Defense Inventory: The Army Needs a Plan to Overcome Critical	 
Spare Parts Shortages (27-JUN-03, GAO-03-705).			 
                                                                 
Prior reports and studies have identified major risks in the	 
Department of Defense's (DOD) management, funding, and reporting 
of spare parts spending programs. Spare parts shortages adversely
affect the U.S. Army's operations and can compromise the	 
readiness of weapon systems. To address these issues, Congress	 
has fully funded DOD's requests for spare parts spending and in  
some instances increased funding for additional spare parts. Yet,
the Army continues to experience spare parts shortages. Congress 
requested that GAO evaluate (1) the Army's strategic plans for	 
reducing spare parts shortages, (2) the likelihood that key	 
initiatives will reduce such shortages, and (3) the Army's	 
capability to identify the impact on readiness of increased	 
investments for spare parts.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-705 					        
    ACCNO:   A07384						        
  TITLE:     Defense Inventory: The Army Needs a Plan to Overcome     
Critical Spare Parts Shortages					 
     DATE:   06/27/2003 
  SUBJECT:   Spare parts					 
	     Equipment inventories				 
	     Military inventories				 
	     Logistics						 
	     Strategic planning 				 
	     Combat readiness					 

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GAO-03-705

Report to the Chairman, Subcommittee on Defense, Committee on
Appropriations, House of Representatives

United States General Accounting Office

GAO

June 2003 DEFENSE INVENTORY

The Army Needs a Plan to Overcome Critical Spare Parts Shortages

GAO- 03- 705

The Army*s logistics strategic plan provides strategic goals, objectives,
and milestones for force transformation efforts, but does not specifically
address the mitigation of critical spare parts shortages. The Army*s
Transformation Campaign Plan, published in April 2001, serves as a
mechanism to move the

Army from its present posture to a more strategically deployable and
responsive force. The plan prescribes specific goals and milestones to
support the transformation process. However, it lacks objectives and
performance measures it could use to show progress in mitigating critical
spare parts shortages.

The Army*s six servicewide logistics initiatives are aimed at enhancing
readiness by improving internal business processes that would increase
supply availability. However, they were not designed to mitigate spare
parts shortages. These processes include those that acquire, repair, and
distribute spare parts. Recognizing that the Armywide initiatives were not
designed to specifically focus on mitigating critical shortages, the Army
recently started a new initiative to address individual spare parts
shortages that affect key weapon systems readiness. However, this
initiative is not part of the

Armywide logistics improvement efforts, and therefore it is not
coordinated with other initiatives and its results are not linked with the
overall goals and performance measures. Absent this coordination and
linkage, any systemic problems that the initiatives identifies may not be
elevated to the Armywide initiatives for resolution and its benefit may be
limited to improving the availability of only a few parts.

The Army has the means to link funding to weapon system readiness, and
reports this in its budget justification documents, but it does not report
to Congress how additional investments in spare parts would increase
readiness. The Army Materiel Systems Analysis Activity can use models to
indicate the investment needed to reach a desired level of supply
availability, along with the possible corresponding increase in readiness,
and it has provided such information to Army units. Additionally, the Army
has used consultants to project the impact of additional funding on the
readiness of specific weapon systems and provided this to the Army Vice
Chief of Staff. For example, the Logistics Management Institute projected
that an additional investment of $331 million for additional spare parts
would increase the overall readiness of the Apache and Blackhawk
helicopters by approximately 2.6 percent. Prior reports and studies have

identified major risks in the Department of Defense*s (DOD) management,
funding, and reporting of spare parts spending programs. Spare parts
shortages adversely affect the U. S. Army*s operations and can compromise
the readiness of weapon systems. To address these issues, Congress

has fully funded DOD*s requests for spare parts spending and in some
instances increased funding for additional spare parts. Yet, the

Army continues to experience spare parts shortages. The Committee
requested that GAO evaluate (1) the Army*s strategic plans for reducing
spare parts shortages, (2) the likelihood that key initiatives will reduce
such shortages, and (3) the Army*s

capability to identify the impact on readiness of increased investments
for spare parts. GAO recommends that the Secretary of Defense:

Modify or supplement the

Transformation Campaign Plan

or the Armywide initiatives to include a focus on mitigating critical
spare parts shortages.

Implement, with a specific completion milestone, the Office of the
Secretary of Defense*s recommendation to report the impact of parts
funding on equipment readiness. In written comments, DOD generally
concurred with the intent

of the recommendations but not all specific actions.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 705. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact George Morse at (757) 552- 8108 or morseg@ gao. gov.
Highlights of GAO- 03- 705, a report to the

Chairman, Subcommittee on Defense, Committee on Appropriations, House of
Representatives

June 2003

DEFENSE INVENTORY

The Army Needs a Plan to Overcome Critical Spare Parts Shortages

Page i GAO- 03- 705 Defense Inventory Letter 1 Results in Brief 3
Background 5 Strategic Plan Addresses Transformation, but Not Mitigation
of

Critical Spare Parts Shortages 7 Armywide Initiatives Improve Logistics
Business Processes, but Are Not Focused on Mitigating Critical Spare Parts
Shortages 9 Army Can Identify Readiness Impact of Additional Investment
and Needs to Report This to Congress 15 Conclusions 17 Recommendations for
Executive Action 17 Agency Comments and Our Evaluation 17 Scope and
Methodology 19 Appendix I Army Recapitalization Systems 21

Appendix II Army Working Capital Fund Fiscal Year 2004/ 2005 Biennial
Budget Estimates Supply Management 22

Appendix III Comments from the Department of Defense 24

Appendix IV GAO Contacts and Staff Acknowledgments 26

Tables

Table 1: Framework for the Army*s Transformation Campaign Plan 9 Table 2:
Army Major Logistics Initiatives 10 Table 3: Operating Requirements by
Weapon System Category 22 Table 4: Operating Requirements by Weapon System
Category 23 Figure

Figure 1: Army Logistics Strategic Guidance 7 Contents

Page ii GAO- 03- 705 Defense Inventory Abbreviations

DOD Department of Defense GPRA Government Performance Results Act

This is a work of the U. S. Government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. It may contain
copyrighted graphics, images or other materials. Permission from the
copyright holder may be necessary should you wish to reproduce copyrighted
materials separately from GAO*s product.

Page 1 GAO- 03- 705 Defense Inventory

June 27, 2003 The Honorable Jerry Lewis Chairman, Subcommittee on Defense
Committee on Appropriations House of Representatives

Dear Mr. Chairman: The Army is now involved in a major effort to transform
its forces to be more deployable and responsive during the 21st century.
Equipment readiness is necessary to support this transformed force
posture, and adequate supplies of spare parts are critical to equipment
readiness. The Army is generally meeting or exceeding the Department of
Defense*s (DOD) overall supply performance goal of having parts available
85 percent of the time when they are requested. However, the Army
continues to experience a shortage of critical spare parts* those that

affect readiness for aviation and ground weapon systems* despite spending
$4.9 billion from its annual operations and maintenance appropriations and
supplemental funding totaling $225 million since fiscal year 2001. 1 While
recognizing that spare parts shortages will never be eliminated, it is
reasonable to expect the services to place a priority on efforts to
mitigate (reduce) those shortages that adversely impact readiness. This
priority should be inherent in their overall planning and stewardship of
funds they request from Congress and their accountability for making spare
parts investment decisions that provide a good readiness return. Since
1990, we have identified DOD*s inventory management as high risk, because
management systems and procedures were ineffective and wasteful. In our
January 2003 Performance and Accountability Series, we wrote that DOD was
experiencing equipment readiness problems

because of a lack of key spare parts, and we recommended that DOD take
actions to address those shortages. 2 As recently as August 2002, DOD

1 These figures are based on the Army*s OP- 31 Budget exhibit about which
GAO recently reported concerns. U. S. General Accounting Office, Defense
Inventory: Better Reporting on Spare Parts Spending Will Enhance
Congressional Oversight, GAO- 03- 18 (Washington, D. C.: Oct. 24, 2002).

2 U. S. General Accounting Office, Major Management Challenges and Program
Risks: Department of Defense, GAO- 03- 98 (Washington, D. C.: Jan. 2003).

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 705 Defense Inventory

recognized the need to overcome critical spare parts shortages and
recommended changes to improve the readiness of weapon systems. 3 This
report is one of a series of reports 4 that responds to your request that

we identify ways to improve the availability of high quality spare parts
for aircraft, ships, vehicles, and weapon systems. As agreed, this report
focuses on Army strategic planning efforts and initiatives to mitigate
critical spare parts shortages. More specifically, we focused our review
on the following questions: 1. Does the Army*s strategic plan address the
mitigation of critical spare

parts shortages* those that adversely affect readiness? 5 2. Will key Army
logistics initiatives likely mitigate spare parts shortages that affect
readiness? 3. Does the Army have the ability to identify the impact on
readiness of

increased investments for spare parts? To accomplish these objectives, we
analyzed Army strategic plans and major initiatives identified by the Army
that pertain to logistics and supply support. We interviewed officials at
Army Headquarters, Army Materiel Command, Army Aviation and Missile
Command, Tank and Automotive Command, and the Army Materiel Systems
Analysis Activity. Our criteria for evaluating the Army*s strategy and
initiatives included the Government

3 Office of the Secretary of Defense, Inventory Management Study
(Washington, D. C.: Aug. 2002). 4 U. S. General Accounting Office, Defense
Inventory: The Department Needs a Focused Effort to Overcome Critical
Spare Parts Shortages, GAO- 03- 707 (Washington, D. C.:

June 27, 2003); U. S. General Accounting Office, Defense Inventory: Air
Force Plans and Initiatives to Mitigate Spare Parts Shortages Need Better
Implementation, GAO- 03- 706 (Washington, D. C.: June 27, 2003); U. S.
General Accounting Office, Defense Inventory: Navy Logistics Strategy and
Initiatives Need to Address Spare Parts Shortages,

GAO- 03- 708 (Washington, D. C.: June 27, 2003); U. S. General Accounting
Office, Defense Inventory: Several Actions Are Needed to Further DLA*s
Efforts to Mitigate Shortages of Critical Parts, GAO- 03- 709
(forthcoming); U. S. General Accounting Office, Defense Inventory: Air
Force Item Manager Views of Repair Parts Issues Consistent With Issues
Reported in the Past, GAO- 03- 684R (Washington, D. C.: May 21, 2003).

5 For this report, critical spare parts are defined as those parts that
directly affect the readiness of weapon systems. For example, the Army
periodically identifies parts as *top drivers* of weapon readiness, such
as a rotor blade for the Apache helicopter.

Page 3 GAO- 03- 705 Defense Inventory

Performance Results Act (GPRA) of 1993, previous GAO reports, and
appropriate DOD reports and guidance. 6 The Army*s logistics strategic
plan provides strategic goals, objectives, and milestones for force
transformation efforts, but does not specifically

address the mitigation of critical spare parts shortages. In April 2001,
the Army published its Transformation Campaign Plan, which serves as a
mechanism for integrating and synchronizing the necessary actions to move
the Army from its present posture to a more strategically deployable and
responsive force. The plan prescribes specific goals and milestones to
support the transformation process. However, it lacks objectives and
performance measures it could use to show progress in mitigating critical
spare parts shortages. For example, the plan describes how the Army is to

provide logistical support to deploy and sustain its forces across a full
spectrum of operations, but without a strategic planning focus on
improving the availability of critical spare parts, the Army cannot ensure
that it is investing in those items that would give them the greatest
readiness return on investment and taking other actions needed to reduce
the critical spare parts shortages that impact readiness.

The Army*s six servicewide logistics initiatives are aimed at enhancing
readiness by improving internal business processes that would increase
supply availability. However, they were not designed to mitigate spare
parts shortages. These processes include those that acquire, repair, and
distribute spare parts. For example, the Single Stock Fund is a business
process reengineering initiative, ongoing since 1997, that provides
worldwide visibility and access to national inventories down to the
installation level. This initiative improves visibility and access to
spare parts, spare parts requirements determination, and measures progress
based on the successful linkage of various inventories. Recognizing that
the Armywide initiatives were not designed to specifically focus on
mitigating critical shortages, the Army recently started a new initiative
to address individual spare parts shortages that affect key weapon systems

readiness. However, this initiative is not part of the Armywide logistics
improvement effort, and therefore it is not coordinated with other
initiatives and its results are not linked to the Army*s overall goals and
performance measures. Absent this coordination and linkage, any systemic
problems that the initiative identifies may not be elevated to the
Armywide

6 Public Law 103- 62, August 3, 1993. Results in Brief

Page 4 GAO- 03- 705 Defense Inventory

initiatives for resolution and its benefit may be limited to improving the
availability of only a few parts.

The Army has the means to link funding to weapon system readiness, and
reports this in its budget justification documents, but it does not report
to Congress how additional investments in spare parts would increase
readiness. The Army Materiel Systems Analysis Activity uses models to
indicate the investment needed to reach a desired level of supply
availability along with the estimated increase in readiness, and on
request it has provided such information to Army units. In addition, the
Army has

used consultants to project the impact of additional funding on the
readiness of specific weapon systems and has provided the projections to
the Army Vice Chief of Staff. For example, the Logistics Management
Institute projected that an additional investment of $331 million for
additional spare parts would increase the overall readiness of the Apache
and Blackhawk helicopters by approximately 2.6 percent. Army officials
warn that there is no direct correlation between additional investments in
spare parts and readiness due to factors such as maintenance capacity and
training requirements. However, the projected impact of additional
investments for parts on supply availability and readiness would be
valuable information for Congress when they decide how to allocate
resources. The value of providing such information was recognized in an
August 2002 DOD report, which directed that readiness impact be included
as part of the calculation for spare parts purchases. 7 However, DOD did

not specify when the Army should begin reporting this information to
Congress.

Given the critical nature of spare parts shortages and their impact on
readiness as well as the Army*s need to make good investment decisions, we
are recommending that the Secretary of Defense direct the Secretary of

the Army to include a focus on mitigating crucial spare parts shortages
with goals, objectives, milestones, and quantifiable performance measures
in the Transformation Campaign Plan or Armywide initiatives. We are also
recommending that the Army provide decisionmakers with information that
links investments in spare parts inventories to weapon system readiness
targets. In written comments on a draft of this report, DOD generally
concurred with the intent of our recommendations, but not all suggested
actions. DOD said the Army would address spares shortages

7 Office of the Secretary of Defense, Inventory Management Study
(Washington, D. C.: Aug. 2002).

Page 5 GAO- 03- 705 Defense Inventory

through its supply management processes, metrics would be tracked in the
Army*s Strategic Readiness System, and initiative milestones would be
added to the Transformation Campaign Plan. 8 However, the Army would not
be modifying the Transformation Campaign Plan or the Armywide logistics
initiatives to focus on spare parts shortages as we had recommended. We
endorse the Army*s effort to add metrics to its readiness system and
milestones for its initiatives to the Transformation Campaign Plan, but
continue to believe that effectiveness of the Army*s efforts would be
improved if its overall plan or initiatives included goals, objectives,
and milestones for mitigating critical spare parts shortages. DOD also
stated that it would be linking spare parts investments to individual
weapon system readiness in future budgets submissions when the required
data becomes available. However, we remain concerned that

DOD has not set a deadline for fully reporting this information. The
Department*s comments and our evaluation are on page 17 of this report.

The Army*s vision for the 21st century mandates a land force that can
operate in joint, combined, and multinational formations to perform a
variety of missions, ranging from humanitarian assistance and disaster
relief to major theater wars. The Army*s vision also requires that it be
capable of putting a combat force anywhere in the world within 96 hours.
To meet these objectives, the Army states that it must transform into a
more deployable and strategically responsive force. This transformation
process also dictates that the Army reengineers its logistics processes to
increase responsiveness to its combat units and to provide the spare parts
needed to maintain equipment readiness.

In recent years, Congress has provided increased operations and
maintenance funding for DOD to enable military units to purchase spare
parts from the supply system as needed. For example, during fiscal years
1999- 2002, Congress provided supplemental funding totaling $1.5 billion,
of which the Army received $170 million in 1999, $25 million in 2001, and

$200 million in 2002 to address spare parts shortages that were adversely
affecting readiness. The Army now projects that it will spend over $7
billion during fiscal years 2003- 05 to purchase spare parts for its
combat and support systems. The Army Chief of Staff*s list of programs
that need more funding indicates that the Army needs an additional $415
million to 8 The Army Strategic Readiness System provides senior leaders
with a means to link

resources to readiness and translates strategy into measurable objectives.
Background

Page 6 GAO- 03- 705 Defense Inventory

sustain the forces in fiscal year 2003 and $263 million to sustain them in
fiscal year 2004 and according to an Army official, to support operations
Enduring Freedom and Iraqi Freedom. A portion of these amounts would be
used to purchase spare parts, but the Army did not provide a breakout of
how the funds will be allocated.

In July 2001, we reported that spare parts shortages in the Army were
adversely affecting operations, maintenance, and personnel. 9 For example,
we reported that safety concerns and the lack of spare parts in 1999
prevented the Chinook and Apache helicopters from meeting their mission-
capable goals. To compensate for the lack of spare parts, maintenance
personnel used parts cannibalized from other equipment, an inefficient
practice that doubles the time needed for a single maintenance effort. We
also reported that the Army had major initiatives under way to improve the
availability of spare parts as part of an overall strategy to
revolutionize its logistics processes. The initiatives included improving

demand forecasts for spare parts, increasing the visibility and access to
spare parts Armywide, and reducing the time it takes to receive parts
after they have been ordered. At that time, we did not assess the extent
to which the initiatives might mitigate spare parts shortages.

DOD is also concerned about the adverse impact that spare parts shortages
have on the readiness of weapon systems. In an August 2002 report on its
inventory management practices, DOD stated a desire to improve supply
management accountability by linking investments in spare parts to
readiness results in order to ensure that resources are focused on optimal
readiness gains. DOD noted that the models it uses to determine inventory
purchases are generally biased toward the purchase of low- cost items with
high demands instead of the items that would improve readiness the most.
10 The report recommended that the services improve their ability to make
inventory investment decisions based on weapon system readiness. It also
recommended that the services* requests for funds to increase inventory
investments be justified based on the corresponding increase in weapon
system readiness.

9 U. S. General Accounting Office, Army Inventory: Parts Shortages Are
Impacting Operations and Maintenance Effectiveness, GAO- 01- 772
(Washington, D. C.: July 31, 2001). 10 Office of the Secretary of Defense,
Inventory Management Study (Washington, D. C.: Aug. 2002).

Page 7 GAO- 03- 705 Defense Inventory

The Army*s current strategic plan provides strategic goals, objectives,
milestones, and performance measures for force transformation efforts.
However, it does not address how the service expects to mitigate critical
spare parts shortages that degrade equipment readiness. As shown in

figure 1, the Army published two plans during 2000 that were subsumed into
a single plan in April 2001. These plans provided guidance for
transforming the Army*s logistics to support forces that will be more
agile and responsive.

Figure 1: Army Logistics Strategic Guidance

The Army*s Strategic Logistics Plan, published in May 2000, was designed
to implement the guidance in the Army Chief of Staff*s vision for its
forces in the 21st century. This plan outlined the major logistical
requirements for achieving a joint, combined, or multinational force that
can be used for a variety of missions, ranging from humanitarian
assistance to major theater wars. For example, a major goal of the plan
was to achieve total asset

visibility, which was intended to give inventory managers information on
the location, quantity, condition, and movement of parts worldwide. Total
asset visibility would therefore allow managers to access and redistribute

parts in the Army*s inventory to meet immediate spare parts requirements.
In March 2000, DOD issued the Defense Reform Initiative 54, which required
each military service to submit an annual logistics transformation
Strategic Plan

Addresses Transformation, but Not Mitigation of Critical Spare Parts
Shortages

Page 8 GAO- 03- 705 Defense Inventory

plan. The Army*s effort was published in July 2000 as the Army Logistics
Transformation Plan. The purpose of this plan was to document, on an
annual basis, the planned actions and related resources for implementing
the Army Strategic Logistics Plan. Generally, the logistics transformation
plan outlined the interrelated activities necessary to support DOD*s four
intermediate objectives: (1) establish customer wait time 11 as a supply
performance measure; (2) adopt a priority system that provides assets to
the commander by the required delivery date; (3) achieve accurate total
asset visibility of existing spare parts; and (4) field a Web- based
system that provides seamless, interoperable, real- time logistics
information.

In April 2001, the Army published its Transformation Campaign Plan, an
all- encompassing document that serves as a mechanism for integrating and
synchronizing the necessary actions to move the Army from its present
posture to a future force that will be more strategically deployable and
responsive. The plan contains specific goals and objectives to provide
logistical support to deploy and sustain its forces across a full spectrum
of operations, and it incorporates the criteria for an effective strategy
contained in GPRA. 12 Furthermore, according to Army officials, the Army
monitors the progress of its efforts to ensure that logistics decisions,

goals, and milestones complement and support the entire transformation
progress. For example, one strategic goal contained in the plan requires
the Army to be able to deploy a combat brigade in 96 hours. The plan
dictates that the Army measures its ability to deploy combat brigades by
employing major decision points at which senior leaders will evaluate
progress and decide whether adjustments need to be made to the original
combat brigade deployment strategy. However, there are no such strategic
goals, objectives, or performance measures in this Army plan relating to
monitoring and resolving critical spare parts shortages.

As shown in table 1, the plan contains 14 lines of operation* or broad
responsibilities* that describe closely related activities designed to
meet specific transformation objectives by established milestones.

11 The total elapsed time between a customer*s request and receipt of the
requested item. 12 GPRA requires establishment of a performance plan
covering any program activity set forth in the agency*s budget that
contains objectives and quantifiable and measurable performance targets
designed to assess the success of the particular program.

Page 9 GAO- 03- 705 Defense Inventory

Table 1: Framework for the Army*s Transformation Campaign Plan Major
transformation tasks Supporting lines of operation

Ensure a Trained and Ready Army (1) Strategic Requirements and Planning
(2) Modernization and Recapitalization (3) Manning and Investing in
Quality People (4) Maintain Unit Readiness and Training (5) Training and
Leader Development

Transform Operational Army (6) Joint/ Army Strategy and Concepts (7) Army
Doctrine (8) Operational Force Design (9) Deploying and Sustaining the
Force

(10) Develop and Acquire Advanced Technology Transform Institutional Army
(11) Management of Force Programs

(12) Installations Support the Forces (13) Strategic Communications

(14) Resourcing Source: U. S. Army*s Transformation Campaign Plan.

Logistics requirements are addressed by line 9 in the plan, *Deploying and
Sustaining the Force.* Specifically, this line of operation addresses how
to transform Army support elements to make the service more strategically
responsive and reduce the cost for logistics without reducing war-
fighting

capability. The Army*s key logistics initiatives were designed to improve
internal business processes, but not specifically mitigate critical spare
parts shortages. Its ongoing six servicewide initiatives are primarily
focused on improving logistics business processes in the areas of (1)
procurement and

repair of spare parts, (2) inventory management, and (3) supply operations
thereby improving supply availability. However, we could not determine the
extent to which they have reduced critical spare parts shortages. The Army
recently started a separate, non- Armywide readiness enhancement
initiative that includes an effort to mitigate critical spare parts
shortages.

The Army*s six major initiatives are expected to improve overall
logistical support for its units by focusing on improving logistics
processes in order to be more responsive and effective in meeting customer
needs. Table 2 summarizes the Army*s initiatives by focus area along with
the expected improvements to logistics operations. Armywide Initiatives

Improve Logistics Business Processes, but Are Not Focused on Mitigating
Critical Spare Parts Shortages

Armywide Initiatives Are Aimed at Improving Logistics Overall

Page 10 GAO- 03- 705 Defense Inventory

Table 2: Army Major Logistics Initiatives

Source: GAO. The Army*s Partnership, Recapitalization, and National
Maintenance Program initiatives are intended to improve the parts supply
process, reduce demand through modernization of major weapon systems, and
provide uniform repair standards. The expected improvements are being
measured in a variety of ways, but none measure or track increases in
supply availability and readiness rates. Without such measures, we could
not determine the extent to which the initiatives have significantly

reduced critical spare parts shortages. The Army is forming partnerships
with manufacturers to provide spare parts and technical assistance
directly to the applicable maintenance depot in order to improve depot-
level repair of selected weapon systems and to improve the depot*s
performance in supplying repaired parts. The Army has formed partnership
agreements with General Electric Aircraft Engines, Sikorsky Aircraft
Corporation, Boeing, Parker- Hannifin, Honeywell, Rolls Royce, and Bell
Helicopters. Some of these companies have agreed to provide spare parts
and technical assistance directly to the Corpus Christi Army Depot, where
depot- level repair is performed for the

Apache and Chinook helicopters. According to an Army official, these
agreements are beneficial for the Army as well as the industry partners.
The Army improves repair operations and saves money by obtaining

Focus areas Initiatives Expected improvement

Partnership Program Increase supply performance by providing parts
directly from vendors to supply customers. Recapitalization Program
Reduces the demand for spare parts

through modernizing and overhauling 17 major weapon systems. Procurement
and

repair National Maintenance Program Improves the repair of spare parts

with uniform repair standards. Single Stock Fund Improves inventory
management by creating visibility and access to Armywide assets. Inventory

management Logistics Modernization Program Makes inventory management more

effective by modernizing and integrating about 30 legacy logistics
databases. Supply operations Distribution Management Improves overall
supply operations to

reduce the time it takes to deliver spare parts to supply or maintenance
customers.

Spare Parts Procurement and Repair Initiatives Expected to Improve Supply
Performance and Reduce Demand

Page 11 GAO- 03- 705 Defense Inventory

hard- to- get, sole- source parts and technical assistance for a
negotiated cost, and the industry partner is able to keep production lines
open by relying on steady demands from the Army. The Army official said
that the partnership initiatives have resulted in significant improvements
to its depot repair operation. For example, the average elapsed time
before the engine in the Apache and Blackhawk helicopters would fail has
improved from about 400 hours to about 1,140 hours. Moreover, the repair-
cycle time for components in the partnership program has decreased from
360 to 95 days, thereby decreasing the demand for spare parts by providing
units with more reliable equipment and achieving more efficient supply
performance. The Army*s Recapitalization Program is expected to return 17
selected legacy weapon systems to like- new condition by rebuilding 13 and
upgrading 14 them at maintenance depots over time as funds become

available. Specifically, the Recapitalization Program is intended to (1)
extend the service life of the equipment; (2) reduce operating and support
costs; (3) improve reliability, maintainability, safety, and efficiency;
and (4) enhance capabilities. The Army began recapitalizing a limited
number of the weapon systems in fiscal year 2002, with full- scale
operation beginning in fiscal year 2003 (see app. I for a list of
systems). In fiscal year 2003, the Army fully funded the initial spare
parts requirements of the Recapitalization Program, investing at least
$419.7 million of its operations and maintenance funding to run the
program. An Army official said that about $200 million was taken from the
Recapitalization Program to help with the Iraq war, but the program will
be reimbursed from the supplemental appropriation. According to Army
officials, recapitalizing Army weapon systems will initially increase the
demand for spare parts because new parts will be used for equipment that
is cycled through the rebuilding and upgrading process. However, in the
long term, the like- new equipment should be more reliable and the demand
for spare parts should decrease.

The National Maintenance Program is expected to establish, by fiscal year
2005, a single national standard for the repair of equipment components
and spare parts. The program*s overhaul standard is generally higher than
the variety of standards held by individual repair units, and consists of
restoring components and spare parts to a nearly like- new condition. This
condition includes the restoration of the part*s original appearance, 13
Rebuilding overhauls a system to like- new condition with near zero time
and near zero miles. 14 Upgrading rebuilds and improves a system to
increase capability.

Page 12 GAO- 03- 705 Defense Inventory

performance, and life expectancy. The National Maintenance Program is
intended to help sustain the weapon systems that have undergone overhauls
and rebuilds through the Army*s Recapitalization Program. In fiscal years
2001 and 2002, the Army obligated $70 million and $16 million,
respectively, for the development of maintenance standards and program
support. The Army has completed overhaul standards for 521 items and is
expected to complete standards for the remaining 272 items by fiscal year
2005. The expected benefit of the National Maintenance Program is that a

single higher repair standard for components and spare parts will enhance
weapon system readiness and reduce the demand for spare parts.

The Army is improving inventory management through its Single Stock Fund
and Logistics Modernization Program initiatives, which are intended to
provide better visibility over spare parts in the inventory, improved
spare parts requirements determination, and an enhanced inventory
distribution process. Like the procurement and repair initiatives
discussed above, these initiatives do not measure progress in reducing
critical spare parts shortages that impact readiness.

In response to a recommendation in our 1990 report, 15 the Army approved a
business process reengineering initiative called the Single Stock Fund in
November 1997. The Single Stock Fund is aimed at improving inventory
management by (1) providing worldwide visibility and access to spare parts
down to the installation level, (2) consolidating separate national and
installation level inventories into a single system, and (3) integrating
logistics automated information systems and financial automated
information systems. The Single Stock Fund streamlines and where needed,
eliminates multiple financial transactions that have previously caused
numerous inefficiencies in duplicate automated legacy systems. The
visibility of worldwide supply items allows managers to calculate
worldwide spare parts requirements and increases the volume of inventory
that is available for redistribution to meet priority readiness
requirements.

For example, the Secretary of the Army testified in 2003 before the Senate
Armed Services Committee that from May 2000 through November 2002, the
Single Stock Fund made it possible to redistribute inventory valued at
$758 million. He further stated that the Single Stock Fund reduced
customer wait time by an average of 18.5 percent.

15 U. S. General Accounting Office, Army Inventory: A Single Supply System
Would Enhance Inventory Management and Readiness, GAO/ NSIAD- 90- 53
(Washington, D. C.: Jan. 25, 1990). Inventory Management

Initiatives Are Designed to Improve Visibility and Customer Support

Page 13 GAO- 03- 705 Defense Inventory

The Logistics Modernization Program is aimed at improving inventory
management by modernizing the Army*s 30- year- old national and retail
logistics automated business processes and practices. The Logistics
Modernization Program is intended to provide an automated system with
real- time capabilities for managing wholesale and retail inventories by
modernizing and integrating about 30 legacy logistics databases. The
program includes about 47 new forecasting methodologies to enable managers
to better forecast demands for spare parts. The Logistics Modernization
Program*s integrated automated systems should reduce supply- cycle time 16
and provide managers with the ability to better support customers by
tracking spare parts requisitions from the time the requisition is
submitted until the customer receives the part. Moreover, the program is
to work in tandem with the Single Stock Fund to provide worldwide
visibility of supply assets in real time. The Army Materiel Command plans
to roll out the Logistics Modernization Program over the next several
years, with the first phase of implementation scheduled in early 2003. The
program*s measures of success include reducing supply- cycle time, but not
supply availability and equipment readiness.

The Army is also trying to improve its supply operations and reduce the
time it takes to deliver spare parts to customers through the Distribution
Management initiative. Distribution Management 17 is an Armywide
initiative established in 1995 to improve supply operations by developing
a faster, more flexible, and efficient logistics pipeline. The
initiative*s overall goal is to eliminate the unnecessary steps in the
logistics pipeline that delay the flow of parts through the supply system.
Distribution Management currently uses two teams* the Distribution Process

Improvement Team and the Repair Cycle Process Improvement Team* to monitor
progress and spearhead continuous improvements within their respective
areas of responsibility. However, the extent to which supply availability
has been improved is not clear because neither team tracks this as
measures of success.

The Distribution Process Improvement Team promotes initiatives to improve
the Army*s inventory distribution processes, including customer response,
inventory planning, warehouse management, transportation, and supply. For
example, the team initiated dollar- cost banding, a new stock

16 Supply- cycle time measures the time for materiel to complete the
entire supply cycle, including acquisition, distribution, transportation,
warehousing, and delivery. 17 Formerly Velocity Management. Supply
Operations Initiative Is

Designed to Reduce Spare Parts Delivery Time

Page 14 GAO- 03- 705 Defense Inventory

determination algorithm that has improved inventory performance.
Traditionally, Army units have used a *one- size- fits- all* approach for
determining whether or not to stock a particular spare part. Consequently,
an item not currently stocked would need nine requests in the prior year
to be stocked on the shelf, regardless of its criticality to equipment
readiness. This criterion was applied equally to a 10- cent screw and to a
$500, 000 tank engine. The dollar- cost banding approach, however, allowed

inventory managers to stock a mission- critical item with only three
requests, rather than nine. The Army has credited this concept with
decreasing customer wait time and increasing equipment readiness.

The Repair Cycle Process Improvement Team strives to improve the Army*s
maintenance processes through such initiatives as the equipment downtime
analyzer, a computer system that links supply and maintenance performance
to equipment readiness. The analyzer examines equipment maintenance
operations and the supply system to identify problem areas as well as the
functions that are working well in the maintenance process. This
capability enables managers to quickly diagnose the root of the

problems and to develop solutions to help maximize the future
effectiveness of the maintenance process. For example, in one case, the
apparent reason for a tank not being mission ready for 18 days was that
the maintenance personnel were waiting for the supply system to provide a
part. The equipment downtime analyzer revealed the following: (1) because
the supply system initially provided the wrong part, a second part had to
be ordered; (2) because maintenance personnel did not initially realize
that the part was needed, a third part was ordered late; and (3)
maintenance personnel finally decided, on day 18, to stop waiting for the
part to be delivered by the supply system and took action to obtain it
from another tank that was not mission ready in order to complete the

maintenance process. Although the Army is generally meeting or exceeding
it overall supply performance goal of having parts available 85 percent of
the time when they are requested, the Army continues to experience
critical spare parts shortages that affect equipment readiness. For
example, in a July 2001 report on Army spare parts shortages, we
identified 90 components or assemblies for the Apache, Blackhawk, and
Chinook helicopters for which the Army was experiencing critical spare
parts shortages. 18 The Army

18 GAO- 01- 772. A Separate Army Initiative

Explicitly Addresses Critical Spare Parts Shortages

Page 15 GAO- 03- 705 Defense Inventory

began a new initiative, separate and apart of the Armywide initiatives, to
take management action on individual critical spare parts shortages.
However, because it is not a part of the Armywide initiatives, it is not
clear how it will be effectively integrated with them to maximize
mitigating critical spare parts shortages and improve readiness.

The new Army initiative to address spare parts shortages that are most
essential to equipment readiness, entitled the *Top 25 Readiness Drivers,*
began in October 2002. For each of its 18 major combat systems, the Army,
on an ongoing basis, has been identifying the top 25 components or spare
parts that are key to the systems* readiness. Of the total 450 spare
parts, the Army had identified as critical to equipment readiness in
February 2003, 291 or 65 percent of the parts were stocked below the
required level. Twenty- nine percent or 132 of these parts were in the
Army*s lowest

inventory category* those for which there is less than 1 1/2 month supply.
Major commands report the inventory status of these spare parts to the
Army Materiel Command, who in turn presents a consolidated report to the
Army Deputy Chief of Staff for Logistics every 2 weeks. A review group
headed by the Deputy Chief of Staff for Logistics initiates possible
actions that can be taken to mitigate the most severe spare parts
shortages among

the top spare parts or components. This new Army initiative is a movement
in the right direction to address critical spare parts shortages; however,
it remains unclear the extent to which this initiative will mitigate
critical spare parts shortages and

improve equipment readiness. The initiative*s effectiveness may be limited
because its efforts and results are not linked to or coordinated with the
goals and metrics of the Army*s other initiatives as part of an overall
approach to mitigating critical spare parts shortages in the future.

While the Army has the means to link funding to a corresponding level of
readiness and reports this information in budget justification documents
(see app. II), it does not report how additional funding requests for
spare parts might impact readiness to decisionmakers such as Congress. The
Office of the Secretary of Defense has recommended that the services
provide such information when requesting additional funds in the future.
The Army has reported that its models correlate the impact of investments

in spare parts on supply availability. 19 However, because of various
other 19 We did not validate the accuracy of these models. Army Can
Identify

Readiness Impact of Additional Investment and Needs to Report This to
Congress

Page 16 GAO- 03- 705 Defense Inventory

factors such as maintenance capacity and training requirements that affect
equipment status, the models can only estimate the impact of the
additional investment on weapon system readiness. The Army Materiel
Systems Analysis Activity uses the Supply Performance Analyzer Model and
the Selected Essential- Item Stockage for Availability Method Model to
determine the investment needed to reach a weapon system*s desired supply
availability rate. Information from these models has been supplied to
individual units to assist in inventory investment decisions. In addition,
the Army used an outside consultant to analyze the impact additional

investment in spare parts would have on readiness. For example, to support
a briefing to the Army Vice Chief of Staff in March 2001, the Logistics
Management Institute completed an analysis for the Army showing that an
additional $331 million for spare parts would increase the

mission- capable rate for the Apache and Blackhawk helicopters by 2.6
percent. According to Army officials, the correlation between additional
investments in spare parts and readiness is not exact because other
factors such as maintenance capacity and training requirements impact
readiness.

Despite having the means to determine how additional funding might affect
readiness, the Army does not provide such analyses to Congress as part of
its funding requests. For example, in the justification for the fiscal
year 2002 budget, the Army requested and received $250 million to

purchase additional spare parts. Moreover, the Army sent correspondence to
the House Committee on Armed Services showing that an additional $675
million was needed for spare parts during fiscal year 2002. However,

in neither case did the Army provide analysis to Congress showing how the
additional funding might affect readiness. The June 2002 Financial
Management Regulations provided a template for reporting the funds to be
spent on spare parts by weapon system as part of the budget submission.
The benefit of reporting such a link was cited in an August 2002 Office of
the Secretary of Defense study that recommended that future requests for

additional funds to increase spare parts inventories be justified in
budget documents submitted to Congress based on the corresponding increase
in weapon systems readiness. 20 20 Office of the Secretary of Defense,
Inventory Management Study (Washington, D. C.: Aug. 2002).

Page 17 GAO- 03- 705 Defense Inventory

The Army*s Transformation Campaign Plan serves as a mechanism to transform
the Army*s forces from its present posture to a more strategically
deployable and responsive force. The plan prescribes specific goals and
milestones to support this transformation process, but it lacks specific
focus on mitigating spare parts shortages. In addition, the Armywide
initiatives to improve the procurement and repair of spare parts,
inventory management, and supply operations do not focus on mitigating
critical spare parts shortages. Without a strategy or Armywide initiatives
focused on the mitigation of critical spare parts shortages and their
impacts on equipment readiness, the Army cannot ensure that it has
appropriately addressed shortages in those parts that would give them the

greatest readiness return. Furthermore, while some of the Army*s logistics
initiatives might increase the availability of spare parts in general, the
lack of specific and effective measures of performance will limit the
Army*s ability to ascertain progress in mitigating spare parts shortages
that are critical to equipment readiness. Finally, the Army has the means
to determine how funding might impact parts availability and equipment
readiness as part of its stewardship and accountability for funds, but has
not provided this information to Congress when it requests additional
funding. Without such information that links additional spare parts
funding to readiness and provides assurance that investments are based on
the greatest readiness returns, Congress cannot determine how best to
prioritize and allocate future funding.

We recommend that the Secretary of Defense direct the Secretary of the
Army to

 modify or supplement the Transformation Campaign Plan, or the Armywide
logistics initiatives to include a focus on mitigating critical spare
parts shortages with goals, objectives, milestones, and quantifiable
performance measures, such as supply availability and readiness related
outcomes and  implement the Office of Secretary of Defense recommendation
to

report, as part of budget requests, the impact of additional spare parts
funding on equipment readiness with specific milestones for completion.

In written comments on a draft of this report, DOD generally concurred
with the intent of both recommendations, but not the specific actions we
recommended. DOD*s written comments are reprinted in their entirety in
appendix III. Conclusions

Recommendations for Executive Action

Agency Comments and Our Evaluation

Page 18 GAO- 03- 705 Defense Inventory

In concurring with the intent of our first recommendation, DOD expressed
concern that because spare parts shortages are a symptom of imperfect
supply management processes, its improvement plans must focus on improving
these processes rather than on the symptoms. According to DOD, the Army*s
Transformation Campaign Plan correctly focuses on transforming the Army*s
forces and equipment from its present posture to a more strategically
deployable and responsive objective force. Furthermore, DOD also stated
that the Armywide logistics initiatives correctly focus on improving
procurement, repair of spare parts, inventory management, and supply
operations. DOD also noted it has/ is taking several actions. The *Top 25
Readiness Drivers* initiative, which addresses specific stock numbers that
affect its major weapon systems, has been added to the metrics in the
Army*s Strategic Readiness System. Milestones for logistics initiatives
would be added to the Army*s

Transformation Campaign Plan. Also, spares shortages will be tracked in
the Strategic Readiness Systems and logistics initiatives will be tracked
in the Transformation Campaign Plan. Therefore, DOD does not agree that
the Army needs to modify its Transformation Campaign Plan or the Armywide
logistics initiatives to focus on spare parts shortages.

We do not believe that these actions alone are sufficient to meet our
recommendation. We endorse the Army*s efforts to add related metrics to
its Strategic Readiness System and milestones for its logistics
initiatives to the Transformation Campaign Plan. Further, our report
recognizes that the Army*s plan focuses on improving the Army*s force
transformation efforts and that improving logistics processes is part of
the solution to mitigating spare parts shortages. However, the intent of
our recommendation was for the Army to include in its Transformation
Campaign Plan or servicewide initiatives a focus on mitigating critical
spare parts shortages. As our report clearly points out, without a focus
on

mitigating critical spare parts shortages with goals, objectives, and
milestones included in the strategic plan or Armywide initiatives, we
believe there is increased likelihood that the Army*s progress will be
limited because it efforts may be ineffective or duplicative in mitigating
spare parts shortages that are critical to equipment readiness. Therefore,
we believe implementation of our recommended actions is necessary to
ensure improved readiness for legacy and future weapon systems.

In concurring with the intent of our second recommendation, DOD stated
that the Army would begin implementing the recommendation by providing
mission- capable rates during the upcoming mid- year budget review
consistent with the June 2002 updated budget exhibit in the Financial
Management Regulation. DOD also states that the Army will

Page 19 GAO- 03- 705 Defense Inventory

fully comply with the August 2002 inventory management study reporting
recommendation when the required data becomes available. We support the
Army*s effort to report mission- capable rates for its weapon systems.
However, we are concerned that the Army has not set a deadline for fully
implementing the recommendation. Providing this valuable information to
Congress in a timely manner is an important step in placing a priority on
efforts needed to mitigate spare parts shortages as part of the Army*s
overall stewardship of funds and accountability for making spare parts
investment decisions that provide a good readiness return. We have
therefore modified our second recommendation to include a provision that
the Army establish milestones for fully implementing the recommendation
from the August 2002 inventory management report.

To determine whether the Army*s strategic plans address mitigating spare
parts shortages, we obtained and analyzed Army planning documents that
pertained to spare parts or logistics. We focused our analysis on whether
these strategic plans addressed spare parts shortages and included the
performance plan guidelines identified in GPRA. We interviewed officials
in the Office of the Army Deputy Chief of Staff for Logistics, and the
Army Transformation Office to clarify the content and linkage of the
various strategic plans.

To determine the likelihood that Army initiatives will achieve their
intended results and contribute to the mitigation of spare parts shortages
to improve readiness, we obtained and analyzed service documentation and
prior GAO reports on major management challenges and program risks and on
the Army*s major initiatives that relate to spare parts or

supply support. We focused our analysis on whether the initiatives
addressed spare parts shortages and the need for quantifiable and
measurable performance targets as identified in GPRA. We also interviewed
officials in the Supply Policy Division, Army Deputy Chief of Staff for
Logistics; Army Materiel Command; Army Aviation and Missile Command; Army
Tank and Automotive Command; and Combined Arms Support Command. We
obtained and analyzed Army data pertaining to spare parts availability,
spare parts back ordered, and specific spare parts that are affecting
equipment readiness.

To determine the extent to which the Army identifies how additional
investments in spare parts affect supply support and readiness, we
obtained and analyzed documentation on the Army*s needs for additional
Scope and

Methodology

Page 20 GAO- 03- 705 Defense Inventory

funding to purchase spare parts. We analyzed the Army*s budget
justification for the funding needed for spare parts for the years 2004
and 2005. We obtained the results of prior analyses showing how additional

funding might affect readiness. However, we did not independently validate
or verify the accuracy of the Army*s models that show the relationship
between funding, supply performance, and readiness.

We also visited and interviewed officials at the Army Materiel Systems
Analysis Activity and considered DOD*s recommendations in its August 2002
Inventory Management Report.

We performed our review from August 2002 through March 2003 in accordance
with generally accepted government auditing standards.

We are sending copies of this report to the Secretary of Defense, the
Secretary of the Army, and other interested congressional committees and
parties. We will also make copies available to others upon request. In
addition, the report will be available at no charge on the GAO Web site at
http:// www. gao. gov.

Please contact me on (202) 512- 8365 if you or your staff has any
questions concerning this report. Major contributors to this report are
included in appendix IV. Sincerely yours,

William M. Solis, Director Defense Capabilities and Management

Appendix I: Army Recapitalization Systems Page 21 GAO- 03- 705 Defense
Inventory

Apache AH- 64 A and AH- 64 D Longbow Helicopters Black Hawk UH- 60
Helicopter Chinook CH- 47 Helicopter

Patriot Ground Support Equipment M1 Abrams Tank M2/ M3 Series Bradley
Fighting Vehicles M992 Field Artillery Ammunition Supply Vehicle Multiple-
Launch Rocket System M113 Family of Vehicles

M48/ M60 Armored Vehicle Launched Bridge AN/ TPQ- 36 Fire Finder Small
Emplacement Excavator M9 Armored Combat Earthmover

Heavy Expanded Mobility Tactical Truck M88A1/ A2 Hercules Recovery Vehicle
High Mobility Multipurpose Wheeled Vehicle AN/ ASM- 190 Electronic Shop
Shelter Appendix I: Army Recapitalization Systems

Aviation Combat

Combat Support Combat Service Support

Appendix II: Army Working Capital Fund Fiscal Year 2004/ 2005 Biennial
Budget Estimates Supply Management Page 22 GAO- 03- 705 Defense Inventory

Table 3: Operating Requirements by Weapon System Category

Dollars in millions

Weapon system/ category FY 2002 Material

readiness indicator a

(percent) FY 2003 Material

readiness Indicator a

(percent)

Chemical Defense Equipment 76.8 NA b 119.3 NA Other Armament, Munitions
and Chemicals 92.0 NA 103.4 NA AH- 64 300.2 77 578.5 75 UH- 60 409.2 75
861.0 80 OH- 58D 98.7 83 190.1 75 CH- 47D 217.0 60 657.4 75 T701C Engines
147.1 NA 151.2 NA Air Delivery/ Aviation/ Troop Equipment 172.9 NA 121.7
NA Mobile Subscriber Equipment 31.0 NA 67.6 NA Night Vision Equipment 45.4
NA 103.1 NA Batteries 49.8 NA 70.4 NA Other Communications/ Electronics
279.0 NA 494.9 NA Multiple Launch Rocket System 25.0 94 47.7 90 PATRIOT
96.9 96 140.1 90 Other Missile Systems 89.8 96 74.8 90 M1 Series Tank
505.4 86 798.3 90 M88 Recovery Vehicle 87.8 84 134.8 90 M109 Howitzer 30.8
93 36.3 90 M198 Howitzer 5.1 96 8.5 90 M113 58.1 92 62.6 90 Bradley
Fighting Vehicle 117.1 94 181.1 90 High Mobility Multipurpose Wheeled
Vehicle 76.4 94 82.6 90

Tires 52.9 NA 82.0 NA Other Tank & Automotive 177.9 NA 268.7 NA

Total 3,242.3 5,436.3

Source: DOD. a The material readiness indicator, according to an Army
official, is the percentage of the total weapon system fleet that is
expected to be mission ready.

b NA means not applicable.

Appendix II: Army Working Capital Fund Fiscal Year 2004/ 2005 Biennial
Budget Estimates Supply Management

Appendix II: Army Working Capital Fund Fiscal Year 2004/ 2005 Biennial
Budget Estimates Supply Management Page 23 GAO- 03- 705 Defense Inventory

Table 4: Operating Requirements by Weapon System Category

Dollars in millions Weapon System/ Category FY 2004 Material readiness
indicator a (percent) FY 2005

Material readiness

indicator a (percent)

Chemical Defense Equipment 111.9 NA b 121.3 NA Other Armament, Munitions
and Chemicals 106.2 NA 105.1 NA AH- 64 501.3 75 481.0 75 UH- 60 662.2 80
615.1 80 OH- 58D 133.3 75 147.2 75 CH- 47D 481.2 75 517.9 75 T701C Engines
119.4 NA 125.9 NA Air Delivery/ Aviation/ Troop Equipment 120.5 NA 90.3 NA
Mobile Subscriber Equipment 44.8 NA 27.2 NA Night Vision Equipment 66.7 NA
60.5 NA Batteries 34.4 NA 31.2 NA Other Communications/ Electronics 366.2
NA 379.0 NA Multiple Launch Rocket System 51.1 90 50.9 90 PATRIOT 132.6 90
127.3 90 Other Missile Systems 82.3 90 93.4 90 M1 Series Tank 770.6 90
816.1 90 M88 Recovery Vehicle 136.8 90 131.4 90 M109 Howitzer 37.2 90 35.0
90 M198 Howitzer 11.2 90 10.9 90 M113 66.5 90 70.4 90 Bradley Fighting
Vehicle 208.6 90 229.7 90 High Mobility Multipurpose Wheeled Vehicle 83.2
90 85.9 90 Tires 69.1 NA 71.8 NA Other Tank & Automotive 308.8 NA 301.4 NA

Total 4,706.0 4,726.0

Source: DOD. a The material readiness indicator, according to an Army
official, is the percentage of the total weapon system fleet that is
expected to be mission ready.

b NA means not applicable.

Appendix III: Comments from the Department of Defense

Page 24 GAO- 03- 705 Defense Inventory Appendix III: Comments from the
Department of Defense

Appendix III: Comments from the Department of Defense Page 25 GAO- 03- 705
Defense Inventory

Appendix IV: GAO Contacts and Staff Acknowledgments Page 26 GAO- 03- 705
Defense Inventory

Richard G. Payne (757) 552- 8119 George O. Morse (757) 552- 8108

In addition to those named above, Robert L. Coleman, Alfonso Q. Garcia,
Susan K. Woodward, Robert K. Wild, Cheryl A. Weissman, Barry L. Shillito,
and Charles W. Perdue also made significant contributions to this report.
Appendix IV: GAO Contacts and Staff

Acknowledgments GAO Contacts Acknowledgments

(350248)

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