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http://www.armytimes.com/story/military/careers/army/officer/2014/11/14/captain-grad-school-cuts/18993967/
Bit by bit we're starting to see the ramifications to the culture of the Army, built on trust, from the 2014 OSBs, as separation deadlines approach.
Yesterday it was the New York Times article highlighting how 1/5 officers selected for separation were prior enlisted, some of which will be retired at their previous enlisted ranks, meaning they'll draw substantially less retirement pay.
Today its news on the how around 40 OSB-selected officers who signed up for the grad school option (GRADSO) are having issues with the Army regarding contracts . It appears these officers and the Army signed a contract (ie, legally binding document) and the Army isn't living up to its part of the contract (legally, perhaps being "in breach" of contract).
In both cases, as in the overall OSB, its quite evident the Army's drive to save money played a role in the OSB. In the first case, if we estimate that the Army cut 341 officers (1/5 of 1651) and retires them at their enlisted rank versus their officer rank, and estimate these officers to be captains with 20 years of total service with a base pay of $6726 monthly at retirement, and estimate that at retirement they are 42 and will live to 78, retiring these folks at the rank of captain would have cost the Army $495,410,256 in retirement pay (plus other benefits like health care and etc), at today's dollar rate not adjusted for inflation or other increases. Retired at sergeant (as an assumption) with a base pay of $3094.80 and the same assumptions as above, the Army would have paid only $227,950,589. That's a difference of $267,459,667, not adjusted. Pretty good extra savings / side benefit from the OSB for the Army---reduce the force, save some extra money.
If we do some math for the GRADSO folks, we'll assume these officers are captains with almost 7 years of service (4 years obligation, plus the extra 3 years to get the GRADSO option) at separation. The Army clearly saves the base pay, but that's the same savings for the Army as non-GRADSO OSB-selects. In this case, though, the Army got, for free, almost 3 extra years of service from 40 officers, or about 120 free man-years (assuming, of course, that GRADSO officers would have separated after their initial 4 year obligation if the Army hadn't signed a legally binding contract offering GRADSO to them). I'm not sure how to calculate what the Army should pay these 40 officers in exchange for the time they served based on a contract for future compensation--but it would probably work out to something like the average cost of a graduate degree in the U.S., plus base pay and benefits for the two years the average graduate degree requires. That, I can estimate.
40 officers; base pay of O-3 with over 6 years is $5415.30. Two years of grad school each. Best average grad school cost I could find was from U.S. News and World Report, of $30,000 a year; I'll use this figure and assume that the living costs associated balance out with BAH that these officers would have been paid). For base pay, the Army is saving $5,198,688, or $129,967 on each officer (not adjusted, and not including other benefits); and an extra $2,400,000 on grad school tuition, for a total savings of $7,598,688 (not adjusted, no other benefits). Pretty good added savings on this one, too. (To answer what the Army probably ought to pay these GRADSO officer, in addition to their normal separation pay, I would estimate something around $160,000---the two years of base pay and grad school).
Together, these two OSB ramifications look to save the Army $275,058,355 (not adjusted, no other benefits) in extra savings / side benefits. That's about 1/3 of a billion dollars.
One who looked at these things from a perspective of appearances of impropriety or ulterior motives might wonder if the memo of instruction to the OSB directed board members to consider concepts such as extra savings possible. Additional information from the Army that could help address such potential concerns would be data on what percentage of GRADSO officers considered by the OSB were selected for involuntary separation, along with what percentage of prior enlisted considered by the OSB were selected for involuntary separation. But I'd estimate we'll never see such information, as the Army still hasn't learned that transparency is the only way to get in front of such potential bad press, or that such OSB-related bad press does not help sustain the Army-officer relationship for those officers who made it through the OSB.
We already know, based on the leaked demographics powerpoint, that white, male, West Point graduates had the lowest rates of separation, and that all minorities and commissioning sources fared worse on the OSB.
If the rate of OSB selection for prior enlisted and GRADSO officers turns out to be double or triple or more than the average rate of selection for involuntary separation, that's probably an issue the Army should address.
Bit by bit we're starting to see the ramifications to the culture of the Army, built on trust, from the 2014 OSBs, as separation deadlines approach.
Yesterday it was the New York Times article highlighting how 1/5 officers selected for separation were prior enlisted, some of which will be retired at their previous enlisted ranks, meaning they'll draw substantially less retirement pay.
Today its news on the how around 40 OSB-selected officers who signed up for the grad school option (GRADSO) are having issues with the Army regarding contracts . It appears these officers and the Army signed a contract (ie, legally binding document) and the Army isn't living up to its part of the contract (legally, perhaps being "in breach" of contract).
In both cases, as in the overall OSB, its quite evident the Army's drive to save money played a role in the OSB. In the first case, if we estimate that the Army cut 341 officers (1/5 of 1651) and retires them at their enlisted rank versus their officer rank, and estimate these officers to be captains with 20 years of total service with a base pay of $6726 monthly at retirement, and estimate that at retirement they are 42 and will live to 78, retiring these folks at the rank of captain would have cost the Army $495,410,256 in retirement pay (plus other benefits like health care and etc), at today's dollar rate not adjusted for inflation or other increases. Retired at sergeant (as an assumption) with a base pay of $3094.80 and the same assumptions as above, the Army would have paid only $227,950,589. That's a difference of $267,459,667, not adjusted. Pretty good extra savings / side benefit from the OSB for the Army---reduce the force, save some extra money.
If we do some math for the GRADSO folks, we'll assume these officers are captains with almost 7 years of service (4 years obligation, plus the extra 3 years to get the GRADSO option) at separation. The Army clearly saves the base pay, but that's the same savings for the Army as non-GRADSO OSB-selects. In this case, though, the Army got, for free, almost 3 extra years of service from 40 officers, or about 120 free man-years (assuming, of course, that GRADSO officers would have separated after their initial 4 year obligation if the Army hadn't signed a legally binding contract offering GRADSO to them). I'm not sure how to calculate what the Army should pay these 40 officers in exchange for the time they served based on a contract for future compensation--but it would probably work out to something like the average cost of a graduate degree in the U.S., plus base pay and benefits for the two years the average graduate degree requires. That, I can estimate.
40 officers; base pay of O-3 with over 6 years is $5415.30. Two years of grad school each. Best average grad school cost I could find was from U.S. News and World Report, of $30,000 a year; I'll use this figure and assume that the living costs associated balance out with BAH that these officers would have been paid). For base pay, the Army is saving $5,198,688, or $129,967 on each officer (not adjusted, and not including other benefits); and an extra $2,400,000 on grad school tuition, for a total savings of $7,598,688 (not adjusted, no other benefits). Pretty good added savings on this one, too. (To answer what the Army probably ought to pay these GRADSO officer, in addition to their normal separation pay, I would estimate something around $160,000---the two years of base pay and grad school).
Together, these two OSB ramifications look to save the Army $275,058,355 (not adjusted, no other benefits) in extra savings / side benefits. That's about 1/3 of a billion dollars.
One who looked at these things from a perspective of appearances of impropriety or ulterior motives might wonder if the memo of instruction to the OSB directed board members to consider concepts such as extra savings possible. Additional information from the Army that could help address such potential concerns would be data on what percentage of GRADSO officers considered by the OSB were selected for involuntary separation, along with what percentage of prior enlisted considered by the OSB were selected for involuntary separation. But I'd estimate we'll never see such information, as the Army still hasn't learned that transparency is the only way to get in front of such potential bad press, or that such OSB-related bad press does not help sustain the Army-officer relationship for those officers who made it through the OSB.
We already know, based on the leaked demographics powerpoint, that white, male, West Point graduates had the lowest rates of separation, and that all minorities and commissioning sources fared worse on the OSB.
If the rate of OSB selection for prior enlisted and GRADSO officers turns out to be double or triple or more than the average rate of selection for involuntary separation, that's probably an issue the Army should address.
Posted in these groups: 
Trust
Officer Separation Board (OSB)
Trust Officer Separation Board (OSB)
Posted >1 y ago
Responses: 4
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- Well laid out facts and arguments above.
- I do not think anyone can argue that cuts in personnel do not have to be made. We can not go from an active Army force of about 560K to 490K or lower without reducing the numbers of personnel at each pay grade. It is simple math.
- A very good argument, however, can be made for HOW we achieve the personnel cuts. Cutting thru fat, in this case personnel who have done documented illegal, immoral, or unethical acts or who are demonstrably non performers are easy to identify and cut. Our problem now, however, is that we are cutting into bone, in this case personnel who have otherwise been good performers.
- An issue not brought up above are personnel who have been eliminated who may have received a DUI as a SPC, went to OCS, became an officer, and got promoted 2-3 times who have now been cut. Elimination was based upon the DUI 10 years ago evidently.
- The key thing for this discussion, IMO is not what is happening, but if you were in charge, how would you conduct the elimination boards so as to be fair and equitable knowing that you have to cut otherwise quality personnel?
- I do not think anyone can argue that cuts in personnel do not have to be made. We can not go from an active Army force of about 560K to 490K or lower without reducing the numbers of personnel at each pay grade. It is simple math.
- A very good argument, however, can be made for HOW we achieve the personnel cuts. Cutting thru fat, in this case personnel who have done documented illegal, immoral, or unethical acts or who are demonstrably non performers are easy to identify and cut. Our problem now, however, is that we are cutting into bone, in this case personnel who have otherwise been good performers.
- An issue not brought up above are personnel who have been eliminated who may have received a DUI as a SPC, went to OCS, became an officer, and got promoted 2-3 times who have now been cut. Elimination was based upon the DUI 10 years ago evidently.
- The key thing for this discussion, IMO is not what is happening, but if you were in charge, how would you conduct the elimination boards so as to be fair and equitable knowing that you have to cut otherwise quality personnel?
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MAJ (Join to see)
Sir:
Thanks for the comment. Agreed---simple math means the Army is cutting to the bone, as you say.
I've written posts on RallyPoint previously laying out some ideas on better ways for the Army to approach this process. My major themes: message this process as retention versus separation; focus on sustaining trust between the institution and serving members; cut those with bad paper at all levels, and be transparent about the process and results (ie, how many of our serving general officers, colonels, and lieutenant colonels screwed up when they were junior officers or enlisted? if the standard is no bad paper....then all bad paper cases should go; results from OSBs and SERBs should be released in detail, not leaked to the internet from HRC;) once we move past cutting everyone with bad paper (because, apparently, bad paper outweighs outstanding performance, leadership, and potential) and start cutting into the bone of good performers, offer a voluntary separation process with benefits similar to an involuntary process.
As we're seeing, OSB and SERB processes are here to stay, with several scheduled for FY15. As LTC (Join to see) mentions, it doesn't appear that this process was well thought through for the FY14 round of cuts. Unfortunately it doesn't seem that any changes have been made for the FY15 round of cuts. And I think that is bad for the Army as an institution.
Thanks for the comment. Agreed---simple math means the Army is cutting to the bone, as you say.
I've written posts on RallyPoint previously laying out some ideas on better ways for the Army to approach this process. My major themes: message this process as retention versus separation; focus on sustaining trust between the institution and serving members; cut those with bad paper at all levels, and be transparent about the process and results (ie, how many of our serving general officers, colonels, and lieutenant colonels screwed up when they were junior officers or enlisted? if the standard is no bad paper....then all bad paper cases should go; results from OSBs and SERBs should be released in detail, not leaked to the internet from HRC;) once we move past cutting everyone with bad paper (because, apparently, bad paper outweighs outstanding performance, leadership, and potential) and start cutting into the bone of good performers, offer a voluntary separation process with benefits similar to an involuntary process.
As we're seeing, OSB and SERB processes are here to stay, with several scheduled for FY15. As LTC (Join to see) mentions, it doesn't appear that this process was well thought through for the FY14 round of cuts. Unfortunately it doesn't seem that any changes have been made for the FY15 round of cuts. And I think that is bad for the Army as an institution.
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If one reads a GRADSO contract, it clearly states the Army can void the contract based upon needs of the Army, so unfortunately the GRADSO contract holders selected do not have a leg to stand on. The Army also says once a person completes the GRADSO and has additional service obligation the Army can cancel the Service obligation at their convenience.
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I would like to add that as leaders, we have failed to properly rate our officers to determine who is the best of the best. When 80% of our captains think they are the top 10% we have a problem. I believe the new OER will better delineate where officers rate among their peers in their year group.
This in an of itself causes problems when we come to the Majors. After discussing this with the G1 of the Army and the members of my Pre-Command Course, the Army is being forced to get rid of the "least best" officers. Like COL Smallfield stated above, getting to 490K is going to be difficult. I believe in the institution's ability to identify those officers they are going to release. There is a ton of analysis being done at HRC that we do not see. I was apprehensive about how they were going to do the reductions, but after having discussions about these specific points, I trust our leaders to make the right decision.
This in an of itself causes problems when we come to the Majors. After discussing this with the G1 of the Army and the members of my Pre-Command Course, the Army is being forced to get rid of the "least best" officers. Like COL Smallfield stated above, getting to 490K is going to be difficult. I believe in the institution's ability to identify those officers they are going to release. There is a ton of analysis being done at HRC that we do not see. I was apprehensive about how they were going to do the reductions, but after having discussions about these specific points, I trust our leaders to make the right decision.
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