Defense Logistics
Actions Needed to Improve the Availability of Critical Items during Current and Future Operations Gao ID: GAO-05-275 April 8, 2005GAO has identified spare parts supply as a long-standing Department of Defense (DOD) management problem. In December 2003, GAO reported on problems with Operation Iraqi Freedom (OIF) logistics support including shortages of spare parts and supplies in Iraq. This report expands on that effort by assessing (1) what supply shortages were experienced by U.S. forces in Iraq between October 2002 and September 2004 and what impact the shortages had on their operations, (2) what primary deficiencies in the supply system contributed to any identified supply shortages, and (3) what actions DOD has taken to improve the timely availability of supplies for current and future operations. To address these objectives, GAO judgmentally selected nine items based on lessons learned and after-action reports that represented possible shortages with operational impacts.
U.S. troops experienced shortages of seven of the nine items GAO reviewed. According to the 2004 National Military Strategy, U.S. forces expect to have sufficient quantities of the right items at the right time. However, demand for the seven items exceeded availability sometime between October 2002 and September 2004. The documented impact of these shortages varied between combat units. For example, while units in the 3rd Infantry Division reported that tire shortages reduced their operational capability, forcing them to abandon equipment, the 4th Infantry Division reported no similar effect. GAO identified five systemic deficiencies that contributed to shortages of the reviewed items, including inaccurate Army war reserve spare parts requirements and ineffective distribution. Annual updates of Army war reserve parts requirements have not been conducted since 1999. As a result, the war reserves did not contain enough track shoes, batteries, and tires to support U.S. forces during initial operations. Effective distribution relies on a seamless process to promptly move supplies from the United States to a customer. GAO found that conflicting doctrinal responsibilities for distribution management, improperly packed shipments, insufficient transportation personnel and equipment, and inadequate information systems prevented the timely availability of four of the items. While U.S. troops developed short-term solutions to manage item shortages during OIF, DOD and the services have begun to undertake systemic, long-term changes to fix some supply problems identified. While GAO did not evaluate their potential for success, the majority of the changes are focused on distribution, and not on the full gamut of systemic deficiencies GAO identified.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-05-275, Defense Logistics: Actions Needed to Improve the Availability of Critical Items during Current and Future Operations
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Report to Congressional Committees:
April 2005:
Defense Logistics:
Actions Needed to Improve the Availability of Critical Items during
Current and Future Operations:
GAO-05-275:
GAO Highlights:
Highlights of GAO-05-275, a report to congressional committees:
Why GAO Did This Study:
GAO has identified spare parts supply as a long-standing Department of
Defense (DOD) management problem. In December 2003, GAO reported on
problems with Operation Iraqi Freedom (OIF) logistics support including
shortages of spare parts and supplies in Iraq. This report expands on
that effort by assessing (1) what supply shortages were experienced by
U.S. forces in Iraq between October 2002 and September 2004 and what
impact the shortages had on their operations, (2) what primary
deficiencies in the supply system contributed to any identified supply
shortages, and (3) what actions DOD has taken to improve the timely
availability of supplies for current and future operations.
To address these objectives, GAO judgmentally selected nine items based
on lessons learned and after action reports that represented possible
shortages with operational impacts.
What GAO Found:
U.S. troops experienced shortages of seven of the nine items GAO
reviewed. According to the 2004 National Military Strategy, U.S. forces
expect to have sufficient quantities of the right items at the right
time. However, demand for the seven items exceeded availability
sometime between October 2002 and September 2004. The documented impact
of these shortages varied between combat units. For example, while
units in the 3rd Infantry Division reported that tire shortages reduced
their operational capability, forcing them to abandon equipment, the
4th Infantry Division reported no similar effect.
GAO identified five systemic deficiencies that contributed to shortages
of the reviewed items, including inaccurate Army war reserve spare
parts requirements and ineffective distribution. Annual updates of Army
war reserve parts requirements have not been conducted since 1999. As a
result, the war reserves did not contain enough track shoes, batteries,
and tires to support U.S. forces during initial operations. Effective
distribution relies on a seamless process to promptly move supplies
from the United States to a customer. GAO found that conflicting
doctrinal responsibilities for distribution management, improperly
packed shipments, insufficient transportation personnel and equipment,
and inadequate information systems prevented the timely availability of
four of the items.
Systemic Deficiencies Contributing to Shortages of Seven GAO-Selected
Items
[See Table 1]
Source: GAO analysis.
[A] These are Marine-Corps-only items.
[End of table]
While U.S. troops developed short-term solutions to manage item
shortages during OIF, DOD and the services have begun to undertake
systemic, long-term changes to fix some supply problems identified.
While GAO did not evaluate their potential for success, the majority of
the changes are focused on distribution, and not on the full gamut of
systemic deficiencies GAO identified.
What GAO Recommends:
This report contains several recommendations to the Secretary of
Defense directing that actions, such as ensuring the accuracy of Army
war reserve requirements and developing and exercising deployable
distribution capabilities, be taken to improve DOD‘s system for
supplying items to U.S. forces. DOD concurred with the intent of the
recommendations and cited actions it has taken or will be taking.
www.gao.gov/cgi-bin/getrpt?GAO-05-275.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact William Solis at (202)
512-8365 or solisw@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Supply Shortages Reduced Operational Capability and Increased Risk to
Troops in Iraq:
Multiple Supply Chain Deficiencies Contributed to Supply Shortages:
DOD Actions to Improve Supply Availability for Current and Future
Operations:
Conclusions:
Recommendations for Executive Action:
Matter for Congressional Consideration:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Assault Amphibian Vehicle Generators:
Appendix III: Armored Vehicle Track Shoes:
Appendix IV: Interceptor Body Armor:
Appendix V: Joint Service Lightweight Integrated Suit Technology Suits:
Appendix VI: BA-5590 and BA-5390 Lithium Batteries:
Appendix VII: Marine Corps Helicopter Rotor Blades:
Appendix VIII: Meals Ready-to-Eat:
Appendix IX: Five-Ton Truck and High-Mobility Multi-Purpose Wheeled
Vehicle Tires:
Appendix X: Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
Add-on-Armor Kit:
Appendix XI: Comments from the Department of Defense:
Appendix XII: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Systemic Deficiencies Contributing to Shortages of Seven GAO-
Selected Items:
Table 2: DOD and Joint Guidance on Distribution:
Table 3: Systemic Deficiencies Contributing to Shortages of Seven
Supply Items:
Table 4: War Reserve Requirements, On-Hand Stock, and Items Requested
Worldwide:
Table 5: Status of On-Hand Army War Reserve Spare Parts Requirements as
of October 2004:
Table 6: Item and Supply Manager:
Table 7: Organizations Interviewed during Review:
Table 8: Forecasted and Actual Demand for Abrams and Bradley Track
Shoes (March-May 2003):
Table 9: CECOM Unfunded Requirements for Fiscal Years 2001 through
2003:
Figures:
Figure 1: CENTCOM's Area of Responsibility:
Figure 2: Total Military Personnel Deployed in CENTCOM's Area of
Responsibility in Support of Operation Enduring Freedom and Operation
Iraqi Freedom, December 2002 through September 2004:
Figure 3: DOD's Joint Distribution System:
Figure 4: Fiscal Year 2003 Army Working Capital Fund Supply Management
Requirements and Cumulative Obligation Authority Received:
Figure 5: Fiscal Year 2003 DLA Supply Management Requirements and
Cumulative Obligation Authority Received:
Figure 6: Assault Amphibian Vehicle and Generator:
Figure 7: Assault Amphibian Vehicle Generator Demand and Back Orders
for OIF by Quarter (3rd quarter fiscal year 2001 through 4th quarter
fiscal year 2004):
Figure 8: Abrams Tank Track:
Figure 9: Interceptor Body Armor:
Figure 10: Worldwide Demand, Production Output, and Back Orders for
Vests by Quarter (December 2001 through September 2004):
Figure 11: Worldwide Demand, Production Output, and Back Orders for
Plates by Quarter (December 2001 through September 2004):
Figure 12: Joint Service Lightweight Integrated Suit Technology Suit:
Figure 13: BA-5590 Lithium Battery:
Figure 14: Worldwide Demand, Inventory Levels, and Back Orders for BA-
5590 and BA-5390 Lithium Batteries by Month (October 2001 through
August 2004):
Figure 15: Worldwide Forecasted Requirements, Demand, and Production
Output for BA-5590 and BA-5390 Lithium Batteries by Month (October 2001
through August 2004):
Figure 16: Rotor Blades on CH-53E Super Stallion:
Figure 17: UH-1N Rotor Blade Demand and Back Orders by Month (March
2003 through September 2004):
Figure 18: CH-53E Rotor Blade Demand and Back Orders by Month (March
2003 through September 2004):
Figure 19: Meal Ready-to-Eat:
Figure 20: Forecasted Requirements, OIF Demand, Production Output, and
Inventory for MREs (December 2002 through June 2003):
Figure 21: M-923 5-ton Truck:
Figure 22: Worldwide Demand, Back Orders, and Inventory Level for the
5- ton Truck Tire by Month (February 2002 through September 2004):
Figure 23: Worldwide Demand, Back Orders, and Inventory Level for the
HMMWV Tire by Month (February 2002 through September 2004):
Figure 24: TACOM's Actual and Reset Requirements, Funding Executed and
Received by Month, Fiscal Year 2003:
Figure 25: Up-Armored HMMWV:
Figure 26: Add-on-Armor Kit Mounted on HMMWV:
Figure 27: Up-Armored HMMWV Requirements, Production Output, and
Redistribution from August 2003 through September 2004:
Figure 28: Add-on-Armor Requirements and Production Output, November
2003 through September 2004:
Figure 29: Up-Armored HMMWV Funding, Requirements, Production Output by
Month (August 2003 through September 2004):
Abbreviations Abbreviations:
AAV: Assault Amphibian Vehicle:
AMC: Army Materiel Command:
ATLASS: Asset Tracking Logistics and Supply System:
CECOM: Communications-Electronics Command:
CENTCOM: U.S. Central Command:
DLA: Defense Logistics Agency:
DOD: Department of Defense:
HMMWV: High-Mobility Multi-Purpose Wheeled Vehicle:
JSLIST: Joint Service Lightweight Integrated Suit Technology:
MRE: Meals Ready-to-Eat:
OIF: Operation Iraqi Freedom:
SAIC: Science Applications International Corporation:
TACOM: Tank-automotive and Armaments Command:
Letter April 8, 2005:
The Honorable John W. Warner:
Chairman:
The Honorable Carl Levin:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Duncan Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Member:
Committee on Armed Services:
House of Representatives:
To support Operation Iraqi Freedom (OIF), the largest deployment of
U.S. troops since Operation Desert Shield/Desert Storm in 1990, the
Department of Defense (DOD) has undertaken a massive logistics
effort,[Footnote 1] moving more than 2 million short tons of cargo
including equipment, spare parts, supplies, and other items several
thousand miles to the Persian Gulf. This effort started in late 2001 as
U.S. Central Command (CENTCOM)[Footnote 2] began planning for OIF,
accelerated as troops deployed in the fall of 2002 and major combat
operations were launched on March 19, 2003, and continues today while
U.S. and coalition forces undertake stabilization efforts in Iraq. From
October 2002 through September 2004, DOD reported spending $51.7
billion for operating support, including fuel, spare parts, and
facilities management, and $10.7 billion for transportation of
personnel and supplies to sustain[Footnote 3] U.S. forces before,
during, and after major combat operations in Iraq. Despite these
expenditures, there have been widespread reports of serious shortages
of some critical items needed by U.S. troops.
DOD relies on a number of individual processes and activities, known
collectively as supply chain management, to purchase, produce, and
deliver products and services to the warfighter during contingency
operations consistent with the National Military Strategy. The goal of
supply chain management is to deliver the "right items to the right
place at the right time" for the warfighter. To meet the initial
increase in demand during a contingency, DOD depends on its war
reserves--stocks of specifically designated weapon systems, equipment,
spare parts,[Footnote 4] and other items that are amassed during
peacetime. The war reserves are intended to fill the gap until the
national supply system can increase production.[Footnote 5] DOD relies
on defense working capital funds to finance the flow of supplies to the
services. These revolving funds are financed by sales revenue rather
than direct appropriations. Working capital funds allow the Defense
Logistics Agency (DLA) and the services' logistics agencies to purchase
needed items from suppliers. Military units then order items from the
logistics agencies and pay for them with appropriated funds when the
requested items--either from inventory or manufacturers--are delivered
to the units. Supplies are shipped from the United States by air and
sea through DOD's joint distribution system and delivered to deployed
units.
Since the 1990s, we have identified DOD's supply chain management as a
high-risk area because of high inventory levels and a supply system
that was not responsive to the needs of the warfighter. In a
substantial body of work, we have examined a range of problems,
including inventory management and shortages of critical spare
parts.[Footnote 6] DOD also recognizes supply chain management as a
serious issue. In the Quadrennial Defense Review for 2001, DOD stated
its intention to transform its logistics capabilities to improve the
deployment process and implement new logistics support tools that
accelerate logistics integration between the services and reduce
logistics demand and cost. OIF is one of the first major tests of these
new capabilities, and we have reported on the supply chain issues that
have impeded support to the warfighter. For example, after visiting the
theater in 2003, we provided our preliminary observations on the
effectiveness of logistics support during OIF.[Footnote 7] Among the
problems we observed were the unavailability of spare parts, hundreds
of backlogged shipments, and an inability to track shipments at the
distribution centers.
Supplying spare parts has been a long-standing DOD management problem.
Under the Comptroller General's authority, we evaluated the
effectiveness of spare parts and related logistics support being
provided to deployed forces for OIF. Our objectives were to assess (1)
what supply shortages were experienced by U.S. forces in Iraq and what
impact the shortages had on operations, (2) what primary deficiencies
in the supply system contributed to any identified supply shortages,
and (3) what actions DOD has taken to improve the timely availability
of supplies for current and future operations.
We developed detailed case studies of nine supply items that were
reported to be in short supply during OIF. (These items, identified in
the Results in Brief section, were managed by various organizations
within DOD including the Army, the Marine Corps, and DLA.) We chose the
items that we believed presented possible shortages with operational
impacts based on information available in GAO and military reports,
military and contractor lessons-learned studies, and other accounts
covering the time period between October 2002 and September 2004. To
identify the extent and impact of supply shortages, we visited numerous
DOD logistics organizations to obtain data on the production,
availability, and distribution of supply items at the national level.
When supply data specifically for OIF were not available, we used
worldwide data since OIF received supply priority. We also interviewed
members of units that had returned from the theater to determine the
extent and impacts of item shortages on their operations. We identified
deficiencies that affected the availability of two or more of the case
study items. We worked with DOD logistics agencies, operational units,
and service and geographic commands to evaluate the significance of
these deficiencies to DOD's overall logistics system. We also
identified DOD's and the services' short-term and long-term efforts to
address these shortages. We assessed the reliability of the data we
obtained for individual items and determined they were sufficiently
reliable for our purposes. We performed our review from March 2004
through February 2005 in accordance with generally accepted government
auditing standards. A detailed discussion of our scope and methodology
is located in appendix I.
Results in Brief:
U.S. troops experienced shortages of seven of the nine items we
reviewed. According to the 2004 National Military Strategy, U.S. forces
expect to have sufficient quantities of the right items at the right
time. During OIF, DOD was responsible for moving millions of tons of
supplies and spare parts to theater. However, demand for seven items we
reviewed exceeded availability sometime between October 2002 and
September 2004. These shortages led, in some cases, to a decline in the
operational capability of equipment and increased risk to troops. These
items included generators for assault amphibian vehicles, armored
vehicle track shoes, Interceptor body armor, lithium batteries, Meals
Ready-to-Eat, tires for 5-ton trucks and High-Mobility Multi-Purpose
Wheeled Vehicles, and up-armored High-Mobility Multi-Purpose Wheeled
Vehicles and add-on armor kits. For example, in August 2003 the Army's
inventory contained only 505 tires for 5-ton trucks which fell far
below the worldwide monthly demand of 4,828 tires, most of which were
needed by troops in Iraq. The remaining two items that we examined--
chemical-biological suits and Marine Corps helicopter rotor blades--did
not experience shortages in theater. The impact of supply shortages on
military operations is difficult to quantify because it varies from one
combat unit to another and is not always apparent in DOD's readiness
systems. For example, while units in the 3rd Infantry Division reported
that tire shortages reduced their operational capability by forcing
them to abandon equipment, the 4th Infantry Division reported that its
tire shortages had no such effect. Detailed case studies, including the
extent of shortages and their impacts, contributing factors, and short-
and long-term solutions, for each of the nine items we studied are in
appendixes II through X.
Five systemic supply system deficiencies primarily contributed to the
shortages for the seven items. As discussed in the body of this report,
studies conducted by DOD and defense contractors indicate that these
deficiencies also affected other items in the supply system. The five
deficiencies are identified in table 1.
Table 1: Systemic Deficiencies Contributing to Shortages of Seven GAO-
Selected Items:
Item: Vehicle generators;
Ineffective distribution.
Item: Track shoes;
Inaccurate and inadequately funded Army war reserve requirements;
Inaccurate supply forecasts;
Insufficient and delayed funding.
Item: Body armor;
Delayed acquisition;
Ineffective distribution.
Item: Batteries;
Inaccurate and inadequately funded Army war reserve requirements;
Inaccurate supply forecasts;
Insufficient and delayed funding;
Delayed acquisition.
Item: Meals Ready-to-Eat;
Inaccurate supply forecasts;
Ineffective distribution.
Item: Tires;
Inaccurate and inadequately funded Army war reserve requirements;
Inaccurate supply forecasts;
Insufficient and delayed funding;
Ineffective distribution.
Item: Up-armored High-Mobility Multi-Purpose Wheeled Vehicles and kits;
Delayed acquisition.
Source: GAO analysis.
[End of table]
* Inaccurate and inadequately funded Army war reserve requirements.
Annual updates of the Army's war reserve requirements have not been
conducted since 1999. According to officials from the Army Materiel
Command, they had not updated the war reserve requirements because they
had not received the latest operational guidance from Army
headquarters. However, an Army official provided us with copies of the
guidance sent to the Army Materiel Command and attributed the failure
to run the model to a variety of reasons, including problems with new
databases. This guidance, based on the annually updated defense
planning guidance, details the force structure and operations that the
Army's war reserve must support. Also, Army data showed that war
reserve requirements had not been not fully funded for many years. This
indicates that the Army has made a risk management decision to not fund
war reserves. This decision forced war reserve managers to prioritize
the use of available funding, and left some items without a war reserve
to support initial operations. The Army's out-of-date and inadequately
funded war reserve requirements for spare parts negatively affected the
availability of three items we reviewed (armored vehicle track shoes,
lithium batteries, and tires). The underfunding problem continues as
only $561.7 million, or 24 percent, of the Army's $2,327.4 million war
reserve requirements were funded as of October 2004. While this funding
information has been reported to Congress, the likely risk to
operations of not fully funding the war reserve has not. To improve the
accuracy and adequacy of Army war reserve requirements we recommend the
Army update the data for its war reserve model based on the latest
defense planning guidance, annually update war reserve requirements,
and disclose to Congress the impact of risk management decisions to not
fully fund the war reserve.
* Inaccurate supply forecasts. As indicated by regulation, the Army
uses computer models to forecast item demand. The regulation also
indicates that the Army's model be able to switch to a wartime
forecasting method; however, the model available during pre-OIF
planning had no such capability. While DLA had a model to forecast
contingencies, it was not effective for all items, such as Meals Ready-
to-Eat. Therefore, Army item managers had to manually develop forecasts
for OIF, but they did not always have sufficient or timely information
on estimated deployment sizes or the duration of operations which are
needed to forecasted accurate supply requirements. As a result, they
underestimated the demand for some items. By contrast, Marine Corps
item managers forecasted requirements from operational plans and
equipment changes. However, the accuracy of these requirements has not
yet been completely reconciled with actual usage during OIF. This is
particularly important because, while the Marine Corps may have
accurately forecasted requirements and predicted the types of items
needed, the Marine Corps has not confirmed the proper quantities. DOD's
requirements processes were not able to accurately forecast supply
requirements for four items we reviewed (armored vehicle track shoes,
lithium batteries, Meals Ready-to-Eat, and tires). To improve the
accuracy of the Army's prewar planning for supplies, we recommend the
Army develop models that have the capability to accurately forecast
operational requirements and ensure that item managers receive timely
data from operational plans. To improve the accuracy of the Marine
Corps' wartime forecasts, we recommend the service complete its
reconciliation of forecasted requirements with actual OIF consumption
data and make needed adjustments to its requirements.
* Insufficient and delayed funding. By regulation, DOD components are
supposed to structure their supply chain processes to provide flexible
and prompt support during crises. During OIF, the Army Materiel Command
asked for additional funding (known as obligation authority) in order
to support the forecasted OIF requirements, but did not receive these
funds in a timely manner. While data are not available to conclusively
determine why the process could not provide more timely and adequate
funding, the Army's multi-stage requirements validation process may
have contributed to the delays. This lack of obligation authority and
delays in its release impeded the availability of three items we
reviewed (armored vehicle track shoes, lithium batteries, and tires).
By contrast, DLA was able to move obligation authority among accounts
to support projected demands and did not require numerous validations
to justify its forecasted requirements. To improve the sufficiency and
timeliness of funding to the Army Materiel Command, we recommend the
Army establish an expeditious supply requirements validation process
that provides accurate information to support timely and sufficient
funding.
* Delayed acquisition. Despite requirements that the supply system
provide timely support during crises, specific problems delayed DOD's
acquisition of three important items we reviewed (Interceptor body
armor, lithium batteries, and up-armored High-Mobility Multi-Purpose
Wheeled Vehicles). The lack of key materials and long production lead-
time continue to affect the production of body armor, and DOD has
reported the limitation to Congress. The initial reliance on a single
source manufacturer and long production lead-time initially delayed
maximum production of lithium batteries. DOD's acquisition decision did
not maximize available capacity to produce up-armored High-Mobility
Multi-Purpose Wheeled Vehicles and add-on armor kits nor did it give
Congress visibility over the basis for its acquisition solution. These
acquisition challenges impeded DOD's ability to respond to rapidly
increasing demands. To minimize acquisition delays in the future, we
recommend the Army and Defense Logistics Agency assess the industrial-
base's capacity to meet updated requirements for critical items within
the time frames required by operational plans and provide visibility to
Congress over acquisition of critical items that emerge during
contingencies.
* Ineffective distribution. According to DOD guidance, distribution is
the operational process of synchronizing all elements of the logistics
system to deliver the "right things" to the "right place" at the "right
time" to support the combatant commander. We identified several times
where the joint distribution system was not synchronized to support the
combatant commander during OIF. Among the problems causing this lack of
synchronization were (1) conflicting doctrine, or military principles,
defining the authority of the geographic combatant commander to
synchronize the distribution of supplies from the U.S. to the theater;
(2) improper packaging of air shipments from the U.S., which forced
personnel in theater to spend extra time opening and sorting shipments;
(3) insufficient transportation equipment and supply personnel in
theater; and (4) the inability of logistics information systems to
support the requisition and shipment of supplies into and through Iraq.
As a result, DOD was not able to distribute sufficient quantities of
four items we reviewed (assault amphibian vehicle generators,
Interceptor body armor, Meals Ready-to-Eat, and tires). To improve the
effectiveness of distribution we recommend that DOD revise current
joint distribution doctrine to clarify responsibilities and
authorities; develop and exercise, possibly through a mix of simulation
and field training, a deployable supply receiving and theater
distribution capability that includes trained personnel and necessary
equipment; and establish common logistics information systems that
support the timely requisition of and visibility over supplies.
Two of the items we reviewed did not have shortages (chemical-
biological suits and Marine Corps helicopter rotor blades). While
acquisition delays and ineffective distribution resulted in a perceived
shortage of chemical-biological suits among personnel deployed to OIF,
we could not identify situations where suits were unavailable.
Similarly, while rotor blades were identified as a possible shortage,
Marine Corps officials and our analysis of supply data indicated there
was no actual shortage.
DOD, the services, and the defense agencies have acted to improve
supply availability. Many short-term solutions to lessen the impact of
supply shortages were instituted during combat operations. For example,
as a result of the lithium battery shortage, the Joint Staff developed
the "critical few list" to improve the availability of specific items
that the services and geographic combatant commands report as critical
to their worldwide operations. DOD is also beginning to make systemic,
long-term changes to correct some of its supply problems. One of the
more notable is the Secretary of Defense's designation of the U.S.
Transportation Command as being responsible for improving distribution.
In addition, the Army has identified four areas of logistics focus for
the next 2 years: connecting the logistician, modernizing theater
distribution, improving force reception, and integrating the supply
chain. While we did not evaluate these efforts' potential for success,
we observed that the majority of them focus only on the distribution
aspects of logistics problems identified during OIF, not the full gamut
of supply deficiencies we identified.
In commenting on a draft of this report, the Department of Defense
concurred with the intent of the recommendations and cited actions it
has taken or will be taking to eliminate the supply chain deficiencies
we noted. While many of the actions cited, if completed, could clearly
resolve some problems, others actions did not appear to fully address
the need to improve the current practices. In addition, no specific
timeline for action was provided; therefore, we modified our
recommendations to require specific completion dates. Therefore, we
have added a matter for congressional consideration that suggests
Congress may wish to require DOD to disclose the risks associated with
not fully funding the Army war reserve. The Department's responses are
in appendix XI and our evaluation of them appears on page 128 of this
report.
Background:
CENTCOM, whose area of responsibility encompasses 27 countries in South
and Central Asia, the Horn of Africa, the Arabian Peninsula, and
Iraq[Footnote 8] began planning for OIF in late 2001 (see fig. 1).
Figure 1: CENTCOM's Area of Responsibility:
[See PDF for image]
[End of figure]
Starting in mid-2002, CENTCOM began to improve the U.S. military's
infrastructure in Kuwait. This included an expansion of fuel and port
facilities to support the arrival of U.S. military units. Beginning in
the fall of 2002, CENTCOM began to deploy troops to the OIF area of
operation. These deployments continued up to, and beyond, the start of
major combat operations in Iraq on March 19, 2003. According to the
Defense Manpower Data Center, the number of military personnel deployed
in CENTCOM's area of responsibility in support of OIF and Operation
Enduring Freedom steadily increased from over 113,000 in December 2002
to over 409,000 in May 2003 (see fig. 2). During major combat
operations, over 280,000 U.S. military personnel were deployed in Iraq,
Kuwait, and nearby Persian Gulf nations. All of the services were
represented in the theater, but U.S. Army units formed the bulk of
military personnel. After major combat operations were officially
declared over on May 1, 2003, the total number of personnel in
CENTCOM's area of responsibility began to gradually decrease. However,
U.S. and coalition forces continue to conduct stabilization operations
in Iraq and DOD increased the number of military personnel in Iraq to
support the elections in January 2005.
Figure 2: Total Military Personnel Deployed in CENTCOM's Area of
Responsibility in Support of Operation Enduring Freedom and Operation
Iraqi Freedom, December 2002 through September 2004:
[See PDF for image]
[End of figure]
Organizations Responsible for Logistics:
CENTCOM's command authority over units deployed to its area of
responsibility allows it to direct all necessary military actions to
assigned military forces, including units deployed in both Operation
Enduring Freedom in Afghanistan and OIF. Command authority also
provides the geographic combatant commander with directive authority
over logistics.[Footnote 9] The services and other defense components,
however, share the responsibility of supplying U.S. forces.[Footnote 10]
The directive authority gives the combatant commander the ability to
shift logistics resources within the theater, but logistics support
outside of the area of responsibility is usually dependent on the
services. The combatant commander relies on the services' logistics
components, such as the U.S. Army Materiel Command (AMC), the U.S.
Marine Corps Logistics Command, and DLA to purchase supplies and manage
inventory. AMC has major subordinate commands that manage supply
inventories, such as the Communications-Electronics Command (CECOM) and
the Tank-automotive and Armaments Command (TACOM). DLA has a role in
packaging supplies for shipment, while the U.S. Transportation Command
is responsible for delivering them to theater. The combatant commander
assigns one service as the lead for logistics support, including
transportation, in the theater.[Footnote 11] During OIF, the Army was
the lead service for logistics support.
War Reserves:
The military services rely heavily on their specifically designated war
reserve stock, including weapon systems, equipment, and spare parts, to
equip units when they first arrive in a theater of operation. The
Army's war reserves consist of major items including trucks and
secondary items such as spare parts, food, clothing, medical supplies,
and fuel. Spare parts have the largest dollar value of the Army's
secondary items.
War reserves are protected go-to-war assets that are not to be used for
purposes such as improving peacetime readiness or filling unit
shortages. Some of these assets are located in Southwest Asia, the
Pacific, Europe, and on special war reserve ships. War reserves are
funded through direct congressional appropriations that are requested
in the services' annual budget submissions.
AMC is responsible for determining the Army's requirements for war
reserve spare parts.[Footnote 12] To do this, AMC officials use a
computer model--the Army War Reserve Automated Process system. The
model uses DOD planning guidance and Army information on anticipated
force structure including a list of the end items and associated spare
parts. For each end item or part, the model uses data on expected usage
and spare parts consumption rates based on breakage, geography,
environment, and rates of equipment loss due to battle damage.
The Marine Corps Logistics Command and logistics planners from Marine
operational units are responsible for determining annually the adequacy
of war reserve stock based on current operational plans. Once this is
determined, planning officials confirm the availability of the supplies
with DLA and other supporting logistics agencies that manage individual
items.
Operational Requirements:
DOD forecasts operational requirements for spare and repair parts
differently than it does for items that result from rapidly emerging
needs. DOD forecasting methods for spare and repair parts vary by
service. The Army normally uses a computer model to forecast its spare
and repair parts requirements based on the average monthly demand over
the previous 24 months. The Marine Corps also uses models and involves
operational and logistics planners at several levels of command to
validate their forecasted requirements.
Operational requirements to support rapidly emerging needs, such as
Interceptor body armor and up-armored High-Mobility Multi-Purpose
Wheeled Vehicle (HMMWV), are developed outside of normal supply
forecasting procedures. They are identified through operational needs
statements from the theater that are validated and resourced by the
Army. Units in theater submit operational needs statements for the
items, which are combined by their higher headquarters into theater
requirements.
The Coalition Forces Land Component Command[Footnote 13] communicates
these requirements to the Department of the Army, where they are
validated and resourced by offices of the Assistant Secretary of the
Army (Financial Management and Comptroller), the Deputy Chief of Staff
for Operations, the Deputy Chief of Staff for Program and Analysis, and
the Deputy Chief of Staff for Logistics and eventually transmitted to
the program manager.
Supply Item Funding:
Generally, supplies and equipment for customers--including military
units and DOD agencies--are purchased using defense working capital
funds or procurement funds.
Defense Working Capital Funds:
Of the nine items we examined, seven are purchased using defense
working capital funds (assault amphibian vehicle (AAV) generators,
armored vehicle track shoes, chemical-biological suits, lithium
batteries, Marine Corps helicopter rotor blades, Meals Ready-to-Eat
(MRE), and tires). Working capital fund managers at the logistics
agencies obligate and spend funds to purchase supplies from
manufacturers and repair items to build up inventories in anticipation
of sales. Military units then order supplies from the logistics
agencies. When the requisitioned supplies are delivered, the units pay
for them with funds that are appropriated annually by Congress. The
logistics agencies then use this revenue to pay the manufacturers and
to cover their own operating costs.
Several funds make up the defense working capital funds, including the
Army Working Capital Fund, the Navy Working Capital Fund (which
finances Marine Corps managed items), and the Defense-wide Working
Capital Fund (which finances Defense Logistics Agency-managed items).
AMC uses the Army Working Capital Fund to purchase and maintain
supplies.
Procurement Funds:
The remaining two items (Interceptor body armor and up-armored HMMWVs)
are purchased with procurement funding because they are still in the
process of initial issuance. Procurement funds are used to pay for such
expenses as the purchase of weapons and weapon components,
communication and support equipment, munitions, initial and
replenishment spare parts, and modernization equipment. Project
managers for these items receive congressional appropriations to fund
purchases of additional supplies.
Distribution Doctrine and Process:
DOD guidance defines distribution as the operational process of
synchronizing all elements of the logistics system to deliver the
"right things" to the "right place" at the "right time" to support the
combatant commander.[Footnote 14] These elements include physical,
financial, information, and communication networks, which can be
divided into two general categories--the actual movement of supplies
(physical networks) and the use of information technology (financial,
information, and communication networks) to support distribution system
activities.[Footnote 15] Table 2 lists the primary DOD regulation and
joint doctrine[Footnote 16] that guide the distribution process.
Table 2: DOD and Joint Guidance on Distribution:
Publication number: DOD Regulation 4140.1-R;
Title: DOD Supply Chain Materiel Management Regulations;
Date of publication: May 23, 2003.
Publication number: Joint Publication 4-0;
Title: Doctrine for Logistic Support of Joint Operations;
Date of publication: April 6, 2000.
Publication number: Joint Publication 4-01;
Title: Joint Doctrine for the Defense Transportation System;
Date of publication: March 19, 2003.
Publication number: Joint Publication 4-01.4;
Title: Joint Tactics, Techniques, and Procedures for Joint Theater
Distribution;
Date of publication: August 22, 2000.
Source: GAO analysis.
[End of table]
In its guidance, DOD identifies eight fundamental principles of theater
distribution:
1. Centralized management: Identify one manager who is responsible for
distribution, visibility, and control of items in the theater
distribution system.
2. Optimize the distribution system: Give distribution managers the
ability to maintain visibility in locations under their control and
provide them with resources to meet changing requirements.
3. Velocity over mass: Substitute speed and accuracy for large
investments in inventory.
4. Maximize throughput: Reduce the number of times that supplies must
be opened and sorted.
5. Reduce customer wait time.
6. Maintain minimum essential stocks: Reduce reliance on large, costly
stockpiles.
7. Maintain continuous, seamless, two-way flow of resources: Apply the
distribution principles to maintain an integrated and seamless
distribution system.
8. Achieve time definite delivery: Deliver the right supplies to the
combatant commander at the right place and time.[Footnote 17]
Figure 3 illustrates the complexity of DOD's joint distribution system.
The system moves supply items from inventories, vendors, and repair
facilities in the U.S. to deployed units in the theater. The system
also returns items to the U.S. for repair and maintenance.
Figure 3: DOD's Joint Distribution System:
[See PDF for image]
[End of figure]
Recent Studies of OIF Logistics:
Several DOD components have recently commissioned assessments of
logistics operations during OIF with the aim of identifying areas for
improvement. One study, Objective Assessment of Logistics in Iraq,
commissioned by the Deputy Under Secretary of Defense (Logistics and
Materiel Readiness) and the Director for Logistics, Joint Staff, was
published in 2004 by the Science Applications International Corporation
(SAIC). This study identified problems with DOD's logistics support and
contained several recommendations that were endorsed by the Under
Secretary of Defense (Acquisition, Technology, and Logistics) such as
synchronizing the distribution chain from the U.S. to CENTCOM's area of
responsibility and resolving issues with technology.
Another study, commissioned by the Army Deputy Chief of Staff for
Logistics, is an independent assessment of the Army's logistics
experience in OIF by the RAND Corporation's Arroyo Center. This study
focuses on how Army forces were sustained and the performance of the
sustainment system during combat operations and initial stability and
support operations. RAND's report is currently under review by the
Army.
Supply Shortages Reduced Operational Capability and Increased Risk to
Troops in Iraq:
During OIF, DOD was responsible for moving over 2 million tons of
supplies and spare parts to theater. U.S. troops experienced shortages
of seven of the nine items GAO selected for review. According to the
2004 National Military Strategy, U.S. forces expect to have sufficient
quantities of the right items at the right time. However, demand for
the seven items exceeded availability sometime between October 2002 and
September 2004. The overall impact of these shortages on military
operations is difficult to quantify because it varied between combat
units and is not always apparent in DOD's readiness systems. The
remaining two items that we examined did not experience shortages in
theater. Detailed case studies for the nine items are in appendixes II-
X.
Shortages Occurred during OIF for Seven Critical Items:
U.S. troops in the OIF theater did not always have sufficient
quantities of seven items that we reviewed. For some items, the
shortages occurred primarily during initial troop deployments and major
combat operations in early 2003; for other items, shortages emerged
during the sustainment period after major combat operations were
declared over in May 2003. The overall impact is difficult to quantify
because it differed between units. For example, while units in the 3rd
Infantry Division reported that tire shortages affected their mission
by forcing them to abandon equipment, the 4th Infantry Division
reported that their tire shortages had no affect on their mission. The
following describes the shortages for each of the seven items.
* Generators for AAVs. Marine Corps units in Iraq experienced shortages
of generators for their AAVs during deployment and combat operations in
early 2003. The AAV is a landing vehicle that the Marine Corps used as
an armored personnel carrier in Iraq. Without the generator, which
provides electric power, the AAV cannot operate. Although 140
generators were reported shipped from the U.S., Marine forces in
theater reported receiving only 15. Neither we nor the Marine Corps
could find the remaining 125 in the supply system. While the service
did not document any operational impacts specifically due to generator
shortages, its forces had to strip parts from about 40 nonoperational
vehicles to maintain the operational capabilities of other vehicles.
* Track shoes for Abrams Tanks and Bradley Fighting Vehicles. As the
conflict in Iraq continued, track shoes, essential components of combat
vehicles such as Abrams tanks and Bradley Fighting Vehicles, were not
available to meet increasing demands. Although sufficient quantities of
track shoes existed to meet demand at the beginning of combat, by May
2003 actual demand was 5 times the forecasted demand primarily because
of the heavy wear and tear on track shoes as a result of high mileage,
poor road conditions, and extreme desert heat. Major combat units
reported that significant shortages of track shoes negatively affected
their operational capabilities. For example, the 3rd Infantry Division
reported in June 2003 that 111 (60 percent) of its 185 Abrams tanks
were unable to perform their missions because of supply shortfalls that
included track shoes. Furthermore, 159 (67 percent) of the division's
237 Bradley Fighting Vehicles were not mission capable for the same
reason.
* Interceptor Body Armor. Demand for Interceptor body armor[Footnote
18] exceeded supply during OIF. The Coalition Forces Land Component
commander decided to increase individual protection by issuing the
armor to all troops and civilians. As a result, demand for the body
armor surged, with quarterly demand rising from a pre-war level of
about 8,600 vests and 9,600 plates, to about 77,000 vests and 109,000
plates by the time the war commenced on March 2003. Back orders for
plates peaked at 598,000 in November 2003, while back orders for vests
reached 328,000 in December. Even though the services did not report
that the lack of body armor impacted their missions during OIF, there
were serious concerns. For example, combat support units in the Army
and Marine Corps were among the last to be equipped with the armor,
increasing the risk to personnel given the enemy's focus on attacking
supply routes.
* Lithium batteries. Army and Marine Corps forces operating in Iraq
experienced severe shortages of lithium batteries, particularly BA-
5590s and BA-5390s, during major combat operations in the spring of
2003. These nonrechargeable batteries power some 60 critical
communications and electronics systems, such as radios and missile
guidance systems. Worldwide demand for these batteries surged from a
peacetime average of below 20,000 per month prior to September 11,
2001, to a peak rate of over 330,000 in April 2003. As a result, the
number of back orders rose rapidly to 900,000 by May 2003. According to
Marine Corps officials, if the war had continued at the same pace into
May 2003 or beyond, Marine units would have experienced degraded
communications capability and increased risk as a result of battery
shortages.
* MREs. U.S. forces in Iraq experienced shortages of MREs primarily
during the deployment and major combat phases in February, March, and
April 2003 before normal dining facilities were established. The peak
monthly demand for MREs rose to more than 1.8 million cases, while
inventories dropped to a level of 500,000 cases. In late April when
other food options became available, demand fell rapidly. While certain
Army units reported running out of MREs, available data only shows that
they came close. According to a RAND study, some Army units came within
an estimated 2 days or less of exhausting their on hand
quantities.[Footnote 19] Similarly, according to a Center for Naval
Analysis study, at times Marine Corps combat support units had less
than 1 day of MREs on hand.[Footnote 20] As a result, both Army and
Marine Corps units were at risk of running out of food if supply
distribution was hindered.
* Tires for 5-ton trucks and HMMWVs. The rising demand for truck tires
during and after major combat operations in Iraq nearly exhausted
existing inventories. The demand grew as vehicles were driven long
distances and were modified with add-on-armor. For example, in August
2003, the Army's inventory contained only 505 tires for 5-ton trucks,
which fell far below the worldwide monthly demand of more than 4,800
tires. As a result, back orders spiked to over 7,000 for 5-ton truck
tires and to over 13,000 for HMMWV tires. The shortages reduced the
operational capabilities of these vehicles and negatively impacted
operations in Iraq. For example, 3rd Infantry Division units reported
that tire shortages forced them to abandon equipment, and Marine Corps
units reported stripping and abandoning otherwise good vehicles because
of a lack of tires.
* Up-armored HMMWVs and add-on-armor kits. Since the U.S. military
began identifying requirements for these vehicles during the summer of
2003, there has been a gap between the number of vehicles required and
the number being produced by the industrial base. This new requirement
was based on the need to protect soldiers and Marines executing
distribution and force protection missions. The up-armored HMMWV
provides enhanced protection against rifle rounds and explosive blasts
while the add-on-armor kits[Footnote 21] provide some additional
protection to previously unarmored vehicles. As of September 2004, only
5,330 of the 8,105 required vehicles were in theater. The overall
impact of the shortages of up-armored HMMWVs and add-on-armor kits is
difficult to measure because units do not report the direct effects of
using unarmored HMMWVs. However, according to a Center for Army Lessons
Learned study, the risk of harm to both personnel and equipment from
improvised explosive devices is greatly reduced when they are
transported in an up-armored HMMWV.
Two Items Were Not in Short Supply During OIF:
Two items we examined--chemical-biological suits and Marine Corps
helicopter parts--did not experience shortages. In these cases,
although demands were high because of wartime operations, the defense
supply system was able to meet the needs of deployed forces. A
discussion of the availability of the two items follows.
* Chemical-biological suits. Although there was a perception that
sufficient quantities of the new Joint Service Lightweight Integrated
Suit Technology (JSLIST) chemical-biological suits were not available
during OIF, our work did not identify any actual shortages in the
theater of operations. Concerns about a shortage of chemical-biological
suits arose as a result of an October 2002 Congressional request that
DOD provide suits to all military and civilian personnel located in the
OIF theater.[Footnote 22] However, according to DLA, the contracting
agent for chemical-biological suits, and our analysis,[Footnote 23]
there were sufficient quantities of the suits in the inventory to meet
the suit demand during OIF.
* Marine Corps helicopter rotor blades. Although concerns were raised
about shortages of helicopter parts for Marine Corps helicopters,
specifically rotor blades, we did not identify any shortages in the
theater of operations. Marine Corps officials reported there were no
rotor blade shortages and our analysis of supply data confirms this. In
addition, the mission capable rates during OIF for the two helicopters
we reviewed--the UH-1N and the CH-53E--were comparable to peacetime
rates.
Impact of Shortages Was Not Always Apparent in DOD's Readiness
Reporting System:
We were not always able to identify the impact of specific shortages
because, although DOD's supply system showed shortages of items in
theater, DOD's readiness reporting systems did not always show the
impact of these shortages on unit operational capability. Such systems
as the Global Status of Resources and Training System and Unit Status
Reports are intended to identify the ability of units to accomplish
their missions and the problems affecting mission performance each
month. In addition, other reporting mechanisms, such as lessons learned
reports or after-action reports, may also disclose the impact of
shortages on operations but do not tie directly to readiness reporting.
As a result, we used a variety of documents, some obtained directly
from the units, to identify the impact of supply shortages.
For our nine items, the information reported through the various
readiness systems, in some cases, was inconsistent with the impact
cited in reports. For example, in July 2003, unit status reports from
the 4th Infantry Division's battalions showed that approximately 145 to
150 of their 176 Bradley Fighting Vehicles were mission capable,
translating to a mission capability rate of around 84 percent. However,
a May 2004 lessons learned report prepared by the division indicated
that the overall mission capability rate for its Bradleys was 32
percent during the July 2003 time frame and that the degraded status
was due to a shortage of armored vehicle track shoes and other vehicle
suspension items. In a June 2003 status report, four of the 3rd
Infantry Division's five infantry battalions reported that 65 percent
of their Bradley vehicles were mission capable. However a 3rd Infantry
Division report for June 2003 showed that 65 percent of the division's
Bradleys were non-mission capable because of supply-related reasons,
which unit officials attributed almost exclusively to track shoe
shortages.
There were also instances of readiness information about unit status in
Iraq not being reported. For example, in August 2003, the 4th Infantry
Division's five Armor battalions and one Calvary unit did not enter any
mission capability data into the readiness reporting systems about the
status of their 247 Abrams tanks. However, the May 2004 briefing report
prepared by the division indicated that by July 2003, 28 percent of the
division's tanks were non-mission capable. The primary reason given was
lack of tank shoes and related suspension parts.
Multiple Supply Chain Deficiencies Contributed to Supply Shortages:
Five deficiencies contributed to shortages in the supply of seven of
the nine items that we studied. According to DOD data and contractor
studies, these deficiencies also affected other items in the supply
system. The deficiencies were (1) inaccurate and inadequately funded
Army war reserve requirements, (2) inaccurate supply forecasts, (3)
insufficient and delayed funding, (4) delayed acquisition, and (5)
ineffective distribution. Table 3 identifies the deficiencies that
affected each of the seven supply items.
Table 3: Systemic Deficiencies Contributing to Shortages of Seven
Supply Items:
Item: AAV generators;
Ineffective distribution.
Item: Armored vehicle track shoes;
Inaccurate and inadequately funded Army war reserve requirements;
Inaccurate supply forecasts;
Insufficient and delayed funding.
Item: Interceptor body armor;
Delayed acquisition;
Ineffective distribution.
Item: Lithium batteries;
Inaccurate and inadequately funded Army war reserve requirements;
Inaccurate supply forecasts;
Insufficient and delayed funding;
Delayed acquisition.
Item: MREs;
Inaccurate supply forecasts;
Ineffective distribution.
Item: Tires for 5-ton trucks and HMMWVs;
Inaccurate and inadequately funded Army war reserve requirements;
Inaccurate supply forecasts;
Insufficient and delayed funding;
Ineffective distribution.
Item: Up-armored HMMWVs and add-on-armor kits;
Delayed acquisition.
Source: GAO analysis.
[End of table]
Inaccurate and Inadequately Funded Army War Reserve Requirements for
Spare Parts Led to Early Shortages during OIF:
The inaccurate requirements for and poor funding of war reserves
affected the availability of three of the supply items (armored vehicle
track shoes, lithium batteries, and tires). Annual updates of the
Army's war reserve requirements for supply items have not been
conducted and, as a result, the Army did not have an accurate estimate
of the spare parts and other items needed for a contingency such as
OIF. In addition, over the past decade, the Army underfunded its war
reserve spare parts, which has forced managers to allocate money for
certain items and not for others.
Army War Reserve Spare Parts Requirements Were Out of Date and
Inventory Was Inadequate:
Army officials told us that annual updates of its war reserve
requirements for spare parts have not been conducted since 1999. AMC
uses a computer model, called the Army War Reserve Automated Process,
to determine its requirements for spare parts in the war reserve. This
model is supposed to be run on the basis of annually updated defense
planning guidance and is designed to support the latest war plans and
Army force structure. According to AMC officials, the model has not
been run since 1999 because the Department of the Army has not provided
the latest guidance, which details the force structure and operations
that the Army's war reserve must support. However, an Army official
provided us with copies of the Army guidance from 2001, 2003, and 2005
that AMC could have used to initiate computation of war reserve
requirements. The Army official stated that AMC did not run the model
for a variety of reasons such as support for ongoing missions and
problems with the implementation of a new database and modeling
system.[Footnote 24]
Because the requirements were out-of-date, the war reserve inventories
for some spare parts were inadequate and could not meet initial wartime
demands. For example, the war reserve requirement for nonrechargeable
lithium batteries (BA-5590s) was not sufficient to support initial
operations in OIF. The requirement for BA-5590s was set at 180,000 to
support the first 45 days of operations, but this amount was
considerably lower than the actual demand of nearly 620,000 batteries
recorded during the first 2 months of the conflict. CECOM officials
attributed this mismatch to inaccurate battery failure and usage rates
in the 1999 model. They also said the model did not include all the
communications systems that used nonrechargeable lithium batteries.
In another example, the war reserve requirement for track shoes for
armored vehicles was inadequate to keep pace with actual demand during
the early months of combat. As table 4 shows, the pre-OIF war reserve
requirement for track shoes for Abrams tanks and Bradley Fighting
Vehicles was, respectively, 5,230 and 5,626; however, in April 2003 the
actual worldwide demand for these tanks was four times higher. The
situation was even worse for 5-ton truck tires.
Table 4: War Reserve Requirements, On-Hand Stock, and Items Requested
Worldwide:
Supply item: Track shoe (Abrams);
War reserve requirement (March 2003): 5,230;
War reserve on hand (March 2003): 5,623;
Items requested worldwide (April 2003): 23,462.
Supply item: Track shoe (Bradley);
War reserve requirement (March 2003): 5,626;
War reserve on hand (March 2003): 5,695;
Items requested worldwide (April 2003): 20,678.
Supply item: 5-ton truck tire;
War reserve requirement (March 2003): 259;
War reserve on hand (March 2003): 16;
Items requested worldwide (April 2003): 4,800.
Source: TACOM.
[End of table]
Since the end of major combat operations, war reserve managers have
made manual adjustments to the requirements to reflect supply
experiences from OIF. For example, officials told us that they have
adjusted the Army and the Marine Corps war reserve requirement for BA-
5590 and BA-5390 lithium batteries upward to more than 1.5 million
batteries based on the average monthly demand of 250,000 batteries
experienced during OIF multiplied by 6 months. Similarly, war reserve
managers at TACOM have increased the requirements for Abrams and
Bradley tank track shoes to 32,686 and 34,864, respectively. While
these actions may correct a particular problem, they do not address the
systemic inaccuracy of the Army's war reserve requirements.
In prior reports, we have identified problems with the Army's process
for computing the war reserve spare parts requirements. In a 2001
report, we recommended that the Secretary of Defense direct the
Secretary of the Army to develop and use the best available consumption
factors; improve the methodology used to determine requirements by
considering planned battlefield maintenance practices; and develop
industrial-base capacity on current, fact-based estimates for the war
reserve.[Footnote 25] In a 2002 report, we recommended that the
Secretary of Defense direct the Secretary of the Army to have the
Commander of AMC change its process of calculating war reserve
requirements. [Footnote 26] While the Office of the Secretary of
Defense concurred with these recommendations, the Army has yet to
implement them.
Risk Management Decisions Led to Years of Low Army War Reserve Funding:
The Army's war reserve requirements for spare parts have been
significantly underfunded for many years, indicating that the Army has
made a risk management decision to not fully fund them. In November
1999, Army documents indicated that the Army had only $1.3 billion in
parts prepositioned, or otherwise set aside for war reserves, to meet
its stated requirement of $3.3 billion. AMC data indicate that a lack
of funding for war reserve spare parts continues to be an issue. As
table 5 shows, as of October 2004, only about 24 percent ($561.7
million out of $2,327.4 million) of AMC's total spare parts requirement
is currently funded and on hand. Moreover, AMC data show this pattern
of underfunding is expected to continue through fiscal year 2009.
Table 5: Status of On-Hand Army War Reserve Spare Parts Requirements as
of October 2004:
Dollars in millions;
Major subordinate commands: Aviation and Missile Command: Aviation;
Requirement: $331.5;
Value on hand: $56.1;
Percentage filled: 16.9%.
Major subordinate commands: Aviation and Missile Command: Missiles;
Requirement: $98.9;
Value on hand: $26.8;
Percentage filled: 27.1%.
Major subordinate commands: Communications-Electronics Command;
Requirement: $344.2;
Value on hand: $81.6;
Percentage filled: 23.7%.
Major subordinate commands: Secondary Item Control Division[A]:
Requirement: $197.0;
Value on hand: $30.2;
Percentage filled: 15.3%.
Major subordinate commands: Tank-automotive and Armaments Command:
Armaments;
Requirement: $245.4;
Value on hand: $70.7;
Percentage filled: 28.8%.
Major subordinate commands: Tank-automotive and Armaments Command:
Biological and chemical equipment;
Requirement: $117.8;
Value on hand: $57.0;
Percentage filled: 48.4%.
Major subordinate commands: Tank-automotive and Armaments Command:
Automotive parts;
Requirement: $992.5;
Value on hand: $239.3;
Percentage filled: 24.1%.
Total;
Requirement: $2,327.4;
Value on hand: $561.7;
Source: Army Materiel Command.
Note: Totals do not add due to rounding.
[A] The Secondary Item Control Division is responsible for items
managed by agencies outside of AMC, such as DLA or the General Services
Administration.
[End of table]
As a result of this low funding, war reserve managers told us that they
must prioritize how the available funding is allocated based on their
professional experience. For example, the war reserve manager for TACOM
reported that he tends to spend his available funds on expensive items
with long production lead-times, such as tank engines, because they are
difficult to acquire on short notice. Conversely, lower cost items with
shorter production lead-times, such as tires, do not receive funding
priority.
The Army accepts the risk of unfunded war reserve requirements in order
to fund other priorities, such as operations and the procurement of new
systems. Although, the Army has reported the amount of war reserve
underfunding to Congress, the risk of not funding the war reserve is
not clearly stated.
Army Supply Forecasts Did Not Accurately Represent Troop Needs in OIF:
The Army's requirements process did not accurately forecast the
supplies needed to support U.S. forces during OIF for four of the items
we studied (armored vehicle track shoes, lithium batteries, MREs, and
tires). As indicated by Army regulation,[Footnote 27] AMC normally uses
a computer model to forecast its spare and repair parts requirements.
The model uses the average monthly demand over the previous 24 months
to predict future equipment use and demand. Although the Army
regulation[Footnote 28] indicates that the model should be able to
switch to a wartime demand forecasting method, AMC officials stated the
system has no wartime forecasting capability. As a result, the Army's
supply requirements forecasting model could not forecast the wartime
surge in requirements during OIF. In contrast, DLA's model has the
capability to forecast requirements for contingencies, but it was not
completely effective, as in the case of MREs.
Instead of using the model, the Army relied on the expert opinion of
item managers, who manage supply items at AMC's subordinate commands.
Item managers, however, did not have sufficient information on
estimated deployment sizes or duration and intensity of operations to
accurately forecast supply requirements for OIF. According to TACOM
officials, AMC initially directed item managers to use their expert
opinion and knowledge to develop forecasts, without input from
operational planners in CENTCOM. AMC officials stated that Army
headquarters did not provide them with formal guidance on the duration
of the conflict, supply consumption, or size of the deploying force.
AMC documents show and their contractors confirm that AMC gathered some
anecdotal information on force size and the duration of operations in
November 2002. However, item managers at AMC's subordinate commands
reported they did not always receive adequate guidance from AMC. For
example, officials at TACOM stated they did not receive planning
guidance on operational plans from AMC to incorporate into their
forecasts of track shoe or tire requirements. The forecasted monthly
requirement for Abrams track shoes was 11,125, which was less than half
of the actual requirement of 23,462 shoes in April 2003. Forecasts for
5-ton truck tires were also inaccurate. Worldwide demand was forecasted
at 1,497 tires during April 2003, less than a third of the actual
demand of 4,800.
In contrast, officials at CECOM reported that in the summer of 2002,
operational planners consulted them about the number of nonrechargeable
lithium batteries needed to support operations. Subsequently, CECOM
officials presented these new requirements to AMC and the Joint
Materiel Priorities and Allocation Board and received $38.2 million in
additional obligation authority for BA-5590 and BA-5390
batteries.[Footnote 29] Despite these efforts, demand for batteries
outpaced production during OIF combat operations.
The Marines forecast supply requirements for their initial operations
based on operational plans[Footnote 30] and modeling factors that
involve both operational and logistics planners. Modeling factors
include historical supply data, number of personnel involved in an
operation, distance of operation, and number of days of operation.
Normally, the forecasting process includes many echelons of Marine
Corps command. Initially, the 1st Marine Expeditionary Force
headquarters provides operational plans to the deploying units that
determine the supply requirements for an operation. Once the deploying
units forecast a supply requirement, it is returned to headquarters for
review. Deploying units review the supply requirements again before
passing them to the Marine Forces Pacific Command for final assessment.
The Marine Corps Logistics Command, the service's integrated logistics
manager, sends the requirements to DLA and other supply providers.
Supply providers then inform the Logistics Command and the deploying
units about their ability to fill the forecasted requirements.
According to the Marines, they used this process to forecast supply
requirements before deploying to OIF.
After the end of major combat operations, the Marine Corps began an
after-action review process to analyze the effectiveness of their OIF
supply forecast. As part of this analysis, the 1st Marine Expeditionary
Force assessed the correlation between supply forecasts and supply
usage. This analysis showed that 88 percent of the types of repairable
supply items forecasted were actually needed,[Footnote 31] and 62
percent of the types of consumable items forecasted were demanded, in
the first 90 days. These data indicate that a significant number of
unneeded items could have been sent to theater, placing an unnecessary
burden on the distribution system. However, the Marine Corps has not
analyzed the accuracy of whether the quantities forecasted equaled the
quantities needed. Without such analysis, the Marines cannot determine
if their forecasting process provided them with the right items in the
right quantity at the right time during OIF.
Insufficient and Delayed Funding Limited the Availability of Supply
Items for OIF:
A lack of sufficient funding (obligation authority) within the Army's
working capital fund and delays with the release of funds limited the
availability of three reviewed items (armored vehicles track shoes,
lithium batteries, and tires). The delays may have been due to the
Army's multi-stage process to validate requirements. In contrast, DLA's
working capital fund was able to move sufficient obligation authority
among accounts to support rapidly increasing demands.
AMC Did Not Receive Sufficient Obligation Authority from the Department
of the Army to Meet Spare Parts Requirements Promptly:
According to a DOD regulation,[Footnote 32] DOD components are supposed
to structure their supply chain processes and systems to provide
flexible and prompt support during crises. However, during fiscal year
2003, AMC did not promptly receive obligation authority to match its
stated requirements. The Department of the Army released $2.9 billion
of obligation authority into the Army Working Capital Fund to buy
supplies in October 2002 as part of the fiscal year 2003 budget cycle
(see fig. 4). This amount was based on the requirements established in
the President's Budget prepared 2 years earlier. By the time fiscal
year 2003 began, AMC had identified a new supply requirement of $4.8
billion to support both peacetime operations and the ongoing global war
on terrorism, but, the obligation authority provided in October 2002
did not support this revised requirement. While Army headquarters
provided some additional funding to AMC, AMC increased its supply
requirements again in March 2003 to $5.6 billion. However, the total
obligation authority AMC received at that time equaled only $4.7
billion. AMC did not receive sufficient obligation authority to support
the final validated requirements of nearly $6.9 billion until the end
of fiscal year 2003, 4 months after major combat operations ended.
Figure 4: Fiscal Year 2003 Army Working Capital Fund Supply Management
Requirements and Cumulative Obligation Authority Received:
[See PDF for image]
Notes:
(1) Reset is a term used to define bringing a vehicle that was used
during Operation Enduring Freedom and OIF back to a fully mission-
capable (serviceable) condition. Resetting a vehicle involves extensive
use of spare parts.
(2) Numbers are rounded to the nearest tenth of a billion dollars.
[End of figure]
In addition to establishing requirements to support its peacetime and
continuing global war on terrorism operations, AMC identified
additional requirements, called reset requirements, of $1.3 billion to
support the repair of items coming back from theater. As figure 4
shows, by the end of fiscal year 2003, AMC had received $6.9 billion of
its total requirement of $8.2 billion (including reset) in obligation
authority, a shortfall of $1.3 billion.
We could not determine exactly why sufficient funding was not provided
to AMC more quickly, because sufficient records were not available to
track when AMC and its subordinate commands requested additional
funding from Army headquarters or the amounts requested. Similarly,
Army headquarters could not provide information about the timing of its
requests for additional obligation authority to the Office of the Under
Secretary of Defense (Comptroller). However, the Army's requirements
validation process likely contributed to delays in the release of
obligation authority into AMC's Army Working Capital Fund. After AMC
completes its internal validation process and requests additional
funding above the programmed requirement during the year of execution,
several organizations within Army headquarters reexamine AMC's
requirements. In the absence of specific direction in Army regulations,
Army headquarters has developed a process for validating AMC's
requirements. While the Office of the Deputy Chief of Staff for
Logistics has the main responsibility for validating AMC's functional
requirements, the Office of Deputy Chief of Staff for Operations, the
Office of the Deputy Chief of Staff for Program and Analysis, and the
Assistant Secretary of Army (Financial Management and Comptroller) must
also review and agree on the requirements. Once these organizations
validate the requirements, the Assistant Secretary of the Army
(Financial Management and Comptroller) requests obligation authority
from the DOD Comptroller. This lengthy process may have delayed the
release of funds and contributed to shortages of tires, track shoes,
and lithium batteries.
The additional time associated with the Army's validation process was
exemplified by events during fiscal year 2003. AMC set its revised
supply requirements to $4.8 billion in October 2002. However, the DOD
Comptroller did not release the first additional obligation authority
of $600 million until January 2003, 3 months later. Army headquarters
office released its next increase of obligation authority of $1.1
billion in March 2003, for a total of $4.6 billion; nearly 6 months
after AMC identified the initial requirement. Army officials were
unable to tell us when they had submitted their requirements to the DOD
Comptroller because they said they often submitted requests for
additional obligation authority during the fiscal year informally via e-
mails and telephone calls. Accordingly, detailed records were not kept.
We were able to confirm that the time between the releases of
obligation authority from the DOD Comptroller to the department of the
Army did not take longer than two weeks. This indicates that for most
of the 6 months, AMC's request for additional obligation authority was
somewhere in the Department of Army's validation process.
In addition to delays in receiving funds, AMC suffered from an overall
lack of sufficient obligation authority for its major subordinate
commands that contributed directly to shortages of tires, track shoes,
and lithium batteries during OIF. Initial priority was to provide
funding to the U.S. Army Aviation and Missile Command to support
critical aviation systems and then to TACOM for tracked and tactical
wheeled vehicles. Without prompt obligation authority, item managers
could not contract for supplies in anticipation of customer demands.
According to item managers, they need sufficient obligation authority
in advance of customer demands in order to have sufficient supplies
available. TACOM officials reported that the lack of adequate
obligation authority prevented them from buying supplies, including
tires and tank track shoes, in anticipation of demands. For example, in
October 2002, TACOM item managers identified total requirements of
nearly $1.4 billion, but only had authority to obligate approximately
$900 million. By May 2003, TACOM's requirements had increased to over
$2.1 billion, but only $1.5 billion in obligation authority was
available. By the end of the fiscal year, TACOM's total requirement,
including funds necessary to reset the force, totaled $2.7 billion, but
its obligation authority was less than $2.4 billion. This shows that
obligation authority for tires and tank track shoes lagged behind
requirements, thereby preventing item managers from buying supplies in
anticipation of demand. Similarly, CECOM reported that unfunded
requirements over several prior years affected its purchases of lithium
batteries. CECOM identified requirements of nearly $1.5 billion for
fiscal year 2003, but received less than $1.1 billion in obligation
authority for the year.
DLA Received Sufficient Obligation Authority to Meet Customer Supply
Needs:
In contrast to the Army, DLA received sufficient obligation authority
from the DOD Comptroller to meet increasing customer supply needs
during OIF. DLA set the requirements for its supply management business
area at $18.1 billion and received $16.5 billion of this amount in
obligation authority in October 2002 (see fig. 5). By February 2003, it
had received obligation authority that kept pace with increasing
requirements. As requirements increased during OIF, the agency was able
to request and receive additional obligation authority to purchase
supplies in anticipation of customer needs. By the end of the fiscal
year, DLA's supply requirements had reached $25.0 billion, and it had
received an equal amount of obligation authority to meet those
requirements.
Figure 5: Fiscal Year 2003 DLA Supply Management Requirements and
Cumulative Obligation Authority Received:
[See PDF for image]
[End of figure]
DLA officials told us they were able to obtain timely increases in
obligation authority from the DOD Comptroller because of their
requirements validation process. The agency conducts an ongoing review
of its requirements throughout the year to ensure they are updated as
changes in demand occur. Agency officials then request additional
obligation authority directly from the DOD Comptroller. This process
allowed DLA to submit requirements and receive increased obligation
authority several times during fiscal year 2003. Agency officials
stated that having accurate requirements ensures that the DOD
Comptroller accepts the requirements without further validation.
According to DLA officials, the DOD Comptroller was responsive to the
agency's needs, providing additional obligation authority within days
of a request.
Delayed Acquisition Caused by a Variety of Challenges:
The supply system faced several challenges in rapidly acquiring three
of the items we reviewed to meet the emerging demands caused by OIF
(Interceptor body armor, lithium batteries, and up-armored HMMWVs and
kits). According to a DOD regulation,[Footnote 33] supply chain
processes and systems, which include relationships with commercial
manufacturers, should provide flexible and prompt support during
crises. The rapid increase in demand for the three items was not
anticipated, and as DOD's supply system attempted to purchase them, its
efforts were impeded by problems that varied by item. For example,
while lithium battery production was limited by the capacity of a sole
source supplier and long production lead-times, body armor
manufacturers faced shortages of the material components of the armor.
Body Armor Production Did Not Support Increasing Demands:
DLA data show that manufacturers of body armor could not meet the surge
in demand for the item's two primary components, plates and vests. For
example, the worldwide demand for plates increased from 9,586 in
December 2002 to 108,808 in March 2003 to a peak of 478,541 in December
2003. A comparison of plate production rates over the same time period
shows that only 3,888 plates were produced during December 2002, 31,162
during March 2003, and 49,746 during December 2003.
Increasing requirements exceeded the manufacturer's capacity to produce
sufficient body armor. For example, in October 2003, CENTCOM expanded
requirements for body armor to include all U.S. personnel in its area
of responsibility. The industrial base could not meet this new
requirement due to a lack of construction materials and long production
lead-times. Vest production was hindered by the limited availability of
Kevlar; plate production was initially slowed due to a lack of a
special backing for the plates and later by the limited availability of
the primary component of the plates, ceramic tiles. In addition, the
minimum production lead-time of 3 months limited the manufacturers'
ability to accelerate production levels to meet increasing demand,
especially for plates, which are more difficult to manufacture than
vests. Due to these industrial-base limitations, body armor was not
issued to all troops in Iraq until January 2004, 8 months after major
combat operations were declared over.
Lithium Battery Production Did Not Support Increasing Demands:
Demand for lithium batteries exceeded inventory and production during
OIF. As mentioned earlier in this report, the requirement for lithium
batteries had not been assessed for the war reserve for several years.
Worldwide demand for lithium batteries increased from 38,956 batteries
per month in October 2001 to a peak of 330,600 in April 2003.
Concurrent battery production was 32,000 in October 2001 and 114,772 in
April 2003, and thus was insufficient to meet demand. CECOM expanded
battery production from one to three manufacturers and received $38.2
million to increase production capacity in late 2002; the 8-fold
increase in battery demand still outstripped production capacity. A 6-
month production lead-time for the batteries precluded the ability of
the three manufacturers to meet the peak demand during April 2003. The
Marines reported being down to only a 2-day supply of batteries in
CENTCOM's area of responsibility in April 2003, despite OIF's priority
on worldwide supply shipments. By late 2003, the Army was able to
acquire enough batteries so that its inventory exceeded back orders.
Pace of Production of Up-Armored HMMWVs and Kits Did Not Match Maximum
Capacity:
Meeting rapidly increasing requirements for armoring HMMWVs also met
with constraints. For example, CENTCOM stated a requirement for 1,407
up-armored HMMWVs to support OIF in August 2003 that grew to 8,105
vehicles in September 2004. Manufacturers were producing 51 up-armored
HMMWVs per month in August 2003. Recognizing the increase in
requirements in February 2004, the Army reached an agreement with the
manufacturers to increase production to 460 vehicles per month by
October 2004. However, the signed agreement with the manufacturer
indicated that maximum production could have been increased to 500
vehicles.
Funding was not available when the requirements increased. As a result,
Army officials stated that the up-armored HMMWV manufacturers were
unable to operate at the maximum capacity. In order to produce vehicles
at a consistent and high rate, the manufacturer needs to be assured of
consistent funding at least 3 months in advance of delivery. While
additional funding was received in fiscal year 2004, program managers
stated they often did not know when the next funding release would
occur, further complicating their procurement planning. As of September
2004, Army data shows that 5,330 of the 8,105 required up-armored
HMMWVs were in CENTCOM's area of responsibility.
Similar issues affected the delivery of add-on-armor kits from the
Army's depot system even more dramatically. Kit production in the
Army's depot system reached its maximum rate of 3,998 kits per month in
April 2004 and would have met the requirement sooner had the Army not
slowed production. Moreover, additional unused capacity was available
for kit production. In February 2004, a contractor-operated Army
facility informed Army depot managers that it could produce an
additional 800 kits per month. While item managers stated they did not
use this contractor-operated facility due to issues with contract
timing and price, they did not have information about the reason for
reducing the level of production at the government-operated facilities.
Army data show that kit production will meet CENTCOM's September 2004
requirement for 13,872 kits no later than March 2005.
DOD's Response to Acquisition Challenge Was Inconsistent:
DOD's response to the various acquisition challenges presented by these
items was inconsistent, lacked transparency, and did not fully exploit
all of its capabilities to influence production. If the Army had
forecasted an accurate requirement for the batteries, the need for
additional manufacturers would have been recognized and production
capacity could have been increased on time to better meet the demand.
In the case of the other two items, the rapid increase in demand was
not as predictable and DOD responded differently to each. DOD officials
made a very aggressive effort to focus on and improve the availability
of body armor using regulatory authority to increase production. DOD
also provided visibility over the problem and courses of action to
Congress. By contrast, DOD's response to the need for more armor
protection for HMMWVs was more measured and its acquisition solution
was less transparent. This may have been why members of Congress have
expressed specific concerns about the availability of these items and
designated specific funds for them.
Ineffective Theater Distribution Contributed to Shortages of Supply
Items:
DOD's inability to distribute sufficient quantities of items to troops
adversely affected the delivery of many items. While all seven items
may have experienced distribution problems, we found that four items
(AAV generators, Interceptor body armor, MREs, and tires) were directly
and negatively affected, causing troops to experience shortfalls.
Distribution is the operational process of synchronizing all elements
of the logistics system to deliver the "right things" to the "right
place" at the "right time" to support the combatant commander. This
complex process involves the precise integration of doctrine,[Footnote
34] transport equipment, personnel, and information technology. Among
the problems encountered during OIF were (1) conflicting doctrine
defining the authority of the geographic combatant commander to
synchronize the distribution of supplies from the U.S. to theater; (2)
improper packaging of air shipments from the U.S., which forced
personnel in theater to spend time opening and sorting shipments as
they arrived; (3) insufficient transportation equipment and supply
personnel in theater; and (4) the inability of logistics information
systems to support the requisition and shipment of supplies into and
through Iraq.
Conflicting Doctrine Impeded Effective Distribution:
We found that conflicting doctrine impeded the establishment of a
distribution system capable of delivering supplies to the warfighter
smoothly and on time. Distribution begins with the supplier, ends with
the warfighter, and includes all systems, both physical and
informational, needed to move and manage supplies between the two ends.
Currently, joint doctrine institutionalizes separate management of
sections of the end-to-end distribution system by placing
responsibility for logistics support outside the theater with the
individual services and the U.S. Transportation Command.[Footnote 35]
However, it also requires the theater commander to synchronize all
aspects of logistics necessary to support the mission.[Footnote 36]
This conflicting doctrine is contrary to DOD's distribution principle
of centralized management, which prescribes that one manager should be
responsible for the end-to-end distribution of supplies. A SAIC study
also reports that joint doctrine does not contain any specific or
prescriptive guidance on how the combatant commander might ensure a
seamless distribution process.[Footnote 37]
During OIF, the CENTCOM combatant commander could not synchronize the
distribution process to support the mission, as required by doctrine,
with the level of control that joint doctrine suggests. Instead, the
combatant commander had to rely on other DOD components responsible for
different functions along the distribution process to gain end-to- end
visibility as supplies moved through the distribution system. For
example, as we reported in December 2003,[Footnote 38] although CENTCOM
issued a policy requiring the use of radio frequency identification
tags on all shipments,[Footnote 39] to track assets shipped to and
within the theater, tags were not always used. Officials from various
DOD components reported that, while no data were compiled on the
frequency of shipments being labeled with radio frequency
identification tags, only about 30 percent of the pallets and
containers coming into the theater were tagged. Officials gave various
reasons for not following the commander's policy, such as personnel
were not trained to use the technology, tags were not available to
place on loads moving through the system, and requirements to use the
technology were not compatible with current operating systems. In
addition, some Army officials reported that CENTCOM does not have
jurisdiction over their process for shipping and tracking assets.
Therefore, while CENTCOM issued guidance directing the implementation
of an in-transit visibility system that relied on the tags, the command
could not control the organizations outside of theater responsible for
applying the tags to ensure their proper use.
Initial Shipments from the U.S. to the Theater Were Not Properly
Packaged:
DOD's distribution principle of maximizing throughput calls for
reducing the number of times that supplies are opened and sorted in
transit so that distribution to warfighters is prompt. Early in OIF,
inefficient packaging and palletizing of air shipments created supply
backlogs in Kuwait. In turn, these backlogs delayed the delivery of
supplies shipped by air to units in Iraq, which included armored
vehicle track shoes, body armor, and tires. Insufficient information
was available to allow us to link how each individual item was affected
by this distribution problem.
According to Army officials, shipments move most efficiently when they
are packed and palletized[Footnote 40] so that they do not have to be
unpacked and reloaded while in transit; sending such "pure" shipments
to a single unit is a standard peacetime procedure. During OIF, Army
officials expected each pallet or container to contain supplies for
only one unit or location. However, initial shipments included spare
parts and supplies for several geographically separate units. DLA
officials stated that U.S. distribution centers could not handle the
high volume of supplies and many shipments were loaded with items for
more than one customer or "mixed." They also said that the volume of
supplies arriving daily for consolidation into air shipments
overwhelmed distribution centers in the U.S. The facilities were
structured to handle peacetime requirements and lacked the necessary
equipment and personnel to handle the surge capacity associated with
wartime. Officials stated that mixed cargo was often sent to the
theater without being sorted in order to make room for incoming
supplies. Moreover, the lack of sorting continued because of a
miscommunication between CENTCOM and DLA, the shipper. CENTCOM expected
the peacetime practice of pure pallets would continue during OIF, while
DLA officials focused on moving pallets to theater regardless of
whether they were pure or mixed. However, at that same time RAND
analysts reported that DLA facilities were sending pure pallets to U.S.
Army units in Europe and Korea.
Once in theater, mixed shipments had to be manually opened, sorted, and
re-palletized at theater distribution points, causing additional
delays. According to staff at the Theater Distribution Center in
Kuwait, some mixed shipments were not marked with all the intended
destinations so the contents of the shipments had to be examined. Army
officials stated that because mixed pallets of supplies were initially
sent to theater, over 9,000 pallets piled up at the center. By the fall
of 2003, 30 percent of the pallets arriving at the center still had to
be reconfigured in some way. The Army and DLA recognized the problem
and worked in conjunction with CENTCOM to establish a "pure palleting"
process at the distribution center in Pennsylvania. This resulted in
potentially longer processing times in the United States in order
reduce customer wait time in theater.
According to a RAND study,[Footnote 41] the pallets arriving in theater
between January and August 2003 contained more than 20,000 cardboard
boxes of small items. Over 4,300 boxes, about one in every five, were
mixed and may have been opened and the contents sorted before being
forwarded on to customers, which further delayed delivery. The RAND
study showed that it took an average of 25 to 30 days for such mixed
boxes to travel from a port in theater, through the theater center, to
the supply activity that ordered it. In contrast, when a box with items
for only one unit was shipped, it took an average of 5 to 10 days to
reach the customer.
Shortages of Supply Personnel and Transportation Equipment Hampered
Supply Distribution:
The lack of sufficient logistics resources, such as trained supply
personnel and cargo trucks, hindered DOD's efforts to move supplies
promptly from ports and theater distribution centers to the units that
had ordered them, as expected under the DOD principle of optimizing the
distribution system. As a result, some troops experienced delays in
receiving MREs and other supplies, thereby reducing operational
capabilities and increasing risk.
According to military personnel, there was a shortage of support
personnel in theater prior to and during the arrival of combat forces.
Moreover, those that arrived were often untrained or not skilled in the
duties they were asked to perform. The effects of these shortages of
trained personnel were most evident at the Theater Distribution Center
and resulted in delays in the processing (receipt, sorting, and
forwarding) of supplies, and backlogs. For example, in the late
February to early March 2003 time frame, the Center had only about 200
reserve personnel and did not reach its authorized staffing level of
965 supply/support personnel until May 2003. Moreover, when the center
opened, it already had an estimated 5,000-pallet backlog and its
commander employed ad hoc work details drawn from surrounding support
units to help. Furthermore, organizations outside of the theater, such
as TACOM, sent personnel to Kuwait to ensure that specific items, such
as tires, were properly processed and sent to the correct customers.
Moreover, according to after-action reports, lessons learned studies,
and discussions with military personnel, the lack of adequate ground
transportation, especially cargo trucks, contributed significantly to
the distribution problems. For example, an Army official with the 377th
Theater Support Command, which was responsible for logistics support in
Kuwait, stated that when combat began his unit needed 930 light/medium
and medium trucks but had only 515 trucks on hand. Although his unit
"managed" with what was available, he said that the shortage of
equipment used to haul supplies into Iraq created a strain on materiel
movement. Both the Marine Corps and the 3rd Infantry Division also
reported that available transportation assets could not meet their
capacity requirements. Even high-priority items, such as food did not
always move as intended. According to a CENTCOM after- action report,
contractors responsible for moving MREs from ports to the Theater
Distribution Center at times had only 50 of the 80 trucks needed. DLA
officials reported that at one time 1.4 million MREs were stored at a
port in theater, awaiting transport to customers.
One cause for the distribution resource problems was the failure of the
force deployment planning process to properly synchronize the flow of
combat and support forces. DOD normally uses time-phased force
deployment data to identify and synchronize the flow of forces during
an operation. Key elements of this process include requirements for
military transportation companies, contractor provided services, and
host nation logistics support. However, the process was "thrown out" in
the planning leading up to OIF. Around November 2002, DOD started to
use another method for deployment planning, referred to as the Request
for Forces process.
The Request for Forces process segregated the initial deployment plan
into over 50 separate deployment orders. DOD's priority was for combat
forces to move into theater first. Under this new process, logistics
unit commanders had to justify the flow of their units and equipment
into the theater--often with little success. According to some DOD
planners, this approach did not adequately meet planner needs,
especially the needs of logisticians. Each deployment order required
its own transportation feasibility analysis, which resulted in a choppy
flow of forces into the theater. This in turn caused imbalances in the
types of personnel needed in the theater to handle logistics
requirements. Furthermore, a RAND study suggests that distribution
assets, particularly for components such as the 377th Theater Support
Command and the 3rd Corps Support Command, were either deleted from the
deployment plan or shifted back in the deployment timeline.[Footnote
42] As a result, logistics personnel could not effectively support the
increasing numbers of combat troops moving into theater.
DOD took steps to mitigate the impact of some distribution problems,
but these did not always work. For example, according to a RAND report,
priority was given to moving critical supplies, such as food, water,
ammunition, and fuel. Other items, to include spare parts, were moved
on a very limited, opportune basis. As a result, according to one after-
action report, it took nearly 2 weeks after U.S. forces moved into Iraq
for the first shipment of spare parts to reach combat forces, and this
delivery was inadequate to support an entire division engaged in combat
operations. Moreover, the Army confirmed that after 45 days of enemy
engagement, moving water still consumed over 60 percent of available
theater transportation trucks. A Marine Corps after-action
report[Footnote 43] listed repair parts distribution as a "near-
complete failure."
In order to move supplies to the troops, both the Army and Marines
contracted for additional trucks. For example, the Marine Corps
contracted for $25.6 million in services from several commercial
trucking companies to support combat operations. It justified this
action by identifying deficiencies in the provision of transportation
support they expected from other components in theater. However, Army
officials stated that its contractors did not always have sufficient
trucks to move supplies as required because contracts did not specify a
level of operational readiness for trucks. As a result, even if trucks
were available, they were not always functional. In its after-action
report, the 3rd Infantry Division stated that available transportation
assets and contracted host nation support could not meet divisional
requirements for carrying capacity.
Information Systems did not Support Supply Distribution:
According to military doctrine, financial, communication, and
information systems used to support supply distribution must be
accessible, integrated, connected, and contain accurate and up-to-date
information.[Footnote 44] In other words, these systems need to provide
a seamless flow of all types of essential data from the point of
production to the warfighter. However during OIF, the logistics systems
used to order, track, and account for supplies were not well
integrated; moreover, they could not provide the essential information
necessary to effectively manage theater distribution.
Data Transmission Problems Hindered Supply Requisitions:
Logistics information systems in use during OIF could not effectively
transmit data, making it difficult to process and track requisitions
for critical supplies. A number of factors limited communications
between the various logistics systems, including a lack of bandwidth in
the theater to satisfy all systems users, systems that were
incompatible with each other, units lacking the necessary equipment or
being delayed in connecting to the supply system, and distances being
too great for supply activities to effectively transmit data by radio.
For example, the supply activities in the Army's 3rd Infantry Division
only received about 2,500 of the over 10,000 items--including armored
vehicle track shoes, lithium batteries, and tires--they requisitioned
between August 2002 and September 2003. Officials at the 3rd Infantry
Division attributed this issue specifically to communications problems
between systems. Army officials also attribute poor communications as a
major factor leading to a $1.2 billion discrepancy between the amount
of supplies shipped to the theater and the amount actually acknowledged
as received, which we reported on in December 2003.[Footnote 45]
The Marine Corps similarly experienced communications problems between
its information technology systems during OIF. Marine forces deployed
with two different versions of the Marine Corps Asset Tracking
Logistics & Supply System logistics information system, which were not
compatible with each other. Marine Corps units in the 1st Marine
Expeditionary Force were using the Asset Tracking Logistics & Supply
System I for frontline logistics, while the 2nd Marine Expeditionary
Force was using the Asset Tracking Logistics & Supply System II+ for
theater support.[Footnote 46] Therefore, requisitions from Marine
support activities at the front lines could not be transmitted directly
to Marine logistics units in the rear. Instead, the Marines used other
processes, such as e-mail and satellite phone to requisition supplies.
However, this left ordering units without any information on the status
of their requisitions. As a result, many duplicate orders were
submitted and may have unnecessarily added more cargo to the already
overwhelmed theater distribution system. A study by SAIC also noted
that the lack of logistics communications was a weaknesses during
OIF.[Footnote 47] The Army's Deputy Chief of Staff for Logistics has
since provided satellite communications equipment to the units
operating in theater to help alleviate these communication
difficulties.
Available Logistics Information Systems Did Not Provide Adequate
Visibility:
Another major problem encountered during OIF was a lack of adequate
visibility over supplies in the distribution system. While the
operation order for OIF called for the use of radio frequency
identification, tracking was limited primarily by a failure to place
radio frequency identification tags on all shipments sent to the
theater and a lack of fixed scanners needed to read radio frequency
identification tags. For example, some ports, such as one we observed
in Bahrain, had no scanners at all.
Another equally challenging problem was that scanners often failed
under the harsh environmental conditions. According to one Army
assessment, only 50 percent of the scanners inspected in Kuwait were
operational. In addition to problems with the radio frequency
identification technology, there was no suitable information system
infrastructure to track and identify supply assets. SAIC reported that
the Joint Total Asset Visibility system could not provide commanders
with the asset visibility they needed, while military officials in
theater told us they knew of no joint system that tracked supplies from
the point of production to the warfighter. Rather, logistics personnel
relied on a number of unintegrated tracking systems. As a result,
CENTCOM and the major combat forces in the Army and Marine Corps could
not adequately track or identify supplies moving to and within the
theater.
The lack of in-transit visibility over supplies significantly effected
distribution. For example, an Army official responsible for logistics
operations at the Theater Distribution Center noted that incomplete
radio frequency identification tags forced the center's personnel to
spend time opening and sorting incoming shipments. This, in turn,
significantly increased processing time, contrary to DOD's principle of
maximizing throughput. As a result, according to a CENTCOM issue paper,
around 1500 Small Arms Protective Inserts plates for body armor were
lost. Another CENTCOM report stated that 17 containers of MREs were
left at a supply base in Iraq for over a week because no one at the
base knew they were there. According to Marine Corps officials, they
became frustrated with their inability to "see" supplies moving towards
them and lost trust and confidence in the logistics system and
processes. For example, the Marines could only verify the receipt of 15
out of 140 AAV generators that were shipped to them.
Changes to Unit Address Codes Disrupted Logistics Information Systems:
The use of new OIF-specific address codes, known as Department of
Defense Activity Address Codes, for ordering supplies limited the
effectiveness of logistics information technology.[Footnote 48] The
codes ensure that supplies are sent to the correct address of the
ordering unit and that the correct unit is charged for the supplies.
Because of poor linkages between Army logistics and financial systems,
a problem of where to ship and who to bill surfaces unless a unit or
activity deploys intact. For example, while some parts of the 3rd
Infantry Division remained in the U.S. during OIF, the majority of the
division deployed to Iraq. To ensure that ordered supplies went to the
correct location of a deployed unit and that the unit was correctly
charged, new codes specifically set up for OIF were issued to deploying
entities. Meanwhile, the original codes remained with that portion of
the unit that did not deploy. Approximately 10,000 new codes were
created for OIF. This caused significant disruptions to logistics
information systems as new data had to be manually updated in each
system. Many problems occurred during this process, such as the
issuance of inactive codes, use of codes already assigned to other
units, and incorrect data being input into logistics systems. These
problems were another factor contributing to the $1.2 billion
discrepancy between supplies shipped and supplies received.
Furthermore, there was a delay in updating the master code schedule
that contained all the locations associated with the new codes. This
caused significant problems for the Theater Distribution Center.
According to an April 10, 2003 Theater Distribution Center log entry,
"Upwards of 50% of pallets shipped to Doha and 20-30% of pallets
shipped to Arifjan are being returned/rejected with the reason being,
'it doesn't belong here.' The master [codes] are not being updated when
units move in or out and the [theater distribution center] is double
and triple handling cargo." Given that the center was already
experiencing problems with personnel and equipment shortages;
additional handling of the same supplies increased their difficulties.
Logistics Personnel Were Not Trained on Some of the Logistics
Information Systems in Use:
A lack of adequate training for logistics personnel also negatively
impacted the performance of logistics information systems. For example,
according to a 101st Airborne after-action review, loading codes and
interfacing with data caused problems that training could have
resolved. Lack of training also contributed to problems with asset
visibility. According to a logistics study, units were generally not
trained in the use of radio frequency identification devices. Marine
Corps officials likewise stated that their personnel were untrained in
the use of tracking equipment.
DOD Actions to Improve Supply Availability for Current and Future
Operations:
As a result of logistics issues that arose during OIF, DOD, the
services, and the defense agencies have undertaken a number of actions
to improve the availability of equipment and supplies during ongoing
and future operations. Some are short-term actions aimed at improving
immediate supply availability. For example, as a result of the battery
shortage, the Joint Staff Logistics Directorate established in July
2003 a revolving "critical few list" of approximately 25 items that the
services and various commands report as most critically needed
worldwide. The Joint Staff Logistics Directorate, in conjunction with
the services, determines the causes of the shortages and makes
recommendations to the Office of the Secretary of Defense and the
services for corrective action and execution. Other actions are long-
term, systemic changes that are designed to improve the overall
effectiveness of the supply system. While we did not evaluate the
changes' potential for success, we observed that the majority of them
focus on the distribution aspects of logistics problems, not the full
range of supply deficiencies we identified. However, other GAO
engagements are currently underway to assess some of these initiatives.
(Specific short-term and long-term actions related to each item are
noted in the appendixes.)
* Inaccurate and inadequately funded war reserve requirements. The Army
has not updated or run its war reserve model in order to systemically
ensure the accuracy of its war reserve requirements. Due to its risk
management decisions, it has also not funded its war reserve
requirements. However, the Army has made manual changes to its war
reserve inventory levels, based on the usage of certain items during
OIF.
* Inaccurate supply forecasts. DOD and the services have not undertaken
systemic actions specifically aimed at improving the accuracy of supply
forecast. However, DLA has undertaken action to improve its customer
support through its Customer Relationship Management program, which
could potentially improve its ability to forecast customer demands.
* Insufficient and delayed funding. The Army has not undertaken long-
term actions to expedite its funding process during contingencies to be
more responsive to customer needs. However, it has undertaken short-
term actions to obtain additional funding for specific supply items.
For example, AMC directed funding towards armored vehicle track shoes.
* Delayed acquisition. DOD has not undertaken long-term actions to
address acquisition issues that contributed to shortages of certain
case study items. However, DLA has undertaken other actions to improve
its ability to leverage industrial-base capabilities. DLA seeks to
improve industrial-base support through its collaborative planning
initiatives with industry. For example, its Strategic Materiel Sourcing
program establishes long-term contracts for approximately 500,000 (of a
total 4.6 million) items the agency considers critical to its
customers' needs. In addition, its Strategic Supplier Alliances program
establishes formal relationships with the agency's top 32 sole source
suppliers.
* Ineffective distribution. DOD has undertaken many initiatives to
improve its distribution system, including the Secretary of Defense's
designation of the U.S. Transportation Command as the Distribution
Process Owner. According to a Secretary of Defense memorandum,[Footnote
49] the U.S. Transportation Command is responsible for improving the
overall efficiency and interoperability of distribution-related
activities. In January 2004, the command established a CENTCOM
Deployment and Distribution Operations Center, which is responsible for
directing airport, seaport, and land transportation operations within
the OIF theater. DOD's Pure Pallet initiative seeks to reduce
inefficiencies in the distribution process and improve in-transit
tracking of shipments by building containers and pallets with radio
frequency identification tags that are designated to units within a
specific geographic location.
The Army and DLA have also undertaken numerous actions to improve the
distribution system. The Army has identified four areas of focus for
the next 2 years: (1) "Connect Army Logisticians" by using technology
to provide logisticians and warfighters with real-time visibility over
distribution and warfighter requirements, (2) "Modernize Theater
Distribution" by developing a distribution-based logistics system to
support the warfighter, (3) "Integrate the Supply Chain" by providing a
system wide view of the supply chain through the integration of
processes, information, and responsibilities, and (4) "Improve Force
Reception" by enhancing the Army's ability to deploy forces to theaters
of operation by establishing an early port opening capability that will
result in-theater expansion and increased theater sustainment.
Furthermore, the Army has expanded its Rapid Fielding Initiative, which
accelerates acquisition and fielding processes to ensure that troops
deploy with high-priority items. DLA has also expanded its Forward
Stocking Initiative by opening a fifth forward stock depot in Kuwait to
reduce customer wait time and transportation costs. Moreover, AMC and
DLA have formed a partnership in which they will explore the use of
commercial systems to increase supply readiness, improve in-transit
visibility, cut costs, and improve parts resupply to field locations.
Conclusions:
In times of war, the defense supply system needs to be as responsive
and agile as the combat forces that depend upon it. In the Quadrennial
Defense Review for 2001, DOD stated its intention to transform its
logistics capabilities to improve the deployment process and implement
new logistics support tools that accelerate logistics integration
between the services and reduce logistics demand and cost. OIF tested
this system as well as industry's capability to meet rapidly increasing
demands, and, in many instances, the system failed to respond quickly
enough to meet the needs of modern warfare. While units in Iraq
achieved success on the battlefield, the supply chain did not always
adequately support the troops and combat operations. A number of
problems prevented DOD from providing supply support to its combat
forces at many points in the process, which reduced operational
capabilities and forced combat commanders to accept additional risk in
completing their missions. An inability to adequately predict the needs
of warfighters at the onset of the war, coupled with a slow process for
obtaining additional resources once those needs were identified,
resulted in critical wartime shortages. In addition, even when
sufficient supply inventories were available within the system, they
were not always delivered to the combat forces when they needed them.
All of these problems were influenced to some extent by a lack of
accurate and timely information needed to support processes and
decisions.
Unless DOD's logistics process improves the availability of critical
supplies during wartime, combat forces engaged in future operations
will likely be exposed to risks similar to those experienced in Iraq.
These risks will continue to exist unless DOD is able to improve the
availability of war reserve supplies at the start of operations and
overcomes problems forecasting accurate wartime demands. Moreover,
delays in the Army's funding processes will continue to place U.S.
troops at risk by not enabling AMC to swiftly meet surges in wartime
demands. In addition, future combat operations may be adversely
affected unless DOD is able to anticipate acquisition delays that could
affect the availability of critical supplies and provide transparency
into how it expects to mitigate production risks. Finally, merely
increasing the availability of supplies in the inventory will not help
combat forces in the field. Troops will continue to face reduced
operational capabilities and unnecessary risks unless DOD's supply
chain can distribute the right supplies to the right places when
warfighters need them.
While DOD took immediate steps to overcome some shortages, and is
beginning to develop solutions to some of the problems identified
during OIF, most systemic solutions have tended to center on resolving
distribution problems. If supply logistics transformation is to be
successful, DOD's supply chain reform will need to include solutions
for the full gamut of identified deficiencies contributing to supply
shortages during OIF. An integrated approach to addressing all of these
deficiencies will increase DOD's potential to achieve responsive,
consistent, and reliable support to warfighters, a goal envisioned in
the National Military Strategy and its logistics concepts and necessary
to support the continued dominance of the U.S. military.
Recommendations for Executive Action:
To improve the effectiveness of DOD's supply system in supporting
deployed forces for contingencies, we recommend that the Secretary of
Defense direct the Secretary of the Army to take the following three
actions and specify when they will be completed:
* Improve the accuracy of Army war reserve requirements and
transparency about their adequacy by:
* updating the war reserve models with OIF consumption data that
validate the type and number of items needed,
* modeling war reserve requirements at least annually to update the war
reserve estimates based on changing operational and equipment
requirements, and:
* disclosing to Congress the impact on military operations of its risk
management decision about the percentage of war reserves being funded.
* Improve the accuracy of its wartime supply requirements forecasting
process by:
* developing models that can compute operational supply requirements
for deploying units more promptly as part of prewar planning and:
* providing item managers with operational information in a timely
manner so they can adjust modeled wartime requirements as necessary.
* Reduce the time delay in granting increased obligation authority to
the Army Materiel Command and its subordinate commands to support their
forecasted wartime requirements by establishing an expeditious supply
requirements validation process that provides accurate information to
support timely and sufficient funding.
We also recommend that the Secretary of Defense direct the Secretary of
the Navy to improve the accuracy of the Marine Corps' wartime supply
requirements forecasting process by completing the reconciliation of
the Marine Corps' forecasted requirements with actual OIF consumption
data to validate the number as well as types of items needed and making
necessary adjustments to their requirements. The department should also
specify when these actions will be completed.
We recommend that the Secretary of Defense direct the Secretary of the
Army and Director of the Defense Logistics Agency to take the following
two actions:
* minimize future acquisition delays by assessing the industrial-base
capacity to meet updated forecasted demands for critical items within
the time frames required by operational plans as well as specify when
this assessment will be completed and:
* provide visibility to Congress and other decision makers about how
the department plans to acquire critical items to meet demands that
emerge during contingencies.
We also recommend the Secretary of Defense take the following three
actions and specify when they will be completed:
* revise current joint logistics doctrine to clearly state, consistent
with policy, who has responsibility and authority for synchronizing the
distribution of supplies from the U.S. to deployed units during
operations,
* develop and exercise, through a mix of computer simulations and field
training, deployable supply receiving and distribution capabilities
including trained personnel and related equipment for implementing
improved supply management practices, such as radio frequency
identification tags that provide in-transit visibility of supplies, to
ensure they are sufficient and capable of meeting the requirements in
operational plans, and:
* establish common supply information systems that ensure the DOD and
the services can requisition supplies promptly and match incoming
supplies with unit requisitions to facilitate expeditious and accurate
distribution.
Matter for Congressional Consideration:
To improve visibility over the adequacy of the Army's war reserves,
Congress may wish to consider requiring the Secretary of Defense to
provide it information that discloses the risks associated with not
fully funding the Army war reserve. This report should include not just
the level of funding for the war reserve, which is currently reported,
but timely and accurate information on the sufficiency of the war
reserve inventory and its impact on the Army's ability to conduct
operations.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD agreed with the
intent of the recommendations and cited actions it has or is taking to
eliminate supply chain deficiencies. Some of the actions could resolve
the problems we identified when completed. Because DOD did not specify
dates for completing all of its actions, we modified our
recommendations to require specific time lines for their completion.
DOD is taking other actions that are not sufficient to fulfill our
recommendations and, in several cases the department's comments did not
specifically address how it plans to improve current practices. In
addition to our evaluation below, we address each of DOD's comments in
appendix XI where its complete response is reprinted.
The department cited several actions it is taking to improve the
accuracy of war reserve requirements, support prewar planning through
supply forecasting, minimize future acquisition delays, and improve
supply distribution. However, it did not clearly identify time lines
for fully implementing most of these actions. For example, initiatives
to improve modeling and data for determining war reserves had no dates
for implementation. In some cases, the department provided tentative
schedules, such as with the fielding of the Army's Logistics
Modernization Program to improve supply forecasting, which it expects
to be in full use in fiscal year 2007. In another instance, it provided
a May 2006 deadline for the developing an information technology plan
to improve distribution, but did not indicate when the plan's
recommendations will be implemented. Therefore, we have modified our
recommendations to require that DOD specify when these actions will be
completed.
In two instances DOD cited actions we do not consider sufficient to
fulfill our recommendations. The department stated that its annual
Industrial Capabilities Report to Congress, as well as the budget
process and other forums, provide adequate information on acquisition
of critical items. While we agree that the report provided visibility
about some items, such as body armor, it did not identify concerns
about acquiring up-armored HMMWVs and kits. Therefore, we do not
believe current reporting forums provide Congress with the consistent
visibility and information needed to make informed decisions on actions
that could speed the acquisition of critical items. In another
instance, DOD cites the establishment of the Deployment and
Distribution Center in CENTCOM as its means of testing improvements to
distribution capabilities. While the center may improve deployable
logistics capability, the department did not commit to actions, as we
recommended, that would ensure through simulation and field training
that there are sufficient trained personnel and equipment to meet the
requirements of the operational plans--a problem in theater before and
during the arrival of combat forces. Therefore, we continue to believe
these recommendations have merit.
DOD did not commit to any specific action to improve transparency to
Congress of the risks associated with inadequately funding Army war
reserves. The department said this risk is already reported to Congress
in the budget process and a number of other ways. As stated in this
report, the methods cited by DOD, such as the budget documentation, do
not ensure consistent transparency by clearly stating the operational
risks of underfunding the Army war reserves. Therefore we believe our
recommendation has merit and have added a matter for congressional
consideration that suggests Congress may wish to require DOD to
disclose the risks associated with not fully funding the Army war
reserve.
While DOD agreed with the intent of three recommendations, it did not
commit to any specific actions to address them. The recommendations
would (1) ensure item managers are provided operational information in
a timely manner, (2) reduce the time delay in granting increased
obligation authority to AMC and its subordinate commands, and (3)
revise joint doctrine to clarify responsibility and authority for
synchronizing distribution. We believe that these recommendations have
merit and have cited the reasons in our comments in Appendix XI.
We are sending copies of this report to the appropriate congressional
committees; the Secretary of Defense; the Secretaries of the Army and
the Navy; the Commandant of the Marine Corps; the Commander, U.S.
Central Command; the Commander, U.S. Transportation Command; the
Director of the Defense Logistics Agency; and other interested parties.
If you or your staff members have any questions regarding this report,
please contact me at (202) 512-8365. Key contributors to this report
are listed in appendix XII.
Signed by:
William M. Solis, Director:
Defense Capabilities and Management:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
To address our objectives, we employed a case study approach, selecting
nine supply items with reported shortages as a way to assess the
availability of supplies and spare parts during Operation Iraqi Freedom
(OIF). We judgmentally selected the nine items because we believed they
presented possible shortages with operational impacts based on our
prior work on OIF logistics and other sources such as military "after-
action" reports on OIF operations, military and contractor "lessons
learned" studies, briefings, congressional testimonies, and interviews
with Department of Defense (DOD) and military service officials
covering the time period between October 2002 and September 2004. We
selected the items to encompass a variety of supply sources and users
within DOD, the Army, and the Marine Corps. The items we selected and
the supply sources for each item are shown in table 6.
Table 6: Item and Supply Manager:
Item: Assault Amphibian Vehicle (AAV) generators;
Supply manager: Defense Logistics Agency (Defense Supply Center
Columbus) and Marine Corps Logistics Command.
Item: Armored vehicle track shoes;
Supply manager: Army Materiel Command (Tank-automotive and Armaments
Command).
Item: Interceptor body armor;
Supply manager: Defense Logistics Agency (Defense Supply Center
Philadelphia).
Item: Chemical-biological suits;
Supply manager: Defense Logistics Agency (Defense Supply Center
Philadelphia).
Item: Lithium batteries;
Supply manager: Army Materiel Command (Communications-Electronics
Command).
Item: Helicopter rotor blades;
Supply manager: Naval Inventory Control Point Philadelphia.
Item: Meals Ready-to-Eat (MRE);
Supply manager: Defense Logistics Agency (Defense Supply Center
Philadelphia).
Item: Tires for 5-ton trucks and High-Mobility Multi-Purpose Wheeled
Vehicles (HMMWV);
Supply manager: Army Materiel Command (Tank- automotive and Armaments
Command).
Item: Up-armored HMMWVs and add-on armor kits;
Supply manager: Program Executive Office Combat Support and Combat
Service Support, Warren, Mich.
Source: GAO.
Note: The Defense Logistics Agency (DLA) became the manager of lithium
batteries in October 2004.
[End of table]
To verify the existence of reported shortages and to determine their
extent, we interviewed DOD logistics officials and industrial-base
suppliers. We also collected and analyzed supply data, such as
requirements, customer demands, inventory levels, production levels,
back order quantities, and funding levels, for the period between
September 2001 through September 2004 for the selected items. We
considered an item to be in short supply if the data we obtained showed
that demands placed by the warfighter exceeded availability in the
supply system. To determine the impact of shortages for the selected
items, we interviewed officials in Army and Marine Corps combat forces
that were deployed in OIF and also reviewed DOD and military services'
after-action reports, lessons learned studies, readiness reports, and
other documents. For a complete list of these organizations, see table
7.
Table 7: Organizations Interviewed during Review:
Office of the Under Secretary of Defense (Comptroller), Arlington, Va.
Joint Staff Directorate of Logistics, Arlington, Va.
Office of the Under Secretary of Defense for Acquisition, Technology,
and Logistics, Arlington, Va.
U.S. Central Command, MacDill Air Force Base, Fla.
U.S. Pacific Command, Camp Smith, Hawaii.
U.S. Transportation Command, Scott Air Force Base, Ill.
U.S. Army: Assistant Secretary of the Army for Financial Management and
Comptroller, Arlington, Va.
U.S. Army: Assistant Secretary of the Army for Acquisition, Logistics,
and Technology, Arlington, Va.
U.S. Army: Assistant Secretary of the Army for Acquisition, Logistics,
and Technology, Program Executive Office Combat Support and Combat
Service Support, Warren, Mich.
U.S. Army: Office of the Deputy Chief of Staff (Logistics), Arlington,
Va.
U.S. Army: Office of the Deputy Chief of Staff (Operations), Arlington,
Va.
U.S. Army: U.S. Army Central Command/Coalition Forces Land Component
Command (Logistics), Fort McPherson, Ga.
U.S. Army: U.S. Army Forces Command, Fort McPherson, Ga.
U.S. Army: U.S. Army Materiel Command.
U.S. Army: U.S. Army Materiel Command: Office of the Deputy Chief of
Staff (Budget Management), Fort Belvoir, Va.
U.S. Army: U.S. Army Materiel Command: Office of the Deputy Chief of
Staff (Logistics), Fort Belvoir, Va.
U.S. Army: U.S. Army Materiel Command: Communications-Electronics
Command, Fort Monmouth, N.J.
U.S. Army: U.S. Army Materiel Command: Tank-automotive and Armaments
Command, Warren, Mich.
U.S. Army: U.S. Army Materiel Command: Tank-automotive and Armaments
Command, Ground Systems Industrial Enterprise, Rock Island, Ill.
U.S. Army: U.S. Army Materiel Command: Tank-automotive and Armaments
Command, Anniston Army Depot, Anniston, Ala.
U.S. Army: U.S. Army Materiel Command: Tank-automotive and Armaments
Command, Lima Army Tank Plant, Lima, Ohio.
U.S. Army: 3rd Infantry Division, Fort Stewart, Ga.
U.S. Army: 4th Infantry Division & III Corps, Fort Hood, Tex.
U.S. Army: 101st Airborne Division (Air Assault), Fort Campbell, Ky.
U.S. Marine Corps: Headquarters Marine Corps, Installation and Logistic
Department, Arlington, Va.
U.S. Marine Corps: Marine Forces Pacific, Camp Smith, Hawaii.
U.S. Marine Corps: Marine Corps Logistics Command, Albany, Ga.
U.S. Marine Corps: Marine Corps Aviation Supply Logistics Office,
Arlington, Va.
U.S. Marine Corps: Marine Corps Systems Command, Quantico, Va.
U.S. Marine Corps: 1st Marine Expeditionary Force, Camp Pendleton, Ca.
U.S. Marine Corps: 2nd Marine Expeditionary Force, Camp Lejeune, N.C.
U.S. Marine Corps: 3rd Marine Air Wing, Miramar, Calif.
Naval Inventory Control Point Philadelphia, Pa.
National Guard Bureau, Arlington, Va.
Defense Logistics Agency: Defense Logistics Agency Headquarters, Fort
Belvoir, Va.
Defense Logistics Agency: Defense Supply Center Columbus, Ohio.
Defense Logistics Agency: Defense Supply Center Philadelphia, Pa.
RAND Arroyo Center, Santa Monica, Ca.
AM General Corporation, Mishawaka, Ind.
Armor Holdings, Inc. (formerly O'Gara-Hess Eisenhardt), Fairfield,
Ohio.
Source: GAO.
[End of table]
To determine what deficiencies contributed to identified supply
shortages, we interviewed officials and collected documentation from
DOD's supply management organizations. On the basis of case studies, we
identified deficiencies that affected the supply of two or more of the
items. We analyzed data from DOD logistics agencies, operational units,
and service and geographic commands to evaluate the significance of
these deficiencies to DOD's overall logistics system. We also reviewed
prior GAO reports, DOD and military services' after-action reports,
military and contractor lessons learned studies, DOD directives and
regulations, and reports by DOD and external experts, including
Accenture, the Center for Naval Analysis, the RAND Corporation's Arroyo
Center, the Science Applications International Corporation, and the
U.S. Army Audit Agency. In addition, we analyzed supply data for each
item to identify and corroborate deficiencies contributing to item
shortages.
To determine what actions DOD has taken to improve the availability of
supplies for current and future operations, we collected data from
military service and joint command headquarters personnel to identify
short-and long-term efforts to address supply shortages. However, we
did not evaluate their potential for success. We also reviewed DOD
logistics and strategic planning documents that provide guidance on
improving logistics support for military readiness.
We assessed the reliability of the supply data we obtained by
interviewing agency officials knowledgeable about the data and
corroborated it with other information about supply shortages gathered
from other DOD and military service organizations. When data
specifically for Iraq were not available, we used worldwide data since
OIF received supply priority. With the exception of data on track
shoes, we determined that the data were sufficiently reliable for our
purposes. In the case of track shoes, we determined that the data
provided by the Army's Tank-automotive and Armaments Command (TACOM)
were not sufficiently reliable for our purposes and did not use it.
However, we were able to identify relevant information from TACOM's
periodic reporting to describe the item's supply status. We determined
that these data were sufficiently reliable for our purposes. In the
case of lithium batteries, the Communications-Electronics Command
(CECOM) switched database systems in July 2003. We determined that the
data from the new system were sufficiently reliable for the purposes of
showing trends and graphing, but we based our findings on program data
prior to the system change. We also identified relevant information
from other DOD sources to confirm reported shortages of lithium
batteries. The limitations of data collected for armored vehicle track
shoes and lithium batteries are included in appendixes III and VI,
respectively. We also determined that funding data were sufficiently
reliable for our purposes by comparing data received from multiple
sources within DOD.
We performed our audit from March 2004 through March 2005 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Assault Amphibian Vehicle Generators:
Background:
The Marine Corps' AAV is a full-tracked landing vehicle designed to
carry up to 25 people from ship to shore and is used as an armored
personnel carrier on land. The Marine Corps used more than 550 AAVs to
transport personnel during operations in OIF. Among the critical parts
of the AAV is its generator, which provides needed electrical power
(see fig. 6).
Figure 6: Assault Amphibian Vehicle and Generator:
[See PDF for image]
[End of figure]
The supply and distribution of AAV generators is a shared
responsibility. The Marine Corps Logistics Command manages the supply
of repairable generators; the Defense Supply Center Columbus supplies
new generators. During OIF, the 2nd Force Service Support Group was
responsible for moving supply shipments from the port to Iraq, and the
1st Service Support Group[Footnote 50] had responsibility for moving
supplies once they reached Iraq. The 3rd Assault Amphibian Battalion,
part of the 1st Marine Expeditionary Force, was in charge of
maintenance for all AAVs in theater.
Extent and Impact of Shortages:
AAV generators were not available to the warfighter at some point
between October 2002 and September 2004. We consider generators to have
been a shortage because 84 were ordered, but only 15 were received. The
Marine Corps' 3rd Assault Amphibian Battalion experienced a shortage of
generators needed to repair AAVs during and after major combat
operations in Iraq, according to officials. Both the Marine Corps
Logistic Command and GAO have reported that the long distances the
vehicles traveled, combined with combat conditions, placed the
equivalent of 5 years of wear and tear on the vehicles over a 6-to 8-
week period. As a result of this accelerated wear and tear, the
vehicles' parts--including generators--wore out quickly. To meet the
rapid rise in demand (see fig. 7), the battalion submitted orders for
84 generators between January and June 2003. According to supply
management data, the Defense Supply Center Columbus sent 64 new
generators and the Marine Corps Logistics Command sent 76 repaired
generators[Footnote 51]--a total of 140--to the theater during major
combat operations. However, the battalion reported that it received
only 15 generators. Officials from the 1st Force Service Support Group
in Iraq stated they did not know why they did not receive all of the
generators shipped from the Marine Corps Logistics Command and the
Defense Supply Center Columbus.
Figure 7: Assault Amphibian Vehicle Generator Demand and Back Orders
for OIF by Quarter (3rd quarter fiscal year 2001 through 4th quarter
fiscal year 2004):
[See PDF for image]
[End of figure]
While a 3rd Assault Amphibian Battalion official stated their demand
for generators exceeded the number received in theater, they did not
report any decline in AAV operational readiness. The reported
operational readiness of AAVs in the Iraqi theater remained at about 89
percent most of the time between February 2003 and October
2003.[Footnote 52] However, in order to maintain this readiness rate, a
3rd Assault Amphibian Battalion official noted that spare parts from
about 40 non-operational vehicles were used to support combat capable
vehicles.
Causes of Shortages:
Poor asset visibility in the Marine Corps' in-theater distribution
system contributed to the shortage of generators needed to repair AAVs.
Although good asset visibility is one of the main tenets of logistics
supply systems,[Footnote 53] the Marines had difficulty maintaining
visibility over the 140 generators shipped to the theater. Marine Corps
Logistics Command and Defense Supply Center Columbus officials tracked
generators to the theater, but their visibility over these shipments
ended there. Once the generators arrived in theater, the 2nd Force
Service Support Group became responsible for maintaining visibility of
supply. However, they stated they did not have visibility of the
generators shipped into Iraq. The 1st Force Service Support Group,
which directly supported units fighting in Iraq, also indicated an
inability to track requisitioned supplies. While 15 of the generators
were received by the 3rd Assault Amphibian Battalion, neither the
Marine Corps' Force Service Support Groups nor we were able to track
the remaining 125 generators.
A contributing factor to the shortage of generators was difficulties
the Marine Corps faced in maintaining visibility over requisitioned and
warehoused spare parts because of incompatible and unstable software
and other visibility systems. Before OIF began, the Marines experienced
difficulties maintaining visibility over the generators in their in-
theater distribution center in Kuwait. Defense Supply Center Columbus
officials reported that generators were shipped to the theater to
support requirements forecasted by deploying units. However, according
to an official with the 3rd Assault Amphibian Battalion, instead of
being delivered to the units, generators were warehoused in the
distribution center. One reason for the poor asset visibility at the
warehouse in February 2003, was the failure of the warehousing
software--Storage Retrieval, Automated, Tracking, Integrated System--
to work properly. Moreover, the 1st Force Service Support Group used
one version of the Asset Tracking Logistics and Supply System (ATLASS)
requisitioning software in theater, while the 2nd Force Service Support
Group used another version, ATLASS II+. Because the two versions could
not interface, personnel of the 1st Force Service Support Group
reported that they reentered requisition information manually to move
data between the systems. Personnel at the Marine's distribution center
in Kuwait entered requisitions into the Supported Activity Supply
System, a stand-alone inventory system. According to Marine Corps
Logistics officials, neither system could track requisitions or parts
related to them through the supply requisition process.
In addition, Marine Corps personnel were expected to use radio
frequency identification[Footnote 54] technology to help maintain asset
visibility during supply distribution. According to 2nd Force Service
Support Group personnel, Marine units in theater did not have
sufficient training or equipment to read the tags in order to support
the use of this technology.
Efforts to Improve Availability:
Short-term Efforts:
When the supply system did not respond to the demand for generators,
Marine Corps personnel noted that units went outside the supply system,
through e-mail and telephone communications, to locate supplies, such
as generators, for AAVs and other equipment.
To minimize data entry errors, Marine Corps personnel developed an
electronic process to transfer data between the ATLASS and ATLASS II+
software systems. According to logistics personnel, to improve
visibility of requisitions through the system, the Marine Corps
streamlined its requisitioning process by using ATLASS to enter
requisitions into the Supported Activity Supply System and by
eliminating the use of ATLASS II+ in theater.
To support greater use of radio frequency identification tags in
theater, the Marine Corps, according to the 2nd Force Service Support
Group officials, has provided training to personnel deploying to Iraq
and increased the use of the technology to improve asset visibility.
Long-term Efforts:
According to 2nd Service Support Group officials, the Marine Corps is
evaluating an Army information system that monitors assets moving
through the supply system to determine if the Army's system can be
adapted for Marine Corps use.
The 2nd Marine Expeditionary Force has developed a Marine Air-Ground
Task Force Distribution Center initiative. The Marines stated that the
initiative, implemented in September 2004, helps them manage the
distribution system by bringing together the Traffic Management Office,
deployed supply units, and transportation assets to replicate the in-
theater supply process. The initiative will enable them to fully
replicate the supply system, including the use of radio frequency
identification tags and satellite transponders.
[End of section]
Appendix III: Armored Vehicle Track Shoes:
Background:
During OIF, U.S. forces relied heavily on armored vehicles such as
Abrams tanks and Bradley Fighting Vehicles.[Footnote 55] For example,
at the beginning of combat operations in Iraq, the 3rd Infantry
Division had a fleet of 252 Abrams tanks and 325 Bradley Fighting
Vehicles drawn from Army prepositioned stock. Troops used Abrams tanks
to lead attacks in urban areas with the support of infantry equipped
with Bradley Fighting Vehicles. Army officials said that Abrams tanks
and Bradley Fighting Vehicles were extremely effective for operations
in urban terrain. Critical components of both types of armored vehicles
are the track that enables the vehicles to move, which are composed of
dozens of metal shoes[Footnote 56] (see fig. 8).
Figure 8: Abrams Tank Track:
[See PDF for image]
[End of figure]
The Army's TACOM Track and Roadwheel Group buys the track shoes that
are used on Abrams tanks and Bradley Fighting Vehicles. Goodyear is the
sole source supplier of Abrams track shoes and the major producer of
Bradley track shoes. VAREC also produces Bradley track shoes. In fiscal
year 2003, TACOM reported spending $195.2 million to purchase track
shoes for all tanks and vehicles. However, worldwide demand for Abrams
and Bradley track shoes totaled $257.4 million. Of the $195.2 million,
TACOM reportedly spent $98.6 million on Abrams track shoes and $52.4
million on Bradley track shoes.
We were unable to obtain reliable data on forecasted requirements,
demands, back orders, and inventory for track shoes from TACOM's Track
and Roadwheel Group. The group's officials told us that because the
models and studies used to compute the data can produce inaccurate
results, they could not validate the data. As a result, we were unable
to document the extent of shortages based on these data. However, group
officials were able to provide us with data used to inform AMC on the
status of track shoe shortages. According to TACOM, these data are
based on information provided by units in theater and best represent
true demand. We corroborated this secondary data with classified data
and used it in our analysis.
Extent and Impact of Shortages:
Track shoes for the Abrams tanks and Bradley Fighting Vehicles were not
available to the warfighter at some time between October 2002 and
September 2004. We consider this item to have a shortage because demand
exceeded the amount of inventory available to meet the needs of the war
fighters.
U.S. forces and logistics personnel reported critical shortages of
track shoes for Abrams tanks and Bradley Fighting Vehicles during OIF,
and these shortages negatively affected their mission. In undertaking
their mission, U.S. forces subjected these tanks and vehicles to the
equivalent of 3 years of high-intensity training during major combat
operations in Iraq. Because of the extensive mileage placed on the
tanks and Bradley vehicles--exacerbated by bad road conditions and
extreme heat--vehicle parts, particularly track shoes, wore out
quickly.
Although TACOM was able to meet the track shoe demands of units
preparing to deploy as well as those already deployed in OIF, it began
to experience difficulties in providing track shoes to units in theater
around April 2003. The demand for Abrams tank and Bradley Fighting
Vehicle track shoes in May 2003 was 5 times the March 2003 forecasted
demand (see table 8). To meet the surge in demand for Abrams track
shoes, TACOM negotiated with Goodyear to increase the production rate
from 15,000 Abrams track shoes per month (from the normal peacetime
rate of 10,000 per month) to 17,000 per month for December 2002, then
to 20,000 per month in May 2003, and to 25,000 per month in July 2003.
However, these increases in production still were not sufficient to
meet OIF demands. In May 2003, for example, the actual demand for
Abrams track shoes rose to more than 55,000.
Table 8: Forecasted and Actual Demand for Abrams and Bradley Track
Shoes (March-May 2003):
March 2003 forecasted demand;
Abrams track shoes: 11,125;
Bradley track shoes: 12,787.
April 2003 actual demand;
Abrams track shoes: 23,462;
Bradley track shoes: 20,678.
May 2003 actual demand;
Abrams track shoes: 55,313;
Bradley track shoes: 55,875.
Source: TACOM.
[End of table]
As a result of track shoe shortages, some Abrams tanks and Bradley
Fighting Vehicles could not operate during the summer months in 2003.
For example, the 4th Infantry Division reported it could not obtain
sufficient quantities of track shoes to meet operational needs. At one
point during post-combat operations, the division had an operational
requirement for 23,626 Abrams track shoes, of which 8,002 were shipped,
but only 1,028 were received. To support the Bradley Fighting Vehicles,
the division had an operational requirement of 29,911 track shoes, of
which 4,591 were shipped, but only 744 were received. As a result of
its inability to obtain more track shoes and other suspension parts,
the 4th Infantry Division reported its readiness rates for both types
of combat vehicles deteriorated. For example, one of its brigades
reported that 11 of its 44 Abrams tanks were unavailable during post
combat operations because of the lack of track shoes.
Track shoe shortages also negatively impacted the 3rd Infantry
Division. On June 11, 2003, the division reported that of the 185
Abrams tanks it had on hand, 111 (60 percent) were deemed "non-mission
capable due to supply." For the 237 Bradley Fighting Vehicles it had on
hand, 159 (67 percent) were deemed non-mission capable due to supply.
According to 3rd Infantry Division officials, the reason tanks and
vehicles were unavailable was because replacement track shoes were not
available to the units. For example, between April 16-18, 2003, one
divisional supply support activities in Kuwait had 22,074 Abrams track
shoes and 18,762 Bradley track shoes on back order.
To alleviate the impact of track shoe shortages on Bradley Fighting
Vehicle readiness, theater commanders wanted to bring an additional
1,407 up-armored HMMWVs into theater. However, as detailed in appendix
X, the procurement of additional up-armored HMMWVs was also
problematic.
Causes of Shortages:
Inaccurate war reserves requirements, inaccurate forecasted
requirements, and erratic funding affected TACOM's ability to provide
track shoes.
Inaccurate War Reserve Requirements:
Inaccurate war reserves requirements negatively affected TACOM's
ability to provide track shoes to units in theater at the beginning of
OIF. Governed by Army Regulation 710-1, war reserves are intended to
provide the Army with interim support to sustain operations until it
can be resupplied with materiel from the industrial base. For TACOM,
the war reserve requirement for 3,635 Abrams track shoes and 1,800
Bradley track shoes identified in September 2001 was not enough to
support OIF demands. Although the war reserve requirement increased in
December 2002, the new requirement for 5,230 Abrams track shoes and
5,626 Bradley track shoes was still not enough to meet demands.
To more accurately reflect track shoe usage in OIF, TACOM officials, in
December 2003, increased the war reserves requirements to 32,686 Abrams
track shoes and 34,864 Bradley track shoes. TACOM officials made the
change manually rather than using the Army War Reserve Automated
Process,[Footnote 57] which was last run in fiscal year 1999. Since
then, the number and type of vehicles have changed, but the official
process has not been performed again to update the requirements. TACOM
officials have been waiting for input based on the defense planning
guidance from the Department of the Army to initiate a new process. At
the time of our review, they were not certain when they would receive
the guidance. Until the model is run, TACOM officials will continue to
make manual changes to war reserves requirements.
In addition, both we and Accenture have questioned the validity of the
Army's war reserve requirements. In a 2001 report, we found that war
reserve requirements could be inaccurate because the calculations were
not updated to reflect new consumption rates; requirements
determination methodology might not be consistent with planned
battlefield maintenance practices; and requirements were based on
internal estimates of what the industrial-base could provide rather
than on well-defined industry data itself.[Footnote 58] A 2003 study by
Accenture concluded that part of the reason for the low war reserve
requirements was that the forecasting process is labor intensive, time
consuming, and suffers from inaccurate input data.[Footnote 59]
Inaccurate Forecasted Requirements:
In fiscal year 2003, TACOM underestimated the amount of Abrams and
Bradley track shoes needed worldwide. Although TACOM revised its
requirements at the end of each quarter, its estimates for Abrams and
Bradley track shoes still fell short.
For example, in April 2003 the forecasted monthly requirement for
Abrams track shoes was 11,125, which was less than half of the actual
demand of 23,462 shoes. The track shoe budget forecasts further
illustrate the discrepancy between forecasted and actual requirements.
Based on its budget-forecasting tool, TACOM forecasted it would need
$46.8 million for Abrams track shoe purchases for fiscal year 2003. At
the end of the year, actual demands for Abrams track shoe totaled
$194.9 million--a 416 percent increase. For Bradley track shoes, the
group forecasted it would need $17.8 million in fiscal year 2003 to
meet customer demands. However, actual demands totaled $62.6 million--
a 351 percent increase--by the end of the fiscal year.
Even if TACOM's revised track shoe estimates had been accurate, it
would have been too late to meet the summer 2003 demand. In order to
have supplies on hand when demands are received, item managers need to
award contracts allowing for sufficient procurement lead-
time.[Footnote 60] TACOM officials explained that track shoe
manufacturers need an average of 4 to 6 months to produce and deliver
track shoes once they receive a contract. The high demands for track
shoes in the late spring and summer of 2003 were not forecasted in
October 2002, which would have been the time when contracts should have
been awarded so that TACOM could adequately meet customer needs.
The failure to forecast the high demand experienced during the early
months of OIF was partly due to the requirements forecasting model used
and to the lack of information and guidance provided to TACOM. In its
conclusions, the Accenture study on track shoe shortages found that the
requirements forecasting model failed to accurately forecast future
demands because the model uses a simple moving average based on 24
months of historical demand[Footnote 61] that does not support dynamic
changes in item usage. This meant that large increases in demand during
the last couple of months of the 24-month period would not result in a
corresponding increase in the forecasted demand. In addition, TACOM
officials stated they did not receive adequate planning guidance on
operational plans from AMC prior to the onset of combat operations that
they could incorporate into their forecasts for track shoes.
Consequently, TACOM determined the requirements based on the model and
on the item managers' expertise and knowledge of the item, as allowed
under Army Regulation 710-1.
Subsequent requirements throughout fiscal year 2003 also were
understated. TACOM officials reported that although they regularly
requested information about the track shoes' usage and durability,
which would have helped them better gauge actual demand, they received
limited information and input from units in the field. As OIF continued
throughout 2003, TACOM held teleconferences with AMC Logistics Support
Element representatives and with units in theater to obtain updated
information about item usage.
Erratic Funding for Track Shoe Production:
During fiscal year 2003, TACOM did not receive sufficient obligation
authority in time to buy track shoes to meet growing demands. TACOM's
total funding requirements in fiscal year 2003 amounted to $257.4
million--$194.9 million for Abrams track shoes and $62.5 million for
Bradley track shoes. TACOM officials told us that they could not buy
sufficient track shoes because they had received only $216 million in
obligation authority to buy all of the items they managed. However,
TACOM spent only $151.0 million on track shoes-- $98.6 million for
Abrams tanks and $52.4 million for Bradley Fighting Vehicles.
In addition to insufficient obligation authority, the uncertainty of
the funding flow affected the manufacturer's ability to produce track
shoes. A primary producer of track shoes for TACOM, Goodyear, was in
danger of closing down its track shoe production plant in April 2003
because of a lack of contracts. TACOM officials stated that they could
not award contracts consistently because they did not know how much
obligation authority they would receive or when the next allotment
would arrive. Because of the acute shortage of track shoes, TACOM
immediately awarded contracts to Goodyear whenever obligation authority
became available. As a result of accelerated deliveries, Goodyear
reported that it had a very low level of remaining workload and was in
danger of closing down the track shoe production plant unless it
received additional contracts.
According to TACOM officials, additional obligation authority was
aggressively requested throughout fiscal year 2003 to support purchases
of track shoes as well as other supply items. As an item critical to
mission success, officials stated that track shoes usually receive more
funding than other commodities managed by TACOM; however, releases of
additional obligation authority were delayed in some instances. TACOM
officials stated that when they need additional obligation authority,
they request it from AMC, which then requests it from Army
headquarters. These requests must be validated and justified (based on
past sales) at each level before the Office of the Under Secretary
Defense (Comptroller) approves for the release of additional obligation
authority. TACOM officials expressed frustration with the process and
complained that both AMC and Army Headquarters were not aggressively
pursuing the issue and did not fully grasp the magnitude of impact to
units in theater because of the lack of obligation authority provided
to item managers.
Efforts to Improve Availability:
Short-term Efforts:
To address inaccuracies in war reserve requirements, TACOM has manually
updated its requirements levels for track shoes, rather than wait for
AMC to implement the next Army War Reserve Automated Process.
To overcome inaccuracies in the requirements forecasting model, TACOM
depended on item managers' judgment and expertise to determine demand
more accurately. Item managers worked with available information
provided by AMC and with input from units in theater. In addition,
priority was given to the Iraqi theater of operations and available
track shoe production was shipped to support units in Iraq. TACOM
worked with theater commanders to expedite and prioritize shipments of
track shoes.
To address funding shortfalls, TACOM continually requested that any
additional obligation authority be made available to buy track shoes
during fiscal year 2003. Because track shoes were considered critical
mission-essential items and their shortage greatly impacted theater
operations, officials from the Track and Roadwheel Group said that they
usually received more funding and attention than other supply groups
within TACOM. For example, in June 2003, the Track and Roadwheel Group
received $64 million that was specifically meant to prevent Goodyear
from closing down its track shoe production plant. In August 2003,
TACOM received an additional $70 million for track shoe purchases.
To improve track shoe availability during OIF, the Army made a $5.2
million investment in Goodyear production facilities to meet the surge
requirements and to sustain the viability of the track shoe
supplier.[Footnote 62]
Long-term Efforts:
At the time of this review, TACOM officials did not identify any long-
term efforts to correct problems identified with war reserves,
requirements, or funding shortfalls.
[End of section]
Appendix IV: Interceptor Body Armor:
Background:
The U.S. military's new Interceptor body armor is composed of two
primary components: an Outer Tactical Vest and two Small Arms
Protective Insert plates (see fig. 9). The Outer Tactical Vest consists
of a combination of a soft fabric vest and para-aramid fiber panels
that provide protection against shrapnel and 9 mm ammunition. The
plates consist of a combination of ceramic tiles and polyethylene fiber
[Footnote 63] that, when inserted into the vest, provide protection
against rifle rounds up to 7.62 mm. The vest accepts two plates, one
for the front and one for the back. Additional attachments can increase
protection.[Footnote 64]
The new body armor provides improved protection and weigh less than the
older version--the Personnel Armor System for Ground Troops, or "flak"
vest--which protects only against shrapnel. The new body armor weighs
16.4 pounds, while the older vest weighs 25.1 pounds.
Figure 9: Interceptor Body Armor:
[See PDF for image]
[End of figure]
The Army planned to issue the Interceptor body armor to U.S. forces
over an 8-year period between 2000 and 2007. It began to distribute the
armor to military personnel during Operation Enduring Freedom. On the
basis of the armor's effectiveness the Army decided to accelerate its
fielding for OIF.
DLA's Defense Supply Center Philadelphia manages the Interceptor body
armor for the Army. The Marine Corps has its own version of the body
armor that is constructed with the same materials as the Army version.
The Marine Corps Systems Command and the U.S. Army Robert Morris
Acquisition Center manage it for the Marine Corps. Both services rely
on the same manufacturers.
Extent and Impact of Shortages:
Interceptor body armor was not available in sufficient quantities to
U.S. military forces in Iraq sometime between October 2002 and
September 2004. We consider this item to have a shortage because demand
exceeded the production output necessary to meet the needs of the war
fighter. While there were shortages of Interceptor body armor during
OIF, Coalition Forces Land Component Command officials stated that
military personnel deployed with either the vest component of the new
body armor or the old body armor. CENTCOM officials stated that all
personnel in Iraq had the new armor by January 2004; 8 months after
combat operations were declared over.
The new body armor was initially intended for limited numbers of
personnel, such as dismounted infantry, however, this changed during
OIF. In May 2003, the Army changed the basis of issue to include every
soldier in Iraq. Then in October 2003, CENTCOM further expanded
issuance of the body armor to include all U.S. military and DOD
civilian personnel working within CENTCOM's area of responsibility
including Iraq, Kuwait, and Afghanistan.
Demand for the vest component part of Interceptor body armor increased
rapidly both at the beginning of OIF, when troops began combat
operations, and again in late 2003 during stabilization operations.
Worldwide quarterly demand for vests rose from 8,593 in December 2002
to 77,052 in March 2003--the onset of combat operations. The demand for
vests continued to spike upward topping out at 210,783 in December
2003. The number of back orders also rapidly increased over this period
of time (see fig. 10). By December 2003 the worldwide number of back
orders reached 328,023 with DLA mandating that OIF requisitions receive
priority. In contrast, during December 2003 the number of vests
actually produced to meet demand was only 23,900.
Figure 10: Worldwide Demand, Production Output, and Back Orders for
Vests by Quarter (December 2001 through September 2004):
[See PDF for image]
Notes: Back order data were not available for the period between
October 2002 and February 2003.
[End of figure]
Similarly, the demand for plates increased with the onset of combat
operations and again during stabilization operations in late 2003. The
demand for plates increased more than ten-fold, from a quarterly demand
of 9,586 plates in December 2002 to a quarterly demand of 108,808
plates in March 2003 at the beginning of OIF. As figure 11 shows, with
the change in the basis of issue for the Interceptor body armor in
October 2003, the demand for plates rose rapidly again, peaking at
478,541 plates in December 2003. In addition, during late 2003, the
number of back orders for plates also increased rapidly. By November
2003, the number of worldwide back orders peaked at 597,739 plates,
with DLA giving OIF requisitions priority. In contrast, during this
month, production output totaled only 40,495 plates.
Figure 11: Worldwide Demand, Production Output, and Back Orders for
Plates by Quarter (December 2001 through September 2004):
[See PDF for image]
Note: Back order data were not available for the period between October
2002 and February 2003.
[End of figure]
Military officials expressed serious concerns over the shortage of
Interceptor body armor. Army officials stated that soldiers' morale
declined as units waited for the armor to reach theater. Because of the
shortages, CENTCOM officials stated they prioritized the issue of the
new body armor to those who were most vulnerable. In addition, there
was a lack of body armor among support personnel, such as the Army's
377th Theater Support Command, while insurgents were attacking and
interdicting supply routes in Iraq. Because of the shortages, many
individuals bought body armor with personal funds. The Congressional
Budget Office estimated (1) that as many as 10,000 personnel purchased
vests, (2) as many as 20,000 purchased plates with personal funds, and
(3) the total cost to reimburse them would be $16 million in
2005.[Footnote 65]
Causes of Shortages:
Temporary shortages of the Interceptor body armor occurred because of
acquisition delays related to lack of key materials and distribution
problems in theater.
Lack of Critical Materials Delayed Acquisition:
A lack of sufficient quantities of key materials used to make vests and
plates delayed acquisition to meet the increasing demand for
Interceptor body armor. According to DLA officials, shortages of
critical materials still limit worldwide production to approximately
35,000 vests and 50,000 plates per month. A production lead-time of
three months has also limited the industrial-base's capacity to
accelerate its production levels to meet increasing demand.
DLA officials stated that the production of vests and plates was
impaired by a limited availability of critical materials. The shortfall
of vests was due to a lack of Kevlar, a para-aramid fiber that was in
short supply. DuPont Chemicals is the only domestic producer of the
para-aramid fiber panels used in the vests. However, an exception under
the Defense Federal Acquisition Regulation Supplement[Footnote 66]
allowed vest contractors to use Twaron[Footnote 67] fiber panels
manufactured in the Netherlands as a replacement for Kevlar fiber
panels.
The shortfall in ceramic plates was due to insufficient quantities of
two materials needed to produce them. The initial shortfall was due to
the limited availability of SpectraShield.[Footnote 68] Until April
2004, Honeywell was the only domestic producer of SpectraShield, and it
had other competing commercial requirements for the material. Plate
producers responded to the limited availability of SpectraShield by
manufacturing modified plates that replaced SpectraShield with Kevlar
and other para-aramid fiber materials. While these plates met ballistic
protection requirements, they weighed a half pound more and required a
service waiver for acceptance.
In April 2004, DSM Dyneema, a foreign firm that produces Dyneema, a
SpectraShield-equivalent, opened a production facility in the U.S. and
began to produce and sell the product. SpectraShield and Dyneema are
the only materials that meet the services' ballistic protection and
weight requirements for Interceptor body armor. Due to their limited
availability, both materials are under Defense Priorities and
Allocation System control.[Footnote 69] Plate production was later
constrained by the limited availability of ceramic tiles. According to
DLA, current production output is subject to further increase as DSM
Dyneema increases its Dyneema production and additional ceramic tiles
are qualified as meeting specification requirements.
Accelerated Fielding Affected Distribution:
Attempts to accelerate fielding of the new body armor met with some
success, but also caused problems. According to an Army Office of the
Inspector General report,[Footnote 70] accelerated fielding resulted in
supplying body armor to soldiers at a much faster pace than normal. The
armor was distributed in some cases virtually directly from the factory
to the warfighter. The report stated that the accelerated fielding did
not allow time for the project manager to coordinate with units and
allow them to establish sufficient accountability in theater, as
required by Army regulations. However, lack of in-transit visibility,
inaccurate reporting of on-hand quantities, lag time in recording
receipt of plates, and other accounting errors resulted in temporary
loss of visibility of between 5,000 and 30,000 sets of plates.
Efforts to Improve Availability:
Short-term Efforts:
To meet the surging demand for plates, DOD used authority under the
Defense Production Act[Footnote 71] to allocate production of
SpectraShield. More specifically, the Office of the Deputy Under
Secretary of Defense (Industrial Policy) used its authority under the
Defense Priorities and Allocation System to direct Honeywell to
accelerate deliveries of SpectraShield in support of OIF on six
occasions in 2003. According to the Acting Under Secretary of Defense
(Acquisition, Technology, and Logistics), Honeywell did this at the
expense of its commercial orders. To increase industrial-base
production capacity, DLA stated that it increased its number of vest
suppliers from 1 to 4; plate manufacturers from 3 to 8 (including
manufacturers of overweight plates); and ceramic tile suppliers from 4
to 10 (including suppliers of overweight tiles).
Long-term Efforts:
DLA has recommended that it have management of Interceptor body armor
requirements for all of the services. It has recommended that the
services establish war reserve stock levels for the new body armor to
mitigate lead-time in industrial-base production. It has also requested
the authority to purchase and maintain an inventory of materials
necessary for producing vests and plates as well as contract with
vendors who have the capacity to use such stored materials during times
of high demand.
[End of section]
Appendix V: Joint Service Lightweight Integrated Suit Technology Suits:
Background:
JSLIST is a protective clothing ensemble that includes a lightweight
chemical-biological protective suit, multi-purpose over-boots, and
gloves (see fig. 12). When combined with a chemical protective mask,
JSLIST provides protection from chemical and biological agents. The
suit can be worn over a uniform and body armor. Once it is removed from
the packages, the suit can provide protection for 45 continuous days.
However, once exposed to an agent, it must be replaced within 24 hours.
The sealed suit package has a shelf life of 14 years. The U.S. military
began fielding JSLIST in November 2002. Before then, the Army relied on
the Battle Dress Overgarment and the Marine Corps depended on the
Saratoga suit.
Figure 12: Joint Service Lightweight Integrated Suit Technology Suit:
[See PDF for image]
[End of figure]
Although the military services manage their own inventories of JSLIST
suits, DLA serves as the contracting agent. The largest producer is the
National Institute for the Severely Handicapped. The primary
subcontractor, Blücher, a German company, makes the suit's filter
fabric liner. A critical component of the liner is the carbon beads,
which absorb chemical and biological agents. The carbon beads are
produced for Blücher--through a sole source contract--by a Japanese
company, Kureha.
Extent and Impact of Perceived Shortages during OIF:
JSLIST was perceived to not be available for the warfighter between
October 2002 and September 2004; however, we do not consider this a
shortage because all personnel in theater were issued a JSLIST or
Saratoga suit and the required spare by February 22, 2003. Some Army
officials in theater, as well as National Guard officials in the U.S.,
indicated a shortage of JSLIST; however our analysis indicated no
actual shortage. Despite this perception of a shortage, neither the
Army nor Marine Corps indicated any impact on operational capabilities
of deployed units. The Army began to field additional JSLIST suits to
units deployed in theater in November 2002, in response to a
congressional request.[Footnote 72] By February 22, 2003, the Army's
Central Command reported that every Army unit had two suits for every
soldier in theater; moreover, the theater supply base had one spare
suit for every soldier. Similarly, the Marine Corps reported it had
sufficient stock during OIF to issue one Saratoga suit[Footnote 73] and
hold two additional suits for each Marine.
Reasons for Perceived Shortages:
The perception of a JSLIST shortage emerged in late 2002 and early 2003
because of a change in requirements, poor asset visibility, and
concerns about production capacity.
Requirements Changed in Fall 2002:
Changes in requirements increased the demand for JSLIST. Before October
2002, the Army's and Marine Corps' requirements called for one chemical-
biological protective suit and one backup for each soldier or marine in
theater. To meet this requirement, the services planned to use the
older suits (e.g., the Army's Battle Dress Overgarment and the Marine's
Saratoga suit) and eventually supplemented them with the newer JSLIST.
In October 2002, however, the House Committee on Government Reform
requested that DOD direct the services to issue JSLIST to all U.S.
forces stationed in the Middle East, thereby increasing the servicewide
demand for JSLIST. According to Marine Corps officials, this request
expanded the number of personnel who needed suits to include not only
DOD military personnel but also DOD civilian contractors and members of
other external organizations. Although Marine Corps officials state
they planned to provide protective suits for non-military personnel
before the congressional request, and had acquired and stocked 400 sets
of Saratoga suits for this eventuality, they found more personnel than
expected who needed the protective gear. Although the services were
required to provide suits for all personnel in theater, there was no
DOD policy to guide the procurement of these items.
Although the availability of JSLIST was sufficient, the sizes of the
available suits were a problem for some soldiers. Initial orders for
JSLIST did not take into account the fact that the suits would be worn
over body armor and, thus, larger sizes were needed. According to DLA
officials, units also did not consider that some National Guardsmen and
reservists would need larger suits than those typically stocked to
support the active-duty forces.
Lack of Asset Visibility:
In some cases, the poor visibility[Footnote 74] over National Guard and
Army Reserve supply inventories affected the perceived nonavailability
of JSLIST. For example, Army officials noted that some National Guard
and reserve units could not promptly find a sufficient number of JSLIST
in their inventory to meet requirements. Their inventory systems did
not provide visibility over inventory in different locations.[Footnote
75] As a result, Army officials said the deployment of National Guard
and reservist personnel was delayed until a sufficient number of JSLIST
were located within their inventory.
Production Concerns:
Although DLA reported operational unit concerns about the production of
carbon beads, the agency was able to meet suit demand during OIF.
Because of the single source subcontractor's limited ability to produce
carbon beads, the total monthly production was limited to 70,000 to
80,000 suits. DLA officials stated this level of production was
sufficient to meet JSLIST requirements and prior GAO analysis supports
their claim.[Footnote 76] However, DLA officials noted they are
concerned about their ability to meet the services' current requirement
to replace the 400,000 to 500,000 suits issued in OIF.
Efforts to Improve Availability:
Short-term Efforts:
To meet the additional requirement to supply DOD civilian contractors
and other non-military personnel with JSLIST, Army officials noted that
suits were shipped directly to the theater for issue. In addition,
Marine Corps officials reported drawing on their prepositioned war
reserve stocks to meet the additional requirement.
To meet the demand for larger sizes, the Director of DLA testified that
DLA provided 2,000 custom-made suits for personnel outside the original
size range.[Footnote 77] Moreover, Army officials said that Federal
Express was used to expedite the shipment of these suits.
Long-term Efforts:
To meet suit requirements for all personnel in theater, Army officials
report that DLA has introduced four larger suit sizes into its
inventory.
As part of an effort to improve asset visibility, the Department of the
Army has implemented an Individual Protective Equipment Centralized
Management Initiative designed to provide units with visibility and
shelf-life management of inventory in the United States.
To increase production capability, DLA officials stated that they
worked in conjunction with DOD to increase the production capability of
the existing industrial base and to develop new protective suits for
future use. For example, DLA officials stated that Blücher is
conducting research to develop an alternative carbon bead in order to
reduce reliance on a sole source producer. In addition, they announced
that in June 2004, the JSLIST Additional Source Qualification program
at Quantico, Virginia, accepted the use of a new bead from Blücher,
which will be available for future suits.
[End of section]
Appendix VI: BA-5590 and BA-5390 Lithium Batteries:
Background:
BA-5590 and BA-5390 nonrechargeable lithium batteries[Footnote 78]
provide a portable power source for nearly 60 critical military
communication and electronic systems, including the Single Channel
Ground and Airborne Radio System, the Javelin missile guidance system,
and the KY-57 transmission security device. U.S. troops depend on these
systems to communicate, acquire targets, and gain situational awareness
on the battlefield. The BA-5590 was developed specifically for military
use more than a decade ago and, according to military officials, is the
most widely used communications battery in the supply system (see fig.
13). The BA-5390 served as a substitute battery when shortages of BA-
5590s occurred during OIF. Prior to the start of Operation Enduring
Freedom, the Army was moving to a rechargeable battery at the direction
of the Environmental Protection Agency. Funding was provided for the
environmentally safe battery, not the disposable lithium battery.
However, these disposable batteries are well-adapted to fast-paced
mobile operations because they do not have to be recharged.
Figure 13: BA-5590 Lithium Battery:
[See PDF for image]
[End of figure]
Before OIF, SAFT manufactured all BA-5590 lithium batteries for the
U.S. military. In late 2002, Ultralife Batteries started supplying BA-
5390s to the military and in early 2003 Eagle-Picher Technologies began
delivering BA-5590s to augment SAFT's output.
Before and during OIF, CECOM's Logistics and Readiness Center bought
and managed DOD's family of lithium batteries. As of September 30,
2004, this responsibility was transferred to DLA's Defense Supply
Center Richmond. CECOM, however, will continue to be responsible for
technical issues related to lithium batteries.
During the time period covered by our review, CECOM used several
methods to derive inventory management data. Before July 2003, CECOM
used the old Commodity Command Standard System. We consider data
derived from this legacy system to be sufficiently reliable for our
purposes. In July 2003, CECOM converted to a new database, the
Logistics Modernization Program, which encountered stabilization and
data clean-up issues. To overcome these issues, CECOM item managers
obtained inventory management information from the Logistics
Modernization Program as well as manual computations. While these data
are sufficiently reliable for the purpose of showing trends and graphs,
our findings rely primarily on data from the Commodity Command Standard
System from the period before July 2003.
Extent and Impact of Shortages:
Nonrechargeable lithium batteries, specifically BA-5590s and BA-5390s,
were available in limited quantities to the warfighter between October
2002 and September 2004. We consider this to be a shortage because the
monthly demand and back orders for these batteries exceeded the monthly
inventory that CECOM had available to supply U.S. forces in OIF.
While demand for nonrechargeable lithium batteries increased
dramatically after September 11, 2001, it quickly outpaced the
available supply, as U.S. troops began preparing for combat operations
in Iraq. Demand rose from a peacetime average of below 20,000
batteries[Footnote 79] per month before September 2001 to an average of
38,313 batteries per month after the United States launched the global
war on terrorism and Operation Enduring Freedom in
Afghanistan.[Footnote 80] In January 2003, as thousands of troops were
deploying to the Gulf region, the number of batteries requisitioned
surged to 140,000 and, in April 2003 during major combat operations,
the number peaked at 330,600 (see fig. 14). When major combat
operations were declared over in May 2003, demand began to fall. Since
the fall of 2003, the demand has leveled off to an average of about
62,000 per month.
Figure 14: Worldwide Demand, Inventory Levels, and Back Orders for BA-
5590 and BA-5390 Lithium Batteries by Month (October 2001 through
August 2004):
[See PDF for image]
Note: Data on inventory and back orders was not available for October
and November 2001.
[End of figure]
U.S. troops encountered severe shortages of nonrechargeable lithium
batteries because inventory levels (including on-hand and war reserve
stocks) were low. As figure 14 shows, inventory levels remained on
average below 15,000 batteries during 2002 and into early 2003,
increasing only in May 2003 after major combat operations were declared
over and demand began to decline. At the same time, the number of back-
ordered batteries grew to about 250,000 in January 2003 and, by May
2003, had nearly quadrupled to 900,000. As demand fell and requisitions
were filled, the number of back orders began to drop in the summer of
2003 and, by the end of 2003, inventory levels exceeded back orders.
Army and Marine Corps units faced critically low supplies of BA-5590s
and BA-5390s during the spring of 2003. On March 24, 2003, a few days
after combat operations began, the Marines reported they were down to
less than a 2-day supply (rather than the required 30-day, on-hand
safety level). In early April, Marine officials projected that, given
existing worldwide inventories, production capacity, and consumption
rates, they would experience degraded communications capacity by early
May if the war continued at the same pace. To mitigate the shortages,
the military took some actions, including requiring stationary units to
use alternative power sources (e.g., rechargeable batteries) and
instituting a weekly Materiel Priority Allocation Board[Footnote 81]
meeting to apportion batteries to combat units that needed them the
most.
Causes of the Shortages:
The critical shortages of BA-5590s and BA-5390s during OIF resulted
from four related conditions: inadequate war reserve requirements,
inaccurate forecasted requirements, lack of full-funding, and
acquisition delays due to industrial-base limitations.
Inadequate War Reserve Requirements:
The Army's war reserve requirements for nonrechargeable lithium
batteries were not sufficient to support initial operations. According
to Army Regulation 710-1, the war reserve is intended to provide the
Army with interim support to sustain operations until it can be
resupplied with material from the industrial base. According to CECOM
officials, before OIF, the war reserve requirement for BA-5590s was set
at about:
180,000 batteries to sustain the first 45 days of war.[Footnote 82]
However, this amount was considerably below the actual demand of nearly
620,000 batteries recorded during March and April 2003. Officials
stated that the low pre-war requirement was generated by the Army's war
reserve model,[Footnote 83] which was last updated in 1999; moreover,
this model used inaccurate battery failure rates and did not include
all of the equipment that used nonrechargeable lithium batteries. Based
on their experience during OIF, CECOM officials have increased the
current Army and Marine Corps war reserve requirement for BA-5590s and
BA-5390s to more than 1.5 million total batteries, an amount equal to
OIF's average monthly demand of 250,000 batteries times 6 months of
continuous combat operations. War reserve planners expected inventories
to reach the 1.5 million mark by February 2005.
Inaccurate Forecasted Requirements:
In addition to low war reserves, CECOM's official monthly forecasted
requirements for nonrechargeable lithium batteries were far below those
needed to meet a wartime contingency. Forecasted requirements are
developed primarily on the basis of actual demand data for an item from
the preceding months[Footnote 84] and are used to support funding
requests to purchase additional supplies. In 2002, CECOM increased its
monthly forecasted requirements from a monthly peacetime norm of 24,000
batteries to a monthly average of 36,000 in response to the global war
on terrorism (see fig. 15). These monthly requirements grew to nearly
60,000 in March 2003 when combat operations began in Iraq, but this
number was only one-fifth of the actual demand recorded that spring.
Forecasted requirements continued to lag behind demand until mid-summer
when they caught up. According to officials from Central Command Joint
Logistics, the pre-OIF monthly requirement figures were low because
some combatant commanders did not submit their requirements and
estimates did not reflect all battery usage; as a result, officials
said that calculating requirements was purely guesswork.
Figure 15: Worldwide Forecasted Requirements, Demand, and Production
Output for BA-5590 and BA-5390 Lithium Batteries by Month (October 2001
through August 2004):
[See PDF for image]
Notes:
(1) The jump in forecasted requirements in April 2003 was the result of
reducing the demand base to 6 months to calculate requirements.
(2) According to CECOM, fluctuations in production output after July
2003 reflect changes in deliveries from one month to the other.
[End of figure]
In the summer of 2002, CECOM and AMC officials developed a more
realistic contingency requirement for nonrechargeable lithium
batteries. Using information from the Operation Plan and other sources,
they forecasted a need for 300,000 to 325,000 batteries per
month.[Footnote 85]
As figure 15 shows, this estimate closely paralleled the actual demand
of 330,000 at the height of major combat operations in April 2003.
CECOM officials presented this requirement to AMC and the Joint
Materiel Priorities and Allocation Board in the fall of 2002 to bolster
their request for $38.2 million of additional obligation authority to
ramp up BA-5590 and BA-5390 production. They received the funding in
early December 2002.
Army Decisions Did Not Provide Full Funding for Batteries:
The Army's risk-based decision not to fund full requirements for CECOM,
particularly lithium nonrechargeable batteries, during several years
prior to OIF compounded the shortage problem. As table 9 shows, CECOM
had unfunded requirements ranging from $85 million to $419 million for
the 3 fiscal years up to and including OIF. In fiscal year 2003, for
example, CECOM identified requirements for the command of nearly $1.5
billion, but received less than $1.1 billion in obligation authority
for the year, resulting in an unfunded requirement of $419 million, or
more than 28 percent of the total amount required.
The command's unfunded requirements specifically for BA-5590 lithium
batteries varied from a high of $4.2 million in fiscal year 2001 to a
low of $1.2 million in fiscal year 2002. However, the low figure for
fiscal year 2002 occurred because AMC directed CECOM to spend $11.5
million to specifically support its BA-5590 requirement. Our analysis
shows that even if CECOM had been able to fund 100 percent of its BA-
5590 battery requirement in fiscal year 2002, it would not have been
able to meet the growing demands from the global war on terrorism. A
fully funded requirement ($22.6 million) would have provided about
33,000 batteries per month, and actual demand exceeded that for most of
the year.
Table 9: CECOM Unfunded Requirements for Fiscal Years 2001 through
2003:
Dollars in millions;
CECOM requirements;
Fiscal year 2001: $498;
Fiscal year 2002: $568;
Fiscal year 2003: $1474.7.
CECOM unfunded requirements;
Fiscal year 2001: $85;
Fiscal year 2002: $207;
Fiscal year 2003: $419.
Percent unfunded;
Fiscal year 2001: 17.1%;
Fiscal year 2002: 36.4%;
Fiscal year 2003: 28.4%.
Source: CECOM and AMC data.
[End of table]
Acquisition Delays Due to Industrial-Base Limitations:
The surge in demand for nonrechargeable lithium batteries exceeded the
amount that the industrial base could produce, thereby delaying
acquisition. Before OIF, CECOM had contracted with only one qualified
producer, SAFT, to make BA-5590s. To support the global war on
terrorism, SAFT doubled its production from 32,000 batteries per month
in October 2001 to 60,000 per month in September 2002. After receiving
$38.2 million in additional obligation authority in December 2002,
CECOM increased its orders for BA-5590s with SAFT and added BA-5590s to
its contract with Eagle-Picher. It also contracted with Ultralife to
make a substitute battery, the BA-5390. According to CECOM officials,
both batteries have a 6-month production lead time.[Footnote 86]
Despite CECOM's efforts, the long lead-time precluded the ability of
these three producers to meet the surge in demand during major combat
operations. Army officials stated that if they had received funding
earlier they would have been able to mitigate the effects of this long
lead time. As figure 15 shows, while production output increased to
over 100,000 batteries per month in the spring of 2003, it did not
approach 200,000 until the late summer of 2003 or reach its peak of
250,000 until early in 2004.
A recent study identified a limited industrial base as the primary
cause of the BA-5590 battery shortage. A March 2004 Science
Applications International Corporation report concluded that battery
shortages and lack of availability were an industrial-base
challenge.[Footnote 87] The supplier was not able to increase
production to meet the unforecasted six-fold increase in demand.
Efforts to Improve Availability:
Short-term Efforts:
To overcome production constraints, CECOM negotiated with two other
producers, in addition to SAFT, to manufacture BA-5590s and BA-5390s.
It also worked with the three producers to augment battery production
by going to a 24/7 schedule. In addition to expedite shipments, CECOM
had SAFT bypass the depot and ship batteries directly to Charleston Air
Force Base for air shipment to the theater. According to CECOM, a
capital investment of $5 million was made in the three producers in May
2003 to expand their production capacity.
DOD took a number of actions to get the limited supply of
nonrechargeable batteries to units that needed them most. According to
CENTCOM, the Joint Chiefs of Staff issued a directive to send all
available BA-5590s and BA-5390s to CENTCOM's area of responsibility
until June 2003. The Joint Staff also put these batteries on the
"critical few list," which focused attention on improving the
availability of specific items the services and geographic combatant
commands reported as critical to their worldwide operations. CECOM and
Marine Corps officials said they shifted available batteries from
military installations worldwide and also bought batteries on the
commercial market. The Army, Marines, and Coalition Forces Land
Component Command also directed troops, especially those in rear units,
to use rechargeable batteries when possible. In addition, the Army
required soldiers to use rechargeable batteries for garrison duty and
training and to maximize their use during peacekeeping operations.
Marine combat units were instructed to do everything possible to reduce
nonrechargeable battery consumption rates. Moreover, Coalition Forces
Land Component Command was appointed the theater's item manager for
batteries, with responsibility for prioritizing and releasing batteries
to units.
Long-term Efforts:
To correct problems with war reserve requirements, CECOM officials said
they set the current war reserve requirement for BA-5590s and BA-5390s
to more than 1.5 million batteries to better reflect the experiences in
OIF. This requirement was expected to be filled by February 2005.
To improve battery availability, the Deputy Under Secretary of Defense
for Logistics and Materiel Readiness, in January 2004, directed the
transfer of battery inventory management from CECOM to DLA as of
September 30, 2004.
In terms of technological efforts, CECOM officials said they are
developing newer, lighter-weight rechargeable batteries that could be
powered by solar panels or other energy sources while troops are on the
move to reduce dependence on disposable batteries.
[End of section]
Appendix VII: Marine Corps Helicopter Rotor Blades:
Background:
During Operation Iraqi Freedom, the Marine Corps relied on a variety of
helicopters to support its forces during combat operations. These
include the UH-1N Huey, a twin-engine utility helicopter used in
command and control, re-supply, casualty evacuation, liaison, and troop
transport, and the CH-53E Super Stallion, a triple-engine cargo
helicopter used to transport heavy equipment and supplies. Both types
of helicopters require numerous spare parts, including rotor blades, to
maintain their operational status (see fig. 16). In Iraq, Marines
reported that enemy fire and harsh environmental conditions, such as
heat, sand, and unimproved airfields, increased the wear and tear on
the rotor blades.
Figure 16: Rotor Blades on CH-53E Super Stallion:
[See PDF for image]
[End of figure]
All Marine Corps helicopter spare part supplies, including rotor
blades, are managed by the Naval Inventory Control Point Philadelphia.
No Supply Shortages Existed During Operation Iraqi Freedom:
There were no shortages of rotor blades between October 2002 and
September 2004, although there were indications of concern due to
increased wear and tear caused by operating from unimproved airfields,
the harsh environment, and back orders. We do not consider this a
shortage because the supply system filled back orders within 2 months
and Marine Corps officials from the 3rd Marine Air Wing reported no
major supply shortages of rotor blades for the UH-1N and CH-53E
helicopters during OIF. The supply system was able to provide a
sufficient replacement quantity of UH-1N and CH-53E rotor blades
despite increased demands. For example, the Marine Corps took the
forecasted 16 UH-1N helicopter rotor blades, to Iraq. As figure 16
shows, from March 2003 through August 2004, the Marines requisitioned
22 additional rotor blades to support their mission, and the supply
system met those demands by filling orders within 2 months of receiving
the order.
In addition, air wings from outside the theater supported the demand in
Iraq by providing rotor blades from various air stations, ship supply,
and Marine Aviation Logistics squadrons. As a result, the Marines were
able to maintain a mission capable rate for the UH-1N of 75.4 percent
during OIF,[Footnote 88] compared with a peacetime rate of 79.9 percent
in 2000.[Footnote 89] To date, the Naval Inventory Control Point
Philadelphia continues to meet UH-1N rotor blade demands for OIF.
Figure 17: UH-1N Rotor Blade Demand and Back Orders by Month (March
2003 through September 2004):
[See PDF for image]
[End of figure]
The 3rd Marine Air Wing took 33 of the forecasted requirement of 64
rotor blades to support CH-53E helicopters in Iraq. As figure 18 shows,
55 additional rotor blades were ordered through the supply system, with
14 on back order from March 2003 through September 2004. The supply
system met those demands by filling orders within 1 month of receiving
the order. As a result, the Marines were able to maintain a mission
capable rate for the CH-53E helicopter of 67.5 percent during combat
operations, compared with a peacetime rate of 72.3 percent in 2000.
Figure 18: CH-53E Rotor Blade Demand and Back Orders by Month (March
2003 through September 2004):
[See PDF for image]
[End of figure]
Marine Corps officials stated that there were no shortages of rotor
blades for UH-1N and CH-53E helicopters and our analysis of the 3rd Air
Wing's demand and the supply system's ability to promptly provide rotor
blades during OIF supports their assertion.
Efforts to Maintain Rotor Blade Supply:
Short-term Efforts:
Even though they were able to get enough rotor blades from the supply
system to meet their demands, Marines took a number of actions during
OIF to extend the life of rotor blades in theater. Marines improved the
durability of CH-53E rotor blades and other bladed helicopter parts by
coating them with titanium paint and a tape covering in order to
protect the leading edge of the blade from sand erosion. In addition,
as the pace of combat operations slowed, Marines built permanent
airfields with paved landing areas, which decreased blade erosion
during take-off and landing.
Long-term Efforts:
The Marine Corps and Naval Inventory Control Point Philadelphia
attribute their ability to provide rotor blades to using models to
determine numbers and timing of spare parts and upgrades to sustain
helicopter operations. The Marine Corps and the Naval Inventory Control
Point Philadelphia maintain a 5-year old system, the Common Rate
Calculation System/Common Application Development System, which uses 4-
year historical demand data for the entire aircraft community for
particular helicopters, engineering data and worldwide environmental
factors to produce more accurate demand projections.
[End of section]
Appendix VIII: Meals Ready-to-Eat:
Background:
The standard military ration for the individual combatant is a
prepackaged, self-contained ration known as a MRE (see fig. 19). A MRE
consists of 1,300 calories per bag and is designed to sustain an
individual engaged in heavy activity, such as military training or
actual military operations, when normal food service facilities are not
available. MREs are issued in cases of 12 and MREs have a shelf life of
3 years when stored at 80°F.
Figure 19: Meal Ready-to-Eat:
[See PDF for image]
[End of figure]
DLA's Defense Supply Center Philadelphia manages the MRE supply for all
services. It has supplied a total of 5.1 million MRE cases for OIF.
Extent and Impact of Shortages:
MREs were not available to the warfighter at some point between October
2002 and September 2004. We consider this item to have a shortage
because demand exceeded the amount available to meet the needs of the
warfighters.
As figure 20 indicates, as the demand for MREs in OIF grew between
December 2002 and March 2003, the worldwide inventory declined. A
shortage of MREs began in February 2003 and continued into March 2003
when monthly demand peaked at 1,810,800 cases, although only 500,000
cases were available in the inventory. Figure 20 also shows the
production output of MREs increased from December 2002 through April
2003. As a result of DLA's actions to maintain an industrial base
capable of a large surge in production, the industrial base was able to
increase its monthly production of MREs.[Footnote 90] Consequently, DLA
never reported any back orders for MREs during OIF. In late April 2003,
as U.S. forces transitioned from MREs to other food consumption
options, monthly demand decreased significantly to 650,000 MRE cases.
That month, the industrial base produced 1.3 million cases. From May
2003 on, a sufficient quantity of MREs were available in inventory to
meet demand.
Figure 20: Forecasted Requirements, OIF Demand, Production Output, and
Inventory for MREs (December 2002 through June 2003):
[See PDF for image]
[End of figure]
Army and Marine Corps units did not always have all the MREs they
needed. According to CENTCOM after-action reports, Army combat units
were supposed to arrive in theater with a 7 to 10 day supply of MREs.
However, CENTCOM reported that many units did not arrive with this
quantity, thereby placing a strain on the in-theater inventory. An
analysis of Army logistics reports by the RAND Corporation indicated
that some units came within 2 days or less of exhausting on-hand
quantities. According to the 2nd Force Service Support Group, Marine
Corps combat units averaged a 6-to 8-day supply throughout the war, but
there were times when some forces had less than 1-day on-hand supply.
Marine Corps' Combat Service Support Companies, which directly support
combat units, also reported critical shortages of MREs. According to
the 1st Force Service Support Group, direct support units were supposed
to maintain a 2-day supply. However, according to a study by the Center
for Naval Analysis, there were times in late March and mid-April 2003
when direct support units had less than a 1-day supply.
Causes of Shortages:
Problems with requirements planning, the release of Operations and
Maintenance funding,[Footnote 91] and distribution contributed directly
to shortages of MREs in theater.
Requirements Not Accurately Forecasted:
DLA's forecasted requirements did not support MRE customer demand for
the first month of combat operations because of rapid changes in the
size of troop deployments. DLA's forecasted requirement for March 2003
was 996,556 cases of MREs; this number fell short of meeting the
customer demand of 1,810,800 cases. The March 2003 forecasted
requirement did not include data that anticipated initial in-theater
personnel levels would be doubled because of a faster deployment of
certain units. In a lesson-learned report, CENTCOM stated that the
forecasted MRE requirement for the period of deployment was predicated
on a 30-day supply for 50,000 personnel. This forecast was quickly
exceeded by the deployment of 100,000 personnel during that 30-day
period. The resulting demand placed a strain on existing in-theater MRE
inventories. However, DLA's model provided accurate planning estimates
for MRE customer demand for all other months.
Funding Was Not Available When Needed:
The Army experienced a delay in the release of operations and
maintenance funding for MREs, despite DOD requirements that supply
chain processes provide timely support during crises. Although the Army
wanted to submit MRE requisitions to DLA in September 2002, it could
not do so because it lacked the Operations & Maintenance funding
necessary to purchase them. When the Army submitted the requisitions in
December 2002, DLA shipped MREs to Kuwait. However, this 4-month delay
in funding contributed to the shortage of MREs by delaying shipments of
MREs into the theater.
The Marine Corps faced a similar funding problem that delayed the
processing of ration requests for OIF. As reported in a Marine Corps
lessons-learned report, a January 6, 2003, request for a withdrawal of
rations from the war reserve was delayed due to lack of available
operations and maintenance funding from Headquarters Marine Corps. The
Marine Corps provided notification of partial funding and the Marine
Corps' first request for rations was passed to DLA on January 16, 2003.
Funding was available to provide for the remainder of the requirement
and funded requisitions were passed to DLA on February 10, 2003, 5 days
before the Marines' required delivery date of February 15, 2003.
Numerous Distribution Problems Impeded Supply:
A number of distribution problems in the logistics supply chain
hampered MRE availability.
Inaccurate Delivery Time Forecasts:
One problem was that actual MRE delivery times exceeded the forecasted
delivery times. Most MREs were transported by ship from the U.S. to a
seaport of debarkation in theater and then by ground transportation to
combat units. CENTCOM officials estimated it would take 30 to 45 days
to transport MREs from the United States to a warehouse in theater.
However, they stated that the actual total time to move these rations
averaged 49 days: 31 days for transit to the theater, 3 days to gain a
berth at port, 5 days to discharge supplies, and 10 days for movement
from the port to the theater warehouse. Officials also noted that there
were times when it took as long as 60 days to transport MREs from the
United States to Kuwaiti ports because multiple, rather than single,
vessels were used in the transport process--a factor that initial
delivery time estimates did not take into account.
Limited Materiel Handling Equipment and Transportation Assets:
The lack of sufficient materiel handling equipment[Footnote 92] and
transportation assets in theater up to and during combat operations
caused delays in unloading supplies from ships and transporting them to
combat units. Because of the lack of adequate handling equipment,
logistics personnel could not efficiently unload the large shipments of
MREs arriving at ports in Kuwait, resulting in a backlog of ships
waiting to be unloaded. DLA officials stated that, at one point in
time, 1.4 million MREs were sitting at a port in theater, waiting to be
processed. In addition, there were insufficient transportation assets
to move MREs from ports to theater distribution warehouses. In
particular, local contractors responsible for delivering rations did
not have sufficient trucks to make regular deliveries to theater
distribution warehouses. In addition, there were insufficient materiel
handling equipment and transportation assets to move MREs from storage
locations to combat units. For example, according to one OIF after-
action report there were times when 80 trucks were needed to move
rations forward but only 50 were available.
Poor In-transit Visibility:
Poor in-transit visibility also delayed distribution of MRE shipments
in several ways. CENTCOM officials stated that logistics personnel
could not always rely on radio frequency identification device
technology to account for shipments. Despite a CENTCOM requirement that
radio frequency identification device tags be used for all shipments to
theater, CENTCOM estimated initial use was only about 30 percent. Among
other problems experienced were the failure to attach tags to all
containers and a lack of sufficient tracking devices to read tags in
order to identify subsistence items stored in containers. As a result,
logistics personnel stated they had to manually review all packing
documents to identify the contents of containers, thereby slowing down
the distribution of supplies.
Because of poor tracking, sufficient supplies of MREs sometimes existed
but were not visible. For example, during the MRE shortage, a DOD
official found over 17 20-foot containers with MREs at a supply base
located halfway to Baghdad; the MREs were there for a week because no
one knew they were there.
Efforts to Improve Availability:
Short-term Efforts:
To reduce MRE consumption during the shortage, Army and Marine Corps
officials stated that units switched to alternate feeding methods such
as Unitized Group Rations. CENTCOM reported working with various
carriers and the (Military) Surface Deployment and Distribution
Command[Footnote 93] to use sustainment packages weeks ahead of their
scheduled issue dates.
To improve the distribution of MREs, military officials formed a joint
working group including members from DLA, the Coalition Forces Land
Component Command, CENTCOM, and U.S. Transportation Command. This group
communicates regularly to improve in-transit visibility over rations.
CENTCOM officials stated that due to the lateness of ships arriving in
theater, DLA located additional rations in other theaters that were
shipped to OIF.
Long-term Efforts:
To ensure timely visibility of anticipated requirements, DLA has
recommended that collaboration between it, the Combatant Commands, and
the services be enhanced. To improve the timeliness of funding, DLA is
working with the services to refine their plans for releasing funding
early in the deployment process. To deal with distribution problems in
theater, the Secretary of Defense in September 2003 designated the U.S.
Transportation Command as the Distribution Process Owner. The
Transportation Command established a Deployment and Distribution
Operations Center in January 2004. The center is responsible for
improving the distribution process within theater by directing airport,
seaport, and land transportation operations.
[End of section]
Appendix IX: Five-Ton Truck and High-Mobility Multi-Purpose Wheeled
Vehicle Tires:
Background:
The U.S. Army depends on a variety of trucks and other vehicles to
support combat operations. During OIF, it relied on the 5-ton capacity
cargo truck to transport all types of supplies and on the HMMWV to
carry troops and armaments, as well as to serve as an ambulance and
scout vehicle. The 5-ton truck (fig. 21) is outfitted with six radial
tires and the HMMWV with four radial tires. The tires are specific to
each type of vehicle and are not interchangeable.
Figure 21: M-923 5-ton Truck:
[See PDF for image]
[End of figure]
The Army's TACOM Tire Group manages the tire inventory for wheeled
vehicles, including the 5-ton truck and the HMMWV, for U.S. forces
worldwide. These tires are produced for the military by several
manufacturers, including Goodyear and Michelin.
Extent and Impact of Shortages:
Tires for the 5-ton truck and the HMMWV were not available to the
warfighter at some time between October 2002 and September 2004. We
consider this item to have a shortage because demand exceeded the
amount of inventory available to meet the needs of the warfighters.
U.S. forces and logistics personnel reported critical shortages of 5-
ton truck and HMMWV tires during OIF that negatively impacted their
mission. According to TACOM officials, the increased pace of the
operations resulted in high-vehicle mileage that caused significant
wear and tear on these tires.
Prior to the onset of OIF in March 2003, TACOM had no back orders for 5-
ton truck tires and reported it was able to support demands from
customers worldwide. However, as figure 22 shows, back orders started
to accumulate after OIF began and, by October 2003, the number had
peaked at 7,063 tires per month. Similarly, worldwide demand for tires
rose after March 2003. As figure 22 indicates, this demand increased
fourfold over the course of 1 year, climbing from a peacetime level of
1,189 tires in April 2002 to a wartime level of 4,800 tires in April
2003. While demand remained high during the summer of 2003, inventory
levels dropped to below 1,000 and were insufficient to meet customer
needs. For example, in August 2003 when demand reached 4,828 tires,
TACOM recorded only 505 tires in its inventory worldwide.[Footnote 94]
According to TACOM officials, demands from OIF received priority and
much of the available inventory supported operations in Iraq.
Figure 22: Worldwide Demand, Back Orders, and Inventory Level for the 5-
ton Truck Tire by Month (February 2002 through September 2004):
[See PDF for image]
[End of figure]
TACOM reported no back orders for HMMWV tires prior to OIF. However, as
figure 23 shows, back orders began to increase in April 2003 and peaked
at 13,778 tires in September 2003 as demand increased and industry took
several months to respond. According to TACOM officials, back orders
accumulated because of the increasing demands coming from OIF.
Worldwide demand rose rapidly in June 2003, peaked at 16,977 tires in
August 2003, and gradually declined during the winter months (see fig.
23). Over the span of 1 year, worldwide demand increased more than four-
fold, from a peacetime rate of 3,251 tires per month in June 2002 to
15,224 tires per month in June 2003. While demand grew during the
summer of 2003, inventory levels were insufficient to meet customer
needs. For example, in July 2003, TACOM recorded only 4,286 HMMWV tires
in its inventory, but had demands for a total of 14,435 tires.
Fluctuating demands were caused by the intensity of the war fight and
the changing mixture of weapons systems employed.
Figure 23: Worldwide Demand, Back Orders, and Inventory Level for the
HMMWV Tire by Month (February 2002 through September 2004):
[See PDF for image]
[End of figure]
Army and Marine Corps units reported that tire shortages negatively
affected operations in Iraq.[Footnote 95] Units of the 3rd Infantry
Division reported that they could not get the required number of tires
to support their mission and that the shortage of tires forced them to
leave vehicles and supplies behind. In addition, TACOM reported in June
2003 that it could only provide 64 percent of the spare parts,
including tires that the 4th Infantry Division considered urgent.
Although the 4th Infantry Division reported shortages in theater, it
did not report any mission impact due to tire shortages. In an after-
action report, the U.S. Marine Corps documented that cannibalization,
stripping, and abandoning otherwise good vehicles occurred because of
the lack of spare tires.
Causes of Shortages:
Problems with war reserve stocks, forecasted requirements planning,
funding, and distribution contributed to shortages of the 5-ton and
HMMWV radial tires during OIF.
Insufficient War Reserves Stock:
The number of tires in war reserve stocks was not sufficient to support
customer demands when OIF began. According to Army regulations, war
reserve stocks are intended to meet the initial increase in demand
during wartime and to fill the gap until the national supply system can
increase production. In December 2002, TACOM officials managing war
reserves established a requirement for 259 tires for 5-ton trucks.
However, officials had only 38 tires on hand at that time, and 3 months
later in March 2003, they had only 16 tires on hand. As of October
2004, the war reserve requirement for the 5-ton truck tire remained at
259 tires, but there were only 2 tires in the inventory. As figure 22
shows, the demand for 5-ton truck tires was always higher than 259
tires, starting with 978 tires in February 2002 and continuing
throughout OIF. Therefore, the war reserve requirement of 259 tires was
too low to support initial demands from units in theater.
For HMMWV radial tires, TACOM managers had a sufficient number of tires
to meet the war reserve requirement of 1,505 tires in December 2002. In
March 2003, managers increased the HMMWV tire war reserve requirement
to 7,908 tires, but they failed to adequately stock tires in the
inventory. At that time, they only had 1,483 tires on hand. As of
October 2004, the war reserve requirement for HMMWV tires remained at
7,908 tires, but there were only 3,764 tires in the inventory.
TACOM officials told us that they do not adequately stock tires in the
war reserves because they lack the necessary funding. This was the
result of risk based decisions about how to allocate DOD funds. As of
October 2004, TACOM's war reserve requirements for all items it manages
(including tires) totaled $1,355.7 million. However, it has received
only $828.9 million to support those requirements. As a result, TACOM
officials have used a risk management approach to prioritize the
funding of their requirements. For example, they gave funding priority
to more expensive items, such as tank engines, which have long lead-
times and are difficult to procure, rather than to less expensive
items, such as tires, which can be produced faster. When OIF began,
tires stocked in war reserves were inadequate to support initial
customer demands because of these decisions.
Inaccurate Forecasted Requirements:
TACOM's forecasted requirements for vehicle tires underestimated the
actual demand for tires during fiscal year 2003. For example, TACOM
forecasted that worldwide requirements,[Footnote 96] for the 5-ton
truck tire would reach 1,497 tires per month in April 2003; however,
the actual demand for this tire rose to 4,800 for that month, more than
three times higher than the forecasted requirements. Similarly, TACOM
forecasted that customers would need 5,800 HMMWV tires per month in
June 2003; instead, actual worldwide demand for HMMWV tires grew to
15,224 per month, three times higher than the forecasted amount.
In June 2003, TACOM changed its requirements forecasting model for
tires and other spare parts from a 12-month average demand base to a 30-
day average demand base to respond to the sharp increase in actual
demand. According to TACOM officials, the 12-month average demand base
model did not react quickly enough to actual demands, which were at
times three or four times higher than the monthly forecasted
requirements. By changing the model to a 30-day average demand base,
TACOM was able to stock up on inventory faster.
In setting forecasted requirements for tires, TACOM officials stated
they relied heavily on past historical demand data because it received
little guidance on the expected demand activities or operational plans
from Army headquarters. TACOM expected an increase in demand for fiscal
year 2003 because of the growing demand from southwest Asia, especially
Kuwait, prior to the onset of OIF. Officials from TACOM's Tire Group
told us they put an emphasis on past historical demand data to forecast
their future requirements. Similarly, TACOM's Track and Roadwheel Group
reported that they relied on historical data, including information
from Operation Desert Storm/Shield and operations in Bosnia, to help
them forecast future requirements in the absence of official guidance.
Insufficient and Erratic Funding:
According to TACOM officials, the Tire Group did not receive adequate
funding (referred to as obligation authority) from the Department of
the Army's working capital fund to buy additional tires to meet
customers' needs. Furthermore, when obligation authority became
available, they did not receive it promptly. In fiscal year 2003, TACOM
had worldwide demands for tires totaling $246.3 million; however, it
received only $212 million in obligation authority, about 86 percent of
its total requirements. By comparison, during the same fiscal year,
TACOM received about $118.5 million worth of requisitions for all tires
needed in OIF. As TACOM exhausted its obligation authority during
fiscal year 2003, additional releases came in sporadically. For
example, in July 2003, TACOM reported that it had used all of its
obligation authority but still had $22 million worth of contracts that
needed funding; by August 2003, however, TACOM reported that it had
funds available to continue awarding contracts.[Footnote 97] TACOM's
Tire Group complained that the 'stop-start' funding releases
complicated their efforts in maintaining a consistent supply of tires
from tire manufacturers by preventing them from providing a steady
stream of funds in advance of production lead-time.
TACOM's Tire Group also did not know when or how much the next release
of obligation authority would be. In order to ensure that the
industrial base could provide supplies promptly, TACOM needed funding
at least one procurement lead-time (e.g., the time it takes a
manufacturer to make and deliver the tire) in advance of the delivery
date. For most tires, the procurement lead-time is 3 to 6 months.
Therefore, in order to meet unexpected surges in demand, TACOM needed
to have funding available 3 to 6 months prior to the surge.
In addition to the Tire Group, TACOM as a whole was underfunded in
fiscal year 2003. Figure 24 shows that throughout fiscal year 2003,
TACOM was funded below its actual requirements. At the beginning of
fiscal year 2003, TACOM identified its requirements at $1,357 million;
however, it was provided with only $885 million in obligation
authority. By May 2003, TACOM came close to using all of its obligated
authority without any assurance that additional funding would arrive.
As a result, TACOM officials asked their support groups to conserve
funding for the most critical items until additional funding arrived.
However, in June 2003:
TACOM received additional funding, which allowed item managers to
resume awarding contracts for supplies. For fiscal year 2003, TACOM
identified its actual requirements at $2,726 million (including $345
million for reset)[Footnote 98] but it received only $2,379 million in
obligation authority.
Figure 24: TACOM's Actual and Reset Requirements, Funding Executed and
Received by Month, Fiscal Year 2003:
[See PDF for image]
[End of figure]
Constraints in the Distribution Process:
Distribution constraints, both in the continental U.S. and in OIF,
contributed to customers not receiving supplies. The distribution
system was not prepared to handle the volume of supplies ordered by
customers or the speed with which supplies needed to be delivered.
In the summer of 2003, the Defense Distribution Center Susquehanna,
Pennsylvania, became overwhelmed by the volume of incoming shipments
from contractors delivering supplies for units in Iraq. Because of the
increased volume, the center gave contractors delivery appointment
times that were 2 to 3 weeks in the future, thereby delaying the
delivery and processing of many items, including tires.
Once tires were in the distribution center's warehouse, the requirement
to build pallets to ship them to the theater caused further delays.
Officials told us that the backlog of pallet building resulted in
delays of up to 30 days or more before tire shipments could be released
from the center. To alleviate this backlog, all tires shipped in and
after June 2003 were diverted to the Defense Depot Red River, Texas, to
be palletized and shipped directly to aerial ports of embarkations at
Charleston and Dover Air Force Base.
Once tires were shipped from the U.S., TACOM lost all visibility of
tire shipments within CENTCOM's area of responsibility. At the Port of
Kuwait, containers could not be identified because radio frequency
identification tags that should have been on the pallets were lost
during shipment, thus increasing processing time. In addition, once
these shipments left the port, receipts were not posted at the customer
supply support center to verify delivery. Officials also stated that
because of the lack of in-transit visibility, shipments were frequently
diverted to other destinations without TACOM's knowledge or
authorization.
Efforts to Improve Availability:
TACOM initiated several temporary actions and one long-term action to
improve the availability of tires to customers in the field. However,
TACOM officials did not identify efforts to improve funding problems
experienced during OIF, and they told us that they are not aware of any
initiatives at AMC headquarters or the Department of the Army that
address funding issues.
Short-term Efforts:
To ensure that forecasted requirements better reflected actual demands,
in June 2003, TACOM's Tire Group changed the average demand base it
used to calculate requirements from 12 months to 30 days. By making
this change, the Tire Group captured demand data in real-time and
allowed item managers to better estimate future requirements. As
result, item managers were able to justify procuring more tires to meet
future demands.
To ensure continuous production while awaiting additional obligation
authority, officials from TACOM's Tire Group noted persuading
manufacturers to continue making tires. Tire manufacturers continued
making tires while waiting for contracts and made capital investments
to procure more tire molds, enabling them to increase production once
contracts were awarded and obligation authority became available.
To ensure quicker distribution of tires to customers in theater, TACOM
sent a group of supply personnel to Camp Arifjan in Kuwait to expedite
the processing of TACOM's shipments of tires and other spare parts. In
response to complaints that TACOM's tire and spare parts shipments were
being diverted and not reaching the right customers, TACOM's supply
personnel also helped to look for these shipments and get them
delivered.
Long-term Efforts:
To help solve the long-term distribution problems in theater, in
September 2003 the Secretary of Defense designated the U.S.
Transportation Command (TRANSCOM) as DOD's Distribution Process Owner.
TRANSCOM established a Deployment and Distribution Operation Center in
January 2004. Under the control of CENTCOM, this center is responsible
for improving the distribution process within theater by directing all
airport, seaport, and land transportation operations.
[End of section]
Appendix X: Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
Add-on-Armor Kit:
Background:
The HMMWV is a highly mobile, diesel-powered, four-wheel-drive vehicle
with a 4,400 pound payload. Using common components and kits, the HMMWV
can be configured to become a troop carrier, armament carrier, shelter
carrier, ambulance, anti-tank missile carrier, or scout vehicle. The
initial number and type of HMMWVs in each unit is based on standard
equipment lists. According to officials, they are the most numerous
U.S. military vehicles in CENTCOM's area of responsibility. The Army
reported that there were 18,656 vehicles--both armored and unarmored--
in theater, as of July 2004.[Footnote 99]
Up-Armored HMMWV:
One version of the HMMWV is a production model known as an Up-Armored
HMMWV, also designated as the M1114 model (see fig. 25). This model is
produced by AM General Corporation and armored by O'Gara-Hess
Eisenhardt, requirements for CENTCOM's area of operations, including
Iraq and Afghanistan, call for this up-armored variant. The M1114 model
of the vehicle features ballistic-resistant windows and steel-plate
armor on the doors and underside to protect against rifle rounds and
explosive blasts, fragmentation protection, and additional armor for
the turret gunner on the roof to protect against artillery, as well as
a powerful air conditioning system.
Figure 25: Up-Armored HMMWV:
[See PDF for image]
[End of figure]
Add-on-Armor Kits:
In order to provide armor protection to existing unarmored HMMWVs in
theater, the Army has developed an add-on-armor kit to be mounted on
vehicles. The basic kit includes armored doors, under-door armor
plates, seat-back armor, ballistic glass windows, and a heavy-duty air
conditioning system. Seven Army depots and arsenals, managed by the
Ground Systems Industrial Enterprise,[Footnote 100] currently produce
the kits. The Army began shipping the kits to Iraq by mid-November 2003
and started mass production at their depots in December 2003. The Army
also contracted with O'Gara Hess Eisenhardt to produce additional armor
kits to meet theater requirements.
Figure 26: Add-on-Armor Kit Mounted on HMMWV:
[See PDF for image]
[End of figure]
Requirements for up-armored HMMWVs and add-on-armor kits are identified
through operational needs statements directly from the theater that are
validated and resourced by the Army. Units in theater submit the
statements for the items, which are combined by their higher
headquarters into bulk Coalition requirements. The Coalition Forces
Land Component Command communicates these requirements for vehicles and
kits to the Department of the Army, where they are validated and
resourced by the Army's Deputy Chiefs of Staff and eventually
transmitted to the Program Executive Office--Combat Service and Combat
Service Support Tactical Vehicles, who manages the procurement of both
the up-armored HMMWVs and the add-on-armor kits.
Extent and Impact of Shortages:
Up-armored HMMWVs and add-on-armor kits were not available to the
warfighter at some time between October 2002 and September 2004. We
consider this item to have a shortage because vehicles and kits were
not available to meet the validated requirements developed by the
warfighters. The Army has been consistently unable to meet recurring
spikes in demand for vehicles and kits. However, the overall impact of
the Army's inability to deliver the vehicles and kits is difficult to
measure.
Extent of Up-Armored HMMWV Shortages:
Since the Coalition Forces Land Component Command first began
identifying up-armored HMMWV requirements for CENTCOM's area of
responsibility in the summer of 2003, there has been a gap between the
number of vehicles required and the number of vehicles the industrial
base is producing. By September 2004, TACOM and the Army had provided
5,330 of the 8,105 required vehicles in theater. To meet Coalition
Forces Land Component Command's requirements, the Army program managers
worked with O'Gara-Hess Eisenhardt to produce an additional 2,533 new
up-armored HMMWVs and the Department of the Army redistributed an
additional 2,797 existing vehicles to Iraq from elsewhere in the world.
Figure 27 shows that Coalition Forces Land Component Command
requirements for vehicles increased faster than O'Gara-Hess Eisenhardt
was producing them, with requirements growing from 1,407 vehicles in
August 2003 to 8,105 vehicles by September 2004. The Army worked with
the manufacturers to increase production from 51 vehicles per month in
August 2003 to 400 vehicles per month in September 2004. According to
Army officials, O'Gara-Hess Eisenhardt will increase production to its
maximum capacity of 550 vehicles per month and will meet current
requirements by March 2005.
Figure 27: Up-Armored HMMWV Requirements, Production Output, and
Redistribution from August 2003 through September 2004:
[See PDF for image]
[End of figure]
Extent of Add-on-Armor Kit Shortages:
As of September 2004, the Army supplied 8,771 of the 13,872 Add-on
Armor kits required by CENTCOM but still needed 5,101 additional kits
to meet all requirements. The Ground Systems Industrial Enterprise
depots and arsenals were required to produce 12,372 while O'Gara-Hess
Eisenhardt was required to produce the remaining 1,500 kits. As shown
in figure 28, by September 2004 the validated requirement of 8,400 kits
grew to 13,872. To meet the 8,400 requirement, program managers worked
with several Army depots to increase production from 35 kits a month in
December 2003 to 600 kits per month by July 2004. At this production
level, theater requirements would have been met by August 2004. However
during this same month, Coalition Forces Land Component Command
increased the requirement to 13,872 kits. Army officials stated that it
would take 3 to 4 months to meet this new demand and accordingly
expected the requirement to be met by early 2005.
Figure 28: Add-on-Armor Requirements and Production Output, November
2003 through September 2004:
[See PDF for image]
[End of figure]
The overall impact of up-armored vehicle and add-on-armor kit shortages
is difficult to measure because units do not report the direct effects
of using unarmored HMMWVs, but the reason for increasing requirements
is well documented. Current HMMWVs are protected only by canvas tops
and have no additional armor protection. According to the Center for
Army Lessons Learned, the harm to both personnel and equipment from
improvised explosive devices is greatly reduced when traveling in an up-
armored HMMWV.[Footnote 101] This has generated a theater-wide concern
for increased vehicle protection. While units have used field-
improvised steel enclosures and other modifications to increase vehicle
protection, up-armored vehicles and add-on-armor kits provide better
protection. The center specifically mentions that the up-armored HMMWVs
would improve the force protection of civil affairs teams as well as
provide ideal transport for teams of engineers operating in the
constricted urban environments of Iraq.
Causes of Shortages:
There are two primary causes for the shortages of up-armored vehicles
and add-on-armor kits. First, a decision was made to pace production
rather than use the maximum available capacity. Second, funding
allocations did not keep up with rapidly increasing requirements.
Production Was Not Paced to Match Maximum Capacity:
DOD paced the production of armor for HMMWVs to meet initial CENTCOM
requirements, but did not use the maximum available production capacity
as the requirements increased dramatically after the onset of OIF.
According to Army officials, the total Army up-armored HMMWV
requirement prior to OIF was approximately 360 vehicles per year, to be
produced at a rate of 30 vehicles per month. However, beginning in
August 2003, Coalition Forces Land Component Command developed new
requirements for additional up-armored HMMWVs based on requests from
units in theater; the requirement increased 576 percent from 1,407 to
8,105 vehicles by September 2004. There was also a significant increase
in the requirement for kits. In November 2003, the initial requirement
for Add-on Armor kits was 8,400 kits. By September 2004, the
requirement had increased to 13,872 kits.
O'Gara-Hess Eisenhardt, the sole producer of the up-armored HMMWV,
increased production, in accordance with agreements with the Army;
however, that rate of production has not been sufficient to meet
increasing demands. The schedule of monthly production increases agreed
to by the Army and O'Gara-Hess Eisenhardt was based on meeting existing
requirements established at a particular time as well as funding
constraints. For example, the Army had requirements of 4,149 vehicles
in February 2004 to meet CENTCOM's needs. In meeting this requirement,
the Army redistributed over 3,000 existing up-armored HMMWVs to
CENTCOM's area of responsibility and agreed to have O'Gara-Hess
Eisenhardt to produce the rest of the vehicles. The Army had planned to
meet the February 2004 requirement by July 2004 without having O'Gara-
Hess Eisenhardt reach its maximum capacity.
As shown in figure 27, the vehicle production rate has increased every
month from 51 vehicles in August 2003 to 400 vehicles by September
2004, with a planned production of 460 vehicles per month by October
2004. However, the signed agreement with O'Gara-Hess Eisenhardt
indicates that the maximum production could have been increased to 500
vehicles per month in October 2004 if needed. Interviews with Army and
contractor personnel indicated that there were other constraints on
production, such as the availability of communication equipment.
Despite increasing requirements for the add-on-armor kits, additional
available production capacity was not used. Prior to CENTCOM's
requirement for 8,400 kits in November 2003, the Army had already begun
designing and shipping some 'pilot' kits in theater. When it received
the requirements in 2003 for 8,400 kits, the Ground Systems Industrial
Enterprise's depots and arsenals began ordering raw materiel such as
steel and ballistic glass and ramped up production from 35 kits per
month in December 2003 to 3,998 kits per month in April 2004. As total
production neared the 2003 requirement, production was slowed to 333
per month by September 2004. Because the kits take three to four months
to produce, it was not until January 2004 that the depots and arsenals
began shipping substantial quantities to theater.
Our review of Army data and interviews with Army officials shows that
additional capacity to produce kits was available within the Ground
Systems Industrial Enterprise system. Managers at Ground Systems
Industrial Enterprise indicated that seven arsenals and depots could
have maintained the maximum level of production without affecting other
operations at the depot, filling the kit requirement early in 2004. In
addition, in February 2004, a contractor operated Army facility
informed the Ground Systems Industrial Enterprise managers that it
could produce another 800 4-door kits per month. While the managers
stated that they did not use the contract operated facility due to
issues with contract timing and price, they did not have information on
the decision to slow the pace of production.
DOD decision makers determined the pace at which both up-armored HMMWVs
and kits would be produced, but did not inform Congress about the total
available production capacity. We have not been able to determine what
criteria were used to set the pace of production; however, in both
cases, additional production capacity was available, particularly for
the kits. As a result of the lack of visibility into and acceptance of
decisions made about the rate of production, DOD received criticism
about the availability of armored vehicles in Iraq.
Funding for Up-Armored HMMWV Production Was Not Received in a Timely or
Predictable Manner:
While funds were available to support the planned pace of production of
up-armored HMMWVs,[Footnote 102] program managers were not aware of the
time frame for releasing funds. Although TACOM received over $1.4
billion between fiscal years 2003 and 2004 to produce 7,502 vehicles,
it was not released in a timely and predictable manner. Figure 29 shows
that in August 2003, the managers received requirements for 1,407
vehicles. However, it had received funding to produce only 648
vehicles. By October 2003, program managers had a requirement to
produce 3,279 vehicles, but received funding to produce only 1,456
vehicles. Significant differences continued until April 2004, when
requirements reached 4,454 vehicles and the program managers received
funding to produce 4,320 vehicles.
Figure 29: Up-Armored HMMWV Funding, Requirements, Production Output by
Month (August 2003 through September 2004):
[See PDF for image]
[End of figure]
The disbursement of funds affected program managers' ability to plan
and contract with O'Gara-Hess Eisenhardt to produce sufficient
quantities of up-armored HMMWVs. As shown in figure 29, requirements
increased in June 2004 to 6,223 vehicles and again in August to 8,105
vehicles. However, additional funding--$572 million--was not received
until August 25, 2004 to meet demands. As a result, Army officials
stated it could not ask O'Gara-Hess Eisenhardt to ramp up to its
maximum capacity of 550 vehicles per month because it did not have the
funding at the time requirements increased. Furthermore, program
managers explained that if O'Gara-Hess Eisenhardt is to efficiently
produce vehicles at a consistent and high rate, the company should be
assured of consistent funding at least 3 months in advance of delivery.
The program officials stated that they did not know when funding would
come, how many disbursements they would be receiving in a given fiscal
year, or what amount of funding to expect, thus further complicating
their procurement planning.
Efforts to Improve Availability:
Short-term Efforts:
The major short-term solution to the up-armored HMMWV funding issue has
been the receipt of additional funding from congressional increases,
supplemental funding, and Office of Secretary of Defense additions. For
fiscal years 2003 and 2004, the Army received over $1.4 billion to
produce 7,502 up-armored HMMWVs to meet worldwide requirements,
including 8,105 vehicles required for CENTCOM's area of operation,
mostly from congressional increases and supplementals. Specifically in
fiscal year 2004, the Army received $1.19 billion in congressional plus-
ups, supplementals, and Office of Secretary of Defense additions above
its $51.7 million received in the President's Budget to produce more up-
armored HMMWVs.
To meet continuing needs for force protection, Congress recommended
$865 million in the 2005 appropriations bill to be used by the Army to
armor additional HMMWVs and other vehicles. As part of the Rapid
Response Force Protection Initiative, Congress intends the funds to be
used to purchase and modify a variety of vehicles currently used in
theater to respond rapidly to the threat of improvised explosive
devices and mortar attacks experienced by deployed U.S. forces.
To improve the industrial capability, the Army worked with O'Gara-Hess
Eisenhardt as well as Army depots to increase production of vehicles
and kits. For example, program managers worked with O'Gara-Hess
Eisenhardt to increase up-armored HMMWV production from an average of
30 vehicles a month to 400 vehicles a month by September 2004. The
company plans to increase production to a maximum 550 vehicles a month
to meet current requirements by March 2005. Army also ran 24-hour
assembly lines at its depots and produced over 1,000 add-on-armor kits
per week between March and April 2004 when materials were available to
make the kits.
Long-term Efforts:
At the time of this review, Army officials had not identified any long-
term efforts to improve the availability of up-armored HMMWVs or add-on-
armor kits.
[End of section]
Appendix XI: Comments from the Department of Defense:
DEPUTY UNDER SECRETARY OF DEFENSE FOR LOGISTICS AND MATERIEL READINESS:
3500 DEFENSE PENTAGON:
WASHINGTON, DC 20301-3500:
MAR 23 2005:
Mr. William Solis:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Solis:
This is the Department of Defense (DoD) response to the GAO draft GAO-
05-275, DEFENSE INVENTORY: Actions Needed to Improve the Availability
of Critical Items During Current and Future Operations, dated February
18, 2005 (GAO Code 350492). The GAO draft report highlights five
deficiencies that caused shortages of spare parts and supplies to U.S.
Forces in Iraq between October 2003 and September 2004 on seven of nine
items reviewed. The DoD concurs with the intent of the recommendations
in the report and has already taken actions as needed to eliminate
deficiencies.
Detailed comments on the draft report recommendations are included in
the enclosure. The DoD appreciates the opportunity to comment on the
draft report.
Signed by:
Bradley Berkson:
Acting:
Enclosure: As stated:
GAO-05-275/GAO CODE 350492:
"DEFENSE INVENTORY: ACTIONS NEEDED TO IMPROVE THE AVAILABILITY OF
CRITICAL ITEMS DURING CURRENT AND FUTURE OPERATIONS":
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
direct the Secretary of the Army to improve the accuracy of Army war
reserve requirements and transparency about their adequacy by:
* updating the war reserve models with OIF consumption data that
validate the type and number of items needed,
* modeling war reserve requirements at least annually to update the war
reserve estimates based on changing operational and equipment
requirements, and:
* disclosing to Congress the impact on military operations of its risk
management decision about the percentage of war reserves being funded.
(Pages 52-53/Draft Report):
DoD RESPONSE: Concur with intent. The Army recognizes the need to
improve the accuracy of its war reserve requirements, update those
requirements annually, and appropriately disclose unfunded requirements
and has already taken action to do so.
Army actions are as follows:
a. Army War Reserves (WR) are computed based on specific scenarios
associated with areas where the outbreak of contingencies is
potentially high based on the Strategic Planning Guidance. Thereafter,
the Army Prepositioned Stocks/WR are strategically prepositioned in the
proximity of those areas to enable rapid responses in the event
contingencies occur. Prior to the commencement of the Global War on
Terrorism (GWOT) and the start of Operations Enduring Freedom and Iraqi
Freedom (OEF/OIF), the risk management decisions made by Army
leadership on military operations were factors on how WR funding was
allocated against an unknown future requirement in addition to the
overall level of risk. The Army is taking steps to better compute WR
requirements and to increase WR funding. These steps include:
(1) Recently, the Army Materiel Systems Analysis Activity, teaming with
RAND Corp., developed a methodology to capture OIF consumption data.
This data will be used to update the sparing model's candidate item
spares population and predictive failure rates (failure factors) found
within the Army WR Requirements Automated Process (AWRAP).
(a) This revised candidate item and failure factor data will be used to
develop the Army's Fiscal Year 2005 (FY 2005) WR Secondary Item (WRSI)
requirements. The requirements development process is currently
scheduled for completion in September 2005. The results will drive Army
funding requirements in the next budget cycle.
(b) WRSIs are critical consumable and reparable secondary items
acquired in peacetime to sustain operations as prescribed by the
Strategic Planning Guidance (SPG). This inventory provides the initial
supply support for the Army's prepositioned brigade sets, medical sets,
operational project stocks, and sustainment stocks for committed forces
and must be stocked on the shelf to ensure that future requirements
will be available to sustain a theater until resupply is established.
(2) The AWRAP, used to compute new WRSIs and generally conducted
biennially to coincide with the building of the Program Objective
Memorandum (POM), has been changed to an annual update to keep pace
with dynamic Department of the Army (DA), Department of Defense (DoD),
and Joint operational guidance.
(a) In January 2005, Army G-4 published the AWRS Secondary Items
Computation Guidance which enables USAMC and United States Army Medical
Materiel Agency to calculate new secondary items sustainment stock
requirements based on the new warfighting scenarios. Updated
consumption rates and planning factors from Force Structure Analysis
(mini Total Army Analysis) were used to ensure that we will have an
improved, responsive capability to compute WRSI requirements that are
aligned with how the Army builds its force structure requirements.
(b) WRSIs will continue to play an important role in enabling the Army
to meet both its current warfighting requirements and any future
contingencies. However, without adequate funding, there is substantial
risk to their availability. Risk associated with inadequate funding is
already reported to Congress in various forums as required, including
the budget process, testimony to hearings, and congressional inquiries.
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
direct the Secretary of the Army to improve the accuracy of its wartime
supply requirements forecasting process by:
* developing models that can compute operational supply requirements
for deploying units more promptly as part of prewar planning, and:
* providing item managers with operational information in a timely
manner so they can adjust modeled wartime requirements as necessary.
(Page 53/Draft Report):
DoD RESPONSE: Concur with intent. The Army recognizes the need to
improve the accuracy of its wartime supply requirements forecasting
process and already has taken actions to do so.
On-going actions within the Army are as follows:
a. Using preliminary logistics intelligence/information, Army weapon
system managers made stockage level decisions, largely based on
historical data gathered from the first conflict in the region,
Operation Desert Storm (ODS). The empirical data gathered from ODS
indicated that we could expect a threefold increase in the monthly
demand rate for the majority of class IX items. The Requirements
Determination & Execution System (RD&ES) defaults were set at that
level to allow for forecasting the increased usage rate. The RD&ES
system is a useful tool in forecasting anticipated Class IX usage
rates, provided the correct feeder data is introduced into the system.
The historical Class IX consumption data of ODS proved to understate
requirements for the current operation. The lack of a dynamic
forecasting system, capable of reacting quickly to unknown situations,
clearly contributed to the Class IX shortage problems. For example
during OIF, modeled forces and their equipment changed from wheeled to
tracked several times over, thereby frustrating supply forecasts;
earlier environment protection decisions warranted the stockage of
rechargeable batteries instead of lithium batteries; additionally,
operational decisions to place add-on-armor to all deployed wheeled
vehicles increased vehicle wear and tear with the effect being an
increase in the demand for CL IX repair parts.
b. The USAMC did take steps to increase the forecasting accuracy --the
demand forecast period was reduced from 24 months to 12 and even 6
months. Past demands were modified with Program Change Factors to
reflect the astronomical growth. With all the shortcomings discussed in
this report, logistics support to OIF did enjoy much success. Readiness
rates for deployed equipment hover very close to the DA peacetime goal
of 90 percent, even though deployed equipment has endured Operational
Tempo (OPTEMPO) rates as much as 12 times higher than normal peacetime
rates.
c. Prior to the out break of OIF/OEF, the Army had developed the
Deployment Stock Package Analyzer (DSPA) to use in conjunction with the
RD&ES. This model uses the same candidate item spares data base as our
WR model, but computes the change in demand patterns that could be
expected from deployed units, offsets the requirement by the stocks on
hand, and develops a strategic stockage level to support the expected
surge. Army was in the process of refining algorithms, developing
policy for item managers and using units, and obtaining funding when
GWOT broke out. We were working to incorporate DSPA into the Commodity
Command Standard System, our strategic level legacy system. In the
meantime, we are moving into an Enterprise Resource Planning
environment. The requirement to support deployment surges will be
addressed in both our strategic and retail systems. The Logistics
Modernization Program has been fielded to the Communications-
Electronics Command and is undergoing design stabilization. Future
fieldings are event driven with fielding to the Aviation and Missile
Command tentatively scheduled for second quarter FY 2006 and the Tank-
automotive and Armament Command first quarter FY 2007. The Global
Combat Support System-Army is being blueprinted now. Fielding is
scheduled to FY 2007-FY 2009.
RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
direct the Secretary of the Army to reduce the time delay in granting
increased obligation authority to the Army Material Command and its
subordinate commands to support their forecasted wartime requirements
by establishing an expeditious supply requirements validation process
that provides accurate information to support timely and sufficient
funding. (Page 53/Draft Report):
DoD RESPONSE: Concur with intent. We agree that supply requirements
validation process to support timely and sufficient funding must be
expeditious. However, with the value of required resources the
validation process must also be justifiable.
Since the start of OEF/OIF, Army demand exceeded predictions. As a
result, Army had a requirement for $1.6 billion above their budgeted
amount. Since this requirement was forwarded for funding in the year of
execution, the Army Staff needed to ensure the validity of the
underlying assumptions and requirements determination process. In order
to provide additional Obligation Authority or Total Obligation
Authority (cash infusion), Army had to forward and justify their
request to the OSD Comptroller. It was absolutely necessary to scrub
and validate the request for additional funds at a lower level to
ensure DoD was able to justify the additional funding. Prior to FY
2003, the Army received $1.4 billion for additional spare parts in
anticipation of demand. The Army received the initial funding increase
for FY 2003 in January, 2003. The requirement continued to increase as
operations continued and $4.0 billion in additional working capital
funds and $762 million in additional appropriations were funded by the
end of FY 2003. At no time was the Army out of money and their requests
for increases were expeditiously considered.
RECOMMENDATION 4: The GAO recommended that the Secretary of Defense
direct the Secretary of the Navy to improve the accuracy of the Marine
Corps' wartime supply requirements forecasting process by completing
the reconciliation of the Marine Corps' forecasted requirements with
actual OIF consumption data to validate the number as well as types of
items needed and making necessary adjustments to their requirements.
(Page 53/Draft Report):
DoD RESPONSE: Concur with intent. The Marine Corps has already taken
action to improve the accuracy of its wartime supply requirements
forecasting process by initiating a study and analysis that will
reconcile actual OIF consumption against War Reserve material
forecasted requirements. Part of the analysis will review the 1003V
Withdrawal Plan requirements and compare to actual OIF consumption
data.
RECOMMENDATION 5: The GAO recommended that the Secretary of Defense
direct the Secretary of the Army and the Director of the Defense
Logistics Agency to:
* minimize future acquisition delays by assessing the industrial base
capacity to meet updated forecasted demands for critical items within
the time frames required by operational plans, and:
* provide visibility to Congress and other decision makers about how
the department plans to acquire critical items to meet demands that
emerge during contingencies.
(Page 53/Draft Report):
DoD RESPONSE: Concur with intent. The Army and DLA already have taken
actions to minimize future acquisition delays by assessing the
industrial base capacity and annual reports are provided to Congress.
Specific actions taken by the Army and DLA are as follows:
The Army issued Army Regulation 700-90 policy, dated December 2004, on
the Army's Industrial Base Process which requires that the Army publish
hardware priorities, war reserve stocks, and industrial preparedness
measures that support war reserve and replenishment objectives, and the
Army's Critical Items List. Also, it requires that Program Managers
assess the industrial base ability to support life cycle requirements,
develop Industrial Preparedness Planning Lists for those end items that
need monitoring or action to ensure sufficient capacity, and perform
surge planning to enable acceleration of program production and
maintenance. The Army is participating in the development of the Joint
Chiefs of Staff Critical Item List which is designed to identify items
with industrial base weaknesses. To acquire critical items and to meet
demands that emerge during contingencies, the Army has improved its
acquisition and fielding processes. The Army has implemented the Rapid
Fielding Initiative (RFI) to ensure that Soldiers have the latest
available equipment. Equipment fielding schedules are revised to
support operational plans and procurement and fielding cycles being
compressed. In coordination with field commanders, mission-essential
items are identified for rapid fielding, laying the foundation for
acquisition transformation. Additionally, Army is accelerating fielding
of select future capabilities to the force. Army has also instituted a
Rapid Equipping Force that works directly with operational commanders
to find solutions to operational requirements.
DLA currently assesses industrial base capacity to meet updated
forecasted demands within the time frames required by operational plans
during the acquisition cycle for long-term contracts. Additive demand
associated with wartime and/or contingency support is identified as a
separate surge and sustainment delivery schedule in solicitations
released to industry. The forecasted, time-phased quantities are based
on Service estimates provided through the annual deliberate planning
process and/or actual requirements compiled from requisition data from
previous contingency operations (like Operations Enduring Freedom and
Iraqi Freedom (OEF/OIF)). Vendor responses must include an assessment
of their capability to meet both peacetime and wartime demand. When
shortfalls in industrial capability are identified, DLA works with
industry to develop cost-effective solutions to production constraints
that will improve industry capacity and response times. In some cases,
the agency uses special appropriated Warstopper funding to invest in
industrial capability improvements to avoid more expensive inventory-
based solutions that could include the purchase of war reserve material
that may or may not actually be used during a conflict.
In January 2005, DoD logistics leaders approved DLA's approach to
enhance its support for medical items. DLA's medical readiness team
worked closely with military service counterparts to ensure total
wartime requirements were clearly identified. The medical directorate
then assessed industrial base capability to meet the wartime/
contingency requirement to determine shortfalls in coverage. The
shortfalls were reviewed with the military services and a joint risk
assessment is used to prioritize the Agency's gap reduction strategy.
Investments in contracts with surge and sustainment coverage for
medical items eliminate any acquisition delays and ensure delivery
within the time frames required by the operational plans.
Information on the acquisition of critical go-to-war items is reported
to Congress annually through the Industrial Capabilities Report to
Congress. This report summarizes industrial capability assessments that
were performed and highlight actions taken to resolve industrial
capability shortfalls that could impact national defense. Additionally,
information concerning acquisition of critical items is provided
Congress through various forums including the budget process, hearings,
and congressional inquiries.
RECOMMENDATION 6: The GAO recommended that the Secretary of Defense:
* revise current joint logistics doctrine to clearly establish
responsibility and authority for synchronizing the distribution of
supplies from the U.S. to deployed units during operations,
* develop and exercise, through a mix of computer simulations and field
training, deployable supply receiving and distribution capabilities
including trained personnel and related equipment for implementing
improved supply management practices, such as radio frequency
identification tags that provide in-transit visibility of supplies, to
ensure they are sufficient and capable of meeting the requirements in
operational plans, and:
* establish common supply information systems that ensure the DoD and
the Services can requisition supplies promptly and match incoming
supplies with unit requisitions to facilitate expeditious and accurate
distribution. (Page 54/Draft Report):
DoD RESPONSE: Concur with intent. In September 2003, the Department of
Defense appointed the Commander, U.S. Transportation Command
(USTRANSCOM), as the Distribution Process Owner. In this capacity,
USTRANSCOM is tasked with developing efficient and effective
distribution solutions to enhance strategic support to worldwide
customers. The DPO is the DoD's one entity to revolutionize this
system, working with the services and combatant commanders in
synchronizing the distribution of personnel and equipment from factory
to foxhole.
Actions addressing the GAO recommendation are underway as identified
below:
In an effort to synchronize distribution with clearly established
responsibility and authority within the DoD, USTRANSCOM established an
Integrated Process Team (IPT). This team analyzes End-to-End (13213)
distribution processes by supply class. The two principle organizations
executing E2E analysis are the DLA and USTRANSCOM. The Deployment and
Distribution IPT also partners with the Joint Forces Command (JFCOM) to
integrate the deployment process architecture into the distribution
process architecture. The basic task of synchronizing the chain from
CONUS to an employed theater of operations is incorporated into an
ongoing effort within the E2E IPT with key deliverables by September
2005 and May 2006.
To improve distribution capabilities available to the combatant
commander, the USTRANSCOM in concert with USCENTCOM have jointly
established a forward logistics capability that is testing a mix of
supply chain operations in a real world contingency environment. The
establishment of the Deployment and Distribution Center in CENTCOM
provides the warfighter a cadre of logistics experts from USTRANSCOM,
the Defense Logistics Agency and national partners to provide a range
of distribution related services such as scheduling, tracking, tracing
and arranging for redistribution within the theater and back to home
station. The center is equipped with a suite of modern distribution
systems to allow real time information flow between all parties in the
supply chain. This deployable capability will be continued to be field
tested and combined with lessons learned from training exercises and
best of breed commercial practices to continually improve the
distribution process.
The Department issued policy on July 30, 2004, from the Under Secretary
of Acquisition, Technology and Logistics directing that the DoD
Components "...immediately resources and implement the use of high data
capacity active Radio Frequency Identification (RFID) in the DoD
operational environment" specifically to enhance in-transit visibility
of our supplies. This direction expanded the use of active RFID to all
Services, DLA and USTRANSCOM shipping full container loads to all
overseas locations. Since that time, the DoD Components have resourced
this requirement and are moving to implement.
At the end of September 2005, USTRANSCOM will begin information
technology (IT) transition analysis. Process-based products include:
capability gaps; improvement recommendations; performance metrics;
impact to policy; identification of IT/systems supporting process
activities; and changes to as-is Joint Distribution Architecture (JDA),
representing the to-be architecture. The Supply Chain Operations
Reference (SCOR) Model is the baseline used to develop the JDA.
USTRANSCOM will begin to vet distribution process improvements in
January 2006 through the Joint Capabilities Integration and Development
Systems (JCIDS) for approval by the Joint Requirements Oversight
Council (JROC). Anticipated duration of the JCIDS coordination is 4 to
12 months.
A pilot analysis was completed in May 2004 and USTRANSCOM is currently
conducting IT transition analysis. The IT analysis will be integrated
into the holistic IT analysis for all supply classes and deployment,
beginning in FY 2006. Non-IT process recommendations will begin the
JCIDS coordination this month, combined with additional Joint Theater
Logistics OIF Lessons Learned process change recommendations, let by
JFCOM.
IT analysis, discussed above, will be used to automate distribution
process improvements, where appropriate, and integrate IT systems for
E2E synchronization and total asset visibility. IT integration analysis
will be conducted, in collaboration with national partners, using three
teams: functional capabilities-based analysis team, consisting of
functional process experts from each Service and DLA; technical
analysis team, consisting of IT integration experts; and, business case
analysis team, consisting of financial-technical experts.
USTRANSCOM will conduct the IT analysis in two, 120-day periods, with a
final IT Transition Plan expected by May 2006. The first period,
October 2005 to January 2006, will be dedicated to analyzing IT
solutions to close process capability gaps. Teams will select IT
solutions and develop a holistic IT transition plan for deployment and
distribution during the second period, February 2006 to May 2006. Once
completed, the product will be an IT transition plan recommending the
most effective systems integration solution to synchronize
distribution, at best value to the government.
GAO's Comments:
The following are GAO's comments on DOD's letter dated March 23, 2005.
1. The department cited action it is taking to improve modeling and
data for determining war reserves that may meet our recommendation to
update the war reserve models, once it is fully implemented. We agree
that by developing a methodology that will capture and use OIF
consumption data to update the model within the Army War Reserve
Requirements Automated Process, DOD should improve the accuracy of the
Army's war reserve requirement. However, the department provided no
timeline for the implementation of this effort. Therefore we modified
our recommendation to require that DOD specify when this action will be
completed.
2. We agree that the department's decision to conduct annual updates of
the Army War Reserve Requirements Process to compute new war reserve
requirements to keep pace with Army, DOD and joint operational guidance
should improve the accuracy of the requirements, as long as the updates
are conducted as required.
3. DOD did not commit to any specific action to address our
recommendation to disclose the risks associated with the percentage of
war reserves being funded. After acknowledging a lack of adequate
funding and the associated risk of such underfunding to the
availability of war reserve items, DOD noted the Army was already
reporting these risks to Congress in various forums. However, as noted
in this report, budget documentation does not clearly state the risk of
underfunding the war reserves; and we believe the other methods cited
by DOD in its comments do not ensure consistent transparency to
Congress of risks to military operations. We continue to believe our
recommendation has merit and should be implemented. In addition, we
have added a matter for Congressional consideration that suggests
Congress may wish to require DOD to disclose the risks associated with
not fully funding the Army war reserve.
4. The near and long-term actions DOD cited to improve modeling support
for prewar planning could address our recommendation when completed.
However, we remain concerned because their effectiveness will not be
known until these initiatives are fully implemented years from now.
After agreeing that the Army currently lacks a dynamic forecasting
system, the department stated that for the near-term it has been
implementing a new database to compute demand changes during
contingency operations that will work in conjunction with the current
supply forecasting system, but did not state when the change would be
completed. Moreover, according to DOD, the long-term solution to the
Army's forecasting problem is fielding of a new supply management
system, the Logistics Modernization Program. However, the full
implementation of this initiative is tentatively scheduled for fiscal
year 2007, but could be affected by events. Furthermore, as indicated
in this report, there are also issues with the reliability of the data
used in the Logistics Modernization Program that may affect its ability
to properly forecast demands. Therefore, we continue to believe our
recommendation has merit until these actions are fully implemented. We
have also modified our recommendation to require that DOD specify when
these actions will be completed.
5. The department did not commit to any specific actions to ensure item
managers are provided operational information in a timely manner so
they can improve the accuracy of modeled wartime forecasts. In the
report, we noted the importance of item managers in setting
requirements for supplies during OIF and cited concerns about failure
to provide them operational information promptly. Furthermore, DOD
noted that Army weapon system (item) managers made stockage decisions
for OIF largely based on historical data that proved to be understated
because operational tempo was as much as 12 times higher than normal
peacetime rates. However, DOD's response did not mention how it would
better equip these managers to affect wartime forecasts if necessary.
We believe that until and even after the proposed improvements to
modeling are successfully implemented, item managers will remain a
vital part of forecasting operational supply requirements. Therefore,
we continue to believe our recommendation has merit.
6. DOD's response to our recommendation to reduce the time delay in the
Army's process for granting increased obligation authority to the Army
Materiel Command noted the validation process is necessary and must be
expeditious, but did not cite any specific actions it would be taking
to achieve that end. We agree with the department that an appropriate
validation process is critical to justifying additional obligation
authority or a cash infusion, particularly in light of the size of the
increases over budgeted amounts. Our recommendation did not ask the
Army to sacrifice due diligence in this process. Rather, our concern
is, as noted in this report, AMC did not receive sufficient obligation
authority to support meet its requirements until four months after
major combat operations ended. As shown in this report, the cause for
this delay was the time consuming process used by the Army to validate
AMC's requests, not the Office of Secretary of Defense's process for
delivering the funds. As we reported, without an expeditious funding
approval process, item managers had difficulty buying supplies in a
timely manner in the right quantity to meet war fighter needs,
resulting in decreased operational capabilities and increased risk.
Therefore, we continue to believe our recommendation has merit. We have
also modified our recommendation to require that DOD specify when this
action will be completed.
7. We agree with the department's actions in response to our
recommendation that the Navy improve the accuracy of the Marine Corps'
wartime supply forecasting process. The planned actions should, when
completed, improve the accuracy of that process. However, DOD provided
no clear schedule for the implementation of this initiative. Therefore,
we have also modified our recommendation to require that DOD specify
when this action will be completed.
8. DOD's response to our recommendation cites Army and DLA actions to
minimize future acquisition delays by assessing the industrial base
capacity to meet updated forecasted demands for critical items, that
when fully implemented, could achieve the intent of the recommendation.
The Army Regulation 700-90, dated December 2004 established a framework
for systematically assessing the industrial base's ability to support
requirements. As noted in our report, the Joint Chiefs of Staff
Critical Few List identifies rapidly emerging or critical items at the
service and geographic command level and the Rapid Fielding Initiative
accelerates acquisition of high priority items for troops. In
combination, these and other initiatives may provide a means to reduce
acquisition delays. In addition, DLA's review of industry and continued
use of War Stopper funding to invest in industrial capacity, should
help DOD avoid some future acquisition delays. Therefore, we have also
modified our recommendation to require that DOD specify when these
actions will be completed.
9. DOD did not commit to any action to provide consistent visibility to
Congress and other decision makers about how the department plans to
acquire critical items to meet emerging demands. It stated that it
already addresses this recommendation annually through the Industrial
Capabilities Report Congress and other forums. While we agree that DOD
provided visibility about some items, such as body armor in the
February 2004 Industrial Capabilities Report, neither the report or the
other forums addressed the issues we identified about the acquisition
of up-armored HMMWVs and kits. Providing clear information in
consistent manner for critical items with rapidly emerging demands
could have clarified the department's acquisition challenges and
equipped Congress to allocate funds or take other actions to increase
the speed of acquisition.
10. In response to our recommendation to clarify responsibility and
authority for synchronizing distribution of supplies, DOD stated it had
appointed U.S. Transportation Command as the responsible organization
for distribution in September 2003. However, neither the command nor
the department have committed to revising joint doctrine to clarify how
the command will interact with the services and geographic commands to
accomplish this. As mentioned in our report, current doctrine
prescribes a disjointed distribution management structure that does not
support the timely delivery of supplies to the war fighter. While it is
taking steps to analyze distribution processes, we believe DOD must
also commit to making institutional changes through joint doctrine to
ensure the geographic combatant commander benefits from a seamless
distribution process. Therefore, we continue to believe our
recommendation has merit. We have also modified our recommendation to
require that DOD specify when this action will be completed.
11. DOD cited the establishment of the Deployment and Distribution
Center in CENTCOM as its means of responding to our recommendation to
develop and exercise deployable supply receiving and distribution
capabilities. While this center may test a forward deployable logistics
capability based on a cadre of logistics experts with enhanced
communications capabilities, we do not see the department's commitment
to ensuring through simulation and field training that there are
sufficient number trained personnel and related equipment to meet the
requirements of operational plans. As noted in our report, the lack of
sufficient logistics resources in theater before and during the arrival
of combat forces hindered DOD's efforts to move supplies promptly from
ports to units. We believe having a pre-established deployable
capability that includes sufficient and trained personnel, at all
levels of command; communications systems; and necessary equipment will
speed the establishment of a theater distribution system. Therefore, we
believe additional actions are necessary to fully address our
recommendation. We have also modified our recommendation to require
that DOD specify when these actions will be completed.
12. DOD stated that it is taking a number of actions to develop a
holistic information technology plan to improve distribution. According
to DOD, this plan, which is expected to be completed in May 2006, will
recommend systems integration solutions to synchronize end-to-end
distribution. We remain concerned that until this plan is completed and
its recommendations fully implemented, DOD and the services will not be
able to achieve their goal of distributing the right supplies to the
right places when war fighters need them. Therefore we have also
modified our recommendation to require DOD to specify when the plan's
recommendations will be implemented.
[End of section]
Appendix XII: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Richard G. Payne, (757) 552-8119;
John W. Lee, (202) 512-8329:
Acknowledgments:
In addition to those named above, Nancy L. Benco, John C. Bumgarner,
Michele C. Fejfar, Emily Gupta, Shvetal Khanna, Harry A. Knobler,
Kenneth R. Knouse, Jr., Elizabeth D. Morris, Tinh T. Nguyen, Kenneth E.
Patton, Terry L Richardson, Cary B. Russell, Rebecca Shea, Christopher
W. Turner, John W. Vanschaik, Jason G. Venner, Gerald L. Winterlin, and
John C. Wren made key contributions to this report.
(350492):
FOOTNOTES
[1] DOD defines "logistics" as the science of planning and carrying out
the movement and maintenance of forces. Logistics has six functional
areas: supply, maintenance, transportation, civil engineering, health
services, and other services. This report will focus on supply and
transportation.
[2] CENTCOM is one of DOD's five geographic combatant commands whose
area of responsibility encompasses 27 countries in Southwest Asia,
South and Central Asia, and the Horn of Africa.
[3] DOD defines sustainment as the provision of personnel, logistic,
and other support required to maintain and prolong operations or combat
until successful accomplishment or revision of the mission or of the
national objective.
[4] Spare parts are defined as repair parts and components, including
kits, assemblies, and subassemblies (both reparable and non-reparable)
required for equipment maintenance.
[5] See Centralized Inventory Management of the Army Supply System,
Chapter 6, Section I, Paragraph 6-1, c. (3), Army Regulation 710-1
(Apr. 15, 2003) and GAO, Defense Inventory: Army War Reserve Spare
Parts Requirements Are Uncertain, GAO-01-425 (Washington, D.C.: May 10,
2001).
[6] See GAO, Defense Inventory: The Department Needs a Focused Effort
to Overcome Critical Spare Parts Shortages, GAO-03-707 (Washington,
D.C.: June 27, 2003) and Defense Inventory: Analysis of Consumption of
Inventory Exceeding Current Operating Requirements Since September 30,
2001, GAO-04-689 (Washington, D.C.: Aug. 2, 2004).
[7] GAO, Defense Logistics: Preliminary Observations on the
Effectiveness of Logistics Activities During Operation Iraqi Freedom,
GAO-04-305R (Washington, D.C.: Dec. 18, 2003).
[8] CENTCOM is one of DOD's five geographic combatant commands. The
others are: U.S. European Command, U.S. Pacific Command, U.S. Southern
Command, and U.S. Northern Command.
[9] See Doctrine for Logistic Support of Joint Operations, Executive
Summary, p. vi, Joint Publication 4-0 (Apr. 6, 2000).
[10] See Joint Publication 4-0, Chapter I, p. I-3-4.
[11] See Joint Tactics, Techniques, and Procedures for Joint Theater
Distribution, Chapter II, p. II-7, Joint Publications 4-01.4 (Aug. 22,
2000).
[12] See Army Regulation 710-1, Chapter 6, Section IV, Paragraph 6-24.
[13] During OIF, CENTCOM's army component, Army Central Command, was
placed in overall command of all ground forces and renamed Coalition
Forces Land Component Command.
[14] See Joint Publication 4-01.4, Chapter I, p. I-1.
[15] See Joint Publication 4-01.4, Chapter I, p. I-2-3.
[16] DOD defines joint doctrine as the fundamental military principles
that guide the employment of forces of two or more services in
coordinated action toward a common objective.
[17] See Joint Publication 4-01.4, Chapter I, p. I-7 and I-8.
[18] The armor used by U.S. forces during OIF is composed of two
primary components: an Outer Tactical Vest and two Small Arms
Protective Insert plates, which, when combined, provide protection
against both shrapnel and rifle rounds.
[19] See unpublished research report by RAND Arroyo Center on the
sustainment of Army units in Operation Iraqi Freedom by Eric Peltz and
Marc Robbins.
[20] See Center for Naval Analysis, Marine Corps Operations in OIF:
Volume IV--Ground Logistics (Sustainment & Distribution Capacity
Management, Classes I & V (W)), CRM D0008872.A2/Final (Alexandria, Va.:
January 2004), 56-59.
[21] These kits, first available in November 2003, consist of armored
doors, armor plates below the doors, an armor plate for the protection
of the seat backs, and a windshield and windows made of ballistic
glass.
[22] Letter from Subcommittee on National Security, Veterans Affairs,
and International Relations to Secretary of Defense Donald Rumsfeld,
October 2, 2002.
[23] GAO, Chemical and Biological Defense: U.S. Ability to Meet
Protective Suit Inventory Requirements Faces Risk, GAO-04-290
(Washington, D.C.: Apr. 28, 2004).
[24] This new database, called the Logistics Modernization Program, has
only been implemented at CECOM.
[25] GAO, Defense Inventory: Army War Reserve Spare Parts Requirements
Are Uncertain, GAO-01-425 (Washington, D.C.: May 10, 2001).
[26] GAO, Defense Inventory: Improved Industrial Base Assessments for
Army War Reserve Spares Could Save Money, GAO-02-650 (Washington, D.C.:
July 12, 2002).
[27] See Army Regulation 710-1, Chapter 4, Section I, Paragraph 4-2.
[28] See Army Regulation 710-1, Chapter 4, Section I, Paragraph 4-2, a.
(4) (b).
[29] The Joint Materiel Priorities and Allocation Board, sets, changes,
or recommends policies for allocating supplies in the DOD system.
[30] DOD defines operation plans as plans for the conduct of military
operations in a hostile environment prepared by the commander of a
unified or specified command in response to a requirement established
by the Joint Chiefs of Staff.
[31] A secondary repairable is a spare part that when broken is
repaired and returned to inventory rather than replaced.
[32] See DOD Supply Chain Material Management Regulations, Chapter 1,
C1.3.2.1, DOD Regulation 4140.1-R (May 23, 2003).
[33] See DOD Regulation 4140.1-R, Chapter 1, C1.3.2.1.
[34] DOD defines doctrine as the fundamental principles by which the
military forces or elements thereof guide their actions in support of
national objectives. It is authoritative but requires judgment in
application.
[35] See Chapter I, p. I-4, I-7, I-8, and I-10, Joint Publication 4-0.
[36] See Chapter I, p. I-7, Joint Publication 4-0.
[37] SAIC, Objective Assessment of Logistics in Iraq, Contract No. GS-
10F-0091L, Task Order 73510 (March 2004), p78.
[38] GAO-04-305R.
[39] Radio frequency identification tags are used to track shipping
containers and pallets and their contents while in transit. The tags
continuously transmit radio signals, which can be read using hand-held
or fixed scanners.
[40] DOD uses a pallet, called the 463L pallet, for air shipments. The
pallet is an 88" ¥ 108" aluminum flat base used to facilitate the
loading and unloading of aircraft.
[41] See unpublished research report by RAND Arroyo Center on the
sustainment of Army units in Operation Iraqi Freedom by Eric Peltz and
Marc Robbins.
[42] See unpublished research report by RAND Arroyo Center on the
sustainment of Army units in Operation Iraqi Freedom by Eric Peltz and
Marc Robbins.
[43] U.S. Marine Corps Enduring Freedom Combat Assessment Team,
Operation Iraqi Freedom, Implications for Seabasing, October 22, 2003.
[44] See Joint Publication 4-0, Chapter I, p. I-17 through I-19 and
Joint Publication 4-01.4, Chapter I, I-8 and I-9.
[45] GAO-04-305R.
[46] Generally, the 1st Marine Expeditionary Force served as the combat
force during the operation, while the 2nd Marine Expeditionary Force
provided theater-level supply support.
[47] See SAIC, Objective Assessment of Logistics in Iraq, Contract No.
GS-10F-0091L, Task Order 73510 (March 2004) Chapter 5.
[48] A Department of Defense Activity Address Code is a six-position
numeric code that uniquely identifies a unit, activity, or organization
that has the authority to requisition and/or receive materiel.
[49] Secretary of Defense, "Actions to Improve Logistics and Global
Supply Chain Management," Memorandum (Washington D.C.: Sept. 16, 2003).
[50] These support groups belong, respectively, to the 2nd Marine
Expeditionary Force, which generally provided theater-level supply
support for OIF, and the 1st Marine Expeditionary Force, which
generally served as the combat force for OIF.
[51] The Marine Corps Logistics Command, Albany, Ga. used repairable
generators obtained from its Foreign Military Sales program. Under this
program, the U.S. government authorizes the sale or transfer of
military equipment, including spare parts, to foreign countries either
through government-to-government agreements or through direct sales
from U.S. manufacturers.
[52] The operational readiness rate refers to the capability of
equipment other than aircraft to perform the mission or functions for
which it is organized or designed and may be used in general terms to
express a level or degree of readiness.
[53] Joint Tactics, Techniques, and Procedures for Joint Theater
Distribution, Chapter I, p. I4, Joint Pub 4.01.4 (Aug. 22, 2000).
[54] Radio frequency identification tags are used to track shipping
containers and pallets and their contents while in transit. The tags
continuously transmit radio signals, which can be read using hand-held
or fixed scanners.
[55] Abrams tanks and Bradley Fighting Vehicles are the Army's dominant
ground combat vehicles. Both provide mobile firepower while protecting
crews from the combat environment.
[56] Each vehicle has a track assembly that rotates on each side. Each
track assembly consists of a number of track shoes attached together to
form an endless track. The metal track shoes engage the teeth of the
track drive sprockets, which allows power to be transferred from the
vehicle to the track. As the sprocket moves the track, it moves the
vehicle. An Abrams tank has 156 track shoes; a Bradley Fighting Vehicle
has 166.
[57] According to Army Regulation 710-1, Chapter 6, paragraphs 6-25 and
6-26, AMC is to compute requirement levels based on guidance from the
Department of Army Headquarters using the Army War Reserve Automated
Process system. This system is a process that computes requirements for
repair parts and minor secondary items and several auxiliary processes
that support the requirement process.
[58] GAO, Army War Reserves Spare Parts Requirements are Uncertain, GAO-
01-425 (Washington, D.C.: May 2001).
[59] Accenture, TACOM Track Study: Findings, Solutions &
Recommendations, December 19, 2003.
[60] A lead-time is the interval in months between the initiation of
procurement action and the item's receipt into the supply system.
[61] Army Regulation 710-1 states that an active database of the past
24-month demand history should be used to compute future demand.
However, the length of the demand base used to forecast requirements
can vary from the standard 24 months.
[62] According to the Annual Industrial Capabilities Report to Congress
in February 2004, Goodyear required an annual minimum production
requirement of about 264,000 track shoes to meet its business case.
[63] The ceramic tile is composed of various ceramic composites such as
boron carbide, silicon carbide, and aluminium oxide. The tile is backed
by multiple layers of polyethylene fiber.
[64] Additional attachments include throat and groin protectors.
[65] The Congressional Budget Office's estimate for H.R. 4200, National
Defense Authorization Act for Fiscal Year 2005, p. 16.
[66] The Defense Federal Acquisition Regulation Supplement, Part 225
governs the acquisition of foreign products and services.
[67] Twaron is a para-aramid fiber that can be substituted for Kevlar.
[68] SpectraShield is a polyethylene fiber used as a backing for the
ceramic plate and is the only material that meets Army and Marine Corps
ballistic protection and weight requirements for the new body armor.
[69] The Defense Priorities and Allocation System assures the timely
availability of industrial resources to meet current national defense
and emergency preparedness requirements.
[70] Department of the Army, Office of the Inspector General, Special
Inspection of the Processes Used to Provide Body Armor to U.S. and
Coalition Forces in Operation Iraqi Freedom and Operation Enduring
Freedom, December 2003-February 2004, April 20, 2004.
[71] The Defense Production Act is the primary legislation for ensuring
that industrial resources and critical technology items essential for
national defense are available when needed.
[72] The congressional request was prompted by our finding that DOD
could not easily identify, track, and locate defective Battle Dress
Overgarments. The Committee's request was subject to available
inventories and urgent deployment constraints.
[73] The Saratoga suit is considered equivalent to the JSLIST in
protection against chemical and biological agents. Therefore, the use
of the Saratoga suit by the Marine Corps was sufficient to meet the
congressional request.
[74] DOD defines visibility as the capability to provide users with
timely and accurate information on the location, movement, status, and
identity of units, personnel, equipment, material, and supplies.
[75] GAO, DOD Business Systems Modernization: Billions Continue to Be
Invested with Inadequate Management Oversight and Accountability, GAO-
04-615 (Washington, D.C.: May 27, 2004) found that asset visibility was
not maintained over JSLIST suits at the unit level. We also found in
GAO, DOD Management: Examples of Inefficient and Ineffective Business
Processes, GAO-02-873T (Washington, D.C.: June 25, 2002) that DOD's
visibility system did not provide accurate information about the
quantities and location of JSLIST suits in its inventory.
[76] GAO, Chemical and Biological Defense: U.S. Ability to Meet
Protective Suit Inventory Requirements Faces Risk, GAO-04-290
(Washington, D.C.: Apr 28, 2004).
[77] Statement by Vice Admiral Keith W. Lippert, Director of the
Defense Logistics Agency, before the Subcommittee on Readiness, House
Armed Service Committee, March 30, 2004.
[78] These are part of the 5X90 family of lithium batteries. The BA-
5590 contains lithium sulfur dioxide (Li/SO2) cells and has a use-life
of about 24 hours. The BA-5390 contains lithium manganese dioxide (Li/
MnO2) cells and has a use-life of about 36 hours. Both batteries have a
shelf life of 5 years.
[79] BA-5590 and BA-5390 batteries are distributed in packages of four
batteries. In this report, we use the number of individual batteries.
[80] According to CECOM officials, demand represents worldwide demand.
[81] The Joint Materiel Priorities and Allocation Board--which performs
duties for the Chairman, Joint Chiefs of Staff--sets, changes, or
recommends priorities for allocating supplies in the DOD system when
competing requirements among DOD components cannot be resolved.
[82] BA-5390s were not part of the pre-OIF war reserve inventory
because the U.S. military did not use them until the fall of 2002.
[83] Army War Reserve Automated Process computes requirements for
secondary items, such as spare parts, for the war reserve.
[84] CECOM's change in the demand base to 6 months was reflected in the
April 2003 forecasted requirements.
[85] CECOM officials stated that this figure included a Marine Corps
requirement.
[86] According to CECOM this relatively long lead-time includes time
for testing.
[87] Science Applications International Corporation (SAIC), Objective
Assessment of Logistics in Iraq (March 2004).
[88] Mission capable is defined as the material condition of an
aircraft indicating it can perform at least one and potentially all of
its designated missions.
[89] The Marine Corps provided fiscal year 2000 as a representative
peacetime year.
[90] After Desert Shield/Desert Storm, DLA established a "War Stopper"
program to ensure sufficient wartime surge capacity for critical items.
It took preemptive steps, such as establishing surge contracts and
investing funds in equipment and facilities, to ensure that these items
would be available in sufficient quantities during contingency
operations.
[91] The operations and maintenance budget covers the costs of
purchasing supply items associated with carrying out military
operations.
[92] Materiel handling equipment refers to mechanical devices that
allow supplies to be handled easily and economically to, through, and
from production facilities, in warehouses and storage, and in receiving
and shipping areas.
[93] This command, formerly known at the Military Traffic Management
Command, provides global surface deployment command and control and
distribution operations.
[94] Inventory as depicted in figure 22 does not include war reserve
stock. As of October 2004, there were 2 5-ton truck tires in war
reserves.
[95] Units in Iraq reported shortages of tires in general, and not
solely the 5-ton or the HMMWV radial tires.
[96] TACOM's worldwide forecasted requirements included those for OIF.
According to TACOM officials, much of the worldwide demand was driven
by demand from OIF.
[97] The primary long-term contract was with Goodyear while Michelin
provided some additional tires.
[98] Reset is a term used to define bringing a vehicle that was used
during Operation Enduring Freedom and OIF back to a fully mission-
capable (serviceable) condition so that units can be combat-ready for
other deployments. Resetting a vehicle involves extensive use of spare
parts to bring the vehicles up to a fully mission-capable condition.
[99] The U.S. Army recognizes three levels of armor protection for
HMMWVs in Iraq. Level 1 is the Up-armored HMMWV, level 2 is a HMMWV
with an add-on-armor kit, and level 3 is field-improvised armor.
[100] Ground System Industrial Enterprise is a TACOM organization
responsible for managing TACOM's arsenals and depots.
[101] Center for Army Lessons Learned, Initial Impressions Report,
Operation Iraqi Freedom, May 2004.
[102] Neither AM General nor O'Gara-Hess Eisenhardt reported that the
Army was not able to pay them for the vehicles they produced.
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