Defense Logistics
Better Management and Oversight of Prepositioning Programs Needed to Reduce Risk and Improve Future Programs Gao ID: GAO-05-427 September 6, 2005The importance of prepositioned stocks to the U.S. military was highlighted during recent operations in Iraq, as much of the equipment and supplies stored at land sites in the region and aboard prepositioning ships were used to support operations. Long-standing problems in the Department of Defense's (DOD) prepositioning program are systematic of the inventory management issues, and more recently supply chain management issues, that GAO has considered as high-risk areas since 1990. GAO was asked to review the risks facing DOD's prepositioning programs, including an assessment of (1) the near-term operational risk given the continuing use of these stocks, (2) the sufficiency of DOD and service-level oversight of these prepositioning programs, and (3) whether DOD has developed a coordinated plan for the future of the department's prepositioning programs that would meet the goals of the recently published defense strategy.
DOD faces some near-term operational risks should another large-scale conflict emerge because it has drawn heavily on its prepositioned stocks to support ongoing operations in Iraq. And, although remaining stocks provide some residual capability, many of the programs face significant inventory shortfalls and in some cases, maintenance problems. For example, the Army has drawn equipment from virtually all of its prepositioned stocks to support operations in Iraq. Some of its storage sites have shortfalls of equipment and sustainment items, like spare parts, and some stocks are in poor condition. Additionally, the Marine Corps has used a significant portion of the stocks downloaded from 5 of its 16 prepositioning ships to support operations in Iraq and it is unclear when this equipment will be refilled. The Air Force is also continuing to use a considerable amount of its prepositioned stocks to support combat operations in Iraq and it is unclear when these stocks will be refilled. The precise operational risk created by these shortfalls is difficult to assess. However, should a new conflict arise in the near term, the combatant commander would likely face difficult operational challenges. The department and the military services have provided insufficient oversight over DOD's prepositioning programs. This inattention has allowed long-standing problems with determining program requirements and managing inventory to persist. DOD has not enforced its directive that could provide centralized oversight over its prepositioning programs. Officials told us they did not enforce this directive because they were able to provide adequate oversight through other mechanisms. Even if the department had enforced its directive, however, the requirements underpinning some of DOD's prepositioning programs are questionable and the services do not have sufficient information on the inventory level and maintenance condition of some prepositioned stocks. Without reliable information on requirements, inventory levels, and maintenance condition, DOD cannot provide sufficient oversight over its programs, which potentially leaves war fighters at risk of not having needed stocks in the future. DOD has not developed a coordinated departmentwide plan or joint doctrine to guide the future of its prepositioning programs, despite the heavy use of prepositioned stocks in recent conflicts and the department's plans to rely on them in the future. DOD's recently published defense strategy indicates that prepositioning programs should be more innovative, flexible, and joint. In the absence of a departmentwide plan or joint doctrine to coordinate the reconstitution and future plans for these programs, the services have been recapitalizing stocks and developing future plans without an understanding of how the programs will fit together to meet the evolving defense strategy. Without a framework that establishes priorities for prepositioning among competing initiatives, DOD cannot provide assurances to Congress that the billions of dollars that will be required to recapitalize the stocks and develop future programs will produce programs that operate jointly, support the needs of the war fighter, and are affordable.
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-05-427, Defense Logistics: Better Management and Oversight of Prepositioning Programs Needed to Reduce Risk and Improve Future Programs
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Report to the Subcommittee on Readiness, Committee on Armed Services,
House of Representatives:
United States Government Accountability Office:
GAO:
September 2005:
Defense Logistics:
Better Management and Oversight of Prepositioning Programs Needed to
Reduce Risk and Improve Future Programs:
GAO-05-427:
GAO Highlights:
Highlights of GAO-05-427, a report to the Subcommittee on Readiness,
Committee on Armed Services, House of Representatives:
Why GAO Did This Study:
The importance of prepositioned stocks to the U.S. military was
highlighted during recent operations in Iraq, as much of the equipment
and supplies stored at land sites in the region and aboard
prepositioning ships were used to support operations. Long-standing
problems in the Department of Defense‘s (DOD) prepositioning program
are systematic of the inventory management issues, and more recently
supply chain management issues, that GAO has considered as high-risk
areas since 1990.
GAO was asked to review the risks facing DOD‘s prepositioning programs,
including an assessment of (1) the near-term operational risk given the
continuing use of these stocks, (2) the sufficiency of DOD and service-
level oversight of these prepositioning programs, and (3) whether DOD
has developed a coordinated plan for the future of the department‘s
prepositioning programs that would meet the goals of the recently
published defense strategy.
What GAO Found:
DOD faces some near-term operational risks should another large-scale
conflict emerge because it has drawn heavily on its prepositioned
stocks to support ongoing operations in Iraq. And, although remaining
stocks provide some residual capability, many of the programs face
significant inventory shortfalls and in some cases, maintenance
problems. For example, the Army has drawn equipment from virtually all
of its prepositioned stocks to support operations in Iraq. Some of its
storage sites have shortfalls of equipment and sustainment items, like
spare parts, and some stocks are in poor condition. Additionally, the
Marine Corps has used a significant portion of the stocks downloaded
from 5 of its 16 prepositioning ships to support operations in Iraq and
it is unclear when this equipment will be refilled. The Air Force is
also continuing to use a considerable amount of its prepositioned
stocks to support combat operations in Iraq and it is unclear when
these stocks will be refilled. The precise operational risk created by
these shortfalls is difficult to assess. However, should a new conflict
arise in the near term, the combatant commander would likely face
difficult operational challenges.
The department and the military services have provided insufficient
oversight over DOD‘s prepositioning programs. This inattention has
allowed long-standing problems with determining program requirements
and managing inventory to persist. DOD has not enforced its directive
that could provide centralized oversight over its prepositioning
programs. Officials told us they did not enforce this directive because
they were able to provide adequate oversight through other mechanisms.
Even if the department had enforced its directive, however, the
requirements underpinning some of DOD‘s prepositioning programs are
questionable and the services do not have sufficient information on the
inventory level and maintenance condition of some prepositioned stocks.
Without reliable information on requirements, inventory levels, and
maintenance condition, DOD cannot provide sufficient oversight over its
programs, which potentially leaves war fighters at risk of not having
needed stocks in the future.
DOD has not developed a coordinated departmentwide plan or joint
doctrine to guide the future of its prepositioning programs, despite
the heavy use of prepositioned stocks in recent conflicts and the
department‘s plans to rely on them in the future. DOD‘s recently
published defense strategy indicates that prepositioning programs
should be more innovative, flexible, and joint. In the absence of a
departmentwide plan or joint doctrine to coordinate the reconstitution
and future plans for these programs, the services have been
recapitalizing stocks and developing future plans without an
understanding of how the programs will fit together to meet the
evolving defense strategy. Without a framework that establishes
priorities for prepositioning among competing initiatives, DOD cannot
provide assurances to Congress that the billions of dollars that will
be required to recapitalize the stocks and develop future programs will
produce programs that operate jointly, support the needs of the war
fighter, and are affordable.
What GAO Recommends:
GAO is making several recommendations to address the risks of inventory
shortfalls and improve DOD‘s management and oversight of its
prepositioning programs.
In commenting on a draft of this report, DOD partially or fully
concurred with GAO‘s recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-05-427.
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:
Inventory Shortfalls and Poor Equipment Condition Leave Many of DOD's
Prepositioning Programs at Risk:
DOD and Some of the Military Services Have Provided Insufficient
Oversight Over Their Prepositioning Programs:
DOD Lacks A Plan To Coordinate Future Prepositioning Programs:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Past Products Identifying DOD Inventory Management and
Prepositioning Challenges:
Appendix II: Scope and Methodology:
Appendix III: Comments from the Department of Defense:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Description of DOD's Prepositioning Programs:
Table 2: Current Status and Operations and Maintenance Funding for Army
Prepositioned Stocks at Key Locations as of January 2005:
Table 3: GAO Products:
Table 4: Other Products:
Figures:
Figure 1: Locations of Army (USAR), Marine Corps (USMC), Navy (USN),
and Air Force (USAF) Prepositioned Stocks:
Figure 2: Sustainment Stocks Stored Outside at Camp Carroll, South
Korea:
United States Government Accountability Office:
Washington, DC 20548:
September 6, 2005:
The Honorable Joel Hefley:
Chairman:
The Honorable Solomon P. Ortiz:
Ranking Minority Member:
Subcommittee on Readiness:
Committee on Armed Services:
House of Representatives:
With fewer troops permanently stationed overseas, prepositioned stocks
of equipment and supplies have become an integral part of the
Department of Defense's (DOD) ability to project forces into conflict
areas faster. The importance of prepositioned stocks to the U.S.
military was highlighted during recent operations in Iraq. The military
used equipment and supplies stored at land sites in the region and
offloaded much of the stocks from its prepositioning ships. Perhaps
more importantly, the availability of the sites gave the United States
the facilities it needed to assemble forces for combat. Recognizing the
importance of the department's prepositioning programs, Congress has
made significant investments in these programs. In recent years, the
services have collectively used over $1 billion each year to operate
and maintain their prepositioning programs; by fiscal year 2005 this
amount had declined to about $724 million, since a large portion of
these stocks were used to support military operations in Iraq. However,
billions of dollars in future investments will be needed to
recapitalize equipment and develop future programs. The recently
published National Defense Strategy indicates that prepositioning will
continue to be an important aspect of DOD's defense posture in the
future.[Footnote 1] The strategy establishes several goals for the
future of these programs, including the need for the programs to be
more flexible and increasingly joint in character.
Each of the military services prepositions combat or support equipment
and supplies in order to speed response times of U.S. forces to
operating locations and reduce the strain on scarce airlift or slower
sealift assets. For example, the Army stores sets of combat brigade
equipment and supporting supplies at land sites in several countries
and aboard prepositioning ships in the Pacific and Indian Oceans. The
Marine Corps stores equipment and supplies for its forces aboard
squadrons of maritime prepositioning ships located around the world and
at land sites in Norway. The Navy stores equipment and supplies to
support ship offloading, deployable hospitals, and construction
projects also aboard the maritime prepositioning ships and at land
sites around the world. The Air Force stores ammunition at land sites
and aboard prepositioning ships and prepositions base support
equipment, vehicles, and supporting supplies at several land sites.
In 1998, we reported on problems ranging from poor inventory visibility
to unreliable requirements-setting processes in the Army and Air Force
prepositioning programs.[Footnote 2] Similar problems were more
recently identified in numerous after-action assessments of the war in
Iraq, and we testified in March 2004 before the Subcommittee about the
performance of the Army and Marine Corps' prepositioning programs
during Operation Iraqi Freedom.[Footnote 3] We found that although the
programs performed well in general, some Army units faced equipment
shortfalls and there were instances where certain types of equipment
were outdated or did not match unit needs. We stated that DOD may need
to rethink its prepositioning programs to ensure that they are
compatible with overall transformation goals and the evolving military
strategy. Following our testimony, Congress directed the Secretary of
Defense to submit a report on its prepositioning plans by October 1,
2005.[Footnote 4] Inventory management issues, and more recently supply
chain management, have been considered high-risk areas by GAO since
1990. To further assist the Subcommittee in its oversight, you asked
that we assess the status and plans for DOD's prepositioning programs
in advance of the department's report. Specifically, you asked us to
review the risks facing the department's prepositioning programs,
including an assessment of: (1) the near-term operational risk given
the continuing use of these stocks, (2) the sufficiency of DOD and
service-level oversight of these prepositioning programs, and (3)
whether DOD has developed a coordinated plan for the future of the
department's prepositioning programs that would meet the goals of the
recently published defense strategy.
To assess the near-term operational risk given the continuing use of
prepositioned stocks, we obtained reports prepared by the military
services on the inventory levels of their prepositioned stocks compared
to program requirements[Footnote 5] and discussed the potential near-
term operational and long-term program risks associated with inventory
shortfalls and maintenance deficiencies. We visited selected
prepositioning sites and reviewed available maintenance reports or
other data used by the services to measure the condition of the
prepositioned stocks. To assess the sufficiency of DOD and the
services' oversight of these programs, we discussed the processes used
by DOD to oversee its prepositioning programs with officials from the
Office of the Secretary of Defense, the Joint Staff, and the military
services. To assess whether DOD has developed a coordinated plan for
the future of its prepositioning programs that would meet the goals of
the recently published defense strategy, we reviewed the recently
published National Defense Strategy and discussed the future direction
of the department's prepositioning programs with officials in the
Office of the Secretary of Defense, the Joint Staff, and the military
services. We also collected and analyzed information from the military
services on the future plans for their prepositioning programs. We also
discussed the time frames and costs needed to repair or replace
prepositioned stocks used in recent military operations. We conducted
our work from July 2004 through May 2005 in accordance with generally
accepted government auditing standards. Our assessments of data
reliability revealed significant concerns that are discussed later in
the report. A more detailed discussion of our scope and methodology is
contained in appendix II.
Results in Brief:
DOD faces some near-term operational risks should another large-scale
conflict emerge because it has drawn heavily on its prepositioned
stocks to support ongoing operations in Iraq. And, although remaining
stocks provide some residual capability, many of the programs face
significant inventory shortfalls and in some cases, maintenance
problems.[Footnote 6] There is currently no strategy in place to
mitigate the operational risks created by inventory shortfalls and poor
maintenance condition of prepositioned equipment. Combatant commanders
rely on prepositioned stocks being available and in good maintenance
condition; otherwise U.S. forces must bring needed stocks with them or
spend valuable time repairing equipment. The current status of the
services' programs is summarized as follows:
* The Army has drawn equipment from virtually all of its prepositioned
stocks to support operations in Iraq and little of the equipment has
been returned. Some stocks are currently stored in South Korea, or are
afloat on prepositioning ships near Guam/Saipan and Diego Garcia.
However, these sites have shortfalls of equipment and sustainment items
like spare parts. Some of these shortfalls have existed in these and
other Army programs for years, however, and are not attributable to the
war in Iraq. In addition, we found that some of these stocks were in
poor maintenance condition, especially those stored in South Korea.
* The Marine Corps is currently using a significant portion of the
stocks offloaded from 5 of its 16 prepositioning ships to support
ongoing operations in Iraq. It is unclear when this equipment will be
returned to prepositioned stocks because much of this equipment will be
left in Iraq to support the continuing deployment of Marine Corps
forces there. Conversely, while the Navy used prepositioned assets like
field hospitals in Iraq, it currently reports few shortfalls.
* The Air Force also has a reduced capability in its prepositioned
stocks because it is continuing to use a considerable amount of these
stocks to support combat operations in both Afghanistan and Iraq. For
example, it used approximately 43 percent of the total number of its
prepositioned bare base sets[Footnote 7] to house deployed forces
supporting Operations Enduring Freedom and Iraqi Freedom. It is unclear
when these stocks will be refilled. The precise operational risk
created by these shortfalls is difficult to assess. Operation Iraqi
Freedom revealed significant issues with the status of prepositioned
stocks, such as shortages in spare parts and less-than-modern
equipment. These problems still exist today. While the military
planners we spoke with told us that they would find a way to work
around the shortfalls, they offered little in the way of concrete
plans. Should a new conflict arise in the near term--especially one
where U.S. forces did not control the timing--the combatant commander
would likely face even more difficult operational challenges.
DOD and the military services have provided insufficient oversight over
the department's prepositioning programs. This inattention has allowed
long-standing problems with determining program requirements and
managing inventory to persist. Management principles, such as those
embraced in the Government Performance and Results Act of 1993, provide
federal agencies with a framework for effectively implementing and
managing programs[Footnote 8]. Management principles include sufficient
information to support sound decision making and enable Congress to
provide proper oversight. However, DOD has not implemented its
directive on war reserve matériel policy that could provide centralized
oversight over its prepositioning program[Footnote 9]s. Officials from
the Office of the Secretary of Defense told us they did not implement
this directive because they did not believe they had the authority to
enforce its provisions. In addition, officials told us they were able
to provide adequate oversight over the department's prepositioning
programs through other mechanisms, such as reviewing quarterly
readiness assessments and the services' budget submissions. While these
mechanisms provide DOD with important information on gaps in
capabilities and resource allocations, they provide only a vague and
broad description of shortfalls or readiness problems and, therefore,
are not effective as an oversight tool. Based on our analysis, even if
the department had implemented its directive, the requirements
underpinning some of DOD's prepositioning programs are questionable and
the Army and Air Force do not have reliable information on the
inventory fill and maintenance condition of some prepositioned stocks.
For example, as recently as February 2005, information contained in the
Army's readiness reporting system showed the maintenance condition of
prepositioned equipment in South Korea to be at a high level. However,
during our work we found that much of the Army's prepositioned combat
equipment stored in South Korea had not been properly maintained.
Without reliable information on requirements, inventory levels, and
maintenance condition, DOD cannot provide sufficient oversight over its
programs, which potentially leaves war fighters at risk of not having
needed stocks in the future.
DOD has not developed a coordinated departmentwide plan or joint
doctrine to guide the future of its prepositioning programs, despite
the heavy use of prepositioned stocks in recent conflicts and the
department's plans to rely on them in the future. The 2005 National
Defense Strategy specifically notes the importance of prepositioning in
the future and indicates that prepositioning programs should be more
innovative, flexible, and joint in character, but provides few details
on how it will accomplish these goals. The independent Overseas Basing
Commission recently echoed the continued importance of the department's
prepositioning programs in the future. DOD officials told us that the
future of its prepositioning programs is unclear and dependent on the
outcome of several interrelated studies ongoing within the department,
especially reviews of mobility and an additional study being led within
the department on overseas presence and basing. In the absence of a
departmentwide plan or joint doctrine to coordinate the
reconstitution [Footnote 10] and future plans for these programs, the
military services have been recapitalizing some stocks and developing
future plans for their programs without a clear understanding of how
they will fit together to meet the evolving defense strategy. This
service-centric approach to prepositioning is out of step with the
department's goals of transforming the military to be more joint and
expeditionary, and potentially misses opportunities to achieve greater
efficiencies where service programs overlap in making future investment
decisions. For example, the Army and Air Force maintain separate
service-centric bare base programs, although the basic capabilities of
these programs are the same. Furthermore, the Navy and Marine Corps are
proposing multibillion dollar procurement programs to support new
concepts, such as sea basing, while the Defense Logistics Agency is
proposing floating depots to resupply troops in theater. Without an
overarching framework that establishes priorities for prepositioning
among competing initiatives and identifies the resources required to
implement the future programs, DOD cannot provide assurances to
Congress that the billions of dollars that will be required to
recapitalize the stocks and develop future programs will ultimately
produce programs that will operate jointly, support the needs of the
war fighter, and are affordable.
We are making several recommendations to address the risks of inventory
shortfalls and improve DOD's management and oversight of its
prepositioning programs. In commenting on a draft of this report, DOD
partially or fully concurred with our recommendations and indicated
that it had initiated several actions to address our recommendations.
Background:
Prepositioning is an important part of DOD's overall strategic mobility
framework. It allows DOD to field combat-ready forces in days rather
than the weeks it would take if the forces and all necessary equipment
and supplies had to be brought from the United States to the location
of the conflict. The U.S. military can deliver equipment and supplies
in three ways: by air, by sea, or by prepositioning. While airlift is
fast, it is expensive to use and impractical for moving all of the
material needed for a large-scale deployment. Although ships can carry
large loads, they are slower than airlift. Prepositioning lessens the
strain of using expensive airlift and reduces the reliance on slower
sealift deliveries. Concerned about the reduction in U.S. forces
overseas and their ability to move forces in the time required to
resolve potential conflicts quickly, the services have expanded
prepositioning programs ashore and on ships in potential areas of
conflict.
The military services have prepositioning programs to store combat or
support equipment and supplies near areas with a high potential for
conflict and to speed response times and reduce the strain on other
mobility assets. The Defense Logistics Agency prepositions food and
bulk fuel to support a range of contingency operations and training
exercises. The Special Operations Command relies on the military
services to preposition common support items for its forces, such as
base support items and vehicles.
The Army's program involves three primary categories of stocks: combat
brigade sets, operational projects, and war reserve sustainment stocks
stored at land sites and aboard prepositioning ships around the world.
The Marine Corps also prepositions equipment and supplies aboard
prepositioning ships and at land sites in Norway. The Navy's
prepositioning efforts are comparatively small, used mainly to support
the Marine Corps' prepositioning program and deploying forces. The Navy
prepositions equipment and supplies at land sites and aboard the
maritime prepositioning ships. The Air Force prepositions stocks of war
reserve equipment and supplies to meet initial contingency requirements
and to sustain early deploying forces. The Air Force's prepositioned
war reserve stocks include bare base sets; vehicles; munitions; and a
variety of consumable supplies, such as rations, fuel, support
equipment, aircraft accessories, and medical supplies. DOD's
prepositioning programs are briefly described in the table below.
Table 1: Description of DOD's Prepositioning Programs:
Service: Army:
Types of stocks: Combat brigade sets;
Description:
* Stored at land sites and aboard prepositioning ships;
* Sets are designed to support 3,000 to 5,000 soldiers;
* Heavy weaponry such as tanks and Bradley fighting vehicles;
* Support equipment such as trucks and High Mobility Multi-purpose
Wheeled Vehicles;
* Spare parts and other sustainment stocks to support the early stages
of a conflict.
Types of stocks: Sustainment stocks;
Description:
* Stored at land sites and aboard prepositioning ships;
* Replacement equipment for losses in early stages of operations or
until resupply is established;
* Includes major end-items such as aircraft engines and tracked
vehicles;
* Secondary items such as meals, clothing, petroleum supplies,
construction materials, ammunition, medical materials, and repair
parts.
Types of stocks: Operational project stocks;
Description:
* Stored at land sites and aboard prepositioning ships;
* Authorized material above unit authorizations designed to support
Army operations or contingencies;
* Equipment and supplies for special operations forces, bare base sets,
petroleum and water distribution, mortuary operations, and prisoner-of-
war operations.
Service: Navy/Marine Corps:
Types of stocks: Maritime prepositioning force;
Description:
* Consists of 16 prepositioning ships organized into three squadrons;
* Each squadron supports about 15,000 Marines for up to 30 days;
* Includes combat systems, communications systems, construction
equipment, munitions, medical supplies, and sustainment stocks.
Types of stocks: Prepositioning program--Norway;
Description:
* Several land sites located in central Norway;
* Designed to support 13,000 Marines for up to 30 days;
* Includes vehicles, weapons, munitions, rations, and other equipment
that will be used to support any geographic combatant command.
Types of stocks: Navy prepositioned assets;
Description:
* Assets are stored aboard maritime prepositioning ships and at land
sites;
* Equipment to offload prepositioning ships, including material
handling equipment, ramps and barges, landing and amphibious craft, and
bulk fuel;
* Construction equipment such as cranes, forklifts, trucks, and tractor
trailers;
* Includes six 500-bed fleet hospitals[A].
Service: Air Force:
Types of stocks: Bare base sets;
Description:
* Base operating support equipment used to house forces, and equipment
and supplies needed to support airfield operations.
Types of stocks: Vehicles;
Description:
* Includes trucks, buses, and High Mobility Multi-purpose Wheeled
Vehicles.
Types of stocks: Other support equipment and supplies;
Description:
* Includes matériel handling equipment, rations, fuel, fuel support
equipment, aircraft accessories, and medical supplies at land sites and
munitions aboard four prepositioning ships.
Source: GAO.
[A] The Navy is in the process of transitioning from 500-bed fleet
hospitals to smaller modular units.
[End of table]
The military services preposition these stocks of equipment and
supplies at several land sites and aboard prepositioning ships around
the world. Most of the military services preposition equipment and
supplies in southwest Asia, the Pacific theater, Europe, and aboard
prepositioning ships. Figure 1 shows the locations of DOD's
prepositioned stocks.
Figure 1: Locations of Army (USAR), Marine Corps (USMC), Navy (USN),
and Air Force (USAF) Prepositioned Stocks:
[See PDF for image]
Note: DOD also prepositions smaller stocks of equipment and supplies at
other locations not identified on this map.
[End of figure]
Inventory Shortfalls and Poor Equipment Condition Leave Many of DOD's
Prepositioning Programs at Risk:
DOD faces some near-term operational risks should another large-scale
conflict emerge due to inventory shortfalls and poor maintenance
condition of some of its prepositioned stocks. For example, the
department has drawn heavily on its prepositioned stocks to support
ongoing operations in Iraq and relatively little has been
reconstituted. In addition, while remaining stocks provide some
residual capability, many have significant inventory shortfalls and in
some cases, maintenance problems. Combatant commanders rely on
prepositioned stocks being available and in good maintenance condition;
otherwise U.S. forces must bring needed stocks with them or spend
valuable time repairing equipment. Since these stocks are typically
used in the early stages of a conflict, it is important for DOD to
determine the operational risk associated with any shortfalls.
Operation Iraqi Freedom revealed significant issues with the status of
prepositioned stocks, such as shortages in spare parts and less-than-
modern equipment. The same problems continue to exist today in some
programs.
The Army Is Reporting Low Inventory Fill and Poor Maintenance Condition
for Some Prepositioned Stocks:
The Army is currently reporting low inventory fill for the combat
brigade sets, operational project stocks, and sustainment stocks that
comprise its prepositioning program, and some stocks not used in recent
operations are in poor maintenance condition. For example, the Army
used much of the equipment and supplies associated with the combat
brigade sets stored at land sites in Kuwait and Qatar and aboard
prepositioning ships afloat near Diego Garcia to support operations in
Iraq. In addition, the Army used some equipment from its other
prepositioned stocks in Europe, South Korea, and from other
prepositioning ships located near Guam/Saipan.
The Army is also reporting low inventory fill for its operational
projects and sustainment stocks. The Army has a total of 14 operational
projects that contain equipment and supplies needed for unique mission
requirements, such as special operations forces, mortuary operations,
and prisoner handling. Sustainment stocks provide replacement equipment
and supplies, such as repair parts, petroleum items, and tracked
vehicles, until normal resupply channels are established. The Army is
reporting inventory fills for operational projects and sustainment
stocks--approximately 26 percent and 20 percent respectively--that are
considerably lower than the program requirements. Some of the Army's
shortfalls have been long-standing, however, including shortfalls in
critical areas like spare parts, and are not attributable to the war in
Iraq. For example, we reported in 2003 that DOD experienced equipment
readiness problems because of a lack of key spare parts.[Footnote 11]
Table 2 provides an overview of the inventory levels, maintenance
condition, and operations and maintenance funding of the Army's
prepositioned stocks.
Table 2: Current Status and Operations and Maintenance Funding for Army
Prepositioned Stocks at Key Locations as of January 2005:
Dollars in millions.
Location: Europe;
Current status: Low inventory fill, with limited combat equipment,
operational projects, and other stocks stored at sites in Germany,
Italy, Luxembourg, and the Netherlands. Some stocks were taken out to
support operations in Iraq, while stocks from Italy were used to
temporarily refill the prepositioning ships now positioned near Diego
Garcia;
Total funding fiscal years 2000-2005: $277.6.
Location: Kuwait/Qatar;
Current status: Equipment in use in Iraq and storage warehouses in
Qatar have been converted to become Central Command's regional
headquarters;
Total funding fiscal years 2000-2005: $304.2.
Location: South Korea;
Current status: As of March 2005, the brigade set had most of its
authorized equipment on hand, though a recent maintenance inspection
revealed maintenance deficiencies. The Army plans to correct the
maintenance problems with the set in September 2005, as well as
reconfigure it to be consistent with the Army's new modular
configuration;
Total funding fiscal years 2000-2005: $245.9.
Location: Afloat near Diego Garcia and Guam/Saipan;
Current status: Two squadrons, each with a partial brigade set, are
available;
Total funding fiscal years 2000-2005: $1,835.8.
Source: GAO analysis of Army data.
[End of table]
Some stocks that were taken from prepositioned storage locations and
used during operations in Iraq are either still in use, or have
experienced extreme wear and tear. For example, the Army continues to
use equipment taken from prepositioned stocks to support its units in
Iraq, delaying the reconstitution and redistribution of the equipment.
According to Army officials, this equipment may not be returned to the
prepositioned stocks because the Army is giving priority to
transforming its forces into more deployable and expeditionary brigade-
based formations and may use formerly prepositioned equipment to fill
additional equipment requirements associated with the new formations.
Importantly, this heavy stress on equipment is a problem across much of
the Army's equipment that has been used in Iraq, not just the equipment
taken from prepositioned stocks.
We also found that some other prepositioned stocks in storage were in
poor maintenance condition, even though they had not been used in
Operation Iraqi Freedom. For example, during a March 2005 visit to Camp
Carroll, South Korea, we found that some of the Army's prepositioned
stocks at this location were in poor maintenance condition and that
much of the equipment was overdue for periodic maintenance. Army
officials confirmed that required cyclic maintenance had not been
performed on the equipment in the brigade set, operational projects,
and sustainment stocks for several years. To address this, the Army has
stepped up its maintenance efforts by bringing in contractor support
and setting up temporary maintenance facilities to assist in repairing
the equipment to standard. Moreover, as shown in figure 2, certain
stocks were stored outside and had been for many years and corrosion
was evident on some pieces of equipment. Corrosion can significantly
affect the readiness of prepositioned equipment: DOD spends an
estimated $20 billion each year to repair the damage to military
equipment and infrastructure caused by this problem. In this regard, we
have called for improvements to DOD's long-term corrosion strategy,
including better planning and establishment of a long-term funding
mechanism.[Footnote 12] Because of continuing concerns over corrosion,
we are currently conducting a congressionally directed review of its
impact on DOD's overall prepositioned assets.
Figure 2: Sustainment Stocks Stored Outside at Camp Carroll, South
Korea:
[See PDF for image]
Source: GAO.
[End of figure]
The Army also maintains European prepositioning storage sites in
Germany, Italy, Luxembourg, and the Netherlands. However, few stocks
remain there because they have been drawn out to support operations in
other locations, including Bosnia and Iraq. The mission in Europe has
steadily declined since the European drawdown of the early 1990s, and
the remaining sites are the last remnants of the Army's large-scale
prepositioning program developed during the Cold War. Army officials
told us that they are currently using the local national workforce at
these locations to perform other maintenance workloads, including
fixing equipment from Iraq. In past reports, we have recommended that
the Army align its workforce and facilities to meet the reduced post-
Cold War mission in Europe.[Footnote 13] Officials told us that they
have reduced infrastructure in response to our recommendations, and are
contemplating further reductions. In Italy, however, the Army has
requested about $55 million to construct new storage and maintenance
facilities that it has said will become the centerpiece of its land
prepositioning in the region. This region still receives considerable
funding, as shown in table 2. The Army spent nearly $290 million during
fiscal years 2000-2004, even though the sites have had an uncertain
mission and reduced stocks for much of that time.
The Marine Corps Is Reporting Low Inventory Fill for Some Prepositioned
Stocks, While the Navy Reports Few Shortfalls:
The Marine Corps has offloaded about 75 percent of the major end-items
stored on 5 of its 16 prepositioning ships to support combat operations
in Iraq. The remaining 11 prepositioning ships are reporting inventory
fills of 95 percent or greater and good maintenance condition for major
end-items and sustainment stocks. The Marine Corps also used some of
its prepositioned major end-items stored at several land sites in
Norway to support operations in Iraq and Afghanistan and to fill
shortfalls at Marine Corps bases and on some of the prepositioning
ships. As a result, these sites are currently reporting an inventory
fill of about 71 percent.
It is unclear when this equipment will be returned to prepositioned
stocks because, according to a Marine Corps official, a large portion
of the Marine Corps' equipment offloaded from prepositioning ships to
support the deployment of the I Marine Expeditionary Force to Iraq is
currently being kept in Iraq to support the rotation of the II Marine
Expeditionary Force. In a recent congressional testimony on the status
of its military equipment, a Marine Corps official reported that in
addition to higher usage rates, equipment is being used under extreme
conditions which have increased the maintenance requirements. For
example, to date, more than 1,800 equipment items have been destroyed
and an additional 2,300 damaged equipment items will require depot
maintenance.[Footnote 14]
For the Norway stocks, the Marine Corps is in the process of updating
the requirements for its program there so that it will be capable of
providing a global response capability to any regional combatant
commander. During our September 2004 visit to the prepositioning sites
in Norway, we discussed this change in the scope of the program and
Marine Corps officials confirmed that the facilities in Norway can
support any combatant commander and the stocks are globally deployable
via air, rail, and sea. This shift in scope is in response to concerns
about the continued relevance of land stocks in Norway.[Footnote 15]
According to Marine Corps officials, however, these stocks are
important to Norway, cost relatively little to maintain (about $3.9
million in operational costs per year), are stored in excellent
facilities, and can be taken out to respond to crises as needed.
The Navy is reporting high inventory fill for its prepositioned assets.
According to Navy officials, most of its equipment used to offload the
maritime prepositioning ships was not used in direct combat and has not
required extensive reconstitution, and other equipment was available to
backfill the field hospitals and construction forces deployed to
support operations in Iraq.
The Air Force Is Reporting Low Inventory Fill and Some Stocks in Poor
Condition:
The Air Force has used a considerable amount of its prepositioned
equipment and supplies to support combat operations in Afghanistan and
Iraq and, as a result, the inventory fill of many of these stocks is
low. For example, it used approximately 43 percent of the total number
of its prepositioned bare base sets to support Operations Enduring
Freedom and Iraqi Freedom, and due to the extreme desert conditions,
many of these sets will have to be replaced. A U.S. Central Command,
Air Forces, official told us that the command is continuing to issue
prepositioned base operating support equipment and vehicles to forces
that have been deployed to the area of responsibility. While the Air
Force is working on refilling its prepositioned equipment and supplies,
if a conflict arises in the near term, these stocks may not be
available for use as it is unclear when these stocks will be refilled.
In addition, the Air Force is experiencing shortfalls in its inventory
of fuel bladders. These bladders are used to store fuel for Air Force
aircraft at austere operating locations. Air Force officials stated
that to support combat operations in Iraq, Central Command, Air Forces,
has used a considerable number of its prepositioned war reserve fuel
bladders. As combat operations continue, the Air Force is depleting its
supply of these bladders, and officials have characterized the impact
of potential shortfalls in these bladders as its "highest operational
risk." At the same time, the Air Force is undergoing an initiative to
modernize its fuel support equipment, including its fuel bladders. As
part of this initiative, the Air Force requested that Central Command,
Air Forces, officials not purchase the type of fuel bladders that had
previously been used. To mitigate the risk, the Air Force has allowed
Central Command, Air Forces, to purchase some replacement fuel
bladders; however, it is unclear when its modernization initiative will
be fully implemented.
During our review, we were also told that some bare base sets that the
Air Force prepositions at Andersen Air Force Base on Guam are in poor
maintenance condition and are unusable. According to a Pacific Air
Forces official, the sets stored at Andersen Air Force Base have
deteriorated due to a lack of required maintenance. Air Force
maintenance personnel are responsible for the war reserve stocks
prepositioned at this location as an additional duty to the maintenance
of operating stocks also stored at the base. The official told us that
the quality of maintenance performed by Air Force personnel on the war
reserve bare base sets has been a long-standing problem at this
location. Air Force officials told us that bare base sets stored in
Southwest Asia and South Korea did not have these same maintenance
problems because contractors have been hired to maintain these sets.
When we discussed these issues with Air Force officials, they told us
that they believed they could overcome shortfalls and any maintenance
problems in the event of a conflict by using supplemental funding or
cross-leveling equipment from other theaters. Additionally, Pacific Air
Forces officials told us that they would be able to obtain some
vehicles from countries where they will operate by using contracts
already in place.
Shortfalls in Inventory Fill Exist for Stocks Prepositioned to Support
Special Operations Forces:
The Army, Air Force, and Navy preposition common support equipment and
supplies for use by their special operations forces.[Footnote 16]
However, the services have traditionally underfunded these stocks and,
as a result, inventory shortfalls exist in most of these stocks.
Lessons learned from recent military operations in Iraq further
highlighted the need for special operations forces to have stocks of
prepositioned equipment and supplies to support these forces in
multiple austere environments. Special Operations Command officials
told us that special operations forces are often among the first units
to deploy and, therefore, have a need to draw prepositioned stocks. The
department recognized this and recent guidance issued by DOD directs
the military services to fully fund inventory shortfalls in these
stocks of common items prepositioned to support special operations
forces.[Footnote 17] The military services have agreed to provide
funding for prepositioned stocks for special operations forces
beginning in fiscal year 2006.
Shortfalls Create Some Operational Risks:
Since prepositioned stocks are integral to the military's war plans,
shortfalls in these programs create risks that combatant commanders
would have to mitigate in the event of a new conflict. It could cost
time or manpower to fill shortages or fix equipment. Since these stocks
are typically used in the early stages of a conflict, it is important
for DOD to determine the operational risk associated with any
shortfalls. The military planners we spoke to told us that they would
find a way to work around the shortfalls, but offered little in the way
of concrete plans.
Operation Iraqi Freedom revealed significant lessons for DOD's
prepositioning managers, especially in the Army, such as shortages in
spare parts and less-than-modern equipment. Prior to the onset of
combat operations in Iraq, the Army had significant shortages in its
prepositioned stocks, especially in spare parts. The Army overcame
these shortfalls by having the units that were drawing the
prepositioned stocks bring their own spare parts, in addition to
obtaining spare parts from nondeploying units.[Footnote 18] However,
according to the Army's after-action assessments of the war, the Army
had shortages in these and other items, including food, water, fuel,
construction materials, and ammunition. The available stocks of these
supplies were insufficient to meet sustainment requirements at the
outset of the deployment and it took the supply chain months to
respond. At the time of our work, we found that many of the same
shortfalls that existed in the Army's program are still evident, and
may be getting worse. For example, as of mid-March 2005, the Army had
only 21 percent of its authorized prepositioned repair parts on hand in
South Korea. According to Army officials, if a military conflict should
arise there, their strategy to mitigate these shortfalls would be to
cross-level required parts from available sustainment stocks as needed.
Although the precise operational risks created by shortfalls in the
Marine Corps and Air Force's prepositioned stocks are difficult to
assess, officials from these services told us that these risks can be
managed. This is because the Marine Corps has kept about two-thirds of
its prepositioned combat capability available for potential
contingencies and that equipment is reported to be in good condition.
Moreover, Air Force officials stated that if a conflict arises, they
will be able to fill shortfalls and repair equipment as needed by using
supplemental funding and obtaining some vehicles and other stocks in
other countries through contracts already in place. Air Force officials
stated, however, that this presumes that they will have the time and
necessary funding available to address the shortfalls.
Combatant commanders rely on prepositioned stocks being available and
in good maintenance condition. Prior to Operation Iraqi Freedom, the
combatant commander built up the required forces over a period of
months, and had time to overcome any inventory shortages in the
prepositioned stocks or resolve any maintenance issues with
prepositioned equipment. However, should a new conflict arise in the
near term--especially one where U.S. forces did not control the timing-
-the combatant commander would likely face even more difficult
operational challenges. During our visit to South Korea, officials told
us that their strategy to mitigate maintenance issues with the Army's
prepositioned stocks stored there, should a conflict arise, would be to
surge maintenance personnel as needed to fix equipment, use arriving
personnel to assist in maintenance execution, and cross-level required
parts from available sustainment stocks. Officials acknowledged,
however, that it could take longer than planned to get the equipment
ready in the event of a conflict.
Another factor making it difficult to assess the potential operational
risks is the lack of sound information available to assess and manage
DOD's prepositioning programs. Such programs need valid inventory
requirements that meet the needs of the war fighters, and reliable
information about inventory levels and maintenance condition for those
requirements. These long-standing management problems are discussed in
the next section of this report.
DOD and Some of the Military Services Have Provided Insufficient
Oversight Over Their Prepositioning Programs:
Oversight over prepositioning programs by DOD and the military services
has been insufficient, despite the importance of prepositioning to the
military. This inattention has allowed long-standing problems to
linger. Management principles, such as those embraced in the Government
Performance and Results Act of 1993,[Footnote 19] provide federal
agencies a framework for effectively implementing and managing
programs. Management principles include sufficient information to
support sound decision making and enable Congress to provide proper
oversight. However, DOD has not adhered to its directive on war reserve
matériel policy that could provide oversight over its prepositioning
programs. In addition, service oversight has been inadequate,
particularly in the Army's processes for determining requirements and
the Army and Air Force processes for assessing inventory shortfalls and
maintenance condition. This limited oversight unnecessarily leaves the
programs at risk of being unavailable when required and lacking the
right mix of equipment and supplies to support the war fighter.
Oversight Has Been Insufficient:
The overarching departmental guidance is contained in DOD directive
3110.6, updated in December 2003, which provides policy guidance on the
department's war reserve matériel program and assigns oversight and
accountability responsibilities within the department. The secretaries
of the military departments, directors of defense agencies, and the
combatant commands are responsible for setting program requirements and
the Defense Logistics Agency has responsibility for storage and
distribution of the stocks. At the department level, their
responsibilities are as follows:
* The Undersecretary of Defense for Acquisition, Technology, and
Logistics is required to assess the adequacy of war reserve stocks
annually.
* The Undersecretary of Defense for Policy is required to provide
planning guidance that includes war reserve requirements.
* The Chairman of the Joint Chiefs of Staff is required to validate the
operational requirements of the geographic combatant commands.
A provision of the directive related to oversight states that the
department is to assess the adequacy of its war reserve stocks. In
order to assess adequacy, the directive requires the secretaries of the
military departments and the directors of defense agencies to submit
annual reports on war reserve matériel levels to the Under Secretary of
Defense for Acquisition, Technology, and Logistics within the Office of
the Secretary of Defense. Officials within the Deputy Under Secretary
of Defense for Supply Chain Integration told us that this oversight
responsibility had been delegated to their office. However, the
directive has not been implemented and, therefore, the reporting
requirement contained in the directive has not been enforced. Neither
the services nor the Under Secretary's office could provide us with
copies of these reports. Officials told us that they had suspended this
reporting requirement in 2002; however, the directive had been updated
in late 2003 and the reporting requirement was maintained. Officials
also stated that although they had been given responsibility for
implementing the oversight provisions of the directive, since their
office primarily deals with only sustainment issues, they did not have
sufficient authority or personnel to meet the requirements stated by
the directive, specifically to assess the adequacy of the services'
prepositioning programs.
Officials further told us they did not believe the reporting
requirement in the directive was necessary because they were able to
provide adequate oversight of the department's prepositioning programs
through other mechanisms, such as reviewing the services' budget
submissions and quarterly readiness assessments. Quarterly readiness
reviews and integrated priority list submissions allow the combatant
commanders and others to identify issues that have reached critical
thresholds that may limit war-fighting capabilities. These assessments,
some of which have included issues related to prepositioned stocks, are
briefed to DOD's senior leadership and may be included in a
legislatively mandated quarterly readiness report to Congress. However,
we have previously reported that these reports provide a vague and
broad description of readiness problems and, therefore, are not
effective as an oversight tool.[Footnote 20] Furthermore, officials at
one combatant command told us that these assessments do not provide a
sufficient mechanism to determine the inventory readiness of stocks
prepositioned in their area of responsibility. Also, a DOD official
told us that they review the budget submissions from the military
services and approve how much the services allocate to their
prepositioning programs. In our view, while such mechanisms provide the
department with important information on gaps in capabilities and
resource allocation, they do not constitute sufficient, sustained
program oversight.
Such oversight problems have existed for years and several prior
reports have cited the lack of centralized oversight and direction in
the department's prepositioning programs, particularly in the Army. For
example, the Institute for Defense Analyses concluded in a 1997 report
that the military services do not coordinate their war reserve planning
among themselves or with the combatant commanders. The report
specifically called on the Army to reinvent the entire war reserve
process, and work with the unified combatant commands and other Army
commands to build credible requirements and better planning factors.
The Army Matériel Command Inspector General also reported in 2001 that
the Army and the combatant commands had not uncovered, mitigated, or
elevated issues about the readiness of the Army's prepositioning
programs to the department level. Further, the report stated that the
lack of centralized oversight fostered inefficiencies and impacted the
effectiveness of the Army's prepositioning program.
Lack of Valid Requirements and Insufficient Information Makes Oversight
Difficult:
The Army does not have sound requirements for some of its
prepositioning programs and both the Army and Air Force do not have
sufficient information about inventory levels and maintenance
condition, making oversight difficult. Without valid requirements
underpinning the services' prepositioning programs, it is impossible to
reliably assess the impact of reported shortfalls or equipment in poor
maintenance condition. As a result, the services cannot assess the
overall readiness of their prepositioning programs, which potentially
leaves war fighters at risk of not having needed stocks in the future.
In addition, assessing the readiness of prepositioned stocks requires
reliable information about inventory levels and maintenance condition.
Inventory levels are measured against requirements set by the services,
while maintenance condition describes whether on-hand items work well
enough to perform their mission. Because prepositioned stocks are
intended to be used in the early stages of a conflict, the stocks need
to be completely filled and in working order. Otherwise, the purpose of
prepositioning is likely defeated. Such problems with questionable
requirements and insufficient information are long-standing, and make
it difficult for the services and the department to assess readiness,
provide oversight, and support sound decision making about where to
make program investments.
Questionable Requirements:
During our review, we found that the requirements underpinning some of
the Army's prepositioning programs are questionable, which may make the
impact of shortfalls difficult to assess. Specifically, Army officials
told us that the war reserve information system used to calculate the
requirements for some sustainment stocks had not been successfully
updated since 1999, although Army officials told us that they are
required to compute these requirements on an annual basis.[Footnote 21]
While the Army is planning on recalculating these requirements by the
end of 2005, it is currently unclear what the requirements for these
stocks should be. As a result, program managers cannot be sure what to
buy because they do not know if inventory shortfalls are valid. We
reported on the operational impacts of this problem in our March 2004
testimony on prepositioned stocks used during Operation Iraqi
Freedom.[Footnote 22] Additionally, in our April 2005 report, we found
that because the process used to determine requirements for Army war
reserve spare parts had not been updated, the war reserve inventories
for some spare parts were inadequate in Operation Iraqi Freedom and
could not meet initial wartime demands.[Footnote 23] In addition,
inaccurate and inadequately funded Army war reserve requirements
contributed to shortages in other items, such as track shoes for Abrams
tanks and Bradley Fighting Vehicles and lithium batteries.
Additionally, we identified problems with DOD's process for
establishing requirements for prepositioned munitions. For example,
during our visit to U.S. Forces Korea, officials told us that the
command is not afforded the opportunity to proactively participate in
the determination of either total munitions requirements or, more
specifically, prepositioned munitions requirements. In October 2002, we
reported that DOD's munitions requirements determination process did
not fully consider the combatant commander's preferences for munitions
and weapon systems that will be used against targets identified in
projected scenarios.[Footnote 24] We recommended that the Secretary of
Defense establish a direct link between the munitions needs of the
combatant commands and the munitions requirements determinations and
purchasing decisions made by the military services. In October 2003,
DOD issued instruction 3000.4, which required that the munitions
requirements developed by each of the military services address the
operational objectives of the combatant commanders against potential
threats. In addition, it directed the military services to work
directly with the military service component and the combatant commands
to develop near-and out-year munitions requirements. Finally, it
directed combatant commanders to review the military services'
generated munitions requirements and report any issues needing
resolution during the planning and programming process. We found that
these requirements are not being met. Only the Air Force visits the
command prior to developing total munitions requirements to support
purchasing decisions. The other services do not coordinate with the
command prior to generating munitions requirements. Further, U.S.
Forces, Korea, officials told us that they do not have the opportunity
to review the service-generated munitions requirements prior to
purchasing decisions and have no input to what munitions will be
prepositioned or where those munitions will be located. While officials
in the Office of the Secretary of Defense and Joint Staff expressed
skepticism about the way U.S. Forces, Korea, had developed their
munitions requirements, they agreed that the proper coordination was
not occurring. As a result, the needed linkage between the combatant
command's needs and the munitions purchases made by the services
continues to be inadequate and raises questions as to whether combatant
commands will have what they need should a conflict arise.
Unreliable Information:
We also found that the Army and Air Force lack reliable information on
the inventory fill and maintenance condition for some prepositioned
stocks. The lack of reliable inventory information may provide program
managers with an unrealistic view on the preparedness of these
programs.
* Army officials told us that its information management system does
not provide reliable information on the inventory levels and
maintenance condition of its operational projects and sustainment
stocks. Army managers told us that this lack of inventory visibility
has persisted for many years, and sometimes the only way to get
reliable information is to contact the storage site directly.
* As recently as February 2005, the Army reported in the unclassified
inventory information that it extracts from its main readiness
reporting system[Footnote 25] that a high percentage of the combat
brigade set prepositioned in South Korea was fully mission capable.
However, in an October 2004 Army assessment, inspectors had found that
a high percentage of the equipment reviewed was not mission capable.
* Air Force officials also told us that they do not have adequate
information available to assess the overall readiness of their
prepositioned stocks. While this information is decentralized and
available in some cases to base and component commanders, information
on inventory levels and maintenance condition is not available to Air
Force managers overseeing the war reserve matériel program. Air Combat
Command and Central Command, Air Forces, officials told us that in
order to obtain information on the readiness of most prepositioned
stocks, they had to contact the storage locations since this
information is not readily available to them. Pacific Air Forces
officials told us that they developed their own automated system to
track the inventory levels and maintenance condition of the war reserve
matériel prepositioned in their area of responsibility because the Air
Force lacked a comprehensive system that provides reliable and timely
readiness information on its war reserve program.
Problems with Requirements and Reliability of Information Have Been
Long-standing, but Remain Unresolved:
The problems we found during our review with requirements determination
and reliability of inventory information are not new. Our review of
past reports going back to 1995 revealed that similar issues have been
reported repeatedly, but have not been resolved. The findings from
several past studies are described below, and appendix I provides a
more comprehensive summary of the major findings from more than 30 past
reports by us and the department's own studies.
Inventory management issues, and more recently supply chain management,
have been considered high-risk areas by us since 1990. Specific to the
prepositioning programs, we have previously reported numerous times on
long-standing management problems. For example, we reported in our last
review of prepositioning programs in 1998 that the Army and Air Force
had poorly defined, outdated, and otherwise questionable requirements
in their programs.[Footnote 26] Our 1998 report also noted that it was
difficult for DOD to assess the readiness of its prepositioned stocks
and the impact of any shortfalls due to the poor information the
services used to manage these programs. We also reported in 2001 that,
among other things, a potential mismatch existed between the Army's
methodology for determining spare parts requirements and the Army's
anticipated battlefield needs.[Footnote 27] And more recently, we
reported in January 2005 that DOD does not have the ability to provide
timely or accurate information on the location, movement, status, or
identity of its supplies due to long-standing data accuracy and
reliability problems within existing inventory management
systems.[Footnote 28]
The department's own auditors and an Army command have also been
sharply critical of program management, especially how program
requirements have been determined. For example, the Army Matériel
Command reported in 2003 that the requirements computation for war
reserve stocks and stockage lists for prepositioned stocks did not
accurately portray what was needed for Operation Iraqi Freedom. These
stockage lists did not contain the most critical items needed to
sustain combat equipment during the operation.[Footnote 29] In
addition, the Army Audit Agency reported in 2004 that Army program
managers had not reviewed the requirements for many of the operational
projects it examined. As a result, some operational projects contained
inaccurate, overstated, or questionable requirements. Of $1.5 billion
in requirements examined, about $727 million were valid, $472 million
were invalid, and about $280 million were questionable.[Footnote 30] In
addition, the Air Force Audit Agency reported in May 2003 that Air
Force personnel did not properly segregate certain war reserve
requirements from peacetime operating spare parts requirements,
resulting in more than $118.8 million of overstated requirements for
peacetime.[Footnote 31]
Past reports have also revealed problems with the reliability of
inventory information. In 2001, Army auditors reported that the lack of
reliable data on operational projects and sustainment stocks impeded
the overall readiness capability of the Army's prepositioning program.
In addition, the Army reported that there was a general lack of
confidence in the information management system used to provide
information on inventory levels.[Footnote 32] More recently, the Army
Matériel Command's 2003 report on lessons learned in Iraq also found
that different automated systems provided different inventory levels at
the same storage location during operations in Iraq.[Footnote 33]
Similarly, a June 2004 CNA Corporation after-action report on the
Marine Corps' prepositioning program in Operation Iraqi Freedom found
that the Marine Corps did not have reliable information on the status
of some prepositioned equipment used to support operations in
Iraq.[Footnote 34] Specifically, due to a lack of automated tracking
systems, the Marine Corps had to use manual methods for tracking
equipment with hand counts and written reports. As a result, Marine
Corps commanders did not have clear and accurate tools for determining
where cargo was in the pipeline, and more importantly, forecasting when
equipment would arrive and when integration would be complete.
DOD Lacks A Plan To Coordinate Future Prepositioning Programs:
DOD has not developed a coordinated departmentwide plan or joint
doctrine to guide the future of its prepositioning programs, despite
the heavy use of prepositioned stocks in recent conflicts and the
department's plans to rely on them in the future. The 2005 National
Defense Strategy specifically notes the importance of prepositioning in
the future and indicates that prepositioning programs should be more
innovative, flexible, and joint in character, but provides few details
on how DOD plans to accomplish these goals. In addition, the
independent Overseas Basing Commission recently echoed the continued
importance of the department's prepositioning programs in the future.
In the absence of a departmentwide plan or joint doctrine to coordinate
the reconstitution and future plans for these programs, the military
services have been recapitalizing some stocks and developing future
plans for their programs without a clear understanding of how they will
fit together to meet the evolving defense strategy. Without an
overarching framework that establishes priorities for prepositioning
among competing initiatives and identifies the resources required to
implement the future programs, DOD cannot provide assurances to
Congress that the billions of dollars that will be required to
recapitalize the stocks and develop future programs will ultimately
produce programs that will operate jointly, support the needs of the
war fighter, and are affordable.
National Defense Strategy and Overseas Basing Report Indicate a
Reliance on Prepositioning in the Future:
The most recent National Defense Strategy published in March 2005
states that to strengthen DOD's capability for prompt global action and
flexibility to employ military forces where needed, prepositioned
stocks "will be better configured and positioned for global
employment."[Footnote 35] This overarching defense strategy establishes
key goals for the future of defense capabilities such as the
prepositioning of support matériel and combat capabilities in critical
regions of the world and along key transportation routes, and a greater
reliance on joint prepositioning capabilities that will be in
accordance with other aspects of transformation. However, while such
goals confirm that prepositioning will continue to play a key role in
the evolving military strategy,[Footnote 36] the National Defense
Strategy provides no specific details on how the department and the
military services will accomplish them.
In addition, the recently released report of the Overseas Basing
Commission states that where DOD puts prepositioned stocks, what they
are comprised of, and how they are maintained is central to the
department's operational capability.[Footnote 37] The report states
that prepositioning is "imperative" for quick response of U.S. forces
in areas of the world where access may be difficult, and calls for
tight integration of service concepts, doctrines, and plans as a first
step in ensuring the sustainability of prepositioning. Importantly, the
Commission recommends that given the centrality of these stocks to the
operational capability of U.S. forces, their high costs, and their
anticipated heavy use over time, Congress should periodically review
the status of prepositioned stocks.
DOD Has Not Developed a Plan or Joint Doctrine for Its Prepositioning
Programs:
While it seems certain that DOD will continue to rely on prepositioning
in the future, it is unclear how prepositioning will fit into its
future plans since DOD currently has no department-level prepositioning
plan that provides specific details on how the department and the
military services will work together to plan the future of their
prepositioning programs or joint doctrine for its prepositioning
programs. DOD officials told us that the future of its prepositioning
programs has not yet been determined, in part because the future is
dependent on the outcome of several interrelated studies ongoing within
the department. For example, DOD is currently reviewing the mobility
capabilities required to meet the full range of mobility needs for all
aspects of the national defense strategy. According to DOD officials,
the recommendations from this study will likely have a significant
impact on the services' prepositioning programs since requirements for
prepositioning are being factored into the mobility deliberations. In
addition, in March 2003, the Secretary of Defense requested that the
department develop a comprehensive and integrated presence and basing
strategy for the next 10 years. This strategy will build upon multiple
DOD studies and will use information from the combatant commanders to
determine the appropriate location of the basing and associated
infrastructure necessary to execute the U.S. defense strategy. DOD
officials told us that the basing study will also likely have an impact
on prepositioning as the services will need to determine where to
preposition their stocks to support the new defense strategy. Although
some preliminary results have been released, DOD officials stated that
once these studies are completed, they will have a better understanding
of how prepositioning will be able to support the war fighter.
Similarly, DOD has not developed joint doctrine to guide the planning
and employment of its prepositioning programs. 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. DOD's transformation guidance states that
part of the department's transformation efforts is developing concepts
to operate in a joint environment, and placing a continuing emphasis on
the importance of expeditionary operations.[Footnote 38] DOD has
published joint doctrine in a number of areas, including deployment and
redeployment operations, multinational operations, and military
operations other than war. However, in the absence of a departmentwide
plan and joint doctrine for prepositioning, the military services
currently plan and implement separate programs in an independent,
service-centric manner. A service-centric approach to prepositioning
potentially misses opportunities to achieve greater efficiencies where
service programs overlap. In a 2003 Joint Staff-sponsored study on
strategies for prepositioning, the Logistics Management Institute found
that the military services continue to program for prepositioning
matériel to meet individual service rather than joint requirements. As
a result, the services may overstate operational requirements and put
unnecessary burdens on limited transportation assets that would be
required to move these prepositioned assets from their storage
locations to the operational sites.[Footnote 39] For example, although
the Army and Air Force have separate bare base programs, there is a
lack of commonality among the design and components of these programs
even though basic capabilities are the same.[Footnote 40] Moreover,
this service-centric approach to prepositioning is out of step with
DOD's transformation guidance, which states that developing concepts to
operate in a joint environment and a continuing emphasis on the
importance of expeditionary operations is key to the department's
transformation efforts.[Footnote 41]
Reconstitution Likely to Be Delayed Due to Ongoing Operations, but
Delay Offers DOD Opportunities to Set Clear Direction for Programs:
Clearly prepositioning figures prominently in the department's future
plans, but the services do not have precise estimates of the costs and
time required to reconstitute their prepositioned stocks since the
services continue to use these stocks in Afghanistan and Iraq. In a
recent report to Congress, DOD estimated that the costs to reconstitute
the Army and Marine Corps' prepositioned equipment will be between $4
billion and $5 billion.[Footnote 42] The report acknowledges, however,
that these estimates may change depending on several factors, including
the length of time the equipment is in use, the number of combat
losses, and any changes in the future plans for its prepositioning
programs. However, most of the costs required to reconstitute and
recapitalize the Army and Marine Corps' prepositioned stocks have not
been budgeted for in the department's baseline submissions or
supplemental funding requests. In the absence of a departmentwide plan
that coordinates the reconstitution of these programs with the future
plans of the department's prepositioning programs, the services are
developing plans to reconstitute and recapitalize their prepositioned
stocks without a clear understanding of how the future of these
programs will fit together in support of the evolving defense strategy.
According to Army officials, plans to reconstitute the equipment and
return it to the combat brigade sets are uncertain because, in some
cases, Army units are continuing to use prepositioned stocks to support
operations in Iraq instead of bringing their own equipment. In
addition, the Army is placing a higher priority for its resources on
supporting ongoing operations and on its modular conversion initiative-
-restructuring its forces to make them more flexible and rapidly
deployable. As a result of this initiative, the Army is planning to use
combat equipment that was part of the prepositioned brigade sets to
meet the increased equipment requirements. For example, over 11,000
pieces of prepositioned combat equipment used in Iraq--such as tanks,
Bradley Fighting Vehicles, and armored personnel carriers--are slated
to be repaired and turned over to active duty units. Furthermore, Army
officials told us that decisions have not been made as to whether the
sustainment and operational project stocks will be reconstituted
because of the large investments required and the uncertainty of the
future plans for the Army's prepositioning program. DOD's recent report
to Congress estimates the costs to reset and reconfigure the Army's
prepositioned stocks to be more than $4 billion. According to the
report, however, these costs are not currently captured in DOD's
baseline submissions or in any of its supplemental funding requests.
The Marine Corps' prepositioning programs are expected to have a
reduced capability until 2008, at least. The department's April 2005
report to Congress estimates the cost to reconstitute the Marine Corps'
prepositioned equipment is approximately $490 million. Of this amount,
about half ($247 million) was requested in the department's most recent
supplemental request. In the past year, the Marine Corps considered its
options to reconstitute the equipment stored aboard the prepositioning
ships given its continuing commitment to support operations in Iraq.
The Marine Corps recently decided to partially refill the five ships
offloaded to support operations in Iraq; however, due to the limited
availability within the Marine Corps of equipment needed, such as heavy
cargo trucks and High Mobility Multi-purpose Wheeled Vehicles, the
Marine Corps forecasts that these ships will have major end-item fill
rates of less than 50 percent. Additionally, Marine Corps officials
stated that the reconstitution of the stocks in Norway is scheduled to
be completed by 2008, at which time the fill rate of these stocks is
projected to be approximately 88 percent.
Air Force officials stated that they do not know when they will be able
to reconstitute prepositioned stocks and return them to storage. As
part of its reconstitution effort, the Air Force is in the process of
replacing or converting all of its existing bare base sets into a
smaller and more modular configuration.[Footnote 43] However, it is
uncertain when the new sets will be available. For example, the Air
Force had budgeted approximately $320 million in fiscal year 2005 for
procurement of the new bare base sets. However, according to an Air
Force official, Congress reduced the Air Force's budget by $53 million
because it was concerned about the large increase in the Air Force's
procurement budget for that year. As a result, the official stated that
the Air Force will not be able to procure all of the required sets. In
addition, Air Force officials told us that they do not know when
reconstitution for other categories of prepositioned stocks will be
completed since much of this equipment is still in use.
Without a Plan and Joint Doctrine, the Military Services and Defense
Logistics Agency's Prepositioning Plans Are Uncoordinated:
Each of the military services and the Defense Logistics Agency are
planning the future of their prepositioning programs without the
benefit of an overall plan or joint doctrine to coordinate their
efforts. Thus, it is unclear to us how the programs will fit together
to meet the evolving defense strategy. DOD officials representing the
Joint Staff and the services shared our assessment and concerns. And,
according to these officials, the Joint Staff has formed a working
group that is focused on establishing common definitions for
prepositioning as a first step in developing joint doctrine and setting
a future plan for the department's prepositioning programs.
The future of the Army's prepositioning program, the largest of DOD's
programs, is still unclear, and the Army acknowledges that it faces
continuing funding challenges as it attempts to modernize, support
ongoing combat operations, and reconstitute its prepositioned
equipment, leaving the future direction of its prepositioning program
uncertain. The Army has a major effort ongoing to transform its units
into more flexible, rapidly deployable forces at the same time it is
supporting ongoing combat operations. The Army's future prepositioning
strategy was being revised during our review, so we could not assess
how this overall transformation--commonly called "modularity" by the
Army--will affect the prepositioning program. In addition, the Army's
prepositioned stocks will have to be reconstituted due to their heavy
use in Operation Iraqi Freedom. According to Army officials, however,
the Army is nearing completion on a new strategy for its prepositioning
programs. They told us that prepositioning will continue to be
important in the future and that the prepositioned sets would be
converted to the "modular" configuration by 2012 or sooner.
While the Marine Corps and Navy have identified concepts for future
prepositioning programs, they have not developed firm schedules and
cost estimates for these programs. For example, the Marine Corps is
planning on changing the focus of its prepositioned stocks in Norway
from their Cold War configuration to a more global support capability.
Additionally, the Marine Corps is considering a fundamental change to
the future of its prepositioning program that would replace existing
Maritime Prepositioning Force ships with an undetermined number of new
ships with a wider range of capabilities. These ships are intended to
be an integral part of a future Navy sea base. The seabasing concept
provides maritime platforms capable of supporting at-sea arrival of
forces, assembly of those forces, rapid movement ashore, and combat
sustainment without reliance on shore facilities. While such seabasing
is envisioned by DOD to be a joint service capability, it is not clear
how this will be accomplished. Furthermore, the affordability of the
program is in question--this new concept could cost billions of
dollars.[Footnote 44]
The Defense Logistics Agency began developing a global stock
positioning strategy in 2004 to support its overseas customers for the
items it manages. The strategy involves a combination of fixed-forward
depots, a floating distribution center, and a deployable distribution
depot. Fixed-forward stocking depots have been established at the
following locations: Germersheim, Germany; Yokosuka, Japan; Pearl
Harbor, Hawaii; Sigonella, Italy; Kuwait; Guam; and South Korea. The
floating distribution center involves a mobile floating depot which
will be capable of providing immediate distribution within the first 30
days of a contingency and could operate as part of the seabasing
concept. The deployable distribution depot will be able to provide a
full range of distribution capabilities in a theater of operations
early in a contingency in developed or remote operating areas. These
last two capabilities are still being developed and the Defense
Logistics Agency does not yet have firm estimates for the costs of
these capabilities.
The Air Force is also planning changes for its prepositioning programs.
It is transforming its bare base sets into a smaller, more modular
configuration and is considering new prepositioning sites to support
the new defense strategy. However, Air Force officials told us that it
cannot make some decisions related to new storage sites for its
prepositioned stocks until DOD's basing study is complete.
Without a plan or joint doctrine to guide their efforts, the services
are planning for the future of their programs without an overarching
framework that establishes priorities for prepositioning among
competing initiatives, develops performance goals to measure success,
and identifies resources to implement plans. Until the department
determines how prepositioning fits into future military plans, it
cannot provide assurances to Congress that the substantial investments
required to recapitalize the stocks will be affordable.
Conclusions:
Prepositioning seems certain to be a key component of U.S. military
strategy for years to come, but the department must make it a priority
for it to overcome past management problems and ensure its future. In
the near term, operational risks may exist should other military
contingencies arise given the current inventory shortfalls and poor
maintenance condition of some prepositioned stocks. However, the
department has not developed concrete plans to overcome these
challenges, even though inventory shortfalls and maintenance issues
exist in the prepositioned stocks in potential trouble spots such as
South Korea.
Despite the importance of prepositioning to the military, however, long-
standing management problems persist and the programs seem to have
received little attention at the department level. Oversight mechanisms
are in place, but they have been ineffective or ignored. Leadership and
accountability begin at the top. Until DOD fully implements its own
directive on war reserve matériel, oversight of its prepositioning
programs will likely continue to be inadequate and the department will
be unable to assess risks associated with any shortfalls in the
programs. Moreover, DOD lacks reliable information in regard to its
prepositioning programs and will be unable to make reliable assessments
of the readiness of these programs. This could result in failure to
obtain the right amount and types of equipment for the designated
prepositioning locations, which could ultimately jeopardize the ability
of U.S. forces to accomplish their war-fighting missions and leave them
at risk.
Congress is also concerned about these issues and directed the
Secretary of Defense to submit a report on its prepositioning plans by
October 1, 2005. Looking toward the future, without a coordinated plan
and joint doctrine that identifies the role of prepositioning in the
transformed military, the department cannot plan the future of its
programs in a comprehensive manner. As a result, DOD cannot provide
assurance to Congress that its prepositioning programs will be
coordinated, effective, and affordable.
Taking all these problems together--and considering them against the
backdrop of growing operational and fiscal strains on the military--we
believe the future of the prepositioning programs are at risk. Unless
the department addresses long-standing management issues and sets a
clear plan for the future, the department and Congress cannot make
informed decisions about the significant investments needed to
reconstitute or recapitalize the stocks.
Recommendations for Executive Action:
To address the risks and management challenges facing the department's
prepositioning programs and improve oversight, we recommend that the
Secretary of Defense take the following five actions:
* Direct the Chairman, Joint Chiefs of Staff, to assess the near-term
operational risks associated with current inventory shortfalls and
equipment in poor condition should a conflict arise.
* Direct the Under Secretary of Defense for Acquisition, Technology,
and Logistics to provide oversight over the department's prepositioning
programs by fully implementing the department's directive on war
reserve matériel and, if necessary, revise the directive to clarify the
lines of accountability for this oversight.
* Direct the Secretary of the Army to improve the processes used to
determine requirements and direct the Secretary of the Army and Air
Force to improve the processes used to determine the reliability of
inventory data so that the readiness of their prepositioning programs
can be reliably assessed and proper oversight over the programs can be
accomplished.
* Develop a coordinated departmentwide plan and joint doctrine for the
department's prepositioning programs that identifies the role of
prepositioning in the transformed military and ensures these programs
will operate jointly, support the needs of the war fighter, and are
affordable.
* Report to Congress, possibly as part of the mandated October 2005
report, how the department plans to manage the near-term operational
risks created by inventory shortfalls and management and oversight
issues described in this report.
Agency Comments and Our Evaluation:
DOD provided written comments on a draft of this report. These comments
are reprinted in appendix III. DOD partially or fully concurred with
our recommendations. However, in its response, DOD disagreed with the
implementation of two of our recommendations because it had already
taken actions to address them. In subsequent discussions with DOD,
officials indicated that this disagreement was not related to the
substance of our recommendations. In fact, the department has already
initiated several actions to address our recommendations including
conducting an assessment of risk, improving requirements and inventory
visibility, and conducting a departmental assessment on future
prepositioning. Further, DOD agreed that oversight policy as discussed
in its directive does not reflect appropriate oversight roles and
responsibilities. To address this issue, DOD plans to clarify policy
and roles and responsibilities for oversight. With respect to our
recommendation to improve requirements determination and the
reliability of inventory data, the initial efforts taken by the Army
and Air Force represent progress, but the planned actions should
address all categories of the Army and Air Force's prepositioned
stocks, as discussed in our report, and not just a portion of these
programs. For example, the planned actions should also include the
Army's operational project stocks and the Air Force's vehicle stocks,
among others. Overall, we acknowledge the actions already taken by the
department to address these issues, but DOD will need sustained
management focus to resolve these deeply rooted and long-standing
problems.
As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
from the date of this report. At that time, we will send copies of this
report to the Secretary of Defense, the Secretary of the Army, the
Secretary of the Air Force, the Secretary of the Navy, and the
Commandant of the Marine Corps. We will also make copies available to
others upon request. In addition, this report will be available at no
charge on the GAO Web site at http://www.gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report.
If you or your staffs have any questions, please contact me at (202)
512-8365. Key contributors to this report are listed in appendix IV.
Signed by:
William M. Solis, Director:
Defense Capabilities and Management:
[End of section]
Appendix I: Past Products Identifying DOD Inventory Management and
Prepositioning Challenges:
The Department of Defense's (DOD) prepositioning programs have faced
long-standing challenges including poor asset visibility; equipment
excesses and shortfalls; and invalid, inaccurate, poorly defined, and
otherwise questionable requirements. GAO, military service auditors,
DOD's Inspector General, and others have called attention to these
problems in products issued over the years. In 1990, we identified
DOD's inventory management as high risk because inventory levels were
too high and the supply system was not responsive to the needs of the
war fighters.[Footnote 45] With the onset of Operation Iraqi Freedom,
other supply chain issues related to inventory management have been
reported as impediments. In a January 2005 update, we expanded this
high-risk area to include DOD's management of its entire supply chain,
which includes distribution, inventory management, and asset
visibility.
Table 3 provides summaries of challenges identified in select GAO
reports and testimonies issued between January 1995 and March 2005.
Table 4 provides summaries of issues identified in select products
released by other organizations during the same time period.
Table 3: GAO Products:
Title: Defense Inventory: Actions Needed to Improve the Availability of
Critical Items during Future Military Operations (GAO-05-275, March
2005);
Key challenges identified: In March 2005, we reported on DOD's supply-
chain management during Operation Iraqi Freedom. We developed detailed
case studies of nine supply items that were reported to be in short
supply and could have had operational impacts, and found that U.S.
troops experienced shortages of seven of the nine items that led, in
some cases, to a decline in the operational capability of equipment and
increased risk to troops. We identified five systemic deficiencies that
contributed to shortages of the selected items, including (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.
Title: High-Risk Series: An Update, GAO-05-207 (January 2005);
Key challenges identified: In January 2005, we reported that DOD's
supply- chain management had experienced significant weaknesses in its
ability to provide efficient and effective supply support to war
fighters. While DOD reports showed the department owning about $67
billion of inventory, shortages of certain critical spare parts were
adversely affecting equipment readiness and contributing to maintenance
delays. DOD also lacked visibility and control over the supplies and
spare parts it owned and did not have the ability to provide timely or
accurate information on the location, movement, status, or identity of
its supplies.
Title: Military Prepositioning: Observations on Army and Marine Corps
Programs During Iraqi Freedom and Beyond, GAO-04-562T (March 2004);
Key challenges identified: In March 2004, we testified that during
Operation Iraqi Freedom, the Army's prepositioning program had some
equipment that was outdated or did not match unit needs. The program
also faced shortfalls, such as trucks, spare parts, and other items. We
noted that shortages in Army prepositioned and war reserve spare parts
had been a long-standing systemic problem. We likewise reported that
the theater supply-and-distribution system became overwhelmed and was
worsened by the inability to track assets available in theater, which
meant that war fighters did not know what was available.
Title: Defense Logistics: Preliminary Observations on the Effectiveness
of Logistics Activities During Operation Iraqi Freedom, GAO-04-305R
(December 2003);
Key challenges identified: In December 2003, we reported that during
Operation Iraqi Freedom poor asset visibility and insufficient and
ineffective theater distribution capabilities contributed to
substantial logistics support problems. DOD and military service
officials raised a number of issues that may have contributed to the
logistics problems, including (1) shortages of some spares or repair
parts needed by deployed forces, (2) a reported mismatch between Army
prepositioned equipment and unit needs, (3) DOD contractors used for
logistics support during Operation Iraqi Freedom were not always
effective, and (4) physical security at ports and other distribution
points in the theater was not always adequate to protect assets.
Title: Military Readiness: New Reporting System Is Intended to Address
Long-Standing Problems, but Better Planning Is Needed, GAO-03-456
(March 2003);
Key challenges identified: In March 2003, we reported that DOD used
readiness measures that varied 10 percentage points or more to
determine readiness ratings and often did not report the precise
measurements outside DOD. We additionally reported that DOD had
complied with most, but not all, of the legislative readiness-reporting
requirements and, as a result, Congress was not receiving all the
information mandated by law. DOD issued a directive in June 2002 to
establish a new comprehensive readiness-reporting system. However, as
of January 2003, DOD had not developed an implementation plan
containing measurable performance goals, identification of resources,
performance indicators, and an evaluation plan to assess progress in
developing the new reporting system.
Title: Major Management Challenges and Program Risks: Department of
Defense, GAO-03-98 (January 2003);
Key challenges identified: In January 2003, we reported that
inefficient inventory management practices represented one of the most
serious weaknesses in DOD's logistics operations. While DOD's inventory
value had been declining for the previous 10 years, GAO's past and
current work in the area indicated that DOD (1) continued to store
unnecessarily large amounts of material, with about half of its
secondary inventory exceeding then- war reserve or current operating
requirements; (2) purchased material for which there was no valid
requirement; (3) experienced equipment readiness problems because of a
lack of key spare parts; and (4) maintained inadequate visibility over
material being shipped to and from military activities.
Title: Defense Management: Munitions Requirements and Combatant
Commanders' Needs Require Linkage, GAO-03-17 (October 2002);
Key challenges identified: In October 2002, we reported that a
fundamental problem in DOD's munitions requirements process remained
unaddressed-- inadequate linkage between the near-term munitions needs
of the combatant commands and the purchases made by the military
services based on computations derived from the department's munitions
requirements-determination process. This disjunction had resulted in
the combatant commands and the services identifying different munitions
needs and, ultimately, in the combatant commanders reporting shortages.
A more fundamental reason for the disconnect, however, was because
DOD's munitions requirements-determination process did not fully
consider the combatant commanders' preferences for munitions and weapon
systems that would be used against targets identified in projected
scenarios.
Title: Defense Inventory: Improved Industrial Base Assessments for Army
War Reserve Spares Could Save Money, GAO-02-650 (July 2002);
Key challenges identified: In July 2002, we reported that the Army's
approach to industrial-base capability assessments lacked key
attributes that included the collection of current industry data, the
analysis of that data, and the creation of management strategies for
improving wartime spare parts availability. We noted that out-of-date
data could result in reduced readiness and inflated or understated war
reserve spare parts funding requests within budget submissions to
Congress, and the Army's ability to identify long lead times and create
management strategies to reduce lead times and thus the amount of
inventory needed.
Title: Defense Inventory: Army War Reserve Spare Parts Requirements Are
Uncertain, GAO-01-425 (May 2001);
Key challenges identified: In May 2001, we reported that
notwithstanding the apparent shortfall in funding for war reserve spare
parts, our review showed uncertainties about the accuracy of the Army's
requirements and funding needs in that area. Specifically, we found
that (1) the best available data regarding the rate at which spare
parts would be consumed during wartime had generally not been used in
determining war reserve requirements for spare parts, (2) a potential
mismatch existed between the Army's methodology for determining spare
parts requirements and the Army's planned battlefield maintenance
practices, (3) the capacity of the industrial base to support the parts
requirements of the two major theaters of war scenario was not well
defined or based on industry data, and (4) emerging issues, such as
force restructuring actions, could significantly affect future war
reserve requirements.
Title: Defense Inventory: Improvements Needed to Prevent Excess
Purchases by the Air Force, GAO/NSIAD-00-5 (November 1999);
Key challenges identified: In November 1999, we reported that the Air
Force requirements model included prestocked requirements in computing
the amount of inventory that needed to be purchased, but this inventory
was not considered important enough to be funded. However, when the
model identified contract quantities to be canceled, these items were
counted as valid. Thus, the model decreased the quantity to be
canceled by the amount of these requirements.
Title: Military Prepositioning: Army and Air Force Programs Need to Be
Reassessed, GAO/NSIAD-99-6 (November 1998);
Key challenges identified: In November 1998, we reported that the Army
and Air Force had poorly defined, outdated, or otherwise questionable
requirements in the major programs that GAO reviewed. The Army and the
Air Force had reported significant shortages and poor maintenance
conditions in their prepositioning programs. In some cases, however,
reliable data to assess inventory fill and maintenance condition were
unavailable. Thus, the precise readiness of the prepositioned stocks--
and the impact of any shortfalls--was difficult to determine because of
the questionable requirements that underpinned the programs and the
poor information that the services used to manage the programs.
Title: Afloat Prepositioning: Not All Equipment Meets the Army's
Readiness Goal, GAO/NSIAD-97-169 (July 1997);
Key challenges identified: In July 1997, we reported that of the Army's
unit sets considered when reporting the readiness of the brigade set of
war reserve equipment, about 25 percent did not meet the Army's
readiness goal for full-mission capability. According to Army
maintenance records, some equipment aboard prepositioning ships had
been reported as nonmission capable since September 1995. These records
also erroneously identified some nonmission-capable equipment as
repairable aboard ship, although Army officials said that many repairs
could not be made until the equipment was downloaded. One factor that
contributed to lower readiness rates was that some equipment was not
fully mission capable when it was originally loaded on prepositioning
ships. Other factors include the deterioration of the equipment while
in storage aboard ships and the limited ability to conduct maintenance
on the equipment while in storage.
Title: Army War Reserves: DOD Could Save Millions by Aligning Resources
With the Reduced European Mission,GAO/NSIAD-97-158 (July 1997);
Key challenges identified: In July 1997, we reported that DOD could
have saved about $54 million per year in personnel costs once the Army
removed unneeded war reserve equipment from central Europe and aligned
its resources with the reduced mission. Army data showed that of
128,000 items in central Europe identified as available for
redistribution outside of Europe, the Army had firm plans for about
54,000 items, had proposed--but had not funded or implemented--the
plans for about 27,000 items, and had no plans for about 46,000 items
because it found no known requirement for them in the war reserve
program.
Title: Defense Inventory Management: Problems, Progress, and Additional
Actions Needed, GAO/T-NSIAD-97-109 (March 1997);
Key challenges identified: In March 1997, we testified that inventory
management problems had plagued DOD for decades. We had recently
reported that about half of DOD's secondary inventory was not needed to
support war reserve or current operating requirements. Most of the
problems that contributed to the accumulation of this unneeded
inventory still existed, such as outdated and inefficient inventory
management practices that frequently did not meet customer demands,
inadequate inventory oversight, weak financial accountability, and
overstated requirements. We noted that while we continued to see
pockets of improvement, DOD had made little overall progress in
correcting systemic problems that had traditionally resulted in large
unneeded inventories.
Title: Defense Logistics: Much of the Inventory Exceeds Current Needs,
GAO/NSIAD-97-71 (February 1997);
Key challenges identified: In February 1997, we reported that $34
billion of DOD's $69.6 billion secondary inventory on hand as of
September 30, 1995, exceeded then-current operating and war reserve
requirements. Although DOD had reduced its inventory from $77.5 billion
since September 30, 1993, about half of the inventory continued to
exceed current operating and war reserve requirements. Further analysis
showed that inventory valued at $1.1 billion represented 100 or more
years of supply.
Title: Defense Inventory: Spare and Repair Parts Inventory Costs Can Be
Reduced, GAO/NSIAD-97-47 (January 1997);
Key challenges identified: In January 1997, we reported that $2.7
billion of DOD's $8.3 billion in inventory at nonmajor locations was
not needed to meet the services' then-current operating and war reserve
requirements. We estimated the services could save about $382 million
annually in inventory-holding costs by eliminating the excess
inventory.
Title: Defense Programs and Spending: Need for Reforms, GAO/T-NSIAD-95-
149 (April 1995);
Key challenges identified: In April 1995, we testified that inventory
management was an area where DOD had experienced long-standing problems
in managing its resources. While we had seen some improvements over the
previous several years, DOD continued to waste billions of dollars
buying, maintaining, and storing supplies that became excess. For
example, as of September 1993, about $1.7 billion of the $9 billion of
inventory that DOD was buying at that time was not needed to meet war
reserve or operational requirements.
Source: GAO.
[End of table]
Table 4: Other Products:
Title: Bare Base Assets Study, Science Applications International
Corporation (August 2004);
Key challenges identified: In August 2004, the Science Applications
International Corporation completed a comprehensive review and
assessment of DOD bare base capabilities across the services, and
identified a number of problems. The study, prepared for the Joint
Staff Director of Logistics, found that the primary deficiency was the
lack of a common understanding of doctrine that should provide the
foundation for the services' bare base programs. This lack of
understanding of doctrine (1) impacted all aspects of bare base
support, to include its relationship to other basing operations, the
methods of providing bare base support, and the responsibilities
associated with bare base support; and (2) inhibited the ability of
combatant commanders to articulate requirements, and the ability of the
services to develop the appropriate capabilities. The study also found
no simple solutions to the challenge of bare base, that the procurement
of additional or new bare base assets was not the key, and those
material solutions that were not linked to doctrinal requirements and
not part of a coordinated solution would result in inefficient and less
effective support.
Title: Operation Iraqi Freedom (OIF) Maritime Prepositioning Force
(MPF) Reconstitution, Regeneration, and Reembarkation (R3) Operations:
Summary Findings, Center for Naval Analyses, CAB D0009974.A2/Final
(June 2004);
Key challenges identified: In June 2004, the Center for Naval Analyses
reported that although Marine Corps Maritime Prepositioning Force
operations in Iraq could be characterized as a success, the execution
of reconstitution, regeneration, and reembarkation was neither simple
nor easy. Challenges and issues included (1) a lack of detailed
published policies and guidance, and servicewide knowledge and
experience, in planning and executing operations; (2) simultaneous
conduct of combat and operations; and (3) a lack of effective systems,
organizations, and procedures for tracking and accounting for
prepositioned equipment after it was downloaded.
Title: Operational Project Stocks - Phase II, Headquarters, Department
of the Army, U. S. Army Audit Agency, A-2004-0108-AML (February 2004);
Key challenges identified: In February 2004, the Army Audit Agency
reported that some operational projects--one of four categories of Army
prepositioned stocks--had (1) invalid intended purposes; (2)
inaccurate, overstated, outdated, or questionable requirements; (3)
insufficient quantities of equipment on hand; or (4) a lack of
requirements for essential equipment. Consequently, about $472 million
of the roughly $1.5 billion in requirements reviewed were invalid and
$280 million were questionable.
Title: The Norway Air-Landed Marine Expeditionary Brigade
Prepositioning Program, Naval Audit Service, N2003-0079 (September
2003);
Key challenges identified: In September 2003, the Naval Audit Service
reported that the Marine Corps continued to store and maintain
prepositioned stocks in Norway despite the program's original strategic
purpose having ended with the fall of the Soviet Union. The Naval Audit
Service further reported that none of the inventory was sourced to an
approved or planned Joint Chiefs of Staff war scenario and that the
stocks were in excess of Marine Corps-wide requirements.
Title: U.S. Army Matériel Command (USAMC) Operation Iraqi Freedom (OIF)
Lessons Learned Conference, 10-11 September 2003, Redstone Arsenal,
Alabama;
Key challenges identified: In September 2003, the U.S. Army Matériel
Command sponsored an Operation Iraqi Freedom lessons learned conference
during which 27 major issues were identified in such areas as
personnel, supply, maintenance, and distribution. For example (1)
supply-related lessons learned included the need to relook at
requirements determinations, asset management and visibility,
prepositioned stocks, and ammunition warfighter support; (2)
maintenance-related lessons learned included the need to improve
prepositioning maintenance, readiness and other reporting,
accountability, and forward repair activity; and (3) distribution-
related lessons learned included the need to modify force structure and
doctrine to support the distribution system, appoint a single DOD
distribution manager, and develop and implement a business system.
Title: Other War Reserve Matériel, Air Force Audit Agency, F2003-0010-
FC4000 (May 2003);
Key challenges identified: In May 2003, the Air Force Audit Agency
reported that Air Force personnel did not properly segregate Other War
Reserve Matériel requirements from peacetime operating spares
requirements for about 16 percent of items, resulting in more than
$118.8 million of overstated peacetime operating spares requirements.
The audit agency likewise reported that Air Force supply personnel
inappropriately applied $4.3 million of excess war reserve matériel
assets to offset unfunded requirements rather than using the excesses
to offset funded peacetime operating spares requirements.
Title: Systematic Inspection of the Material Condition of Army War
Reserve Stocks, U.S. Army Matériel Command Inspector General (August
2001);
Key challenges identified: In August 2001, the Army Matériel Command
Inspector General reported the following problems with Army war reserve
sustainment stocks related to the Army Prepositioned Stock program: (1)
a lack of centralized strategic operational direction; (2) insufficient
funding for program requirements; (3) a lack of data integrity in
automated systems; (4) adverse mission impact caused by readiness
reporting procedures and overall operational practices; (5) mismatches
between recorded condition codes of matériel and true conditions; (6)
no established procedures for test, measurement, and diagnostic
equipment support; (7) an inability of the command to effectively
support the Army's wartime mortuary affairs mission; (8) matériel
excess to requirements stored at prepositioned sites; (9) ineffective
government oversight of a contractor allowing decreased readiness and
increased costs; and (10) bulk fuel, potable water, and other assets to
support forces during deployment were not part of the package.
Title: Medical Unit Readiness Reporting, Air Force Audit Agency,
00058007 (December 2000);
Key challenges identified: In December 2000, the Air Force Audit Agency
reported that medical unit personnel inconsistently apportioned Air
Force resources among the Aerospace Expeditionary Forces and improperly
(1) reported war reserve matériel condition status, (2) accomplished
readiness training, (3) monitored expiration-dated war reserve matériel
items, and (4) controlled sensitive readiness data.
Title: Inventory Management of Navy Fleet Hospitals by the Fleet
Hospital Support Office, Cheatham Annex, Virginia, Department of
Defense Inspector General, D-2000-191 (September 2000);
Key challenges identified: In September 2000, the DOD Inspector General
assessed the Navy's prepositioned fleet hospitals. It found that the
Naval Fleet Hospital Support Office (1) improperly managed its
approximate $108 million inventory warehoused at Cheatham Annex,
Virginia; (2) fielded two fleet hospitals without key pieces of
equipment; and (3) did not properly manage unliquidated obligations.
Title: Prepositioned Aircraft Fuel Drop Tanks, Air Force Audit Agency,
00062006 (July 2000);
Key challenges identified: In July 2000, the Air Force Audit Agency
reported that Air Force managers did not validate, quantify, and
correct suspected parts shortages in more than 9,000 prepositioned,
unassembled drop tanks resulting in a possible inability to meet
wartime tank requirements and consequent delays in critical wartime
fighter sorties.
Title: Selected War and Mobilization Planning Factors, Air Force Audit
Agency, 99058006 (September 1999);
Key challenges identified: In September 1999, the Air Force Audit
Agency reported that the Central and Pacific Air Forces planning
personnel did not always correctly prepare War and Mobilization Plan,
Volume 4 data or consistently and correctly use program planning
factors to determine war reserve matériel requirements.
Title: Civil Engineer Support Equipment Assigned to Naval Mobile
Construction Battalions, Naval Audit Service, 036-99 (May 1999);
Key challenges identified: In May 1999, the Naval Audit Service
reported that (1) 1,587 of 5,289 assets assigned to fulfill the table
of allowances for 20 naval mobile construction battalions could not
satisfy the requirements, and (2) 37 civil engineering support
equipment assets not assigned to a table of allowances but kept as
backup in case of a contingency could possibly satisfy up to $1.1
million in planned procurements for other Navy activities.
Title: Accountability and Inventory Levels of Air Force Medical War
Reserve Material at Fort Worth, Texas, Department of Defense Inspector
General, 98-163 (June 1998);
Key challenges identified: In June 1998, the DOD Inspector General
reported that while the Air Force maintained adequate accountability
over medical war reserve material warehoused at Fort Worth, about $33
million of the medical war reserve material was not needed to satisfy
its deployable medical systems requirements.
Title: Army Prepositioned Stock Program, Combat Equipment Group -
Europe, U.S. Army Audit Agency, AA 98-138 (March 1998);
Key challenges identified: In March 1998, the Army Audit Agency
reported that while the Army Combat Equipment Group properly accounted
for its war reserve stocks stored in Europe, improved accounting
procedures were needed for its war reserve stocks loaned in support of
Operation Joint Endeavor in Bosnia. The audit agency additionally
reported that repair parts had been identified during the audit that
were not needed to support the deployable unit sets authorized for the
war reserve program. Moreover, while war reserve equipment was
generally maintained and stored properly, some of the combat equipment
companies retained too many line items, maintained excess stockage
levels, and didn't establish an effective method to monitor maintenance
operations.
Title: Sustainment Requirements for the Army Prepositioned Stock
Program, U.S. Army Audit Agency, AA 98-99 (February 1998);
Key challenges identified: In February 1998, the Army Audit Agency
reported that a substantial number of undesignated war reserve assets
were stored in Europe that could have been used to satisfy new
sustainment stock requirements.
Title: Total Asset Visibility-Operational Projects, U.S. Army Audit
Agency, AA 98-31 (November 1997);
Key challenges identified: In November 1997, the Army Audit Agency
reported problems in the Total Asset Visibility capability for Army
operational projects, including (1) incomplete or unreliable onhand
asset balances, (2) a lack of visibility over loaned assets, (3)
inadequate identification of key management controls in Army policy
regulations, (4) weaknesses in data integrity, and (5) failure of Army
managers at both the wholesale and retail levels to redistribute assets
to improve readiness and reduce requirements.
Title: Equipment Pre-positioned Afloat, Department of Defense Inspector
General, 97-054 (December 1996);
Key challenges identified: In December 1996, the DOD Inspector General
reported that the Army had rapidly expanded its afloat prepositioning
program without first publishing criteria, policy, plans, and doctrine
resulting in a possible inability to ensure effective equipment
management in support of the combatant commanders.
Source: GAO.
[End of table]
[End of section]
Appendix II: Scope and Methodology:
To assess the near-term operational risk given the continuing use of
prepositioned stocks, we obtained reports prepared by the military
services on the inventory levels of their prepositioned stocks compared
to program requirements. We also reviewed available maintenance reports
or other data used by the services to measure the maintenance condition
of the prepositioned stocks. We also observed the physical condition of
matériel stored by the Marine Corps at its prepositioning locations in
Norway and aboard a prepositioning ship at its maintenance facility
located at Blount Island, Florida; and observed the maintenance
condition of the Army's prepositioned stocks at Camp Carroll, South
Korea and Sagami Army Depot, Japan. We interviewed program managers at
each of the military services to determine the impact of reported
shortfalls and poor maintenance condition in the prepositioned stocks
and discussed the time frames and costs needed to repair or replace
prepositioned stocks used in recent military operations.
To assess the sufficiency of the Department of Defense's (DOD) and
service-level oversight of these prepositioning programs, we discussed
the processes used by DOD and the services to oversee their
prepositioning programs with officials from the Office of the Secretary
of Defense, the Joint Staff, and the military services. We reviewed
relevant DOD directives and readiness reports prepared by the services
and the Joint Staff to determine the extent to which the information
contained in these reports could be used by DOD or the services to
provide oversight. We also reviewed past reports prepared by GAO, the
Army Audit Agency, the Air Force Audit Agency, the Army Matériel
Command Inspector General, and the CNA Corporation that identified
problems with the reliability of data regarding the preparedness of the
services' prepositioned stocks and problems with the requirements
determination processes for some of these stocks. We discussed issues
regarding the sufficiency of data on the preparedness of DOD's
prepositioned stocks with program managers from each of the services.
To assess whether DOD has developed a coordinated plan for the future
of its prepositioning programs that would meet the goals of the
recently published defense strategy, we collected and analyzed
information from the military services and the Defense Logistics Agency
on the future plans for their prepositioning programs. We also reviewed
the recently published National Defense Strategy and discussed the
future direction of the department's prepositioning programs with
officials in the Office of the Secretary of Defense, the Joint Staff,
and the military services.
We conducted our review from July 2004 through May 2005 in accordance
with generally accepted government auditing standards. We reviewed
available data for inconsistencies and discussed the data with DOD
officials. Our assessments of data reliability revealed significant
concerns that are discussed in the report.
We interviewed officials and obtained documentation at the following
locations:
Army:
* U.S. Army Headquarters, Washington, D.C.
* U.S. Army Matériel Command, Ft. Belvoir, Virginia:
* U.S. Army Field Support Command, Rock Island, Illinois:
* U.S. Army Forces Command, Ft. McPherson, Georgia:
* U.S. Army Special Operations Command, Ft. Bragg, North Carolina:
* Eighth U.S. Army, Yongsan Garrison, South Korea:
* Combat Equipment Battalion-Northeast Asia, Camp Carroll, South Korea:
* Matériel Support Center-Korea, Camp Carroll, South Korea:
* Sagami Army Depot, Camp Zama, Japan:
Marine Corps:
* U.S. Marine Corps Headquarters, Arlington, Virginia:
* Marine Corps Combat Development Command, Quantico, Virginia:
* Blount Island Command, Jacksonville, Florida:
* Frigaard Storage Facility, Norway:
* Hammerkammen Storage Facility, Norway:
* Vaernes Aviation Storage Facility, Norway:
* Marine Corps Logistics Command, Albany, Georgia:
Navy:
* Chief of Naval Operations, Washington, D.C.
* CNA Corporation, Alexandria, Virginia:
* Naval Facilities Engineering Command, Washington, D.C.
* Naval Special Warfare Command, San Diego, California:
* Naval Audit Service, Falls Church, Virginia:
* Naval Medical Logistics Command, Fort Detrick, Maryland:
* Military Sealift Command, Washington, D.C.
Air Force:
* U.S. Air Force Headquarters, Washington, D.C.
* Air Combat Command, Langley Air Force Base, Virginia:
* Headquarters, Central Command, Air Forces, Shaw Air Force Base, South
Carolina:
* Headquarters, Pacific Air Forces, Hickam Air Force Base, Hawaii:
* U.S. Air Forces in Europe, Ramstein Air Base, Germany:
* 49th Matériel Maintenance Group, Holloman Air Force Base, New Mexico:
* Air Force Special Operations Command, Hurlburt Field, Florida:
Unified Commands:
* U.S. Pacific Command, Camp H.M. Smith, Hawaii:
* U.S. Special Operations Command, MacDill Air Force Base, Florida:
* U.S. Forces Korea, Yongsan Garrison, South Korea:
[End of section]
Appendix III: Comments from the Department of Defense:
DEPUTY UNDER SECRETARY OF DEFENSE FOR LOGISTICS AND MAT—RIEL READINESS:
3500 DEFENSE PENTAGON:
WASHINGTON, DC 20301-3500:
JUL 20 2005:
Mr. William Solis:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N. W.:
Washington, DC 20548:
Dear Mr. Solis:
This is the Department of Defense (DoD) response to the GAO draft
report GAO-05-427, DEFENSE LOGISTICS: Better Management and Oversight
of Prepositioning Programs Needed to Reduce Risk and Improve Future
Programs, dated June 6, 2005 (GAO Code 350568). The GAO draft report
highlights that the DoD faces some near-term operational risks should
another large-scale conflict emerge because it has drawn heavily on its
prepositioned stocks to support ongoing operations in Iraq. The GAO
made 5 recommendations to address the risks of inventory shortfalls and
to improve DoD's management and oversight of its prepositioning
programs. The DoD partially concurs with the recommendations in the
report and is already taking action 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 DRAFT REPORT - DATED JUNE 6, 2005 GAO CODE 350568/GAO-05-427
"DEFENSE LOGISTICS: Better Management and Oversight of Prepositioning
Programs Needed to Reduce Risk and Improve Future Programs"
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of the Defense
direct the Chairman, Joint Chiefs of Staff, to assess the near-term
operational risks associated with current inventory shortfalls and
equipment in poor condition should a conflict arise. (Page 39/GAO Draft
Report):
DOD RESPONSE: Partially concur. While we concur in substance with the
GAO's recommendations, we disagree with the implementation. The Joint
Staff has conducted a mission analysis on several Operation Plans
(OPLANs), based on the readiness of prepositioned assets in order to
determine near-term operational risks. This mission analysis resulted
in a risk assessment that was briefed to the Joint Chief of Staff
Senior Leadership on June 3, 2005. Results of this assessment, which
are classified as Secret//No Foreign Nationals, are being addressed
through coordinated efforts of the Services and Combatant Commands.
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology, and
Logistics to provide oversight over the Department's prepositioning
programs by fully implementing the Department's directive on war
reserve matériel and, if necessary, revise the directive to clarify the
lines of accountability for this oversight. (Page 39/GAO Draft Report):
DOD RESPONSE: Partially Concur. Oversight policy as discussed in the
DoD Directive does not reflect appropriate oversight roles and
responsibilities. To address this issue, representatives of the Joint
Staff and the Office of the Deputy Under Secretary of Defense
(Logistics & Matériel Readiness) co-chair a War Reserve/Prepo Working
Group established in February 2005, to assess the adequacy of the
current war reserve matériel policy, including appropriate oversight
roles and responsibilities. This group will recommend changes to the
Department's directive where appropriate. Estimated completion date is
December 2005.
RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
direct the Secretary of the Army to improve the processes used to
determine requirements and direct the Secretaries of the Army and Air
Force to improve the processes used to determine the reliability of
inventory data so that the readiness of their prepositioning programs
can be reliably assessed and proper oversight over the programs can be
accomplished. (Page 39/GAO Draft Report):
DOD RESPONSE: Partially Concur. While we concur in substance with the
GAO's recommendations, we disagree with the implementation.
The Army is taking steps to better compute Army Prepositioned Stocks
(APS) War Reserve Secondary Items (WRSI) requirements. In January 2005,
HQDA G-4 published the Army War Reserve Sustainment Secondary Items
Computation Guidance which enables the Army to calculate new secondary
items sustainment stock requirements based on the new warfighting
scenarios. Updated consumption rates and planning factors from 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. The new
requirements will have far greater level of fidelity and validity in
supporting the warfighter's contingency and wartime requirements. The
Army War Reserve Automated Process (AWRAP) used to compute APS WRSI
requirements is scheduled to be completed by November 15, 2005.
Air Force oversight of Basic Expeditionary Airfield Resources (BEAR)
assets has increased significantly. Monthly reviews of BEAR status are
provided to senior Air Force leadership and Combatant Commanders to
facilitate ,accountability and supply readiness of critical assets.
Additionally, the Air Force is refining its solution to this problem
via the BEAR-Base Reconstitution and Management System (BBRAMS). This
system is being designed to improve the operational efficiency in Air
Force BEAR-base systems operations. It uses Automatic Identification
Technology (AIT)) to automate asset tracking, replenishment of assets,
maintenance and logistics efforts. BBRAMS is essential for the beddown
and sustainment phases of establishing expeditionary airfields. BBRAMS
can account for receipt of assets throughout the maintenance process
and track assets through the packaging and reconstitution processes.
The system allows for total asset visibility as items move through the
warehouse, through maintenance and deployment. Initial testing of
BBRAMS was conducted at Holloman AFB in September 2004 and, with
complete funding, full fielding is expected to begin approximately
January 2006.
RECOMMENDATION 4: The GAO recommended that the Secretary of Defense
develop a coordinated Department wide plan and joint doctrine for the
Department's prepositioning programs that identifies the role of
prepositioning in the transformed military and ensures these programs
will operate jointly, support the needs of the warfighter, and are
affordable. (Page 39/GAO Draft Report)
DOD RESPONSE: Partially Concur. DoD is providing a coordinated response
to the National Defense Authorization Act of FY 2005 Section 1046 that
will assess programs of the Military Services for prepositioning of
matériel and equipment with a focus on how these programs will support
the goal of the Secretary to have the capability, from the onset of a
contingency situation, to deploy forces to a distant theater within 10
days, defeat an enemy within 30 days, and be ready for an additional
conflict within another 30 days. This assessment will include a review
of prepositioned matériel and equipment used in Operation Iraqi Freedom
and Operation Enduring Freedom, a description of changes to doctrine,
strategy, and transportation plans needed, a description of
modifications to prepositioned programs that could be required, and a
discussion of joint operations and training that support force
projection requirements. This assessment addresses this recommendation
and is to be submitted to Congress not later than October 1, 2005. Upon
completion of the assessment, we will determine if any additional
changes are required to DoD directive(s) or joint doctrine.
RECOMMENDATION 5: The GAO recommended that the Secretary of Defense
report to Congress, possibly as part of the mandated October 2005
report, how the Department plans to manage the near-term operational
risks created by inventory shortfalls and management and oversight
issues described in this report. (Page 39/GAO Draft Report):
DOD RESPONSE: Concur. The DoD will provide this assessment as part of
the report to Congress outlined in the DoD response to recommendation
4, which is to be provided not later than October 1, 2005.
Additionally, the Department will continue to report the status of
prepositioning programs through the Secretary's Annual Defense Report
to the President and Congress.
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
William M. Solis, (202) 512-8365:
Acknowledgments:
In addition to the contact named above, John Pendleton, Assistant
Director, Harold Reich, Assistant Director, Aisha Cabrer, Katherine
Chenault, Lee Cooper, Jeff Kans, Renee McElveen, John Nelson, Emmy
Rhine, Enemencio Sanchez, Patricia Sari-Spear, Kimberly Seay, Robyn
Trotter, Matthew Ullengren, Eddie Uyekawa, Hector Wong, and Ignacio
Yanes also made key contributions to this report.
FOOTNOTES
[1] The Department of Defense, The National Defense Strategy of the
United States of America (March 2005).
[2] GAO: Military Prepositioning: Army and Air Force Programs Need to
Be Reassessed, GAO/NSIAD-99-6 (Washington, D.C.: Nov. 16, 1998).
[3] GAO, Military Prepositioning: Observations on Army and Marine Corps
Programs During Operation Iraqi Freedom and Beyond, GAO-04-562T
(Washington, D.C.: Mar. 24, 2004).
[4] Pub. L. No. 108-375, § 1046, (2004).
[5] We will refer to stocks on hand as compared against required levels
as "inventory fill" in this report.
[6] As discussed later in this report, reliable data needed to assess
inventory fill and maintenance condition were unavailable in many
cases. Therefore, the precise readiness of prepositioned stocks and the
impact of any shortfalls are difficult to determine.
[7] The term "bare base sets" refers to tents for troops, latrines,
kitchens, aircraft hangers, maintenance shops, generators, and
environmental controls. The sets support early-arriving combat forces
and are especially critical in austere environments.
[8] Pub. L. No. 103-62.
[9] DOD Directive 3110.6, War Reserve Matériel Policy (Nov. 9, 2000--
certified current as of Dec. 1, 2003).
[10] Reconstitution includes the costs to clean, inspect, maintain,
replace, and restore equipment to the required condition at the
conclusion of a contingency operation or unit deployment.
[11] GAO, Defense Inventory: The Army Needs a Plan to Overcome Critical
Spare Parts Shortages, GAO-03-705 (Washington, D.C.: June 27, 2003).
[12] See GAO, Defense Management: Opportunities to Reduce Corrosion
Costs and Increase Readiness, GAO-03-753 (Washington, D.C.: July 7,
2003), and Defense Management: Opportunities Exist to Improve
Implementation of DOD's Long-Term Corrosion Strategy, GAO-04-640
(Washington, D.C.: June 23, 2004).
[13] GAO, Army War Reserves: DOD Could Save Millions by Aligning
Resources With the Reduced European Mission, GAO/NSIAD-97-158
(Washington, D.C.: July 11, 1997) and Military Prepositioning: Army and
Air Force Programs Need to Be Reassessed, GAO/NSIAD-99-6 (Washington,
D.C.: Nov. 16, 1998).
[14] Statement of the Deputy Commandant for Plans, Policies, and
Operations, United States Marine Corps, before the Subcommittee on
Readiness, House Armed Services Committee, Concerning Requirements to
Reconstitute Military Equipment, April 6, 2005.
[15] Naval Audit Service: The Norway Air-Landed Marine Expeditionary
Brigade Prepositioning Program, N2003-0079 (September 2003) and Final
Report of the Commission on Review of Overseas Military Facility
Structure of the United States (Arlington, Va.: Aug. 15, 2005).
[16] Common support equipment and supplies include items adopted by a
military service for use by its own forces and their activities,
including standard issue military items, base support items, and the
supplies and services provided by the military service to support and
sustain its own forces.
[17] Department of Defense, (U) Joint Programming Guidance for Fiscal
Years 2006-2011, June 2004.
[18] GAO, Military Prepositioning: Observations on Army and Marine
Corps Programs During Operation Iraqi Freedom and Beyond, GAO-04-562T
(Washington, D.C.: Mar. 24, 2004).
[19] Pub. L. No. 103-62.
[20] GAO, Military Readiness: Reports to Congress Provide Few Details
on Deficiencies and Solutions, GAO/NSIAD-98-68 (Washington, D.C.: Mar.
30, 1998) and Military Readiness: New Reporting System Is Intended to
Address Longstanding Problems, but Better Planning is Needed, GAO-03-
456 (Washington, D.C.: Mar. 28, 2003).
[21] The Army uses the Army War Reserve Automated Process to determine
its requirements for spare parts in the war reserve.
[22] GAO, Military Prepositioning: Observations on Army and Marine
Corps Programs During Operation Iraqi Freedom and Beyond, GAO-04-562T
(Washington, D.C.: Mar. 24, 2004).
[23] GAO, Defense Logistics: Actions Needed to Improve the Availability
of Critical Items during Current and Future Operations, GAO-05-275
(Washington, D.C.: Apr. 8, 2005).
[24] GAO, Defense Management: Munitions Requirements and Combatant
Commander's Needs Require Linkage, GAO-03-17 (Washington, D.C.: Oct.
15, 2002).
[25] The Army's Status of Resources and Training System is the
counterpart to the Global Status of Resources and Training System,
which is an automated system that assesses the extent to which military
units possess the required resources and training to undertake their
wartime missions.
[26] GAO, Military Prepositioning: Army and Air Force Programs Need to
Be Reassessed, GAO/NSIAD-99-6 (Washington, D.C.: Nov. 16, 1998).
[27] GAO, Defense Inventory: Army War Reserve Spare Parts Requirements
Are Uncertain, GAO-01-425 (Washington, D.C.: May 10, 2001).
[28] GAO, High Risk Series: An Update, GAO-05-207 (Washington, D.C.:
January 2005).
[29] U.S. Army Matériel Command, Iraq Lessons Learned Conference
(Redstone Arsenal, Ala.: Sept. 10-11, 2003).
[30] Army Audit Agency, Operational Project Stocks Phase II, Report A-
2004-0108-AML (Alexandria, Va.: Feb. 12, 2004).
[31] Air Force Audit Agency, Other War Reserve Matériel, F2003-0010-
FC4000 (Washington, D.C.: May 2003).
[32] U.S. Army Matériel Command Inspector General, Systematic
Inspection of the Material Condition of Army War Reserve Sustainment
Stocks (Ft. Belvoir, Va.: August 2001).
[33] U.S. Army Matériel Command, Iraq Lessons Learned Conference
(Redstone Arsenal, Ala.: Sept. 10-11, 2003).
[34] CNA Corporation, Operation Iraqi Freedom (OIF) Maritime
Prepositioning Force (MPF) Reconstitution, Regeneration, and
Reembarkation Operations: Summary Findings (Alexandria, Va.: June
2004).
[35] DOD, The National Defense Strategy of the United States of America
(March 2005).
[36] Recent changes in DOD's defense posture have shifted the
department's focus from being capable of winning two major theater wars
to including having the capabilities needed to (1) defend the United
States, (2) deter aggression and coercion in four critical regions, (3)
swiftly defeat aggression in overlapping major conflicts, and (4)
preserve the option to win decisively in one conflict.
[37] Final report of the Commission on Review of Overseas Military
Facility Structure of the United States (Arlington, Va.: August 15,
2005).
[38] DOD, DOD Transformation Planning Guidance (Washington, D.C.: April
2003).
[39] Logistics Management Institute, Strategies for Worldwide
Prepositioning (McLean, Va.: August 2003).
[40] Science Applications International Corporation, Bare Base Assets
Study (McLean, Va.: Aug. 31, 2004).
[41] DOD Transformation Planning Guidance, April 2003; Air Force
Transformation Flight Plan, November 2003.
[42] DOD, Ground Force Equipment Repair, Replacement, and
Recapitalization Requirements Resulting From Sustained Combat
Operations (Washington, D.C.: April 2005).
[43] Formerly known as Harvest Eagle and Harvest Falcon, the new bare
base sets are called Basic Expeditionary Airfield Resources (BEAR).
Rather than deploying all of the assets that are part of the larger
Harvest Eagle and Harvest Falcon sets, the Air Force established a more
tailored basing capability. This tiered approach establishes a new 150-
person set and replaces the Harvest Eagle/Falcon sets with 550-person
initial and 550-person follow-on sets. The plan for deployment is for
the 150-person set to support the forces that open the airbase,
followed by a 550-person initial set to establish the airbase. The 550-
person follow-on sets would then be set up as the base capability
expands, on an as-needed basis.
[44] Issues of joint service participation and affordability are
discussed in more detail in two reports: Congressional Budget Office,
The Future of the Navy's Amphibious and Maritime Prepositioning Forces
(Washington, D.C.: November 2004) and Congressional Research Service
Report for Congress, Navy-Marine Corps Amphibious and Maritime
Prepositioning Ship Programs: Background and Oversight Issues for
Congress (Washington, D.C.: Nov. 15, 2004).
[45] In 1990, we began a special effort to review and report on the
federal program areas we considered high risk because they were
especially vulnerable to waste, fraud, abuse, and mismanagement. In
December 1992, we issued a series of reports on the fundamental causes
of problems in designated high-risk areas, including one entitled: High-
Risk Series: Defense Inventory Management, GAO/HR-93-12 (Washington,
D.C.: December 1992).
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