Chapter 10

PERSONNEL

The Department has been extremely successful in accomplishing its two overarching drawdown goals -- to maintain a high state of readiness and to treat people fairly. Readiness has been maintained; a balanced force is in place; and DoD has accessed the numbers of new recruits required to maintain the needed mix of experience, grade, and skills.

The carefully executed and highly successful post-Cold War drawdown of U.S. forces is near its conclusion. The success with which significant reductions in military personnel were made can be attributed to the Department's strategy to maintain a close linkage between force structure and personnel management programs. For example, a rapid achievement of the force structure outlined in the Bottom-Up Review required significant congressional cooperation and support for temporary separation incentive programs, early retirement authorizations, transitional assistance, and relief from statutory constraints. These programs have allowed orderly downsizing with due consideration of the human dynamics involved in such a massive undertaking. Minimizing involuntary separations was central to the Department's plans, and the vast majority of the reductions have been accomplished through voluntary measures, a tremendous accomplishment in the context of an all-volunteer force. The result is a right-sized force providing challenging career opportunities and one that is sustainable well into the next century.

RECRUITING HIGH QUALITY PEOPLE

Sustained and effective recruiting is essential to maintain a force with the right distribution of skills and balance of experience that supports readiness. Each Service must enlist and appoint enough people each year to sustain the force and ensure seasoned and capable leaders for the future. DoD annually must recruit about 200,000 youth for the active duty armed forces, along with approximately 150,000 for the Selected Reserve. FY 1997 recruiting requirements will be more than 20 percent higher than the numbers needed in FY 1995.

Recruits with a high school diploma are especially valued. Years of empirical research show that those with a high school diploma are more likely to complete their initial three years of service. About 80 percent of recruits who receive a high school diploma will complete their first three years; yet only about 50 percent of those who failed to complete high school will do that. Those holding an alternative credential, such as a General Equivalency Diploma (GED) certificate, fall between those extremes. Over the past five years, more than 95 percent of all active duty recruits held a high school diploma, compared to the 75 percent of American youth ages 18 to 23.

Aptitude is also important. All recruits take a written enlistment test, called the ASVAB (Armed Services Vocational Aptitude Battery). One component of that test is the Armed Forces Qualification Test, or AFQT, which measures math and verbal skills. Those who score at or above the 50th percentile on the AFQT are in Categories I-IIIA. DoD values these higher-aptitude recruits because their training and job performance are superior to those in the lower (below the 50th percentile) categories. There is a strong correlation between AFQT scores and on-the-job performance, as measured by hands-on performance tests (speed and accuracy of performing job-related tasks) across the range of occupations. Over 70 percent of recent recruits scored above the 50th percentile of the nationally representative samples of 18-23 year olds.

Higher levels of recruit quality serve to reduce attrition while increasing individual performance. In 1993, the Department established benchmarks to sustain recruit quality. The chart below illustrates the recent success against those standards (90 percent high school diploma graduates; 60 percent top-half aptitude).

Challenges in a Changing Recruiting Environment

Since 1975, the Department of Defense annually has conducted the Youth Attitude Tracking Study (YATS), a computer-assisted telephone interview of a nationally representative sample of 10,000 young men and women. This survey provides information on the propensity, attitudes, and motivations of young people toward military service. Enlistment propensity is the percentage of youth who state they plan to definitely or probably enlist in the next few years. Research has shown that the expressed intentions of young men and women are strong predictors of enlistment behavior.

 

Table 4 Quality and Numbers of Enlisted Accessions -- Active (Numbers in Thousands)
FY 1996 Quality Indices			Accessionsa (in thousands)
Component/  Service	Percent High School Diploma Graduates	Percent Above  Average Aptitude  AFQT I-IIIA	FY 1996  Objectives	FY 1996  Actual	FY 1997  Plannedb	FY 1998  Plannedb
Army	95	67	73.4	73.4	89.7	84.0
Navy	95	66	48.2	48.2	56.7	53.8
Marine Corps	96	65	33.5	33.5	35.3	36.4
Air Force	99	83	30.9	30.9	30.2	30.4
TOTAL	96	69	186.0	186	211.9	204.6
a Includes prior service accessions. Only Army and Navy recruit to a prior service mission.  b Based on Service Recruiting Production Reports and DoD FY 1998 Budget Estimate Submission.

Results from the 1996 YATS show enlistment propensity for both young men and women basically unchanged from 1995. One notable exception is that the interest of women in the NaAvy is significantly higher than last year. FY 1995 was the bottom of the drawdown for recruiting. Today, recruiting objectives are going back up without corresponding levels of resources. Between FYs 1995 and 1997, recruiting missions rose 20 percent while resources, including money for advertising, remained relatively flat, except in the Army where there was a drop in the expenditure-per-recruit. Thus, these YATS results (considerably lower than during the pre-drawdown years) are not surprising and suggest that recruiting will continue to be challenging.

Over the past several years, enlistment propensity has declined (see Appendix G) as the Services experienced serious cuts in recruiting resources. In 1994, 1995, and 1996, recruitment advertising was increased, and the 1995 and 1996 YATS results indicate that the decline propensity may have stabilized. Continued investment in recruiting and advertising resources is required, however, to assure that the pool of young men and women interested in the military will be available to meet Service personnel requirements in the future.

Recruiting for the Selected Reserve

With the increased reliance on the Reserve components, continued manning by quality prior service and non-prior service recruits remains a priority. During recent years, the Department has experienced considerable success in recruiting for the reserve forces. Since 1991, the number of new recruits into the Reserve components with high school diplomas has increased 8 percent. New recruits in the upper half of the Armed Forces Qualification Test categories have increased 7 percent. There are, however, current and future dynamics that will make it increasingly difficult to maintain robust reserve force strength levels in the coming years. The perceptions caused by downsizing, reduced budgets, and inactivating local units all continue to give the public the impression that the Reserves are no longer hiring, or that the Reserves are not a viable employment opportunity. Additionally, the approaching completion of the drawdown of the active forces will mean fewer service members entering the prior service pool for Selected Reserve membership, thus increasing the need for non-prior service recruiting. To meet this challenge, increased advertising budgets and more recruiters are needed, especially after the Reserve component downsizing abates and accession missions increase.

The Assistant Secretary of Defense for Reserve Affairs convened a Reserve component recruiting and retention task force to analyze the current state of supporting programs and to explore new and innovative ways to meet the mission. Prime among the topics this task force will explore is the utilization of the Selected Reserve Incentive Program, a series of bonuses for enlistment and reenlistment. The task force also will focus on intensifying retention efforts to reduce unprogrammed losses in the selected reserve that occur prior to reenlistment windows.

Table 5 Quality and Numbers of Enlisted Accessions -- Selected Reserve (Numbers in Thousands)
FY 1995 Quality Indices   Non-Prior Service			Total Accessions  Non-Prior and Prior Service (in thousands)
Component/   Service	Percent High School   Diploma Graduates	Percent Above Average   Aptitude AFQT I-IIIA	FY 1996   Objectivea	FY 1996   Actuala	FY 1997   Plannedb	FY 1998   Plannedb
Army National Guard	82	56	61.8	60.4	59.3	62.3
Army Reserve	95	74	50.2	46.2	47.9	44.2
Naval Reserve	100	82	16.8	16.8	18.0	16.9
Marine Corps Reserve	98	78	10.4	10.7	11.2	10.8
Air National Guard	93	73	11.0	10.0	10.0	9.6
Air Force Reserve	94	77	6.1	6.5	9.9	8.6
TOTAL	90	66	156.3	150.6	156.3	152.4
a Based on Service Component Recruiting Production Reports.  b FY 1998 Budget Estimate Submission.

Table 6 Recruiting Challenges and Responses
Health Care	In August 1994, the Department addressed the issue of TRICARE Prime for members and their families in areas outside normal areas of coverage. In May 1996, a demonstration site was established to test the concept. The test results are being evaluated to determine the feasibility to expand TRICARE Prime to cover all individuals outside normal areas of coverage.
Housing	Many recruiters and other individuals assigned to local communities -- particularly those stationed in high cost areas -- are inadequately reimbursed for housing cost; therefore, the Department has introduced legislation to reform the military housing allowance that will help adequately reimburse recruiters and others in high cost areas.
Child Care	The Department is reviewing the possibility to expand and use child care space in other government programs. This includes negotiating with the General Services Administration to obtain space for military members at about 100 government-owned or leased locations nationwide.
Pay	In April 1996, Special Duty Assignment Pay for recruiters was increased from $275 to $375 per month.

National Service and Recruiting Programs

The Department explored the impact of National Service on military recruiting; DoD believes both programs are appropriately sized and structured. The Department concluded that the two programs can coexist successfully because the National Service program is smaller and the value of its benefits is lower in comparison with enlistment benefits offered by the military.

TREATING PEOPLE FAIRLY

Pay and Allowances

In order to attract, motivate, and retain quality people, the armed forces must provide a standard of living for its members that can compete with the private sector. If it does not, the Services cannot continue to recruit and retain high quality people in this nation's all-volunteer force. The Administration requested and Congress approved a 3.0 percent pay raise for FY 1997, and the Administration has pledged support for maximum pay raises authorized by law for military personnel through the end of the decade.

Additionally, the Department of Defense implemented a number of new compensation initiatives this year, the most significant being Variable Housing Allowance rate protection. Now, no service member's housing allowance can go down if their housing costs do not go down. Programs were also implemented to provide Basic Allowance for Quarters (BAQ) to single E-6s on sea duty, continuous sea pay for crew members assigned to tenders, family separation allowance for geographic bachelors, Dislocation Allowance for members relocating due to Base Realignment and Closure (BRAC), and automatic Service Member's Group Life Insurance (SGLI) coverage of $200,000. The Department is also committed to lower out-of-pocket housing costs now being experienced by those in uniform. The FY 1997 4.6 percent BAQ increase further reduce members' out-of-pocket costs.

The Department pursues its military compensation initiatives through a unified legislative and budgeting process. The following departmental legislative initiatives that were enacted as part of the FY 1997 National Defense Authorization Act.

• Basic Allowance for Quarters for E-5 without Dependents on Sea Duty authorizes quarters allowances for single petty officers assigned to sea duty. This allows these members to establish and maintain permanent residences ashore.
• Round-trip travel for picking-up a privately-owned vehicle is allowed for members when they must transport their privately-owned vehicles to and from a port when moving between the United States and overseas.
• Privately-owned vehicle storage will permit members to store their vehicles, at government expense, when a permanent change of station to a location overseas precludes entry of their vehicle or requirement of substantial modification.
• Variable Housing Allowance Floor for High Housing Cost Areas that will ensure all members receive at least a minimum adequate level of allowance for housing costs. Locality floors would be determined by independent Housing and Urban Development Fair Market Rent data and the member will receive the higher of the normal (member survey) VHA or this new VHA locality floor.
• Dislocation Allowance Increase from two months basic allowance for quarters to two-and-one-half months. This will better compensate members for a variety of nonreimbursable costs incurred in connection with the move of dependents during a permanent change of station.

These improvements directly and measurably assist members of the armed forces and their families. Moreover, these investments constitute a sound means of preserving high levels of personnel readiness.

Promotions

The Services have worked hard to provide reasonably consistent promotion opportunities in order to meet requirements, ensure a balanced personnel force structure, and provide a meaningful opportunity for all service members. There is a common misconception that promotions have been frozen because of the drawdown, but that is simply not the case. Promotions have remained generally steady during the drawdown. Last year, the Services promoted 110,554 soldiers, sailors, airmen, and marines into the top five enlisted pay grades (E-5 to E-9). Overall, average time in service at promotion has accelerated by about six months since 1995. Officer promotion opportunity also has held steady, generally remaining within 5 percent of the levels before the drawdown began. For the future, the Department expects some acceleration of the career-timing of promotions, with the overall promotion-selection rate remaining steady.

Force Stability

As the Services complete their downsizing, the focus shifts to the task of stabilizing the force. Any drawdown of the size that has been achieved, even one carefully and successfully managed, will cause turbulence. It is an inevitable by-product of change. Therefore, DoD is now taking steps to return a sense of stability to the armed forces.

Compensation, housing, and family support, the central points of the initiative, are keys to creating the sense of stability. Less quantifiable factors also contribute to a stable environment for service members. These include visible and challenging career opportunities, healthy military communities, reasonable expectations for the future, and the availability of a military career for those who perform well.

Finally, personnel tempo (PERSTEMPO), the amount of time service members spend away from their home base, is an important component of force stability. PERSTEMPO has increased somewhat as DoD has reduced forces stationed overseas since the end of the Cold War; this is particularly true for the Army and Air Force. The Navy and Marine Corps, though more accustomed to routine deployments, have also seen some increase in PERSTEMPO. If this rate were to become too high, it could have a negative effect on the stability of the force. While there are certain specific units and military specialties which have been used repeatedly, DoD believes the current PERSTEMPO of the force as a whole is sustainable. Overall morale, retention, and readiness remain high. This is due, in part, to the fact that service members have always derived a sense of purpose and satisfaction from the opportunity to perform the functions for which they joined the military. However, there are some indications that high PERSTEMPO in certain units has a negative impact on the quality of life of members. For the small number of units and military occupations subjected to a high deployment rate, DoD has taken steps to alleviate that strain, including increased use of the Reserve component.

Equal Opportunity

Equal opportunity is a military necessity. Discrimination, sexual harassment, and disparate treatment jeopardize combat readiness by threatening unit cohesion, good order, and discipline. The Department of Defense has maintained an aggressive program to ensure that all military and civilian personnel are treated fairly. The Department's policies and programs in this area address all impermissible discrimination and harassment, whether based on race, sex, national origin, age, disability, or religion. The impetus for the Department's current efforts is contained in a March 1994 Secretary of Defense policy memorandum on equal opportunity.

Several measures described in the March 1994 memorandum have been accomplished and steady progress has been made toward others. Those measures which have been implemented include the establishment of the Office of the Deputy Assistant Secretary of Defense for Equal Opportunity, restructuring the Department's senior advisory council on equal opportunity, and conducting special equal opportunity training for senior civilian and military leaders. Progress continues on measures to study the flow of minority and female officers from recruitment through the senior officer ranks and to improve the representation of women, minorities, and people with disabilities among the Department's civilian managers.

When soldiers were accused of the racially-motivated murders of two African-American citizens in December 1995 in North Carolina, there were widespread concerns about extremist group activities within the military. The Department's response was swift and encompassing. Revised departmental guidance on military participation in extremist group activities clarified prior policy, established procedures for reporting information on hate crimes, and required that DoD policy be included in Service training programs. Secretary Perry restated the Department's policy prohibiting racial intolerance and discrimination in any form in the strongest terms, while the Secretary of the Army directed the Army to root out any extremist activity. The Secretaries of the Navy and Air Force undertook similar aggressive actions.

A Department-wide survey, taken in conjunction with the DoD's Task Force on Discrimination and Sexual Harassment, indicated that sexual harassment in the active military is declining. The survey was taken at the same time as DoD was pursuing initiatives to prevent sexual harassment. These initiatives include sexual harassment prevention training, understanding the definition of sexual harassment, and knowing the process for reporting sexual harassment. While any level of sexual harassment is unacceptable, the survey responses indicate that these initiatives have been effective.

In Adarand Constructors, Inc. vs. Pena, the Supreme Court held that federal affirmative action programs that use racial and ethnic criteria as a basis for decision making are subject to strict scrutiny. Subsequently, the President directed that a review be conducted of the federal government's affirmative action programs. Chapter Seven of the Affirmative Action Review: Report to the President, July 19, 1995, rated military affirmative action efforts as successful, although it concluded that more remains to be done. In response to recommendations contained in the report, DoD has established a continuing dialogue with other federal agencies on the services and training programs at the Defense Equal Opportunity Management Institute, Patrick Air Force Base, Florida, and how these and similar programs may benefit other agencies.

IMPROVING FORCE MANAGEMENT

Improving Compensation

The law requires the President to conduct a complete review of the principles and concepts of the compensation system for members of the uniformed services every four years. President Clinton signed a charter for the Eighth Quadrennial Review of Military Compensation (QRMC) in January 1995. Previous QRMCs focused on elements of the existing compensation system and how to improve its effectiveness; the Eighth QRMC is focusing on how to employ the military human resource management system strategically. The charter requires the Eighth QRMC to look well into the future and to develop a military compensation system that will attract, retain, and motivate the diverse work force of the 21st century. The QRMC is:

• Conducting a comprehensive review of current compensation and human resource management theory/practice.
• Evaluating the evolving characteristics of the military and the environment impacting it; setting forth a framework for military compensation in the 21st century.
• Identifying new and emerging approaches to compensation and assessing their implications for the military.
• Designing components of a future compensation system; suggesting how the human resource management system can be employed strategically to accomplish organizational objectives; proposing implementation strategy.
• Establishing DoD as a leader in attracting, retaining, and motivating the diverse work force of the 21st century.

STATUS OF WOMEN IN THE MILITARY

Defense Advisory Committee on Women in the Services

The Defense Advisory Committee on Women in the Services (DACOWITS) is a civilian federal advisory committee composed of prominent citizens from across the nation, representing industry, education, and civic affairs. Establishment of the Committee in 1951 was a major milestone for military women. DACOWITS serves to promote public acceptance of military service as a career field for women and to advise the Secretary of Defense on policies relating to the utilization of women. DACOWITS has been particularly effective in improving opportunities and benefits for military women. In 1996, the DACOWITS Executive Committee was invited to visit Jordan for the purpose of a military and cultural exchange. The visit opened a continuing dialogue between U.S. military women and women in the Jordanian Armed Forces. The Executive Committee traveled to Jordan as part of the annual overseas installation trip, which also included visits to U.S. bases located in Italy, the United Kingdom, Hungary, and Germany. The overseas trip was an effective means to assess and obtain feedback on quality of life, forces development and utilization, and equality issues. The committee conducted meetings with approximately 1,500 service women and men and provided their feedback in their report to the Secretary of Defense. During this year, a conference was held in the Washington, D.C., area that resulted in the following recommendations being forwarded to the Secretary of Defense:

• That the Secretary of the Navy open to women all classes of ships and vessels and their associated billets that remain closed because of cost considerations, even though they are legally open after repeal of the Combat Exclusion Law.
• That the Secretary of Defense operate Reserve Officer Training Corps (ROTC) Programs only at institutions of higher learning (post-secondary) that do not discriminate in student admissions on the basis of gender.
• That the Deputy Assistant Secretary of Defense for Personnel Support, Families, and Education identify Reserve component child care needs for the purpose of exploring the opening of existing child care centers on weekends at locations where Reserve components conduct unit training.

New Roles for Service Women

During the past three years, the Department made great progress in allowing women to compete for assignment to nontraditional jobs previously closed to them. For example, women now are serving as pilots and flight crew members on combat aircraft. They also serve in all positions on combatant vessels; in fact, for the first time in history, women performed as crew members aboard the combatant ships that fired cruise missiles on Iraq. Women also have been assigned to Army and Marine Corps ground units, with the exception of those units below brigade level having a primary mission of direct combat engagement.

Additionally, the proportion of women serving in the military continues to increase at a positive rate. DoD is attracting more and more qualified women and is utilizing them in a wider variety of roles. Leadership positions available to women increased. In 1996, DoD witnessed significant firsts as Lieutenant General Carol Mutter, United States Marine Corps, and Vice Admiral Patricia Tracey, United States Navy, advanced to their current three-star ranks.

In summary, the promotion of women, as well as the opportunities for their service, have increased since 1989. Today, women are being assigned to some 260,000 additional positions, with more than 80 percent of military jobs now open to both genders. More than 90 percent of the career fields in the armed forces now are being filled by the best-qualified and available person -- man or woman. In turn, this provides the type of assignment flexibility that helps to improve unit manning, thus personnel readiness, within a smaller force.

HEALTH CARE

Changing world politics, revised national security objectives, rapid changes in technology, and advances in the practice of medicine present new challenges to military medicine. Preparations within the Military Health Services System (MHSS) to meet both its operational and peacetime mission require innovative thinking, careful contingency planning, and quick adaptation to change.

The MHSS is positioned to be the benchmark health care delivery system of the 21st century. It is committed to joint medical readiness capabilities to prepare the Department to successfully respond to a rapidly changing continuum of military operations; top quality and cost-effective health care benefits for members of the armed services and their families, retirees, and others entitled to DoD health care; and integrating technologies to enable the best possible and most cost-beneficial clinical and management outcomes.

The Department's health care mission is complex and serves a large number of personnel. There are 8.2 million beneficiaries eligible to receive health care from MHSS. Direct care is delivered worldwide in 115 hospitals and numerous clinics. The bulk of civilian care is purchased through managed care support contracts implemented under the TRICARE Program. Substantial resources are required to accomplish the DoD medical mission. The FY 1997 budget is $15.7 billion or 6.2 percent of the entire defense program.

Health Care Initiatives

TRICARE

In the direct care system, the Department provides a comprehensive range of acute-care services, from primary to tertiary care, and nearly two-thirds of all care delivered to DoD beneficiaries is provided by the direct care system. Family members of active duty personnel, as well as retirees and their family members who are under age 65, may seek care under CHAMPUS when the direct care system cannot provide the needed health care. TRICARE, the Department's comprehensive managed care initiative, is being implemented worldwide to improve the Military Health Services System delivery of care. It more effectively integrates military and civilian health care resources, establishes uniform benefits, and introduces managed care improvements to the system.

For each of the 12 designated regions of the United States, the senior military officer, or lead agent, is responsible for coordinating the delivery of all health care for those who live in the region. The lead agent does this in conjunction with a TRICARE managed care support contractor to improve health care delivery and offer beneficiaries better health care value. Managed care support contractors establish civilian provider networks, offer wellness information, assist military families with medical care referrals, process health care claims, and offer other assistance. These contracts are being awarded incrementally with five of seven contracts, covering 3.3 million beneficiaries, currently under award. Offeror proposals for the remaining two contracts, covering an additional 1.7 million beneficiaries, are under evaluation and the Department expects to award them in calendar year 1997 with health care delivery beginning by the end of the calendar year. In Europe and the Pacific, a modified version of TRICARE began October 1, 1996, with reengineering of the direct care system to support the TRICARE Prime benefit for active duty families stationed overseas. Alaska will begin offering TRICARE benefits in 1997. TRICARE Latin America is currently under development.

TRICARE offers three options for CHAMPUS-eligible beneficiaries: TRICARE Prime, TRICARE Extra, and TRICARE Standard. TRICARE Prime, the civilian health maintenance option, provides for enrollment and the selection of a primary care manager (PCM) who either provides or arranges for the family's health care. It also offers enhanced preventive health care benefits and reduced cost-sharing for civilian care when referred by the PCM. All active duty military personnel are eligible and are considered automatically enrolled in TRICARE Prime, with most care delivered in Military Treatment Facilities. TRICARE Extra is the preferred provider option for beneficiaries who desire greater freedom of choice in their health care. This option provides a reduced cost sharing percentage for beneficiaries who use the civilian network of providers developed by the TRICARE contractor. TRICARE Standard is essentially the same as the basic CHAMPUS Program.

Federal regulations governing TRICARE and the Uniform HMO benefit for TRICARE Prime enrollees were published in 1996, and the Department is working toward implementing recent legislation to further improve TRICARE by providing greater protections for TRICARE Prime beneficiaries. Key among these are establishing direct care priority for Prime enrollees, eliminating the potential for a Prime enrollee to be balance-billed by a nonnetwork provider when the enrollee is referred by the PCM, and eliminating the requirement that enrollees must obtain a nonavailability statement in addition to following the referral procedures under Prime. In addition, DoD plans to implement enrollment portability and split enrollment in 1997. This enhancement will allow Prime enrollees to transfer their enrollment to a new region during a permanent move and will offer split enrollment where members of the same family can enroll in different regions without having to pay more than the annual family enrollment fee.

MEDICARE SUBVENTION

In September 1996, the Department of Health and Human Services (DHHS), the Health Care Financing Administration (HCFA), and the Department of Defense agreed to conduct a demonstration under which the Medicare Program would treat DoD and the MHSS similarly to a Medicare risk HMO for dual-eligible Medicare/DoD beneficiaries. Under the agreement, HCFA would pay for dual-eligibles enrolled in the DoD managed care program after DoD met its level of effort, measured in terms of health care expenditures for the dual-eligible population. The goal of this demonstration was to implement, through a joint effort by DHHS and DoD, a cost-effective alternative for delivering accessible and quality care to dual-eligible beneficiaries while ensuring that the demonstration did not increase the total federal cost for either agency. The agreement required the enactment of federal authorizing legislation before the demonstration could be implemented. However, the 104th Congress did not pass the necessary legislation before adjourning in October 1996. The agencies plan to submit new authorizing legislation in early 1997.

DoD is also examining its other policy options for allowing Medicare-eligible beneficiaries to participate in TRICARE. One option under consideration, the TRICARE Senior Project, is a pretest of elements of the military managed care program described in the DoD/DHHS Agreement without reimbursement from HCFA. Because the project would not require Medicare reimbursement to DoD, no authorizing legislation would be required. HCFA assistance project has been requested. This project would allow DoD to test on its own a cost-effective alternative for delivering accessible and quality care to dual-eligible beneficiaries. The project would be scheduled to begin in mid-1997 and continue for three years.

OVERSEAS FAMILY MEMBER DENTAL CARE

The Department has initiated an aggressive program to improve and standardize access to dental care for family members living outside the United States. The Overseas Family Member Dental Program is a comprehensive, integrated plan tailored to each location and is an integral part of the regional health services plan currently being developed. A sizable increase in dental resources has already been provided and is resulting in improved dental care access for families. Phased implementation began in Europe and is now being extended to the Pacific and remote site locations worldwide. This initiative is already considered one of the single greatest quality of life improvements for family members overseas.

RESERVE DENTAL CARE

Over the past year, the Department developed plans to enhance the dental readiness of reserve personnel. Recently enacted legislation authorizes a Department sponsored dental insurance plan for the selected reserve to begin in FY 1997. The plan will ensure inexpensive access to selected dental care. The Department has also introduced standards for frequency of dental examinations for reserve members and oral health standards for deployment that are consistent with those for the active duty component.

RETIREE DENTAL CARE

As a result of the military drawdown, retirees and their families have had increasing difficulty obtaining space available dental care at military facilities. To ensure availability of dental services, recently enacted legislation authorizes a retiree paid dental insurance plan under sponsorship of the Department that will enable retirees and their dependents to obtain low cost comprehensive dental care.

MEDICAL CARE FOR BENEFICIARIES IN BRAC AREAS

The approved BRAC lists (1988, 1991, 1993, and 1995) will result in the closure of 31 military hospitals and an additional number of health clinics in the continental United States. With strong congressional support for the Department to do more for beneficiary populations affected by base closures, the Department has enhanced its planning and programs to specifically address their needs. DoD eligible beneficiaries remaining in areas affected by BRAC actions will be provided with alternative health care delivery options after their local military treatment facility closes. The Department's actions to lessen the medical impact include transition health care planning, managed care initiatives, retail and mail order pharmacy programs, and meetings with beneficiaries at affected BRAC sites.

GULF WAR VETERANS' HEALTH ISSUES

The Department is strongly committed to responding to the health concerns of Gulf War veterans. In examining adverse health consequences that may have resulted from service in the Persian Gulf, DoD efforts have concentrated in the areas of clinical care, research, and investigation.

Since June 1994, the Department has provided in-depth medical evaluations to DoD beneficiaries who are experiencing illnesses through the Comprehensive Clinical Evaluation Program (CCEP). Spouses and children of Gulf War veterans participate in the CCEP if they are eligible for DoD health care. As of November 26, 1996, there were 36,327 participants in the program, of whom 27,975 had requested an examination and 23,562 had finished the evaluation process. In April 1996, the Department released a comprehensive report on the results of examinations of over 18,000 participants. The results of the CCEP indicate that participants have a variety of symptoms and diagnoses spanning multiple organ systems. Based on the clinical experience to date, there appears to be no clinical evidence for a previously unknown, serious illness or syndrome among over 18,000 veterans participating in the CCEP. The Department's findings are consistent with a review of the CCEP conducted by the Institute of Medicine, National Academy of Sciences which was released in January 1996. In September 1996, the data set for the CCEP was made available to qualified scientific researchers interested in conducting further analysis.

In addition to providing comprehensive clinical care to Gulf War veterans, the Department has initiated an aggressive research program. Although the types of conditions identified among CCEP participants appear similar to those seen in the general population, formal research studies involving appropriate comparison populations are needed to determine the degree to which certain kinds of symptoms and diagnoses may or may not be common among Gulf War veterans. DoD medical research efforts are ongoing in a variety of areas including reproductive health, leishmaniasis, health effects of exposure to depleted uranium, pyridostigmine bromide, and possible chronic health effects resulting from subclinical exposure to chemical weapons. As part of the President's commitment to better understand the illnesses reported by Gulf War veterans, the Departments of Defense and Veterans Affairs (VA) announced the award of $7.3 million for 12 research studies to government, nongovernment, and academic institutions on possible causes and treatment of Gulf War veterans' illnesses.

Last year, the Deputy Secretary of Defense established the Persian Gulf War Veterans Illnesses Investigation Team (PGIT) to look for possible causes of illnesses in veterans by evaluating the vast amount of documents from the war, and by investigating specific incidents and theories presented by veterans and others. A toll-free telephone line, 1-800-796-9699, was established to allow veterans to provide information on incidents they feel may have affected their health. To date, over 1,100 incidents have been reported, and new information continues to be evaluated. The PGIT is composed of personnel with backgrounds in medicine, scientific research, military operations, military investigation, and military intelligence. The PGIT has been involved in the process of accumulating and declassifying health-related documents. The PGIT continues to work closely with the Services, the Intelligence Community, and other government and nongovernment agencies to gain a clearer understanding of factors surrounding the incidents and theories involving the health of Gulf War veterans. To date, the PGIT has not identified a causal relationship between any post war illnesses of Gulf War veterans and the incidents and theories under investigation. However, the need for continuing investigation and research is a Departmental priority. The PGIT has now become a part of a department-wide effort overseen by the Special Assistant to the Deputy Secretary for Gulf War illnesses.

The Department will continue to collaborate with other federal agencies and conduct comprehensive, cross-departmental programs to provide care to veterans and assess health consequences of service in the Gulf War. The Department has cooperated fully with the Presidential Advisory Committee on Gulf War Veterans' Illnesses, which has been reviewing and providing recommendations on the full range of government activities relating to veterans' illnesses. The committee released an interim report in February 1996. In response to the Interim Report, DoD, VA, and DHHS developed a coordinated plan of action submitted by the Persian Gulf Veterans Coordinating Board that responds to the Advisory Committee's interim recommendations.

PREVENTIVE HEALTH CARE

The Department is conducting a program to improve breast cancer services for beneficiaries, utilizing funds allocated in the National Defense Authorization Act for FY 1996. The goals of the Breast Cancer Prevention, Education, and Diagnosis Program are to provide training for primary health care providers in early detection, to minimize breast cancer risk, and to optimize health care availability while emphasizing access and follow-through. TRICARE regions are providing education and counseling programs on breast self-examination, developing novel education and training programs for primary care providers, examining ethical considerations and decision making in genetic testing, and seeking better psychosocial support programs for patients and family members diagnosed with breast cancer. The TRICARE Prime Program features a number of preventive health care benefits, including recently enacted legislation adding colon and prostate cancer screening.

TELEMEDICINE

Telemedicine combines highly technical communications and emerging medical technologies to deliver health care that is time and distance independent. Reducing space and time in the delivery of health care is an obvious benefit for military medicine as the continuum of military operations expands and U.S. forces engage in missions worldwide. Telemedicine benefits military medicine and will also benefit health care providers because they will be able to work more closely so distance and time will not be factors. Rapid advances in communications and related technologies continue to expand the usefulness of telemedicine. Within the MHSS, many telemedicine initiatives have moved from the conceptual stage to operational prototypes.

The Department deployed telemedicine capabilities in support of U.S. forces in Operation Joint Endeavor under the PrimeTime III Project. This project not only provides day-to-day telemedicine support to health care providers and military patients but serves to validate the operational concepts for such capabilities. Today's provisional telemedicine links between deployed U.S. forces (for example, in Bosnia, Hungary, and aboard ship) and military hospitals in the United States support diagnostic consultation, long-distance medical mentoring, and delivery of care. The PrimeTime III Project will serve as the basis for integrating telemedicine within the theater of operations. Medical areas of concentration include trauma care, radiology, dentistry, pathology, surgery, dermatology, psychiatry, speech therapy, obstetrics and gynecology, pediatrics, infectious disease surveillance, and support of epidemiological field investigations.

These efforts are built upon prior work done under the Pacific Medical Network Program and AKAMAI Program in the United States Pacific Command. Through that program, communications technologies, computer software, and MHSS information technology components were prototyped. These components not only have applicability to deployed forces but ultimately will change the way that the Department provides support through information management and technology systems worldwide. These technologies are expected to become much more widely applied in military and civilian health care delivery, medical training and education, and medical research. Through these and other technologies, DoD expects not only to make significant improvements in the delivery of peacetime health care, but also to project expert medical care forward on the battlefield to save casualties who would have been among those killed in action in previous wars.

JOINT EFFORTS WITH THE DEPARTMENT OF VETERANS AFFAIRS

Under the auspices of Reinventing Government-Phase II, Vice President Gore tasked the VA and DoD, with the assistance of the Office of Management and Budget, to assess the potential for achieving additional improvements between the two federal health care systems and to report recommended strategies. The Vice President asked that a joint study be initiated to reduce the cost of providing government services and to increase the level of beneficiary satisfaction with those services. The report was forwarded to the Vice President in May 1996. Opportunities that DoD and the VA will continue to explore will include:

• Joint ventures, including shared services and use of DoD and VA facilities.
• Combined purchasing power to reduce costs and improve services.
• Improvement in education and training programs, including Graduate Medical Education.
• Appropriate agreements enabling the provision of medical care to DoD beneficiaries by VA medical centers under the TRICARE managed care support contracts.
• Coordination of the development of specialized care for specific types of conflict-related injuries (for example, spinal cord injury, blindness, amputation, and traumatic brain injury).
• Development of arrangements whereby DoD beneficiaries can receive appropriate specialized care (for example, head trauma and rehabilitative care) from VA medical centers.
  
• Incorporation of improved clinical guidelines using resources of DoD, VA, and other private and public sector agencies.
• Continued close cooperation on post-deployment research, epidemiology, and clinical care; strategy development for anticipating future-post-deployment issues.
• Opportunities to share the assessments of emerging and established technologies and to standardize the methodologies used between the DoD and VA.
• Development of joint and coordinated efforts in developing telemedicine as a means to improve readiness and patient care.

THE CIVILIAN WORK FORCE

Recruiting and Hiring

The Department has maintained a well-trained and diverse civilian work force, while the significant reduction in the size of that force continues. Since October 1989, DoD has reduced civilian employment by approximately 304,000 positions and plans to cut an additional 84,000 jobs by September 2001, when the planned personnel downsizing will be complete. The result will be an efficient work force shaped to meet the challenge of supporting the National Defense Strategy.

Despite the overall reductions, the Department will hire about 20,000 new employees each year. Through an innovative agreement with the Office of Personnel Management (OPM), DoD may now conduct its own examining, buy services from OPM, or use a combination of the two approaches to rate and rank applicants for vacancies and to make competitive service appointments. By delegating this authority to the installations and regional civilian personnel offices, DoD has enhanced the hiring process by speeding up an applicant's entry on duty and empowering personnel offices to meet the recruiting and hiring challenges brought about by evolving mission requirements.

Effective Use of the Civilian Work Force

The drawdown of military forces has required an increased reliance on Defense Department civilian and private contractor support during military operations. Civilians are an integral part of the Total Force and are vital to the sustainment and flexibility of U.S. forces. Department civilians now perform or oversee many support tasks formerly done by military personnel, such as intelligence, communications, translation services, and morale and welfare operations. As various weapons systems have become more sophisticated, civilians have become more critical to their maintenance. The inclusion of civilian assets during deliberate planning significantly enhances force readiness and sustainment by ensuring more rapid, efficient, and effective use of U.S. military forces.

Civilian Downsizing and Transition Assistance

The Department uses innovative personnel programs and incentives to provide a soft landing to employees who are displaced. As a result, less than 10 percent of civilian strength reductions have come about through involuntary separations. Since buyouts were first approved in 1993, DoD has offered over 91,000 incentives. In that same time, the Department has reabsorbed over 30,000 employees through the Department's Priority Placement Program. Through operations of the Defense Outplacement Referral System, over 1,500 employees have gone to other federal employers and many more have been hired by private and other public employers.

DoD has added the Non-Federal Hiring Incentive, which Congress authorized in the FY 1995 National Defense Authorization Act, at all closing bases. This incentive encourages private and public employers to hire DoD workers facing separation by providing payments of up to $10,000 per worker for retraining and relocation. It has been used at Mare Island Naval Shipyard, Vallejo, California; Philadelphia Naval Shipyard, Philadelphia, Pennsylvania; and Naval Aviation Depot, Alameda, California.

The FY 1996 National Defense Authorization Act also allows DoD activities and installations to manage the impact of downsizing by encouraging employees to volunteer to be separated in lieu of another employee who is slated to be separated by reduction-in-force procedures.

Family-Friendly Workplace Initiatives

To help ensure innovative and proactive support of the President's Family-Friendly Workplace Initiative, the Deputy Secretary of Defense urged the heads of the military departments and the defense agencies to personally support and encourage the use of flexible work arrangements like alternative work schedules and telecommuting. It is estimated that over 40 percent of the DoD work force is now using some type of alternative work schedule.

The Department has been an important participant in the development of a program of telecommuting for federal employees. In support of the National Telecommuting Initiative, the Department is conducting a telecommuting pilot project to encourage greater use of telecommuting and to determine how telecommuting can be most effectively employed. Under the pilot, a central fund has been established to underwrite the expenses associated with using General Services Administration (GSA) telecommuting centers. Over 200 DoD employees are now using the GSA telecommuting centers. Because of DoD's leading role in the telecommuting area, the Department has been invited to become a founding sponsor of Telecommute America, a public/private effort to promote utilization of telecommuting nationwide.

Civilian Training, Education, and Development

While the Department continues the downsizing of the civilian work force, attention is turning to the need to build up the competencies and capabilities of the remaining and incoming force. New employment initiatives are emerging that include more systematic civilian force planning, more deliberate training and education, and more organizational and functional mobility.

To improve civilian leadership, the Department is establishing a systematic program of training, education, development, rotation, and selection within and across the DoD components called the Defense Leadership Management Program. This program will prepare, certify, and continuously educate and challenge a highly capable, diverse, mobile cadre of career senior civilian managers and executives. It provides a framework for the alignment of current and future leadership programs. The program will use many of the approaches that have proved effective in the military. Organizational and occupational mobility shall be a condition of selection and geographic mobility will be strongly encouraged.

Defense Partnership Council

Chartered in June 1994, the Defense Partnership Council (DPC) is composed of senior management officials and key leaders from the Office of the Secretary of Defense, defense agencies, the military departments, and major union officials who represent approximately 1,700 bargaining units located throughout the world. The DPC has taken important steps in the process of transforming labor-management relations from the traditional adversarial mode to a cooperative model based on partnership and mutual respect. The Office of the Assistant Secretary of Defense for Force Management Policy is conducting an extensive labor-management cooperation training and facilitation program. This program encompasses interventions in labor-management relations, including partnership facilitation and training, labor-management skills training and education, facilitation of negotiations, consultative assistance, co-mediation, and the application of Alternative Dispute Resolution. This latter program has been helpful in approximately four dozen interventions, with many more planned for the future. In FY 1996, 4,500 personnel specialists and labor-management officials were trained in Alternative Dispute Resolution.

Civilian Personnel Regionalization and Systems Modernization

The Department has made great strides in its efforts to regionalize civilian personnel services and develop a modern information system. DoD's goal is to improve service while reducing costs. The Department began this effort with a ratio of personnel specialists to employees serviced of 1:61. By the end of FY 1996, the ratio was approaching 1:68. This ratio will continue to improve after the modern system is deployed and regionalization of personnel services is complete. The reductions in personnel specialists that will be achieved when DoD reaches this goal will meet or exceed the Department's National Performance Review streamlining targets.

With input from the military departments and defense agencies, the Department developed a regional service delivery model based on a number of successful prototypes implemented since 1986. Regionalization capitalizes on economies of scale by consolidating DoD's civilian personnel operations into 23 regional service centers and approximately 350 customer support units. Administrative processing operations and program management activities are being moved into regional service centers, while operations requiring face-to-face customer interaction will remain at customer support units. Through the end of FY 1996, the military departments and defense agencies have established 12 regional service centers and approximately 20 percent of their customer support units. With planned program and funding support for regionalization and modernization, an additional 11 regional service centers will be established by the end of FY 1998.

The Department is continuing to modernize its civilian personnel data system with deployment expected to begin during FY 1998. DoD is using a commercial off-the-shelf human resources information system as the basis for its modern data system. Managers will have access to an easy-to-use data system through graphical user interfaces which will improve speed and accuracy of personnel information. This approach reduces development time and resources and implements private sector best practices wherever possible.

Consolidated Advisory Services to the Field

Establishment of Field Advisory Services (FAS) in 1994 eliminated two or three human resources management layers between base-level human resources offices and the policy offices at the headquarters. FAS is the principal source of advice and guidance to all defense organizations worldwide on civilian human resources management issues and questions in the areas of employee benefits, entitlements, compensation, travel, classification, and labor relations. FAS provides service to 12,500 human resources specialists in over 350 full-service offices who, in turn, provide service to more than 800,000 DoD employees.

FAS, the first organization of its kind in DoD, constantly strives for higher quality and faster customer service. FAS continues to provide answers to 86 percent of the inquiries within one work day and 94 percent within three work days.