Improving Internal Navy Allocation Decisions: The Case of Military Manpower

In a period of shrinking resource, the Navy is searching for ways to reduce the costs of operating and supporting its forces. Those savings can be used to help recapitalize the Navy as the turn of the century approaches. Past efforts at reducing support costs have often focused on outsourcing or privatizing work that can be done commercially. Evidence from past research indicates that savings are available form outsourcing work and from public-private competitions. The evidence indicates that the pressure of competition, among private sector firms and between government activities and the private sector, is the source of those savings. In the Program Objectives Memorandum (POM) process, resource sponsors pay a price for each billet they authorize. The Navy has begun to include more explicit personnel costs in the POM process. This paper considers the potential for how that cost information may improve manpower resource decisions and examines broader decision-making frameworks as well.