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1 4 AUG 2013

1. Across the board reductions in Federal spending imposed by the Budget Control Act of 2011 will significantly decrement the Army's budget in the foreseeable future. Given these reductions , we must focus on the Army's core missions, sustaining the Army's ability to provide a smaller, more capable Army able to provide ready land forces to meet combatant commanders' global requirements; develop leaders for the 21 st century, while maintaining the bonds of trust with Soldiers and Families. To ensure Army readiness at these reduced budget levels, we must make the best and maximum use of every single dollar provided to the Army. 2. To best allocate Army resources, we direct a 2013 Army Focus Area Review Group to review specific focus areas and propose executable recommendations to best apply reductions to Army programs and elements. Army Program Analysis and Evaluation (PA&E) has already made an initial allocation of reductions across Program Objective Memorandum (POM) 15-19. The Review Group recommendations will enable us to make specific decisions concerning the consolidation and reduction of organizations, programs and functions . 3. Mr. Thomas Hawley and LTG Thomas Spoehr will lead the Review Group. The group will initially have seven Focus Area teams. The purpose of the Focus Area teams is to develop bold executable recommendations which will be used to balance the already directed reductions in POM 15-19. See Appendix 1 (Focus Area Team Leads and Membership) for more details. Where appropriate, specific targets for each focus area in dollars and full-time equivalents (FTE) will be provided to team leads as soon as they are available. Army PA&E will provide support as needed to each team. The Focus Areas are: Institutional Headquarters Reductions Operational Headquarters Reductions Operational Force Structure and Ramps Readiness Acquisition Work Force Installation Services and Investments Army C31 and Cyber

4. The timeline for decision and action is short. Not later than 11 September 2013, the Focus Area Review Group will provide us with a comprehensive set of recommendations. Given the difficulty of this task, we fully expect that Review Group

SUBJECT: 2013 Focus Areas

recommendations are unlikely to reflect consensus. To the extent possible, each recommendation will include actionable options, distinguished by their effect on our Army and the cost savings associated with each. To promote transparency, recommendations will be staffed with ALL affected Army stakeholders. Comments, minority views and nonconcurrences will be documented, justified in detail and submitted to us for consideration. Except in extraordinary circumstances, recommendations to conduct further studies or assessments are not acceptable. To the extent practicable, the Review Group will rely on existing data, studies and reviews. 5. The Review Group leads have the authority to adjust the work within each of the Focus Area teams. They will coordinate with the Director of the Army Staff to obtain additional staff support as needed to complete this effort in the allocated time. Since this is a Total Army effort, each focus area will also have a representative from the Army National Guard and Army Reserve. 6. We expect weekly updates starting in early August 2013. Mr. Hawley and LTG Spoehr will establish the necessary battle rhythm to develop and review the recommendations. This effort will take priority over all other activities. 7. Let there be no mistake, aggregate reductions WILL TAKE PLACE. The money is gone; our mission now is to determine how best to allocate these cuts while maintaining readiness . We expect Army leaders, military and civilian, to seize this opportunity to re-shape our Army . This effort will take PRIORITY OVER ALL other Headquarters, Department of the Army activities . 8. One element of the Focus Area Review is to determine how to reduce Army Headquarters (both institutional and operational, at the 2-star and above levels) in the aggregate by 25%. In the next two weeks, Commands (Army Command (ACOM), Army Service Component Command (ASCC) and Direct Reporting Unit (DRU)) and Army Headquarters Principal Officials should be prepared to present their individual plans on what functions they would reduce or eliminate and the corresponding organizational change that would cause a 25% reduction in Headquarters funding and manning. 9. This effort suspends many of the efforts on Institutional Army Headquarters reform led by the Institutional Army Transformation Commission (IATC) and Army Headquarters Transformation (AHT) . Selected proposals from both of these efforts will be reviewed and incorporated within this effort.

SUBJECT: 2013 Focus Areas

10. If you have any questions , contact Mr. Thomas Hawley, (70 3) 697-8150, and LTG Thomas Spoehr, (703) 614-4682 ,

Raymond T. Odierno General, United States Army Chief of Staff

ohn M. McHugh ecretary of the Arm

DISTRIBUTION : Principal Officials of Headquarters, Department of the Army Commander U.S. Army Forces Command U.S. Army Training and Doctrine Command U.S. Army Materiel Command U.S. Army Pacific U.S. Army Europe U.S. Army Central U.S. Army North U.S. Army South U.S. Army Africa/Southern European Task Force U.S. Army Special Operations Command Military Surface Deployment and Distribution Command U.S. Army Space and Missile Defense Command/Army Strategic Comma nd U.S Army Cyber Command U.S. Army Network Enterprise Technology Command/9th Signal Command (Army) U.S. Army Medical Command U.S. Army Intelligence and Security Command U.S. Army Criminal Investigation Command U.S. Army Corps of Engineers U.S. Army Military District of Washington U.S. Army Test and Evaluation Command U.S. Army Installation Management Command Superintendent, United States Military Academy Director, U.S. Army Acquisition Support Center Executive Director, Arlington National Cemetery Accessions Support Brigade CF : Director, Army National Guard Director of Business Transformation

Appendix 1: Focus Area Team Leads and Membership The Focus Groups will develop executable recommendations that can meet established resource targets and senior leader guidance for the planning period 2015-2019.
1. Focus Area teams should look at developing bold, innovative recommendations from an Army-wide perspective, focusing on and validating the key core missions of the Army. Do these recommendations support where we want the Army to go? Where can we take risk to minimize the risk to the Army core missions? 2. Designated Team leads shall be responsible for meeting or exceeding specified targets in a manner that best matches resources to missions. The Team leaders will work with Army Program Analysis and Evaluation (PA&E) to understand applicable resource constraints. For this effort, assume we are operating under the POM Budget Control Act (BCA) funding levels and the Office of the Secretary of Defense (OSD)/Army guidance . 3. The Team leaders have the latitude to select their team members after conducting mission analysis and providing those names to Mr. Hawley and LTG Spoehr for their approval. The Director of the Army Staff will arbitrate any disagreements with the owning organizations. Army Commands and Direct Reporting Units (DRU) are directed to provide point of contact information to the appropriate Focus Group leaders and the Review Group. 4. Note that these reductions have already been made to the program , the dollars and the authorizations have already been taken, thus it will not be acceptable to present recommendations that fail to meet the established targets. 5. Special care and consideration must be applied to ensure that reductions are integrated across the focus areas to avoid "double-tapped/double-counting" savings in the recommendations . To that end, an integration cell will be stood up to support the Focus Review Group in binning recommendations for dollar and manpower savings from across all focus groups. The integration cell will also provide support to focus area teams as required.

6. FOCUS AREA TEAMS a. Institutional Headquarters Reductions . MG Thomas Horlander (Office of Business Transformation (OBT)) will lead this team with Mr. Pete Bechtel and Dr. Leonard Braverman as directed members. The requirement for this team is to reduce the size of the Total Army Institutional Headquarters by 25% (HQDA, FOAs, ACOMs and DRUs) in the aggregate, across military, civilian and contractors (down to every organization authorized a 2-Star General Officer or Tier 2 SES). A particular emphasis will be placed on ensuring HQDA reductions are put into place. The Army National Guard and Army Reserve members will provide necessary information and support for their

organizations and commands. The baseline reductions from which the reductions are to be calculated are the dollars and Table of Distribution Allowances (TDA) Full-Time Equivalents (FTE) reflected in FY18 of POM 1418 for these headquarters. Movement of personnel outside of headquarters to subordinate units is not a legitimate means of achieving savings. Teams should consider consolidation, reductions, and closing organizations. Reductions have already been applied to these accounts in a proportional manner. This team will assess how these reductions should optimally be applied. The team should capitalize on work that has already been done by the Army Headquarters Transformation (AHT) effort and the Institutional Army Transformation Commission (IATC). b. Operational Headquarters Reductions. MG Jeffrey Snow will lead this team with BG Robin Mealer as a directed member. This team will develop courses of action to transform operational headquarters (2-star and above), based on strategic priorities and the stated needs of combatant commanders, while simultaneously achieving a 25% aggregate reduction. The baseline is the FY18 funding from the President's Budget 2014 and the authorizations in FMS Web for 2018 for these organizations. Consideration can be given to both empowering and consolidation of ASCCs, but recommendations should not drive to a single solution. Additionally consolidation and transfer of functions between ASCCs, Corps and Divisions should be reviewed. Once again, these changes will be across the Total Army formations and include all 2-StarfTier 2 SES and above led operational commands. c. Operational Force Structure and Ramps. BG Roger Cloutier (G-3/5/7 Force Management) will lead this team with Ms. Gwen DeFilippi (ASA(MR&A) as a directed member. Mr. John McLaurin will temporarily lead this team until BG Cloutier's arrival. The goal of this team is to determine the appropriate mix of the formations in our Army and the proper drawdown ramps in order to achieve that structure by 2019. This is a Total Army effort and will include members from the Army National Guard and Army Reserve to ensure that their unique challenges in reorganizing can be included in the decisions. Include for consideration multi-component organizations, organizational design, echelon consolidations and schedules. Specific interest areas are forces that provide support to other Services, task organization of Corps and Divisions, Logistics, Theater capabilities and other echelon above Brigade Combat Team (BCT) forces. Review should look broadly across the force; at rules of allocation and at AC/RC alignment. d. Readiness. BG Wayne Grigsby (G-3/5/7 Training) will lead this team with COL John Muller (ASA(MRA)) as a directed member. The goal of this team is to ensure our limited resources are correctly estimated and applied across both AC and RC forces to provide necessary force readiness levels to meet national security objectives, in FY15-19 informed by FY14 planning. Strategy, model and readiness investments should be reviewed with

recommendations focused on training readiness within constrained resourcing. e. Acquisition Work Force. Mr. Thomas Mullins (ASA(ALT)) will lead this team with MG Bo Dyess (G-8 Force Development) as a directed member. The goal of this team is to reduce the size of the different parts of the acquisition work force commensurate with the reduction in funding for their functions. This group will provide the appropriate metrics, but in the aggregate, the acquisition workforce should be reduced in a manner that optimizes the resources to support our core missions.

Installation Services and Investments. MG AI Aycock (ACSIM) will lead team with Mr. Paul Cramer (ASA(IE&E) as a directed member. The goal of this team is to review all installation support and services and programs Recommendations should consider across all PEGs and all Components. reductions of workforce and missions and other cost-savings measures while sustaining quality care of Soldiers and families. The Army National Guard and Army Reserve members will provide the necessary information to ensure this is a look across the Total Army. Closely examine and make recommendations concerning which programs at the installation level can be eliminated and/or consolidated. Additionally, working with the G-3 FM recommendations should include options for stationing forces beyond 2015 in order to reduce costs to installations support and services.

g. Army C31 and Cyber. This team will be led by (TBD) and will include Mr. Dean Pfoltzer as a directed member. The goal of this team is to reduce the size of the organizational headquarters within the C31 construct (ARCYBER, G2, INSCOM, CIO/G6, NETCOM , ITA) by 25% in the aggregate, across military, civilian , and contractors (down to every organization authorized a 2Star General Officer or Tier 2 SES). A particular emphasis will be placed on consolidations and eliminations. The baseline reductions from which the reductions are to be calculated are the dollars and TDA FTEs in FY18 of POM 14-18 for these commands and organizations. Movement of personnel outside of headquarters to subordinate units is not a legitimate means of achieving savings. Team should consider consolidation , reductions, and closing organizations. Reductions have already been applied to these accounts in a proportional manner; this team's purpose will be to assess how these reductions should optimally be applied .