Military Personnel

Since September 11, 2001, the high pace of military operations has placed significant stress on U.S. operating forces. In late 2003, the Department of Defense (DOD) reported that several studies had found that tens of thousands of military personnel were performing tasks that were not military essential and that these tasks could be performed more cost effectively by civilian or private-sector contract employees. To address this matter, DOD, in fiscal year 2004, began a multiyear initiative to convert military positions, including military health care positions, to federal civilian or contract positions. Within DOD, the Office of the Under Secretary of Defense, Personnel and Readiness (USD, P&R), has overall responsibility for issuing guidance on manpower management, which includes guidance related to determining the least costly mix of military, civilian, and contract personnel. Additionally, the Under Secretary of Defense (Comptroller) (USD (C)) and the Director, Program Analysis and Evaluation (PA&E) play key roles in determining the costs of military, civilian, and contract personnel. For example, the USD(C) is responsible for developing the composite pay rates used in developing military and civilian personnel budgets and PA&E provides leadership in developing and promoting tools, data, and methods for analyzing allocation of resources. USD, P&R also has responsibility for the Defense Health Program, which provides health care to over 9 million beneficiaries--including military servicemembers and retirees and their families and survivors. This program had estimated costs of $21 billion for fiscal year 2007 and DOD officials anticipate further significant growth in these health care costs. In fact, the costs associated with the program have doubled since fiscal year 2000 due to factors such as increased enrollment, medical inflation, and implementation of the TRICARE for Life program.

While the military departments are well under way in converting almost 10,000 military medical positions to civilian positions and have generally addressed the reporting requirements of the law, Congress lacks information from the departments that would help it make decisions on current and future conversions. Although the National Defense Authorization Act for Fiscal Year 2008 places a statutory moratorium on conversions from October 1, 2007, through September 30, 2012, the accelerated growth of the Armed Forces through fiscal year 2010 and the sustained growth of the Defense Health Program will continue to tax the military health system in several areas, including manpower management. As a result, the issue of converting military medical and dental positions to civilian positions might arise again in the near future. Accordingly, we continue to believe that our previous recommendation for the departments to use a consistent, full cost methodology, like that suggested by OSD's PA&E, in any future conversion certifications has merit. Without clear guidance on the use of such a methodology, the departments would be unable to assure Congress that conversions will not increase the cost of medical care. Moreover, without clear guidance on documenting information about, for example, the departments' assessments of the potential effects of conversions on the quality of care, the departments may be unable to support their assessments. If such conversions are to be done, it will be important for Congress to receive sufficient information from the military departments to provide assurances that planned conversions will not increase cost or decrease access to care or quality of care.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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