Defense Logistics
Department of Defense's Annual Report on the Status of Prepositioned Materiel and Equipment Can Be Enhanced to Better Inform Congress Gao ID: GAO-09-147R December 15, 2008The Department of Defense (DOD) prepositions equipment at strategic locations around the world in order to field combat-ready forces in days, rather than the weeks it would take if equipment had to be moved from the United States to the locations of conflicts. DOD's prepositioned stock programs support the National Military Strategy and are an important part of its overall strategic mobility framework. Prepositioned materiel and equipment have played an important role in supporting ongoing operations in Iraq and Afghanistan. However, sustained continuing operations in Iraq and Afghanistan have taken a toll on the condition and readiness of military equipment. In April 2008 we testified that it was unclear when these critical reserve stocks would be reconstituted or how much the total cost would be. The Army and Marine Corps face a number of ongoing and long-term challenges that will affect both the timing and the cost of equipment repair and replacement--particularly to its prepositioned stocks. DOD has reported to Congress that the military services are committed to resetting prepositioned materiel but must balance its efforts within the priorities of reorganization of those prepositioned capabilities and changes in overseas military presence. In June 2008, DOD issued an instruction on the War Reserve Materiel Policy. In the instruction, DOD established a Global Prepositioned Materiel Capabilities Working Group to, among other things, address joint issues concerning war reserve risk assessments provided by the military departments and the Defense Logistics Agency, initiate programs as needed, and make recommendations for war reserves that balance resources against operational risk. Over the last few years, we have identified a number of ongoing and long-term challenges that will affect both the timing and the cost of reconstituting prepositioned stocks. The National Defense Authorization Act for Fiscal Year 2008 (NDAA) added an annual reporting requirement to Title 10 of the United States Code, directing DOD to submit a report to the congressional defense committees on the status of prepositioned materiel and equipment as of the end of each fiscal year, no later than the date of the submission of the President's annual budget requests. The report is required to address the following six elements: (1) the level of fill for major end items of equipment and spare parts, (2) the materiel condition of equipment in the prepositioned stocks, (3) a list of major end items drawn from prepositioned stocks that fiscal year and a description of how the equipment was used and whether it was returned to the stocks after its use, (4) a timeline for completely reconstituting any shortfall in the prepositioned stocks, (5) an estimate of the funding required to completely reconstitute any shortfall in the prepositioned stocks and a description of the Secretary's plan for carrying out the reconstitution, and (6) a list of any operations plans affected by a shortfall in the prepositioned stocks and a description of the action taken to mitigate any risk created by that shortfall.
While DOD addresses the six elements required in its annual report, the services' information varied due to differences in the configuration of their prepositioned materiel and equipment. The law also requires the services to report on the status and condition of spare parts. The Navy and Marine Corps provided data on spare parts, but the Army and Air Force did not do so because they track spare parts differently. In addition to reporting on the status and condition of their prepositioned materiel and equipment, the services reported on the status of equipment drawn from and returned to prepositioned stocks during the reporting period of October 1, 2007, to March 31, 2008, to support ongoing operations or training exercises; timelines ranging from 2010 to 2015 to reconstitute shortfalls in stocks; funding estimates to reconstitute those shortfalls; and the risk to operations plans that would be affected by any shortfall in prepositioned stocks and subsequent mitigation strategies. In future DOD reports on the status of its prepositioned materiel and equipment, additional information on funding requirements for the services' prepositioned programs and risk to current operations and concept plans could further inform congressional defense committees. The services provided the Joint Staff with an estimate of the amount of funds required to reconstitute shortfalls of prepositioned materiel and equipment as required. However, overall funding estimates on equipment and materiel shortages alone do not provide a means to measure the services' progress toward meeting long-term prepositioning goals or provide the visibility to inform congressional decision making. Consistent with best practices to provide clear funding plans to support decision making, funding estimates should be transparent, comprehensive, easily replicated, and updated to help ensure the validity of the estimate. In addition to the required estimate to reconstitute shortfalls, presenting funding requirements by year and appropriation accounts, similar to DOD's annual budget request presentation, in one report to Congress would provide a more comprehensive, detailed estimate of the services' requirements for prepositioned materiel and equipment. Detailed funding estimates would provide a means to measure the services' progress towards meeting long-term prepositioning goals. While the services listed operations plans affected by shortfalls in prepositioned stocks, as required, additional information on the effect of prepositioned equipment shortfalls on current operations such as ongoing operations in Iraq and Afghanistan and concept plans such as plans for the defense of one country against invasion from another country, would provide greater disclosure and visibility over other possible risks. Without information on other possible risks, Congress may not be fully informed on the range of military options available in times of crisis.
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Director: Team: Phone:GAO-09-147R, Defense Logistics: Department of Defense's Annual Report on the Status of Prepositioned Materiel and Equipment Can Be Enhanced to Better Inform Congress
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December 15, 2008:
Congressional Committees:
Subject: Defense Logistics: Department of Defense's Annual Report on
the Status of Prepositioned Materiel and Equipment Can Be Enhanced to
Better Inform Congress:
The Department of Defense (DOD) prepositions equipment at strategic
locations around the world in order to field combat-ready forces in
days, rather than the weeks it would take if equipment had to be moved
from the United States to the locations of conflicts. DOD's
prepositioned stock programs support the National Military Strategy and
are an important part of its overall strategic mobility framework.
Prepositioned materiel and equipment have played an important role in
supporting ongoing operations in Iraq and Afghanistan. However,
sustained continuing operations in Iraq and Afghanistan have taken a
toll on the condition and readiness of military equipment. In April
2008 we testified that it was unclear when these critical reserve
stocks would be reconstituted or how much the total cost would
be.[Footnote 1] The Army and Marine Corps face a number of ongoing and
long-term challenges that will affect both the timing and the cost of
equipment repair and replacement--particularly to its prepositioned
stocks.[Footnote 2] DOD has reported to Congress that the military
services are committed to resetting prepositioned materiel but must
balance its efforts within the priorities of reorganization of those
prepositioned capabilities and changes in overseas military
presence.[Footnote 3] In June 2008, DOD issued an instruction on the
War Reserve Materiel Policy. In the instruction, DOD established a
Global Prepositioned Materiel Capabilities Working Group to, among
other things, address joint issues concerning war reserve risk
assessments provided by the military departments and the Defense
Logistics Agency, initiate programs as needed, and make recommendations
for war reserves that balance resources against operational
risk.[Footnote 4]
Over the last few years, we have identified a number of ongoing and
long-term challenges that will affect both the timing and the cost of
reconstituting prepositioned stocks.[Footnote 5] For example, the Army
conducted a reassessment of its current Army Prepositioned Stocks (APS)
strategy in fiscal year 2006, resulting in programwide changes in the
structure and employment concepts to ensure the APS can support both
steady-state and surge requirements. In addition, the Marine Corps is
in the process of transforming its Maritime Prepositioning Force by
incorporating more flexible capability sets to enable a variety of
missions, while the Navy continues to transform its expeditionary
medical capability, including moving from 500-bed fleet hospitals to
smaller 250-bed modular units. Similarly, the Air Force is in the
process of shifting from its historical emphasis on air-deployable
assets to new deployment configurations that reduce its reliance on
airlift by prepositioning materiel on land and on ships.
The National Defense Authorization Act for Fiscal Year 2008
(NDAA)[Footnote 6] added an annual reporting requirement to Title 10 of
the United States Code,[Footnote 7] directing DOD to submit a report to
the congressional defense committees on the status of prepositioned
materiel and equipment as of the end of each fiscal year, no later than
the date of the submission of the President's annual budget requests.
The report is required to address the following six elements: (1) the
level of fill for major end items of equipment and spare parts, (2) the
materiel condition of equipment in the prepositioned stocks, (3) a list
of major end items drawn from prepositioned stocks that fiscal year and
a description of how the equipment was used and whether it was returned
to the stocks after its use, (4) a timeline for completely
reconstituting any shortfall in the prepositioned stocks, (5) an
estimate of the funding required to completely reconstitute any
shortfall in the prepositioned stocks and a description of the
Secretary's plan for carrying out the reconstitution, and (6) a list of
any operations plans affected by a shortfall in the prepositioned
stocks and a description of the action taken to mitigate any risk
created by that shortfall. In the conference report accompanying the
NDAA,[Footnote 8] the conferees expressed their belief in the strategic
importance of the collection and placement of military materiel and
supplies in locations around the world to facilitate and speed response
to crisis or contingencies. The conferees communicated their awareness
that current stocks of prepositioned materiel and equipment have been
depleted to support operations in Iraq and Afghanistan. DOD submitted
its report on the status of its prepositioned equipment and materiel
for the time period of October 2007 to March 2008 to Congress in August
2008. The annual reporting requirement directs us to review DOD's
annual reports and submit to the congressional defense committees any
additional information that will further inform such committees on
issues relating to the status of the materiel in prepositioned stocks
no later than 120 days after the date on which DOD submits its report
to Congress.
For this report, our objectives are to determine the extent to which
(1) DOD's report addresses the six elements in the annual reporting
requirement and (2) what additional information in future DOD reports
on the status of its prepositioned materiel and equipment could further
inform congressional defense committees on issues relating to the
status of prepositioned materiel and equipment. We compared DOD's
report with the statutory reporting requirements to assess the extent
to which DOD provided information for each of the six elements required
in the annual report. We also examined GAO and DOD reports on the
services' prepositioned stock programs, collected readiness data on the
services' materiel and equipment sets, reviewed relevant DOD and
service policies, and met with DOD and service officials to determine
whether additional information could further inform Congress on the
status of prepositioned materiel and equipment. We reviewed the
services' funding estimates and funding best practices identified in
GAO reports[Footnote 9] to determine if the estimates and plans were
transparent and comprehensive. While we did not independently assess
the data DOD provided to Congress, we discussed the reliability of the
systems used to develop the report data with service officials and
determined that the data are sufficiently reliable to meet the
objectives of this engagement. A more detailed discussion of our scope
and methodology is included in enclosure I. We conducted this
performance audit from August 2008 to December 2008 in accordance with
generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives.
Summary:
While DOD addresses the six elements required in its annual
report,[Footnote 10] the services' information varied due to
differences in the configuration of their prepositioned materiel and
equipment. For example, the Army and Marine Corps reported their
prepositioned materiel and equipment by major end item,[Footnote 11]
such as Abrams tanks or Bradley fighting vehicles. However, the Navy
and Air Force configure their prepositioned equipment based on
capabilities such as Navy medical facilities or Air Force refueling
capabilities. The Navy provided data on materiel and equipment
capabilities including medical facility and civil engineering support
equipment, while the Air Force provided data on materiel and equipment
capabilities to establish air bases. Army and Marine Corps officials
agreed that the list of major end items compiled by the Joint Staff in
response to the annual reporting requirement represented their
prepositioned materiel and equipment. The law also requires the
services to report on the status and condition of spare parts. The Navy
and Marine Corps provided data on spare parts, but the Army and Air
Force did not do so because they track spare parts differently.
According to officials, the Army reports the readiness of spare parts
as part of its equipment end item readiness. The Air Force tracks spare
parts as part of its peacetime stocks rather than with its War Reserve
Materiel (WRM) program,[Footnote 12] which includes prepositioned
materiel and equipment for base support of ground operations. In
addition to reporting on the status and condition of their
prepositioned materiel and equipment, the services reported on the
status of equipment drawn from and returned to prepositioned stocks
during the reporting period of October 1, 2007, to March 31, 2008, to
support ongoing operations or training exercises; timelines ranging
from 2010 to 2015 to reconstitute shortfalls in stocks; funding
estimates to reconstitute those shortfalls; and the risk to operations
plans that would be affected by any shortfall in prepositioned stocks
and subsequent mitigation strategies.
In future DOD reports on the status of its prepositioned materiel and
equipment, additional information on funding requirements for the
services' prepositioned programs and risk to current operations and
concept plans could further inform congressional defense committees.
The services provided the Joint Staff with an estimate of the amount of
funds required to reconstitute shortfalls of prepositioned materiel and
equipment as required. However, overall funding estimates on equipment
and materiel shortages alone do not provide a means to measure the
services' progress toward meeting long-term prepositioning goals or
provide the visibility to inform congressional decision making.
Consistent with best practices to provide clear funding plans to
support decision making, funding estimates should be transparent,
comprehensive, easily replicated, and updated to help ensure the
validity of the estimate.[Footnote 13] In addition to the required
estimate to reconstitute shortfalls, presenting funding requirements by
year and appropriation accounts, similar to DOD's annual budget request
presentation, in one report to Congress would provide a more
comprehensive, detailed estimate of the services' requirements for
prepositioned materiel and equipment. Detailed funding estimates would
provide a means to measure the services' progress towards meeting long-
term prepositioning goals. While the services listed operations plans
affected by shortfalls in prepositioned stocks, as required, additional
information on the effect of prepositioned equipment shortfalls on
current operations such as ongoing operations in Iraq and Afghanistan
and concept plans such as plans for the defense of one country against
invasion from another country, would provide greater disclosure and
visibility over other possible risks. Without information on other
possible risks, Congress may not be fully informed on the range of
military options available in times of crisis.
To provide Congress with the visibility to better assess the status and
condition of DOD's prepositioned materiel and equipment, we recommend
that the Secretary of Defense direct the Joint Staff and the
Secretaries of the military services to provide, in addition to the six
elements currently required in the annual report, a more comprehensive
picture of the services' requirements for prepositioned stocks by
including funding requirements by year and appropriation accounts
similar to the level of detail provided in the annual budget request
presentation. To ensure that Congress is aware of other potential risks
created by shortages of prepositioned materiel and equipment, we also
recommend that the Secretary of Defense direct the Joint Staff and the
Secretaries of the military services to include in DOD's prepositioned
equipment report to Congress current operations and concept plans risks
and mitigation strategies. In commenting on a draft of this report, the
department concurred with the first recommendation and nonconcurred
with the second recommendation. Because we continue to believe that
identifying specific risks to current operations and concept plans
created by the unavailability of prepositioned materiel and equipment
will help to better inform Congress, we have added a matter for
congressional consideration that suggests Congress may wish to require
DOD to provide additional information on the effect of prepositioned
equipment shortfalls. DOD also provided a number of technical comments
separately, which we considered and incorporated as appropriate. The
department's comments and our evaluation of those comments are
discussed in detail in a later section of this report. DOD's written
comments are reprinted in enclosure II.
Background:
Each military service maintains different configurations and types of
materiel and equipment to support its prepositioned stock program. The
services' prepositioned stock programs are briefly described below.
Table 1: Description of DOD's Prepositioning Stock Programs:
Service: Army: APS 1-5;
Types of stocks: Brigade Combat Team (BCT) sets;
Description: * Stored at land sites and aboard prepositioning ships;
* Sets are designed to support 3,000 to 5,000 soldiers;
* Abrams tanks, Bradley infantry fighting vehicles, High Mobility Multi-
purpose Wheeled Vehicles, support trucks, and vehicles;
* Spare parts and other sustainment stocks to support the early stages
of a conflict.
Service: Army: APS 1-5;
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 tracked vehicles;
* Secondary items such as meals, clothing, petroleum supplies,
construction materials, ammunition, medical materials, and repair
parts.
Service: Army: APS 1-5;
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: Marine Corps: MPSRON 1-3;
Types of stocks: Forward deployed;
Maritime Prepositioning Force (MPF);
Description: * Consists of 16 prepositioning ships organized into three
squadrons;
* Each squadron supports about 16,000 Marines and sailors for up to 30
days;
* Includes combat systems, communications systems, construction
equipment, munitions, medical supplies, and sustainment stocks.
Service: Marine Corps: MPSRON 1-3;
Types of stocks: Prepositioning program--Norway;
Description: * Several land sites located in central Norway;
* Designed to support a Marine Expeditionary Brigade (MEB) with select
types and classes of vehicles, equipment, and supplies;
* Includes vehicles, engineering equipment, munitions, rations, and
other equipment that will be used to support any geographic combatant
command.
Service: Navy: MPSRON 1-3;
Types of stocks: Navy prepositioned assets;
Description: * Assets are stored aboard MPF 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 3,000 fleet hospital beds.
Service: Air Force: various geographic locations;
Types of stocks: Bare base sets;
Description: * Base operating support equipment and supplies used to
house forces at austere bare base forward operating locations;
* Supports up to 77,500 personnel and 850 combat/mobility aircraft at
up to 15 forward operating locations worldwide;
* Includes housekeeping sets for personnel life support, industrial
operations sets to establish expeditionary airbase infrastructure, and
flight line (flying) operations sets.
Service: Air Force: various geographic locations;
Types of stocks: Operational stocks;
Description: * Direct and indirect mission support equipment and
vehicles for up to 43 forward operating locations to support major
combat operations (MCO) and vignettes as specified in DOD's Integrated
Security Posture (ISP) and Strategic Planning Guidance;
* Includes equipment stored at forward operating locations (land bases)
worldwide to provide direct mission support, such as aerospace ground
equipment for flying operations, fuels operational readiness capability
equipment (FORCE) for aircraft refueling, and general aviation support;
* Includes both general purpose vehicles such as trucks, buses, and
vans, and special purpose vehicles such as material handling equipment,
fire trucks, and civil engineering construction equipment.
Service: Air Force: various geographic locations;
Types of stocks: Other aviation support equipment and supplies;
Description: * Includes other war reserve materiel sustainment
equipment and supplies such as rations, munitions stored at land sites
and aboard prepositioning ships, petroleum (aircraft fuel), oils,
lubricants at multiple locations and centralized storage locations
globally.
Source: GAO.
[End of table]
The Army and Marine Corps programs maintain sets of materiel and
equipment by support unit or brigade type through land and ship storage
facilities. The Navy and Air Force maintain materiel that support
capabilities through land and ship storage facilities. For example, the
Navy maintains fleet hospitals and plans to transform to expeditionary
medical facilities in its program by fiscal year 2013. The Air Force
maintains a Basic Expeditionary Airfield Resources (BEAR) package that
provides basing assets at austere airfields and Fuels Operational
Readiness Capability Equipment (FORCE) to provide fueling capabilities
in areas without supporting infrastructure.
We and other audit agencies have reported in the past on numerous long-
standing problems facing DOD's prepositioning programs, including a
lack of centralized operational direction, unreliable reporting on the
maintenance condition of equipment, equipment excesses at some
prepositioning locations, and systemic problems with requirements
determination and inventory management. In September 2005, we
recommended that DOD develop a coordinated departmentwide plan and
joint doctrine for the department's prepositioning programs.[Footnote
14] In February 2007, we reported that while the Army expected to
finalize its implementation plan for prepositioned stocks by December
31, 2006, DOD would not complete its departmentwide strategy before mid-
April 2007.[Footnote 15] We recommended that the Secretary of Defense
direct the Secretary of the Army to take steps to synchronize the
Army's prepositioning strategy with the DOD-wide strategy in order to
ensure that future investments made for the Army's prepositioning
program would align with the anticipated DOD-wide prepositioning
strategy. DOD generally concurred with our recommendations. The John
Warner National Defense Authorization Act for Fiscal Year 2007[Footnote
16] required DOD to establish a strategic policy on its programs for
the prepositioning of materiel and equipment by April 2007. In February
2008, we reported that DOD officials believed the publication of the
War Reserve Materiel Policy and Joint Strategic Capability
Plan[Footnote 17] satisfied the requirement of the John Warner National
Defense Authorization Act for Fiscal Year 2007. We further stated that
the publication of the War Reserve Materiel Policy and Joint Strategic
Capability Plan did not satisfy the requirement.[Footnote 18] However,
during our current review, DOD officials stated that in response to our
recommendations to develop a coordinated departmentwide prepositioning
strategic policy, they established the Global Prepositioned Materiel
Capabilities Working Group in June 2008, to address joint issues on
prepositioned materiel and equipment.[Footnote 19]
DOD's Report Addresses the Six Reporting Requirements but Is Limited:
While DOD addresses the six elements required by the statute[Footnote
20] in its annual report, the services' information varied due to
differences in the configuration of their prepositioned materiel and
equipment. Based on the required elements set out in the law, the Joint
Staff developed a data collection template for the services to
complete. Each service responded to the Joint Staff request for
information based on the services' individual configuration of
prepositioned materiel and equipment. The Army and Marine Corps
reported on the first element of the statute by major end item. Army
and Marine Corps officials told us that they agreed that the list of
major end items provided by the Joint Staff represented their
prepositioned materiel and equipment. However, the Navy and Air Force
do not configure their prepositioned materiel and equipment by major
end item, therefore, they did not report the status of prepositioned
materiel and equipment in terms of major end items. The Navy configures
its prepositioned materiel and equipment by capability. The Navy
provided data on the status of its expeditionary medical facility,
civil engineering support equipment, and spare parts. The Air Force
configures its prepositioned materiel and equipment based on the Air
Force's capability to establish air bases and refueling capabilities,
and it provided data on the status of these capabilities. While the law
also requires the services to report on the status of spare parts, the
Navy and Marine Corps provided data on spare parts, but the Army and
Air Force did not because of the way in which they track spare parts.
According to Army officials, they did not report on the status of spare
parts as required because they report readiness of spare parts as part
of their equipment end item readiness. The Air Force did not include
spare parts, as required, because aircraft spare parts are not part of
the Air Force WRM program and nonaircraft spare parts are included in
the BEAR set reporting. Air Force officials said that 5 years ago the
service made the decision to increase the efficiency of aircraft spare
parts management by eliminating aircraft spare parts from the WRM
program and combining them with peacetime stocks. While all of the
services responded to the annual reporting requirement by providing
information on the status and condition of their prepositioned materiel
and equipment, each service based its responses to the annual reporting
requirement on the configuration of its prepositioned materiel and
equipment, which does not include all of the categories of data
required, such as major end items and spare parts. By employing a
reporting format restricted to major end items and spare parts, DOD's
report may not capture the status and condition of all prepositioned
stocks. Additional information from the services on materiel and
equipment in their prepositioned stocks could provide Congress with the
visibility to better assess the status and condition of DOD's
prepositioned stock programs to support its decision-making process.
In addition to responding to the status and condition of their
prepositioned materiel and equipment, the services reported, as
required, on the status of equipment drawn from and returned to
prepositioned stocks during the reporting period of October 1, 2007, to
March 31, 2008; the timelines to reconstitute shortfalls in stocks;
estimates of funding required to reconstitute those shortfalls; and the
risk to operations plans that would be affected by any shortfall in
prepositioned stocks and subsequent mitigation strategies for
associated risks. The services reported that equipment drawn from and
returned to prepositioned stocks during the reporting period was
primarily used to support ongoing operations or for training exercises.
We previously reported that the Army's previous strategy, APS Strategy
2013, did not clearly identify reconstitution requirements, and neither
the Army nor Congress could be assured it had the visibility needed for
its decision-making process.[Footnote 21] The Army is now pursuing the
Army Prepositioned Stocks Strategy 2015 (APS Strategy 2015) to
replenish all equipment sets by 2015.[Footnote 22] The Marine Corps
estimates that it will complete the reconstitution of its Maritime
Prepositioning Squadrons by 2012. The Air Force projects that it will
be able to reconstitute the WRM assets it uses to configure aircraft
for various operational missions such as Air Force tanks, racks,
adaptors, and pylons by 2015, with reconstitution of BEAR, basic
expeditionary airfield resources, by 2013, and major improvements to
specific subsystems of BEAR by 2010.
Additional Information on Prepositioned Stock Funding Requirements and
Risks to Current Operations and Concept Plans Could Further Inform
Congress:
In future DOD reports on the status of its prepositioned materiel and
equipment, additional information on funding requirements for the
services' prepositioned stocks and risks to current operations and
concept plans in addition to operations plans could further inform
congressional defense committees.
While the services provided estimates of funding required to
reconstitute shortfalls in their prepositioned materiel and equipment
in the annual report as required, providing more detailed information
about estimated funding requirements for prepositioned stocks would
further inform Congress. As we have previously reported, consistent
with best practices, funding estimates should be transparent,
comprehensive, and easily replicated, and updated to help ensure the
validity of the estimate.[Footnote 23] During our review, the Army, Air
Force, and Navy provided additional funding data. The Army provided
additional funding data by equipment set, year, and appropriation
accounts, while the Air Force provided data by set, appropriation
accounts, and the year in which the set would be fully reconstituted.
The Navy provided additional funding data by year and appropriation
accounts. However, the Marine Corps did not provide additional funding
data at this level of detail. Marine Corps officials stated that
because cost estimates to reconstitute its prepositioned stocks are
included in its overall procurement account, additional detailed
funding requirements cannot be identified separately. Requests for
funding for prepositioned stocks span two-to-three appropriation
accounts including Operation and Maintenance, Procurement, and
Research, Development, Test, and Evaluation. Presenting funding
requirements by year and appropriation accounts, similar to the level
of detail DOD provides in its annual budget request presentation, in
one report to Congress would provide a more comprehensive detailed
estimate of the services' requirements for prepositioned materiel and
equipment.[Footnote 24] In addition, we have also recommended that DOD
take a more strategic approach to decision making to promote
transparency and ensure investments in equipping its forces are made
based on sound, comprehensive plans.[Footnote 25] Providing funding
estimates on equipment and materiel shortages alone does not provide a
means to measure the services' progress toward meeting long-term
prepositioning goals or provide visibility to Congress to inform its
decision-making process in times of crisis.
As part of the annual report, DOD provided a classified annex of
operations plans[Footnote 26] affected by shortfalls in its
prepositioned stocks including risk mitigation strategies. All four
services reported on operations plans affected by prepositioned stock
shortfalls as required by the law. Additional information was provided
to the Joint Staff on the effect of prepositioned equipment shortfalls
on current operations and concept plans[Footnote 27] in order to
provide a complete status of prepositioned stock programs. Current
operations include ongoing operations in such places as Iraq and
Afghanistan. Concept plans include plans for the defense of one country
against invasion of another country. Providing information to Congress
on the effect of prepositioned equipment shortfalls on current
operations and concept plans would provide greater disclosure and
visibility over other possible risks. Without information on other
possible risks, DOD and Congress may not be fully informed on the range
of military options available in times of crisis.
Conclusions:
Prepositioned materiel and equipment have been vital to ongoing
operations in Iraq and Afghanistan over the past several years.
Providing more detailed estimates of funding required for the services'
prepositioned stocks by year and appropriation accounts, similar to
DOD's annual budget request presentation, would provide Congress a more
transparent and comprehensive picture of the services' funding needs
for prepositioned materiel and equipment toward meeting long-term
prepositioning goals and provide Congress the visibility to support its
decision-making process. Finally, information on the current operations
and concept plans, in addition to operations plans, affected by
shortfalls in prepositioned stocks as well as actions taken to mitigate
the resulting risks would better inform DOD and Congress on the range
of military options that could be considered in times of crisis.
Recommendations for Executive Action:
To provide Congress with the visibility to better assess the status and
condition of DOD's prepositioned materiel and equipment, we recommend
that the Secretary of Defense direct the Joint Staff and the
Secretaries of the military services to provide, in addition to the six
elements currently required in the annual report, (1) a more
comprehensive picture of the services' funding requirements for
prepositioned stocks by providing funding requirements by year and
appropriation accounts similar to the level of detail provided in the
annual budget request presentation, and (2) information on the effect
of prepositioned equipment shortfalls on current operations and concept
plans, including risks and mitigation strategies to provide better
visibility over possible risks.
Matter for Congressional Consideration:
To improve visibility over possible risks to current operations and
concept plans and related mitigation strategies, Congress may wish to
consider requiring the Secretary of Defense to provide information in
the annual report on the effect of prepositioned equipment shortfalls
on current operations and concept plans, as well as actions taken to
mitigate the risks caused by the shortfalls.
Agency Comments and Our Evaluation:
In commenting on a draft of this report, DOD concurred with our first
recommendation and nonconcurred with the second recommendation. In
response to our first recommendation that the Secretary of Defense
provide a more comprehensive picture of the services' requirements for
prepositioned stocks by including funding requirements by year and
appropriation accounts similar to the level of detail provided in the
annual budget presentation, DOD commented that it will implement this
recommendation in its fiscal year 2009 report to Congress, which will
be delivered in early 2010.
In response to our second recommendation that the Secretary of Defense
provide additional information on the effect of prepositioned equipment
shortfalls by including risks to current operations and concept plans
and related mitigation strategies to provide better visibility over
other possible risks, DOD stated that it believes that the annual
Chairman's Risk Assessment[Footnote 28] already provides a
comprehensive and more holistic approach to risks and mitigation
strategies. Specifically, DOD commented that the annual Chairman's Risk
Assessment, submitted to the President and Secretary of Defense, along
with the Presidential Budget Request to Congress, considers not only
shortfalls in prepositioning programs, but also all factors relating to
DOD readiness and strategy. Consequently, DOD believes that reporting
additional risks and mitigation strategies for current operations and
concept plans of only the prepositioned programs could result in
suboptimized decision making. The Chairman's Risk Assessment, however,
is a broad assessment of DOD's ability to execute the global missions
specified in its National Military Strategy and may not specifically
address the effect of prepositioned equipment shortages on individual
operations or specific concept plans. We continue to believe that
identifying specific risks to current operations and concept plans
created by the unavailability of prepositioned equipment and materiel,
along with related mitigation strategies, will help to better inform
Congress of the potential ramifications associated with specific
shortages of prepositioned stocks. The House Armed Services Committee,
for example, recently reported that the committee continues to be
concerned about the lack of availability of prepositioned stocks of
combat equipment and noted that the recent drawdown of prepositioned
stocks has increased the time it will take to deploy equipment to a
contingency.[Footnote 29] Given these congressional concerns regarding
the unavailability of prepositioned stocks and the potential
detrimental effect on DOD's ability to respond to potential future
contingencies, we continue to believe that DOD's subsequent annual
reports on the status of its prepositioned materiel and equipment
should include risks to current operations and concept plans and
related mitigation strategies.
DOD also provided a number of general and technical comments, which we
have considered and incorporated as appropriate. A copy of DOD's
written comments is included in enclosure II.
We are sending copies of this report to the appropriate congressional
committees; the Secretary of Defense; the Chairman of the Joint Chiefs
of Staff; the Secretaries of the Army, the Navy, and the Air Force; and
the Commandant of the Marine Corps.
In addition, this report will be available at no charge on GAO's Web
site at [hyperlink, http://www.gao.gov]. If you or your staff members
have any questions regarding this report, please contact me at (202)
512-8365 or solisw@gao.gov. Contact points for our Office of
Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made major contributions to this
report are listed in enclosure III.
Signed by:
William M. Solis, Director:
Defense Capabilities and Management:
List of Committees:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Ike Skelton:
Chairman:
The Honorable Duncan L. Hunter:
Ranking Member:
Committee on Armed Services:
House of Representatives:
The Honorable John P. Murtha:
Chairman:
The Honorable C.W. Bill Young:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Enclosure I: Scope and Methodology:
To evaluate the Department of Defense's (DOD) report on the status of
its prepositioned stocks, we compared DOD's report to the congressional
defense committees with the statutory reporting requirements to assess
the extent to which DOD provided information on each of the six
elements required in the annual report. We obtained and analyzed data
from the Joint Staff, Army, Marine Corps, Navy, and Air Force that
described the status of materiel and equipment in the prepositioned
stocks. We reviewed DOD and service guidance and strategies that guide
the prepositioned stock programs to understand the variations of
information reported by the services on the status of prepositioned
materiel and equipment. After analyzing the data, we met with
appropriate Joint Staff and service officials to discuss the
methodology used to collect and report materiel status, the differences
in service programs, and the reliability of data from systems the
services used to report the status of their prepositioned stocks. We
also examined GAO and DOD reports on the services' prepositioned stock
programs, collected readiness data on the services' materiel and
equipment sets, reviewed relevant DOD and service guidance, and met
with DOD and service officials to determine whether additional
information could further inform Congress on the status of
prepositioned materiel and equipment. We reviewed the services' funding
estimates and funding best practices identified in GAO reports[Footnote
30] to determine if the estimates and plans were transparent and
comprehensive. While we did not independently assess the data DOD
provided to Congress, we discussed the reliability of the systems used
to develop the report data with service officials and determined that
the data are sufficiently reliable to meet the objectives of this
engagement. During this audit engagement, we met with officials from
the Office of the Assistant Deputy Under Secretary of Defense for
Supply Chain Integration; Office of the Joint Chiefs of Staff,
Logistics; Army Deputy Chief of Staff, Program Analysis & Evaluation
Directorate; Army Deputy Chief of Staff, Operations and Plans; Army
Deputy Chief of Staff, Logistics; Army Materiel Command; Army Aviation
and Missile Command; Army Sustainment Command; Headquarters Marine
Corps Installations & Logistics; Chief of Naval Operations, Logistics
Operations Branch; Naval Facilities Naval Expeditionary Program Office;
Headquarters Air Force Plans and Integration, and Air Force Air Combat
Command. We conducted this performance audit from August 2008 through
December 2008 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Enclosure II: Comments from the Department of Defense:
Deputy Under Secretary Of Defense For Logistics And Materiel Readiness:
3500 Defense Pentagon:
Washington, DC 20301-3500:
December 8, 2008:
Mr. William M. 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-09-147r, "Defense Logistics: Department of Defense's Annual
Report on the Status of Prepositioned Materiel and Equipment Can Be
Enhanced to Better Inform Congress, " dated November 7, 2008 (GAO Code
351247). Detailed comments on the report recommendations are enclosed.
The DoD concurs with the draft report's recommendation to provide a
more comprehensive picture of the Services' requirements for
prepositioned stocks. The DoD non-concurs with the GAO's recommendation
to provide additional reporting information regarding current
operations and concept plans because the Department already provides a
comprehensive and more holistic approach to risk and mitigation
strategies each year with its submission of the Chairman's Risk
Assessment. The rationale for the Department's position is attached.
The Department appreciates the opportunity to comment on the draft
report. Technical comments are provided separately. For further
questions concerning this report, please contact Col Arnold Holcomb,
703-604-0098 extension 108, email arnold.holcomb@osd.mil.
Sincerely,
Signed by:
Jack Bell:
Enclosure:
As stated:
GAO Draft Report – Dated November 7, 2008 GAO Code 351247/GAO-09-147R:
"Defense Logistics: Department of Defense's Annual Report on the Status
of Prepositioned Materiel and Equipment Can Be Enhanced to Better
Inform Congress":
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommends that the Secretary of Defense
direct the Joint Staff and the Secretaries of the military Services to
provide, in addition to the six elements currently required in the
annual report, a more comprehensive picture of the Services'
requirements for prepositioned stocks by including funding requirements
by year and appropriation account similar to the level of detail
provided in the annual budget request presentation.
DOD Response: Concur. The Department will implement this recommendation
into the FY09 report to Congress, to be delivered in early 2010. An
attempt to incorporate the change into the full FY08 report would cause
excessive delay in delivering the final product to Congress.
Recommendation 2: The GAO recommends that the Secretary of Defense
direct the Joint Staff and the Secretaries of the military Services to
provide, in addition to the six elements currently required in the
annual report, additional information on the affect of prepositioned
equipment shortfalls by including risks to current operations and
concept plans and mitigation strategies to provide better visibility
over other possible risks.
DOD Response: Non-concur. The Department already provides a
comprehensive and more holistic approach to risk and mitigation
strategies each year with its submission of the Chairman's Risk
Assessment. The annual Chairman's Risk Assessment, submitted to the
President and Secretary of Defense along with the Presidential Budget
Request to Congress, considers not only shortfalls in prepositioning
programs, but also all factors relating to DoD readiness and strategy.
Reporting additional risks and mitigation strategies for current
operations and concept plans of only the prepositioned programs could
result in sub-optimized decision making. Therefore, the Department does
not concur with including additional risks and mitigation strategies as
part of the Department of Defense's Annual Report on the Status of
Prepositioned Materiel and Equipment.
[End of section]
Enclosure III: GAO Contact and Staff Acknowledgments:
GAO Contact: William M. Solis, (202) 512-8365 or solisw@gao.gov:
Staff Acknowledgments: In addition to the contact named above, David A.
Schmitt, Assistant Director; Stacy Bennett; Meghan Cameron; Nicole
Harms; Joanne Landesman; Elizabeth D. Morris; Charles Perdue; Terry
Richardson; Donna M. Rogers; and Christopher T. Watson made
contributions to this report.
[End of section]
Footnotes:
[1] GAO, Force Structure: Restructuring and Rebuilding the Army Will
Cost Billions of Dollars for Equipment but the Total Cost Is Uncertain,
[hyperlink, http://www.gao.gov/products/GAO-08-669T] (Washington, D.C.:
Apr. 10, 2008).
[2] GAO, Defense Logistics: Preliminary Observations on Equipment Reset
Challenges and Issues for the Army and Marine Corps, GAO-06-604T
(Washington, D.C.: Mar. 30, 2006); GAO, Defense Logistics: Preliminary
Observations on the Army's Implementation of Its Equipment Reset
Strategies, [[hyperlink, http://www.gao.gov/products/GAO-07-439T]
(Washington, D.C.: Jan. 31, 2007).
[3] DOD, Report on Department of Defense Programs for Prepositioning of
Materiel and Equipment: Interim Submission: Way Ahead to Comprehensive
Review and Discussion of Current Service Prepositioning Strategies
(Sept. 19, 2007).
[4] Department of Defense Instruction 3110.06, War Reserve Materiel
(WRM) Policy (June 23, 2008).
[5] GAO, Defense Logistics: Better Management and Oversight of
Prepositioning Programs Needed to Reduce Risk and Improve Future
Programs, [hyperlink, http://www.gao.gov/products/GAO-05-427]
(Washington, D.C.: Sept. 6, 2005); GAO, Defense Logistics: Improved
Oversight and Increased Coordination Needed to Ensure Viability of the
Army's Prepositioning Strategy, [hyperlink,
http://www.gao.gov/products/GAO-07-144] (Washington, D.C.: Feb. 15,
2007); GAO, Defense Logistics: Army and Marine Corps Cannot Be Assured
That Equipment Reset Strategies Will Sustain Equipment Availability
While Meeting Ongoing Operational Requirements, [hyperlink,
http://www.gao.gov/products/GAO-07-814] (Washington, D.C.: Sept. 19,
2007); GAO, Defense Logistics: Army Has Not Fully Planned or Budgeted
for the Reconstitution of Its Afloat Prepositioned Stocks, [hyperlink,
http://www.gao.gov/products/GAO-08-257R] (Washington, D.C.: Feb. 8,
2008); GAO, Military Readiness: Impact of Current Operations and
Actions Needed to Rebuild Readiness of U.S. Ground Forces, [hyperlink,
http://www.gao.gov/products/GAO-08-497T] (Washington, D.C.: Feb. 14,
2008); [hyperlink, http://www.gao.gov/products/GAO-08-669T].
[6] Pub. L. No. 110-181, §352 (2008).
[7] 10 U.S.C. §2229a.
[8] H.R. Conf. Rep. No. 110-477, at 884 (2007).
[9] GAO, Force Structure: Need for Better Transparency for the Army's
Grow the Force Funding Plan, [hyperlink,
http://www.gao.gov/products/GAO-08-354R] (Washington, D.C.: Jan. 18,
2008); [hyperlink, http://www.gao.gov/products/GAO-08-669T].
[10] 10 U.S.C. §2229a.
[11] According to the Department of Defense, Supply Chain Materiel
Management Regulation, DoD 4140.1-R, AP1.1.11.7 (May 23, 2003), a major
end item is a final combination of end products that is ready for its
intended use.
[12] While the Army, Marine Corps, and Navy use the term Prepositioned
Stock program, the Air Forces uses the term War Reserve Materiel
program.
[13] [hyperlink, http://www.gao.gov/products/GAO-08-354R]; [hyperlink,
http://www.gao.gov/products/GAO-08-669T].
[14] [hyperlink, http://www.gao.gov/products/GAO-05-427].
[15] [hyperlink, http://www.gao.gov/products/GAO-07-144].
[16] Pub. L. No. 109-364, §351 (2006), codified at 10 U.S.C. §2229.
[17] The Joint Strategic Capability Plan apportions resources to the
combatant commanders. It covers a 2-year period and provides strategic
guidance to the combatant commanders, Joint Chiefs of Staff members,
and heads of defense agencies and departments.
[18] [hyperlink, http://www.gao.gov/products/GAO-08-257R].
[19] Department of Defense Instruction 3110.06.
[20] 10 U.S.C. §2229a.
[21] [hyperlink, http://www.gao.gov/products/GAO-08-257R].
[22] The Army issued a Prepare to Deploy Order adding an Infantry
Brigade Combat Team (IBCT) equipment set to support Central Command
requirements. The Army plans to relocate the IBCT set to its afloat
stocks in the future.
[23] [hyperlink, http://www.gao.gov/products/GAO-08-354R].
[24] Presenting funding requirements by prepositioned set may make the
document classified.
[25] [hyperlink, http://www.gao.gov/products/GAO-08-354R], [hyperlink,
http://www.gao.gov/products/GAO-08-669T].
[26] Operations plans are complete and detailed joint plans identifying
specific forces, functional support, and resources required to execute
the plan and estimates for flow of forces into theater.
[27] Concept plans are operations plans in an abbreviated format that
may require considerable expansion or alteration to convert it into an
operations plan.
[28] Section 153 of Title 10 of the United States Code requires the
Chairman to submit a report to the Secretary of Defense with the
Chairman's assessment of the nature and magnitude of the strategic and
military risks associated with executing the missions called for under
the National Military Strategy no later than January 1st of each odd-
numbered year. The law requires the Secretary to forward this report as
well as his comments, if any, to Congress with the department's next
annual budget submission. If the Chairman's assessment indicates that
the risk associated with executing the missions called for under the
National Military Strategy is significant, the Secretary shall include
his plan for mitigating that risk when he forwards the report to
Congress. The law also requires the Chairman to submit a report
containing the results of a comprehensive examination of the National
Military Strategy to the Senate and House Committees on Armed Services
no later than February 15th of each even-numbered year.
[29] H.R. Rep. No. 110-652, at 288 (2008).
[30] GAO, Force Structure: Need for Better Transparency for the Army's
Grow the Force Funding Plan, [hyperlink,
http://www.gao.gov/products/GAO-08-354R] (Washington, D.C.: Jan. 18,
2008); GAO, Force Structure: Restructuring and Rebuilding the Army Will
Cost Billions of Dollars for Equipment but the Total Cost Is Uncertain,
[hyperlink, http://www.gao.gov/products/GAO-08-669T] (Washington, D.C.:
Apr. 10, 2008).
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