Department of Veterans Affairs: Improved Succession Planning Would Help Address Long-Standing Workforce Problems

VA operates one of the largest health care delivery systems in the nation and provides billions of dollars in benefits and services to veterans and their families. However, VA faces serious and long-standing problems with management challenges and veterans' access to care and disability benefits. For example, as of December 2018, VA reported an overall staff vacancy rate of 11 percent at VHA medical facilities, including vacancies of more than 24,000 medical and dental positions, and around 900 human resource positions. Ensuring VA, VHA, and VBA have a pipeline of talent to fill leadership positions and mission-critical occupations is key to addressing these challenges.

The VA Choice and Quality Employment Act of 2017 includes a provision for GAO to review succession planning policies and guidance at VA and its administrations. This report addresses the extent to which succession planning policies and procedures at VA, VHA, and VBA are consistent with key leading practices.

GAO reviewed agency documents related to succession planning for leadership positions and mission-critical occupations, and interviewed agency officials. To identify key leading practices, GAO reviewed GAO’s past work and Office of Personnel Management guidance.

The Department of Veterans Affairs (VA), the Veterans Health Administration (VHA), and the Veterans Benefits Administration (VBA) have not fully incorporated key succession planning leading practices (see table).

Source: GAO analysis of VA's, VHA's, and VBA's succession planning efforts. │ GA O-20-15

VA lacks a current, department-wide succession plan. According to VA officials, VA has not produced a department-wide succession plan since 2009 due to leadership turnover. VA officials said the 2009 plan does not reflect their current succession planning efforts. Establishing a succession plan would help VA identify and develop high-potential staff to meet VA's mission over the long term.

VHA's succession plan is consistent with some leading practices, but our prior work found that VHA's physician staffing data are incomplete. Also, VHA performs limited monitoring and evaluation of its plans. Additional monitoring and evaluation could help VHA assess the effectiveness of its strategies in achieving its goals.

VBA's plan includes some analysis of workforce gaps for mission-critical occupations. However, VBA's plan does not address leadership positions or fully incorporate key leading practices for mission-critical occupations, such as veterans claims examiners. Developing a succession planning process for leadership positions and fully incorporating key leading practices into its existing processes could help VBA better meet its current and future workforce needs.

VA has not updated its succession planning directive since 2003 and VA officials told us that the directive does not incorporate legal requirements put in place since then. The directive establishes requirements and responsibilities for succession planning across VA. VA officials stated that they have not updated the directive because of leadership turnover and changes in legal requirements. Updating the directive could help to ensure it reflects relevant legal requirements. In addition, we found that VA, VHA, and VBA do not follow all of the requirements outlined in the directive. Updating the directive could help to clarify and recommunicate succession planning roles and responsibilities across the department.

GAO is making four recommendations. VA should develop a department-wide succession plan and update its succession planning directive. VHA and VBA should fully incorporate key leading practices for succession planning. VA agreed with the recommendations.

The Department of Veterans Affairs (VA) operates one of the largest  health care delivery systems in the nation and provides billions of dollars  in benefits and services to veterans and their families. However, the  department and two of its administrations, the Veterans Health  Administration (VHA) and the Veterans Benefits Administration (VBA),  face serious and long-standing problems with management challenges  and veterans’ access to care and disability compensation benefits. In  multiple reports, we have found that mission-critical skills gaps and a lack  of strategic human capital management have limited VA’s ability to carry  out its vital mission to serve and honor America’s veterans.

We previously reported that, as of September 30, 2017, 30 percent of the  VA workforce would be eligible to retire in the next 5 years. Furthermore,  as of December 2018, VA reported an overall staff vacancy rate of 11  percent at VHA medical facilities, including vacancies of more than  24,000 medical and dental positions, and around 900 human resources  positions. In addition, we reported in December 2016 that VHA had  limited human resources capacity and weak internal control practices,  which undermined VHA’s human resources operations and its ability to  improve delivery of health care services to veterans. We made 12  recommendations to improve VHA’s human resources capacity and its  performance management system. As of July 2019, five of those  recommendations remain open.

These issues have contributed to our decision to list several areas  involving VA, VHA, and VBA on our High-Risk List. These high-risk  areas include managing acquisitions, managing risk and improving  veterans’ health care, managing disability claim workloads, and updating  eligibility criteria for disability benefits. In addition, we reported in May  2019 that leadership turnover impeded VA’s ability to address several of  these management challenges. Ensuring VA, VHA, and VBA have a  pipeline of talent to fill leadership positions and mission-critical  occupations is key to addressing these challenges.

The VA Choice and Quality Employment Act of 2017 includes a provision  for us to assess the extent to which key succession planning policies and  guidance at VA and its administrations are consistent with leading  practices. This report addresses the extent to which succession planning  policies and procedures at VA, VHA, and VBA are consistent with key  leading practices.

We focused our review on VA, VHA, and VBA because they comprise  more than 99 percent of VA’s total workforce, and our past work has  identified human capital deficiencies that can affect the care and services  they provide. We excluded the National Cemetery Administration from our review because it comprises less than 1 percent of VA’s total  workforce.

We reviewed agency documents related to succession planning for  leadership positions and mission-critical occupations, and interviewed  agency officials about these topics. We also reviewed selected  Standards for Internal Control in the Federal Government. We focused  on leadership positions and mission-critical occupations because skills  gaps in these areas can negatively affect VA’s ability to accomplish its  mission. Our review also included VA strategic workforce planning  documents, since VA officials told us they use this process for managing  mission-critical occupations. In this report, we use the term “succession  planning” to include both VA’s succession planning processes for  leadership positions and broader strategic workforce planning efforts for  mission-critical occupations.

To identify key leading practices for succession planning, we reviewed  our past work on succession planning that identifies such practices and  Office of Personnel Management (OPM) guidance. We also interviewed  OPM officials. The key leading practices we identified for this report  include:  1.  Obtain active support and participation from leadership. Agencies’ top  leadership actively participates in, regularly uses, and ensures the  needed financial and staff resources for key succession planning and  management initiatives.  2.  Develop succession plans aligned with strategic goals. Agencies  discuss how workforce knowledge, skills, and abilities for leadership  and mission-critical occupations will contribute to the achievement of  strategic and annual performance goals.  3.  Analyze current and future workforce gaps. For leadership and  mission-critical occupations, agencies identify the current talent state  and critical skills in the workforce, future workforce needs, and current  and future workforce gaps.  4.  Identify strategies for closing workforce gaps. Agencies identify  strategies for closing workforce gaps for leadership and mission- critical occupations, such as recruitment strategies, training, and  developmental opportunities.  5.  Monitor, evaluate, and update succession plans and strategies.

Agencies identify and track performance measures and progress  against goals to measure the effectiveness of succession  management programs, and regularly update plans to reflect lessons  learned.

We assessed the extent to which VA’s, VHA’s, and VBA’s policies and  procedures are consistent with these practices. Our review focused on  succession planning at VA, VHA, and VBA at the department and  administration levels, and excluded efforts at lower levels, such as at  specific medical centers within VHA. We developed an overall  assessment rating for each practice using the following definitions:

Not met. VA, VHA, or VBA have taken few, if any, actions to meet the  practice.

Partially met. VA, VHA, or VBA have taken some, but not all, actions  necessary to meet the practice.

Met. VA, VHA, or VBA have taken actions that meet the practice.

There are no significant actions that need to be taken to further  address this practice.

In reviewing VA and its administrations, we reviewed their policies and  procedures to determine to what extent they were consistent with leading  practices. We did not assess whether VA and its administrations were  effectively implementing those policies and procedures. When assigning  ratings, we did not consider draft plans or other documents currently in  development or under review because it is unclear whether and when  leadership will approve them.

Additionally, we identified requirements related to these leading practices,  including those contained in regulations established by OPM for strategic  human capital management. For example, under the strategic human  capital management regulations, agency human capital policies and  procedures must align with the agency’s mission, goals, and strategic  objectives, and be based on comprehensive workforce planning and  analysis. Agencies are also required to monitor and address skill gaps  within mission-critical occupations, and to evaluate succession plans for  leadership positions to ensure leadership continuity.

We conducted this performance audit from February 2019 to October  2019 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

We and others have identified challenges specific to VA’s management  and oversight. These challenges have affected VA’s ability to accomplish  its mission economically, efficiently, and effectively. For example, in April  2019, we summarized priority open recommendations from our previous  reports to address these VA challenges. These recommendations cover  areas affected by shortcomings in human capital management, such as  veterans’ access to timely health care and reform of the appeals process  for disability benefits. VA agreed or partially agreed with 28 of our 30  priority recommendations and is taking steps to implement them.

We have also previously reported on human capital challenges across  VA. For example, we reported in March 2017 that VA determined VBA  staff resources have not sufficiently kept pace with increased pending  appeals, and additional staff were needed to improve timeliness and  reduce its appeals inventory. We found that VA’s written workforce plans—which cover recruiting, hiring, and training—were not consistent  with sound workforce planning practices. We recommended that VBA  ensure the development of a timely, detailed workforce plan for recruiting,  hiring, and training new hires. As of October 2018, VA had taken steps to  address this recommendation, but still needed to address risk mitigation  strategies for ensuring it has appropriate capacity to manage appeals  workloads and improve timeliness of appeals decisions.

In addition, VA officials told us in August 2017 that VA had taken actions  to hire more staff to update regulations on disability eligibility criteria.  However, as of September 2018, the agency was still working to hire  these staff. Furthermore, we reported in August 2018 that VHA’s Sterile  Processing Services experienced workforce challenges such as lengthy  hiring time frames and limited pay and professional growth potential.  Officials told us that these challenges resulted in difficulty maintaining  sufficient staffing. These challenges pose a potential risk to VA medical  centers’ ability to ensure access to sterilized medical equipment. We  recommended that VHA examine the services’ workforce needs and take  actions based on the assessment. As of July 2019, this recommendation  remained open.

In 2018, VA’s Office of Inspector General identified leadership and  workforce investment as a major management challenge. The Inspector  General noted that the root cause for many of the issues it identified at  VA was poor and unstable leadership and staffing shortages. Also, a  2015 Independent Assessment found that VHA’s leadership pipeline was  not robust enough to meet its current and future needs. The report also  concluded that VHA could not identify potential leaders and prepare them  to assume their future roles. It stated that inadequate succession planning  and unfocused leadership development efforts contributed to these  problems. Finally, the report found that VHA may have difficulties meeting  projected demand for services if it does not increase its total number of  clinical employees, such as physicians, and their productivity.

Effective succession planning can help agencies ensure they have a  pipeline of talent to meet current and future mission requirements,  according to OPM and our past work. Succession planning is a proactive  and systematic process where organizations identify the positions they  consider to be too critical to be left vacant or filled by any but the best  qualified persons, according to OPM guidance. Organizations then  develop a plan to fill those positions with qualified and capable  employees. The guidance also states that organizations should take a  planned, deliberate, and holistic approach to selecting, developing, and  engaging their workforce. In our prior work, we noted that effective  succession planning is more than filling existing vacancies with people  with the same occupational skills and competencies. Rather, succession  planning focuses on current and future needs, and develops pools of  high-potential staff to meet the organization’s mission over the long term.

VA, VHA, and VBA Need to Fully Incorporate Key Succession Planning Leading Practices

Our assessment found that VA’s succession planning efforts partially met  one leading practice and did not meet four. VHA met two and partially met  three leading practices. VBA partially met three and did not meet two  leading practices (see table 1).

VA Does Not Have an Up- to-Date Department-wide Succession Plan

VA lacks a current, department-wide succession plan. It also has not met  four of the key leading practices for succession planning, but has partially  met one practice. VA Directive 5002 requires that VA use the  administrations’ plans to develop a workforce and succession plan  annually. However, VA has not produced a leadership-approved,  department-wide succession plan since 2009. VA officials said the 2009  plan does not reflect their current succession planning efforts.

Obtain active support and participation from leadership: Not met.  According to VA officials, VA has tried to update its 2009 succession plan;  however, leadership has not approved a revised plan because of  leadership turnover. VA has developed a draft workforce plan, but as of  July 2019, VA leadership had not approved the draft plan. Active  leadership support for succession planning could help VA strengthen its  current and future capacity to serve veterans.

Develop succession plans aligned with strategic goals: Not met. VA  officials did not provide evidence that VA’s succession planning process  was aligned with strategic goals. OPM strategic human capital  management regulations require an agency’s human capital policies and  programs to align with its missions, goals, and strategic objectives.  Developing an up-to-date succession plan aligned with the department’s  strategic goals would help VA to establish a strategic process for meeting  its current and future workforce needs.

Analyze current and future workforce gaps: Not met. VA officials told  us that they have conducted some analyses of workforce data for  mission-critical occupations, but they did not provide evidence that VA  analyzes or projects workforce gaps for leadership positions or for each  mission-critical occupation. For example, in accordance with the VA  MISSION Act of 2018 (MISSION Act), VA reported on the steps it is  taking to achieve full staffing capacity. The report included data on VA’s  onboard employees, turnover rates, and growth rates for the department’s  total workforce, and growth and turnover rates for clinical positions and a  limited number of other positions. VA also forecasted its overall hiring  requirements for the current and upcoming fiscal year based on the  budget and average turnover.

However, the report, which VA produces to meet the specific  requirements of the MISSION Act, does not include an analysis of  workforce gaps for leadership positions or for specific mission-critical  occupations. OPM’s strategic human capital management regulations  require agency human capital policies and programs be based on  comprehensive workforce planning and analysis, and use comprehensive  data analytic methods and gap closure strategies to monitor and address  skill gaps within mission-critical occupations. Further analyzing  workforce gaps could help VA identify current and emerging workforce  challenges and inform succession planning strategies.

Identify strategies for closing workforce gaps: Partially met. VA has  identified some strategies for addressing workforce gaps, though not  within a succession planning process. VA’s Corporate Senior Executive  Management Office (CSEMO) is responsible for managing the Senior  Executive Service (SES) across the department and its administrations.  CSEMO coordinates the hiring, placement, training, and development of  VA’s SES employees. VA also has an SES Candidate Development  Program, which identifies and develops talent to fill key SES positions.  Further, in its MISSION Act report, VA identifies several strategies to  achieve full staffing capacity. For example, the report discusses efforts to  recruit and retain clinical staff through the VHA Education Debt Reduction  Program and the VA Health Professional Scholarship Program. The  report also discusses the Hire Right Hire Fast model initiated in 2017 that  aims to fill open positions and reduce the time to hire for the medical  support assistance occupation.

VA officials have not provided evidence that they developed strategies for  addressing future workforce gaps as part of the agency’s succession  planning process. VA’s strategies are focused on closing current  vacancies and achieving full staffing capacity. However, our prior work  has found that leading organizations do more than just focus on replacing  individuals; rather, they engage in broad, integrated succession planning  and management efforts to strengthen both current and future  organizational capacity. Additionally, OPM’s strategic human capital  management regulations require agencies to plan for and manage current  and future workforce needs, and to make progress towards closing any  knowledge, skill, and competency gaps. Furthermore, because VA has  not conducted a full analysis of its future workforce gaps, VA cannot  identify strategies for closing those gaps.

Monitor, evaluate, and update succession plans and strategies: Not  met. VA provided limited evidence that it monitors and evaluates  workforce planning strategies. For example, VHA and VBA produce  action trackers to monitor the progress of some human capital initiatives  at the administration level. However, because VA officials did not provide  a current succession plan with strategies for closing workforce gaps, VA’s  limited monitoring and evaluation efforts are not clearly linked to a  succession planning process. Monitoring and evaluating the outcomes of  strategies, policies, programs, and activities is one of the key systems  established in OPM’s strategic human capital management regulations,  and requires agencies to identify, implement, and monitor process  improvements. Monitoring and evaluating activities as part of its  succession planning process could help VA ensure that it is implementing  effective strategies. Furthermore, regularly updating its succession plans  would help VA identify and address current and emerging workforce  gaps.

VHA’s Succession Plan Is Consistent with Some Leading Practices but VHA Performs Limited Monitoring and Evaluation of Its Plans

VHA developed a succession plan in 2016, and its efforts have met two of  the five succession planning leading practices for both leadership and  mission-critical occupations. However, leadership has not ensured that  VHA has complete workforce data. In addition, VHA’s monitoring and  evaluation of its succession plans is limited.

Obtain active support and participation from leadership: Partially  met. VHA leadership has dedicated resources to succession planning.  For example, VHA leadership dedicated staff and financial resources to  develop a succession plan for VHA in 2016. VHA leadership also  established the Healthcare Leadership Talent Institute (HLTI) in 2015 to  strategically manage and develop VHA’s leadership talent. In addition, the  former Undersecretary for Health approved the 2016 plan and  encouraged staff to use the plan to develop talented staff, improve  workplace culture and employee engagement, and address workforce  challenges to improve the veteran experience.

However, VHA leadership has not ensured that VHA’s plan incorporates  leading practices and departmental requirements for succession planning,  primarily related to analyzing workforce gaps and monitoring and  evaluating its plan. VHA officials also told us that VHA does not provide  leadership succession planning guidance to Veterans Integrated Service  Networks (VISN) or medical centers because VHA has started to  centralize leadership succession planning at the national level.  Additional support and involvement from top leadership, such as  providing additional oversight and guidance, could help to ensure VHA is  meeting department-level succession planning requirements, and ensure  that succession planning efforts achieve workforce goals.

Develop succession plans aligned with strategic goals: Met. VHA  has developed a succession plan and strategies that align with the  administration’s and department’s strategic goals. The 2016 succession  plan discusses VHA’s strategic direction—which includes strategic goals,  major initiatives, and legislation that affect VHA’s workforce—and  succession planning priorities. For example, the plan describes VHA’s  strategies to adapt to a changing veteran population and to ensure it can  provide sufficient, patient-driven primary and mental health care to meet  the needs of veterans.

Analyze current and future workforce gaps: Partially met. VHA’s  2016 succession plan analyzes current and projected workforce trends for  both leadership and mission-critical occupations. For example, the plan  presents the total number of executive leadership positions and the  number of vacancies in those positions. In addition, the plan includes  analyses of recent historical and projected workforce trends for mission- critical occupations, including prior and anticipated onboard, retirement,  quit, and total loss rates. VHA collects workforce data from facilities  annually and displays these data on its internal website, which is  accessible to VHA staff who make human capital and workforce planning  decisions.

Although VHA tracks workforce data, our prior work has identified  weaknesses with these data. For example, in October 2017, we found  that VHA was unable to accurately count the total number of physicians in  VA medical centers. Medical centers annually report data through a  workforce planning tool; however, this tool does not include information  on contract physicians, fee-basis physicians, and physician trainees. All  of these arrangements help medical centers meet their demand for  physicians, which have regularly been identified as one of VHA’s top  shortage occupations. We recommended VHA develop and implement a  process to accurately count all physicians providing care at each medical  center. VA disagreed with this recommendation and, as of March 2019,  had not implemented this recommendation. Improving the completeness  and accuracy of its data would help VHA better address workforce gaps.

Identify strategies for closing workforce gaps: Met. VHA’s 2016 plan  identified strategies for closing workforce gaps. For leadership positions,  HLTI offers training programs focused on developing future healthcare  leaders. In addition to managing development programs, HLTI has  implemented several initiatives to address specific gaps in leadership  positions and build a succession pipeline of talent. For example, HLTI  facilitates an annual talent review process by identifying and developing  clinical and administrative leaders at medical centers who are interested  in moving up into medical center director positions, the highest position in  a VA medical center.

VHA has also identified strategies to close gaps for its mission-critical  occupations. For example, VHA requires facilities to develop action plans  as part of the annual workforce planning cycle to reduce the risk of having  critical staffing shortages. For instance, one VA medical center identified  increasing human resources training and awareness of recruitment,  retention, and relocation funding as an action to address shortages in  dentist positions—the clinical occupation with the most severe shortage of  candidates at that medical center. In addition, VHA established an  initiative for hiring mental health providers, which involved hosting a  virtual career event, partnering with professional organizations, and  implementing other marketing and recruitment strategies.

Monitor, evaluate, and update succession plans and strategies:  Partially met. VHA has taken some steps to monitor, evaluate, and  update its succession planning. VHA updates its succession plan  approximately every 4 years and issues limited updates to the plan  annually. VHA’s Office of Workforce Management and Consulting tracks  workforce data nationally and provides data and risk scores by  occupation to VISNs and medical centers so they can monitor workforce  trends. VHA also uses these data to assess to what extent facilities’  efforts are achieving workforce goals. For leadership positions, VHA  officials told us that HLTI evaluates its leadership development programs  and that these evaluations are used to modify the programs to better  meet VHA’s succession needs.

However, VHA’s 2016 plan only included limited evaluations of previously  identified strategies because VHA has not established a process for  evaluating its succession planning efforts. While VHA tracks facility-level  metrics for various occupations, VHA’s plan did not discuss specific  methods for monitoring and evaluating its succession planning strategies.  For example, VHA tracks the vacancy rates for medical center director  positions; however, VHA has not identified a process to monitor and  evaluate the effectiveness of the talent review process it has implemented  for identifying and developing medical center director candidates.

The plan also mentioned that subject matter experts within VHA  suggested expanding monitoring efforts of certain recruitment and  retention programs. As noted above, agencies are required to identify,  implement, and monitor process improvements under the evaluation  system established in OPM’s strategic human capital management  regulations. Additional monitoring and evaluation of VHA’s succession  plans and strategies could help VHA to assess the effectiveness of its  strategies, and to identify and address emerging workforce challenges.

VBA Analyzes Some Gaps in Its Mission-Critical Workforce, but Has Not Developed a Succession Plan for Leadership Positions

VBA has partially met three key leading practices for succession planning  and has not met two practices. Its strategic workforce plan, which VBA  officials said is their primary succession planning document, only  incorporates some key leading practices for mission-critical occupations.  The plan does not address succession planning for leadership positions.

Obtain active support and participation from leadership: Partially  met. VBA’s leadership has taken some steps to promote succession  planning, but has not fully incorporated departmental requirements or key  leading practices. VBA officials told us that VBA’s leadership prioritizes  filling vacancies for mission-critical occupations. For example, human  capital staff brief VBA leadership monthly on vacancies and hiring  initiatives. However, our prior work has found that leading organizations  do more than simply backfill specific positions; rather, they engage in  broad, integrated succession planning and management efforts to  strengthen both current and future organizational capacity. As noted  above, OPM’s strategic human capital management regulations require  agencies to plan for and manage current and future workforce needs. In  addition, VBA officials told us that VBA’s leadership reviewed and  approved its strategic workforce plan. However, unlike VHA’s plan, VBA’s  plan does not indicate that it was reviewed and approved by leadership.

VBA leadership also has not ensured that VBA’s plan incorporates  departmental requirements or key leading practices. Some of the missing  leading practices discussed below—such as aligning plans with strategic  goals, identifying strategies to close workforce gaps, and monitoring and  evaluating those strategies—are also required by VA’s succession  planning directive.

VBA leadership also has not ensured that VBA is performing succession  planning for leadership positions, which is required by VA’s succession  planning directive and recommended by leading practices. In addition,  strategic human capital management regulations require agencies to  ensure leadership continuity by, in part, implementing and evaluating  succession plans for leadership positions.

According to VBA officials, VBA’s strategic workforce plan does not  include succession planning for leadership positions because VBA plans  Senior Executive Service (SES) development in coordination with the  Corporate Senior Executive Management Office (CSEMO). While  CSEMO manages SES development, VBA officials told us that VBA  provides input to CSEMO on VBA’s SES needs. VBA officials did not  provide evidence that they are identifying current and future leadership  needs. Furthermore, VBA’s leadership also includes General Schedule  (GS)-13 to GS-15 managers, who are below the SES level. Planning for  those managers would not involve coordination with CSEMO. Therefore,  incorporating leadership succession planning into its existing workforce  planning processes could help VBA strategically identify and better meet  current and future leadership needs.

Develop succession plans aligned with strategic goals: Not met.  Officials stated that VBA’s strategic workforce plan is the primary  document that would discuss succession planning, but this document  does not discuss strategic goals and how VBA’s plans align with those  goals. As noted earlier, OPM strategic human capital management  regulations require agency policies and programs to align with the  agency’s mission, goals, and strategic objectives. Aligning plans with  strategic goals could help VBA better achieve current and future mission  requirements. For example, VBA does not clearly describe how  succession plans and strategies for its veterans claims examining  occupations—a mission-critical occupation series—will address VBA’s  goal to provide veterans benefits and services in a timely manner. It can  also help VBA officials create a clear and convincing case for agency  leaders to dedicate resources―both budget and personnel―to  succession planning.

Analyze current and future workforce gaps: Partially met. VBA’s  strategic workforce plan includes some analysis of current and future  workforce gaps for mission-critical occupations, but not for leadership  positions. For example, according to the plan, VBA has increased the  number of employees in its veterans claims examining occupations. VBA  also anticipates that it will need additional claims processors to meet  future demand. However, the plan does not contain similar information for  leadership positions, either at the SES level or at lower levels. As noted  above, agency human capital policies and programs are to be based on  comprehensive workforce planning and analysis. Analyzing workforce  gaps in leadership could help VBA better understand its current and  future workforce requirements to meet its evolving mission requirements.

Identify strategies for closing workforce gaps: Partially met. VBA’s  strategic workforce plan does not identify strategies or actions to close  anticipated workforce gaps. VBA’s plan states that a forthcoming action  plan will develop specific goals and corresponding targets, but VBA  officials told us they are still developing this plan. As noted earlier,  agencies are required to plan for and manage current and future  workforce needs, and make progress towards closing knowledge, skill,  and competency gaps. However, VBA does have training and  development programs designed to ensure a pool of capable employees  is available to take over leadership positions. For example, the Assistant  Director Development Program helps prepare GS-14 and GS-15  employees for leadership positions within VBA. Nonetheless, identifying a  coordinated set of strategies in its plan for filling leadership positions and  closing mission-critical workforce gaps could help VBA address  challenges in these areas.

Monitor, evaluate, and update succession plans and strategies: Not  met. VBA updates its strategic workforce plan every 4 years and issues  limited updates to the plan annually. However, VBA’s plan does not  provide any information on monitoring or evaluating strategies to close  workforce gaps for mission-critical occupations or leadership positions. It  also does not include updates to actions or strategies based on past performance. Monitoring and evaluating the outcomes of strategies,  policies, programs, and activities is one of the key systems established in  OPM’s strategic human capital management regulations, and requires  agencies to identify, implement, and monitor process improvements.

VA’s Succession Planning Directive Has Not Been Updated Since 2003 and May Not Reflect All Relevant Legal Requirements

VA has not updated its succession planning directive since 2003 and VA  officials told us that the directive does not incorporate legal requirements  put in place since then. VA’s succession planning directive establishes  the requirements and assigns the roles and responsibilities for succession  planning across the department. VA’s directive identifies succession  planning as an ongoing activity intended to best meet the needs of the  department over time. According to VA officials, VA has attempted to  update the directive twice since 2003, but has not completed the update  due to leadership turnover. In addition, officials stated that they had to  delay updating the directive to revise it to incorporate new regulatory and  legislative changes that occurred during those past efforts to update the  directive.

A key update to legal requirements since 2003 is OPM’s strategic human  capital regulations. These regulations establish the framework agencies  are to use to plan, implement, evaluate, and improve human capital  policies and programs. OPM originally issued the regulations in 2008 and  then revised them in December 2016. In addition, the VA Choice and  Quality Employment Act of 2017 requires VA, among other things, to  establish a single database that lists each vacant position in VA that the  Secretary determines is critical to the mission of VA, difficult to fill, or  both.

Updating the directive could help to ensure it reflects legal requirements  put in place since 2003, such as OPM’s strategic human capital  regulations. Updating the directive is also consistent with GAO’s  Standards for Internal Control in the Federal Government, which requires  management to identify and respond to significant changes, such as new  laws and regulations.

In addition, we found that VA, VHA, and VBA do not follow all of the  requirements outlined in the directive. For example, the directive assigns  responsibility to VA, VHA, and VBA for monitoring and evaluating their  succession planning strategies, which is consistent with leading practices.  However, as stated above, we found that VA, VHA, and VBA do not  conduct sufficient monitoring and evaluation. Updating the directive could  help VA clarify and recommunicate succession planning roles and  responsibilities across the department and its administrations.

We and others have previously identified leadership turnover and  mission-critical vacancies that have affected VA’s ability to provide  services to veterans. Addressing these challenges will require a planned  and holistic approach to succession planning that focuses on current and  future mission requirements over the long term rather than on filling  existing vacancies with people with the same occupational skills and  competencies.

VA, VHA, and VBA have taken important steps to develop a pipeline of  talent to fill leadership positions and mission-critical occupations. For  example, each has developed training and development programs for  aspiring leaders. However, VA lacks a current department-wide  succession plan for leadership positions and mission-critical occupations,  as required by its own directive. Establishing a department-wide  succession plan and improving existing workforce plans would help VA  identify and develop pools of high-potential staff to meet VA’s mission  over the long term. Meanwhile, VHA and VBA could each take additional  steps to fully incorporate key leading practices into their succession  planning.

Addressing VA’s challenges will require active leadership support and  clear departmental guidance outlining VA’s and its administrations’  responsibilities for succession planning. However, VA has not updated its  succession planning directive since 2003 due to leadership turnover,  among other factors. Updating the directive could help ensure VA and its  administrations are complying with relevant legal requirements—including  OPM’s strategic human capital management regulations—and ensure  they understand their roles and responsibilities for succession planning.

We are making a total of four recommendations, including two to VA, one  to VHA, and one to VBA:  The Secretary of Veterans Affairs should develop a department-wide  succession plan for leadership and mission-critical occupations that  incorporates key leading practices for succession planning.  (Recommendation 1)

The Under Secretary for Health should incorporate key leading practices  into VHA’s succession planning processes, including monitoring and  evaluating VHA’s succession planning. (Recommendation 2)

The Under Secretary for Benefits should develop a succession planning  process for all leadership positions and incorporate key leading practices  into VBA’s succession planning for leadership positions and mission- critical occupations. These practices include aligning the plans with  strategic goals, identifying strategies to close workforce gaps, and  monitoring and evaluating VBA’s succession planning. (Recommendation  3)

The Secretary of Veterans Affairs should update VA’s 2003 directive on  workforce and succession planning to incorporate relevant legal  requirements, including OPM strategic human capital management  regulation requirements. (Recommendation 4)

We provided a draft of this report to the Secretary of Veterans Affairs for  review and comment. VA provided written comments, which are  reproduced in appendix III. VA concurred with all four recommendations.  VA also provided technical comments, which we incorporated as  appropriate.

We are sending copies of this report to the appropriate congressional  committees and the Secretary of Veterans Affairs. In addition, the report  is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2757 or goldenkoffr@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix IV.

Appendix I: Leadership Positions and Mission-Critical Occupations

Table 2 summarizes leadership positions and mission-critical occupations  at the Department of Veterans Affairs (VA), Veterans Health  Administration (VHA), and Veterans Benefits Administration (VBA) as  identified by the department and administrations.

Appendix II: Description of Key Leading Practices for Succession Planning

We reviewed our past reports and Office of Personnel Management  guidance to identify the following key leading practices for succession  planning. The list below explains the importance of the practices and  provides examples of how agencies can demonstrate them.  1.  Obtain active support and participation from leadership. Agencies’ top  leadership actively participates in, regularly uses, and ensures the  needed financial and staff resources for key succession planning and  management initiatives. This leadership is important because it can  provide (1) stability during plan development and implementation, (2)  champions within the agency, and (3) integration with other key  management planning efforts. This practice may be demonstrated by,  for example, leadership participating in key succession planning  meetings and ensuring succession planning policies are up-to-date.  2.  Develop succession plans aligned with strategic goals. Agencies  discuss how workforce knowledge, skills, and abilities for leadership  and mission-critical occupations will contribute to the achievement of  strategic and annual performance goals. This alignment helps ensure  agencies’ plans provide the talent needed to meet their current and  future mission requirements. This practice may be demonstrated by,  for example, integrating succession planning into strategic planning  and annual strategic objectives review assessments.  3.  Analyze current and future workforce gaps. For leadership and  mission-critical occupations, agencies identify the current talent state  and critical skills in the workforce, future workforce needs, and current  and future workforce gaps. This gap analysis is important for  identifying the skills and competencies needed for achieving its  missions and goals even as the agency’s operating environment  changes. This practice may be demonstrated by, for example,  conducting and documenting current and projected workforce  analysis, including workforce gaps.  4.  Identify strategies for closing workforce gaps. Agencies identify  strategies for closing workforce gaps for leadership and mission- critical occupations, such as recruitment strategies, training, and  developmental opportunities. This planning is important for aligning  strategies to eliminate gaps, and tailoring workforce programs and  processes to the agency’s needs. This practice may be demonstrated  by, for example, developing and implementing action plans and  training and development programs.  5.  Monitor, evaluate, and update succession plans and strategies.

Agencies identify and track performance measures and progress  against goals to measure the effectiveness of succession  management programs, and regularly update plans to reflect lessons  learned. This performance monitoring is important for measuring both  the outcomes of strategies and how the outcomes have helped  accomplish the agencies’ missions and goals. This practice may be  demonstrated by, for example, conducting progress assessments or  revising programs based on past performance.

Appendix III: Comments from the Department of Veterans Affairs

Appendix IV: GAO Contact and Staff Acknowledgments

Robert Goldenkoff, (202) 512-2757 or goldenkoffr@gao.gov.

In addition to the contact named above, Shannon Finnegan (Assistant  Director), Alexander Ray (Analyst-in-Charge), Colleen Corcoran, Karin  Fangman, Robert Gebhart, and Sarah Green made key contributions to  this report. Steven Flint, Shelby Kain, Christy Ley, Marcia Mann, Rachel  Stoiko, and James Whitcomb also made contributions.

Turnover in key occupations threatens VA’s ability to deliver on its mission. Specifically, about a third of VA’s workers in 2017—including many senior leaders—would be eligible to retire by 2022. Also, VA medical facilities had a vacancy rate of 11% last year, including 24,000 medical and dental jobs.

VA has worked to solve these problems, but additional efforts are needed. Our recommendations include better planning to develop the next generation of leaders and fill key positions.

VA’s management of care and disability benefits are topics on our High Risk List.


Afghanistan Security Forces Fund: DOD Has Processes for Identifying Training Needs and Maintaining Visibility over Contracts

The United States has made a commitment to building Afghanistan's security and governance structure in order to counter terrorist threats and create sustainable security and stability in Afghanistan. Since 2005 Congress has appropriated more than $78.8 billion for the ASFF to build, equip, train, and sustain the Afghan National Defense and Security Forces. Over that period, nearly $4.3 billion has been expended to support the training and operations of the Afghan National Army. Training requirements are primarily fulfilled through contracts. In recent years, concerns have been raised in Congress about the high costs of some of these training contracts.

The Joint Explanatory Statement accompanying the Consolidated Appropriations Act, 2018, included a provision for GAO to examine the ASFF training contracts. This report describes DOD's processes to (1) identify Afghan National Army training needs and associated funding requirements; (2) develop and execute ASFF training contracts; and (3) provide visibility over ASFF training contracts. GAO reviewed DOD guidance for identifying and executing training needs, and interviewed DOD officials.

GAO also reviewed documentation associated with task orders issued against an indefinite delivery, indefinite quantity contract for training completed in fiscal years 2017 through 2019 for the Afghan National Army.

Combined Security Transition Command-Afghanistan (CSTC-A) has established processes to identify capability gaps within the Afghan National Defense and Security Forces (ANDSF), develop and select training needed to address those gaps, and identify associated funding requirements. CSTC-A generally includes these requirements in the Afghanistan Security Forces Fund (ASFF) budget justification book. Many of the key decisions and associated cost assumptions on how CSTC-A and Train Advise Assist Command–Air (in the case of Afghan pilot training) intend to carry out ASFF training efforts are proposed 18-24 months before the training will occur (see figure).

ASFF-funded training contracts are developed and executed under a process modeled on the U.S. government's foreign military sales program. Prior to April 2019, most ASFF-funded training requirements were filled under a single-award indefinite delivery, indefinite quantity (IDIQ) contract that supported a wide range of DOD training needs. An IDIQ contract provides for an indefinite quantity, within stated limits, of supplies or services during a fixed period. The government places orders for individual requirements. According to an Army official, that contract's broad scope and high contract value ceiling made it a highly expedient way to contract for various types of training for the ANDSF. However, contracting officals stated that using a single-award contract limited DOD's ability to negotiate some costs. At that point, DOD began to transition to an approach using several contracts, including one with multiple providers. Given that DOD executed its first task order under these new contracts in April 2019, it is too early for GAO to comment on the efficacy of this new approach.

DOD has varying degrees of visibility over ASFF-funded contracts. DOD officials stated that they have visibiliity at the broadest level of the overall execution of the ASFF budget, including funding associated with Afghan National Army training. At the individual contract level, the military services' contracting commands maintain contract files, but the services' systems do not interface with one another. According to DOD officials, although DOD can obtain visibility over ASFF training contracts in the aggregate, the department must work with the contracting commands at the respective military services to gather information specific to training contracts.

Since 2001 the United States has made a commitment to building  Afghanistan’s security and governance structure in order to counter  terrorist threats and create sustainable security and stability in  Afghanistan. Developing independently capable Afghan National Defense  and Security Forces (ANDSF) is a key component of U.S. and coalition  efforts. In support of those efforts, the Department of Defense (DOD)  relies heavily on the Afghanistan Security Forces Fund (ASFF) to provide  assistance to the ANDSF, which comprises all Afghan forces under the  Ministry of Defense and Ministry of Interior.

The ASFF was established in 2005 to build, equip, train, and sustain the  ANDSF, and since then Congress has appropriated more than $78.8  billion in ASFF funding. Over that period, about two-thirds of the funds  provided to the ASFF have been executed through the Defense Security  Cooperation Agency, including about $4.3 billion to support the training  and operations of the Afghan National Army. Most of the remaining  ASFF funding was provided directly to the Government of the Islamic  Republic of Afghanistan, primarily to fund pay and operational support to  the ANDSF, such as facilities sustainment contracts and information  technology system management support. Concerns have been raised in  Congress about the high costs of some training contracts funded by the  ASFF.

The Joint Explanatory Statement accompanying the Consolidated  Appropriations Act, 2018, included a provision for us to examine the  ASFF training contracts. This report describes DOD’s processes to (1)  identify Afghan National Army training needs and associated funding  requirements; (2) develop and execute ASFF training contracts; and (3)  provide visibility over ASFF training contracts.

For our first objective, we focused on the process used to determine  training needs and funding requirements for the Afghan National Army  and the Afghan Air Force (which is part of the Afghan National Army),  managed by the U.S. Army, because this training accounts for about 90  percent of the total ASFF training offerings for fiscal years 2017 and  2018. We reviewed and analyzed guidance on the processes for  identifying and requesting funding for training needs. We interviewed  DOD officials involved in the process, including those from Combined  Security Transition Command-Afghanistan; Train Advise Assist  Command–Air, Program Executive Office for Simulation, Training, and  Instrumentation; and Army Contracting Command.

For our second objective, we reviewed guidance on the process for  developing and executing ASFF training contracts, as well as the  contracting process. We also reviewed documentation associated with  task orders issued against an indefinite delivery, indefinite quantity  contract for training completed in fiscal years 2017 through 2019 for the  Afghan National Army. We conducted a more detailed review of  documentation associated with fixed- and rotary-wing pilot training that  had been completed at the time of our review. To more fully understand  the contracting process and the costs associated with the training, we  performed a more detailed but non-generalizable review of documents  associated with a task order covering fixed-wing pilot training and we  interviewed U.S. Army Contracting Command officials.

For our third objective, we reviewed DOD’s budget and contracting  processes related to ASFF training requirements to determine how they  provide DOD officials with visibility over key ASFF contract information,  from budgeting information to contract execution. We interviewed officials  from the Office of the Under Secretary of Defense for Policy (OUSD- Policy), Defense Security Cooperation Agency, Combined Security  Transition Command-Afghanistan (CSTC-A), U.S. Army Security  Assistance Command, U.S. Army Materiel Command, U.S. Army  Contracting Command, and Program Executive Office for Simulation,  Training, and Instrumentation.

We conducted this performance audit from June 2018 to November 2019  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

The United States currently has two primary missions in Afghanistan: the  U.S-led counterterrorism mission and the NATO-led Resolute Support  mission to train, advise, and assist the ANDSF. For U.S. purposes, both  of these missions are a part of Operation Freedom’s Sentinel,  commanded by U.S. Forces-Afghanistan. Combined Security Transition  Command-Afghanistan is the command under NATO’s Resolute Support  mission that conducts the train, advise, and assist mission in Afghanistan.  These efforts are carried out via the regional Train Advise Assist  Commands (TAACs) that collectively cover all of Afghanistan.  Specifically, Train Advise Assist Command–Air (TAAC-Air) focuses on  developing and advising the Afghan Air Force.

The ASFF is generally a 2-year appropriation that is used to provide  assistance, with the concurrence of the Secretary of State, to the security  forces of Afghanistan, including the provision of equipment, supplies,  services, training, facility and infrastructure repair, renovation,  construction, and funding. The ASFF presently comprises four budget  activity groups: Afghan National Army, Afghan National Police, Afghan Air  Force, and Afghan Special Security Forces. Each budget activity group  includes four sub-activity groups: sustainment, infrastructure, equipment  and transportation, and training and operations. According to officials, the  training and operations sub-activity group encompasses most of CSTC- A’s efforts to train the ANDSF, including the Afghan National Army.

DOD Processes for Identifying Afghan National Army Training Needs and Associated Funding Requirements

CSTC-A has established processes to identify capability gaps within the  ANDSF, develop and select training needed to address those gaps, and  identify associated funding requirements. To do so, CSTC-A works with  various requiring activities—partner organizations, such as the Train  Advise Assist Commands—to identify ANDSF training needs. CSTC-A  then incorporates these needs and associated funding requirements into  the ASFF budget request, typically a year or more before the training is  initiated.

CSTC-A Works with Its Partner Organizations to Identify ANDSF Capability Gaps and Training Needs

CSTC-A has established processes to identify capability gaps within the  ANDSF, develop and select training needed to address those gaps, and  identify associated funding requirements for inclusion in ASFF budget  justification documentation. To help execute these processes, CSTC-A  has developed standard operating procedures and other guidance for  planning, resourcing, and executing the ASFF. These procedures and  other guidance include information on processes to validate training  requirements and associated resources. CSTC-A works with various  partner organizations—referred to as “requiring activities”—to identify  capability gaps and training needs for the ANDSF. Requiring activities are  the organizations that request the resourcing of ANDSF capability needs  through ASFF. They include CSTC-A, the TAACs, and other U.S. or  NATO organizations partnered with the ANDSF.

According to DOD officials, a partner organization can identify capability  gaps in a number of ways. For example, Train Advise Assist Command– Air, which develops and advises the Afghan Air Force, works with subject  matter experts from the relevant U.S. military services and other  organizations to identify potential Afghan Air Force capability gaps.

Additionally, according to DOD officials, in 2015 DOD tasked the MITRE  Corporation to conduct a study of Afghan Air Force capabilities.  According to DOD officials, MITRE’s November 2015 study highlighted  capability gaps within the cadre of Afghan Air Force fixed- and rotary-wing  pilots and maintenance personnel. Further, officials stated that the study  concluded that the training of additional pilots constituted a critical need  for the Afghan Air Force.

Once a capability gap has been identified, the requiring activity develops  potential courses of action to address it, such as proposals to train the  ANDSF to develop needed capabilities. Through CSTC-A’s procedures  these proposals are validated, along with associated resources. The  validation process is intended to ensure that a transparent and  accountable process is followed when allocating ASFF resources to  emerging requirements.

For example, as part of the fiscal year 2018 budget process, TAAC-Air  identified a capability gap within the Afghan Air Force and then worked  with various subject matter experts to develop courses of action to  address the gap. Specifically, TAAC-Air worked with personnel from the  Program Executive Office for Simulation, Training, and Instrumentation  (PEO-STRI), which provides simulation, training, and testing solutions for  the Army and joint community. Subject matter experts from PEO-STRI  provided details regarding various options for addressing the capability  gap. PEO-STRI officials noted that they also provided cost estimates for  delivering the solution based on historical data. According to PEO-STRI  officials, this was a highly interactive process entailing frequent formal  and informal discussions among multiple organizations to develop the  most effective solution for pilot training for the Afghan Air Force. Once  details and cost estimates were solidified, the requirement owner  presented them to a Council of Colonels, an officer group responsible for  requirement validation for training needs, among other capability needs.  The requirement was then taken to the General Officer Steering  Committee, which votes to validate the requirement and approve the  proposed solution.

CSTC-A Process Incorporates Validated Training Needs into ASFF Budget Request

CSTC-A’s process incorporates validated training needs and their  associated funding requirements as part of DOD’s annual budget  process. DOD’s planning, programming, budgeting, and execution  (PPBE) process, which is governed in part by DOD Directive 7045.14,  along with other DOD guidance, is conducted under four phases (see  figure 1). Specifically, DOD uses the PPBE process to determine and  prioritize requirements and allocate resources to provide capabilities  necessary to accomplish the department’s missions. According to  officials, as part of this process, CSTC-A provides inputs, including  training requirements and associated funding needs, and later works with  various contracting commands to execute appropriated funds.

In the case of ASFF, CSTC-A’s guidance indicates that a proposed  activity (for example, fixed-wing pilot training classes) should generally be  included in the ASFF budget justification book in order to later use ASFF  funds for that activity. To do so, CSTC-A’s Program and Analysis  Division develops and incorporates the requests from requirement owners  for funding for the operations, sustainment, and development of the  ANDSF into the ASFF budget request and associated budget justification  materials. The Program and Analysis Division works with the  requirement owners to write a narrative describing their proposed activity  and associated cost estimate for delivering the activity. The division then  works with the OUSD-Comptroller to consolidate requirements for all  budget activities and sub-activity groups into a single draft budget  justification book.

One significant aspect of this process is that many of the key decisions,  and associated cost assumptions, on how CSTC-A and TAAC-Air (in the  case of Afghan pilot training) intend to carry out ASFF training efforts are  proposed 18-24 months before the training will occur. For example, as  shown in figure 2, preparation of the ASFF budget justification book for  fiscal year 2019 began in the summer of 2017. In turn, the budget  justification book was subsequently submitted to the OUSD-Comptroller  in December 2017, and funds were not available for use until the start of  the new fiscal year, in October 2018.

These time frames can present a challenge in developing accurate cost  estimates for CSTC-A, given that situations in Afghanistan can change  significantly in the time between CSTC-A’s developing a proposed  capability requirement and associated cost estimate for inclusion in the  ASFF budget justification book and the execution of that requirement,  according to officials. If conditions change, officials noted, the proposed  actions and associated cost estimates for a given requirement may no  longer be appropriate or accurate. For example, the Special Inspector  General for Afghanistan Reconstruction reported in January 2019 that  CTSC-A may have overestimated the cost for UH-60 Blackhawk rotary- wing pilot training by as much as $1 billion over a 7-year period— attributing the overestimation mainly to unrealistic assumptions regarding  student or pilot attrition and the English language program.

In the case of initial entry fixed-wing pilot training classes, CSTC-A’s  original proposal, as reflected in its budget justification book was to have  classes of 25 students. However, during the implementation of this  training, the class size fell to 12 students because not all 25 students  achieved the required English language proficiency, and one student had  dropped out of the program. Consequently, the resulting class was half  the projected size underlying the estimated funding requirement, which  resulted in funds being excess to CSTC-A’s actual need. CSTC-A officials  acknowledged the challenges they faced in filling classes with the  expected number of students, adding that they had purposely built in  significant flexibility in the training approach to be able to adjust to the  realities of the ANDSF’s ability to generate qualified students. According  to CSTC-A officials, the number of English-proficient Afghan student  candidates varies from year to year.

For cases like these, where CSTC-A requested more funding than it  ultimately obligated, in some circumstances DOD may reprogram the  unobligated amounts within the same appropriation account, or may  transfer it to other appropriation accounts, if there is authority to do so.  Otherwise, time-limited appropriations, such as the ASFF, expire after  their period of availability and are unavailable for new obligations.  According to CSTC-A officials, in cases where they have unobligated  funding due to changing conditions such as smaller-than-expected class  sizes, they try to reprogram that money for related needs within the same  sub-activity group in the ASFF budget prior to expiration. For example, if  certain Afghan Air Force training costs are lower than expected, the  money could be reprogrammed for other efforts within the Afghan Air  Force training and operations sub-activity group.

CSTC-A’s Process for Developing and Overseeing ASFF Training Contracts

ASFF-funded training contracts for the ANDSF are developed and  executed through a process that is modeled on the U.S. government’s  foreign military sales process. Until April 2019, ASFF-funded orders to  train the Afghan National Army were generally filled under a contract with  a single provider. At that point, DOD began to transition to an approach  using several contracts, including one with multiple providers.

ASFF-Funded Training Contracts Are Developed and Executed Under a Process Modeled on the Foreign Military Sales Program

ASFF-funded training contracts are developed and executed under a  process modeled on the U.S. government’s foreign military sales (FMS)  program, referred to as “pseudo-FMS.” As indicated by CSTC-A  guidance, these pseudo-FMS procurements are FMS-like cases and use  U.S. funds to purchase items, services, and training for ANDSF capability  requirements. The process is outlined in the Security Assistance  Management Manual, which provides DOD-wide guidance to DOD  components engaged in the management or implementation of DOD  security assistance and security cooperation programs over which the  Defense Security Cooperation Agency has responsibility. We have  previously reported that while the many steps of the process used for  FMS and pseudo-FMS cases can be grouped in different ways, they fall  into five general phases: assistance request, agreement development,  acquisition, delivery, and case closure.

First, CSTC-A works with the resource coordinator, requirement owner,  and other elements to develop a Memorandum of Request, and it submits  that memorandum to the implementing agency and the Defense Security  Cooperation Agency, requesting assistance to contract for ANDSF needs  using ASFF funds. For example, when developing the Memorandum of  Request for initial entry fixed-wing pilot training, CSTC-A worked with  TAAC-Air, the requirement owner, to identify details regarding the agreed- upon training solution. Officials noted that CSTC-A also worked with the  subject matter experts from PEO-STRI to develop the independent  government cost estimate.

Second, as described by officials, the agreement development phase  begins with the Defense Security Cooperation Agency’s receiving the  Memorandum of Request. The Defense Security Cooperation Agency  opens a case and assigns it to an implementing agency—that is, the  military department or defense agency responsible for overall  management of the actions that will result in the delivery of materials or  services. According to contracting officials, the implementing agency for  training foreign military ground and air forces outside of the United  States—such as the Afghan National Army—is the U.S. Army Security  Assistance Command. The implementing agency then works with the  appropriate Program Executive Office to develop the Letter of Offer and  Acceptance—which serves to document the transfer of articles and  services to the U.S. government requesting authority. For example, for  the out-of-country fixed-wing pilot training requirement, contractors  delivered the training, and the appropriate implementing agency was  PEO-STRI, according to officials. Once the Letter of Offer and  Acceptance is completed and signed by the implementing and requesting  agencies, it is reviewed and approved by the Defense Security  Cooperation Agency and Department of State, as appropriate.

Third, the Program Executive Office works with the appropriate  contracting command to acquire the requested defense goods or services  as part of the acquisition phase. According to contracting officials, the  contracting command solicits and receives bids from contractors and  selects the best value option (including price plus deliverables). Fourth,  the contractor delivers the required good or service. According to officials,  the relevant Program Executive Office is responsible for monitoring the  contractor’s performance by ensuring compliance with applicable contract  clauses. Fifth, following contract completion and payment of outstanding  obligations, the implementing agency initiates case closure with the  Defense Security Cooperation Agency.

Training Requirements for the Afghan National Army Were Generally Provided by a Single Vendor Prior to April 2019, but Are Now Provided by Multiple Vendors

Prior to April 2019, ASFF-funded training requirements for the Afghan  National Army, including out-of-country fixed- wing pilot training, were  generally executed under a single award indefinite delivery, indefinite  quantity contract known as the Warfighter Field Operations Customer  Support (WFF) contract. The WFF contract provided integrated training  system sustainment and training services world-wide for the U.S. Army,  Marine Corps, Navy, Air Force, and Special Operations Command.  According to Army contracting officials, WFF was the most expedient way  to contract for various types of training for the Afghan National Army due  to the contract’s broad scope and $11.2 billion ceiling. These officials said  it provided the capacity and flexibility needed to fulfill the Afghan National  Army’s requirements and time frames in a streamlined way because the  competition and award process had already occurred, enabling officials to  move directly to awarding task orders for support.

However, while the single award indefinite delivery, indefinite quantity  contract streamlined the process for contracting ANDSF training, it limited  DOD’s ability to negotiate some costs. According to contracting officials,  only certain types of costs could be negotiated, such as those associated  with housing, travel, and the number of advisors supporting the training.  The officials stated that other costs were established as a per-unit cost at  the time of the contract award. In addition, various administrative fees  were established when the WFF contract was awarded in 2007 and could  not be renegotiated, according to contracting officials. As a result, any  task orders under this contract, including those to train the Afghan  National Army, had to include these administrative fees and established  labor wages.

To illustrate the various costs associated with the Afghan Air Force  training program, we reviewed documentation associated with training  provided under the WFF contract. One training program cost $12.1 million  for the delivery of an 86-week fixed-wing pilot training course (from  February 2018 through September 2019) for 13 Afghan Air Force  students at the Fujairah Aviation Academy in the United Arab Emirates.  The pilot training was conducted by contractors and comprised aviation  English language training, theory of flight, basic and advanced instrument  ground school, advanced flight instrumentation, and simulation training for  the Afghan Air Force Cessna C-208 Caravan aircraft. The $12.1 million  total included amounts paid to the contractor and administrative charges  to cover the costs of entities within the U.S. government. The costs  associated with the training are shown in figure 3 below.

The largest cost factor in this task order was the cost of the flight school  itself, which accounted for 68.4 percent (or $8.2 million) of the total cost,  according to contracting officials. The flight school included ground  school, simulation, advanced instruments, and flying hours training, and it  represented a cost per each of the 13 students who actually attended the  training. The flight school also included the cost of housing, electronic  books / manuals, and campus security, some of which costs were  negotiable, according to officials. Other costs, such as the Defense  Security Cooperation Agency 3.5 percent surcharge and contract  administration services 1.2 percent surcharge, were established based  upon rates current at the time of the letter of offer and acceptance.  According to officials, the contractor’s profit was established at the time of  award of the contract in 2007. Officials stated that the costs that could be  negotiated were limited and included costs associated with travel,  lodging, and adding more advisors to augment the training. According to  contracting officials, these limitations were not unique to this ASFF  training but applied broadly to all ASFF training task orders they executed  under WFF.

In 2018 DOD decided to replace WFF, which was nearing expiration, with  a series of new contracts. DOD has begun to transition work previously  performed under WFF to these new contracts, the first of which was  awarded in 2018. According to contracting officials, ASFF-funded training  efforts are expected to be executed primarily under two of the new  contracts – the Enterprise Training Services Contract and the Training,  Instructor Operator Support Services Contract. The Enterprise Training  Services Contract is a multiple award indefinite delivery, indefinite  quantity contract with a total contract ceiling of $2.4 billion that was  awarded to multiple contractors in June 2018. According to officials, the  Training, Instructor Operator Support Services Contract is a single award  indefinite delivery, indefinite quantity contract with a ceiling of $197.6  million that was awarded in July 2018.

According to Army contracting officials, the contracting process for ASFF  training services will include competition among multiple contractors for  each task order under the Enterprise Training Services Contract. Army  contracting officials stated that under a multiple-award contract, each  contract holder is to be provided a fair opportunity to compete for each  task order, in part to use competition to ensure that the proposed prices  are fair and reasonable. According to Army contracting officials, the  Enterprise Training Services Contract also affords the opportunity to  negotiate more elements than previously under the WFF contract, such  as labor rates or travel costs associated with training. The first training  task order under the Enterprise Training Services Contract in support of  Afghan forces was issued in April 2019. As this task order has only  recently been issued, it is too early for us to comment on the efficacy of  these contracts.

DOD Processes to Provide Visibility over ASFF-Funded Training Contracts

DOD has varying degrees of visibility over ASFF-funded training  contracts. At the broadest level, OUSD-Comptroller and contracting  officials stated that they have visibility of the overall execution of the  ASFF budget, including funding associated with Afghan National Army  training. For example, OUSD-Comptroller tracks and reports ASFF  obligations and disbursements in monthly status-of-funds reports, known  as Defense Financial and Accounting Services 1002 Reports. In addition,  the Special Inspector General for Afghanistan Reconstruction tracks and  reports ASFF obligations and disbursements via its Overseas  Contingency Operations quarterly reports to Congress.

At the individual contract level, the military services’ contracting  commands, such as PEO-STRI and Army Contracting Command,  develop and maintain contract files for individual ASFF-funded contracts  and task orders. However, according to officials, DOD does not have a  centralized system or reporting mechanism for tracking all ASFF training  contracts, because the systems used by the services for managing  funding and those used for contract management do not interface with  each other. According to OUSD-Comptroller officials, the systems used  for financial management were not designed or intended to identify ASFF  funds specifically obligated for training contracts because there is no  requirement for them to do so.

Officials said that consequently, in the single instance in which they have  had to develop a comprehensive list of all ASFF-funded training  contracts, they had to work with the contracting commands at the  respective military services to gather this information. For example, to  respond to congressional direction related to contracts funded with ASFF,  OUSD-Policy contacted all of the military services to request a list of all  training contracts funded through the ASFF under the respective services’  responsibilities, according to OUSD officials. In turn, Army contracting  officials stated that they identified the requested information by using the  lines of accounting fields in their contract management systems to identify  those training contracts funded with ASFF. OUSD-Policy officials  provided us with the resulting list of 40 contracts and task orders, totaling  over $483 million in estimated contract value, but they acknowledged that  the list was likely incomplete.

OUSD-Policy officials who compiled the list of training contracts told us  that the precision of the list was affected by inconsistent interpretations  among the services of what constitutes a training contract. According to  these officials, training for the Afghan National Army can also occur under  procurement or maintenance contracts that have embedded training  components. For example, according to officials, the Army’s National  Maintenance Strategy contract provides logistic support to the Afghan  National Army and includes a training component. Similarly, the Navy’s  ASFF-funded ScanEagle unmanned aerial vehicle reconnaissance  procurement contract includes a training component. Because these  contracts are not primarily training-oriented, according to contracting  officials, they were not identified under the training and operations  subactivity group in the ASFF budget, and therefore would not be easily  identifiable as ASFF training contracts. Despite these limitations, DOD  officials stated that, given their existing systems and processes and their  ability to reach out to contracting officials to obtain additional data when  needed, they believe they have sufficient tools to identify most ASFF- funded training contracts. Additionally, DOD officials stated that the  congressional direction associated with ASFF-funded training was a one- time request, not a recurring task.

We provided a draft of this report to DOD, and DOD responded that it  would not be providing formal comments. DOD also provided technical  comments, which we incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees and to the Secretary of Defense. In addition, the report is  available at no charge on our website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  Cary Russell at (202) 512-5431 or russellc@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. Key contributors to this report are listed in  the appendix.

Appendix I: GAO Contact and Staff Acknowledgments

In addition to the contact named above, James A. Reynolds, Assistant  Director, and Jerome Brown, William Chatlos, Alfonso Garcia, Steve  Pruitt, Michael Shaughnessy, McKenna Stahl, and Cheryl Weissman  made key contributions to this report.

The United States has been building Afghanistan’s security forces to help counter terrorist threats. Since 2005, Congress has appropriated more than $78.8 billion to build, equip, train, and sustain these forces. Concerns have been raised in Congress about the high cost of training contracts (about $4.3 billion so far).

Officials told us that their original contracting approach made it harder for DOD to negotiate some costs, but that they’ve been transitioning to a new contracting approach since April 2019. The old approach generally relied on one service provider. The new approach allows purchases from multiple providers.