Pentagon Workforce Cuts May Not Achieve Savings, GAO Warns

Civilian and contractor reductions are not well documented.

The Defense Department has failed to document budgetary savings associated with cuts in its civilian and contractor workforces, according to the Government Accountability Office.

In a review of the Pentagon’s plans to trim spending by cutting jobs, the auditors in late December said the department in 2014 and 2015 only partially established a process for implementing planned reductions. “DOD did not address savings the department intends to achieve through reductions in the number of military, civilian, and contractor personnel,” GAO said. “Instead the report outlined reductions in full-time equivalent (FTE) positions, which may not equate to savings, and did not outline savings in funding for the contractor workforce beyond fiscal year 2015.”

Such planning requirements were contained in the 2013 National Defense Authorization Act. “Without this information, Congress has limited assurance on how the department will achieve required savings and whether the savings will be achieved in a manner that is consistent with workforce-management laws,” the report said.

What’s more, the Pentagon’s fiscal 2016 budget “shows a planned increase in spending on the contractor workforce that, if carried out, will mean that about half the reduction to contractor workforce spending that DOD has identified as its goal through fiscal 2017 remains to be achieved.”

That, GAO said, means the department would need to reduce spending on contractors by about $4.1 billion from 2012 through 2017 to match military cuts of approximately 7 percent over the same period. The law requires DoD to develop a plan that achieves savings “in the total funding for civilian and contractor workforces that are not less, as a percentage, than savings in funding for basic military personnel pay resulting from reductions in military end strengths from fiscal 2012 through 2017,” GAO noted.

The department must also assure that the savings “are not achieved through unjustified transfers of functions between or among the military, civilian, and service contractor personnel workforces of DOD, consistent with authorities available to the department.”

In its two reports to Congress, DOD has not provided the required explanation of the reasons for the shortfall, in part, GAO explained, “because complying with other statutory requirements has been a main focus of DoD's efforts to limit spending on the contractor workforce.

GAO recommended that the Defense secretary fully address the workforce trimming requirements in its next status report. DOD officials agreed, offering clarification to assure GAO that its personnel readiness officials are working to ensure that the cuts do not violate workforce management laws.