Defense Logistics: Preliminary Observations on the Effectiveness 
of Logistics Activities During Operation Iraqi Freedom		 
(18-DEC-03, GAO-04-305R).					 
                                                                 
Operation Iraqi Freedom (OIF) is one of the largest logistics	 
supply and support efforts that the U.S. military has ever	 
undertaken. For example, of the $28.1 billion that the Department
of Defense (DOD) has obligated for OIF, the services and the	 
Defense Logistics Agency have reported that $14.2 billion is for 
operating support costs and $4.9 billion is for transportation	 
costs. This operation required the movement of large numbers of  
personnel and equipment over long distances into a hostile	 
environment involving harsh desert conditions. Congress asked us 
to study a number of issues related to logistics support to	 
deployed forces. In April 2003, shortly after the onset of OIF,  
we began work that focused on DOD's accountability and control	 
over supplies and equipment shipped to that theater of operation.
Based on the early results of this work, we subsequently	 
broadened our scope to include other logistical issues, such as  
the deployment of support units and the transportation of	 
supplies and equipment. 					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-305R					        
    ACCNO:   A09039						        
  TITLE:     Defense Logistics: Preliminary Observations on the       
Effectiveness of Logistics Activities During Operation Iraqi	 
Freedom 							 
     DATE:   12/18/2003 
  SUBJECT:   Logistics						 
	     Military operations				 
	     Military policies					 
	     Strategic planning 				 
	     Internal controls					 
	     Military cost control				 
	     DOD Operation Iraqi Freedom			 

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GAO-04-305R

United States General Accounting Office Washington, DC 20548

December 18, 2003

The Honorable Jerry Lewis
Chairman
Subcommittee on Defense
Committee on Appropriations
House of Representatives

Subject: Defense Logistics: Preliminary Observations on the Effectiveness
of Logistics Activities during Operation Iraqi Freedom

Dear Mr. Chairman:

Operation Iraqi Freedom (OIF) is one of the largest logistics supply and
support efforts that the U.S. military has ever undertaken. For example,
of the $28.1 billion that the Department of Defense (DOD) has obligated
for OIF, the services and the Defense Logistics Agency have reported that
$14.2 billion is for operating support costs and $4.9 billion is for
transportation costs. This operation required the movement of large
numbers of personnel and equipment over long distances into a hostile
environment involving harsh desert conditions.

You asked us to study a number of issues related to logistics support to
deployed forces. In April 2003, shortly after the onset of OIF, we began
work that focused on DOD's accountability and control over supplies and
equipment shipped to that theater of operation. Based on the early results
of this work, we subsequently broadened our scope to include other
logistical issues, such as the deployment of support units and the
transportation of supplies and equipment.

At the outset of this assignment, we agreed to keep you periodically
informed of the status of our work. On November 6, 2003, we provided your
office with a briefing on our preliminary observations of the
effectiveness of logistics activities during OIF. As we emphasized at the
briefing, these observations are based on the limited work we have done to
date. As requested, we are transmitting the briefing (enc. I) in this
report. In conducting our preliminary work, we relied on data gathered
through our visits and interviews with military logistics personnel
deployed to the theater of operations. We visited logistics support
activities in Kuwait, Bahrain, and Qatar, but we did not visit activities
in Iraq. We also met with senior officials at DOD and military service

                                    Summary

headquarters and logistics support activities in the United States and
Europe. We also reviewed the military services' and DOD's "after-action"
reports, "lessons learned" studies, and other similar documents. The scope
of our work included all types of supplies and equipment used during OIF,
including such items as repair parts, food, clothing, and construction
material.

Although we have done some limited analysis, we have not verified all of
the data and plan to more fully address the issues identified in this
briefing in subsequent work. We expect to complete our work and issue a
report, including recommendations for executive action, during 2004. In
addition, we are planning to provide DOD with a short letter of inquiry
concerning a serious condition we came across relating to the return of
materiel from units in the theater, which we believe warrants DOD's
immediate attention. A copy of the draft letter will be provided to you,
and the response from DOD will also be provided.

Although major combat operations during the initial phases of OIF were
successful, our preliminary work indicated that there were substantial
logistics support problems in the OIF theater, as evidenced by

o  	a backlog of hundreds of pallets and containers of materiel at various
distribution points due to transportation constraints and inadequate asset
visibility;

o  	a discrepancy of $1.2 billion between the amount of materiel shipped
to Army activities in the theater of operations and the amount of materiel
that those activities acknowledged they received;

o  	a potential cost to DOD of millions of dollars for late fees on leased
containers or replacement of DOD-owned containers due to distribution
backlogs or losses;

o  	the cannibalization of vehicles and potential reduction of equipment
readiness due to the unavailability of parts that either were not in DOD's
inventory or could not be located because of inadequate asset visibility;

o  	the duplication of many requisitions and circumvention of the supply
system as a result of inadequate asset visibility; and

o  	the accumulation at the theater distribution center in Kuwait of
hundreds of pallets, containers, and boxes of excess supplies and
equipment that were shipped from units redeploying from Iraq without
required content descriptions and shipping documentation. For example, at
the time we visited the center, we observed a wide array of materiel,
spread over many acres, that included a mix of broken and usable parts
that had not been sorted into the appropriate supply class, unidentified
items in containers

that had not been opened and inventoried, and items that appeared to be
deteriorating due to the harsh desert conditions.

We noted a number of factors that, in combination with other conditions,
may have contributed to the logistics support problems we identified. Such
factors include the following:

o  	Poor asset visibility. DOD did not have adequate visibility over all
equipment and supplies transported to, within, and from the theater of
operations in support of OIF. For example, although the U.S. Central
Command issued a policy requiring, whenever feasible, the use of radio
frequency identification tags to track assets shipped to and within the
theater, these tags were not used in a uniform and consistent manner.1 In
addition, units operating in the theater did not have adequate access to,
or could not fully use, DOD's logistics and asset visibility systems in
order to track equipment and supplies because these systems were not fully
interoperable and capable of exchanging information or transmitting data
over required distances. Furthermore, DOD and military service personnel
lacked training on the use of radio frequency identification tags and
other tracking tools, which also adversely affected asset visibility.

o  	Insufficient and ineffective theater distribution capability. DOD did
not have a sufficient distribution capability in the theater to
effectively manage and transport the large amount of supplies and
equipment deployed during OIF. For example, the distribution of supplies
to forward units was delayed because adequate transportation assets, such
as cargo trucks and materiel handling equipment, were not available within
the theater of operations. The distribution of supplies was also delayed
because cargo arriving in shipping containers and pallets had to be
separated and repackaged several times for delivery to multiple units in
different locations. In addition, DOD's lack of an effective process for
prioritizing cargo for delivery precluded the effective use of scarce
theater transportation assets. Finally, one of the major causes of
distribution problems during OIF was that most Army and Marine Corps
logistics personnel and equipment did not deploy to the theater until
after combat troops arrived, and, in fact, most Army personnel did not
arrive until after major combat operations were underway. In addition,
logistics personnel

1 Radio frequency identification (RFID) tags are used to track shipping
containers and pallets and their contents while in transit. These tags
identify what items are in a container or pallet and continuously transmit
that information through radio signals, which can be read electronically
using hand-held scanners or fixed interrogators placed at various points
along supply routes.

were not adequately trained in various logistics functions, such as
operating material handling equipment and managing theater distribution
centers.

o  	Failure to apply "lessons learned" from prior operations. The failure
to effectively apply lessons learned from Operations Desert Shield and
Desert Storm and other military operations may have contributed to the
logistics support problems encountered during OIF. Our prior reports, as
well as DOD and military service after-action reports and other studies of
prior military operations, have documented some of the same problems that
appear to be occurring in OIF. For example, our September 1992 report
concluded that accountability and asset visibility were lost during
Operation Desert Storm due to the lack of container documentation and an
inadequate transportation system to distribute these supplies.2 DOD's
April 1992 report to Congress on the conduct of the Persian Gulf War
reported that, in addition to a lack of asset visibility and poor materiel
distribution, the logistics effort was weakened by the long processing
time for supply requisitions, which resulted in the loss of confidence and
discipline in the supply system, the abuse of the priority designation
process, and the submission of multiple requisitions.3 In addition, DOD's
after-action report from the more recent operation in Kosovo concluded
that military leaders had limited visibility over supplies because the
communications support needed to fuse data from multiple collection points
was inadequate.4 Based on the preliminary observations from our current
work, it appears that the same or similar problems continue to exist in
OIF.

o  	Other Logistics Issues. DOD and military service officials raised a
number of other logistics-related issues with us during our review.
Although these issues need to be explored further, they are included in
this report because they may have contributed to the recent logistics
problems. There were indications of the following:

o  	At times there were shortages of some spares or repair parts needed by
deployed forces. Military personnel we spoke with noted shortages of

2 U.S. General Accounting Office, Operation Desert Storm: Lack of
Accountability Over Materiel During Redeployment, GAO/NSIAD-92-258
(Washington, D.C.: Sept. 23, 1992).

3 Department of Defense, Conduct of the Persian Gulf War: Final Report to
the Congress (Washington, D.C.: April 1992).

4 Department of Defense, Kosovo/Operation Allied Force After-Action
Report: Report to the Congress (Washington, D.C.: Jan. 31, 2000).

                             Scope and Methodology

Agency Comments

items such as tires, tank track, helicopter spare parts, and radio
batteries. As a result, units resorted to cannibalizing vehicles or
circumventing normal supply channels to keep equipment in ready condition.

o  	Army prepositioned equipment used for OIF was not adequately
configured to match unit needs. For example, parts inventories contained
in the prepositioned stocks were not sufficient to meet the needs of the
units that relied on them.

o  	DOD contractors used for logistics support during OIF were not always
effective. For example, we were told that some commercial shippers were
unable to provide "door-to-door" delivery of supplies to units in the
theater, as was required by their contracts.

o  	Physical security at ports and other distribution points in the
theater was not always adequate to protect assets from being lost or taken
by unauthorized personnel. For example, Army officials noted cases where
vehicles and expensive communications and computer equipment had been lost
from various distribution points in Kuwait.

In developing these issues for this briefing, we held discussions with
officials from key DOD and military service organizations responsible for
logistics support and materiel management policies and procedures in the
United States, Europe, and the OIF theater of operations in the Middle
East. Our audit work primarily focused on Army and Marine Corps
operations. In the theater of operations, we visited logistics support
activities in Kuwait, Bahrain, and Qatar, but we did not visit activities
in Iraq. We also reviewed policies, procedures, and processes in place to
maintain accountability and control over materiel as it moved to, within,
and from the theater of operations. In addition, we reviewed lessons
learned reports and other assessments of logistics support for Operations
Desert Shield and Desert Storm and other military operations, including
OIF. We performed our review from April 2003 through December 2003 in
accordance with generally accepted government auditing standards.

In providing oral comments on the briefing slides, DOD representatives
from the Office of the Assistant Deputy Under Secretary of Defense (Supply
Chain Integration) and other military logistics officials stated that they
generally concurred with the observations we presented. They pointed out
that the problems we identified were ones that they were also familiar
with and noted that DOD was already taking a number of actions

that address some of them. For example, they stated that the Secretary of
Defense has designated the Under Secretary of Defense (Acquisition,
Technology, and Logistics) as the Defense Logistics Executive with the
authority to address all logistics and supply chain issues. In addition,
the Secretary of Defense designated the U.S. Transportation Command as a
single distribution process owner to address problems with the
distribution process that hampered DOD's ability to optimally support
deployed forces. Finally, the DOD representatives noted that, in October
2003, DOD issued a policy directing the use of radio frequency
identification technology as a standard business process across the
department to address visibility problems.

We are sending copies of this report to the Chairmen and Ranking
Minority Members of other Senate and House committees and
subcommittees that have jurisdiction and oversight responsibilities for
DOD. We are also sending copies to the Secretary of Defense and the
Director, Office of Management and Budget. Copies will also be available
at no charge on our Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me
at (202) 512-8365 or e-mail me at [email protected]. Key contributors to this
report were Kenneth Knouse, Cary Russell, Gerald Winterlin, Jason
Venner, Kenneth Daniell, Tinh Nguyen, and Nancy Benco.

Sincerely yours,

William M. Solis
Director, Defense Capabilities and Management

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