Potential Reductions in Personnel

According to the projected net savings from Army e-mail migration to DISA e-mail will be $76.1 million in FY13 and $78.5 million in FY14, ultimately rising to $86.9 million in FY17.(1)  Assuming that at least 60% of these savings will be in manpower, this is equivalent to elimination of about 950 FTEs. Savings will accrue mostly from manpower because server virtualization will reduce the costs of hardware.

The current Army e-mail costs (e.g. status quo) are $186.3 million in FY13, or 0.5% of the total IT budget of $38 billion. Assuming that at least half of the total IT budget, excluding the costs of communications, is made of manpower costs, this suggests that the maximum total potential manpower reductions for DoD could be as high as 95,000. That number assumes that all components are at least as inefficient as the Army. That is unlikely, but plausible for scoping purposes. A concerted effort to reduce IT costs could have an impact on manpower employment, which is mostly made up of contractors.

The Army is replacing at least eighteen different network enclaves in existence with redundant Microsoft Exchange Email systems across the globe. The large number of disparate and redundant networks, along with the high number of servers and personnel required to maintain them over the life cycle of the systems, resulted in high costs and significant operational inefficiencies. Most Army installations host their own Microsoft Exchange servers and employ a large support staff.

Whether such inefficiencies are typical for other DoD components cannot be used for estimating what could be the cost reduction consequences. However, the Army’s planned cuts are an indicator that elimination of contractor personnel may come to influence how implementation will be allowed to proceed.

SUMMARY
DoD is facing the potential of large reductions in the number of support personnel deployed in IT operations. This personnel is made up mostly of contractors, with a share operating under in set-aside contracts for small businesses. The political pressures of small firms on local Congressional delegations to curtail manpower reductions could become an obstacle in implementing proposed cost reduction plans.

(1) ENTERPRISE EMAIL, ARMY SERVICE ACQUISITION, REPORT TO CONGRESS. Feb 01, 2012