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DoD's Straightforward Drawdown Objectives Continue
Prepared statement of Frederick F.Y. Pang, assistant secretary of defense for force management policy, The Personnel Subcommittee, Senate Armed Services Committee, Thursday, March 16, 1995

Mr. Chairman and members of the committee, I appreciate the opportunity to appear before you today to present testimony on manpower, personnel and compensation programs of the Department of Defense.

I will be covering four broad areas in my testimony: force management, including the drawdown and stabilization of the force; military personnel support and Secretary [of Defense William J.] Perry's quality of life initiatives; civilian personnel issues; and our commitment to and progress on equal opportunity.

In our fiscal year 1996 budget, Secretary Perry established three priorities for the Department of Defense:


  • Managing the use of military force in the post-Cold War era;
  • Preventing the re-emergence of a nuclear threat;
  • And managing the drawdown of our forces.

My office holds primary responsibility for managing the drawdown, and I am pleased to present a status report on our progress.

The management of our military downsizing has been a resounding success because we have learned the lessons of history. The cycle of war, drawdown, mobilization and war repeated throughout this century has taught us that:


  • It is difficult to accurately foresee emerging threats to our national security.
  • Our military must always be ready to fight and win the next war, and therefore deter it.
  • Our people are our most important resource, and if we support them in peacetime as we have in wartime, they will perform with excellence and valor when called to protect our national interests.

The downsizing of our military force following the Cold War was not only prudent, but necessary. We knew, however, that if we did not proceed carefully, we would invite conflicts in which servicemen and women could die needlessly.

Our downsizing of the active component is now over 80 percent complete. The reductions we plan for fiscal year 1996 will essentially complete the drawdown of our active forces. I can report that despite the unprecedented challenge of shrinking an all-volunteer force we have met or exceeded our national security objectives with respect to the size and capabilities of the armed forces. Because our military personnel leaders were skillful in executing this drawdown, our force is more experienced, of higher quality, is more diverse and has the right mix of skills to meet current and future challenges.

Importantly, we have achieved this while treating our people fairly whether they stayed in service or separated. Even though the number of active duty personnel has already been reduced by more than 600,000, the number of service members who have been involuntarily separated has been quite small, and most of those who have separated have been successful in finding a civilian job. A great deal of the credit for our success belongs to the Congress, including this subcommittee, which provided the separation incentives and transition tools we needed to ensure that we kept faith with those who served our nation.

Our focus is now shifting to the task of stabilizing the force. Any drawdown of this size, even one carefully and successfully managed, will cause turbulence -- it is an inevitable byproduct of change. Therefore, we are now taking steps to secure a greater sense of stability in our armed forces.

For the 1.5 million men and women who remain on active duty this administration has established and funded an extraordinary program to support them and their families. First, President [Bill] Clinton added $7.7 billion to the defense program to see that service members get the maximum pay raise allowed by law for military personnel through the end of the century.

Second, Secretary Perry increased quality of life spending by $2.7 billion over the next five years to improve housing, expand child care, supplement the income of service members assigned to high cost areas in the United States, narrow the housing cost gap, improve morale and recreation services and provide other benefits for service members and their families.

Our fiscal year 1996 budget contains an initial investment of $450 million for these initiatives, and we have set aside funding to add the same amount each year for the following five years. By taking these two actions we ensure basic fairness to the people who defend our nation and at the same time improve the readiness and effectiveness of our forces.

Our test in making personnel policy and program decisions will be: Will this improve life for the Army captain at Fort Bragg [N.C.]? Can the staff sergeant at MacDill [Air Force Base, Fla.] support his family at a decent level and focus on maintaining fighter aircraft? Is the high school graduate with a dream of going to Parris Island [Marine Corps Recruiting Depot, S.C.] still interested when he hears the details of military pay and benefits? And will the daughter of a petty officer on the [USS] Eisenhower feel good enough about military life to study hard and work toward going to the naval academy?

When the current reductions began, we had nearly 2.2 million men and women in uniform on active duty; by the end of fiscal year 1995 we will have slightly more than 1.5 million; and by the end of the drawdown in fiscal year 1999 we'll have approximately 1.45 million. Overall that's a drop of nearly three-quarters of a million -- one-third of the active force.

Our drawdown objectives continue to be straightforward: take care of people -- both those who are leaving and those who are staying -- while maintaining readiness to accomplish the missions that the military is called upon to undertake. In accomplishing these objectives we carefully evaluate the ways in which today's decisions will affect tomorrow's force. Our ability to achieve these objectives was greatly enhanced by the tools Congress provided to help us manage the reductions fairly and effectively.

Prior to fiscal year 1991 we had inadequate personnel management tools available to help us accomplish the unprecedented large-scale reduction of our all-volunteer force. The fiscal year 1991 authorization act provided, for the first time, involuntary separation pay for enlisted members and established programs of separation counseling and employment assistance, which brought together the skills and resources of the departments of Defense, Labor and Veterans Affairs.

The Persian Gulf conflict gave us a short respite and the opportunity to develop incentives to stimulate voluntary losses from the career force. Absent such incentives, we were severely limited in our ability to accomplish reductions while maintaining faith with the more senior members of the all-volunteer force and continuing to access the men and women who would help provide a balanced and effective force in future years.

Initially, therefore, most of the reductions came from junior service members -- those with fewer than six years of service. We reduced accessions and released people short of completion of their service obligation.

This approach could not be sustained for an extended period without creating future problems -- specifically, a future seniority deficit brought on by too few accessions during the drawdown. Thus we worked with the Congress to develop tools to encourage people in the career force to voluntarily separate short of 20 years of service. These programs allowed us to begin downsizing in a way that allowed us to pursue a robust recruiting program and allow a strong flow of high quality accessions that would provide the leaders for the next century.

A well-informed and supportive Congress provided the tools we needed to manage the drawdown. We have used the personnel management authorities provided by Congress to carefully tailor the downsizing to meet our needs. We sought to create a healthy flow through the system from recruitment to retirement, allowing for consistent promotion rates and a balance of experience throughout the force.

Beginning in fiscal year 1992 the Voluntary Separation Incentive/Special Separation Benefit initiative was authorized and funded. Also, more flexible Selective Early Retirement Board authority removed some of the statutory restrictions that limited the number and type of officers who could be considered for early retirement; thus the services could manage the retirement-eligible portion of the force more vigorously. The Temporary Early Retirement Authority program providing for a retirement after 15 years of service was enacted in fiscal year 1993.

After calibrating accession requirements we used the more flexible SERB authority to increase the retirement rate of those members already eligible. We then focused on mid- and late-career service members. The TERA program was used to shape and size the force for those close to retirement. For those in mid-career the VSI and SSB programs helped us make necessary reductions through voluntary separation.

At the end of fiscal year 1995 the active force drawdown will be about 90 percent complete. The success of the force reduction authorities is demonstrated by an important fact -- about 138,000 career members will have departed under voluntary authorities by the end of this fiscal year, and less than 2,000 involuntary separations through reduction in force actions have been required to date. This is an extraordinary accomplishment.

Today the Marine Corps is virtually complete in its reductions. By the end of fiscal year 1995 the Army and the Air Force will be about 95 percent done. The Navy started its reduction later, but will be about 75 percent complete by the end of this fiscal year. One further evidence of the success of this carefully crafted process: Promotion flows have remained relatively consistent throughout the drawdown period.

The most important aspect of our efforts to right-size the armed forces is that quality, experience and diversity have actually increased substantially since the drawdown began, producing a higher quality and more effective force. The proportion of active duty enlisted personnel in the upper aptitude categories has increased from 56 percent in 1987, when the drawdown began, to 64 percent in 1994. Those in the lowest acceptable aptitude category dropped from 11 percent of the force in 1987 to just 6 percent in 1994.

The active force has become richer in experience as measured by age and length of service. For example, the average age increased 1.3 years from 1987 to 1994 (to 28.6).

Finally, the percentage of women in active service has increased from 10 percent to 12 percent over the same period. There was widespread concern that the drawdown would impact more heavily on minority members of the armed forces. This has not proved to be the case. Total minority representation in the force has increased from 27.4 percent to 29.9 percent. Minority officers in pay grades O-4 through O-6 showed an even larger increase -- from 7 percent of the total to 11 percent over the period.

The increase in age and experience in the force that we have experienced is healthy in a smaller force. Effective recruiting, however, remains the key to the strength of tomorrow's personnel force. Each service must sustain its flow of seasoned leaders for the future -- tomorrow's tank commander is being recruited today. Over the next several years the department will recruit about 200,000 young people each year to join the full-time, active duty armed forces, along with an additional 150,000 for the Selected Reserve, more than 50,000 of whom will be nonprior service entrants.

During the drawdown we have done well in attracting high quality recruits. For example, over the last two years approximately 95 percent of all active duty recruits held a high school diploma. Only about 75 percent of American youth ages 18 to 23 hold that credential. In addition, about 70 percent of new recruits have top-half aptitude scores, compared to 50 percent of our nation's youth population. Higher quality recruits reduce attrition while increasing hands-on job performance. Well educated, high aptitude recruits are essential components of the individual and unit performance that is so instrumental to readiness, particularly in the high technology force of today and tomorrow.

Today our principal concern in recruiting centers on a reduced propensity among American youth to enlist. By propensity we mean the percentage of the 10,000 nationally representative survey respondents who indicate that they definitely or probably plan to enlist. Reported interest dropped from 1991 through 1993, and our 1994 survey shows a continuing decline in propensity for 16- to 21-year-old men, especially blacks. We have focus groups planned to help us understand this situation better. Propensity for 16- to 21-year-old women and 22- to 24-year-old men and women now appears to have stabilized.

In addition, recent surveys suggest that recruiters are being pushed hard. Recruiting is a difficult assignment few service members relish, and... they are working in a tough market. They work long hours, and while 75 percent say their goals are achievable, the balance are less optimistic.

To strengthen recruiting efforts in fiscal year 1994 we reprogramed $41 million into recruiting. This helped us to get out the message that the armed forces were still hiring and that military service was an excellent choice for talented young men and women. For fiscal year 1995 Congress increased the recruiting budget by $89 million. Our total recruiting investments are steady at about $1.4 billion (active) plus $.6 billion (reserve), for a total of about $2 billion.

Advertising is cost-effective and central to reversing the downward trend in enlistment propensity. Recognizing this, Congress and DoD have acted to expand funding in that area. We increased from an investment of $145 million in fiscal year 1994 to the fiscal year 1995-96 level of about $185 million.

We are optimistic that fiscal year 1995 will be another successful year. However, we are concerned about fiscal years 1996 and 1997. Resource levels for those years are steady; yet numerical goals are rising while propensity has slipped. The department's senior panel on recruiting, established by Deputy Secretary [John] Deutch about a year ago, meets quarterly -- and more frequently if required -- to monitor progress in recruiting. This panel includes the secretaries of the military departments and the chairman of the Joint Chiefs of Staff. Any emerging problems in this area will continue to receive quick, high level attention.

During each of fiscal years 1995-97 about 19,000 new junior officers will enter the armed forces. Roughly two-thirds will go initially to the active components, with the rest going to the reserves (which also are fed by officers leaving active duty).

Just as we take great care bringing people into the military, we help them as they transition back to civilian life. The assistance given to more than 300,000 service members and their families who separate each year remains a high priority for the department. These veterans form a tremendously talented resource pool for America; 99 percent have high school diplomas, 22 percent have some college credit, and approximately 57,000 have at least one college degree. Operation Transition's goal is to prepare service members and their families to make a successful transition to civilian life.

Each military service, in conjunction with DoD, the departments of Labor [and] Veterans Affairs, and federal/state employment service agencies, has initiated innovative transition programs. During fiscal year 1994 service members made nearly 725,000 visits to transition offices for preseparation counseling and employment assistance.

Within the United States the DoL and VA also provide employment assistance workshops at 204 selected bases. In fiscal year 1994 more than 163,000 service members and spouses participated in 3,686 workshops.

In an example of good government coordination, DoD, DoL and VA implemented the service members' Occupational Conversion and Training Act to address the needs of unemployed veterans, particularly those whose military skills do not readily translate to civilian jobs. As of November 1994 VA processed 58,235 training applications and 8,388 eligible veterans have been placed in job training under this program. A new program, to be administered jointly by the DoD and Department of Justice in 1995, will promote the entry of qualified service members into law enforcement -- the Troops to Cops program.

Automated systems are a vital part of DoD transition programs. The Defense Outplacement Referral System is a resume data base referral system linking private sector employers to departing service members and spouses. In fiscal year 1994 there were 7,980 employers and over 60,000 personnel registered in the DORS. Since December 1991, 730,078 resumes have been sent to employers.

The Transition Bulletin Board allows employers to list job openings at military installations worldwide. In September 1994 TBB listed 9,693 want ads, business opportunities and federal jobs. The verification document (DD Form 2586) translates service members' military skills and training into civilian terms.

The public and community service registry, established in June 1994, contains information on organizations desiring to hire veterans. So far 125 organizations have registered, with hundreds being researched for inclusion. Since June 1994 nearly 70,000 separating personnel have registered.

Finally, we provide additional benefits, such as extended health care and extended commissary and exchange privileges, to the relatively small number of involuntarily separated military members and their families, and to certain people separated voluntarily.

I would like to turn now to one of the most dramatic and important elements of our military personnel plans: Secretary Perry's quality of life initiative.

The president and Secretary Perry are determined to give military personnel and their families the kind of support they deserve and have earned by their service to the nation. It is a matter both of basic fairness and of military readiness. If the Department of Defense cannot continue to attract and retain high caliber people to military service, the quality of our national security will be endangered. If soldiers, sailors, airmen and Marines cannot concentrate on the mission at hand because they are worried about their families and their futures, we will have jeopardized our ability to accomplish that mission.

The quality of life initiative has three major components: raising compensation, improving the quantity and quality of housing, and bolstering our community and family support programs.


  • Military compensation.

No single stimulus is stronger than monetary compensation in generating the retention of top-quality people. Our initiatives in this area include:

The pay raise. The budget we have submitted funds a military pay raise at the full rate allowed by law through the end of the century. This is an unprecedented commitment and a reflection of the value that this administration places on treating our men and women in uniform fairly. We have allocated $7.7 billion to cover this commitment.

Housing allowances. About 70 percent of our military families live in the civilian community and receive housing allowances. These allowances were designed to cover about 85 percent of the housing costs of military members, but they have fallen behind and now cover only 78 percent of housing costs. Secretary Perry has approved a plan to increase housing allowance payments over the next five years and begin to bring them back in line for more than 700,000 military members and their families. The secretary directed the addition of $43 million in fiscal year 1996 as the first step in his plan.

CONUS COLA. Last year the Congress authorized a cost-of-living allowance within the continental United States in recognition of the difficulties faced by service members assigned to certain areas in which the cost of living is exceptionally high. The department intends to implement the CONUS COLA in the last quarter of fiscal year 1995. Secretary Perry has specified that individuals living in areas where the local, nonhousing cost-of-living exceeds the national average by more than 9 percent would receive this new allowance.

The amount of the allowance is determined by three things: the area's cost of living in relation to the national average; the military member's spendable income; and whether the member has dependents. We expect the monthly average benefits to vary from $16 to $266, depending on area. Approximately 30,000 members will benefit from this program.


  • Housing improvements.

Decent and affordable housing is an essential concern of military personnel and their families and a significant factor in retention. Secretary Perry has reallocated a total of $296 million in the fiscal year 1996 budget for the improvement of military housing. The plan calls for upgrades over the next six years to about 10,000 homes currently threatened by closure due to lack of maintenance funds; improvements in privacy and other amenities to 5,000 dormitory (barracks) spaces -- 1,200 immediately; and the exploration of partnerships with the private sector.

With a view to increasing the availability of affordable and quality housing DoD hopes to provide land and funding to stimulate home building, with lease-back options via private sector housing ventures/partnerships. The reallocation of $296 million in fiscal year 1996 is in addition to previously planned and programed funds for maintenance and construction.


  • Community and family support.

In fiscal year 1996 our plan increases funding for child care and for better community and family support by $94 million. Our total capacity in DoD child care programs in fiscal year 1996 will be increased by 23 percent, to 204,000 spaces. This means that we will meet two-thirds of need for child care. Currently we are meeting only one-half. The money will also be used to improve recreation facilities, extend hours, reduce surcharges on the use of recreational goods and services, and strengthen the prevention and counseling programs aimed at the prevention of family violence.

As we move forward with the plans I have outlined, we are searching for additional way[s] to improve military life. In order to ensure that we are doing everything possible to support our men and women in uniform and their families Secretary Perry has established a panel of distinguished outside experts to form a quality of life task force. The task force, chaired by former Army Secretary Jack Marsh, will provide recommendations for improving housing and the delivery of community and family services.

The task force will also advise the secretary on initiatives he can take to address the issue of personnel turbulence -- an increasing problem in an era of high deployment rates -- and its effect on military families. The secretary has also established an internal Quality of Life Executive Committee, which I chair, to ensure that the approved recommendations of the Marsh panel are carried out swiftly and efficiently.

Finally, the eighth Quadrennial Review of Military Compensation, which formally began its work this January, gives us an additional opportunity to review how we provide for our service members. Whenever he considers it appropriate, but at least once every four years, the president is required to direct a complete review of the principles and concepts of military compensation.

The president has directed that the eighth QRMC address both the challenge of supporting the men and women who serve today and the actions necessary to ensure the vitality of the forces that will protect our nation in the years to come. This QRMC will look to the future and will identify desirable components of a military compensation system capable of attracting, retaining and motivating a diverse military force in the 21st century.

Their long-term strategy is to set forth a framework for military compensation in the next century and to design the components of the compensation system along with a strategy for implementation. Short-term objectives include a review of ways to re-engineer elements of the current compensation system to better support readiness and the quality of life initiatives of Secretary Perry and the president while expediting the adoption of initiatives that put people first and thereby support readiness.

In addition to Secretary Perry's quality of life initiative we are working hard to fulfill our ongoing responsibility to support all areas of military life.


  • Commissaries.

Commissaries support a reasonable standard of living for military people stationed in the United States and abroad. They help offset the economic stress experienced by many families. Surveys show that consumers can save an average of 20 percent to 25 percent over commercial retail food stores and annual savings can range from a few hundred dollars to more than $1,500, depending on family size.

This nonpay benefit is an integral part of the nonpay compensation package for active duty military, members of the reserve components and military retirees. Secretary Perry has made clear his view that the commissary benefit must not be eroded. As of October 1994 there are 223 commissaries in the United States and 108 overseas, where they are often the only source of American products.


  • Off-duty education.

Off-duty voluntary education benefits both the service member and the nation. DoD offers outstanding incentives to military personnel who want to continue their education on their off-duty time or increase their skills to become more competitive in their military career. In fiscal year 1993 the department made available $134 million in tuition assistance, which represented 75 percent of the cost of studies undertaken by service members. Almost 40 percent of the force participated in college and university courses offered through the program.


  • Child care.

Service members are parents to 1.2 million children under the age of 12. Reliable, high quality child care helps military families achieve economic security in a time when two incomes are often essential. Not only is the department the largest provider of child care in the world, but DoD child development services have been heralded as a role model for other government agencies and the nation as a whole. Approximately 166,000 child care spaces are available at 374 locations worldwide. The department has a potential child care need for 312,000 spaces.


  • Family advocacy programs.

As the rate of deployment for service members rises, the stress and the potential for family violence increases. The Family Advocacy Program, now in its 14th year, has been successful in helping troubled families.

In addition to treatment and intervention the Family Advocacy Program works to recognize the signs of potential abuse and to institute training and support systems that prevent it from starting. Congress has helped enormously by increasing assistance to new parents and first-term families. New parent support programs will be implemented at installations with high populations of young first-term families. Outreach services will include pre and postnatal home visits, parent education and other skillbuilding services.


  • Youth programs.

While the number of children in the birth to age 5 population is decreasing, there has been an increase in the number of children ages 6-18 -- now more than 854,000. The increased tempo of deployments is creating greater strain [on] our families of these children. We are concerned about an increase in the number of substantiated cases of child abuse in these age groups, especially the adolescent population.

We are also concerned about the general welfare of youth on installations, who are not immune to the forces of violence and gang activity which trouble the nation as a whole. In addition to maintaining youth activity centers, which feature social and recreational activities, we have begun supporting locally developed child and adolescent support projects through the Model Communities incentive awards program.


  • Morale, welfare and recreation.

Morale, welfare and recreation programs include fitness centers, libraries, sports and athletic programs, as well as a wide variety of other recreational, social and developmental activities. These programs, along with exchange services, serve 12 million patrons and participants and employ over 220,000 people worldwide.

Revenues generated from exchange sales and MWR programs are used to build and modernize MWR facilities. In fiscal year 1995 the nonappropriated construction program totaled $323 million. We have streamlined operations, modernized facilities and freed the hands of the services and the installation commanders to act within broad policy guidance.


  • Armed forces professional entertainment overseas.

The Armed Forces Professional Entertainment Office is a joint-service program that logistically supports entertainers who are willing to perform free of charge for service members on military installations overseas. Entertainers perform at numerous overseas locations, with a priority given to remote and isolated sites. Shows are also organized for troops mobilized for missions in such places as Somalia, Macedonia and Saudi Arabia.

In fiscal year 1994 the AFPEO fielded 88 noncelebrity tours and 17 celebrity United Service Organizations/DoD tours. These tours performed an estimated 2,300 shows, entertaining over 250,000 service members and their families. This small but vigorous programs touches the lives of members overseas, when they most need it.


  • Family centers.

By 1994 over 60 percent of our service members had family responsibilities. Our 317 family centers provide them and their civilian counterparts with programs that are tailored to the unique needs of military life. In that way family centers can assist commanders in maintaining the readiness of the total work force. [Their] responsibilities include information and referral, relocation assistance, personal financial management, spouse employment assistance, outreach, family life education, crisis assistance and volunteer coordination. These essential services create an infrastructure for the quality of life that military families deserve.

As we saw in the Persian Gulf war family readiness is a crucial component of overall force readiness. Family center deployment support programs specifically focus on family preparedness -- teaching skills to ensure that family members have the capabilities and tools to manage in the absence of the military member. In conjunction with these programs family support groups at the unit level provide a critical resource and link to other support systems.

As the frequency of deployments increase family center programs have refocused efforts to mediate the stress associated with more frequent separation. The centers continually adapt, evolve and develop innovative ways to assist the families in meeting the growing challenge of family separation.


  • Department of Defense dependent schools.

Department of Defense Dependents Schools will support 87,000 students overseas in fiscal year 1996. We strive for educational excellence in all of our schools by extensively involving parents, staff and the military services in strategic planning and by pursuing the president's national education goals. Further, we will improve methods of accountability of high student performance and increase the decision making at the school level, seeking even higher levels of student performance. Parents and teachers throughout the system are involved in the development of a strategic plan that will focus resources on preparing students for the 21st century.

We can report that our efforts to minimize the effects of the drawdown on children's education have been extremely successful. In spite of the reductions, DoDDS students scored 8 to 19 percentile points above the national average in all Comprehensive Test of Basic Skills and American College Test test areas over the past school year. Although students already perform well above the national norms on standardized achievement tests, DoDDS has set even more demanding targets under the national education goal in the areas of math and science, as well as core studies throughout the elementary and secondary grades. By the 1996 school year we expect schools in Europe and the Pacific to be stabilized from the drawdown.

DoDDS has maintained a quality educational program with enhancements such as distance education, foreign language immersion, reading recovery (a program to help children-at-risk learn to read) and advancement via individual determination (a college preparatory program for students who come from backgrounds most underrepresented in four year colleges and universities). DoDDS has also offered a test bed for applications of advanced technology, including the use of the Defense Simulation Internet. DoDDS now serves all preschool children between the ages of 3-5 with disabilities under the provisions of the Individual[s] with Disabilities Education Act.


  • DoD Domestic Elementary Schools.

The DoD Domestic Elementary Schools program (formerly Section 6 schools) provide[s] education to approximately 33,000 eligible dependents residing on 16 military installations in the United States and Puerto Rico. The schools have locally elected school boards which participate in the development and oversight of policies, procedures and programs.

Under the national education goals we have developed special projects to support a high degree of parental participation in child development, preschool and early childhood development programs; advanced placement courses; special instructional models; and strategies designed to help students learn. This agency also has oversight responsibility and fiscal support of eight special contractual arrangements with local educational agencies in five states and Guam serving an additional 6,000 students.


  • Chaplain services.

The military chaplaincies serve as the link between service members, their families and support services throughout the department. They act as liaisons with family centers, family advocacy and other military relief programs; they also work with outside organizations such as the American Red Cross and drug and alcohol rehabilitation centers. Chaplains offer expert assistance at pre- and post-deployment briefings, provide pastoral care to family members who remain at home, and facilitate the religious and spiritual needs of deployed service members worldwide.


  • Relocation/base closure assistance.

When a military base closes, no one feels the stress more than the families who depend on that base for their living. We have responded by organizing a base closure assistance team to provide commanders with expert consultation to address individual installation issues. The multidisciplinary teams will work with affected installations to identify potential problem areas and to develop strategies and solutions tailored to local needs. We are also gathering lessons learned and developing resource and planning guidance to ensure that organizational and individual needs are addressed during the closure and realignment process.


  • Impact of block grant proposals.

Since many young military families are of moderate means, we have taken a strong interest in federal programs that help them make ends meet. We are concerned that proposals to shift many of these programs that support families, such as the Women, Infants and Children program, to state block-grant mechanisms may harm some rank and file service members. We urge the Congress to give consideration to military personnel as they reform these programs.


  • Civilian personnel.

Even as we work hard to maintain a good quality of life for our service members and their families we understand that our civilian work force is a crucial link in our national defense. The Department of Defense employs over a million civilians around the world. With roughly 824,000 of these in the federal civil service system we are by far the largest federal employer; indeed, we account for nearly half of the federal civil servants. Additionally we employ about 180,000 through the nonappropriated fund system to work in morale, welfare and recreation, as well as 62,400 foreign nationals at our bases outside the United States.

The Department of Defense has accounted for the overwhelming majority of personnel cuts in the federal government. Our regular employment has fallen from 1.117 million at the end of fiscal year 1989 to 887,000 in November 1994. In the past two fiscal years we reduced civilian employment by roughly 115,000 people. Fewer than 8,000 of these separations were involuntary -- that is, as a result of reductions in force. We have tried hard to avoid reductions in force because they are so costly in morale, productivity, time and money. To achieve this we have relied on a variety of policy tools provided by the Congress, including hiring freezes, the Priority Placement Program, separation incentives, outplacement assistance and collaborative ventures with the Department of Labor and OPM [Office of Personnel Management].

Our separation incentives, or buyouts, started in January 1993; roughly 54,000 employees have taken them so far. Further, over 8,000 employees have retired under the Voluntary Early Retirement Authority.

This year marks the 30th anniversary of our Priority Placement Program, a pioneering effort to help displaced DoD employees find other positions within the organization. It is part of the Civilian Assistance and Re-employment program, which is designed to help the department meet its drawdown goals of achieving necessary reductions, minimizing the impact on civilian employees, helping laid-off employees and maintaining work force balance.

In the central care activity PPP placements increased to an average of 900 per month for fiscal year 1994. The program's interactive bulletin board system now connects personnel offices worldwide with the CPMS [Civilian Personnel Management Service] systems support branch. This connection has allowed us to process an average of 19,000 registrants a year, up from a few thousand several years ago.

Despite the heavy drawdown, between the end of fiscal year 1989 and the end of fiscal year 1994 the percentage of women among civilian DoD employees held steady. Although the relative percentage of women in blue collar occupations fell slightly, the percentage of mid- and high-grade white collar positions going to women increased. The relative percentage of minorities in the work force rose in all general schedule categories. Much of these successes can be attributed to intelligent, aggressive use of buyouts and the PPP. The Priority Placement Program protects our capital investment because it lets us transfer valuable assets to other locations within the department.

We have managed our reductions by being true to our goals (reducing staff, avoiding involuntary separations, assisting employees and achieving balance) and by steadfastly holding to mission and readiness requirements. We have delegated authority to the lowest levels possible in order to let managers determine where reductions are needed and which skills they need to retain. Our voluntary tools (incentives, VERA, hiring authority) allow managers to control, to a large degree, who goes and when. We also pay constant attention to work force demographics and the results of downsizing, most notably through a work force reshaping task force managed by the Office of Civilian Personnel Policy.

We have successfully used a variety of tools provided by the Office of Personnel Management to achieve our goals including:


  • Early retirement flexibility.

OPM allowed us to expand early retirement authority to cover locations where we could create placement opportunities.


  • Retirement eligibility.

When we closed Eaker Air Force Base (La.), we learned that a woman would be separated only three weeks before she was eligible for a retirement annuity; yet she had to be let go. We worked with OPM, which agreed to publish a rule change to allow employees to use annual leave if that would let them reach retirement eligibility. This Title 5 change, of course, helps all federal agencies, not just DoD, to manage downsizing more humanely.


  • Training and retraining.

When we closed Mather Air Force Base in California, regulations at the time made it impossible for the Department of Labor to help with retraining employees until RIF notices actually were distributed. We worked with the OPM and DoL to develop a certificate of expected separation, which may be used six months in advance of a RIF to receive eligibility for Job Training Partnership Act programs.


  • Civilian personnel regionalization and systems modernization.

With the establishment of regional servicing centers and the movement of all DoD components to a standard, modern data system, we will go from one personnel specialist for every 60 employees to one for every 100 by the year 2001. After the new system is in place DoD will save about $156 million a year.


  • Developed labor-management partnerships.

The Office of Civilian Personnel Policy continued to use its presidents' roundtable to involve union, employee and managerial groups, as well as the services and defense agencies in civilian personnel policy. More significantly, we managed to have the Defense Partnership Council chartered and its bylaws adopted. Further, the staff provided partnership training to over 700 senior managers and their counterpart union representatives in support of the National Performance Review.


  • Initiated liaison offices for injury and compensation.

We located field liaison offices at Department of Labor offices, through which technical experts have provided advice and guidance to the over 400 installation personnel on Federal Employees' Compensation Act matters. Review of injury claims at the DoL and encouraging installations to re-employ injured workers resulted in 158 successful placements. As a direct result actual one-year savings exceed $3 million, with potential savings exceeding $101 million.


  • Streamlined and increased complaint investigations.

The Office of Complaint Investigations reduced its work-in-progress inventory by a third while reducing staffing levels by 8 percent. It increased monthly production almost 20 percent through economies of scale, staff training and streamlined procedures. By implementing mediation OCI has enabled local parties to achieve settlement in over half of all mediation attempts. Conservatively, OCI's use of mediation has been saving DoD at least $8 million a year. As all investigators become trained mediators the savings should rise even higher.

Finally, I want to stress our unwavering commitment to equal opportunity and to the right of all military members and civilian employees in the Department of Defense to perform their job and pursue their career objectives without discrimination or harassment. Secretary Perry has set in motion a comprehensive set of initiatives that will help ensure that we build on our past successes.

First, he established the Office of the Deputy Assistant Secretary of Defense for Equal Opportunity as a focal point for military and civilian programs and appointed William E. Leftwich III to serve as deputy assistant secretary.

Second, he restructured the department's Defense Equal Opportunity Council to emphasize management accountability. The council is chaired by Deputy Secretary of Defense Deutch. Its membership includes the service secretaries; the undersecretaries of defense; the director, administration and management/Washington Headquarters Services; and other members of the OSD's [Office of the Secretary of Defense] senior management team.

Third, he initiated a major study of the officer pipeline. This study will help us to outline a clear and achievable vision of what we need to do to improve the flow of minority and female officers from recruitment through general and flag officer ranks.

Fourth, Secretary Perry set in motion a vigorous, sustained effort to improve the representation of women, minorities and people with disabilities among our civilian managers.

Fifth, he energized our program of equal opportunity training, particularly the training of our leaders to ensure they understand their responsibilities with respect to equal opportunity. In response to this charge the Defense Equal Opportunity Management Institute has developed special seminars and briefings for senior civilian and military leaders, including a mandatory two-day program for all new flag and general officers and members of the Senior Executive Service.

Secretary Perry has also focused our attention on the need to combat sexual harassment as a key element of our overall policies to ensure fair and respectful treatment of service members and civilians. Secretary of the Air Force [Sheila] Widnall and Undersecretary of Defense [for Personnel and Readiness Edwin] Dorn have developed a five-part policy action plan in response. They also head a task force on discrimination and sexual harassment that reviews the services' discrimination complaints systems, including issues such as the training of complaint handlers, commanders and supervisors; the conduct of investigations; support services for victims; procedures for the prevention of reprisals; and procedures for reporting the results of investigations.

Last August Secretary Perry set out sexual harassment program guidelines that established baseline standards for all elements of the Department of Defense that firmly underscored his commitment to eliminating sexual harassment from the DoD workplace. We will soon issue a new directive to set out departmentwide standards that are informed by the work of the task force on discrimination and sexual harassment.

As I indicated earlier in my statement, we are well along with the task of right-sizing the force. We have achieved this without reducing the representation of women and minorities in the services -- indeed their representation has improved. Our task now is to meet Secretary Perry's vision and complete the measures necessary to expand opportunities for women and minorities. ...



Published for internal information use by the American Forces Information Service, a field activity of the Office of the Assistant to the Secretary of Defense (Public Affairs), Washington, D.C. Parenthetical entries are speaker/author notes; bracketed entries are editorial notes. This material is in the public domain and may be reprinted without permission.