Potential Savings from Substituting Civilians for Military .../media/Corporate/Files/Publications/IDA_Documents/CARD/D-5193.pdfArmy usually has the highest fraction of civilians relative

I N S T I T U T E F O R D E F E N S E A N A L Y S E S

Potential Savings from Substituting Civilians for Military Personnel

(Presentation)

Stanley A. Horowitz

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May 2014

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IDA Document NS D-5193

Log: H 14-000580

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I N S T I T U T E F O R D E F E N S E A N A L Y S E S

IDA Document NS D-5193

Potential Savings from Substituting Civilians for Military Personnel

(Presentation)

Stanley A. Horowitz

Potential Savings from Substituting Civilians for Military Personnel

Stan Horowitz June 2014

The views expressed in this presentation are those of the author and do not reflect the official policy or position of the Department

of Defense or the U.S. Government

Objective

Identify areas where it may be efficient to substitute some civilian personnel for military Provide rough estimates of potential savings Consider impediments to substitution

24 June 2014 1

Much of this is preliminary and is meant to identify directions for analysis

24 June 2014 2

Outline

Background and motivation Areas of opportunity Medical Cyber Infrastructure

Conclusions and suggestions

Civilian Personnel Have Been Substituted for Military

In almost all force and infrastructure categories, civilian staffing has risen more or fallen less than military staffing

In FY 2012 there were still > 500,000 active duty personnel in infrastructure positions

24 June 2014 3

-60%

-40%

-20%

0%

20%

40%

60%

80%

Active

Civilian

Staffing Changes between 2000 and 2012

Motivation There is pressure to cut civilian staff – management by input??

Medical: ban on mil-to-civ conversion; directed reduction in Army civilians Continuing civilian personnel caps FY 2013 NDAA emphasis on achieving savings in civilian workforce H.R. 4257: “Rebalance for an Effective Defense Uniform and Civilian Employees Act”

– 15% cut in civilians by 2021 American Enterprise Institute (AEI): “Hagel must rein in DoD civilian workforce”

DoD Policy (Instruction 1100.22) provides proper framework Identify mission requirements Determine whether inherently governmental Determine military essentiality Identify most efficient performer for non-military essential positions

Civilian personnel are generally less expensive than equivalent military DoDI 7041.04: compare full marginal costs Example in the instruction shows civilians cost 75% to 80% of military

Many military personnel seem to be in non-military essential jobs The pressure to cut civilians may be revealed to be misguided

24 June 2014 4

Criteria for Identifying Promising Areas for Civilianization

Functions where many do not deploy Less compelling case for military essentiality Generating forces; e.g., training, personnel

administration, acquisition support Non-deploying combat-related forces: e.g., many cyber,

non-operational medical, intelligence, UAVs Expanding, non-deploying functions where we are

soon likely to substantially increase the number of military personnel It’s easier to influence something before it exists Cyber and UAV workforce, for example

24 June 2014 5

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Occupational Group Average Deployment Rate Average Deployment Rate, All Specialties Average Deployment Rate, Medical Specialties

Army Medical Deployment Rates (2001–2012)

24 June 2014 6

Fraction of man-years with at least one day deployed in the year.

Operationally required specialties deploy more than those primarily associated with beneficiary care Even the most deployed medical specialties had deployment rates below the Army average Other medically related corps display similar patterns

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7 24 June 2014 7

Potential to Use More Medical Civilians

Military medical staffing is greater than required to meet deployment/readiness requirements

Civilian medical personnel are cheaper than military Composite rate understates special pays and training costs Full (or any) cost is not evident to users of military personnel Civilian personnel have fewer overhead requirements; e.g.,

Graduate Medical Education (GME)

Ratio of military/civilian medical personnel varies by Service Army has most

aggressively civilianized Moving others to Army

ratio could save $500M/year (double in the long run)

24 June 2014 8

Medical Manpower: Observations and Recommendations

24 June 2014 9

Management information, incentives, and constraints inhibit choosing the most efficient mix of personnel

Recommendations Develop annual estimates of training cost by specialty Move more of the cost of military personnel into MILPERS account,

so programmers see it Develop pilot projects to allow organizations to trade expenditures

on military, civilian, and contractor personnel Remove prohibition to mil-civ conversion

The Cyber Workforce

The cyber workforce is expanding rapidly Services are forming various kinds of cyber teams USCYBERCOM provided guidance that this

workforce should be 80% military Service policies vary, but some meet or exceed

the 80% guidance Most cyber work is done in CONUS offices We are examining the extent to which the

positions are military-essential Savings may be possible. Training costs may be

high and retention difficult 24 June 2014 10

Selected Infrastructure Areas

Army usually has the highest fraction of civilians relative to military Moving all Services to same ratio as the highest Service could save $1.6B/year Examine rationales for military personnel; e.g., sea-shore rotation

11

0

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25000

30000

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Air Force Army Marines Navy

Departmental ManagementCiv

Departmental ManagementAD

Central Training Force Installations

Personnel Admin. Departmental Mgmt.

24 June 2014

Conclusions

Since 2000 we have been substituting civilians for military personnel

It likely saved a good deal of money There is strong, continuing pressure to reduce the

use of civilians in DoD under any circumstances. This is misguided

There are opportunities for further civilianization in the medical area, in other infrastructure activities, and probably in the cyber workforce

Fairly modest increases in civilianization would save several billion dollars a year – CBO agrees

24 June 2014 12

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