Performance Measurement The Department of the Navy, one of the largest employers in our nation, is also one of the most visible to the public. With Service members in multiple countries, at sea and ashore, in every time zone and in every climactic region, the spotlight never leaves our emblem. With our charter to defend our nation and its interests at home and abroad, it becomes essential that every employee take an active role in using his/her resources wisely, measuring performance and ensuring success in each endeavor. The President has stated that this Administration is "dedicated to ensuring that the resources entrusted to the federal government are well managed and wisely used." To achieve this, the strategy proposed in the PMA focuses on five basic tenets: (1) Budget and Performance Integration, (2) Strategic Management of Human Capital, (3) Competitive Sourcing, (4) Financial Management Improvement, and (5) Expanding EGovernment. The FY 2004 budget consolidates performance management goals of the PMA with those of the FY 2001 QDR under a balanced scorecard approach for risk management, within which we have previously described the major accomplishments and future plans for the DON. The PMA also designates metrics to track associated performance results to improve programs as an integral component of the Department's budget and performance integration initiative. In an effort to incorporate these metrics into the budget process, the Office of Management and Budget (OMB) has instituted the Program Performance Assessment process to identify programs that will be measured in "getting to green" and providing a rating system that is consistent, objective, credible, and transparent. The initial programs reviewed in FY 2004 are summarized in the DON FY 2004 Budget Book (February 2003). Programs were assessed and evaluated across a wide range of issues related to performance, including strategic planning, program management and program results. We are continuing to work with OSD and DON Program Managers in refining these metrics and improving performance where it is warranted. Amplifying information can be found in the detailed budget justification materials supporting the FY 2004 President's budget submission to Congress. Conclusion Our Naval Forces will continue to lead from the front lines of the Global War on Terrorism and continue to answer the call of our Nation. Together with our fellow services, we will assure our friends and allies and we will dissuade, deter and defeat our nation's enemies. While our Navy and Marine Corps Team faces uncertain future battlegrounds, we have set a course to win our nation's wars and transform to meet tomorrow's challenges. REPORT OF THE SECRETARY OF THE AIR FORCE INTRODUCTION After the traumatic events of September 11, 2001, the words "clear and present danger" acquired a new meaning for America, our allies, and our friends. This nation's safety and security, as well as the freedoms that we should never take for granted, are at risk here and abroad. As we move into the third year of this new century, we are facing an unprecedented array of asymmetric threats in the Global War On Terrorism. We are responding to critical missions at flashpoints in Afghanistan, the Middle East, and Southeastern Asia we are poised to defend America's interests wherever threatened. We continue to meet an unprecedented level of sustained demand for a diverse portfolio of air and space capabilities to quickly project American power globally while providing effective homeland defense. We are meeting this challenge while simultaneously transforming our capabilities, our operational concepts, and our people to meet the threats of today while preparing for tomorrow. The U.S. Air Force continues to provide America the “high ground” advantage of space and unmatched air dominance in all theaters of operation. With new, more disruptive technologies in the hands of our enemies, we must apply the sum of our operational experiences and experimentation to develop dynamic, flexible, and adaptable forces capable of dissuading, deterring, and defeating a much wider range of potential future adversaries. This fluid setting underscores the need for agility in how we think about military operations, as well as more responsive planning and acquisition processes to provide future joint warfighters the tools they will need to support our National Security Strategy. As advanced military capabilities proliferate among potential adversaries, we need to keep pushing technology forward to dominate these threats before they can be used effectively against our interests. In less than one hundred years, American air and space power has evolved into an effective tool of national policy, creating a host of sophisticated, stealthy aerial vehicles capable of global reach. Through calculated research, development, and procurement decisions and a resolve to integrate all of our combat, information, and support systems into an enterprise architecture of joint air and space capabilities, we will achieve our mission to win this nation's wars and protect our vital interests whenever and wherever they are threatened. As we supported an unprecedented level of contingency operations over the last year, we evaluated, implemented, and validated a host of technological advances, organizational changes, and operational concepts that enabled our men and women to achieve desired effects on the battlefield faster and with greater precision than at any time in the history of warfare. Such adaptation is characteristic of Air Force transformation, as airmen strive to push the envelope to achieve innovative and unprecedented air and space capabilities for combatant commanders, the joint force, and our nation. We have continued to move our expeditionary Air Force closer to realizing the transformational imperatives of this new era, machine-to-machine digital integration of manned, unmanned, space, and joint command and control assets. FORCE MANAGEMENT Transforming our force would not be possible without an integrated plan to educate, train, and mature the right mix of Active Duty, Air National Guard, Air Force Reserve, and civilian personnel who understand the nature of our changing security environment. To achieve this, we are evolving our personnel function towards a new Total Force Development process that better blends Professional Military Education, advanced academic degrees, and assignment policies. The strength of our nation's Air Force will never reside in systems alone, but in the airmen operating them. Nor will our capabilities improve solely through technological advances, but instead through the dedication, professionalism, skills, and adaptive insights of the Air Force family, including our extended family of defense analysts and members of industry to support our transformation objectives. We recruit and retain a remarkably diverse group to ensure we reach our fullest potential. Their backgrounds reflect the cross-section of American culture all races, religions, economic and educational backgrounds, skill and management levels, men and women that make this Air Force the tremendous organization that it is today. Airmen embrace transformational ideas and seek to apply them to every aspect of the Air Force, from new organizational constructs to innovative joint concepts of operations. The true test of their ideas is evident in real-world operations, where the Air Force is often the "tip of the spear" and airmen have proven themselves as unequalled warfighters. Whether maintaining safe skies over UN no-fly zones, supporting counter-terrorist missions in the jungles of the Philippines, or paying the ultimate price while rescuing fellow Americans in a battle on an Afghan ridge, our airmen are proven combat veterans. To enable our people to support these real-world expeditionary operations, the Air Force transformed to a force management construct known as the Air and Space Expeditionary Force (AEF). After nearly three complete and successful deployment cycles, our AEF construct is validated as an effective means of meeting our nation's increased operations tempo requirements. Yet we've continued to enhance the construct by initiating significant organizational changes -- for example, ensuring that every airman belongs to one of our ten AEFs. A beneficial collateral effect has been a change in our corporate mindset and culture, where an airman's AEF association cultivates an expeditionary perspective and a clearer appreciation for joint warfighting requirements and capabilities. Force Development - A New "Flight Plan" for Leadership Future military missions will require greater sophistication and understanding of the security environment, and our expeditionary force requires airmen with international insight, foreign language proficiency, and cultural understanding. We are working diligently to expand the cadre of professionals with such skill sets and experiences. Our education initiatives will contribute to a major corporate culture shift that fosters appropriate development throughout our airmen's careers to meet evolving force requirements. In the past, we addressed aspects of career development, education, and assignments individually, but not necessarily in a coordinated, connected approach. Recognizing this, and to prepare for the future, we introduced a systemic force development construct that evolves professional airmen into joint force warriors. This construct provides the right level, timing, and focus of education, training, and experience for all airmen, while encompassing personal, team, and institutional leadership skills for all levels of military operations. As opportunities in advancing technologies unfold, it is imperative that the Air Force continue to draw upon a vibrant collection of educated, technically skilled, and technologically savvy airmen - both uniformed and civilian alike. Agile, flexible training is an essential investment in human capital, and our initiatives ensure our investment delivers the right training to the right people at the right time. In August 2002, we began our groundbreaking Enlisted-to-Air Force Institute of Technology (AFIT) Program. An initial cadre of senior NCOs began receiving world-class, graduate education to optimize them for greater responsibilities and challenging follow-on assignments. In addition, because more than 42 percent of our civilian force will be eligible for retirement in the next five years, we are committing significant resources to pay for advanced education as well as cross-functional career broadening. Diversity Diversity is a readiness issue; it is a warfighting issue. We know that we must continue to attract people from all segments of American society and tap into the talents and advantages resident in our diverse population if we hope to reach our fullest potential as a fighting force. Today's multi-threat world also mandates that we instill in our airmen the ability to effectively think across cultural boundaries and functional paradigms. Our continuing goal is to recruit, train, and retain airmen without imposing artificial intellectual boundaries, adopting the personnel policies and practices that will best integrate people, their ideas, new weapons and systems to achieve air and space dominance. Recruiting the Best It takes tremendous effort to identify and develop such airmen, yet the return for the nation is immeasurable. Increased advertising, an expanded recruiting force with broader access to secondary school students, and competitive compensation prepare us to meet recruiting goals. Despite the challenge of mustering such a diverse and skilled collection of Americans, we exceeded our Fiscal Year 2002 enlisted recruiting goals and expect to surpass Fiscal Year 2003 objectives. We will adapt our goals to meet new force objectives; however, the capacity limitations of Basic Military Training and Technical Training School quotas will continue to challenge our Total Force recruiting efforts. Officer recruitment presents similar challenges. We are particularly concerned with a shortage of military and civilian scientists and engineers. We fell short of our accession goal for this group and have begun all-out recruitment and retention efforts for these critical specialties. Historically, the Air National Guard and Air Force Reserve access close to 25 percent of eligible separating Active Duty Air Force members (i.e., no break in service). The demands of continued high operations tempo may negatively impact our efforts in attracting Air National Guardsmen, as well as drawing separating Active Duty airmen to the Air Force Reserve. As a result, recruiting will have to make up a substantial portion of accessions from that market by developing alternatives. Retention The Air Force is a retention-based force. The critical skill sets we develop in our airmen are not easily replaced, so we expend every effort to retain our people – the impetus for our "re-recruiting" efforts. Overall retention plans include robust compensation packages that reward service, provide for a suitable standard of living, ensure a high quality of life, and retain the caliber of professionals we need to win America's wars decisively. Over the past year, we continued to reap the benefits of our aggressive retention program, aided by bonuses, targeted pay raises, and quality of life improvements. Introducing the Critical Skills Retention Bonus for select officer specialties reinforced our commitment to target specific skills suffering significant retention challenges. The Air National Guard has placed particular emphasis on aircraft maintenance fields, security forces, and communication and intelligence specialists by offering enlistment and reenlistment bonuses, a Student Loan Repayment Program, and the Montgomery GI Bill Kicker Program. However, many airmen retained under Stop Loss will separate throughout Fiscal Year 2003 - a fact of particular concern for our rated force. Our flexible Aviation Continuation Pay (ACP) program remains an important part of our multifaceted plan to retain pilots. OPERATIONS Meeting Our Nation's Warfighting Requirements Committed to meeting any mission tasked, the Air Force completed an unprecedented array of operations and exercises in 2002. From the jungles of the Philippines to the deserts of the Middle East, and across every continent and body of water, the Air Force joined with land and naval forces to secure America's national security objectives. We do |