Quadrennial Defense Review:

Some Personnel Cuts and Associated Savings May Not Be Achieved

NSIAD-98-100: Published: Apr 30, 1998. Publicly Released: Apr 30, 1998.

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Pursuant to a congressional request, GAO reviewed the 1997 Report of the Quadrennial Defense Review (QDR), focusing on the: (1) basis for the personnel cuts; (2) services' plans to implement personnel cuts; (3) extent that the services believe cuts will impact their ability to execute the national military strategy; and (4) Department of Defense's (DOD) plans to monitor the services' progress in implementing the cuts.

GAO noted that: (1) DOD's decision to reduce personnel as part of the QDR was driven largely by the objective of identifying dollar savings that could be used to increase modernization funding; (2) DOD officials concluded that a 10-percent force structure cut would result in unacceptable risk in implementing the national military strategy and determined that the review process had not identified sufficient infrastructure savings to meet DOD's $60-billion modernization goal; (3) thus, the Secretary of Defense directed the services to develop plans to cut the equivalent of 150,000 active military personnel to save between $4 billion and $6 billion in recurring savings by fiscal year (FY) 2003; (4) the services proposed initiatives to eliminate about 175,000 personnel and save an estimated $3.7 billion; (5) although the services relied on some ongoing studies to develop proposals to achieve the cuts, some of the analyses were limited; (6) moreover, variations existed in the services' plans; (7) considerable risk remains in some of the services' plans to cut 175,000 personnel and save $3.7 billion annually by FY 2003; (8) with the exception of the Air Force, the services have plans that should enable them to achieve the majority of the active military cuts by the end of FY 1999; (9) however, the FY 1999 future years defense program, which is the first to incorporate the QDR decisions, does not include all of the personnel cuts because the Office of the Secretary of Defense determined that some of the Air Force's active military cuts announced in May 1997 are not politically executable at this time, according to service officials; (10) moreover, plans for some cuts are still incomplete or based on optimistic assumptions about the potential to achieve savings through outsourcing and reengineering and may not be implemented by FY 2003 as originally anticipated; (11) the Air Force made an assumption that all military positions planned to be competed would be replaced by contractors rather than relying on historical experience that the civilian workforce wins 40 percent of all competitions; (12) the Air Force military personnel cuts will focus primarily on personnel assigned to infrastructure activities rather than mission forces and will involve replacing personnel with less costly civilians or contractors rather than eliminating functions; and (13) because some aspects of DOD's plan to reduce personnel will not occur or will be delayed, it is critical that the Office of the Secretary of Defense monitor the services' progress in achieving the personnel cuts and associated savings.

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