The Naval Postgraduate School and the Impending Budget Battle of FY22
It would seem that the Naval Postgraduate School (NPS) is in the field of play for the FY22 Navy budget. The outcome of those discussions could well lead to a significant overhaul of NPS itself. See Naval Postgraduate School faces big budget cuts and possible reorganization. While the reasons for being a budget target are no doubt many, the relevancy and cost effectiveness of NPS itself continue to be central to the discussions. The timing seems appropriate to re-publish the article I wrote in November 2018 forecasting this very scenario.
The Naval Postgraduate School: Does The Cost Outweigh The Benefit? (Nov 2018)
It is essential that the Navy maintain the ability to deliver tailored graduate education to its officers within the confines of the core competencies of going to sea to protect the nation, maintaining freedom of navigation, and when necessary imposing the will of the nation. The cost of doing so through the Naval Postgraduate School (NPS) is the subject of this brief article. In an era of record budget deficits, is the Naval Postgraduate School a truly cost effective method for providing relevant graduate education to its officers? Is graduate education for 1400 military officers/students per year in Monterey, CA really a top priority for Navy leadership? With the Navy safety record of the past few years and the various weapon systems program shortfalls, might the money spent maintaining the NPS infrastructure to include staff and faculty not be more efficiently used to fund the core competencies of Navy and Marine Corps officers? Coincident with the recent selection of another retired Navy vice admiral as the new president of NPS, perhaps it is again time to take inventory of some of the costs associated with maintaining NPS from the perspective of the current model for Navy graduate education in an attempt to think objectively and critically about questions of cost effectiveness and relevance as they pertain to the Naval Postgraduate School. One thing that is certain. In the not-too-distant future the Navy budget will again be scrutinized and squeezed as Congressional efforts to control the deficit get underway. The scrutiny will likely result in moving monies to the war-fighting portions of the budget and away from the ‘nice-to-haves’ and sacred cows, as has been past practice. The purpose of this brief article is not to take issue with the need for Naval Officers to have graduate education. Rather the intent is to encourage thought ahead of a certain impending shift in budget priorities that might endanger the current model used by the Navy to deliver graduate education in general, and the Naval Postgraduate School in specific. (The reader’s attention is invited to https://www.usni.org/magazines/proceedings/2013-10/naval-postgraduate-school-sacred-cow by CAPT Jeanne McDonnell, USN ret.)
What is the Naval Postgraduate School (NPS)
The Naval Postgraduate School is a Navy-run graduate research university and is one of the U. S. Navy’s institutions providing graduate education for Navy and Marine Corp officers, as well as a representation from other military services, Department of Defense civilians, and foreign military officers. It traces its origins back to 1909 when then Secretary of the Navy George von L. Meyer signed General Order No. 27, establishing a school of marine engineering to be co-located with the U. S. Naval Academy in Annapolis, Md. NPS is currently located in Monterey, CA and the organizational structure of NPS provides for four graduate schools and an array of institutes, centers, and academic groups. The four schools are the Graduate School of Business and Public Policy (formerly known as the Department of Systems Management), the Graduate School of Engineering and Applied Sciences, the Graduate School of Operational and Information Sciences, and the School of International Graduate Studies. These four schools manage 14 academic departments and confer, inter alia, Master of Arts, Master of Science, Master of Engineering, Electrical Engineer, Master of Business Administration, and doctoral degrees.
NPS is situated on approximately 647 acres of prime real estate located in Monterey, California, and showcases the historic old Del Monte Hotel (now named Hermann Hall) as its administrative building. Monterey includes some of the priciest zip codes in the nation. It is approximately 70 miles south of San Francisco. One acre of NPS land would easily sell for well in excess of $1 million in 2018 dollars.
NPS Mission and Relevance
The mission of NPS is “…to provide relevant and unique advanced education and research programs to increase the combat effectiveness of commissioned officers of the Naval Service to enhance the security of the United States.” [from NPS mission statement.] Further described, “The Naval Postgraduate School supports a program of mid-career, professional, graduate education in order to meet the Navy and Marine Corps requirements for a technically qualified, intellectually equipped Total Force. The graduate education provided by the Naval Postgraduate School plays a critical role in the fulfilling the Navy’s need for career long development of Naval officers, producing warriors who are highly advanced, scientifically and technologically, across systems and platforms and with well-developed problem solving skills.” [p.13, Department of the Navy Fiscal Year 2017 Budget Estimates, Justification of Estimates.]
With the above statements in mind, it is relatively easy to understand and correlate the Graduate School of Engineering and Applied Sciences and the Graduate School of Operational and Information Sciences vis-a-vis the NPS mission statement as well as the Justification of Estimates statement. There are however, many other academic institutions that currently offer and provide world class programs in these disciplines to Naval officers, outside of NPS. And perhaps it is not too much of a stretch to understand how the School of International Graduate Studies (SIGS) might fit in with the mission statement and that of the Justification of Estimates statements, although somewhat tangentially. This is where the “…scientifically and technologically...” descriptors become a bit of a stretch, as SIGS awards students MA degrees which require little or no quantitative rigor. Likewise, there are several renowned academic institutions that are currently fulfilling these requirements for Naval Officers.
The last of the four schools is the Graduate School of Business and Public Policy (GSBPP), which was formerly known as the Department of Systems Management, and whose current mission statement reads “To serve our Nation by educating U.S. and allied military officers as well as defense civilians in defense-focused business and public policy, by conducting research in defense management and public policy, and by providing intellectual resources for leaders and organizations concerned with defense business management practices and policies.” This appears to be a bit disconnected from the mission statement of NPS and more so with the statement from the Justification of Estimates. In fact, one of GSBPP’s academic program offerings is a Master’s in Business Administration (MBA). Again, the “...producing warriors who are highly advanced, scientifically and technologically, across systems and platforms...” aspect seems to fracture the concinnity of the GSBPP articulated mission statement and the various statements associated with the NPS mission. While NPS is a fine school no doubt, there is also no doubt that the relevance of an MBA and a Navy run business school are questionable vis-a-vis the NPS mission statements. There are, factually, nationally renowned business schools that could and perhaps should fill this need for the Navy if producing MBAs is truly a Navy need and do so at a lesser cost. Further, the absence of any mention of ‘Navy’ in the GSBPP mission statement is mildly troubling.
A question that comes to mind relative to GSBPP (and the three other Schools, for that matter) is what types of specific research do the faculty and students conduct, and how is it relevant to the mission statements? If 100% of the research is in support and furtherance of providing “…relevant and unique advanced education and research programs to increase the combat effectiveness of commissioned officers of the Naval Service to enhance the security of the United States”, then the answer to the question of relevance is self-evident. If however, research is being conducted at the expense of the Navy, is of interest to a small cohort in academia, and that research is not pertinent to the NPS mission statement, then the question appropriately should be open to scrutiny and debate. Clearly, research areas such as cardiac events and migration habits in India would not seem to be appropriate Navy-funded scholarship for GSBPP either in support of an MBA or in support of the NPS mission. History demonstrates that periodically, the Office of the Chief of Naval Operations (CNO) feels compelled to formally reinforce the need for relevancy of research and programs at NPS by issuing executive guidance in the form of official CNO correspondence. The impetus for such guidance is likely the visibility of research that is not relevant to the NPS mission statement or to the Navy. No doubt, that has probably occurred yet again within the past year.
The Budget for NPS
NPS is funded through the Office of the Chief of Naval Operations primarily by direct funding and reimbursable funding. Direct funding are dollars budgeted for NPS in the Navy budget process, and reimbursable dollars are simply monies reimbursed to NPS for services rendered by NPS. As well, there is also funding for NPS that is not visible in the budget process. The costs of maintaining NPS on the Monterey Peninsula are relatively well established and a matter of record, for the most part.
To meet the NPS mission (and needs of the Navy) in Academic Year (AY)17, NPS had a student load (on-board) of approximately 1400, with the average cost per student being spread far beyond that which is directly funded in an attempt to demonstrate a reasonable cost number. The FY17 estimate (OMN Vol II Data Book) was $42,720 per student, but that is probably a low estimate. NPS faculty for the same period numbered 612, with 228 of those being tenure track (tenure being lifetime appointments that can be terminated only for extraordinary reasons) and 384 are non-tenure track. There are only 35 military faculty. Based on these numbers, one should not infer that the student-teacher ratio is low or that classroom/student contact hours are high. In addition, NPS reported total military end strength (number of military assigned to NPS) of 89 for FY17, and a civilian Full Time Equivalent (FTE) count of 879. These numbers are likely very conservative as well. The total operating budget for NPS in AY17 is estimated at $387,000,000; direct authorization (w/o military salaries) is estimated at $91,000,000; and reimbursable income is estimated at $104,000,000 (2017 NPS Quick Facts, p.14, https://my.nps.edu/documents/10180/111427233/NPS+Annual+Report+2018-FINAL-2.pdf/a9d5681b-0d28-408a-a81c-304955aa2a21).
Some of the perennial questions surrounding NPS and its budget include: What is the “hard", quantifiable Return On Investment (ROI) for the Navy? Restated, what is the net profit to the Navy (actual number) divided by the cost of the investment (NPS)? How many graduates truly use their NPS education in follow on tours in direct support of the Navy and Marine Corps? Are there other alternatives available to support the delivery of graduate education to a small cohort more cost efficiently, as opposed to physically maintaining a Navy-run university in a extremely expensive part of the country?
Possible Alternatives to NPS
The Navy is not unique in its drive to deliver graduate education to its officer corp. There are alternate methods of achieving the stated mission of NPS. The Air Force for example, maintains its own graduate school as well, the Air Force Institute of Technology (AFIT, founded in 1919) which is composed of a Graduate School of Engineering and Management, School of Strategic Studies, School of Systems and Logistics Management, and Civil Engineering School. The institution, although not a mirror image of NPS, is certainly a very close cousin. It is located on Wright Patterson Air Force Base in Ohio and has approximately 800 students in residence. NPS and AFIT have cooperated closely over the years in moving programs from one institution to the other. In anticipation of the coming budget crunch, might it make sense to explore the cost of consolidation and physical relocation of NPS with AFIT under a DoD moniker and keep the school in a comparatively lower cost geographic area, like Ohio? This potentially would allow for faculty and curricula consolidations where appropriate, and for overall reduced footprint on the Monterey peninsula, among other things. As well, this alternative would keep the graduate education of officers ‘in house’ and allow the Navy to continue to exercise hands-on control vis-a-vis their requirements for specific types of programs.
NPS was one of the early pioneers of ‘distance learning’ over 25 years ago and through 2017 boasts more than 900 students enrolled in the distance learning programs. Most major graduate degree conferring universities have distance learning programs which cover many of the programs offered at NPS with degrees ranging from MS through Ph.D., and disciplines ranging from management to aerospace engineering and mechanics (e.g. the University of Alabama, Georgia Tech, the University of Texas, etc). Might it make sense to explore a system whereby prospective students are selected for NPS approved, Navy funded, online graduate programs which do not require physical relocation to Monterey?
Summary
The time-worn defenses for NPS’s budget and the cost of maintaining NPS on the Monterey peninsula will no doubt be resurrected as budget discussions get underway. Arguments such as relating the NPS budget to the unit cost of an F-35, or as a fraction of the overall Navy budget do not demonstrate fresh thinking. Since NPS houses the Navy’s own business school, perhaps GSBPP will be chartered to make the case quantitatively as to why NPS is the most cost effective and best value in the overall graduate education program of the Navy. This tasking might help focus their research agendas and showcase the intellectual horsepower resident within GSBPP.
It is essential that the Navy maintain the ability to deliver tailored graduate education to its officers within the confines of the core competency of going to sea to protect the nation, maintain freedom of navigation, and when necessary impose the will of the nation. But as with many other services that were once organic to the Navy and have now been contracted out, the delivery of graduate education to officers of the Navy and Marine Corps should likewise be reviewed for cost effectiveness. While graduate education at NPS supplements the core competencies of Naval officers, the delivery of graduate education in and of itself is not a core competency of the Navy. It is in this light that the cost effectiveness of NPS should be scrutinized now to ensure that precious Navy dollars are being efficiently utilized. Rather than react to circumstances, it would be better to attempt to control the events that will very likely impact the ability of the Navy to deliver tailored graduate education to its officers in the not-too-far distant future. It has been said that sacred cows do make the best hamburgers…