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‘Total Force’ drill pay hit; Triwest loses bid protest

July 5, 2012

by Tom Philpott

Defense officials can expect a fight if they embrace a plan from an internal study group that would urge Congress to cut drill pay and annual retirement points for Reserve and National Guard members in return for allowing retired pay to start years sooner than the current age-60 threshold.

The warning came Tuesday from Marine Corps Maj. Gen. Andrew B. Davis, executive director of the Reserve Officers Association.

Davis charged that the 11th Quadrennial Review of Military Compensation "paints an incomplete picture" of drill pay purposes today and that its director, Thomas L. Bush, pushed unsuccessfully for the same "total force compensation" concept a decade ago as a senior policy official on reserve affairs at the Pentagon.

"This pitch was first brought up 10 years ago, by Mr. Bush, and was put on the shelf when Reserve and Guard members started taking heavy casualties in the war. Now is not the time to resurrect an old idea and try to ram it through Congress," Davis said a statement.

The QRMC proposes making Reserve and Guard compensation less costly and more flexible to meet recruiting and retention targets. To do that, it touts reserve compensation that is "more closely aligned with the approach used to compensate" active duty members.

The study, released in June, recommends replacing the tradition of paying two days’ basic pay for a day of weekend drill with a new formula: one day of basic pay plus housing and food allowance for one day of drill.

To bolster its case that drill pay needs to be modernized, the QRMC notes that currently "reserve members are paid more for a day of weekend training than for a day serving in combat."

Marshall Hanson, legislative director of ROA and a retired Navy Reserve captain, called this a "slogan" that obscures important facts. For example, reserve personnel in a war zone receive additional pays including hostile fire pay or danger pay and valuable tax exemptions.

Also, double basic pay for drill weekends compensates for the extra hours members spend on reserve business for which they receive no credit. It also helps to cover unreimbursed travel expenses that many members experience in getting to and from drill sites.

When all these factors are weighed, the relative value of service in combat rises and the relative value of drill pay falls, Hanson said.

The QRMC also proposes cutting retirement points earned per year by a drilling member from 75 down to 53 – or just a point for each of 24 weekend drill days, 14 more for two week’s summer training and 15 annual participation points. This would represent a 30 percent cut in points earned toward future retirement pay calculations.

To ease the impact of these changes, the QRMC’s "total-force compensation" concept also endorses earlier reserve retirement. Rather drawing an annuity at age 60, reservists with 20 or more qualifying years of service could draw retired pay 30 years after they first entered the military. So a member who entered service at age 18, for example, could draw reserve retirement at age 48.

Earlier retirement alone would not be enough to sustain the current force if drill pay and retirement points were to be cut. Indeed, the think-tank RAND explained in a background report for the QRMC that these changes alone would create a shortfall of 10 to 16 percent in the number of reserve component officers and a cut of 10 to 19 percent in the enlisted force.

So the QRMC also calls for some sort of "supplemental payment" for the Guard and Reserve. It considered but largely rejected reimbursing members for travel of more than 50 miles one way to drills, or paying additional for hours spent on reserve business outside of drill weekends.

Easier to administer, the study suggested, would be an incentive pay for drilling reservists, perhaps payable in a lump sum at the end of the year. Amounts would vary by rank and years of service and could also be used to modify the shape of the force. Some examples in the study show these incentive payments might equal 10 to 60 percent of annual reserve pay.

In briefing reporters on the importance of creating a new incentive pay to make the other elements for modernizing reserve compensation work, Bush acknowledged some risk. Will Congress fully fund the incentive pay account every year to the level the services argue they need? Those would be "discretionary" dollars that could be diverted elsewhere, Bush conceded.

Hanson at ROA sees more risk in assuming Congress, in exchange for cutting drill pay, would approve an earlier retirement plan for reservists. He noted how Congress four years ago voted to allow Reserve and Guard members who deploy to Iraq and Afghanistan to earn credit toward earlier retirement. But lawmakers still haven’t found budget dollars to apply that change retroactively to the tens of thousands of personnel called up for war after 9-11 but before January 2008 when that credit change was enacted.

Both the QRMC and its critics acknowledge an era of belt-tightening is here. The QRMC says reserve compensation must be made more efficient if the force is to be sustained. But Hanson said if these efficiency moves are taken, when families and employers already are urging Reserve and Guard members "to drop the military thing," it could hollow out reserve components and ultimately jeopardize the entire all-volunteer force.

TRIWEST LOSES PROTEST – About 2.9 million TRICARE beneficiaries living in the western states will have a new support contractor next April after 16 years of dealing with TriWest Healthcare Alliance of Phoenix, Ariz.

On Monday, the Government Accountability Office denied a protest filed by TriWest that had challenged the award of a new $20.4 billion support contract to UnitedHealth Military & Veterans Services of Minnetonka, Minn.

TriWest said its bid offered better value and a stellar performance record, and that TRICARE contract officers had ignored "United’s extensive track record of problems with consumers, providers, beneficiaries and government enforcement agencies."

GAO said its review showed that the bid evaluation process was reasonable. It denied TriWest’s protest on all counts.

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