this area, we do not profess perfection and we recognize there is room for improvement.

While I realize that the subcommittee is primarily interested in manpower utilization of the civilian work force, I think the recitation of certain facts about our military force is appropriate. With this in mind, my statement will cover three areas: Military personnel, civilian personnel, and military/civilian manpower management. Additionally, I will discuss those matters which are of specific interest to the subcommittee.

In the area of military personnel, large draft calls were required in the first half of fiscal year 1962 to support the increase in strength resulting from the Berlin buildup. As a consequence, equivalent losses will be experienced 2 years later, in the first half of fiscal year 1964, and again we will experience large draft calls with corresponding high loads in the Army training base. This causes a cyclical fluctuation on a biennial basis in the training strength of the Army. However, to control this cyclical fluctuation, the Army is authorized a temporary strength increase to 980,000 for end fiscal year 1963 with a subsequent adjustment to about 960,000 for end fiscal year 1964. This increase in strength in fiscal year 1963 permits us to train recruits before we experience our losses and will result in more effective utilization of manpower by leveling the training base, and thus the trained portion of the Army as well.

Subsequent to the establishment of our fiscal year 1964 end strength of 960,000, the Army was authorized an increase of 15,000. This increase is for the purpose of testing and evaluating the air-assault concept and has the incidental effect of helping us smooth out even further the recurring manpower hump caused by the Berlin buildup of 1961.

To better understand the Army's military manpower utilization problem, a brief look at its composition is required. The Active Army is composed of approximately 20 percent inductees and 80 percent volunteers. The majority of these volunteers are personnel serving their first enlistment. Career personnel with over 4 years' service represent only 35 percent of the total Active Army strength.

Each year approximately 250,000 trained personnel leave the Army and are replaced by a like number of new personnel, the majority of whom have had no previous military service. Only about 10 percent of the new accessions have civilian-acquired skills which can be utilized by the Army. Until trained in the basic essentials of military duty, each of these new entrants represents a drain of manpower to instruct and support them. The minimum training time is 8 weeks of basic and, for most, at least another 8 weeks of advanced individual training.

Many critical skill areas require formal service school training and thus the noneffective time for these individuals is even higher. Approximately 80,000 of the 250,000 enter courses of formal military instruction each year. Such courses require from 6 to 52 weeks in addition to basic combat training, with an average course length of approximately 25 weeks.

A primary goal in the utilization of military manpower is to improve the ratio of combat forces to support troops. In fiscal year 1959 the ratio was 1:1.44 and has decreased continually, excluding

fiscal year 1962, when an increase was caused by the Berlin buildup. The fiscal year 1963 ratio is 1:1.34 and a ratio of 1:1.21 is projected for fiscal year 1964.

In order further to improve manpower utilization and better control the allocation of manpower in the total Army structure, we created in late April of this year the Office of the Assistant Chief of Staff for Force Development. One of his principal responsibilities is to recommend improvement in the allocation of Army resources— to include military manpower. We have great hopes for the work that this officer and his staff will perform for us.

Next, I would like to discuss the Army's civilian workforce, an area of primary interest to the subcommittee. The beginning and end direct-hire civilian workforce reflected in the President's budget for 1964 are 377,540 and 377,803, respectively. These figures include direct-hire civilians in both military and civilian functions. The directhire strength in military functions was reduced from 363,213 at end fiscal year 1962 to 344,738 at end fiscal year 1963-approximately 18,500. This reduction involved the transfer of approximately 8,000 spaces to other defense agencies and an actual cut in the workforce of approximately 10,500. The reduction is being accomplished through installation closings, reductions in support possible because of the decrease in the Active Army strength, diversion of resources from lower to higher priority requirements, continued austerity in staffing, and reduced levels of support in CONUS. And I should explain that point about reductions possible because of the decrease in the Active Army strength. That refers to the release of the reservists in July and August of last year.

For fiscal year 1964 we are authorized a civilian strength of 346,138 in military functions, an increase of 1,600.

In its oversea operations, the Army utilizes approximately 150,000 employees who are citizens of the host country. Some 37,500 of these employees are hired directly while the remainder are secured under arrangements with the host country. The bulk of the non-U.S. citizen personnel are employed in France (20,259), Germany (67,767), Japan (19,395), and Korea (25,128).

Local national employees serve in almost every occupational field found in the Army in nonsecurity type work. Fifty-four percent are in the blue-collar or trades and crafts category. White-collar workers constitute the remaining 46 percent; of these, one-sixth occupy positions equivalent to GS-9 and above.

The booming economies in Germany, France, and Japan have resulted in tight labor markets and upward trends in wage rates. For example, in France the payroll cost for roughly the same employment levels has increased from $39.6 million in fiscal year 1962 to $45.4 million estimated for fiscal year 1964. Despite this upward wage trend, the total cost of local national manpower is still substantially below costs which would be incurred if U.S. citizens were employed. The day-to-day supervision of the local national employees overseas is a responsibility of the U.S. Forces. The heavy reliance Army places on its local national work-force and the impact our management of local nationals may have on international relations make it essential that equitable personnel programs be maintained governing the management of local personnel. The Department of the Army

has recently published specific objectives, as part of its overall civilian personnel management program for fiscal year 1964, which call for positive action to assure that local national employees are being developed and utilized to their maximum capacity and that their compensation is adjusted in a manner which is timely and fair to employees and the U.S. taxpayers alike.

Periodically, the Army conducts on-site surveys of civilian personnel management in the oversea commands which include a detailed inquiry into local national personnel matters. Additionally, reports on local national personnel administration are submitted each quarter to Headquarters, Department of the Army. These reports cover such subjects as recruitment, the extent to which training needs are being met, losses, participation in the suggestion program, and the like.

In the field of labor-management, the President signed Executive Order 10988 on January 17, 1962, thus inaugurating a new policy governing labor-management relations in the Federal service. To communicate the importance of this new policy to all levels of Army management, a series of orientation seminars was conducted at 14 population centers throughout the country. Over 1,000 commanders, civilian personnel officers, and other Army managers attended these 1-day sessions. During June and July last year, approximately 100 representatives attended a weeklong labor relations meeting in Washington commands.

During 1962, the Army was primarily in the organizing and recognition phase of the new system, with principal emphasis on identification of appropriate bargaining units and processing of union petitions. There have been active organizing efforts on the part of some unions, especially among employees working in arsenals and depots. There was an apparent increase of about 25 percent in overall membership during the year, partly because of more complete statistics furnished by unions; but a significant portion of this increase is a result of more active organizing efforts.

The current estimate of union membership (50,000 members) represents about 15 percent of the Army civilian work force. Formal recognition on a national basis has been granted to three unions: The American Federation of Government Employees; the National Federation of Federal Employees; and District 44, International Association of Machinists. These three unions represent about 86 percent of the total Army union membership. To date, Army activities have granted formal recognition to 58 local union lodges and exclusive recognition to 30 local union lodges.

We are now moving into the area of formalized consultation and negotiations with the union locals which have been recognized under the Executive order. The first negotiated agreement governing conditions of employment has been approved by the Department of the Army. The agreement was negotiated by the Commander, Brooklyn Army Terminal, New York, and Local 333, National Maritime Union, which represents our maritime employees at the terminal. Other agreements are being negotiated presently at other installations.

It is our belief that the recognition of union groups can and will contribute significantly to employee-management cooperation at all levels in the Department, and to the development of a more effective and productive work force.

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In a continuous effort to implement the policies of this administration the Army has taken an affirmative approach to the President's equal employment opportunity program. The following actions have, or are being implemented:

(1) Surveys of civilian personnel management have been conducted to include a review of installation programs to insure equal employment opportunities in employment of minority group members. Present figures indicate that Negroes comprise approximately 12.5 percent of the civilian work force.

(2) Activity plans of action are being developed and tailored to the needs of the local situations with the object of making certain that every available techniques is being used to insure that hiring and promotion decisions are influenced by ability alone.

We are making progress in the administration and extension of Army-wide career management programs to recruit, train and provide developmental assignments in the major occupational specialties of our civilian work force. During the past year we have concentrated attention on exploring the feasibility of extending career program coverage to additional major occupational groups; to standardizing the policies, administration and operating procedures of the 10 programs already in operation; and to streamlining and simplifying the procedural aspects of the programs.

Fifty thousand civilian employees, who represent 60 percent of the potential for coverage under career management programs, and who represent 24 percent of employees occupying Classification Act positions, are now included in such programs. Present plans call now for the development of seven new programs which will include another 30,000, and these we hope to have in effect, the last of them by the end of next fiscal year, fiscal year 1965. These new programs will cover personnel in occupational categories such as engineering, mathematics and science, intelligence and manpower management.

Our civilian work force was affected by the reorganization of the Army, but in organizational location rather than in numbers. Of the 10,800 Army civilians in the Washington area, about 4,300 were shifted into new organizations in town, 800 were transferred out of the area, and 5,700 were retained in current organizations.

All personnel reassignments required to staff the new commands have not been completed. It appears, however, that the bulk of the assignments required by the reorganization will be accomplished with minor adverse impact on the employees involved. Adjustment to the new organizational structure, insofar as it relates to protection of the rights of the people involved, has been achieved with facility and suggests that civilian personnel planning was well conceived and effectively executed.

Another area in which we have made major efforts to improve civilian personnel management is in the handling of grievances and appeals. New procedures have been inaugurated to speed up the consideration of grievances, reduce the number of levels of appeal, assign decisionmaking responsibility to the lowest practicable level of command, and accord more realistic consideration to the different categories of grievances and appeals.

We have developed and conducted an intensive training course for grievance examiners the individuals who are responsible for inves

tigating and holding hearings on appeals. Our use of trained examiners is a major feature of the new system, replacing the committee system formerly used.

We expect that the use of trained examiners, coupled with fewer appeal levels and less centralized decisionmaking, will produce equitable decisions with less delay than in the past.

Next, I would like to discuss several items that fall under the general heading of military-civilian manpower management. But first, a little on our manpower utilization survey program:

Between July 1, 1962, and March 31, 1963, 241 manpower surveys of tables of distribution units were conducted within the Army. These surveys included an on-site appraisal of 186,382 military and civilian positions. As a result of these surveys 11,060 personnel spaces, of which 9,677 were military and 1,383 civilian, were either redistributed to areas of more effective utilization, or were identified as spaces that could be deleted in order to stay within reduced civilian space limitations. In addition, Headquarters, Department of the Army, reviewed 20,797 spaces covered by these on-site appraisals by subordinate commands. Of this number, 131 spaces were questioned as possible malutilization of personnel, thereby requiring a reevaluation of these spaces.

To insure proper utilization and distribution of personnel in administrative support functions, Headquarters, Department of the Army, publishes guidance indicating the type positions which should be filled by civilians. Some of these civilian-type positions must be filled by military. The primary consideration is to maintain the rotation base for military occupational specialties required in combat and combat-support type units; for example, clerk-typist MOS. Combat and combat-support units require a certain number of clerk-typist positions overseas and in the continental United States. Therefore, military personnel will be found in certain clerk-typist positions. This provides the enlisted man a tour of duty in the United States while concurrently maintaining clerical skills needed in field combat or combat-support units.

There are still certain spaces currently being occupied by military personnel that could be occupied by civilians. Current civilian ceiling and fund limitations result in a number of military personnel being used in positions which could be performed by civilian personnel. The use of military personnel for such positions is not necessarily disadvantageous from the standpoint of job performance. For example, the competence of a scientist is not dependent on his military or civilian status. However, advantages do accrue to the Army as a whole if the civilian ceiling and availability of funds allow the bulk of these positions to be staffed by civilians. Military personnel can then be utilized for duties which must be performed by military personnel.

Through the continuous evaluation of the mission, work methods, automation, and other tools of personnel management, the Army is striving continuously to reduce the number of military personnel occupying these civilian-type positions.

This leads us into the subject of hiring retired military personnel as civilian employees. Two years ago we made a count of the number of retired military employed in civilian positions in the Army. We