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	Background

The Constitution provides Congress with broad powers over the Armed Forces, including the power "to raise and support Armies," "to provide and maintain a Navy," and "to make Rules for the Government and Regulation of the land and naval Forces." It also provides the Senate with the authority to provide "Advice and Consent" on presidential nominations of "all other Officers of the United States," which includes military officers. On the basis of its constitutional authority, Congress has passed a number of laws which govern important aspects of military officer personnel management, including appointments, assignments, grade structure, promotions, and separations.
The most senior officers in the Army, Air Force, and Marine Corps are known as general officers. The most senior officers in the Navy are known as flag officers. The phrase "general and flag officers" or "GFO" refers to all officers in paygrades O-7 through O-10, thereby including one-star, two-star, three-star, and four-star officers. At the highest level, O-10, GFOs hold the most visible and important military positions in the Department of Defense, including the Chairman of the Joint Chiefs of Staff, the chiefs of the four military services, and the combatant commanders. At the lowest level, O-7, they hold positions that span an array of roles, including commanders, deputy commanders, and key staff roles in large organizations.
This report provides an overview of active duty GFOs in the United States Armed Forces—including authorizations, duties, and compensation—historical trends in the proportion of GFOs relative to the total force, criticisms and justifications of GFO to total force proportions, and statutory controls. National Guard and Reserve GFOs are not addressed in this report, unless they are serving on active duty in a manner that counts against the active duty caps on GFOs.
Given the authority granted to general and flag officers, Congress has developed a statutory framework applicable to this elite group, and considers changes to these laws as it deems appropriate. Congress also periodically reviews the number, duties, and compensation of GFOs. A frequent tension during these reviews has been DOD requests for additional GFOs versus congressional concerns that there are too many GFOs. As one senior DOD official noted during a 1997 congressional hearing:
throughout our history there has been a dialogue, just as is going on now, that has ebbed and flowed between the Congress and the military on the number of general and flag officers we need.... I think it is fair to say that over the years, the Congress has consistently taken the view that we have needed fewer general and flag officers, and that we have taken the opposite view, that we needed more than the Congress would allow. These debates tended to intensify during periods of major downsizing and restructuring of our forces, such as after World War II, the Korean War, the Vietnam War, and now after the cold war.
References in this report to specific grades (ranks) within the general and flag officer corps will use the appropriate capitalized title, insignia, or paygrade as indicated in Table 1 .

		Current Number of General and Flag Officers

As of November 1, 2018, there were 920 active duty GFOs, of which 891 were subject to the statutory caps and 29 were exempt from the statutory caps. Distribution by grade and service is summarized in Table 2 . The 891 GFOS subject to the statutory caps is lower than the maximum of 963 authorized in statute (see " Current Grade Limits " later in this report). This is in accord with an intentional decision made by DOD in 2011 as part of an efficiency initiative directed by then-Secretary of Defense Robert Gates. By keeping GFO numbers substantially below the maximum authorized, this policy provides DOD flexibility to respond to new requirements for GFOs without the delays caused by the need to find an "offset" by downgrading or eliminating another GFO position.

		Responsibilities of General and Flag Officer Positions

While Congress has specified functions or duties for some key positions—such as members of the Joint Chiefs of Staff, the Combatant Commanders, the top two officers of each service, the Commander of U.S. Special Operations Command, and the Chief of the National Guard Bureau —the great majority of GFO positions are not defined in statute. In these instances DOD uses the following criteria for determining whether a position should be filled by a general or flag officer:
Nature, characteristics, and function of the position; Grade and position of superior, principal subordinates, and lateral points of coordination; Degree of independence of operation; Official relations with other U.S. and foreign governmental positions; Magnitude of responsibilities; Mission and special requirements; Number, type, and value of resources managed and employed; Forces, personnel, value of equipment, total obligation authority; Geographic area of responsibility; Authority to make decisions and commit resources; Development of policy; National commitment to international agreements; Impact on national security and other national interests; and Effect on the prestige of the nation or the armed force

		Historical Changes in General and Flag Officer Levels

A summary of the number of active duty GFOs and the proportion of GFOs relative to the total force over the past five decades is provided in Table 3 . A review of GFO levels indicates an 11% increase in the number of four-star officers (36 on September 30, 1965 vs. 40 on September 30, 2018) and a 24% increase in the number of three-star officers (119 vs. 147). At the same time, the number of one-star and two-star officers has decreased by about 35% (1,129 vs. 734).
However, during this time period, the size of the total force was cut roughly in half, dropping from 2.66 million on September 30, 1965, to 1.32 million on September 30, 2018. Thus, a more salient measure may be the proportion of GFOs to the total force. Looking at the data from this perspective, it is clear that while GFOs have always made up a very small percentage of the total force, the general and flag officer corps has increased as a percentage of the total force over the past five decades. GFOs made up about one-twentieth of one percent (0.048%) of the total force in 1965, while they made up about one-fifteenth of one percent (0.070%) of the total force in 2018, indicating that the share of the total force made up of GFOs increased by 46%. This historical trend is more pronounced with respect to four-star officers (which grew from 0.0014% of the total force to 0.0030%, a 114% increase) and three-star officers (which grew from 0.0045% of the total force to 0.0112%, a 149% increase). One- and two-star officers as a percentage of the total force increased less rapidly (from 0.0425% of the total force to 0.0557%, a 31% increase).
These increases occurred at the same time that the size of the officer corps in general was increasing as a percentage of the total force. As indicated in the last column of Table 3 , between 1965 and 2018, the officer corps increased from 12.76% of the total force in 1965 to 17.51% in 2018, indicating that the share of the total force made up of officers increased by 37%.

		Criticisms of the Increasing Proportion of GFOs

There have been two principal criticisms raised against the increasing proportion of GFOs relative the total force. The first criticism revolves around the increased cost of employing a GFO in comparison to a lower ranking officer. The second relates to the belief that too many GFOs slow down decisionmaking processes. Each point is explained in more detail below.
Cost . GFOs cost more to employ than officers of a lower rank. In part, this is due to the higher compensation they receive. For example, the average GFO in paygrade O-7 receives $204,405 in regular military compensation 14 in 2019, while the average officer in paygrade O-6 receives $180,709. Additionally, there can be other costs associated with GFOs, particularly at higher grades, such as the costs of larger staffs, official travel, security details, and aides. An example of this perspective was provided by a witness at a 2011 congressional hearing, who stated "The progression towards a more top-heavy force is not without its consequences.... The cost of officers increases markedly with their rank, so taxpayers are overpaying whenever a G/FO is in a position that could be filled by a lower ranking officer." Decision making . Another criticism is that an increasing proportion of GFOs slows down decisionmaking by adding additional layers of management between the highest echelons of command and the lowest. In a 2010 speech, former Secretary of Defense Robert Gates criticized the impact of an increase in GFOs and senior civilians in making the Department of Defense a top-heavy and overly bureaucratic organization:
During the 1990s, the military saw deep cuts in overall force structure—the Army by nearly 40 percent. But the reduction in flag officers—generals and admirals—was about half that. The Department's management layers—civilian and military—and numbers of senior executives outside the services grew during that same period. Almost a decade ago, Secretary Rumsfeld lamented that there were 17 levels of staff between him and a line officer. The Defense Business Board recently estimated that in some cases the gap between me and an action officer may be as high as 30 layers.... Consider that a request for a dog-handling team in Afghanistan—or for any other unit—has to go through no fewer than five four-star headquarters in order to be processed, validated, and eventually dealt with. This during an era when more and more responsibility—including decisions with strategic consequences—is being exercised by young captains and colonels on the battlefield.

		Justifications for Increasing Proportion of GFOs

The increasing proportion of GFOs in comparison to the total force has been a topic of particular interest during past congressional hearings. During these hearings, and particularly during a 1997 congressional review of GFO authorizations, witnesses from the Department of Defense put forth a number of rationales for this growth, including the following:
Joint requirements . One frequently cited cause of the increasing ratio of GFOs during past congressional hearings has been the increase in "joint" requirements that followed enactment of the Goldwater-Nichols Act (GNA) in 1986. While removing the Chairman of the Joint Chiefs of Staff from the chain of command, GNA enhanced the authority of the Chairman in other ways; significantly increased the roles and authorities of commanders of the joint Combatant Commands; and emphasized joint duty assignments for officers. These new institutional arrangements led to the creation of more joint GFO positions and powerful career incentives to serve in those positions. Testifying before Congress in 1997, the Vice Director of the Joint Staff emphasized how the growth of joint organizations affected the proportion of GFOs to the total force: "There is really no law of proportionality here when you talk about joint growth. If you think about it, sir, where we have been since 1980, we stood up CENTCOM, SOCOM, Space Command; we have reorganized to form ACOM, TRANSCOM, [and] STRATCOM." Since then, additional joint headquarters have been established, to include U.S. Northern Command (established in 2002), Joint Task Force Guantanamo (established 2002), Combined Joint Task Force Horn of Africa (established 2002), U.S. Africa Command (2007), and U.S. Cyber Command (2009). Coalition Operations . Another rationale used to explain the increased proportion of GFOs has been an increased emphasis by the United States on forging coalitions with other nations to achieve common security objectives. This has, in turn, generated a demand for senior military leaders to conduct coordinated planning, training, and operations with their peers from foreign nations. The argument is also linked to the number of contingency operations the U.S. military has conducted since the end of the Cold War, which have often involved forces from dozens of countries, including the forces of the nation in which the operations take place. Examples of these coalition operations include Iraq and Afghanistan as well as smaller-scale contingencies such as Bosnia, Haiti, and Kosovo (ongoing). Contingency operations such as these are commanded by a GFO, who usually has additional GFOs as subordinate commanders and senior staff officers. Both their experience and the authority inherent in their grade can be considered important elements to the success of complex operations. Political and diplomatic considerations can also be a factor, as the officers leading these operations are normally expected to interact with the senior military and civilian leadership of the foreign nation where the operations are occurring. Organizational structure . As noted previously, the increase in the proportion of GFOs over the past 50 years has not been due to an increase in the number of GFOs, which has gone down in this time period, but to the much larger decrease in the size of the Armed Forces in general. In part, this slower reduction is due to the organizational structure of the Armed Forces, which includes certain GFO positions whether the Armed Forces are comparatively large or small. For example, there was a Chief of Staff of the Air Force at the peak of the Vietnam War, when the Air Force had about 900,000 airmen, and there is one today, when the Air Force has approximately 325,000 airmen. A similar case can be made for many of the GFOs who serve on the Joint Staff, the Service Staffs, the Combatant Commands, and certain defense agencies. Given the organizational structure of the Armed Forces—some of which is required by law—the amount of management "overhead" does not necessarily change in direct proportion to the size of the force. Another way of illustrating this is to consider what would happen if an Army division were disestablished: doing so would eliminate about 15,000 soldiers, but only three of them would be general officers. Technological changes . A fourth justification for increased GFO ratios is that technological advances have changed the way the United States fights its wars. Modern weapons systems, much more powerful and accurate than their predecessors, require fewer personnel to deliver greater firepower. Thus, while the number of personnel a GFO commands may decline as more sophisticated equipment is substituted for manpower, the lethality of those forces may increase. From this perspective, the lethality of the weapons systems, rather than the number of people, provides the justification for an organization to be led by a very senior military officer. Additionally, the advent and development of new domains of warfare—such as space and cyber—has led to the creation of new organizations to exploit advantages and defend against vulnerabilities in those environments.

	Regular Military Compensation for General and Flag Officers

There are three main ways in which military personnel, including general and flag officers, are compensated: cash compensation (pay and allowances), non-cash compensation (benefits), and deferred compensation (retired pay and benefits). In this report, only the compensation elements which make up r egular m ilitary c ompensation will be discussed.

		An Overview of Regular Military Compensation

Regular Military Compensation (RMC) is a statutorily defined measure of the major compensation elements which every servicemember receives. It is widely used as a basic measure of military cash compensation levels and for comparisons with civilian salary levels. RMC, as defined in law, is "the total of the following elements that a member of the uniformed services accrues or receives, directly or indirectly, in cash or in kind every payday: basic pay, basic allowance for housing, basic allowance for subsistence, and Federal tax advantage accruing to the aforementioned allowances because they are not subject to Federal income tax." These elements are described in more detail in the Appendix . Certain GFOs receive a "personal money allowance" as well. This is not part of RMC, but is described in a footnote below. Congress included provisions in recent National Defense Authorization Acts to deny GFOs any increase in basic pay during calendar years 2015 and 2016.

		Regular Military Compensation for General and Flag Officers

 Table 4 provides the average RMC that general and flag officers received in 2019. It assumes that all GFOs receive BAH, rather than living in government provided housing.

	Statutory Controls on GFOs

Congress has established a statutory framework for GFOs which limits their numbers by grade, requires presidential determination of many three-star and four-star positions, and specifies the grade and/or duties of certain key positions. This framework provides for greater congressional control over the most senior GFO positions, while providing substantial latitude to the executive branch in the management of the remaining GFOs.

		Current Grade Limits

Sections 525 and 526 of Title 10 establish the number of general and flag officers that may be on active duty in the Army, Navy, Air Force, and Marine Corps. The two provisions establish separate caps for each service and for the joint community. There are certain circumstances under which a general or flag officer does not "count" against these caps. Additionally, the President has authority under 10 U.S.C. §527 to suspend the operation of the caps in time of war or national emergency declared by the Congress or the President.
 Table 5 summarizes the statutory limitations by grade for GFOs for service-specific positions. Table 6 summarizes the statutory limitations for GFOs service in Joint positions. Combining the maximum number of service and joint GFO authorizations, the maximum number of GFO positions authorized is currently 963. The current number of active duty GFOs subject to the statutory caps is 891. There are another 29 active duty GFOs who are not subject to the statutory caps. (See " Current Number of General and Flag Officers " earlier in the report.)

		Grade Limits after December 31, 2022

The FY2017 National Defense Authorization Act included a provision, codified at 10 U.S.C. §526a, to reduce the number of GFOs authorized to be on active duty. The conference report that accompanied the bill highlighted congressional concerns that the military departments had not demonstrated a willingness to implement GFO reductions directed by then-Secretary of Defense Robert Gates in 2011 and, furthermore, noted the context of significant reductions in personnel strength that occurred in the 2011-2016 time frame. Starting in 2023, §526a will lower the number of GFOs that may be on active duty to a maximum of 620 for Service positions and 232 for Joint positions, a reduction of 111 from the current number of GFO positions authorized by 10 U.S.C. §526.

		Presidential Determination for Three-Star and Four-Star positions

Section 601 of Title 10 provides that "[t]he President may designate positions of importance and responsibility to carry the grade of general or admiral or lieutenant general or vice admiral.... An officer assigned to any such position has the grade specified for that position if he is appointed to that grade by the President with the advice and consent of the Senate." Thus, with the exception of those so designated in statute, all three-star and four-star positions must be designated as such by the President. Congress can review the rationale for this designation as part of its oversight function, and the Senate retains the power to confirm or reject the nomination of an individual to fill such a position. The authority of the President to designate such positions is also limited by the strength caps on general and flag officers found in 10 U.S.C. §§525 and 526.

		Statutorily Defined Positions

Congress has established a number of GFO positions in law which carry designated grades, designated duties, or both.

			Statutory Grades

Congress has specified the grade for a number of key positions. For example, 10 U.S.C. §152 specifies that the Chairman of the Joint Chiefs of Staff holds the rank of General or Admiral. Similar language also exists for the Vice Chairman of the Joint Chiefs of Staff, the top two officers of each service, the Commander of U.S. Special Operations Command, and the Chief of the National Guard Bureau. Table 7 highlights some positions with statutorily required grades. Congress sometimes changes these statutory grades. For example, in 2008, Congress increased the grade of the Chief of the National Guard Bureau from Lieutenant General to General. Additionally, Section 502 of the FY2017 National Defense Authorization Act amended various statutory provisions to eliminate the statutory grade for 54 positions. As explained in the report that accompanied the Senate version of the FY2017 National Defense Authorization Act, where the provision originated:
The Committee determined that in order to effectively manage the reduction in the number of general and flag officers prescribed elsewhere in this Act, that the Secretary of Defense must be given the flexibility to assign appropriate officer grades to positions. The provision would not prohibit the position from being filled by an officer with the same, or a higher, or lower grade than the law currently requires.

			Statutory Duties

Positions with statutorily required grades typically have statutorily required duties as well. Table 7 provides excerpts of the statutorily required responsibilities, duties, or functions of certain GFO positions. Congress sometimes changes these duties. For example, in 2011, Congress changed the law to specify that the Chief of the National Guard Bureau was a member of the Joint Chiefs of Staff whose duties included "the specific responsibility of addressing matters involving non-Federalized National Guard forces in support of homeland defense and civil support missions."

	Considerations for Congress

Congress has a long-standing interest in the military officer corps in general, and has periodically focused additional attention on its most senior officers. Should Congress elect to address GFO authorizations, duties, compensation, or other related topics in more detail, it may wish to consider the following:
What is the most appropriate way to determine how many GFOs the Department of Defense should have? How closely should this be linked to total force size? What other factors would be useful in determining what the right number of GFOs is? How do advances in information technology and decisionmaking tools impact the need for GFOs? Could use of these technologies result in flattened management structures and decrease the need for GFOs? Should Congress modify the current statutory framework that governs GFOs? Should it modify the caps set out in 10 U.S.C. §§525, 526, and 526a? To what extent do other statutory requirements, such as the Goldwater-Nichols Act (GNA), drive GFO requirements? Should GNA be revised to alter this effect? Could organizational restructuring of the Joint Staff and Service Staffs decrease the need for GFOs, or allow positions to be held by lower graded GFOs? Could certain organizations be merged to reduce the requirements for GFOs? Could military relations with international partners be restructured so as to lessen the need for GFO representation? How important is rank equivalence when senior U.S. military personnel work with their allied peers? Could National Guard and Reserve GFOs be used to reduce the need for active duty GFOs? Are there GFO positions that could be eliminated or "downgraded" to a lower rank? Are there GFO positions that could be replaced by civilian employees? What are the costs and benefits associated with these actions? How might this impact military effectiveness? Can the direct and indirect costs associated with GFOs be reduced? For example, could compensation or staff costs be reduced without significantly affecting the ability of GFOs to carry out their duties?

		Appendix. Elements of Regular Military Compensation

Regular Military Compensation (RMC), as defined in law, is "the total of the following elements that a member of the uniformed services accrues or receives, directly or indirectly, in cash or in kind every payday: basic pay, basic allowance for housing, basic allowance for subsistence, and Federal tax advantage accruing to the aforementioned allowances because they are not subject to Federal income tax." Each of these elements is described below.
Basic Pay
All members of the Armed Forces receive basic pay, although the amount varies by pay grade (rank) and years of service (also called longevity). For most servicemembers, basic pay is the largest element of the compensation they receive in their paycheck and typically accounts for about two-thirds of an individual's RMC. It is roughly analogous to civilian salary.
Basic Allowance for Housing
All servicemembers living in the United States are entitled to either government-provided housing or a housing allowance, known as basic allowance for housing (BAH). About 17% of GFOs living in the United States receive government-provided housing with the remainder receiving BAH to offset the costs of the housing they rent or purchase in the civilian economy. The amount of BAH a servicemember receives is based on three factors: paygrade (rank), geographic location, and whether or not the servicemember has dependents. However, there is no increase in BAH after paygrade O-7. Therefore, the amount of BAH for GFOs does not vary by rank, but only by locality and dependency status.
Paygrade and dependency status are used to determine the type of accommodation—or "housing profile"—that would be appropriate for the servicemember (for example, one-bedroom apartment, two-bedroom townhouse, or three-bedroom single family home). Geographic location is used to determine the average costs associated with each of these housing profiles. The average costs of these housing profiles are the basis for BAH rates. As a result of this methodology, BAH rates are much higher in some areas than others, but servicemembers of similar paygrade and dependent status should be able to pay for roughly comparable housing regardless of their duty location.
Basic Allowance for Subsistence
Nearly all servicemembers receive a monthly payment to defray their personal food costs. This is known as basic allowance for subsistence (BAS). BAS is provided at a flat rate, with separate rates for officers and enlisted personnel. In 2019, all officers, including GFOs, received $254.39 a month.
Federal Tax Advantage
Military allowances are generally not considered part of gross income and are not subject to federal income tax, thus generating a tax benefit for servicemembers. RMC considers only the federal income tax advantage provided by the exemption of housing and subsistence allowances from gross income. The precise value of the federal tax advantage for an individual servicemember will vary depending on his or her unique tax situation.

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In the exercise of its constitutional authority over the Armed Forces, Congress has enacted an array of laws which govern important aspects of military officer personnel management, including appointments, assignments, grade structure, promotions, and separations. Some of these laws are directed specifically at the most senior military officers, known as general and flag officers (GFOs). Congress periodically reviews these laws and considers changes as it deems appropriate. Areas of congressional interest have included the number of GFOs authorized, the proportion of GFOs to the total force, compensation levels of GFOs, and duties and grades of certain GFOs.
As of November 1, 2018, there were 891 active duty GFOs subject to statutory caps, which is 72 less than the maximum of 963 authorized by law. There were also another 29 exempt from the statutory caps. The current number is about average for the post-Cold War era, though substantially lower than the number of GFOs in the 1960s-1980s, when the Armed Forces were much larger in size than they are today. However, while always very small in comparison to the total force, the general and flag officer corps has increased as a percentage of the total force over the past five decades. GFOs made up about one-twentieth of one percent (0.048%) of the total force in 1965, while they made up about one-fifteenth of one percent (0.069%) of the total force in 2018, indicating that the share of the total force made up of GFOs increased by 44%. Some argue that this increased proportion of GFOs is wasteful and contributes to more bureaucratic decisionmaking processes. Others counter that the increased proportion is linked to the military's greater emphasis on joint and coalition operations, core organizational requirements, and the increasing use of advanced technologies.
Compensation for GFOs varies. One commonly used measure of compensation, known as regular military compensation (RMC), includes basic pay, basic allowance for housing, basic allowance for subsistence, and the federal tax advantage associated with allowances, which are exempt from federal income tax. In 2019, the lowest-ranking GFOs make about $204,000 per year in RMC, while the highest-ranking GFOs make about $238,000 per year.
Congress has also used its authority to specify the grade and duties of certain GFO positions. For example, Congress increased the grade of the Chief of the National Guard Bureau (CNGB) from Lieutenant General to General in 2008. Three years later, Congress again changed the law to specify that the CNGB was a member of the Joint Chiefs of Staff whose duties included "the specific responsibility of addressing matters involving non-Federalized National Guard forces in support of homeland defense and civil support missions." In 2016, Congress removed the statutory grade requirement from 54 GFO positions.
This report provides an overview of active duty GFOs in the United States Armed Forces—including authorizations, duties, and compensation—historical trends in the proportion of GFOs relative to the total force, criticisms and justifications of GFO to total force proportions, and statutory controls. National Guard and Reserve GFOs are not addressed in this report, unless they are serving on active duty in a manner that counts against the active duty caps on GFOs.


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	DOD Has Established 10 Cross-Functional Teams That Are in Various Stages of Implementation

DOD has established 10 cross-functional teams that OCMO officials  consider responsive to section 911, and these teams are in various  stages of implementation. The Secretary of Defense established a cross- functional team to manage the transfer of background investigations for  DOD personnel security clearances from the Office of Personnel  Management to DOD. This team is required to report directly to the  Secretary. In addition, the Deputy Secretary of Defense established 9  additional cross-functional teams to implement reform initiatives for  improving DOD’s business operations. These teams report to the CMO.

		DOD Is in the Early Stages of Establishing a Cross-Functional Team to Manage the Transfer of Background Investigations to DOD

In August 2017, the Secretary of Defense issued a memorandum  authorizing its first cross-functional team in response to section 911 to  address challenges with personnel vetting and background investigation  programs. The memorandum notes that a backlog of background  investigations affects DOD’s mission readiness, critical programs, and  operations. According to the memorandum, this cross-functional team will  conduct a full review of current personnel vetting processes to identify a  redesigned process for DOD’s security, suitability and fitness, and  credential vetting. The cross-functional team’s objectives are to develop  options and recommendations to mitigate shortcomings, ensure  necessary resourcing, and transform the personnel vetting enterprise.  The Office of the Under Secretary of Defense for Intelligence and the  Defense Security Service are leading the efforts to establish the team.
Since we last reported on DOD’s efforts to establish the team, DOD has  taken some steps, such as assigning some team members, but has not  completed other key steps to staff and establish a direction for the team.  In February 2018, we reported that DOD had selected an interim leader  for the team. As of May 2018, this person, a non-Senior Executive  Service individual from the Defense Security Service, was still serving as  the interim leader. Section 911 requires DOD to assign a senior qualified  and experienced individual as the leader of the team. According to Office  of the Under Secretary of Defense for Intelligence officials, the  department plans to seek nominations from DOD components for a  permanent leader from the Senior Executive Service, but does not have a  specific timeframe for doing so. DOD also assigned seven full-time  personnel to the team, who are now co-located, in accordance with  requirements under section 911. These personnel are from the Army,  Defense Civilian Personnel Advisory Service, DOD Consolidated  Adjudications Facility, OCMO, Office of the Under Secretary of Defense  for Intelligence, and MITRE Corporation. Office of the Under Secretary of  Defense for Intelligence officials estimated that the team may have 20  members when it is fully staffed, but they did not have an estimate of  when DOD will assign the remaining team members.
In addition, the Office of the Under Secretary of Defense for Intelligence  has established priorities for the cross-functional team. For example, the  team is required to prepare a project plan incorporating all key  components for a DOD enterprise vetting mission—including key  milestones, specific objectives, performance metrics, a resourcing plan,  and an action plan for tracking key initiatives—which are key steps for  establishing the team’s direction. According to Office of the Under  Secretary of Defense for Intelligence officials, as of May 2018, the interim  leader was outlining a project plan. Filling key leadership and staff  positions will be important for ensuring that the team has the knowledge  and expertise from components across the department to effectively  develop and implement the plan.

		DOD Has Established 9 Cross-Functional Teams to Improve DOD’s Business Operations

The Deputy Secretary of Defense has established 9 additional cross- functional teams since October 2017 to implement reform initiatives  intended to improve the quality and productivity of the department’s  business operations, including moving toward more use of enterprise  services. According to the memoranda appointing the team leaders,  these teams support the Secretary of Defense’s focus on creating a more  lethal and effective force by allowing the department to reallocate  resources from business operations to readiness and to recapitalization of  the combat force. OCMO officials stated that they consider these teams  to be responsive to section 911 of the NDAA for Fiscal Year 2017.
Section 911 requires DOD to assign senior qualified and experienced  individuals to lead the teams, and the Deputy Secretary of Defense  generally appointed senior DOD officials as leaders. Seven leaders  were appointed in October 2017, one in November 2017, and one in  January 2018. According to OCMO officials, these leaders report to the  CMO. As of May 2018, the size of the teams ranged from 5 to 12  members; OCMO officials stated that the size of the teams can vary  based on the knowledge and expertise the team needs to implement its  initiatives. The teams include representatives from the military  departments, functional organizations relevant to the reform topic, and  external experts. According to OCMO officials, the team leaders chose  their team members from candidates proposed by the military  departments and functional organizations. In addition, the members may  be assigned on a full-time or part-time basis, and all of the teams have  co-located space. Figure 1 provides additional details on the structure of  these 9 teams.
OCMO officials stated that these 9 teams are in various stages of  implementing their initiatives. For example, the Human Resources team  was the most recent team to be established, and OCMO officials stated  the team is in the process of finalizing the identification and beginning the  implementation of its reform initiatives. Other teams, such as the  Financial Management and Information Technology and Business  Systems teams, have identified and are in the process of implementing  initiatives related to their reform areas.
DOD established the Reform Management Group to identify opportunities  for reform and provide support to these 9 cross-functional teams. Chaired  by the Deputy Secretary of Defense and facilitated by the CMO and  Director of Cost Assessment and Program Evaluation, the Reform  Management Group provides oversight and guidance, makes decisions  on team recommendations, and monitors the teams’ progress, according  to OCMO officials. These officials also told us that the Reform  Management Group holds weekly meetings to discuss the status of the  reform teams’ efforts and provides monthly comprehensive reports on  these efforts to the Secretary of Defense.

	DOD Has Not Issued Its Organizational Strategy That Outlines Steps for Advancing a Collaborative Culture

OCMO has drafted an organizational strategy, but DOD has not issued  the strategy, which section 911 required to be completed by September 1,  2017. OCMO officials told us that they have not completed the strategy  because they want to align it with the National Defense Strategy, which  was issued in January 2018, and the National Defense Business  Operations Plan, which was issued in May 2018. OCMO officials told us  that, once the organizational strategy is reviewed internally to align with  the National Defense Strategy and the National Defense Business  Operations Plan, the CMO plans to coordinate the review and approval of  the strategy across components within the department. We previously  recommended, and DOD concurred, that the CMO should obtain input on  the development of the strategy from key stakeholders, such as the  military departments and defense agencies. The officials estimated that  DOD components would have about 2 to 3 weeks to provide input on the  strategy and that the strategy could be issued as early as July 2018.
We found that, consistent with our recent recommendations, a revised  version of the draft organizational strategy addresses the requirements in  section 911, including outlining steps for advancing a collaborative culture  within the department. In February 2018, we found that the August 2017  version of the draft organizational strategy that we reviewed addressed  the two required elements under section 911, but did not outline how it  would achieve several future outcomes that advance a collaborative  culture within the department, as required by the NDAA. We  recommended, and DOD concurred, that the CMO should revise the  organizational strategy to outline how it would achieve these outcomes  and, in doing so, should consider our nine leading practices on mergers  and organizational transformations.
Based on our review of a February 2018 version of the draft  organizational strategy, we found that OCMO officials have taken steps to  address our recommendation, including identifying potential action steps  for the department that align with each of the nine leading practices. For  example, consistent with the leading practice for establishing a coherent  mission and integrated strategic goals to guide the transformation, OCMO  officials revised the draft strategy to propose that the CMO, in  coordination with stakeholders, could develop an implementation plan  with detailed initiatives for increasing collaboration and information  sharing across the department. According to the draft strategy, this plan  could include goals and milestones for these initiatives, and the CMO  could report periodically on the achievement of the goals. Further,  consistent with the leading practice to involve employees to obtain their ideas and gain their ownership for the transformation, OCMO officials  proposed that a representative from OCMO could chair an action officer- level governance body to plan and share performance information related  to this effort. According to the draft strategy, this governance body would  solicit feedback about the related changes, propose changes to new  policies and procedures based on the feedback, and manage the  implementation and tracking of the established goals. Issuing the  organizational strategy—in accordance with section 911 and our prior  recommendation—will better position DOD to advance a collaborative  culture.

	DOD Has Not Implemented Training or Issued Guidance for Its Cross- Functional Teams or Provided Training to Presidential Appointees

DOD has not fulfilled three related requirements of section 911 to guide  the implementation of its cross-functional teams, namely to (1) provide  training to cross-functional team members and their supervisors, (2) issue  guidance on cross-functional teams, and (3) provide training to  presidential appointees. OCMO officials stated that they plan to send the  guidance and training curricula to the Secretary of Defense for review and  approval after the organizational strategy is issued. Table 1 shows the  three requirements of section 911, the due dates, and the status of DOD  actions, if any, as of May 2018.

		DOD Has Not Implemented Training or Issued Guidance for Its Cross-Functional Teams

As of May 2018, OCMO had developed a draft training curriculum for  cross-functional team members and their supervisors, but had not  provided the required training. In February 2018, we reported that the  draft training curriculum addressed all requirements in section 911.  OCMO officials stated that after the Secretary of Defense reviews and  approves the training curriculum, which will occur after the organizational  strategy is issued, they will provide training to the members of the cross- functional team on personnel vetting for background investigations and to  the 9 teams implementing reform initiatives.
OCMO has also drafted guidance on cross-functional teams, but DOD  has not issued the guidance and did not meet the statutorily-required date  of September 30, 2017. Section 911 requires the guidance to address  areas such as the decision-making authority of the teams and key  practices that senior leaders should follow with regard to leadership,  organizational practice, collaboration, and the functioning of cross- functional teams. In February 2018, we reported that OCMO had  developed draft guidance for cross-functional teams that addressed six of  seven statutorily-required elements and incorporated five of eight leading  practices for effective cross-functional teams that we identified in prior  work. We recommended, and DOD concurred, that the CMO should  fully address all requirements in section 911 and incorporate these  leading practices into the guidance. DOD has taken steps to address our  recommendation. For example, consistent with the practice for open and  regular communication, OCMO revised the guidance to state that the  cross-functional team leaders and OCMO will encourage and facilitate  continuous communication and information sharing. According to the  revised guidance, the team leaders and OCMO will accomplish this  through co-location of team members, management practices by cross- functional team leaders that promote a unified team culture and trust, and  use of collaborative information technology tools maintained by OCMO.  However, as of May 2018, DOD had not issued the guidance. As we  reported in February 2018, without initial guidance that fully addresses  the required statutory elements in section 911 and incorporates our  leading practices, DOD’s cross-functional teams may not be able to  consistently and effectively pursue the Secretary of Defense’s strategic  objectives or further promote a collaborative culture within the  department.

		Over Two-Thirds of Presidential Appointees in the Office of the Secretary of Defense Have Been Appointed, but None Have Received Required Training or Waivers

OCMO has developed a draft training curriculum for individuals filling  presidentially-appointed, Senate-confirmed positions in the Office of the  Secretary of Defense. However, as of May 2018, DOD had filled 26 of 36  such positions, and none had received the training or been granted a  training waiver. Further, section 911 requires these individuals to  complete the training within 3 months of their appointment, but 22 have  been in their positions longer than 3 months, as shown in figure 2.
In February 2018, we reported that the draft curriculum addressed only  one of the four required elements in section 911. Specifically, we found  that the draft curriculum addressed the required statutory element for  training on the operation of cross-functional teams, but did not incorporate  the required statutory elements for leadership, modern organizational  practice, or collaboration. We recommended, and DOD concurred, that  the CMO should either (1) provide training that includes all of the required  elements in section 911 or (2) develop criteria for obtaining a waiver and  have the Secretary of Defense request such a waiver from the President  for these required elements if the individual possesses—through training  and experience—the skill and knowledge otherwise to be provided  through a course of instruction. Once the training curriculum is reviewed  and approved by the Secretary of Defense, which will occur after the  organizational strategy is issued, OCMO officials plan to provide the  training on the operation of cross-functional teams to the presidential  appointees. These officials stated that DOD plans to develop criteria for  presidential appointees who are eligible for a waiver from the training on  leadership, modern organizational practice, and collaboration, and to  recommend that the Secretary of Defense approve these waivers. Until  DOD finalizes actions on this recommendation, the department may have  difficulty advancing a collaborative culture, as top leadership commitment  is a key practice for a successful organizational transformation.

	Agency Comments

We are not making recommendations in this report. We provided a draft  of this report to DOD for review and comment. DOD concurred with our  report. In addition, DOD provided technical comments, which we  incorporated as appropriate.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, and DOD’s Chief Management  Officer. In addition, the report is available at no charge on our website at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-2775 or FieldE1@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix III.

Appendix I: Prior GAO Reports on the Department of Defense’s Implementation of Section 911 of the National Defense Authorization Act for Fiscal Year 2017

Section 911 of the National Defense Authorization Act (NDAA) for Fiscal  Year 2017 included a provision for us—every 6 months after the date of  enactment on December 23, 2016, through December 31, 2019—to  submit to the defense committees a report setting forth a comprehensive  assessment of the actions that DOD has taken pursuant to section 911  during each 6-month period and cumulatively since the NDAA’s  enactment. We issued our first report in June 2017, and did not make  recommendations. We issued our second report in February 2018, and  made four recommendations to improve DOD’s implementation of section  911. Table 2 identifies the two prior GAO reports on DOD’s  implementation of section 911 and the status of the four  recommendations from our February 2018 report.

Appendix II: Summary of Requirements in Section 911 of the National Defense Authorization Act for Fiscal Year 2017

Section 911 of the National Defense Authorization Act for Fiscal Year  2017 requires the Secretary of Defense to take several actions. Table 3  summarizes some of these requirements, the due date, and the date  completed, if applicable, as of May 2018.

Appendix III: GAO Contact and Staff Acknowledgments

	GAO Contact

	Staff Acknowledgments

In addition to the contact named above, Margaret Best (Assistant  Director), Tracy Barnes, Arkelga Braxton, William Carpluk, Adelle  Dantzler, Michael Holland, William Lamping, Amie Lesser, Ned Malone,  Judy McCloskey, Sheila Miller, Richard Powelson, Terry Richardson, Ron  Schwenn, Jared Sippel, Sarah Veale, and Tina Won Sherman made key  contributions to this report.

Output:
Why GAO Did This Study

DOD continues to confront organizational challenges that hinder collaboration. To address these challenges, section 911 of the NDAA for FY 2017 directed the Secretary of Defense to issue an organizational strategy that identifies critical objectives that span multiple functional boundaries and would benefit from the use of cross-functional teams. Additionally, DOD is to establish cross-functional teams to support this strategy, issue guidance on these teams, and provide training to team members and civilian leaders in the Office of the Secretary of Defense.
The NDAA also included a provision for GAO to periodically assess DOD's actions in response to section 911. This is GAO's third report on the implementation of section 911. It assesses the status of DOD's efforts to (1) establish cross-functional teams, (2) issue an organizational strategy, and (3) issue guidance on cross-functional teams and provide training to team members and Office of the Secretary of Defense leaders.
GAO reviewed documentation on DOD's implementation of its cross-functional teams and DOD's draft organizational strategy, draft guidance on establishing cross-functional teams, and draft training curricula. GAO also interviewed DOD officials on efforts to implement section 911.
GAO is not making new recommendations in this report. DOD concurred and is taking actions to address GAO's previous recommendations on DOD's implementation of section 911. DOD also concurred with the findings in a draft of this report.

What GAO Found

The Department of Defense (DOD) has implemented some statutory requirements in section 911 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017, enacted in December 2016, to address organizational challenges. However, senior leadership has not implemented several requirements intended to support cross-functional teams and promote department-wide collaboration (see table).
DOD has established 10 cross-functional teams, which are in various stages of implementation. Specifically, DOD is in the early stages of establishing one cross-functional team to address the backlog of the department's personnel security clearance background investigations and has assigned an interim leader and seven members to this team. In addition, DOD established 9 cross-functional teams to implement reform initiatives intended to improve the efficiency of the department's business operations. DOD generally appointed senior department officials to lead these teams, and the size of the teams, as of May 2018, ranged from 5 to 12 members.
DOD has drafted, but not issued, an organizational strategy. DOD officials stated that they have not completed the strategy because they want to align it with two department-wide strategy documents—the National Defense Strategy, which was issued in January 2018, and the National Defense Business Operations Plan, which was issued in May 2018.
DOD also has not fulfilled three statutory requirements related to guidance and training for cross-functional teams and civilian leaders in the Office of the Secretary of Defense. Specifically, DOD has not (1) provided training to cross-functional team members, (2) issued guidance on cross-functional teams, or (3) provided training to presidential appointees in the Office of the Secretary of Defense. DOD officials stated that they plan to send the guidance and training curricula to the Secretary of Defense for review and approval after DOD issues the organizational strategy. Fully implementing these requirements and GAO's prior recommendations related to the organizational strategy, guidance, and training, will better position DOD to effectively implement its cross-functional teams and advance a collaborative culture as required by the NDAA.


Input:
	Background

Since January 2017, the Navy has suffered four significant mishaps at  sea that have resulted in serious damage to Navy ships and the loss of  17 sailors (see figure 1). Three of the four at sea mishaps that have  occurred—two collisions and one grounding—have involved ships  homeported overseas in Yokosuka, Japan. Appendix II provides a  summary of major mishaps for Navy ships at sea in fiscal years 2009  through 2017.
The Navy currently has 277 ships, a 17 percent reduction from the 333  ships it had in 1998. Over the past two decades, as the number of Navy  ships has decreased, the number of ships deployed overseas has  remained roughly constant at about 100 ships; consequently, each ship is  being deployed more to maintain the same level of presence. We  reported in September 2016 that the Navy, along with the other military  services, had been reporting persistently low readiness levels. The Navy  attributes these, in part, to the increased deployment lengths needed to  meet the continuing high demand for its aircraft carriers, cruisers,  destroyers, and amphibious ships. For example, the deployment lengths  for carrier strike groups had increased from an average of 6.4 months  during the period of 2008 through 2011 to a less sustainable 9 months for  three carrier strike groups that were deployed in 2015. In 2016, the Navy  extended the deployments of the Harry S Truman and Theodore  Roosevelt Carrier Strike Groups to 8 and 8.5 months, respectively. In  addition, the Navy has had to shorten, eliminate, or defer training and  maintenance periods to support these high deployment rates. These  decisions have resulted in declining ship conditions across the fleet and  have increased the amount of time required for the shipyards to complete  maintenance on these ships. Lengthened maintenance periods, in turn,  compress the time that ships are available for training and operations.

	Ships Homeported Overseas Provide Increased Forward Presence but Train Less, Defer More Maintenance, Degrade Faster, and Cost More to Operate

As we previously reported, to help meet the operational demands using  its existing inventory of ships, the Navy has assigned more of its surface  combatants and amphibious ships to overseas homeports. Since 2006,  the Navy has doubled the percentage of the fleet assigned to overseas  homeports. In 2006, 20 ships were homeported overseas (7 percent of  the fleet); today, 40 ships are homeported overseas (14 percent of the  fleet) in Japan, Spain, Bahrain, and Italy; and an additional destroyer will  be homeported in Yokosuka, Japan in 2018 (see figure 2).
According to the Navy, homeporting ships overseas is an efficient method  for providing forward presence and rapid crisis response. Our prior work  confirms that having ships homeported overseas provides additional  presence, but it comes at a cost. For example, we found in May 2015 that  homeporting ships overseas results in higher operations and support  costs than homeporting ships in the United States. In addition, the  operational schedules the Navy uses for overseas-homeported ships limit  dedicated training and maintenance periods, resulting in difficulty keeping  crews fully trained and ships maintained. In fact, the primary reason that  Navy ships homeported overseas provide more deployed time than ships  homeported in the United States is that the Navy reduces their training  and maintenance periods in order to maximize their operational  availability. Ships homeported overseas do not operate within the  traditional fleet response plan cycles that apply to U.S.-based ships.  Since the ships are in permanent deployment status during their time  homeported overseas, they do not have designated ramp-up and ramp- down maintenance and training periods built into their operational  schedules (see figure 3). Navy officials told us that because the Navy  expects these ships to be operationally available for the maximum  amount of time, their intermediate and depot-level maintenance are  executed through more frequent, shorter maintenance periods or deferred  until after they return to a U.S. homeport—generally after 7 to 10 years  overseas.
In May 2015, we also found that high operational tempo for ships  homeported overseas limits the time for crew training when compared  with training time for ships homeported in the United States. Navy officials  told us that U.S.-based crews are completely qualified and certified prior  to deploying from their U.S. homeports, with few exceptions. In contrast,  the high operational tempo of ships homeported overseas had resulted in  what Navy personnel called a “train on the margins” approach, a  shorthand way to say there was no dedicated training time set aside for  the ships so crews trained while underway or in the limited time between  underway periods. We found that, at the time of our 2015 review, there  were no dedicated training periods built into the operational schedules of  the cruisers, destroyers, and amphibious ships homeported in Yokosuka  and Sasebo, Japan. As a result, these crews did not have all of their  needed training and certifications. We recommended that the Navy  develop and implement a sustainable operational schedule for all ships  homeported overseas. DOD concurred with this recommendation and  reported in 2015 that it had developed revised operational schedules for  all ships homeported overseas. However, when we contacted DOD to  obtain updated information for this testimony, U.S. Pacific Fleet officials  stated that the revised operational schedules for the cruisers and  destroyers homeported in Japan were still under review and had not been  employed. As of June 2017, 37 percent of the warfare certifications for  cruiser and destroyer crews homeported in Japan had expired, and over  two-thirds of the expired certifications—including mobility-seamanship  and air warfare—had been expired for 5 months or more. This represents  more than a fivefold increase in the percentage of expired warfare  certifications for these ships since our May 2015 report. The Navy’s  Surface Force Readiness Manual states that the high operational tempo  and frequent tasking of ships homeported overseas requires that these  ships always be prepared to execute complex operations and notes that  this demand for continuous readiness also means that ships homeported  overseas should maintain maximum training, material condition, and  manning readiness.
With respect to the material condition of the ships, we found in May 2015  that casualty reports—incidents of degraded or out-of-service equipment—nearly doubled over the 2009 through 2014 time frame, and  the condition of overseas-homeported ships decreased even faster than  that of U.S.-based ships (see figure 4). The Navy uses casualty reports to  provide information on the material condition of ships in order to  determine current readiness. For example, casualty report data provide  information on equipment or systems that are degraded or out of service,  the lack of which will affect a ship’s ability to support required mission  areas. In 2015, Navy officials acknowledged an increasing number of  casualty reports on Navy ships and a worsening trend in material ship  condition. They stated that equipment casualties require unscheduled  maintenance and have a negative effect on fleet operations, because  there is an associated capability or capacity loss.
In our May 2015 report, we recommended that the Navy develop a  comprehensive assessment of the long-term costs and risks to its fleet  associated with the Navy’s increasing reliance on overseas homeporting  to meet presence requirements; make any necessary adjustments to its  overseas presence based on this assessment; and reassess these risks  when making future overseas homeporting decisions. DOD concurred  with this recommendation, but, as of August 2017, it has not conducted  an assessment, even though it has continued to increase the number of  ships homeported overseas.

	Size and Composition of Ship Crews May Contribute to Sailor Overwork and Create Readiness and Safety Risks

In the early 2000s, the Navy made several changes to its process for  determining the size and composition of ship crews that may contribute to  sailor overwork and create readiness and safety risks. These changes  were intended to drive down crew sizes in order to save on personnel  costs. However, as we reported in May 2017, these changes were not  substantiated with analysis and may be creating readiness and safety  risks. With fewer sailors operating and maintaining surface ships, the  material condition of the ships declined, and we found that this decline  ultimately contributed to an increase in operating and support costs that  outweighed any savings on personnel (see figure 5). The Navy eventually  reassessed and reversed some of the changes it had made during this  period—known as “optimal manning”—but it continued to use a workweek  standard that does not reflect the actual time sailors spend working and  does not account for in-port workload—both of which may be leading to  sailors being overworked. Additionally, we found that heavy workload  does not end after ships return to port. Crews typically operate with fewer  sailors while in port, so those crew members remaining must cover the  workload of multiple sailors, causing additional strain and potential  overwork.
In 2014, the Navy conducted a study of the standard workweek and  identified significant issues that could negatively affect a crew’s  capabilities to accomplish tasks and maintain the material readiness of  ships, as well as crew safety issues that might result if crews slept less to  accommodate workload that was not accounted for. The Navy study  found that sailors were on duty 108 hours a week, exceeding their weekly  on-duty allocation of 81 hours. This on-duty time included 90 hours of  productive work—20 hours per week more than the 70 hours that are  allotted in the standard workweek. This, in turn, reduced the time  available for rest and resulted in sailors spending less time sleeping than  was allotted, a situation that the study noted could encourage a poor  safety culture. Moving forward, the Navy will likely face manning  challenges, especially given its current difficulty in filling authorized  positions, as it seeks to increase the size of its fleet by as much as 30  percent over its current size. Navy officials stated that even with  manpower requirements that accurately capture all workload, the Navy  will be challenged to fund these positions and fill them with adequately  trained sailors at current personnel levels. Figure 6 shows the Navy’s  projected end strength and fleet size.
In our May 2017 report, we found that the Navy’s guidance does not  require that the factors it uses to calculate manpower requirements be  reassessed periodically or when conditions change, to ensure that these  factors remain valid and that crews are appropriately sized. We made  several recommendations to address this issue, including that the Navy  should (1) reassess the standard workweek, (2) require examination of in- port workload, (3) develop criteria to reassess the factors used in its  manpower requirements process, and (4) update its ship manpower  requirements. DOD concurred with our recommendations, stating that it is  committed to ensuring that the Navy’s manpower requirements are  current and analytically based and will meet the needs of the existing and  future surface fleet. As of August 2017, DOD had not yet taken any  actions to implement these recommendations. We believe that, until the  Navy makes the needed changes, its ships may not have the right  number and skill mix of sailors to maintain readiness and prevent  overworking its sailors.

	The Navy’s Inability to Complete Ship Maintenance on Time Hampers Its Efforts to Rebuild Readiness

To address its persistently low readiness levels, the Navy began  implementing a revised operational schedule in November 2014, which it  referred to as the optimized fleet response plan. This plan seeks to  maximize the employability of the existing fleet while preserving adequate  time for maintenance and training, providing continuity in ship leadership  and carrier strike group assignments, and restoring operational and  personnel tempos to acceptable levels. The Navy’s implementation of the  optimized fleet response plan—and readiness recovery more broadly—is  premised on adherence to deployment, training, and maintenance  schedules.
However, in May 2016, we found that the Navy was having difficulty in  implementing its new schedule as intended. Both the public and private  shipyards were having difficulty completing maintenance on time, owing  primarily to the poor condition of the ships after more than a decade of  heavy use, deferred maintenance, and the Navy’s inability to accurately  predict how much maintenance they would need. We reported that in  2011 through 2014 only 28 percent of scheduled maintenance for surface  combatants was completed on time and just 11 percent was completed  on time for aircraft carriers. We updated these data for the purposes of  this testimony to include maintenance availabilities completed through the  end of fiscal year 2016 and found continued difficulty completing  maintenance on time for key portions of the Navy fleet (see figure 7):
Aircraft Carriers (CVNs): In fiscal years 2011 through 2016,  maintenance overruns on 18 of 21 (86 percent) aircraft carriers  resulted in a total of 1,103 lost operational days—days that ships were  not available for operations—the equivalent of losing the use of 0.5  aircraft carriers each year.
Surface Combatants (DDGs and CGs): In fiscal years 2011 through  2016, maintenance overruns on 107 of 169 (63 percent) surface  combatants resulted in a total of 6,603 lost operational days—the  equivalent of losing the use of 3.0 surface combatants each year.
Submarines (SSNs, SSBNs, and SSGNs): In fiscal years 2011  through 2016, maintenance overruns on 39 of 47 (83 percent)  submarines resulted in a total of 6,220 lost operational days—the  equivalent of losing the use of 2.8 submarines each year.
Navy officials are aware of the challenges faced by both the public and  private shipyards and have taken steps to address the risks these pose to  maintenance schedules, including hiring additional shipyard workers and  improving their maintenance planning processes. However, Navy officials  have told us that it will take time for these changes to bring about a  positive effect. For example, as of May 2016, data on the public  shipyards’ workforce showed that 32 percent of all employees had fewer  than 5 years of experience. According to Navy officials, this workforce  inexperience negatively affects the productivity of the shipyards, and it will  take several years for them to attain full productivity.

	Navy Readiness Rebuilding is Part of a Broader DOD Effort

In September 2016, we found that although DOD has stated that  readiness rebuilding is a priority, implementation and oversight of  department-wide readiness rebuilding efforts did not fully include key  elements of sound planning, and the lack of these elements puts the  overall rebuilding efforts at risk. The Navy states that its overall goal for  readiness recovery is to reach a predictable and sustainable level of  global presence and surge capacity from year to year. The Navy identified  carrier strike groups and amphibious ready groups as key force elements  in its plan for readiness recovery and had set 2020 for reaching a  predictable and sustainable level of global presence and surge capacity  by implementing the optimized fleet response plan. However, we found in  2016 that the Navy faced significant challenges, such as delays in  completing maintenance and emerging demands, in achieving its  readiness recovery goals for carrier strike groups and amphibious ready  groups, and projections show that the Navy will not meet its time frames  for achieving readiness recovery.
As a result, we recommended that DOD and the services establish  comprehensive readiness goals, strategies for implementing them, and  associated metrics that can be used to evaluate whether readiness  recovery efforts are achieving intended outcomes. DOD generally  concurred with our recommendations and, in November 2016, issued  limited guidance to the military services on rebuilding readiness; it has  also started to design a framework to guide the military services in  achieving readiness recovery but has not yet implemented our  recommendations. The Navy has since extended its time frame for  readiness recovery to at least 2021, but it still has not developed specific  benchmarks or interim goals for tracking and reporting on readiness  recovery. Navy officials cited several challenges to rebuilding readiness,  chief among them the continued high demand for its forces, the  unpredictability of funding, and the current difficulty with beginning and  completing ship maintenance on time.
In January 2017, the President directed the Secretary of Defense to  conduct a readiness review and identify actions that can be implemented  in fiscal year 2017 to improve readiness. DOD and Navy officials told us  that, as part of this readiness review, the Navy prioritized immediate  readiness gaps and shortfalls. These officials added that this review  would guide the Navy’s investment decisions in future budget cycles, with  the intention to rebuild readiness and prepare the force for future  conflicts. However, high demand for naval presence will continue to put  pressure on a fleet that is already stretched thin across the globe.  Looking to the future, the Navy has plans to grow its fleet by as much as  30 percent, but it has not yet shown the ability to adequately man,  maintain, and operate the current fleet. These readiness problems need  to be addressed and will require the Navy to implement our  recommendations—particularly in the areas of assessing the risks  associated with overseas basing, reassessing sailor workload and the  factors used to size ship crews, and applying sound planning and  sustained management attention to its readiness rebuilding efforts. In  addition, continued congressional oversight will be needed to ensure that  the Navy demonstrates progress in addressing its maintenance, training,  and other challenges.
Chairmen Wilson and Wittman, Ranking Members Bordallo and Courtney,  and Members of the Subcommittees, this concludes my prepared  statement. I would be pleased to respond to any questions you may have  at this time.

	GAO Contact and Staff Acknowledgements

If you or your staff have questions about this testimony, please contact  John Pendleton, Director, Defense Capabilities and Management at (202)  512-3489 or pendletonj@gao.gov.
Contact points for our offices of Congressional Relations and Public  Affairs may be found on the last page of this statement. GAO staff who  made key contributions to this testimony are Suzanne Wren, Assistant  Director; Steven Banovac, Chris Cronin, Kerri Eisenbach, Joanne  Landesman, Amie Lesser, Tobin McMurdie, Shari Nikoo, Cody  Raysinger, Michael Silver, Grant Sutton, and Chris Watson.

Appendix I: Implementation Status of Prior GAO Recommendations Cited in this Testimony

Over the past three years, we issued several reports related to Navy  readiness cited in this statement. Table 1 summarizes the status of  recommendations made in these reports, which contained a total of 11  recommendations. The Department of Defense generally concurred with  all of these recommendations but has implemented only one of them to  date. For each of the reports, the specific recommendations and their  implementation status are summarized in tables 2 through 4.

Appendix II: Summary of Major Mishaps for Navy Ships at Sea for Fiscal Years 2009 Through 2017, as of August 2017

The Navy defines a class A mishap as one that results in $2 million or  more in damages to government or other property, or a mishap that  resulted in a fatality or permanent total disability. We analyzed data  compiled by the Naval Safety Center for fiscal years 2009 through 2017  to provide a summary of major Navy mishaps at sea (see table 5).

Appendix III: Related GAO Products

Report numbers with a C or RC suffix are Classified. Classified reports  are available to personnel with the proper clearances and need to know,  upon request.
Department of Defense: Actions Needed to Address Five Key Mission  Challenges. GAO-17-369. Washington, D.C.: June 13, 2017.
Military Readiness: Coastal Riverine Force Challenges. GAO-17-462C.  Washington, D.C.: June 13, 2017. (SECRET)
Navy Force Structure: Actions Needed to Ensure Proper Size and  Composition of Ship Crews. GAO-17-413. Washington, D.C.: May 18,  2017.
Military Readiness: DOD’s Readiness Rebuilding Efforts May Be at Risk  without a Comprehensive Plan. GAO-16-841. Washington, D.C.:  September 7, 2016.
Navy and Marine Corps: Services Face Challenges to Rebuilding  Readiness. GAO-16-481RC. Washington, D.C.: May 25, 2016.  (SECRET//NOFORN)
Military Readiness: Progress and Challenges in Implementing the Navy’s  Optimized Fleet Response Plan. GAO-16-466R. Washington, D.C.: May  2, 2016.
Navy Force Structure: Sustainable Plan and Comprehensive Assessment  Needed to Mitigate Long-Term Risks to Ships Assigned to Overseas  Homeports. GAO-15-329. Washington, D.C.: May 29, 2015.
Military Readiness: Navy Needs to Assess Risks to Its Strategy to  Improve Ship Readiness. GAO-12-887. Washington, D.C.: September 21,  2012.
Force Structure: Improved Cost Information and Analysis Needed to  Guide Overseas Military Posture Decisions. GAO-12-711. Washington,  D.C.: June 6, 2012.
Military Readiness: Navy Needs to Reassess Its Metrics and  Assumptions for Ship Crewing Requirements and Training. GAO-10-592.  Washington, D.C.: June 9, 2010.
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.

Output:
Why GAO Did This Study

Since January 2017, the Navy has suffered four significant mishaps at sea that resulted in serious damage to its ships and the loss of 17 sailors. Three of these incidents involved ships homeported in Japan. In response to these incidents, the Chief of Naval Operations ordered an operational pause for all fleets worldwide, and the Vice Chief of Naval Operations directed a comprehensive review of surface fleet operations, stating that these tragic incidents are not limited occurrences but part of a disturbing trend in mishaps involving U.S. ships.
This statement provides information on the effects of homeporting ships overseas, reducing crew size on ships, and not completing maintenance on time on the readiness of the Navy and summarizes GAO recommendations to address the Navy's maintenance, training, and other challenges.
In preparing this statement, GAO relied on previously published work since 2015 related to the readiness of ships homeported overseas, sailor training and workload issues, maintenance challenges, and other issues; GAO updated this information, as appropriate, based on Navy data.

What GAO Found

GAO's prior work shows that the Navy has increased deployment lengths, shortened training periods, and reduced or deferred maintenance to meet high operational demands, which has resulted in declining ship conditions and a worsening trend in overall readiness. The Navy has stated that high demand for presence has put pressure on a fleet that is stretched thin across the globe. Some of the concerns that GAO has highlighted include:
Degraded readiness of ships homeported overseas : Since 2006, the Navy has doubled the number of ships based overseas. Overseas basing provides additional forward presence and rapid crisis response, but GAO found in May 2015 that there were no dedicated training periods built into the operational schedules of the cruisers and destroyers based in Japan. As a result, the crews of these ships did not have all of their needed training and certifications. Based on updated data, GAO found that, as of June 2017, 37 percent of the warfare certifications for cruiser and destroyer crews based in Japan—including certifications for seamanship—had expired. This represents more than a fivefold increase in the percentage of expired warfare certifications for these ships since GAO's May 2015 report. The Navy has made plans to revise operational schedules to provide dedicated training time for overseas-based ships, but this schedule has not yet been implemented.
Crew size reductions contribute to sailor overwork and safety risks: GAO found in May 2017 that reductions to crew sizes the Navy made in the early 2000s were not analytically supported and may now be creating safety risks. The Navy has reversed some of those changes but continues to use a workweek standard that does not reflect the actual time sailors spend working and does not account for in-port workload—both of which have contributed to some sailors working over 100 hours a week.
Inability to complete maintenance on time: Navy recovery from persistently low readiness levels is premised on adherence to maintenance schedules. However, in May 2016, GAO found that the Navy was having difficulty completing maintenance on time. Based on updated data, GAO found that, in fiscal years 2011 through 2016, maintenance overruns on 107 of 169 surface ships (63 percent) resulted in 6,603 lost operational days (i.e., the ships were not available for training and operations).
Looking to the future, the Navy wants to grow its fleet by as much as 30 percent but continues to face challenges with manning, training, and maintaining its existing fleet. These readiness problems need to be addressed and will require the Navy to implement GAO's recommendations—particularly in the areas of assessing the risks associated with overseas basing, reassessing sailor workload and the factors used to size ship crews, and applying sound planning and sustained management attention to its readiness rebuilding efforts. In addition, continued congressional oversight will be needed to ensure that the Navy demonstrates progress in addressing its maintenance, training, and other challenges.

What GAO Recommends

GAO made 11 recommendations in prior work cited in this statement. The Department of Defense generally concurred with all of them but has implemented only 1. Continued attention is needed to ensure that these recommendations are addressed, such as the Navy assessing the risks associated with overseas basing and reassessing sailor workload and factors used in its manpower requirements process.