    Chemical and Biological Defense: Improved Risk Assessment and
    Inventory Management Are Needed (28-SEP-01, GAO-01-667).

    The Department of Defense (DOD) believes it is increasingly
    likely that an adversary will use chemical or biological weapons
    against U.S. forces to degrade superior U.S. conventional warfare
    capabilities, placing servicemembers' lives and effective
    military operations at risk. To reduce the effects of such an
    attack on military personnel, DOD has determined the quantity of
    chemical and biological protective suits, masks, breathing
    filters, gloves, boots, and hoods that are needed based on
    projected wartime requirements. DOD's assessment process is
    unreliable for determining the risk to military operations. DOD's
    2000 report is inaccurate because it includes erroneous inventory
    data and wartime requirements. Inadequate inventory management is
    an additional risk factor because readiness can be compromised by
    DOD's inventory management practices, which prevent an accurate
    accounting of the availability or adequacy of its protective
    equipment.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-01-667
        ACCNO:   A01543
      TITLE:     Chemical and Biological Defense: Improved Risk Assessment
    and Inventory Management Are Needed
         DATE:   09/28/2001
      SUBJECT:   Biological warfare
    	     Chemical warfare
    	     Combat readiness
    	     Equipment inventories
    	     Military inventories
    	     Military operations
    	     Military personnel
    	     Joint Service Lightweight Integrated
    	     Suit Technology Program

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    GAO-01-667

    Report to the Chairman, Subcommittee on Military Readiness, Committee on
    Armed Services, House of Representatives

    United States General Accounting Office

    GAO

    September 2001 CHEMICAL AND BIOLOGICAL DEFENSE

    Improved Risk Assessment and Inventory Management Are Needed

    GAO- 01- 667

    Page i GAO- 01- 667 Chemical and Biological Defense Letter 1

    Results in Brief 2 Background 4 DOD?s Assessment Process Is Unreliable for
    Determining Risk to

    Military Operations 5 Erroneous Suit Inventory and Requirements Data
    Compromise

    DOD?s Risk Analysis 6 Inadequate Inventory Management Is an Additional Risk
    Factor 9 Conclusion 13 Recommendations 14 Agency Comments and Our Evaluation
    14 Scope and Methodology 15

    Appendix I Scope and Methodology 16

    Appendix II Comments From the Department of Defense 18

    Appendix III GAO Contact and Staff Acknowledgments 22

    Related Products 23

    Tables

    Table 1: DOD?s Criteria to Assess Risk 6 Table 2: Risk Based on Protective
    Items Available in Wartime 7 Table 3: Risk Based on New Requirements and
    Protective Items

    Available in Wartime 7 Table 4: Servicemembers With Required Protective
    Ensembles 8 Contents

    Page ii GAO- 01- 667 Chemical and Biological Defense Figures

    Figure 1: Components of the Protective Ensemble 4 Figure 2: Boxes of
    Defective Suits at the Defense Logistics Agency

    Depot in Albany, GA 12

    Abbreviations

    DOD Department of Defense JSLIST Joint Service Lightweight Integrated Suit
    Technology

    Page 1 GAO- 01- 667 Chemical and Biological Defense

    September 28, 2001 The Honorable Joel Hefley Chairman, Subcommittee on
    Military Readiness Committee on Armed Services House of Representatives

    Dear Mr. Chairman: The Department of Defense (DOD) believes it is
    increasingly likely that an adversary will use chemical or biological
    weapons against U. S. forces to degrade superior U. S. conventional warfare
    capabilities, placing servicemembers? lives and effective military
    operations at risk. To reduce the effects of such an attack on military
    personnel, DOD has determined the quantity of chemical and biological
    protective suits, masks, breathing filters, gloves, boots, and hoods
    (together known as protective ensembles 1 ) that are needed on the basis of
    projected wartime requirements.

    In response to a request from the former Chairman of your Subcommittee, we
    reviewed U. S. forces? readiness in terms of the protective equipment needed
    for operations in a chemically or biologically contaminated environment. We
    determined (1) whether DOD?s process for assessing the risk to military
    operations on the basis of wartime equipment requirements is reliable and
    (2) how DOD?s inventory management of chemical and biological protective
    gear has affected the risk level. Also, as requested by the former Chairman,
    we will soon issue two additional reports on the readiness of military
    medical support in Korea and of the Military Sealift Command to operate in a
    contaminated environment.

    Prior to 1994, each service had its own chemical and biological defense
    program and developed and procured individual protection equipment that was
    not always interoperable. The National Defense Authorization Act for Fiscal
    Year 1994 (Pub. L. 103- 160), 2 however, required the Secretary of Defense
    to conduct a DOD- wide program for chemical and biological

    1 DOD?s requirements also specify equipment to detect the presence of
    chemical or biological agents, to decontaminate equipment, and to provide
    protection for servicemembers in groups.

    2 50 U. S. C. sect.sect. 1522 and 1523.

    United States General Accounting Office Washington, DC 20548

    Page 2 GAO- 01- 667 Chemical and Biological Defense

    warfare defense, to exercise program oversight, and to report annually to
    the Congress on the program?s status. The Secretary assigned responsibility
    for the program to the Under Secretary of Defense for Acquisition,
    Technology, and Logistics. Subsequently, the Joint Nuclear, Biological, and
    Chemical Defense Board, which comprises the services? representatives, was
    created to address related policy, joint requirements, funding issues, and
    plans for modernization and logistics.

    To assist in program oversight, the Joint Board publishes the Joint Service
    Nuclear, Biological, and Chemical Defense Logistics Support Plan: Readiness
    and Sustainment Status, which provides an assessment of the overall
    logistics readiness of the armed forces to survive and sustain combat
    operations in a contaminated environment. Also, DOD?s Chemical and
    Biological Defense: Annual Report to Congress, which is partially derived
    from information provided by the services and the Defense Logistics Agency,
    provides an assessment of the overall readiness of the armed forces to fight
    in a chemically or biologically contaminated environment.

    DOD?s assessment process is unreliable for determining the risk to military
    operations; as a result, in its 2000 report to the Congress, the Department
    inaccurately reported the risk in most cases as ?low.? The report is
    inaccurate because it includes erroneous inventory data and wartime
    requirements. More important, the process for determining risk is
    fundamentally flawed because (1) the Department determines requirements by
    individual pieces of protective equipment rather than by the number of
    complete ensembles that can be provided to deploying servicemembers, and (2)
    the risk- determining process combines individual service requirements and
    reported inventory data into general categories, masking specific critical
    shortages affecting individual service readiness. Had the Department
    assessed the risk on the basis of the number of complete ensembles it had
    available, by service, the risk would rise to

    ?high? in all cases. Inadequate management of inventory is an additional
    risk factor because readiness can be compromised by DOD?s inventory-
    management practices, which prevent an accurate accounting of the
    availability or adequacy of its protective equipment. These practices can
    also undermine efforts to mitigate the risk. Moreover, these practices
    indicate problems in the Results in Brief

    Page 3 GAO- 01- 667 Chemical and Biological Defense

    Department?s management of inventory that we have noted in a previous
    report. 3 The practices that we identified in the current report regarding
    inventories of chemical and biological equipment contribute to the
    development of erroneous inventory data that in turn affect the accuracy of
    the risk assessment. First, DOD cannot monitor the status of the entire
    inventory of protective equipment because the services and the Defense
    Logistics Agency use at least nine different systems of inventory management
    with differing data fields to manage suit inventories, and the systems?
    records contain data that cannot be easily linked. Second, DOD cannot
    determine whether all of its older suits would adequately protect
    servicemembers because some of the systems? records omit essential data on
    suit expiration. Third, DOD cannot easily identify, track, and locate
    defective suits because inventory records do not always include contract and
    lot numbers. Finally, DOD has miscalculated the requirements for suits and
    the number available; for example, the Department counted new suits as on
    hand before they had been delivered and consequently overstated the actual
    inventory.

    We are making recommendations to assist DOD in better assessing risk and
    improving oversight of the inventory of chemical protective equipment.

    3 Major Management Challenges and Program Risks: Department of Defense (GAO-
    01- 244, Jan. 2001).

    Page 4 GAO- 01- 667 Chemical and Biological Defense

    DOD may be unable to prevent an attack using chemical or biological weapons.
    Therefore, DOD has determined that servicemembers must be protected to
    survive and conduct effective military operations. Consequently, DOD
    supplies servicemembers with a protective ensemble consisting of a suit,
    mask with breathing filter, rubber boots, butyl gloves, and hoods as
    required. Figure 1 displays the components that comprise a protective
    ensemble.

    Figure 1: Components of the Protective Ensemble

    Note: The new JSLIST suit has an attached hood so a separate hood would no
    longer be necessary. Source: The Army?s Soldier Biological and Chemical
    Command.

    Background

    Page 5 GAO- 01- 667 Chemical and Biological Defense

    During Operation Desert Shield/ Desert Storm, DOD noted that most of this
    equipment (1) could cause unacceptable heat stress to the wearer, (2) could
    limit freedom of movement and impair job performance, (3) is bulky, and (4)
    is not fully interoperable across the services. Furthermore, most of the
    existing suits (1) are no longer manufactured, (2) can be used for up to 14
    years from the date of manufacture, and (3) will expire by 2007. To address
    these issues, DOD developed new, lightweight individual protective equipment
    such as the Joint Service Lightweight Integrated Suit Technology (JSLIST)
    trousers and coat to replace the current protective suits. DOD began
    procuring the JSLIST suits in 1997. An improved multipurpose overboot is in
    procurement and new protective gloves are under development to improve
    manual dexterity and/ or reduce heat stress on the wearer. Similarly, since
    the existing masks may cause some breathing difficulty, DOD is developing a
    new mask but does not expect to begin procurement until fiscal year 2006.

    During fiscal years 2002 through 2007, DOD plans to spend about $5.7 billion
    on planning for chemical and biological defense, acquisition of defense
    equipment, facilities construction, and research and development. In 1999,
    we recommended that DOD develop a performance plan guided by outcome-
    oriented management principles embodied in the Government Performance and
    Results Act of 1993 (Pub. L. 103- 62). 4 DOD created a plan; however,
    performance goals and measures were being developed at the time of our
    review.

    DOD?s assessment process for determining the risk to military operations is
    unreliable, and, as a result, the Department?s current determination that
    the risk is generally low is inaccurate. Although the Department uses the
    Chemical and Biological Defense Program Annual Report to Congress to
    indicate its readiness for operations in a chemically and biologically
    contaminated environment, the 2000 report contains erroneous inventory data
    and understates equipment requirements. More important, the methodology for
    assessing the risk is flawed because it is not based on the number of
    complete ensembles needed and it obscures military service readiness by
    combining service data and reporting the results jointly.

    4 Chemical and Biological Defense: Program Planning and Evaluation Should
    Follow Results Act Framework (GAO/ NSIAD- 99- 159, Aug. 1999). DOD?s
    Assessment

    Process Is Unreliable for Determining Risk to Military Operations

    Page 6 GAO- 01- 667 Chemical and Biological Defense

    DOD?s criteria for assessing the risk of wartime shortages is to determine
    the numbers of protective suits, masks, breathing filters, gloves, boots,
    and hoods it has on hand, compare them against the requirements for those
    individual items, and then assign risk. (See table 1)

    Table 1: DOD?s Criteria to Assess Risk Risk level Wartime requirements on
    hand (percent)

    Low At least 85 Moderate From 70 to 84 High Less than 70

    Source: Chemical and Biological Defense Program: Annual Report to Congress,
    March 2000.

    In the draft fiscal year 2001 annual report to Congress provided to us in
    June 2001, DOD reported that it was generally at low risk for suits. 5
    However, the risk assessment process was flawed in part because DOD used
    erroneous data on protective suits. For example

     DOD made computational errors in comparing the older suits and JSLIST
    suits against a combined total suit requirement,

     the Air Force overreported its suit requirement by 801,167 suits,

     DOD reported it had 1,229,935 JSLIST suits on hand as of September 30,
    2000, but overcounted its inventory by 782,232 JSLIST suits,

     the Navy included about 117,000 suits that had passed their expiration
    dates and were therefore unusable, and

     the Army underreported its suit stocks by an estimated 231,050 suits.
    These errors occurred in large part as the result of problems in DOD?s
    systems for managing protective suit inventories. 6 We believe that the
    services collectively had no more than 4, 348,999 suits of all types on hand
    as of September 30, 2000. When we included all the suits for wartime use and
    adjusted the numbers to account for the errors and miscounts, the risk
    category changed to high for suits, as shown in table 2.

    5 DOD has already published the same inventory data in its fiscal year 2001
    Logistics Support Plan. 6 Some of these problems and their causes are
    discussed later in this report in more detail in the section on inventory
    management. DOD?s Process to Assess

    Risk Erroneous Suit Inventory and Requirements Data Compromise DOD?s Risk
    Analysis

    Page 7 GAO- 01- 667 Chemical and Biological Defense

    Table 2: Risk Based on Protective Items Available in Wartime Item
    Requirement Inventory Inventory as a share of

    requirements (percent) Risk level

    Suits 6, 346,599 4,348,999 68.5 High Masks 2,120,823 2,278,322 107.4 Low
    Filters 3, 479,307 4,762,358 136.9 Low Gloves 7,720,150 7,424,811 96.2 Low
    Boots 5, 061,719 3,887,172 76.8 Moderate Hoods 2,481,051 3,559,906 143.5 Low

    Source: Our analysis based on data in DOD?s Logistics Support Plan for
    fiscal year 2001.

    In February 2001, the military services informed the Joint Nuclear,
    Biological, and Chemical Defense Board that equipment requirements were
    actually much higher than those reported to Congress and included in the
    fiscal year 2001 Logistics Support Plan. The board subsequently accepted the
    new requirements. Based on these new requirements, the risk remained high
    for suits; changed to high for filters, boots, and hoods; and remained low
    for gloves and masks, as shown by comparing the risk level columns in tables
    2 and 3.

    Table 3: Risk Based on New Requirements and Protective Items Available in
    Wartime

    Item New requirements Inventory Inventory as a share of requirements
    (percent) Risk level

    Suits 6, 354,678 4,348,999 68.4 High Masks 1,655,964 2,278,322 137.6 Low
    Filters 7, 223,660 4,762,358 65.9 High Gloves 7,082,772 7,424,811 104.8 Low
    Boots 5, 844,656 3,887,172 66.5 High Hoods 5,521,232 3,559,906 64.5 High

    Source: Our analysis based on guidance provided by the services.

    DOD has inaccurately assessed the risk to military operations by determining
    the number of individual items of equipment it has on hand and by combining
    the services? inventories of individual items. Service guidance specifies
    that a total of 1,573,866 active and reserve servicemembers need protection
    to meet current operations plan requirements. DOD provides each deploying
    servicemember with up to four ensembles either at deployment or held in war
    reserve and distributed Assessing Readiness by

    Individual Items and by Individual Service Obscures the Risk

    Page 8 GAO- 01- 667 Chemical and Biological Defense

    to theater operating forces when needed. The ensembles consist of five
    components: (1) four protective suits, (2) between four and eight pairs of
    gloves and boots, (3) between four and eight hoods, (4) up to four breathing
    filters, and (5) one mask.

    Because DOD does not report each service?s readiness based on the equipment
    it has on hand, but rather provides a joint assessment, critical service
    shortages or opportunities for cross- service assistance tend to be
    obscured. In fact, each service reported shortages of one component of the
    ensemble. Specifically, the Army reported critical shortages of hoods; the
    Air Force reported shortages of gloves; the Navy, shortages of suits; the
    Marine Corps, shortages of boots. When we compared the number of ensembles
    required by each service?s guidance and applied the DOD risk criteria, the
    risk was high for all four services. As a result, DOD cannot provide all the
    required ensembles for 682,331 servicemembers scheduled for wartime
    deployment, as shown in table 4.

    Table 4: Servicemembers With Required Protective Ensembles Servicemembers
    Service Require

    protection Protected Not protected Percent

    protected Risk level

    Army 725,000 467,574 257,426 64.5 High Navy 354,182 160,668 193,514 45.4
    High Air Force 281,390 168,479 112,911 59.9 High Marine Corps 213,294 94,814
    118,480 44.5 High

    Total 1,573,866 891,535 682,331 56.6 High

    Source: Our analysis based on data from the Army, Navy, Air Force, and
    Marine Corps.

    The risk posed by suit shortages is likely to worsen through 2007 due to
    increasing rates of older suits? expiration and DOD?s plan not to replace
    all of them. As of October 1, 2000, DOD reported a shortage of about 1.7
    million protective suits; it believes about 3.3 million, or 75 percent, of
    the current suit inventory will expire by 2006. JSLIST suits cost about $203
    each compared to about $80 each for most of the existing suits, and DOD
    plans to buy only about 2.8 million JSLIST suits as replacements. Therefore,
    the shortage will increase to about 2.2 million suits by 2006.

    DOD?s plan to buy fewer new suits is also influenced by expiration of the
    suits and budgetary considerations. By replacing suits at a rate slower than
    the expiration rate, DOD plans to spread future suit purchases over more
    years to avoid a disproportionately large amount of suits expiring in any
    one year. This tactic allows greater dispersion of future suit expirations

    Page 9 GAO- 01- 667 Chemical and Biological Defense

    and replacement costs but is likely to also increase the short- term risk of
    wartime shortages.

    DOD is attempting to mitigate some of the shortages. For example, the Army
    plans to procure more than 500, 000 hoods through fiscal year 2002, and the
    Defense Logistics Agency was procuring more of the existing generation of
    boots at the time of our report. Some opportunities also exist for one
    service to assist another. For example, the Army and Marine Corps reported
    significantly more gloves on hand than required and could transfer some to
    the Air Force to offset Air Force shortfalls since all the services use the
    same gloves. However, other available equipment is not interoperable and
    cannot be easily shared. For example, the Navy and Marine Corps suits are
    hooded, so they do not have separate hoods and therefore cannot help
    alleviate the Army?s shortage. If all goes according to plan, such
    interoperability problems should ease after fiscal year 2006, as all four
    services begin using the JSLIST suit and new joint masks, gloves, and boots.

    Shortcomings in DOD?s inventory management of chemical and biological
    protective equipment adversely affect the Department?s ability to accurately
    assess the readiness of the services to meet requirements for the equipment
    and mitigate the risk of shortages. DOD?s current inventory information on
    chemical and biological equipment is unreliable for making an accurate risk
    assessment because DOD and the services cannot easily link inventory
    records; lack data on suit expiration dates; cannot easily identify, track,
    and locate defective suits; and have miscalculated the requirements and the
    number of suits available. These shortcomings are consistent with long- term
    problems in DOD?s inventory management that we have consistently identified
    since 1990 as a high- risk area due to a variety of problems, including
    ineffective and wasteful management systems and procedures. 7

    7 Major Management Challenges and Program Risks: Department of Defense

    (GAO- 01- 244, Jan. 2001). Inadequate Inventory

    Management Is an Additional Risk Factor

    Page 10 GAO- 01- 667 Chemical and Biological Defense

    The Defense Logistics Agency and the military services store war reserve
    inventories of chemical and biological protective suits and other equipment
    at a variety of depots, warehouses, and storage facilities and as noted
    earlier, use at least nine different inventory systems to manage the
    inventories. However, because these systems are not linked, DOD- wide
    oversight of the inventories is restricted, and the systems are not used to
    directly support the inventory data in the annual report to Congress and the
    Logistics Support Plan. Instead, DOD makes an additional effort to collect
    data theoretically already in the systems. The data collection requires
    units and depots that store the chemical protective equipment to provide
    separate data on the equipment annually and relies heavily on government and
    contractor personnel to manually compile the data.

    Although DOD has at least nine major inventory management systems, it cannot
    accurately determine the expiration rate of most of the older suits used by
    the Air Force and Army. These account for about 3.3 million of the current
    suit inventory and can be used for up to 14 years from the date of
    manufacture after which testing has determined that the suits cannot be used
    in a contaminated environment. Therefore, knowing the date the suits were
    manufactured is critical to estimating the suits? expiration rate and the
    rate at which the suits must be replaced with JSLIST suits. However, neither
    DOD nor we can accurately determine the expiration rate of the old suits
    because the Defense Logistics Agency, the buyer of the suits, was unable to
    locate most of the relevant procurement records. Moreover, many of the
    inventory systems cannot be used to locate the actual expired suits in
    specific depots because the systems do not record equipment expiration dates
    or the manufacturers? contract or lot numbers.

    Two examples or illustrations follow:

     The Army does not record suit expiration information in its primary
    inventory management system. To compensate, the Army has assumed an annual
    20- percent expiration rate of its inventory through fiscal year 2005 and
    expects that all suits will expire by 2005. However, the Army?s assumption
    may be inaccurate. Records from a depot in Kentucky indicate that almost
    80,000 suits would be serviceable after 2005 and some as late as 2008.

     The Navy does not know when its suits will expire because, according to
    the Naval Sea Systems Command, the Navy does not require inventory managers
    to include the expiration date in inventory records. Nonetheless, in June
    2001, the Navy estimated that of 178, 000 suits that it had on hand, only
    about 61,000 were actually serviceable because the rest had passed DOD?s
    Inventory

    Management Systems Are Not Linked and Cannot Be Used to Support Risk
    Assessments

    DOD Does Not Know the Expiration Rate of Older Suits

    Page 11 GAO- 01- 667 Chemical and Biological Defense

    their expiration date. Our review of 19 Military Sealift Command ships,
    which help to sustain deployed U. S. forces, showed that most had severe
    suit shortages, due mostly to expirations. We found additional problems in
    48 ships in the Atlantic and Pacific fleets. These ships currently report
    that they are missing one or more components of their ensembles and
    consequently cannot provide a complete ensemble for a single crewmember.

    The Air Force and Marine Corps use different inventory management systems
    that include contract, lot, and expiration information. Consequently, these
    two services can estimate suit expiration rates to manage their inventories
    effectively. Nonetheless, neither system is compatible with the other DOD
    systems.

    The majority of DOD?s and the services? inventory systems cannot be used to
    identify, track, and locate defective suits that may be in current
    inventories because contract and lot numbers needed for the purpose are not
    always included in the inventory records. In September 1999, officials from
    one manufacturer pleaded guilty to selling 778, 924 defective suits to the
    government. Since these defective suits were distributed to DOD war reserve
    and various other inventories, it was imperative that the suits be found. In
    May 2000, DOD directed units and depots to locate the defective suits and
    issue them for training use only. At the conclusion of our review, DOD had
    not found about 250,000 of these suits and did not know whether they had
    been used, were still in supply, or were sent for disposal.

    Finding the suits was difficult even when the storage depot was known. For
    example, the Defense Logistics Agency inventory system does not link the
    contract and lot number with the box or pallet number to allow ease in
    locating specific items. Consequently, during our review, the Agency
    resorted to using 19 reservists for up to 34 days to physically inspect all
    pallets and boxes containing about 1.3 million protective suits at its depot
    in Albany, GA. The reservists found about 347,000 defective suits. Figure 2
    displays some of the boxes of these suits. DOD Cannot Locate

    Defective Suits That May Be in the Inventory

    Page 12 GAO- 01- 667 Chemical and Biological Defense

    Figure 2: Boxes of Defective Suits at the Defense Logistics Agency Depot in
    Albany, GA

    Source: GAO.

    Despite the problem in finding defective suits, the Defense Logistics
    Agency?s supply system remained unchanged at the time of our review. Agency
    officials acknowledged that they would have to physically reinspect depot
    stocks if specific lots of other suits need to be removed from the inventory
    before the end of their normal 14- year shelf life.

    Several questionable inventory management practices and related actions have
    further contributed to the generation of the inaccurate inventory data,
    which in turn affects the accuracy of DOD?s risk assessment process. These
    include miscalculating suit requirements, failing to count parts of the suit
    inventory, and counting suits as part of the inventory long before they are
    actually delivered from manufacturers. Some specifics regarding these counts
    are as follows: Other Questionable

    Inventory Management Practices Affect Risk Assessment Accuracy

    Page 13 GAO- 01- 667 Chemical and Biological Defense

     The Air Force double- counted a portion of its suit requirement by
    reporting a requirement for both 801,167 of the older suits and the same
    number of replacement JSLIST suits.

     The Army asked units that store suits to report the numbers being stored,
    but it did not tell them to include desert pattern suits, which are
    generally reserved for use in desert climates. As a result, units did not
    always include desert pattern suits in their reported inventories, and the
    Army believes it consequently underreported its desert pattern suit
    inventory by 10 percent of the total, or 231,050 suits.

     In the fiscal year 2001 Logistics Support Plan and draft Annual Report to
    Congress, the services reported they had 1,229,935 JSLIST suits on hand on
    September 30, 2000, but that included 782, 232 suits not yet delivered. DOD
    procedures for compiling inventory data for these reports allow reporting
    suits expected to be delivered during the year as on hand. In March 2001,
    the Marine Corps Systems Command, which manages JSLIST suit distribution,
    acknowledged that DOD did not have 1,229, 935 JSLIST suits on hand on
    September 30, 2000 but might reach that quantity a year later on September
    30, 2001. Moreover, in the same two reports, DOD projected that it would
    reach 1.5 million suits by September 30, 2001, again overestimating JSLIST
    production.

    DOD?s inventory management practices tend to affect the suit inventory
    count. This count in turn can significantly affect the results of the risk
    assessment process, which is a comparison of requirements against the
    inventory on hand.

    Because the Department of Defense?s risk assessment process is flawed and
    unreliable, DOD inaccurately assessed the risk to servicemembers? lives and
    military operations from potential wartime shortages of protective equipment
    as low. The Department underestimated the risk by analyzing requirements
    based on individual equipment items and not ensembles. Furthermore, DOD
    combined this service data into a consolidated DOD inventory position, which
    obscured service- specific shortages. As we discovered, the risk is
    currently higher than reported by DOD. Inadequate inventory management has
    contributed to increased risk. Because the Department has no integrated
    inventory system for managing protective equipment, it has no effective way
    to (1) gather the data needed for the annual report to Congress and
    Logistics Support plan, (2) determine the expiration dates of protective
    equipment, and (3) ensure that its data is correct. To further compound the
    problem, the services have counted equipment as on hand before it has been
    delivered, adding to the overcounting of equipment that they had in the
    inventory. Inaccurate Conclusion

    Page 14 GAO- 01- 667 Chemical and Biological Defense

    risk assessment and inadequate inventory management could adversely affect
    readiness and prevent informed acquisition decisions that could undermine
    risk mitigation.

    To improve the Department of Defense?s ability to accurately assess the
    level of risk and readiness for operations in a contaminated environment, we
    recommend that the Secretary of Defense direct the Under Secretary of
    Defense for Acquisition, Technology, and Logistics to

     issue and implement guidance requiring each service to evaluate its risk
    on the basis of current inventory numbers of complete ensembles against
    wartime requirements;

     implement a fully integrated inventory management system to manage
    chemical and biological defense equipment and use it to prepare (1) the
    required annual report to Congress and (2) the annual Logistics Support Plan
    on chemical and biological defense;

     establish data fields in the inventory management system to show the
    contract, lot number, and expiration date of shelf life items; and

     cease counting equipment as on hand before delivery from the contractor.
    DOD provided written comments on a draft of our report and generally
    concurred with our recommendations. DOD partially concurred with our
    recommendation to conduct risk assessments on the basis of ensembles
    required in wartime and not just components of the ensemble and stated that
    the department will issue implementing guidance. DOD concurred with comment
    with our recommendations to (1) establish an integrated inventory management
    system; (2) include item contract, lot number, and expiration date
    information in the new inventory system; and (3) cease counting equipment as
    on hand before it is delivered and explained its plan to implement the
    recommendations. In addition, DOD provided technical comments, which we
    incorporated into our report as appropriate.

    DOD?s comments are printed in their entirety in appendix II along with our
    evaluation of their comments. Recommendations

    Agency Comments and Our Evaluation

    Page 15 GAO- 01- 667 Chemical and Biological Defense

    We discuss our scope and methodology in detail in appendix I. We conducted
    our review from August 2000 to April 2001 in accordance with generally
    accepted government auditing standards.

    We will send copies of this report to interested congressional committees;
    the Secretaries of Defense, the Army, the Navy, and the Air Force; the
    Commandant of the Marine Corps; and the Director of the Office of Management
    and Budget.

    If you or your staff have any questions about this report, please contact me
    at (202) 512- 6020. Additional contact and staff acknowledgments are listed
    in appendix III.

    Sincerely yours, Raymond J. Decker Director, Defense Capabilities and
    Management Scope and

    Methodology

    Appendix I: Scope and Methodology Page 16 GAO- 01- 667 Chemical and
    Biological Defense

    We determined (1) whether DOD?s process for assessing the risk to military
    operations on the basis of wartime equipment requirements is reliable and
    (2) how DOD?s inventory management of chemical and biological protective
    gear has affected the risk level. We included in our scope chemical and
    biological protective suits, masks and breathing filters, gloves, boots, and
    hoods.

    To understand the process DOD uses to assess the risk, we determined how DOD
    performs risk assessments. We examined DOD?s fiscal years 1999, 2000, and
    2001 Chemical and Biological Defense: Annual Report to Congress and Joint
    Service Nuclear, Biological, and Chemical Defense Logistics Support Plan:
    Readiness and Sustainment Status and service input to these reports. To
    understand equipment requirements, we interviewed an official from the
    Office of the Deputy Assistant to the Secretary of Defense, Chemical and
    Biological Defense; the Joint Nuclear, Biological, and Chemical Defense
    Board; the Joint Staff; and other organizations and obtained documents
    showing how many suits, masks, breathing filters, gloves, boots, and hoods
    are needed to support operations. We also obtained the Center for Army
    Analysis? Joint Service Chemical Defense Equipment Consumption Rates IV,
    Volume II; briefing slides; guidance; directives; memorandums; cables; and
    other documents that specify requirements. We also used service guidance to
    determine the number of servicemembers scheduled for deployment who need
    protection. We did not evaluate the validity of the requirements. To
    calculate on- hand stocks, we obtained inventory records from war reserve or
    other depots in the United States, Japan, the Republic of Korea, the
    Netherlands, elsewhere in Europe, and aboard prepositioned ships in Guam to
    determine the size of the stockpile. As a result of the national security
    reviews under way at the time of our review, requirements for chemical
    defense equipment could change. If so, current risk assessments would need
    revision.

    To determine how DOD?s inventory management practices affected risk, we
    tried to verify the accuracy of inventory data reported by the services. We
    did this by (1) interviewing officials and obtaining documents showing how
    the inventory data were collected and verified, (2) obtaining Navy documents
    showing the number of suits still in the inventory that had not expired and
    comparing that number to the reported inventory, and (3) obtaining JSLIST
    suit production data. We also tried to determine how many of the older
    chemical protective suits DOD had bought and when, but the Defense Logistics
    Agency could not find most of its records documenting suit procurement. To
    determine the compatibility of the nine major supply systems, we interviewed
    the responsible DOD officials, Appendix I: Scope and Methodology

    Appendix I: Scope and Methodology Page 17 GAO- 01- 667 Chemical and
    Biological Defense

    compared system inventory procedures, checked records against physical
    inventories, and obtained relevant documents. To determine how long shelf
    life items can be used and to estimate equipment expiration rates, we
    interviewed officials from the Army?s Soldier Biological and Chemical
    Command in Maryland; Natick Soldier Center in Massachusetts; and Rock Island
    Arsenal in Illinois; the Naval Sea Systems Command in Virginia; the Air
    Force Headquarters Directorate of Supply in Washington, D. C.; and the
    Marine Corps? Combat Development Command in Virginia and Materiel Command in
    Georgia. We also interviewed officials and obtained documents from the
    Defense Logistics Agency offices in Pennsylvania showing planned or actual
    procurement of JSLIST suits and other equipment. To determine how the
    services and depots identify which items will expire and need replacement,
    we inspected or inventoried chemical protective suits stored at the
    Bluegrass Army Depot in Richmond, KY; the Defense Logistics Agency?s war
    reserve depot in Albany, GA; the Air Force?s Mobility Bag Center in Avon
    Park and MacDill Air Force Base, FL; and aboard ships at the Norfolk Navy
    Base, Norfolk, VA. At these locations, we met with officials and obtained
    supply records and suit and other equipment expiration data.

    Appendix II: Comments From the Department of Defense

    Page 18 GAO- 01- 667 Chemical and Biological Defense

    Appendix II: Comments From the Department of Defense

    Note: GAO comments supplementing those in the report text appear at the end
    of this appendix.

    Appendix II: Comments From the Department of Defense

    Page 19 GAO- 01- 667 Chemical and Biological Defense

    See comment 1.

    Appendix II: Comments From the Department of Defense

    Page 20 GAO- 01- 667 Chemical and Biological Defense

    See comment 2. See comment 2.

    Appendix II: Comments From the Department of Defense

    Page 21 GAO- 01- 667 Chemical and Biological Defense

    The following is our response to the Department of Defense letter dated
    September 18, 2001.

    1. While DOD presents the data in the cited Annual Report to Congress and
    Logistics Support Plan annexes, the data is presented on an item- byitem
    basis and not an ensemble basis. Consequently, the information as presented
    does not give a fully reliable risk assessment.

    DOD acknowledges that it has scarce resources and must manage risk within
    those resource constraints. Consequently, DOD also indicated in its comments
    that it will rely on industrial surge capacity to make up any shortfall in
    required ensemble components. Nonetheless, the Department?s risk assessment
    is based on having 120 days of supply at the units or in war reserve. If the
    Department now plans to stock fewer than 120 days of supply and rely on
    industrial surge to make up the difference in a crisis, the risk level would
    be higher because the continuing shortages would be greater.

    2. The Air Force has developed, and the Marine Corps is developing inventory
    systems, both of which include contract, lot number, and expiration date of
    equipment on hand. Adopting one of these systems DOD- wide could reduce or
    eliminate development costs associated with the Business System
    Modernization program, assure interoperability across the services, and meet
    the intent of our third recommendation. GAO Comments

    Appendix III: GAO Contact and Staff Acknowledgments

    Page 22 GAO- 01- 667 Chemical and Biological Defense

    William W. Cawood, Jr. (202) 512- 3959 In addition to the contact named
    above, Brian J. Lepore, Raymond G. Bickert, Tracy M. Brown, and Sally L.
    Newman made key contributions to this report. Appendix III: GAO Contact and
    Staff

    Acknowledgments GAO Contact Acknowledgments

    Related Products Page 23 GAO- 01- 667 Chemical and Biological Defense

    Major Management Challenges and Program Risks: Department of Defense (GAO-
    01- 244, Jan. 2001).

    Chemical and Biological Defense: Units Better Equipped but Training and
    Readiness Reporting Problems Remain (GAO- 01- 27, Nov. 2000).

    Chemical and Biological Defense: Program Planning and Evaluation Should
    Follow Results Act Framework (GAO/ T- NSIAD- 00- 180, May 2000).

    Chemical and Biological Defense: Observations on Nonmedical Chemical and
    Biological R& D Programs (GAO/ T- NSIAD- 00- 130, Mar. 2000).

    Chemical and Biological Defense: Chemical Stockpile Emergency Preparedness
    Program for Oregon and Washington (GAO/ NSIAD- 00- 13, Oct. 1999).

    Chemical and Biological Defense: Observations on Actions Taken to Protect
    Military Forces (GAO/ T- NSIAD- 00- 49, Oct. 1999).

    Chemical and Biological Defense: Program Planning and Evaluation Should
    Follow Results Act Framework (GAO/ NSIAD- 99- 159, Aug. 1999).

    Chemical and Biological Defense: Coordination of Nonmedical Chemical and
    Biological R& D Programs (GAO/ NSIAD- 99- 160, Aug. 1999).

    Chemical and Biological Defense: DOD?s Evaluation of Improved Garment
    Materials (GAO/ NSIAD- 98- 214, Aug. 1998).

    Chemical and Biological Defense: Observations on DOD?s Plans to Protect U.
    S. Forces (GAO/ T- NSIAD- 98- 83, Mar. 1998).

    Assuring Condition and Inventory Accountability of Chemical Protective Suits
    (D- 2000- 086, Feb. 25, 2000).

    M41 Protection Assessment Test System Capabilities

    (99- 061, Dec. 24, 1998).

    Unit Chemical and Biological Defense Readiness Training

    (98- 174, July 17, 1998). Related Products

    GAO Reports Department of Defense Inspector General Reports

    Related Products Page 24 GAO- 01- 667 Chemical and Biological Defense

    Inventory Accuracy at the Defense Depot, Columbus, Ohio

    (97- 102, Feb. 27, 1997).

    Army Protective Mask Requirements (95- 224, June 8, 1995).

    (702089)

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