Pentagon Lays Out Game Plan To Address Workforce Losses.

Civilian Pentagon leaders believe that the military services should be concerned about the Defense Department's ability to manage future weapon programs. The reason, officials said, is that, by 2005, more than 60,000 members of the Defense Department acquisition workforce will be eligible to retire.

Replacing these workers will not be easy, these officials stressed, because the acquisition bureaucracy, after a decade of downsizing, is not equipped or trained to hire fresh talent. Recruiting and retaining younger workers, additionally, will be hampered by the lack of flexibility in government personnel policies, said a report titled "The Acquisition Workforce 2005," published in October by a special task force, funded by the offices of the defense undersecretary for acquisition, technology and logistics, and the undersecretary for personnel and readiness.

The task force plans to introduce a series of personnel and administrative reforms, some of which require legislative approval. These efforts are designed to help lure young workers to the government and to ensure the Pentagon has in-house skills in critical areas such as information technology and various engineering disciplines. Implementing the task force program is expected to cost $230 million between 2001 and 2007.

Between 1989 and 1999, the defense acquisition workforce was cut by 50 percent. The Defense and Energy Departments accounted for nine out of 10 jobs cut during that time. There are approximately 152,000 workers in defense acquisition jobs today, and about 124,000 are civilian. The remaining are military officers.

The director of the task force, Keith Charles, said that more "awareness" is needed within the military services about a looming personnel crisis in the acquisition workforce. The bottom line, he said, is that "there are implications for new weapon systems."

The uniformed leaders should understand that the procurement of new equipment would be affected by future shortages of acquisition workers, Charles said during a briefing to defense industry representatives. "They can't assume that a contractor just backs up [a truck] in front of the Pentagon and dumps off a new helicopter."

The nation's demographics worsen the problem, he explained, because the so-called baby-boom generation will begin to retire in droves in 2007. That means the Defense Department will face greater competition for workers from the rest of the federal government and from the private sector. By 2007, said Charles, "we will be retiring, as a nation, three times more people than at any other time in history. There is no hope of recovery. We have to capture people before 2007 hits."

One consequence of the 50 percent cutbacks of the 1990s, he said, is that "we sacrificed our youth. We haven't hired anyone in 11 years. We don't know how to do it. The population has changed," and new skills are needed to keep up with rapidly advancing technology.

"We need for the senior uniformed leadership to share in the sense of urgency. I don't think they are very sensitive to what this can do for them," said Charles. The shortage of workers would not only affect the acquisition of new equipment but also logistics support, he said. "The Persian Gulf War worked because we had huge reserves of supplies from the Reagan [administration] buildup. We couldn't do that today."

By 2008, 75 percent of today's civilians at the Defense Department will be retired, said Charles. Even though the Pentagon spends $7.5 billion a year on its civilian workforce, he noted, it has not managed to plan for its future.

The expected shortage of acquisition managers will come at a time when the Pentagon anticipates growth in procurement accounts, so there will be "more work and fewer people," Charles said.

Cutbacks in government staff also have increased the Pentagon's reliance on contractors. The upshot is that there are more contractors that need government supervision. "We've gone through 13-14 years of outsourcing," he said.

Bernard Rostker, undersecretary of defense for personnel and readiness, commented on this issue during a recent breakfast with reporters in Washington, D.C.

"One thing that is very different today than 10 years ago is our use of contractors. One of the things we do with contractors is supervise them," said Rostker. As head of the Pentagon's Gulf War Illness office, he said, "I had a shop of about 200 people. About 20-25 were government and 175-180 were contractors in various forms.

"I used the government people in supervisory roles. I was not interested in a 22-year government employee, just out of college, supervising contractors. I wanted mature, older people, brought from the military or hired at GS-15 or Senior Executive Service ranks."

Rostker predicted that many of those government supervisors who will be retiring can be replaced, in part, with military service members and with new employees hired from the defense industry. "We have to think about different career patterns feeding the federal government."

It is nor likely, however, that the Pentagon will be in a situation where there won't be enough government workers to supervise contractors. Before that happens, Rostker said, "we will hire people."

Encouraging the practice of phased retirements is a "top priority," said Rostker. That would allow full-time workers to shift to part-time work without being financially penalized. "We have to explore that. What a waste of talent if we say, 'you are either working or you are not working,"' he added. It would make sense rather to use the talents of the experienced people to train younger employees.

Charles agreed that "there is a minimum 'core' needed by the government to oversee programs. ... A minimum skill-set is needed to protect the government interests." He cited a February 2000 Defense Department inspector general report, which attributed quality problems in many defense programs to management mistakes.

The 50 percent shrinkage of the civilian acquisition workforce was necessary after the end of the Cold War. But Charles believes the downsizing should not continue. "The number should be about what it is now: 152,000."

There will not be an obvious "degradation in programs in the short term," he said. Acquisition projects probably won't be affected in any significant way for the next two to four years. "But the lead time is such that we need to be working now, so we have the people and the process in place to keep going."

Given the anticipated wave of retirements, however, that workforce would go down to less than 100,000 by 2008, if no action were taken today, said Carolyn Bean Willis, Air Force representative on the Acquisition 2005 task force. Out of those 100,000 employees, nearly half would have more than 21 years of service.

"If we didn't do anything today, continued business as usual, we would lose 50,000 people," Willis said in an interview.

Short Term Goals

In the near term, the task force plans to roll out a number of initiatives by January 15, 2001, Willis explained. High on the list will be a briefing to the new administration transition team, which, task force officials hope, will pay heed to the acquisition workforce problem. The task force also wants to update selected staff members of the Armed Services and Government Affairs committees on Capitol Hill.

By the January deadline, Willis said the plan is to issue a "human resource performance planning guide" that will be distributed to the military services. The task force wants the services to use that guide as a tool to figure "what people they need for what jobs," she said. The goal is to "really get the senior leadership involved early. ... We will ask for feedback by mid-summer," she added. But realistically, "it probably will take a lot longer than that."

Other proposals by the task force include:

* Obtain legislative authority for the Defense Department to be able to convert term appointments to permanent appointments non-competitively.

* Get congressional endorsement of a Pentagon/industry two-way worker exchange program.

* Introduce personnel policies that encourage job mobility, allowing the government to cover relocation costs and job search costs for spouses.

* Increase bonus ceilings for high-demand occupations, such as information technology specialists and engineers.

* Simplify the hiring process for private sector workers seeking government employment.

* Seek authority to rehire federal retirees without financial penalties to them, as was done during the Y2K computer crisis, when retired Cobol programmers were asked to come back without being penalized on their retirement pay.

"Right now, if you retire from the Defense Department, you can come back and work part-rime, but you lose part of your retirement," Willis explained. The emergency provisions that allowed the Pentagon to rehire the Cobol programmers should apply to the acquisition workforce, she said. "We think we might reach a crisis point when this may be needed. We think we would meet the criteria under the emergency provisions.

The task force does not expect any immediate results from this work, said Willis. "I think we'll see some results right away, but it will be only in thinking, as the services begin to frame their workforce issues." It will take at least two years to see any significant change.