Years 2005 through 2013 68 Figure 16: Office of the Chief of Naval Operations Headquarters Support Costs for Fiscal Years 2009 through 2013 69 Figure 17: Headquarters, U.S. Marine Corps, Authorized Military and Civilian Positions for Fiscal Years 2005 through 2013 71 Page iii GAO-15-10 Defense Headquarters Figure 18: Headquarters, Marine Corps, Support Costs for Fiscal Years 2005 through 2013 72 Figure 19: Authorized Military and Civilian Positions in the Office of the Secretary of the Air Force, Fiscal Years 2001 through 2013 75 Figure 20: Authorized Military and Civilian Positions in the Office of the Chief of Staff of the Air Force, Fiscal Years 2001 through 2013 76 Figure 21: Air Force Secretariat and Staff Headquarters Support Costs for Fiscal Years 2001 through 2013 77 Abbreviations DOD Department of Defense OSD Office of the Secretary of Defense This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. Page iv GAO-15-10 Defense Headquarters 441 G St. N.W. Washington, DC 20548 January 21, 2015 Chairman Ranking Member Committee on Armed Services House of Representatives The Department of Defense (DOD) has multiple layers of headquarters management with complex, overlapping relationships among them. Such layers include, but are not limited to, the Office of the Secretary of Defense (OSD), the Joint Staff, and the military services’ secretariats and staffs, which are the highest organizations in DOD responsible for managing and overseeing the major elements of the department. Like the rest of the federal government, DOD is operating in a constrained budget environment and is facing difficult decisions about how to allocate its resources to meet its broad and varying mission requirements across the world.1 One approach the department has pursued in recent years to realize cost savings is to reduce its headquarters staff. In July 2013, the Secretary of Defense directed a 20 percent cut in management headquarters2 spending throughout the department, to include spending within headquarters organizations such as OSD, the Joint Staff, and the military services’ secretariats and military staffs.3 These cuts, which are to take place regardless of the budget approved by Congress, are, according to the Secretary’s guidance, designed to streamline DOD’s management of its headquarters through efficiencies and elimination of spending on lower-priority activities. At a time of growing economic and fiscal constraints and changing national security challenges, it is critical 1Among other constraints, the Budget Control Act of 2011 established requirements for automatic budget sequestration, setting caps on the levels of DOD spending from fiscal years 2013 to 2021. See Pub. L. No. 112-25 (2011). 2Some DOD officials use the terms management headquarters and major DOD headquarters activities interchangeably. For purposes of this report, we also use the terms interchangeably. DOD Instruction 5100.73, Major DOD Headquarters Activities, defines major DOD headquarters activities as those headquarters (and the direct support integral to their operation) whose primary mission is to manage or command the programs and operations of DOD, its components, and their major military units, organizations, or agencies. 3Deputy Secretary of Defense Memorandum, 20% Headquarters Reductions (July 31, 2013). Page 1 GAO-15-10 Defense Headquarters for DOD to ensure that its headquarters organizations meet mission requirements in the most efficient and effective manner possible. DOD’s headquarters organizations have responsibilities that include developing guidance, reviewing performance, allocating resources, and conducting mid-to-long-range budgeting as they oversee, direct, and control subordinate organizations or units. However, accounting for the resources devoted to headquarters has been a long-standing challenge for DOD. In October 1997, as part of our review on the mid-1990s military drawdown, we found that total personnel and costs of defense headquarters were significantly higher than were being reported. Specifically, we found that three-fourths of subordinate organizations excluded from the management headquarters accounting were actually performing management or management support functions, and such accounting masked the true size of DOD’s headquarters organizations.4 Our more recent work has found that DOD’s challenges in accounting for headquarters resources have continued. In March 2012, we found that DOD’s data on its headquarters personnel lacked the completeness and reliability necessary for use in making efficiency assessments and decisions.5 Subsequently, in May 2013, we found several weaknesses in DOD’s process for sizing its geographic combatant commands, and in June 2014, we found that DOD did not have an accurate accounting of the resources being devoted to management headquarters to use a starting point for tracking reductions to such headquarters.6 See appendix I for a discussion of our prior work on defense headquarters, related recommendations, and their statuses. House Report 113-102 mandated GAO to review the military and civilian personnel and contracted services resources devoted to OSD, the Joint Staff, and the military services’ secretariats and military staffs from fiscal 4GAO, Defense Headquarters: Total Personnel and Costs Are Significantly Higher Than Reported to Congress, GAO/NSIAD-98-25 (Washington, D.C.: Oct. 30, 1997). 5GAO, Defense Headquarters: Further Efforts to Examine Resource Needs and Improve Data Could Provide Additional Opportunities for Cost Savings, GAO-12-345 (Washington, D.C.: Mar. 21, 2012). 6GAO, Defense Headquarters: DOD Needs to Periodically Review and Improve Visibility of Combatant Commands’ Resources, GAO-13-293 (Washington, D.C.: May 15, 2013) and Defense Headquarters: DOD Needs to Reevaluate Its Approach for Managing Resources Devoted to the Functional Combatant Commands, GAO-14-39 (Washington, D.C.: June 26, 2014). Page 2 GAO-15-10 Defense Headquarters year 2001 through fiscal year 2013.7 This report (1) identifies past trends, if any, in personnel resources devoted to OSD, the Joint Staff, and the secretariats and staffs of the military services and any plans for reductions to these headquarters organizations; and (2) evaluates the extent to which DOD determines and reassesses personnel requirements for these headquarters organizations. To address the first objective, we identified sources of information within DOD that would provide data on the personnel resources of OSD, the Joint Staff, and the secretariats and staffs for the military services.8 We focused on these nine organizations—OSD; the Joint Staff; the Offices of the Secretary of the Army and Army Staff; the Office of the Secretary of the Navy and Office of the Chief of Naval Operations; Headquarters, Marine Corps; and the Offices of the Secretary of Air Force and Air Staff—because these components represent some of the highest-level headquarters organizations within DOD and are responsible for overseeing, directing, and controlling subordinate organizations or units. Specifically, we obtained and analyzed available data on authorized military and civilian positions in these headquarters organizations9 from fiscal years 2001 through 2013.10 This time frame allowed us to assess trends in resources without including nonwar years prior to fiscal year 2001 and to include the most recent data available, for fiscal year 2013. We obtained and analyzed available data on contracted services performing functions for the organizations within our review for fiscal year 2013, but in some instances these data were not available. DOD is still in the process of compiling complete data on contractor full-time equivalents. Using available data, we also conducted an analysis of trends in headquarters support costs, including the costs for civilian compensation and benefits, at the headquarters organizations in our 7See H.R. Rep. No. 113-102 (June 7, 2013) accompanying H.R. 1960, a proposed bill for the National Defense Authorization Act for Fiscal Year 2014. 8In addition to OSD, the Joint Staff, and the secretariats and staffs of the military services, other headquarters organizations include portions of the defense agencies, DOD field activities, and the combatant commands, along with their subordinate unified commands and respective service component commands. 9For purposes of this report, authorized positions refer to military and civilian positions that have been approved by DOD components for funding for a specific fiscal year. 10Some organizations were unable to provide data for the entire period. These exceptions are detailed in app. II. Page 3 GAO-15-10 Defense Headquarters