Defense Logistics
Actions Needed to Improve the Marine Corps' Equipment Reset Strategies and the Reporting of Total Reset Costs Gao ID: GAO-11-523 August 4, 2011The U.S. Marine Corps received approximately $16 billion in appropriated funds between fiscal years 2006 and 2010 for reset of aviation and ground equipment that has been degraded, damaged, and destroyed during oversees contingency operations. Reset encompasses activities for repairing, upgrading, or replacing equipment used in contingency operations. The Marine Corps continues to request funding to reset equipment used in Afghanistan. GAO initiated this review under its authority to address significant issues of broad interest to the Congress. GAO's objectives were to evaluate the extent to which the Marine Corps has made progress toward (1) developing effective reset strategies for both aviation and ground equipment used in Afghanistan and (2) providing accurate estimates of total reset costs.
The Marine Corps has developed a strategic plan that addresses the reset of aviation equipment used in operations in Afghanistan and includes the elements of a comprehensive, results-oriented strategic planning framework. However, a reset strategy for ground equipment has not yet been developed. The Marine Corps is taking steps to develop such a strategy; however, the timeline for completing and issuing this strategy is uncertain. Although Marine Corps officials agreed that a reset strategy for ground equipment will be needed, they stated that they do not plan to issue a strategy until there is a better understanding of the dates for drawdown of forces from Afghanistan. While more specific drawdown information is desirable and will be needed to firm up reset plans, the President stated that troops would begin to withdraw in July 2011, working towards a transfer of all security operations to Afghan National Security Forces by 2014. Until the ground equipment reset strategy is issued, establishing firm plans for reset may be difficult for the Marine Corps Logistics Command to effectively manage the rotation of equipment to units to sustain combat operations. It is also uncertain to what extent the Marine Corps plans to align its ground equipment reset strategy with its ground equipment modernization plan. GAO found that the Iraq reset strategy for ground equipment contained no direct reference to the service's equipment modernization plans, leaving unclear the relationship between reset and modernization. A clear alignment of the ground equipment reset strategy for Afghanistan and modernization plans would help to ensure that the identification, development, and integration of warfighting capabilities also factor in equipment reset strategies so that equipment planned for modernization is not unnecessarily repaired. The total costs of reset estimated by the Marine Corps may not be accurate or consistent because of differing definitions of reset that have been used for aviation and ground equipment. These differing definitions exist because Department of Defense (DOD) has not established a single standard definition for use in DOD's budget process. Specifically, the Marine Corps does not include aviation equipment procurement costs when estimating total reset costs. According to Marine Corps officials, procurement costs are excluded because such costs are not consistent with its definition of aviation equipment reset. In contrast, the Marine Corps' definition of reset for ground equipment includes procurement costs to replace theater losses. However, GAO found that the Office of the Secretary of Defense Director of Cost Assessment and Program Evaluation had obtained a procurement cost estimate for Marine Corps aviation equipment as part of its efforts to track reset costs for the department. DOD's Resource Management Decision 700 tasks the Office of the Secretary of Defense Director of Cost Assessment and Program Evaluation to provide annual departmentwide reset updates. GAO recommends that the Secretary of Defense (1) establish a timeline for issuing formal reset planning guidance and a ground equipment reset strategy for equipment used in operations in Afghanistan, (2) provide linkages between the ground equipment reset strategy and the modernization plan, and (3) develop and publish a DOD definition of reset for use in the DOD overseas contingency operations budgeting process. DOD concurred with one and partially concurred with two of the recommendations.
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: William M. Solis Team: Government Accountability Office: Defense Capabilities and Management Phone: (202) 512-8365GAO-11-523, Defense Logistics: Actions Needed to Improve the Marine Corps' Equipment Reset Strategies and the Reporting of Total Reset Costs
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United States Government Accountability Office:
GAO:
Report to Congressional Addressees:
August 2011:
Defense Logistics:
Actions Needed to Improve the Marine Corps' Equipment Reset Strategies
and the Reporting of Total Reset Costs:
GAO-11-523:
GAO Highlights:
Highlights of GAO-11-523, a report to congressional committees.
Why GAO Did This Study:
The U.S. Marine Corps received approximately $16 billion in
appropriated funds between fiscal years 2006 and 2010 for reset of
aviation and ground equipment that has been degraded, damaged, and
destroyed during oversees contingency operations. Reset encompasses
activities for repairing, upgrading, or replacing equipment used in
contingency operations. The Marine Corps continues to request funding
to reset equipment used in Afghanistan. GAO initiated this review
under its authority to address significant issues of broad interest to
the Congress. GAO‘s objectives were to evaluate the extent to which
the Marine Corps has made progress toward (1) developing effective
reset strategies for both aviation and ground equipment used in
Afghanistan and (2) providing accurate estimates of total reset costs.
What GAO Found:
The Marine Corps has developed a strategic plan that addresses the
reset of aviation equipment used in operations in Afghanistan and
includes the elements of a comprehensive, results-oriented strategic
planning framework. However, a reset strategy for ground equipment has
not yet been developed. The Marine Corps is taking steps to develop
such a strategy; however, the timeline for completing and issuing this
strategy is uncertain. Although Marine Corps officials agreed that a
reset strategy for ground equipment will be needed, they stated that
they do not plan to issue a strategy until there is a better
understanding of the dates for drawdown of forces from Afghanistan.
While more specific drawdown information is desirable and will be
needed to firm up reset plans, the President stated that troops would
begin to withdraw in July 2011, working towards a transfer of all
security operations to Afghan National Security Forces by 2014. Until
the ground equipment reset strategy is issued, establishing firm plans
for reset may be difficult for the Marine Corps Logistics Command to
effectively manage the rotation of equipment to units to sustain
combat operations. It is also uncertain to what extent the Marine
Corps plans to align its ground equipment reset strategy with its
ground equipment modernization plan. GAO found that the Iraq reset
strategy for ground equipment contained no direct reference to the
service‘s equipment modernization plans, leaving unclear the
relationship between reset and modernization. A clear alignment of the
ground equipment reset strategy for Afghanistan and modernization
plans would help to ensure that the identification, development, and
integration of warfighting capabilities also factor in equipment reset
strategies so that equipment planned for modernization is not
unnecessarily repaired.
The total costs of reset estimated by the Marine Corps may not be
accurate or consistent because of differing definitions of reset that
have been used for aviation and ground equipment. These differing
definitions exist because DOD has not established a single standard
definition for use in DOD‘s budget process. Specifically, the Marine
Corps does not include aviation equipment procurement costs when
estimating total reset costs. According to Marine Corps officials,
procurement costs are excluded because such costs are not consistent
with its definition of aviation equipment reset. In contrast, the
Marine Corps‘ definition of reset for ground equipment includes
procurement costs to replace theater losses. However, GAO found that
the Office of the Secretary of Defense Director of Cost Assessment and
Program Evaluation had obtained a procurement cost estimate for Marine
Corps aviation equipment as part of its efforts to track reset costs
for the department. DOD‘s Resource Management Decision 700 tasks the
Office of the Secretary of Defense Director of Cost Assessment and
Program Evaluation to provide annual departmentwide reset updates.
Based on this tasking, the Marine Corps provided total reset costs
that included procurement costs for equipment replacement, as well as
maintenance costs, for both ground and aviation equipment. GAO was not
able to determine the reasons for this apparent inconsistency between
what the Marine Corps considers to be valid aviation equipment reset
costs and what was reported in the 2010 DOD Reset Planning Projections
annual update. Without a single standard definition for reset for the
services to use, the Marine Corps may continue to report its total
reset costs for aviation equipment inconsistently.
What GAO Recommends:
GAO recommends that the Secretary of Defense (1) establish a timeline
for issuing formal reset planning guidance and a ground equipment
reset strategy for equipment used in operations in Afghanistan, (2)
provide linkages between the ground equipment reset strategy and the
modernization plan, and (3) develop and publish a DOD definition of
reset for use in the DOD overseas contingency operations budgeting
process. DOD concurred with one and partially concurred with two of
the recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-11-523] or key
components. For more information, contact William M. Solis at (202)
512-8365 or solisw@gao.gov.
[End of section]
Contents:
Letter:
Background:
The Marine Corps Has a Reset Strategy for Aviation Equipment Used in
Afghanistan and Plans to Develop a Reset Strategy for Ground Equipment:
Differing Definitions for Reset May Result in Inaccurate or
Inconsistent Estimates of Total Reset Costs:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Funding for Marine Corps Equipment Reset:
Appendix III: Comments from the Department of Defense:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Incorporation of Strategic Management Planning Elements into
the Marine Corps' Aviation Equipment Reset Strategy:
Table 2: Marine Corps Ground Equipment Reset Funding, Fiscal Years
2009-2012:
Table 3: Marine Corps Aviation Equipment Reset Funding, Fiscal Years
2009-2012:
Table 4: Top 10 Marine Corps Ground Equipment Reset Procurement Items
That Received Fiscal Year 2010 Funding:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
August 4, 2011:
Congressional Addressees:
The U.S. Marine Corps received approximately $16 billion in
appropriated funds from fiscal year 2006 through fiscal year 2010 for
the reset of aviation and ground equipment that has been degraded,
damaged, and destroyed during overseas contingency operations. The
service has requested a total of $4.6 billion in reset funds for
fiscal years 2011 and 2012. Reset encompasses activities for
repairing, upgrading, or replacing equipment used in contingency
operations. Developing and implementing effective reset strategies for
its equipment is critical to the Marine Corps' ability to maintain,
restore, and enhance its combat capability. In addition, providing
accurate estimates of total reset costs enables decision makers to
evaluate trade-offs and make the most effective use of defense dollars
in light of the nation's long-term fiscal challenges. As the Marine
Corps continues to support overseas contingency operations and reset
equipment, it also has efforts under way to rebalance its forces,
posture it for the future, and experiment with and implement new
capabilities and organizations.
This report examines Marine Corp equipment reset issues for operations
in Afghanistan. We performed this review under the authority of the
Comptroller General to conduct evaluations on his own initiative to
address significant issues of broad interest to the Congress. Our
specific objectives were to evaluate the extent to which the Marine
Corps has made progress toward (1) developing effective reset
strategies for both aviation and ground equipment used in Afghanistan,
and (2) providing accurate estimates of total reset costs. We plan to
report separately on Army equipment reset issues.
To assess progress toward developing effective reset strategies, we
identified existing reset strategies for equipment used in
Afghanistan, and assessed these strategies against the elements of a
comprehensive, results-oriented strategic planning framework that we
have identified in our prior work.[Footnote 1] Where strategies had
not yet been developed, we collected information regarding ongoing
reset planning efforts from Marine Corps officials and discussed with
them the process used and the factors considered when developing a
reset strategy. As a basis for assessing current reset planning
efforts for Afghanistan, we also reviewed the reset strategy that the
Marine Corps prepared for equipment used in Iraq. To assess the Marine
Corps' estimates of total reset costs, we obtained recent cost
estimates and compared these with Department of Defense (DOD) budget
formulation guidance, as well as with DOD guidance provided to the
services on preparing annual updates of total reset costs. We obtained
documents detailing the processes the Marine Corps uses to estimate
reset costs for ground and aviation equipment, and we obtained
additional insight and information through interviews with Marine
Corps officials who are involved in developing these estimates. For
details on our scope and methodology, see appendix I.
We conducted this performance audit from November 2010 through August
2011 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.
Background:
Marine Corps' Definitions of Reset for Aviation and Ground Equipment:
Reset encompasses activities related to the repair, upgrade, or
replacement of equipment used in contingency operations. Aviation and
ground equipment are managed separately within the Marine Corps,
[Footnote 2] and different definitions of reset are used for each.
Marine Corps officials defined aviation equipment reset as an aircraft
material condition and readiness sustainment effort that is required
due to prolonged combat operations. Included are actions to maintain,
preserve, and enhance the capability of aircraft. Ground equipment
reset is defined by the Marine Corps as actions taken to restore units
to a desired level of combat capability commensurate with the unit's
future mission.[Footnote 3] It encompasses maintenance and supply
activities that restore and enhance equipment that was destroyed,
damaged, stressed, rendered obsolete, or worn out beyond economic
repair[Footnote 4] due to combat operations by repairing, rebuilding,
or procuring replacement equipment. Also included as part of ground
equipment reset is recapitalization (rebuild or upgrade) that enhances
existing equipment through the insertion of new technology or restores
selected equipment to near-original condition.
Reset Budget for Fiscal Years 2009 through 2012:
The Marine Corps's equipment reset budget totals more than $8 billion
for fiscal years 2009 through 2012.[Footnote 5] Maintenance-related
activities included as part of reset are funded from operations and
maintenance appropriations, while most recapitalization[Footnote 6]
and all acquisitions of new equipment as part of reset are funded from
procurement appropriations. Reset funds are requested and budgeted
separately for aviation and ground equipment.
* Aviation equipment: The Marine Corps' aviation equipment reset
budget was approximately $66.7 million in fiscal year 2009 and
approximately $57.8 million in fiscal year 2010. The Marine Corps
requested approximately $56.1 million for fiscal 2011 and has
requested $45.3 million for fiscal year 2012 to reset aviation
equipment. As discussed later in this report, reset funding for
aviation equipment covers only operations and maintenance
appropriations and excludes procurement appropriations.
* Ground equipment: The Marine Corps' ground equipment reset budget
was approximately $2.2 billion in fiscal year 2009 and approximately
$1.3 billion in fiscal year 2010. The Marine Corps requested
approximately $2.6 billion for fiscal year 2011 and has requested $1.8
billion for fiscal year 2012 to reset ground equipment. This funding
includes funds requested as part of operations and maintenance
appropriations and procurement appropriations. The fiscal year 2011
request included a $1.1 billion increase in procurement funding over
fiscal year 2010, which the Marine Corps attributed to increased
equipment combat losses and to the replacement of equipment that is
beyond economic repair.
Appendix II provides further detail on reset funding for aviation and
ground equipment.
Elements of Sound Strategic Management Planning:
Our prior work has shown that sound strategic management planning can
enable organizations to identify and achieve long-range goals and
objectives.[Footnote 7] We have identified six elements that should be
incorporated into strategic plans to establish a comprehensive,
results-oriented framework--an approach whereby program effectiveness
is measured in terms of outcomes or impact. These elements follow:
(1) Mission statement: A statement that concisely summarizes what the
organization does, presenting the main purposes for all its major
functions and operations.
(2) Long-term goals: A specific set of policy, programmatic, and
management goals for the programs and operations covered in the
strategic plan. The long-term goals should correspond to the purposes
set forth in the mission statement and develop with greater
specificity how an organization will carry out its mission.
(3) Strategies to achieve the goals: A description of how the goals
contained in the strategic plan and performance plan are to be
achieved, including the operational processes, skills and technology,
and other resources required to meet these goals.
(4) External factors that could affect goals: Key factors external to
the organization and beyond its control that could significantly
affect the achievement of the long-term goals contained in the
strategic plan. These external factors can include economic,
demographic, social, technological, or environmental factors, as well
as conditions or events that would affect the organization's ability
to achieve its strategic goals.
(5) Use of metrics to gauge progress: A set of metrics that will be
applied to gauge progress toward attainment of the plan's long-term
goals.
(6) Evaluations of the plan to monitor goals and objectives:
Assessments, through objective measurement and systematic analysis, of
the manner and extent to which programs associated with the strategic
plan achieve their intended goals.
Prior GAO Reviews of Equipment Reset:
Over the past several years we have reported on equipment reset
issues. In 2007, for example, we reported that the Marine Corps could
not be certain that its reset strategies would sustain equipment
availability for deployed units as well as units preparing for
deployment, while meeting ongoing operational requirements.[Footnote
8] We have also made recommendations aimed at improving DOD's monthly
cost reports for reset and defining the types of costs that should be
included in the base defense budget rather than funded from
supplemental appropriations for contingency operations. Specifically,
we recommended DOD amend its Financial Management Regulation to
require that monthly Supplemental and Cost of War Execution Reports
identify expenditures within the procurement accounts for equipment
reset at more detailed subcost category levels, similar to reporting
of obligations and expenditures in the operation and maintenance
accounts.[Footnote 9] DOD initially disagreed with this recommendation
but later revised its Financial Management Regulation, expanding the
definition of acceptable maintenance and procurement costs and
directing the military services to begin including "longer war on
terror" costs in their overseas contingency operations funding
requests. We subsequently recommended that DOD issue guidance defining
what constitutes the "longer war on terror," to identify what costs
are related to that longer war and to build these costs into the base
defense budget.[Footnote 10] While the department concurred with this
recommendation and stated that it has plans to revise its Financial
Management Regulation accordingly, it has not yet done so.
Budget Formulation Guidance and Estimating Reset Costs:
The Office of Management and Budget (OMB) has issued budget
formulation guidance for DOD that addresses overseas contingency
operations, including reset funding. Guidance issued in February 2009
provided new criteria for DOD to use when preparing its budget request
to assess whether funding, including funding for reset, should be
requested as part of the base budget or as part of the budget for
overseas contingency operations.[Footnote 11] The criteria identified
geographic areas where overseas contingency operations funding could
be used; provided a list of specific categories of spending that
should be included in the overseas contingency budget, such as major
equipment repairs, ground equipment replacement, equipment
modifications, and aircraft replacement; and identified certain
spending that should be excluded from the overseas contingency
operations budget (i.e., should be included in the base budget) such
as funding to support family services at home stations. For example,
funding is excluded for the replacement of equipment losses already
programmed for replacement in the Future Years Defense Plan. In
September 2010, OMB issued updated criteria to, among other things,
clarify language and eliminate areas of confusion.
DOD has also issued its own budget formulation guidance for overseas
contingency operations. In December 2009, DOD issued Resource
Management Decision 700 to regulate the funding of the military
services' readiness accounts and to require that significant resources
from the overseas contingency operations funding be moved into the
base defense budget. Specifically, the services' 2012 Program
Objective Memorandum submissions for overseas contingency operations
funding are restricted to resource levels appropriate for planned and
projected troop levels. To facilitate the implementation of this
guidance within the department, Resource Management Decision 700
outlines several actions for organizations to take. For example, it
directed the Office of the Under Secretary of Defense for Acquisition,
Technology and Logistics, in coordination with the Director of Cost
Assessment and Program Evaluation, the military services, the DOD
Comptroller, and the Joint Staff, to conduct periodic reviews of the
services' in-theater maintenance activities and reset maintenance
actions that include an assessment of the relationship between
maintenance-funded base programs and contingency operations. This
assessment was provided to the Deputy Secretary of Defense in July
2010.
The Director of Cost Assessment and Program Evaluation tracks
estimated total reset costs across the department based on data
provided by the services. The total reset costs are the amount of
funding needed to reset all equipment used in contingency operations
if the operations were to cease. Specifically, the total reset costs
equal the sum of the annual unbudgeted reset liability and the annual
budgeted reset. The annual unbudgeted reset liability is the amount of
equipment eligible for reset that stays in theater and is not reset
during the budget year, based on operational decisions. The annual
budgeted reset is the amount of equipment planned to return from
operations that requires funds budgeted for reset.
Marine Corps Processes for Estimating Total Reset Costs:
As part of its ground equipment reset strategy for Iraq, the Marine
Corps developed the Reset Cost Model to generate cost estimates for
the service's supplemental budget requests. Additionally, the Reset
Cost Model allows the Marine Corps to estimate reset costs for ground
equipment, including budgeted and unbudgeted reset costs. Since the
Reset Cost Model is focused on ground equipment employed in the U.S.
Central Command area of responsibility, the Marine Corps continues to
use the Reset Cost Model to develop overseas contingency operations
budget requests for ground equipment used in Afghanistan.
The cost estimates generated by the Reset Cost Model are based on the
four possible reset actions:
* First, equipment returning from theater is inspected to determine if
depot-level repairs are required. Depot maintenance actions are
conducted if the estimated cost of repair for the equipment is 65
percent or less than the latest acquisition cost.
* Second, ground equipment used in operations is evaluated at various
locations throughout the logistics chain to determine if the equipment
requires field-level maintenance. These maintenance actions are
conducted by operating forces.
* Third, upon return to the continental United States, equipment
identified as obsolete or uneconomical to repair is replaced through
procurement as its reset action.
* Fourth, if equipment acquired for combat operations does not have a
long-term requirement within the Marine Corps, no reset maintenance
actions are taken unless there is an immediate requirement in another
campaign or theater of operations.
Estimating aviation equipment reset costs follows a separate process.
For aviation equipment reset, the Marine Corps has a process for
requirements determination, budgeting, and execution, all of which are
included in the annual budget process. According to Navy and Marine
Corps officials, a clearly defined process is used to determine reset
costs for aviation equipment that includes requirements generated from
the fleet while working closely with the Chief of Naval Operation
Fleet Readiness Division and each of the program offices to determine
current and future reset requirements. Overseas contingency costs--
including reset costs--are generated using issue sheets that record
information on each item such as the categorization of funding, the
amount of funding requested for a specific item, the number of items
requested, and the cost per unit. Once the issue sheets are generated,
Headquarters, Marine Corps, and the Commander of Naval Air Forces
prioritize the issue sheets and provide a finalized list of the
funding priorities according to current needs for which future funding
is allocated.
The Marine Corps Has a Reset Strategy for Aviation Equipment Used in
Afghanistan and Plans to Develop a Reset Strategy for Ground Equipment:
Aviation Equipment Reset Strategy Incorporates Elements Needed for a
Comprehensive, Results-Oriented Framework:
The Marine Corps has developed an annual aviation plan[Footnote 12]
and an aviation reset program policy[Footnote 13] that together
constitute its reset strategy for aviation equipment used in
Afghanistan. Although separate documents, the annual aviation plan and
aviation reset program policy are linked through the aviation plans'
reference to the aviation reset policy. Our evaluation of this reset
strategy shows that it incorporates the six elements of a
comprehensive, results-oriented strategic planning framework. For
example, the reset strategy establishes goals and associated time
frames for completing detailed reviews of aircraft and aircraft
components and transitioning to future aircraft. It also provides
strategies for accomplishing key tasks such as scheduling inspections,
as well as performance measures and targets. (See table 1.)
Table 1: Incorporation of Strategic Management Planning Elements into
the Marine Corps' Aviation Equipment Reset Strategy:
Strategic planning element: Mission statement;
Examples of planning element in aviation equipment reset strategy: The
strategy provides the Marine Corps vision for reset to sustain and
enhance the material condition of the Marine Corps' overseas
contingency operations aircraft. The strategy also includes details
regarding activities such as inspection, cleaning, repair, and select
mandatory parts replacement to enhance/sustain aircraft. This improves
aircraft availability and reduces the maintenance burden on Marines
who are tasked with maintaining aircraft equipment at a fully mission-
capable status.
Strategic planning element: Long-term goals;
Examples of planning element in aviation equipment reset strategy: The
strategy includes the goal of having scheduled maintenance activities
that sustain an aircraft to an established standard, which are
performed on all aircraft in direct support of overseas contingency
operations. The strategy also includes a detailed review of aircraft
and aircraft components including the timelines for transition for
future and legacy aircraft. The Marine Corps aviation plan--which is
directly linked to the aviation reset strategy--serves as another way
for the Marine Corps to achieve its long-term goals. The Marine Corps
aviation plan provides a detailed description of the plans for
modernization for aircraft and equipment transitions over the next 10
years.
Strategic planning element: Strategies to achieve goals;
Examples of planning element in aviation equipment reset strategy: The
strategy includes specific maintenance events that occur throughout
the deployment of the aircraft. The reset maintenance events for
aviation equipment are divided into reset categories, such as in-
theater sustainment and reconstitution. In-theater sustainment
inspections are scheduled for all aircraft used in operations in
Afghanistan that are on an extended rotation exceeding 1 year.
Reconstitution inspections are scheduled following a deployment that
had at least 60 consecutive days of land-based operations. These
milestones are set for the deployment and postdeployment phases of
aviation equipment and serve as a method to evaluate plans and monitor
progress toward meeting goals and objectives.
Strategic planning element: External factors that could affect goals;
Examples of planning element in aviation equipment reset strategy: The
strategy includes consideration of, and plans for, dealing with
external factors that could affect goals, such as time constraints for
conducting required maintenance. The use of contractor field teams is
aimed at reducing the burden of nonreset maintenance actions on
Marines. The strategy notes that contractor field teams may perform
nonreset maintenance actions when not actively involved in equipment
reset. This may positively or negatively affect the time frames for
nonreset maintenance actions depending on the workload.
Strategic planning element: Use of metrics to gauge progress;
Examples of planning element in aviation equipment reset strategy: The
strategy provides time frames to gauge the process for the completion
of maintenance performed on aircraft returning from overseas
contingency operations. The strategy states that an inspection must be
performed on all aircraft returning from operations that have had at
least 60 consecutive days of land-based operations in those
operational areas. In addition, it states that the maintenance will
commence no earlier than the first day upon return from deployment and
will be completed no later than 180 days from the date the aircraft
returns. Maintenance should not exceed 21 calendar days, including all
inspection and repair phase tasks.
Strategic planning element: Evaluations of the plan to monitor goals
and objectives;
Examples of planning element in aviation equipment reset strategy: The
strategy provides details on the type of information that should be
recorded about each of the maintenance inspections for standardization
purposes. An information system is used by personnel performing the
maintenance tasks to record information on the reset activities
performed on the aircraft. Additionally, the strategy requires that
these records be monitored to ensure compliance. If records are found
to be incomplete, the receiving authority is to assume noncompliance
and conduct a reinspection following existing directives or refuse
acceptance of the aircraft or equipment until corrective action has
been taken.
Source: GAO analysis of FY 2011 Marine Aviation Plan dated September
2010 and Aviation Reset Program Policy dated April 2010.
[End of table]
Marine Corps Is Taking Steps toward a Ground Equipment Reset Strategy,
but a Timeline for Issuing the Strategy and the Extent It Will Align
with Modernization Plans Are Uncertain:
The Marine Corps is taking steps to develop a strategy addressing the
reset of ground equipment used in Afghanistan; however, the timeline
for completing and issuing this strategy is uncertain. Although Marine
Corps officials agreed that a reset strategy for ground equipment will
be needed, they stated that they do not plan to issue a strategy until
there is a better understanding of the dates for initial and final
drawdown of forces from Afghanistan. While more specific and certain
drawdown information is desirable and will be needed to firm-up reset
plans, the President stated that troops would begin to withdraw in
July 2011, working towards a complete transfer of all security
operations to Afghan National Security Forces by 2014. The current
dates announced by the President are the best available for the
purposes of contingency planning and provide a reasonable basis for
developing a timeline to complete its reset strategy. In the meantime,
Marine Corps officials are taking the following steps toward
developing a reset strategy:
* First, the Marine Corps completed a force structure review in early
2011 that is aimed at ensuring the service is properly configured. The
force structure review included a determination of equipment reset
requirements to support the post-Afghanistan Marine Corps force
structure.
* Second, the Marine Corps is currently developing an implementation
plan based on the results of the force structure review. A goal of the
force structure implementation plan is to ensure that the Marine Corps
achieves a restructured force by the time the reset of equipment used
in Afghanistan is complete. The focus of this implementation plan is
the establishment of the mission-essential tasks and the development
of refined tables of equipment in support of those tasks. These
refined tables of equipment will determine what equipment the Marine
Corps will reset and how the equipment will be reintegrated into
nondeployed Marine Corps forces. The Marine Corps plans to issue this
force structure implementation plan in summer 2011.
* Third, following issuance of the force structure implementation
plan, the Marine Corps plans to develop and issue formal reset
planning guidance that informs operating force units and the Marine
Corps Logistics Command what equipment they will receive and be
responsible for resetting. Specifically, Marine Corps officials stated
that the planning guidance is intended to allow Marine Forces
Commands, Marine Expeditionary Forces, and Marine Corps Logistics
Command to assess their reset maintenance capacity requirements and
identify additional support requirements beyond the maintenance
centers' capacity. The officials indicated that the planning guidance
would serve as a precursor to a comprehensive reset strategy.
Although the Marine Corps has laid out several steps toward developing
its ground equipment reset strategy, it has not specified timelines
for completing and issuing either the formal reset planning guidance
or its reset strategy or indicated how it plans to take into
consideration the current dates announced by the President for
withdrawal in its reset strategy for Afghanistan. The reset strategy
is necessary to help ensure that life-cycle management governance is
provided to key organizations responsible for executing reset, such as
the Marine Corps Logistics Command. Until the reset strategy is
issued, establishing firm plans for reset may be difficult for the
Marine Corps Logistics Command to effectively manage the rotation of
equipment to units to sustain combat operations or meet the equipment
needs of a newly defined post-Afghanistan Marine Corps force
structure. In the absence of a reset strategy, Marine Corps Logistics
Command officials told us they cannot issue its supporting order which
enables its maintenance centers to effectively begin planning for and
phasing in a new maintenance workload.
It is also uncertain to what extent the Marine Corps plans to align
its ground equipment reset strategy with its ground equipment
modernization plan. The ground equipment modernization plan is used
annually to develop future warfighting capabilities to meet national
security objectives. Following the plan guides the Marine Corps in the
identification, development, and integration of warfighting and
associated support and infrastructure capabilities.[Footnote 14]
Marine Corps officials have stated that they plan to establish a link
between the reset strategy for Afghanistan and the ground
modernization plan. As a basis for evaluating current reset planning
for ground equipment used in Afghanistan, we also reviewed both the
aviation reset strategy for Afghanistan[Footnote 15] and the ground
equipment reset strategy that the Marine Corps developed for Iraq.
[Footnote 16] We found that the aviation reset strategy was directly
linked to the aviation equipment modernization plan. For example, the
aviation equipment modernization plan outlines the transition for the
UH-1N Marine Light Attack Helicopter to the UH-1Y, which should be
fully phased in by fiscal year 2015. As part of the reset strategy for
the UH-1Y, reset requirements for the maintenance centers associated
with this transition have been identified.
In contrast, we found that the Iraq reset strategy for ground
equipment contained no direct reference to the service's equipment
modernization plans. Marine Corps officials stated that it was
unnecessary to include a direct reference to the equipment
modernization plan in its Iraq reset strategy because they are
indirectly linked through the roles and responsibilities for the
Deputy Commandant, Combat Development and Integration. Specifically,
the officials noted that the Iraq reset strategy contains a section
outlining these roles and responsibilities and that these same roles
and responsibilities are included in the Expeditionary Force
Development System instruction. However, this indirect linkage does
not provide a clear relationship between reset and modernization. A
clear alignment of the ground equipment reset strategy for Afghanistan
and modernization plan would help to ensure that the identification,
development, and integration of warfighting capabilities also factor
in equipment reset strategies so that equipment planned for
modernization is not unnecessarily repaired. Without a Marine Corps
reset strategy for ground equipment used in operations in Afghanistan
that includes clear linkages to the modernization plan, the Marine
Corps may not be able to effectively plan and execute ground equipment
reset in the most efficient manner.
Differing Definitions for Reset May Result in Inaccurate or
Inconsistent Estimates of Total Reset Costs:
The total costs of reset estimated by the Marine Corps may not be
accurate or consistent because of differing definitions of reset that
have been used for aviation and ground equipment. These differing
definitions exist because DOD has not established a single standard
definition for use in DOD's budget process.[Footnote 17] Specifically,
the Marine Corps does not include aviation equipment procurement costs
when estimating total reset costs. According to Marine Corps
officials, procurement costs are excluded because such costs are not
consistent with its definition of aviation equipment reset.
Additionally, Marine Corps officials stated that the definition of
reset for aviation equipment is to maintain, preserve, and enhance the
capability of aircraft through maintenance activities. This
definition, according to Marine Corps officials, does not include
procurement funding for the replacement of aviation equipment losses
in theater. In contrast, the Marine Corps' definition of reset for
ground equipment includes procurement costs to replace theater losses.
Reset for all types of equipment as defined by other services (e.g.,
the Army) also includes procurement costs.
Although the Marine Corps excludes procurement costs when estimating
aviation equipment reset costs, we found that the Director of Cost
Assessment and Program Evaluation had obtained a procurement cost
estimate for Marine Corps aviation equipment as part of its efforts to
track reset costs for the department. DOD's Resource Management
Decision 700 tasks the Director of Cost Assessment and Program
Evaluation with providing annual departmentwide reset updates that (1)
outline current-year reset funding needs, (2) assess the multiyear
reset liability based on plans for equipment redeployment, and (3)
detail deferred reset funding actions. Based on this tasking, the
Marine Corps provided total reset costs that included procurement
costs for equipment replacement, as well as maintenance costs, for
both ground and aviation equipment. The update showed that total reset
costs for Marine Corps aviation equipment was approximately $1.8
billion for fiscal years 2010 through 2012, which includes $1.4
billion for procurement costs. These reported costs were included in
the 2010 DOD Reset Planning Projections annual update prepared by the
Director of Cost Assessment and Program Evaluation. We were not able
to determine the reasons for this apparent inconsistency between what
the Marine Corps considers to be valid aviation equipment reset costs
(i.e., excludes procurement costs) and what was reported in the 2010
DOD Reset Planning Projections annual update (i.e., includes
procurement costs). Navy and Marine Corps officials stated that they
were unable to identify any official from the Navy or Marine Corps as
the source for providing or producing this total reset cost data for
Marine Corp aviation equipment. Therefore, we could not assess the
basis for the reported aviation equipment reset costs to determine
their accuracy.
DOD's Resource Management Decision 700 also directed the DOD
Comptroller to publish a DOD definition of reset for use in the DOD
overseas contingency operations budgeting process. DOD's definition of
reset was to be submitted by the Comptroller to the Deputy Secretary
of Defense for approval by January 15, 2010, well ahead of the Marine
Corps' initial submission of its total reset liability, which was due
by June 1, 2010. However, a single standard definition of reset for
budget purposes has not yet been issued to the services.
We also found that the Marine Corps' definition of aviation reset
differs from the definition of reset provided for use in congressional
testimony in a January 2007 memorandum from the Deputy Under Secretary
of Defense for Logistics and Materiel Readiness to the under
secretaries of the military departments. That memorandum states that
reset encompasses maintenance and supply activities that restore and
enhance combat capability to units and prepositioned equipment that
was destroyed, damaged, stressed, or worn-out beyond economic repair
due to combat operations by repairing, rebuilding, or procuring
replacement equipment. According to the memorandum, the Office of the
Secretary of Defense and the services agreed to this definition of
reset; the memorandum emphasizes that it is important that all DOD
military departments are consistent in the definition of the terms
during congressional testimony.
Without a single standard definition for reset for the services to
use, the Marine Corps may continue to report its total reset costs for
aviation equipment inconsistently. Furthermore, data integrity issues
will make it challenging to identify program funding trends within the
Marine Corps and among the services for equipment reset. Without
accurate reporting of total reset costs for aviation equipment, the
level of reset funding the Marine Corps needs to sustain future
operations may not be properly communicated to Congress beyond what
has been requested for overseas contingency operations. Furthermore,
the Office of the Under Secretary of Defense Comptroller, Director of
Cost Assessment and Program Evaluation, and OMB may not have the most
reliable aviation equipment reset data for their review and oversight
of the Marine Corps' overseas contingency operations budget requests.
Conclusions:
With the increased demands current operations have placed on Marine
Corps equipment, and at a time when the federal government is facing
long-term fiscal challenges, it is important for the Marine Corps to
have a reset strategy in place for both ground and aviation equipment
used in operations in Afghanistan as well as a standard DOD definition
for reset. Reset strategies provide a framework that allows Marine
Corps officials to adequately plan, budget, and execute the reset of
equipment used in operations in Afghanistan. The reset strategy, and
the timing thereof, could be modified if U.S. drawdown plans
subsequently change or should the Marine Corps receive more specific
and certain drawdown information. However, without specified timelines
for completing and issuing either formal reset planning guidance or
its reset strategy that also take into consideration the current dates
announced by the President for withdrawal--which are the best
available for the purposes of contingency planning--the Marine Corps
may be unable to effectively manage the rotation of equipment to units
to sustain combat operations, or meet the equipment needs of a newly
defined post-Afghanistan Marine Corps force structure. Additionally,
without a Marine Corps reset strategy for ground equipment used in
operations in Afghanistan that includes clear linkages to the
modernization plan, the Marine Corps may not be able to effectively
plan and execute ground equipment reset in the most efficient manner.
Furthermore, the total reset costs provide information that allows the
Marine Corps to more efficiently plan and make informed budget
decisions and allows Office of the Under Secretary of Defense
(Comptroller) and OMB to have oversight. Until DOD establishes a
single standard definition for reset for the services to use, DOD and
Congress may have limited visibility over the total reset costs for
the services. Accurate reporting of total reset costs for aviation
equipment would provide Congress with the level of funding the Marine
Corps needs to reset all equipment used in operations in Afghanistan
at the conclusion of operations. Furthermore, the Office of the Under
Secretary of Defense for the Comptroller and for Cost Assessment and
Program Evaluation and OMB may lack the visibility needed over the
aviation reset funds in their review and oversight of the Marine Corps
overseas contingency operations budget requests.
Recommendations for Executive Action:
To improve the Marine Corps' ability to plan, budget for, and execute
the reset of ground equipment used in Afghanistan, we recommend that
the Secretary of Defense direct the Commandant of the Marine Corps to
take the following two actions:
* Establish a timeline for completing and issuing formal reset
planning guidance and a ground equipment reset strategy for equipment
used in Afghanistan that allows operating force units and the Marine
Corps Logistics Command to effectively manage equipment reset.
* Provide linkages between the ground equipment reset strategy for
equipment used in Afghanistan and equipment modernization plans,
including the Expeditionary Force Development System and the annual
Program Objective Memorandum Marine Air-Ground Task Force Requirements
List.
To improve oversight and ensure consistency in the reporting of total
reset costs, we recommend that the Secretary of Defense direct the
Office of the Under Secretary of Defense (Comptroller), in
coordination with the Office of the Under Secretary of Defense for
Cost Assessment and Program Evaluation, the Office of the Under
Secretary of Defense for Acquisitions, Technology and Logistics, the
services, and the Joint Staff to act on the tasking in the Resource
Management Decision 700 to develop and publish a DOD definition of
reset for use in the DOD overseas contingency operations budgeting
process.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD concurred with one
of our recommendations and partially concurred with the other two
recommendations and provided information on the steps it is taking or
plans to take to address them. DOD partially concurred with our
recommendation that the Secretary of Defense direct the Commandant of
the Marine Corps to establish a timeline for completing and issuing
formal reset planning guidance and a ground equipment reset strategy
for equipment used in Afghanistan that allows operating force units
and the Marine Corps Logistics Command to effectively manage equipment
reset. DOD commented that guidance for resetting the force is being
developed in its Operation Enduring Freedom Reset Plan, the Operation
Enduring Freedom Reset Playbook, and the Marine Air Ground Task Force
Integration Plan. However, during the course of our review, the
development of a strategy for ground equipment in Afghanistan was in
the beginning stages and the Marine Corps did not discuss or provide
details regarding the three documents now cited as its guidance for
resetting the force. DOD added that the Marine Corps has established a
timeline/estimated date of April 30, 2012, for completing and issuing
format reset planning guidance and a ground equipment reset strategy
for equipment used in Afghanistan. While the Marine Corps has provided
DOD with a date for completing and issuing this guidance, the Marine
Corps does not appear to have established a sequenced timeline, as we
recommended. Specifically, DOD's response has both the formal reset
planning guidance and the ground equipment reset strategy being issued
at the same time. Marine Corps officials stated that the formal reset
planning guidance is intended to serve as a precursor to a
comprehensive reset strategy that will allow Marine Forces Commands,
Marine Expeditionary Forces, and Marine Corps Logistics Command to
assess their reset maintenance capacity requirements and identify
additional support requirements beyond the maintenance centers'
capacity. We believe this guidance will not be useful if it is not
issued sufficiently ahead of time to guide the development of the
ground equipment reset strategy. Consequently, we disagree with DOD's
statement that the Marine Corps does not need further direction to
establish a timeline for completing and issuing formal reset planning
guidance and a ground equipment reset strategy for equipment used in
Afghanistan.
DOD partially concurred with our recommendation that the Secretary of
Defense direct the Commandant of the Marine Corps to provide linkages
between the ground equipment reset strategy for equipment used in
Afghanistan and equipment modernization plans, including the
Expeditionary Force Development System and the annual Program
Objective Memorandum Marine Air-Ground Task Force Requirements List.
DOD commented that it recognizes the importance of providing a linkage
between ground equipment reset strategies and equipment modernization
plans. Specifically, DOD commented that the Marine Corps plans to
outline these linkages in their Operation Enduring Freedom Reset Plan,
the Operation Enduring Freedom Reset Playbook, and the Marine Air
Ground Task Force Integration Plan, which are currently being
developed. While, as previously mentioned, the Marine Corps did not
provide specific details regarding the three documents cited above
during the course of our review, we believe that including this
linkage in these documents would be responsive to our recommendation
and will allow the Marine Corps to more effectively and efficiently
plan and execute ground equipment reset.
DOD concurred with our recommendation that the Secretary of Defense
direct the Office of the Under Secretary of Defense (Comptroller), in
coordination with the Office of the Under Secretary of Defense for
Cost Assessment and Program Evaluation, the Office of the Under
Secretary of Defense for Acquisitions, Technology and Logistics, the
services, and the Joint Staff to act on the tasking in the Resource
Management Decision 700 to develop and publish a DOD definition of
reset for use in the DOD overseas contingency operations budgeting
process. DOD commented that it is developing a definition of reset for
use in the overseas contingencies operations budgeting process that
will be incorporated into the DOD Financial Management Regulation.
However, during the course of our review DOD had not yet taken action
to develop a reset definition, which was to have been submitted by the
Comptroller to the Deputy Secretary of Defense for approval by January
15, 2010. In addition, DOD commented that in the interim the
department is using specific criteria provided by OMB guidance for
determining the reset requirements that are overseas contingency
operations or base. While OMB has provided guidance for overseas
contingency operations budget requests, this guidance does not provide
specific direction concerning what constitutes reset. Consequently,
DOD recognizes the need for a common definition of equipment reset for
budget purposes, but has not met its goal of establishing one.
Resource Management Decision 700 established a January 2010 date for
approving a common reset definition, and that definition could have
been used in developing the department's fiscal year 2012 budget
submission. DOD is now developing its fiscal year 2013 budget
submission without the benefit of a common definition. Therefore, we
disagree with DOD's statement that additional and separate guidance
from the Secretary of Defense is not necessary, and believe that
additional direction is needed to emphasize that the Under Secretary
of Defense (Comptroller), in coordination with the Office of the Under
Secretary of Defense for Cost Assessment and Program Evaluation, the
Office of the Under Secretary of Defense for Acquisitions, Technology
and Logistics, the services, and the Joint Staff should expedite the
development and publication of a DOD definition of reset for use in
the DOD overseas contingency operations budgeting process. The
department's comments are reprinted in appendix III.
We are sending copies of this report to appropriate congressional
committees, the Secretary of Defense, and appropriate DOD
organizations. In addition, this report will be available at no charge
on our website at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-8365 or solisw@gao.gov. Contact points for our
Offices:
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 appendix IV.
Signed by:
William M. Solis, Director:
Defense Capabilities and Management:
List of Addressees:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Joseph Lieberman:
Chairman:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Buck McKeon:
Chairman:
The Honorable Adam Smith:
Ranking Member:
Committee on Armed Services:
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
To determine the extent to which the Marine Corps has a strategy in
place to manage the reset of ground and aviation equipment used in
operations in Afghanistan, we obtained and reviewed the Marine Corps
reset strategies for ground and aviation equipment used in operations
in Afghanistan. Where strategies had not yet been developed, we
collected information regarding ongoing reset planning efforts from
Marine Corps officials and discussed with them the process used and
the factors considered when developing a reset strategy. As a basis
for assessing current reset planning efforts for Afghanistan, we also
reviewed the reset strategy that the Marine Corps prepared for
equipment used in Iraq. We collected written responses and supporting
documentation to our inquiries and data requests from Marine Corps
officials related to ground and aviation equipment reset strategies.
We also discussed with Marine Corps officials the process used and the
factors considered when developing these reset strategies.
Additionally, we discussed the reset strategies with Marine Corps
officials to determine the roles and responsibilities of the
maintenance and fleet readiness centers in preparing for equipment
requiring reset and determining the appropriate reset strategy.
To determine the extent to which the Marine Corps has developed
effective reset strategies for the reset of equipment used in
operations in Afghanistan that address the key elements of a
comprehensive, results-oriented strategic planning framework, we
reviewed and analyzed the ground and aviation equipment reset
strategies and supporting guidance documents. Specifically, we
analyzed the reset strategies and supporting guidance documents to
determine if they included the six key elements of a strategic
planning framework. In performing our analysis, we reviewed the
strategies to determine if they included, partially included, or did
not include each of the six key elements. Through our assessment we
determined the guidance documents in addition to the aviation
equipment reset strategy that comprises the Marine Corps strategic
plan for reset. In addition, to understand the extent to which the
Marine Corps aligns its modernization plans with its reset strategies,
we interviewed Marine Corps officials to discuss the plans used for
modernization and discussed the process for how these plans are
incorporated with the strategies for equipment reset.
To assess the Marine Corps' estimates of total reset costs, we
obtained and reviewed the Department of Defense's (DOD) Resource
Management Decision 700--separate from the budget formulation
guidance--tasking the services to provide annual reset cost updates,
and the Marine Corps processes for determining total reset costs for
ground and aviation equipment. We collected written responses to our
inquiries and data requests from Marine Corps officials about the
system they use to determine total reset costs for ground and aviation
equipment used in operations in Afghanistan. In addition, we
interviewed Marine Corps officials to obtain any information relevant
to the system they use to determine total reset costs for equipment
used in operations in Afghanistan.
To better understand the Marine Corps reset funding needs for ground
and aviation equipment, we requested reset budget data for fiscal year
2009 through fiscal year 2012. We reviewed the budget data obtained
and met with Marine Corps officials to discuss the data to ensure that
we had a correct understanding of the different budget categories,
such as procurement and operations and maintenance. We then analyzed
the Marine Corps' reset budgets from fiscal year 2009 through fiscal
year 2010 for the reset of ground and aviation equipment to identify
any trends in the operations and maintenance and procurement funding
categories. We discussed the results of our analysis with Marine Corps
officials to determine the rationale for any trends in the funding. We
interviewed Office of the Secretary of Defense, Department of the
Navy, and Marine Corps officials to obtain information and any
guidance documents pertaining to the process used for budget
development and budget review and approval. To gain a better
understanding of how the Marine Corps is using procurement funding, we
reviewed the Marine Corps procurement reset funding appropriated for
ground equipment in fiscal year 2010 for the 10 items that had the
highest amount of funding.
To determine the reliability of the reset budget data provided for
ground equipment from the Global War on Terror Resources Information
Database by Marine Corps officials, we assessed the data reliability
of the budget data by obtaining and reviewing agency officials'
responses on the data reliability questionnaires provided. Based on
our review of the Office of the Secretary of Defense and Marine Corps
officials' responses to our data reliability questionnaire, we
identified any possible limitations and determined the effect, if any,
those limitations would have on our findings. We also spoke with
agency officials to clarify how the budget data were used and to
ensure that we had a good understanding of how to interpret the data
for our purposes. We also reviewed the fiscal year 2009 through fiscal
year 2012 reset budget data provided to make sure that the formulas in
the database were accurate for the data we planned to use. Based on
all of these actions, we did not find any areas of concern with the
data and we determined that the data used from the Global War on
Terror Resources Information Database were sufficiently reliable for
our purposes.
To determine the reliability of the reset budget data provided for
aviation equipment from the Program Budget Information System, Navy
Enterprise Resource Planning system, and the Justification Management
System by Navy and Marine Corps officials, we assessed the data
reliability of the budget data by obtaining and reviewing agency
officials' responses on the data reliability questionnaires provided.
Based on our review of Navy and Marine Corps officials' responses to
our data reliability questionnaire, we identified any possible
limitations and determined the effect, if any, those limitations would
have on our findings. We also spoke with agency officials to clarify
how the budget data were used and to ensure that we had a good
understanding of how to interpret the data for our purposes. Based on
all of these actions, we did not find any areas of concern with the
data and we determined that the data used from the Program Budget
Information System, Navy Enterprise Resource Planning system, and the
Justification Management System were sufficiently reliable for our
purposes.
To address each of our objectives, we also spoke with officials, and
obtained documentation when applicable, at the following locations:
* Office of the Under Secretary of Defense for Acquisitions,
Technology and Logistics, Assistant Director of Defense for Material
Readiness:
* Office of the Secretary of Defense for Cost Assessment and Program
Evaluation:
* Office of the Under Secretary of Defense (Comptroller):
* Assistant Secretary of the Navy, Financial Management and
Comptroller; Navy Financial Management Branch:
* Naval Air Systems Command Reset Project Office:
* Naval Air Systems Command Comptroller Office:
* Naval Air Systems Command Naval Aviation Enterprise War Council:
* Headquarters Marine Corps Deputy Commandant for Installations and
Logistics:
* Headquarters Marine Corps Deputy Commandant for Plans, Policies, and
Operations:
* Headquarters Marine Corps Deputy Commandant for Marine Corps Combat
Development Command:
* Headquarters Marine Corps Deputy Commandant for Programs and
Resources:
* Headquarters Marine Corps Deputy Commandant, Aviation:
* Marine Corps Systems Command:
* Marine Corps Logistics Command:
We conducted this performance audit from November 2010 through August
2011 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]
Appendix II: Funding for Marine Corps Equipment Reset:
This appendix provides further details on funding for Marine Corps
equipment reset for fiscal years (FY) 2009 to 2012. Tables 2 and 3
provide a summary of funds that were budgeted or requested to reset
ground and aviation equipment.
Table 2: Marine Corps Ground Equipment Reset Funding, Fiscal Years
2009-2012:
Procurement;
FY 2009 (budgeted): $1.4 billion;
FY 2010 (budgeted): $0.4 billion;
FY 2011 (requested): $1.5 billion;
FY 2012 (requested): $1.1 billion.
Ammunition;
FY 2009 (budgeted): $0.3 billion;
FY 2010 (budgeted): $0.5 billion;
FY 2011 (requested): $0.4 billion;
FY 2012 (requested): $0.2 billion.
Operations and maintenance;
FY 2009 (budgeted): $0.5 billion;
FY 2010 (budgeted): $0.4 billion;
FY 2011 (requested): $0.7 billion;
FY 2012 (requested): $0.5 billion.
Total reset funding;
FY 2009 (budgeted): $2.2 billion;
FY 2010 (budgeted): $1.3 billion;
FY 2011 (requested): $2.6 billion;
FY 2012 (requested): $1.8 billion.
Source: Budget data provided by Marine Corps Program and Resources
officials from the Global War on Terror Resources Information Database.
[End of table]
Table 3: Marine Corps Aviation Equipment Reset Funding, Fiscal Years
2009-2012:
Procurement[A];
FY 2009 (budgeted): $216.2 million;
FY 2010 (budgeted): $202.3 million;
FY 2011 (requested): $45.5 million;
FY 2012 (requested): $83.4 million.
Operations and maintenance;
FY 2009 (budgeted): $66.7 million;
FY 2010 (budgeted): $57.8 million;
FY 2011 (requested): $56.1 million;
FY 2012 (requested): $45.3 million.
Total reset funding;
FY 2009 (budgeted): $282.9 million;
FY 2010 (budgeted): $260.1 million;
FY 2011 (requested): $101.6 million;
FY 2012 (requested): $128.7 million.
Source: Budget data provided by Marine Corps Aviation officials and
Naval Air Systems Command officials from the Program Budget
Information System, Navy Enterprise Resource Planning system, and the
Justification Management System.
[A] We have included procurement funding for the replacement of losses
in the aviation equipment table to be consistent with the table for
ground equipment. As discussed in the report, the Marine Corps does
not consider the replacement of aviation equipment losses to be within
its definition of aviation equipment reset.
[End of table]
The Marine Corps' top 10 ground equipment reset procurement items
totaled approximately $365 million and accounted for approximately 90
percent of their total reset procurement funding in fiscal year 2010.
Table 4 provides a summary of the procurement reset funding budgeted
for these ground equipment items.
Table 4: Top 10 Marine Corps Ground Equipment Reset Procurement Items
That Received Fiscal Year 2010 Funding:
Rank: 1;
Procurement - ground equipment: Medium Tactical Vehicle Replacement;
FY 2010 (budgeted): $105.5 million.
Rank: 2;
Procurement - ground equipment: 155mm Lightweight Towed Howitzer;
FY 2010 (budgeted): $54.0 million.
Rank: 3;
Procurement - ground equipment: Logistics Vehicle System Replacement;
FY 2010 (budgeted): $45.0 million.
Rank: 4;
Procurement - ground equipment: Tactical Fuel Systems;
FY 2010 (budgeted): $33.4 million.
Rank: 5;
Procurement - ground equipment: Radio Systems;
FY 2010 (budgeted): $32.5 million.
Rank: 6;
Procurement - ground equipment: Intelligence Support Equipment;
FY 2010 (budgeted): $23.4 million.
Rank: 7;
Procurement - ground equipment: Common Computer Resources;
FY 2010 (budgeted): $23.1 million.
Rank: 8;
Procurement - ground equipment: Command Post Systems;
FY 2010 (budgeted): $23.0 million.
Rank: 9;
Procurement - ground equipment: Family of Tactical Trailers;
FY 2010 (budgeted): $13.4 million.
Rank: 10;
Procurement - ground equipment: Repair and Test Equipment;
FY 2010 (budgeted): $11.7 million.
Procurement - ground equipment: Total;
FY 2010 (budgeted): $365.0 million.
Source: Budget data provided by Marine Corps Program and Resources
officials from the Global War on Terror Resources Information Database.
[End of table]
[End of section]
Appendix III: Comments from the Department of Defense:
Office Of The Assistant Secretary Of Defense:
Logistics And Materiel Readiness:
3500 Defense Pentagon:
Washington, DC 20301-3500:
July 15, 2011:
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, GA0-11-523, "Defense Logistics: Actions Needed to Improve the
Marine Corps' Equipment Reset Strategies and the Reporting of Total
Reset Costs," dated June 14, 2011 (GAO Code 351552).
The Department partially concurs with the GAO recommendation and
appreciates the opportunity to comment on the GAO Draft Report.
(Enclosed)
My point of contact in this matter is Mr. John Stankowski. He can be
reached at (703) 614-0948.
Sincerely,
Signed by:
Alan F. Estevez:
Principal Deputy:
Enclosure: As stated.
[End of letter]
GAO Draft Report Dated June 14, 2011:
GAO-11-523 (GAO Code 351552):
"Defense Logistics: Actions Needed To Improve The Marine Corps'
Equipment Reset Strategies And The Reporting Of Total Reset Costs"
Department Of Defense Comments To The GAO Recommendations:
Recommendation 1: To improve the Marine Corps' ability to plan, budget
for, and execute the reset of ground equipment used in Afghanistan,
the GAO recommends that the Secretary of Defense direct the Commandant
of the Marine Corps to establish a timeline for completing and issuing
formal reset planning guidance and a ground equipment reset strategy
for equipment used in Afghanistan and allows operating force units and
the Marine Corps Logistics Command to effectively manage equipment
reset.
DoD Response: Partially concur. The Department, and more specifically
the Marine Corps, understands the importance of publishing formal
planning guidance for the reset of ground equipment from Afghanistan.
Since the reset of equipment will be challenging, it is critically
important that effective processes and policies are enacted swiftly as
the Marine Corps balances resources to support ongoing combat
operations, re-arms, and repositions forces around the world.
Important considerations such as retrograde, reset and reconstitution
are being coordinated within the Marine Corps and with other agencies,
and formal guidance is being shared with the operating forces and
supporting organizations. This guidance for resetting the force is
being developed in our Operation Enduring Freedom (OEF) Reset Plan,
the OEF Reset Playbook and the Marine Air Ground Task Force (MAGTF)
Integration Plan. Although establishing timelines for execution is
problematic due to pending decisions regarding the size and pace of
redeployment operations, the Marine Corps has established a
timeline/estimated completion date of 30 April 2012 for completing and
issuing formal reset planning guidance and a ground equipment reset
strategy for equipment used in Afghanistan that allows operating force
units and the Marine Corps Logistics Command to effectively manage
equipment reset. Therefore, the Marine Corps does not require specific
direction on this matter.
Recommendation 2: To improve the Marine Corps' ability to plan, budget
for, and execute the reset of ground equipment used in Afghanistan,
the GAO recommends that the Secretary of Defense direct the Commandant
of the Marine Corps to provide linkages between the ground equipment
reset strategy for equipment used in Afghanistan and equipment
modernization plans, including the Expeditionary Force Development
System and the annual Program Objective Memorandum Marine Air-Ground
Task Force Requirements List.
DoD Response: Partially concur. The Department recognizes the
importance of linkage between ground equipment reset strategies and
equipment modernization plans. The Marine Corps will outline these
linkages in their Operation Enduring Freedom (OEF) Reset Plan, the OEF
Reset Playbook, and the Marine Air Ground Task Force (MAGTF)
Integration Plan. The development of these documents is currently
underway. The OEF Reset Plan will be an overarching policy that guides
the planning and execution of important logistical tasks necessary for
effective equipment retrograde and reset actions from theater.
The OEF Reset Playbook will serve as an equipment item manual for
retrograde and reset strategy. It will also identify items that are
obsolete, pending upgrade, or pending replacement by newer
technologies. In addition, development of the MAGTF Integration Plan
will define the parameters in which equipment modernization will
occur. And, because the creation of the MAGTF Integration Plan will
heavily influence the MAGTF Program Objective Memorandum across the
Future Years Defense Program, it will effectively serve as the linkage
from the equipment reset strategy to the service modernization plan.
The estimated completion date for Marine Corps corrective actions in
response to recommendation no. 2 is 30 April 2012. Therefore, separate
guidance from the Secretary of Defense is not required.
Recommendation 3: To improve oversight and ensure consistency in the
reporting of total reset costs, we recommend that the Secretary of
Defense direct the Office of the Secretary of Defense (Comptroller),
in coordination with the office of the Under Secretary of Defense for
Cost Assessment and Program Evaluation, the Office of the Under
Secretary of Defense for Acquisitions, Technology, and Logistics, the
Services, and the Joint Staff to act on the tasking in the Resource
Management Decision 700 to develop and publish a DOD definition of
reset for use in the DOD overseas contingency operations budgeting
process.
DoD Response: Concur. The Department is developing a definition of
reset for use in the overseas contingencies operations (OCO) budgeting
process that will be incorporated into the DoD Financial Management
Regulation (FMR). In the interim, the Department is using specific
criteria provided in OMB guidance for determining the reset
requirements that are OCO or base. Additional and separate guidance
from the Secretary of Defense on this subject is not necessary at this
time.
[End of section]
Appendix IV: 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, Larry Junek, Assistant
Director; Tamiya Lunsford; Stephanie Moriarty; Cynthia Saunders; John
Van Schaik; Michael Willems; Monique Williams; and Erik Wilkins-McKee;
Tom Gosling; William Graveline; Asif Khan; Thomas McCool; Charles
Perdue; Gregory Pugnetti; and William Woods made key contributions to
this report.
[End of section]
Footnotes:
[1] GAO, Managing for Results: Critical Issues for Improving Federal
Agencies' Strategic Plans, [hyperlink,
http://www.gao.gov/products/GAO/GGD-97-180] (Washington, D.C.: Sept.
16, 1997).
[2] Aviation equipment is managed by Deputy Commandant, Aviation, and
ground equipment is managed by Deputy Commandant, Installations and
Logistics.
[3] U.S. Marine Corps, OIF Ground Equipment Reset Plan (June 16, 2009).
[4] The term beyond economic repair refers to equipment that is
identified as obsolete or uneconomical to repair which will have
procurement/replacement as its reset action. Depot maintenance actions
are conducted if the estimated cost of repair for the equipment is 65
percent or less than the latest acquisition cost.
[5] The Marine Corps's equipment reset budget totaled more than $12
billion for fiscal years 2006 through 2008.
[6] Equipment rebuild activities are funded with operations and
maintenance appropriations, and equipment upgrades are funded with
procurement appropriations.
[7] [hyperlink, http://www.gao.gov/products/GAO/GGD-97-180].
[8] 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).
[9] [hyperlink, http://www.gao.gov/products/GAO-07-814].
[10] GAO, Overseas Contingency Operations: Funding and Cost Reporting
for the Department of Defense, [hyperlink,
http://www.gao.gov/products/GAO-10-288R] (Washington, D.C.: Dec. 18,
2009).
[11] OMB, Criteria for War/Overseas Contingency Operations Funding
Requests (February 2009).
[12] U.S. Marine Corps, FY 2011 Marine Aviation Plan (September 2010).
The aviation modernization plan, which is issued by the Deputy
Commandant for Marine Corps Aviation, describes Marine Corps aviation
policy, program decisions, and plans for modernization and provides a
method to introduce new aircraft and improved capabilities.
[13] U.S. Marine Corps, Aviation Reset Program Policy (April 2010). An
addendum to the February 15, 2009, Aviation Reset Program Policy.
[14] The Marine Corps' ground equipment modernization plan is
comprised of (1) the Expeditionary Force Development System and (2)
the Program Objective Memorandum Marine Air-Ground Task Force
Requirements List. The Expeditionary Force Development System guides
the identification, development, and integration of warfighting and
associated support and infrastructure capabilities for the Marine Air-
Ground Task Force. The Program Objective Memorandum Marine Air-Ground
Task Force Requirements List prioritizes existing programs and new
initiatives for consideration during the next program objective
memorandum cycle.
[15] The Marine Corps' aviation modernization plan provides a method
to introduce new aircraft and improved capabilities, and to shape the
future organization of Marine Corps aviation while maintaining current
capability. The Marine Corps' 2011 aviation modernization plan, for
example, outlines the service's transition from 13 to 6 manned
aircraft.
[16] U.S. Marine Corps, OIF Ground Equipment Reset Plan (June 16,
2009).
[17] While the DOD Financial Management Regulation contains several
distinct budget categories for various kinds of reset, it does not
provide a single definition of reset, as a whole. DOD Financial
Management Regulation 7000.14R, volume 12, chapter 23, Contingency
Operations (Sept. 2007).
[End of section]
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