http://www.rkeng.com/projects/cobra.html>;
U.S. General Accounting Office. 1997. Military Bases: Lessons
Learned from Prior Base Closure Rounds, GAO/NSIAD-97–151,
Washington, D.C., July; U.S. General Accounting Office. 1995.
Military Bases: Analysis of DOD's 1995 Process and Recommendations
for Closure and Realignment, GAO/NSIAD-95–133,
Washington, D.C., April; U.S. General Accounting Office. 1993.
Military Bases: Analysis of DOD's Recommendations and Selection
Process for Closures and Realignments, GAO/NSIAD-93–173,
Washington, D.C., April.
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Information Technology for
Infrastructure Management
At the start of the information age, the DOD led the way in
developing both computers and networks. It dominated the
marketplace, funding the research and setting the priorities. In
1955, the Navy was considered to have the best computer systems in
the world. But a sea-state change has occurred, and today's
information technology (IT) industry is leading the charge. DOD
currently represents less than 5 percent of IT business. The
objectives are to improve connectivity, speed of information flow
and information sharing, streamlined operations, and new business
models. Success derives from getting the right information to the
right people in the right time frame. Connectivity, content, cost,
control, sharing, and collaboration are the essential elements to
success.
A Navy-wide Information Plan
The committee acknowledges the difficulty and enormous costs
associated with creating an enterprise-wide information plan for an
institution as complex as the Navy. However, the payoff is
potentially huge because information technology can have an impact
on the infrastructure and on shore readiness in two ways. The first
is to increase capabilities and provide services in ways that were
not possible before. The second is to reduce the costs of providing
the fleet with current shore-based outputs by using new means to
provide the services. In either case, information systems rarely
result in increased capabilities or reduced costs simply by
automating tasks being performed by personnel. Rather, information
systems are a lever for increasing capabilities or reducing costs
by enhancing access to and accountability for data and
services.
The industrial age revolutionized the Navy by giving individuals
control over thousands rather than tens of horsepower. This
magnification of human labor revolutionized society as well. A
modern revolution in information technology offers the Navy another
opportunity to make startling improvements. It provides individuals
with unparalleled control over goods, services, and activities that
cross the barriers of time and distance. Exploiting this newfound
power is key to a cost-effective shore establishment. Information
technology in the 21st century is the lubricant that will allow the
Navy business to flow with less friction and waste. It holds the
potential for integrating ship and shore in ways that were never
before possible.
Given at the end of this section are the committee's
recommendations for evolving a Navy-wide information plan with the
following attributes:
• Navy-wide information space (infospace): defining,
creating, and maintaining it;
• Service access: the key to consolidation of
infospace-based Navy shore services; and
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• Decision support: leveraging the power of managers
for cost-effective decision making.
Navy-wide Information Space and Its
Components
The concept of a Navy-wide information space (infospace) is that
of an adaptive system defined at any time by a set of performance
standards for timely and effective information delivery throughout
the Department of the Navy. The infospace includes basic components
such as an information network infrastructure and information
workstation capabilities that can be adapted to IT technology
advances; associated training; and technology refresh cycles.
However, it is emphasized that the infospace is a system
characterized by a set of connectivity and service goals rather
than a set of hardware and software goals. The particular
technology solutions can vary, but the goals can and should remain
relatively constant. Establishment of connectivity and service
goals creates a benchmark against which progress can be measured
without constraining the combination of solutions applied to the
problem. Although this discussion is aimed primarily at the Navy,
the infospace will eventually have to embrace all of DOD. Many of
the prescriptions in the following sections can be applied
DOD-wide.
The purpose of the infospace is to provide an infrastructure for
delivery of information and services from any provider to anyone in
need of a service. This approach must use Internet technology,
rather than attempt to provide new point-to-point connections for
each client-server combination. The concept of major information
services requiring specific connectivity and specific workstations
is no longer economically feasible. There must be a standard
vehicle for delivery of and access to information and services. It
should include not only a network with sufficient connectivity and
bandwidth but also a standard information workstation that all
service providers can depend on and develop around (i.e., a
standard for developers and providers of software
applications).
The desired infospace is, therefore, a trusted capability that
all developers can depend on (e.g., as it is possible to depend on
the existing telephone system). In an ideal system, the issues of
how to get connected to users, where those users are, and what
capabilities they have will disappear. Such a trusted service
delivery system is critical to the Navy's consolidation and
regionalization cost-cutting efforts. If all service providers know
that they can reliably deliver their service to any user anywhere
in the Navy, the design and development task is greatly simplified.
In addition, issues of geography and distance can be subordinated
to those of cost and effective service. If commanders and managers
can depend on the infospace to access and obtain service in a
reliable and timely manner, the management need for
“controlling our own” is diminished. This lowers many
of the cultural barriers to consolidation and regionalization. The
key is that on both the provider and the user sides, the infospace
must be trusted in terms of security, access, timeliness, and
usability.
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reviews some of the issues and considers ways to satisfy both
personnel and efficiency objectives.
Measuring Rotation
The Navy classifies all its billets with a sea-shore code. Sea
duty billets are those in deployable units or at some of the
overseas ashore installations. Student billets are classified
separately and are not included in the computed sea-shore numbers.
The metric used by the Navy to monitor sea-shore rotation is the
sea-shore ratio. This indicator is the simple ratio of time in sea
duty to time in shore duty. It is computed only for E5 to E9
billets, because these are considered the career pay grades.
Overall, the Navy calculates its sea-shore ratio at about 3.8:3.
That is, a career sailor is expected to spend 3.8 years at sea for
every 3 years ashore. There is considerable variance across
ratings. An important attribute of the sea-shore ratio is that the
DOD and the Congress generally accept it as a tool to manage the
Navy career force.
There are several concerns with using the sea-shore ratio as a
management tool:
• The ratio is for billets and not personnel. Although
manning practices vary, one should protect only military shore
billets that correspond to sea billets that are actually filled by
people in pay grades E5 to E9.
• The metric covers all E5 billets. Although some of those
billets are filled by E5s in their first term, rotation is designed
for careerists. By including only positions traditionally filled by
E5 careerists, the process could have a significant effect on the
ratings with 6-year initial obligations.
• Student billets ashore are excluded from the shore part
of the ratio, although one of the reasons to return personnel to
shore is to develop skills that will increase productivity at
sea.
The committee examined sea-shore ratios for personnel instead of
billets, using the Navy's classification of sea and shore billets.
Figure 3.1 displays these ratios over time, with the following
observations. The jump in 1989 reflects a change in the definition.
The top curve represents the ratio for personnel using the Navy's
practice of including all E5s and above. That curve shows that the
ratio for personnel has averaged 3.3:3 over the past few years.
That is, when personnel rather than billets are looked at, there
appears to be more than a 10 percent drop in the ratio (from 3.8:3
to 3.3:3). The lower curve includes only career personnel.
Comparing the curves suggests two distortions caused by including
first-term E5s. It makes the sea part of the career appear larger
and the long-term decline look more dramatic than it was. Overall,
actual Navy sea-shore ratios for careerists are less than 3:3.
Individual ratings may still have
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Figure 3.1
Sea-shore ratios for personnel, 1982–1997.
considerably higher ratios. The actual sea-shore ratio has been
relatively flat since 1991 and generally declined during the
drawdown.
Effects of Sea Duty
The principal reason for managing sea-shore rotation is to keep
extended sea duty from reducing retention. In surveys, personnel
frequently report family separation as a key reason for leaving the
Navy. However, analysis of actual retention rates shows only modest
impact of sea duty and time underway on retention. An extensive
study in the 1970s showed that a 10 percent increase in expected
sea duty (e.g., from 50 to 55 percent) would decrease retention by
3 percent (from 25 to 24.1 percent).12 A later study of retention in the
1980s found similar effects for measures of personnel tempo
(perstempo).13 This study
12Warner,
John, and Matthew Goldberg. 1984. “The Influence of
Nonpecuniary Factors on Labor Supply: The Case of Navy Enlisted
Personnel,” Review of Economics and Statistics,
February, pp. 26–35.
13Cooke,
Timothy, Alan Marcus, and Aline Quester. 1992. Personnel Tempo
of Operations and Navy Enlisted Retention, Research Memorandum
91–150, Center for Naval Analyses, Alexandria, Va.,
February.
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looked at actual deployment lengths, time between deployments,
and time underway when not deployed. Perstempo had the most
deleterious effect on the retention of married personnel. But even
here, the greatest impact was from very long deployments, those of
more than 8 months. The retention declined from 40 percent to 30.5
percent. Other effects were more modest and in line with the
earlier study.
The above studies also found that reenlistment bonuses can
compensate for additional sea duty. In most cases, reenlistment
bonuses that are equivalent to less than 10 percent of regular
military compensation (base pay and tax-adjusted allowances) would
offset as much as a 25 percent increase in perstempo.14,15 Married personnel would require
higher bonuses. Some would still leave, but others originally
leaving for different reasons would later reenlist and offset the
loss.
Hidden Costs of Rotation
Fairly recent research16-19 has
uncovered a hidden cost of reserving shore billets for military
personnel. Activities with the highest percentage of military
personnel produce the greatest savings when competed, i.e., opened
to competitive bidding. Controlling for the size of the competition
and the type of activity competed, public-private competitions of
military positions produce 50 percent more savings than
competitions of civilian positions. This strongly suggests that the
Navy pays dearly by retaining a military person unnecessarily in a
shore position that could be competed. Although these results may
have been unexpected, they are consistent with other general
observations:
• Young individuals tend to be less productive than older
individuals, at
14Cooke,
Timothy, Alan Marcus, and Aline Quester. 1992. Personnel Tempo
of Operations and Navy Enlisted Retention, Research Memorandum
91–150, Center for Naval Analyses, Alexandria, Va.,
February.
15Sharma,
Ravi, and Henry Griffis. 1995. Implications of Changes in Time
Spent at Sea,Research Memorandum 94–150, Center for Naval
Analyses, Alexandria, Va., April.
16Marcus,
Alan J. 1993. Analysis of the Navy's Commercial Activities
Programs,Memorandum 92–226.10, Center for Naval Analyses,
Alexandria, Va., July.
17King,
Angela L., Angela M. Rademacher, and R. Derek Trunkey. 1996. An
Examination of the DoD Commercial Activities Inventory Data,
Information Memorandum 471, Center for Naval Analyses, Alexandria,
Va., December.
18Trunkey, R.
Derek, Robert P. Trost, and Christopher M. Snyder. 1996.
Analysis of DoD's Commercial Activities Programs, Research
Memorandum 96-63, Center for Naval Analyses, Alexandria, Va.,
December.
19Snyder,
Christopher M., Robert P. Trost, and R. Derek Trunkey. 1998.
Bidding Behavior in DoD's Commercial Activities Competitions,
Research Memorandum 97-68, Center for Naval Analyses, Alexandria,
Va., January.
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least between the late teens and mid-fifties. Contractors often
use older workers to do work previously done by younger military
personnel.
• Turnover reduces the productivity of workers. Rotation by
definition moves people continuously through the activity. With a
3-year rotation, the average worker has only 18 months at the
activity. Contractors keep workers longer and lessons learned are
more likely to persist over time.
• Organizations that are predominantly military have
limited ability to use part-timers and temporary workers.
Contractors can, at apparently less cost, use overtime during surge
workloads and reduce the number of full-time employees.
• Military personnel are not accounted for in local
budgets, because these costs are handled centrally. Although local
activities do not purposely overuse or misuse personnel, costs are
hidden in a budget sense, and no one can free up funds for other
uses by cutting military personnel. As a result, the system is
biased toward having excess people.
• The demand for work performed by military personnel is
often unconstrained by cost. For example, civilian depot costs are
often covered by reimbursements from the fleet, whereas the
military intermediate maintenance facility costs are not. When
there are choices, the fleet tends to use the latter facilities.
Although depots attempt to bring down their costs, the intermediate
maintenance facilities have no such pressures.
Reconciling Efficiency and Personnel
Objectives
Some shore jobs must remain military. Some of these jobs require
personnel with recent operational experience or provide additional
skills for later tours. But for many jobs, this is not the case,
and in most cases there is a hidden cost.
The Navy faces a dilemma in deciding which shore billets can
most easily be competed or staffed by civilians. If it eliminates
general billets that are unrelated to sailors' jobs at sea, it has
reduced its flexibility in assigning personnel ashore. Training and
maintenance billets, for example, require personnel with the
appropriate rating and Navy enlisted classification (NEC). Yet the
rotation needs of individual ratings may shift over time and the
shore billets may not match. The clear point here is that the Navy
must consider the efficiency gains, the impact on skills, and the
flexibility in making assignments when it considers which functions
and billets to target for competitive sourcing and other
infrastructure efficiencies.
As a general observation, the committee believes that the
process for selecting military billets for competition and other
efficiencies is weighted too heavily to standard sea-shore goals.
For example, the Deputy Chief of Naval Operations, Manpower and
Personnel (N1) currently has veto authority over the inclusion of
military shore billets. It is the committee's view that the
decision needs to be based on the inputs of all stakeholders.
Disagreements could be resolved by the Vice Chief of Naval
Operations (VCNO) as the final arbitrator.
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There are many ways to reconcile efficiency and personnel
concerns. For one, the Navy should try to identify alternative ways
to improve sailors' quality of life. For example, many sailors find
workloads while in home port to be particularly onerous. Since
about half of the time in a sea billet is spent at the home port,
those working conditions should be reviewed. Tiger teams on the
base could move from ship to ship to reduce long workdays when the
ship is in port. Also, time underway when not deployed can be
better utilized, so that there are fewer days away from home.
The Navy could consider increasing compensation. As noted above,
many sailors would accept an additional year or two, or even
another sea tour, for additional pay. The most effective tool is
almost certainly sea pay, which could be targeted to those at the
end of their sea tours. Not all need to accept this offer for the
Navy to cut into the number of required shore billets.
Another option to consider is including the employment of
military personnel as part of private contracts. That is, the
contractor would agree to use some of the personnel in the
performance of the service to the Navy. There are several benefits
and limitations to this approach. First, if the Navy outsources to
a highquality provider, it will benefit from the training its
personnel receive in leading business practices. Second, military
personnel will eventually benefit when they leave the Navy because
they can cite private-sector experience. To the extent that there
are savings, they result from the Navy having fewer people in
support activities. If a contractor is using military personnel,
the Navy will still pay for them directly or, if the contractor
pays part of the military personnel cost, the Navy will pay
indirectly through the contract price. Also, this option does not
address the drawdown in ashore requirements resulting from other
efficiencies, such as regionalization, Smart Base, and direct
vendor deliveries.
Another way to keep some of the military shore billets is for
the Navy to include military personnel in their MEO and participate
in the competitions. When military positions are now competed, they
are automatically converted to civilian positions for the in-house
bid. To keep some military positions in the in-house bid would
require more flexibility in switching funds between Navy military
personnel (MPN) and O&M. However, the evidence is that
contractors will win most of these competitions, and only a few
billets will be saved. Also, this approach along does not help with
other labor-saving initiatives.
Another solution would integrate military personnel with
government civilian personnel. The Navy has started to do this in
maintenance, where the civilian depot work force and the military
intermediate maintenance work force are being combined. The merger
allows for downsizing through the reduction in excess capacity and
scale economies. It also may improve the productivity of both the
civilian workers, who bring to the job greater maintenance
expertise, and the military workers, who bring to the job the
understanding of operational usage and diagnostics. More
importantly, this may allow the Navy to cut civilian workers in
lieu of its military workers. This approach works because of
the
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excess capacity at the depots. However, just as there is a
hidden cost in using military personnel instead of private
civilians in many areas, it is also likely that there is a hidden
cost in using military personnel instead of government civilians in
many jobs.
In the long run, the Navy needs to cut personnel at sea.
Programs such as Smart Ship can cut into those requirements.
Cutting those billets not only reduces shore billets reserved for
sailors, but it also cuts into the total number of support
personnel needed.
Infrastructure efficiencies can reduce the need for facilities
and the associated construction costs. They can also cut
inventories. But the biggest costs are in personnel, and it is
those costs that must be cut if the Navy is to shift resources from
support into modernization.
A-76 Competition Practices
In its visit to the San Diego naval bases, the committee was
briefed on successful public-private competitions (e.g., family
service centers) and a private-private competition for third-party
deliveries of office supplies throughout the area. Drawing on these
experiences, and those of others,20 the committee offers its suggestions
on ways to improve the numbers and quality of local A-76
competitions.
First, the Navy should remove the local obstacles to effective
competition. Today, managers of local activities have little or no
reason to downsize or compete unless directed. Currently,
installation managers must (1) pay for conducting the analyses
leading to the competition, (2) incur the inconvenience or hardship
of losing employees and dislocation, and (3) return the savings
realized to the U.S. Treasury—all while being measured on the
level of service provided.
Second, the Navy should focus on larger competitions,
anticipating the results of regionalization, by carrying out
process redefinition and holding competitions concurrently. For
example, if a larger number of qualified bidders could be
solicited, functions might be combined, since experience shows that
the percentage of savings per billet increases with the size of the
function competed.
Third, those in the chain of command must unequivocally support
the competitive process. Because the supporting analyses of
solicitations take several years in most cases, formalized
organizations charged with planning and implementing major
competitions will be required to provide continuity as the
leadership rotates.
20Trunkey, R.
Derek, Benjamin P. Scafidi, Francis P. Clarke, Cheryl Kandaras,
Andrew M. Seamans, LCDR Carolyn M. Kresek, USN, Robert P. Trost,
Angela L. King, Christine H. Baxter, Kerensa E. Riordan, Steven
Smith, and Michael Ye. 1998. Moving Forward with A-76 in the
Navy, CRM98-9.10, Center for Naval Analyses, Alexandria, Va.,
April.
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Findings
In the areas of competition and sea-shore rotation, the
committee's key findings are the following:
• The Navy's decentralized tactical process to identify
A-76 competition candidates and to execute the program is not
producing the large competitions necessary to reach the Navy's
goal. Larger, more strategically executed competitions are needed
to attain the Navy's competitive sourcing goal.
• Larger competitions have traditionally produced greater
initial savings. In the past, competitions for fewer than 10
positions produced estimated initial savings of 22 percent;
competitions for activities with more than 200 positions produced
savings of 45 percent.
• Supporting findings: There are still significant
opportunities to reduce costs with competitive sourcing.
—According to the Navy's records, there are 300,000
commercial activity positions (of which 60 percent are civilian)
and, at most, only 10 percent have been previously competed. Even
if all traditionally noncompeted work (such as depot maintenance
and R&D) were excluded, the Navy would still have 55,000
civilian positions and 17,000 military positions available for
competition.
—Using the estimated savings from the 1980s competitions
and adjusting them for changes in the mix and size of activities
and the civilian-military makeup of the work force would suggest
slightly lower initial savings: from 31 percent to 27 percent.
However, to the extent that there are trends, estimated savings
have increased over time. If competitions are arranged by the year
in which they were decided, the estimated percentage saved is
higher in the later years. Also, the drawdown in forces and
manpower seems to have had no effect on the percentage saved. The
DOD work force peaked in 1987. The estimated percentage saved
continued to increase into the early 1990s, when the earlier
program ended. The most recent competitions are producing estimated
savings greater than the historical 30 percent average. In the
Navy, each of the three Navy competitions completed in 1997 and
1998 had estimated savings of more than 35 percent. The Air Force
reports that it is now initially saving an average of 34 percent.
Other DOD efficiency initiatives are either increasing or not
affecting the savings from competitions. For example, the Navy
regionalized and competed three family service centers concurrently
in the San Diego region, an approach that produced greater savings
than would have resulted from three separate competitions. Also,
the Navy has used efficiency reviews in an attempt to reduce costs.
Although the internal efficiency review at the telecommunications
facility in Stockton, California, produced no savings, a later
competition produced an estimated initial savings of 37
percent.
—Many military personnel remain in commercial activities,
and personnel policies are a major limit on the number of billets
available for competition,
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with only 16,800 of 138,000 military shore billets available for
competitions under the implementation of current policies on
sea-shore rotation and homebasing. The Navy has limited its own
flexibility to target activities and consolidate them into larger
competitions.
Conclusions
Past uses of competition, for the most part, are based on the
practices of the 1980s, which were far from optimal. Recently,
there has been a revolution in strategic sourcing in the commercial
world. Moreover, although some shore jobs must remain as military
positions, the Navy needs to better reconcile its infrastructure
efficiency and seagoing personnel management objectives. This
should increase opportunities for competition. It is the
committee's conclusion that the Navy could increase savings further
through actions such as the following:
• Taking a more strategic approach to competitions.
The Navy can bundle positions for competition, select sources as
long-term partners, and induce continuous improvement to match the
practices of innovative commercial firms.
• Regionally competing support functions. The Navy
now can take advantage of scale and scope economies. Half of the
competitions between 1978 and 1994 were for 14 or fewer positions.
Competitions of that size are relatively costly to administer, do
not attract the most successful firms in the private sector, do not
provide opportunities for economies of scale or scope, and produce
the least savings. In the past, 37 percent of competitions for 10
or fewer positions produced no savings, whereas only 4 percent of
competitions for 100 or more positions produced no savings.
• Requiring OPNAV approval to cancel competitions.
Many competitions are being canceled by command-level
authority.
• Continuing to critically review inherently
governmental positions. Many of these jobs could be commercial,
and the use of this exemption category varies considerably across
locations and parts of DOD.
• Removing disincentives to competitive sourcing.
Until recently, local commands paid for the competitions but did
not keep any of the savings. Headquarters should pay the cost of
the competition and allow local commands to keep some of the
savings to improve facilities and quality-of-life services.
• Adjusting military personnel policies to allow for
competitive sourcing of more continental United States (CONUS)
shore positions. For example, the Navy includes sea billets
normally filled by first-termers to justify shore billets for its
careerists. In some cases, additional pay may be required to
attract personnel to longer operational tours or shorter CONUS
tours. Given that planned savings from competing functions
performed by military personnel far exceed those from competing
functions performed by civilians, targeting additional pay
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to those affected could be a cost-effective approach to
increasing the number of military positions available for
competition.
• Creating competition support offices as corporate
repositories of lessons learned and providers of expertise.
Regional and local commands will be less frustrated if they know
how others have solved problems similar to their own.
• Committing strong leadership to overcome resistance
throughout the Navy and DOD. Large-scale use of competition
requires a commitment from those at the top.
• Making provisions for sea-shore rotation slots in any
competitive sourcing. That is, Navy personnel could work in
contractor-managed billets for their shore rotations. To increase
retention, contractors could be prohibited from hiring military
personnel until they had completed another sea rotation.
Major Recommendation
The Navy should use competitive sourcing as a preferred
approach to selecting the best providers of all support. In this
regard, the Navy should establish a cross-functional team under the
Assistant Secretary of the Navy/Installation and Environment
(ASN/I&E) and the Assistant Secretary of the Navy/Research,
Development, and Acquisition (ASN/RDA) to be responsible for
overseeing the execution of competitive sourcing in business
operation areas approved by Navy leadership.
In addition, the Navy should address all existing constraints
in sea-shore rotation. The CNO should broaden the objective to
managing seagoing personnel as a part of total naval personnel
management and should direct relevant elements of the Office of
Naval Operations (OPNAV) and second-echelon commands to search for
innovative ways to satisfy the morale and retention needs that
allow greater flexibility in reducing the cost of the
infrastructure.
Recommendations—Competition
• The SECNAV-OPNAV-fleet team should determine the best
approach for each business operation area with respect to stopping
provision of services in-house and instead establishing
private-private competitions, public-private competitions,
government-owned contractor-operated facilities, or public-private
partnerships.
• The Navy should no longer depend on a bottom-up
tactical approach. The senior cross-functional team should
recommend to the CNO and SECNAV particular areas in which to stop
in-house provision and instead consolidate into large, more
strategic competitions.
• The CNO should develop a schedule for the actions
recommended above that reflects the urgency of reducing costs in
business operations.
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Recommendations—Managing Seagoing
Personnel
• The CNO should expand the Navy's current objective
beyond sea-shore rotation to finding the best ways to attract and
retain sailors.
• The CNO should task an appropriate independent
analysis and research firm to better define the relationships among
sea tour lengths vis-à-vis shore tour lengths, sea pay, time
with family, work satisfaction, and other appropriate factors, to
determine the impact on moral and retention of seagoing
personnel.
• The CNO should establish an ongoing dialogue between
the CNO staff (including all stakeholders in reducing the cost of
the infrastructure) and the fleet commanders to better define the
specific attributes of maintaining morale and retention of seagoing
personnel in the Navy.
• The CNO should direct relevant elements of the OPNAV
and second-echelon commands to (1) search for new and innovative
ways of satisfying the morale and retention requirement that would
allow greater flexibility in reducing the cost of the
infrastructure, and (2) carefully review the requirement or policy
for the shore duty billets to be closely associated with the
skill(s) required at sea. In addition, the committee recommends the
following: (1) balance the potential gain or loss of skills with
the loss in flexibility in accommodating new opportunities for
privatization of functions; (2) strive to obtain better integration
of shore duty billet policies with larger Navy programs and
competitive sourcing initiatives; (3) continue and expand the
merging of intermediate-and depot-level maintenance programs with
military personnel integrated with civilians in shipyards and
NADEPs; and (4) look for ways to make use of military personnel in
other contractor facilities and in competitive sourcing
contracts.
• The CNO should change the veto authority of the N1
over billets nominated for competitive sourcing to one of greater
management consensus by all of the stakeholders, with the VCNO as
the final arbitrator.
Implementing the Strategy
Changes of the kind and magnitude visualized under the strategy
outlined in this chapter do not come easily to a large,
tradition-based organization. In part, the changes will be induced
by the new Navy systems that are acquired, in which new
technologies and new system designs will make their own demands on
the support system. However, the Navy cannot wait to implement
infrastructure change with new acquisition programs. An intensified
campaign to make the most of the opportunities presented,
especially when it entails extensive organizational and budgetary
shifts, will be challenging in the extreme and should be initiated
now. The changes involved will entail risks to achieve the benefits
sought, and managing—not minimizing—risks will be
essential to success.
The benefits to be achieved are obvious. The portion of the
Navy's personnel, material, and other resources available to apply
to the Navy's core systems
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and missions will be increased. The Navy's use of highly trained
personnel can be better applied to those systems and missions. In
improving shore support, the quality of life of Navy personnel and
their families will be improved, leading to higher rates of
retention and better-trained crews. Overall fleet readiness and
combat capability will be improved within given, constrained budget
levels. Also, tendencies toward isolation of the Navy from the
civilian economy and population that may have attended the shift to
an all-volunteer, career force and reduction of its supporting
infrastructure through the BRAC process will be lessened or
reversed.
The risks are those attending disruption and establishment of
new organizational connections and procedures. Traditional
organizational responsibilities and authorities will be shifted to
other who will have to learn how to use them in new circumstances.
Unfamiliar funding patterns will require different justification
that may be more difficult to support with budgeting authorities,
such as OMB and the Congress, to which the new patterns will be
unfamiliar. The order of sequentially dependent changes may be lost
in the processes of overcoming institutional resistance, throwing
the effectiveness of such changes in doubt without remedying the
negative effects of the disruptions or gaining all of the positive
benefits that were sought. Mistakes will be made. Some may be
costly, using resources sorely needed for substantive investments;
other may be irretrievable in a less forgiving oversight
environment, causing ripples that could further disrupt the process
of change.
In the last analysis, all such risks entail potential added
expenditures of time and resources in effecting the sought-after
changes, with the chance of using the fleet's financial resources
ineffectively and, in consequence, hurting its readiness and combat
capability. The benefits, to the extent that they are achieved,
will greatly enhance resources available for the Navy's core
missions and capabilities, and its readiness along with them.
It is the balance between the risks and rewards that must be
weighed by Department of the Navy decision markers in taking each
step of the strategy to rationalize the fleet system and its
support component. Perhaps the only certainty in the equation is
that failure to take at least some of the risks will lead
inevitably to further decline in the fleet's efficient and
effective use of any available resources, and consequently in its
size, capability, and readiness. There thus seems to be no
alternative to going forward, managing the risks as they are
anticipated and felt.
Representative terms from entire chapter:
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