Personnel and readiness in the DoD John R. Quetsch Memorial Lecture.

Dr. David S. Chu Under Secretary of Defense for Personnel Readiness

As a central feature of its annual Professional Development Institute, the American Society of Military Comptrollers (ASMC) sponsors one or two lectures in a series designated as the John R. Quetsch Memorial Lectures. Over his distinguished career, Mr. Quetsch served as Principal Deputy Assistant Secretary of Defense (Comptroller), ASMC National President, and a member of the Board of Directors and Chief Financial Officer of the Pentagon Federal Credit Union. He was greatly respected by all who knew him.

These lectures are considered to be the academic high point of the ASMC's professional development offerings. The lectures offer a forum for speakers to share their viewpoints on future trends in domestic and foreign policy and in government management.

One of this year's two Quetsch lecturers was the Honorable David S. C. Chu, Under Secretary of Defense for Personnel and Readiness. Dr. Chu was sworn in as the Under Secretary of Defense for Personnel and Readiness on June 1, 2001. In this role, he serves as the Secretary of Defense's senior policy advisor on recruitment, career development, and pay and benefits for 1.4 million active duty military personnel, 1.3 million Guard and Reserve personnel, and 680,000 Department of Defense (DoD) civilians. He is also responsible for overseeing the state of military readiness.

Dr. Chu earlier served in government as the Director and then Assistant Secretary of Defense (Program Analysis and Evaluation) (ASD (PA&E)) from May 1981 to January 1993, where he became personally acquainted with Mr. Quetsch. As the ASD (PA&E), Dr. Chu advised the Secretary of Defense on the future size and structure of the Armed Forces, their equipment, and their preparation for crisis or conflict.

Dr. Chu's topic for the ASMC lecture was the "Transformation of the Department of Defense" and its far-reaching objectives and consequences. Although there are many facets to the Department's transformation efforts, Dr. Chu concentrated on changes to the civilian personnel system. He began by recalling that, at the end of the Cold War, the Congress began a process called the Quadrennial Defense Review (QDR) in which the Department would review national military strategy, establish goals, and determine ways to attain those goals.

He also mentioned the establishment of the National Defense Panel, which reviewed the first QDR report independently and, as part of its review, called for a transformation of the Department. President George W. Bush made transformation a centerpiece for his campaign and gave his Secretary of Defense [Donald Rumsfeld] a charter to transform the Department--a mission that has been and continues to be one of his primary tasks. Dr. Chu refers to transformation as an effort to change the equation--to rethink how we do business.

As an example of transformation, Dr. Chu used the launching by President Nixon 30 years ago of the all-volunteer force. No nation with armed forces the size of those in the United States had ever tried to do this. For the first 10 years it almost failed, but in the 20 years since then, the use of volunteers (instead of conscripts) has become a model for many countries in the modern world.

"Even France admires us," he said.

On April 10, 2003, the Department sent to the Congress a [proposed] Defense Transformation Act, which proposed a new National Security Personnel System. Dr. Chu was careful to point out that he and the Secretary of Defense take great pride in the DoD workforce; however, the system that regulates this workforce lacks the agility to respond in a timely way to the Department's needs, especially the world situation after September 11, 2001. He added, "Agility is not the first thing you think of when describing the present civil service system."

He then detailed the three major reasons why changes now are needed.

"Half the workforce we have in place today will be gone in 5 to 15 years, and we have not hired young people to replace them."

Dr. Chu made several remarks about the competitive disadvantage the Department faces when it tries to recruit young, high-quality persons who also receive offers from business and industry. "They can put a young college graduate on the payroll next week, and all we can tell them is to fill out forms and perhaps they will make a list." The DoD hiring process typically takes 3 to 5 months and, by then, the graduates have been lured away by more flexible private sector organizations.

"The Secretary of Defense has stated that there will be no military end strength increases, yet commanders need more people for more missions."

Analysis shows that there are several hundred thousand jobs being performed by military members that should--or could--be performed by civilians, either under contract or within the civil service. Dr. Chu feels this occurs because military personnel rules permit more flexibility than those that govern civilian employees; consequently, the work has migrated to military positions, and now this needs a re-look.

"Many of the personnel who currently constitute the United States" forces overseas will likely be stationed in the continental United States within the near future. "

Dr. Chu suggests that the infrastructure support for these personnel can best be performed by civilians.

Since changes in the civilian personnel system are moving rapidly through the House and the Senate Defense Authorization committees, what will the future personnel system look like? The Department has learned a lot from the many personnel experiments it has conducted, beginning with China Lake. [The China Lake Experiment was implemented by the Human Resources Department of the Naval Air Warfare Center in China Lake, California, subsequent to the 1978 Civil Service Reform Act. It was a highly successful experiment in personnel management that gave supervisors more flexibility in hiring and rewarding their federal workforce.] There have been very positive measurable effects on morale and performance and, in fact, 30,000 employees already are covered by new processes.

Thus, in the future, the Department will have only 5 career fields and 3 to 4 pay bands. The supervisor will set the entry-level pay for new hires and will reward high performers with appropriate pay raises. (For those who wish to read a more detailed description of the system, Dr. Chu referred to the description published in the Federal Register on April 2, 2003.)

Dr. Chu also mentioned that the Department has asked the Congress for authority to bargain with national unions. Currently, nearly every change affecting civilian personnel must be bargained locally (totaling 1,366 unions). As an example, Dr. Chu stated that some negotiations (for example, drug testing) are not yet complete even though negotiations began in 1990.

Finally, Dr. Chu reported on a proposal to lengthen the tours of duty for very senior officers from the current 2 years to 4 or 5 years and to extend the careers of general and flag officers beyond 30 years, both of which may be positively received by the congressional committees. He also mentioned an initiative to invest more resources in the training and education of civilian employees in a manner similar to the way the Department trains and develops its military personnel. While that is unlikely to pass this year, he said that the Department will try for this authority again next year.

In closing, Dr. Chu noted that John Quetsch would have approved of these initiatives because they are the right thing to do. Dr. Chu thanked Mr. James Quetsch, John's son, who attended the lecture on behalf of the Quetsch family.

To honor the event, the ASMC and the PFCU jointly made a donation of $1,000 to the New Orleans Childrens' Hospital in the name of the Quetsch family.

John T. Raines is Associate Director for Professional Development at the American Society of Military Comptrollers. He is currently working on the training portion of the Defense Financial Management Certification program. Previous work assignments include program and fiscal management far the Army Continuing Education System; Appropriation Director for Program 8 (General Personnel Activities), Army Budget Office, Headquarters Department of the Army; Chief of the Financial Management Education and Training Division, CFO Support Directorate, Office of the Under Secretary of Defense (Comptroller); and past Acting President of the Defense Business Management University.