Military Prepositioning: Observations on Army and Marine Corps	 
Programs During Operation Iraqi Freedom and Beyond (24-MAR-04,	 
GAO-04-562T).							 
                                                                 
Since the Cold War, the Department of Defense (DOD) has increased
its reliance on prepositioned stocks of military equipment and	 
supplies, primarily because it can no longer plan on having a	 
large forward troop presence. Prepositioned stocks are stored on 
ships and on land in the Persian Gulf and other regions around	 
the world. Prepositioning allows the military to respond rapidly 
to conflicts. Ideally, units need only to bring troops and a	 
small amount of materiel to the conflict area. Once there, troops
can draw on prepositioned equipment and supplies, and then move  
quickly into combat. Today's testimony describes (1) the	 
performance and availability of Army and Marine Corps		 
prepositioned equipment and supplies to support Operation Iraqi  
Freedom (OIF); (2) current status of the stocks and plans to	 
reconstitute them; and (3) key issues facing the military as it  
reshapes these programs to support DOD's force transformation	 
efforts.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-562T					        
    ACCNO:   A09568						        
  TITLE:     Military Prepositioning: Observations on Army and Marine 
Corps Programs During Operation Iraqi Freedom and Beyond	 
     DATE:   03/24/2004 
  SUBJECT:   Army supplies					 
	     Combat readiness					 
	     Defense contingency planning			 
	     Equipment management				 
	     Logistics						 
	     Military materiel					 
	     Military operations				 
	     Mobilization					 
	     Property and supply management			 
	     Military inventories				 
	     Inventory control					 
	     DOD Operation Iraqi Freedom			 

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GAO-04-562T

United States General Accounting Office

GAO Testimony

Before the Subcommittee on Readiness,

Committee on Armed Services, House of

                                Representatives

For Release on Delivery

Expected at 2 p.m. EST MILITARY

Wednesday, March 24, 2004

PREPOSITIONING

 Observations on Army and Marine Corps Programs During Operation Iraqi Freedom
                                   and Beyond

Statement of William M. Solis, Director, Defense Management and Capabilities

GAO-04-562T

Highlights of GAO-04-562T, a testimony before the Subcommittee on
Readiness, Committee on Armed Services, House of Representatives

Since the Cold War, the Department of Defense (DOD) has increased its
reliance on prepositioned stocks of military equipment and supplies,
primarily because it can no longer plan on having a large forward troop
presence. Prepositioned stocks are stored on ships and on land in the
Persian Gulf and other regions around the world. Prepositioning allows the
military to respond rapidly to conflicts. Ideally, units need only to
bring troops and a small amount of materiel to the conflict area. Once
there, troops can draw on prepositioned equipment and supplies, and then
move quickly into combat.

Today's testimony describes (1) the performance and availability of Army
and Marine Corps prepositioned equipment and supplies to support Operation
Iraqi Freedom (OIF); (2) current status of the stocks and plans to
reconstitute them; and (3) key issues facing the military as it reshapes
these programs to support DOD's force transformation efforts.

GAO's observations are based on ongoing work as well as previous reports
on equipment accountability, supply distribution, and other logistics
issues during OIF, plus other past work on spare parts shortages and on
the readiness of prepositioning programs.

www.gao.gov/cgi-bin/getrpt?GAO-04-562T.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact William M. Solis at (202)
512-8365 or [email protected].

March 24, 2004

MILITARY PREPOSITIONING

Observations on Army and Marine Corps Programs During Operation Iraqi Freedom
and Beyond

The importance of prepositioned stocks was dramatically illustrated during
OIF. While they faced some challenges, the Army and Marine Corps relied
heavily on prepositioned combat equipment and supplies to decisively
defeat the Iraqi military. They both reported that prepositioned stocks
were a key factor in the success of OIF. Prepositioned stocks provided
most of the combat equipment used and, for the most part, this equipment
was in good condition and maintained high readiness rates. However, the
Army's prepositioned equipment included some older models of equipment and
shortfalls in support equipment such as trucks, spare parts, and other
supplies. Moreover, the warfighter did not always know what prepositioned
stocks were available in theater, apparently worsening an already
overwhelmed supply-and-distribution system. The units were able to
overcome these challenges; fortunately, the long time available to build
up forces allowed units to fill many of the shortages and adjust to
unfamiliar equipment.

Much of the prepositioned equipment is still being used to support
continuing operations in Iraq. It will be several years-depending on how
long Iraqi Freedom operations continue-before these stocks will be
available to return to prepositioning programs. And, even after they
become available, much of the equipment will likely require substantial
maintenance, or may be worn out beyond repair. The Army has estimated that
it has an unfunded requirement of over $1 billion for reconstituting the
prepositioned equipment used in OIF. However, since most prepositioned
equipment is still in Southwest Asia and has not been turned back to the
Army Materiel Command for reconstitution, most of the funding is not
required at this time. When the prepositioned equipment is no longer
needed in theater, decisions will have to be made about what equipment can
be repaired by combat units, what equipment must go to depot, and what
equipment must be replaced with existing or new equipment to enable the
Army to reconstitute the prepositioned sets that were downloaded for OIF.

DOD faces many issues as it rebuilds its prepositioning program and makes
plans for how such stocks fit into its future. In the near term, the Army
and Marines must necessarily focus on supporting ongoing OIF operations.
While waiting to reconstitute its program, the Army also has an
opportunity to address shortfalls and modernize remaining stocks. For the
longer term, DOD may need to (1) determine the role of prepositioning in
light of efforts to transform the military; (2) establish sound
prepositioning requirements that support joint expeditionary forces; and
(3) ensure that the program is resourced commensurate with its priority
and is affordable even as the force is transformed. Congress will play a
key role in reviewing DOD's assessment of the cost effectiveness of
various options to support its overall mission, including prepositioning
and other alternatives for projecting forces quickly.

Mr. Chairman and Members of the Subcommittee:

Thank you for the opportunity to discuss our work on logistical issues
related to Operation Iraqi Freedom (OIF), focusing on prepositioned
stocks. Since the end of the Cold War, the Department of Defense (DOD) has
increased its reliance on prepositioned reserves of military equipment and
supplies since it can no longer plan on having a large forward troop
presence. Prepositioned stocks are stored on ships and on land in the
Persian Gulf and other regions around the world. Prepositioning can speed
response times. Ideally, the military needs only to bring troops and a
small amount of materiel to the area of conflict. Once there, troops can
draw on prepositioned equipment and supplies, and then move rapidly into
combat.

My statement today reflects our preliminary observations drawn from
ongoing work as well as previously published reports. As requested, my
testimony today will focus on the performance, reconstitution, and future
of prepositioning programs. Specifically, it describes (1) the performance
and availability of Army and Marine Corps prepositioned equipment and
supplies to support OIF; (2) the current status of the stocks and plans to
reconstitute them; and (3) key issues facing the military as it reshapes
these programs to support the military's force transformation efforts.

Summary 	The importance of prepositioned stocks was dramatically
illustrated during OIF. While they faced some challenges, the Army and
Marine Corps relied heavily on prepositioned combat equipment and supplies
to decisively defeat the Iraqi military. The following summarizes our
preliminary observations and issues to consider for the future.

o  	Army and Marine Corps officials reported that prepositioned stocks
were a key factor in the success of OIF. Prepositioned stocks provided a
significant amount of the combat equipment used by the Army and the Marine
Corps. For the most part, the prepositioned combat systems were in good
condition and reportedly maintained high readiness rates throughout the
war. However, the Army's prepositioning program had some less-than-modern
equipment and had shortfalls, such as trucks, spare parts, and other
items. Moreover, the warfighters did not always know what prepositioned
sustainment stocks were available in theater, apparently worsening an
already overwhelmed theater supply-anddistribution system. While these
challenges were not insurmountable to the units, they did slow them down.
Fortunately, the long time available to build up forces allowed U.S.
forces to fill many of the shortages and adjust to unfamiliar equipment.

o  	Much of the prepositioned equipment is still being used to support
continuing operations in Iraq. It will be several years-depending on how
long Iraqi Freedom operations continue-before these stocks will be
available to return to prepositioning programs. And, even after these
stocks become available, much of the equipment will likely require
substantial maintenance, or it may be worn out beyond repair. The Army has
estimated that it has an unfunded requirement of over $1 billion for
reconstituting the prepositioned equipment used in OIF. However, since
most prepositioned equipment is still in Southwest Asia and has not been
turned back to the Army Materiel Command for reconstitution, most of the
funding is not required at this time. When the prepositioned equipment is
no longer needed in theater, decisions will have to be made about what
equipment can be repaired by combat units, what equipment must go to
depot, and what equipment must be replaced with existing or new equipment
to enable the Army to reconstitute the prepositioned sets that were
downloaded for OIF. In the interim, both the Army and Marines have kept
some land-or sea-based prepositioned stocks in the Pacific to cover a
possible contingency in that region.

o  	The defense department faces many issues as it rebuilds its
prepositioning program and makes plans for how such stocks fit into the
future. In the near term, the Army and the Marine Corps must necessarily
focus on supporting ongoing operations in OIF. And while it may be several
years before most prepositioned assets are available to fully reconstitute
the Army's programs, opportunities exist to address shortfalls and
selectively modernize the remaining stocks. For the longer term, the
department may need to rethink its prepositioning programs to ensure that
they are in sync with overall transformation goals and the evolving
military strategy. Some changes are already underway. For example, the
Army and Marine Corps are pursuing sea-basing ideas-where prepositioning
ships could serve as floating logistics bases. Importantly, DOD needs to
consider affordability. The drawdown of Army forces made prepositioning a
practical alternative in recent years because the service had ample
equipment. However, as the services' equipment is transformed or
recapitalized, it may not be practical to buy enough equipment for units
to have one set at their home station and another set in prepositioning.
Consideration of the cost of various options will be critical as the
department evaluates alternatives for transforming its force structure to
achieve future mission objectives. Congress will have a key role in
reviewing the department's assessment of the cost-effectiveness of options
to support DOD's overall mission, including mobility and force projection.

 In responding to your request, we conducted work that included officials from
  Headquarters, U.S. Army and U.S. Marine Corps, Washington, D.C.; Army Field
            Support Command, Rock Island, Illinois; Combat Equipment

Background

Group-Afloat, Goose Creek, South Carolina; and Blount Island Command,
Jacksonville, Florida. At these locations, we interviewed officials
familiar with prepositioning issues during OIF as well as plans for the
future. We reviewed and obtained relevant documentation and performed
analyses of reconstitution and options for the future. We also reviewed
after-action reports on OIF and Operation Desert Storm. We obtained
service estimates for funding prepositioned stocks requirements, but we
did not validate these estimates. In addition, we drew on the preliminary
results of our ongoing reviews of OIF lessons learned and OIF
reconstitution and on our recent reports on OIF supply and distribution
issues, Stryker deployment, and Army spare parts shortages. We also relied
on our 2001 report on Army war reserve spare parts shortages, 1998 report
on prepositioning in the Army and the Air Force, and early 1990s reports
on Operation Desert Storm.1 We performed our work in March 2004 in
accordance with generally accepted government auditing standards.

The basic purpose of prepositioning is to allow DOD to field combat-ready
forces in days rather than in the weeks it would take if the forces and
all necessary equipment and supplies had to be brought from the United
States. However, the stocks must be (1) available in sufficient quantities
to meet the needs of deploying forces and (2) in good condition. For
prepositioning programs, these factors define "readiness." If on-hand
stocks are not what is needed-or are in poor condition-the purpose of
prepositioning may be defeated because the unit will lose valuable time
obtaining or repairing equipment and supplies. U.S forces had months to
build up for OIF, so speed was not imperative. Prepositioning sites became
reception and staging areas during the months leading up to the war, and
afforded the military the necessary time and access in Kuwait to build up
its forces for the later offensive operations of OIF.

1 U.S. General Accounting Office, Defense Logistics: Preliminary
Observations on the Effectiveness of Logistics Activities during Operation
Iraqi Freedom, GAO-04-305R (Washington, D.C.: Dec. 18, 2003); Military
Transformation: Realistic Deployment Timelines Needed for Army Stryker
Brigades, GAO-03-801 (Washington, D.C.: June 30, 2003); Defense Inventory:
The Army Needs a Plan to Overcome Critical Spare Parts Shortages,
GAO-03-705 (Washington, D.C.: June 27, 2003); Defense Inventory: Army War
Reserve Spare Parts Requirements Are Uncertain, GAO-01-425 (Washington,
D.C.: May 10, 2001); Military Prepositioning: Army and Air Force Programs
Need to Be Reassessed, GAO/NSIAD-99-6 (Washington, D.C.: Nov. 16, 1998);
Operation Desert Shield/Storm: Impact of Defense Cooperation Account
Funding on Future Maintenance Budgets, GAO/NSIAD-93-179 (Washington, D.C.:
June 10, 1993); and Operation Desert Storm: Early Performance Assessment
of Bradley and Abrams, GAO/NSIAD-92-94 (Washington, D.C.: Jan. 10, 1992).

Prepositioning programs grew in importance to U.S. military strategy after
the end of the Cold War, particularly for the Army. Recognizing that it
would have fewer forward-stationed ground forces-and to support the
two-war strategy of the day-the Army used equipment made available from
its drawdown to field new sets of combat equipment ashore in the Persian
Gulf and in Korea. It also began an afloat program in the 1990s, using
large ships to keep equipment and supplies available to support operations
around the world. The Marine Corps has had a prepositioned capability
since the 1980s. Its three Marine Expeditionary Forces are each assigned a
squadron of ships packed with equipment and supplies-the Marines view this
equipment as their "go-to-war" gear. Both the services also have retained
some stocks in Europe, although the Army stocks have steadily declined
since the end of the Cold War.2 Today, the Army has sites in the
Netherlands, Luxembourg, and Italy, while the Marine Corps retains stocks
in Norway. Figure 1 shows the location of Army and Marine Corps
prepositioned equipment prior to OIF.

2 U.S. General Accounting Office, Army War Reserves: DOD Could Save
Millions by Aligning Resources with the Reduced European Mission,
GAO/NSIAD-97-158 (Washington, D.C.: Jul. 11, 1997).

Figure 1: Location of Army and Marine Prepositioned Equipment Prior to OIF

Prepositioning is an important part of DOD's overall strategic mobility
calculus. The U.S. military can deliver equipment and supplies in three
ways: by air, by sea, or by prepositioning. Each part of this triad has
its own advantages and disadvantages. Airlift is fast, but it is expensive
to use and impractical for moving all of the material needed for a
large-scale deployment. Although ships can carry large loads, they are
relatively slow. Prepositioning lessens the strain on expensive airlift
and reduces the reliance on relatively slow sealift deliveries. However,
prepositioning requires the military to maintain equipment that
essentially duplicates what the unit has at home station. Moreover, if the
prepositioned equipment stocks are incomplete, the unit may have to bring
along so

  Prepositioned Equipment Performed Well in OIF, Despite Shortfalls and Other
  Logistical Challenges

much additional equipment that using it could still strain lift,
especially scarce airlift in the early days of a conflict.

The Army and Marine Corps reported that their prepositioned equipment
performed well during OIF but that some problems emerged. We reviewed
lessons-learned reports and talked to Army and Marine Corps officials who
managed or used the equipment. We heard general consensus that major
combat equipment was generally in good condition when drawn and that it
performed well during the conflict. However, Army officials said that some
equipment was out-of-date and some critical items like trucks were in
short supply and parts and other supplies were sometimes not available.
The officials agreed that, overall, OIF demonstrated that prepositioned
stocks could successfully support major combat operations.

Most of the issues we heard were with the Army's program. Marine Corps
officials reported few shortfalls in their prepositioned stocks or
mismatches with unit equipment. This is likely due to two key differences
between the services. First, the Marines view prepositioned stocks as
their "go-to-war" gear and give the stocks a very high priority for fill
and modernization. Second, the units that will use the prepositioned
stocks are assigned in advance and the Marine Corps told us that the
combat units feel a sense of "ownership" in the equipment. This manifests
itself in important ways. For example, the Marines have periodic
conferences with all involved parties to work out exactly what their ships
will carry and what the units will need to bring with them to the fight.
Such an effort to tailor the prepositioned equipment increases
familiarity, allows for prewar planning, and thus minimizes surprises or
last-minute adjustments. The Marines also train with their gear
periodically. By contrast, the Army does not designate the sets for any
particular unit and provides little training with the equipment,
especially with the afloat stocks.

Prepositioned Combat Equipment Performed Well

Personnel who used and managed the equipment agreed that the tanks,
infantry fighting vehicles, and howitzers were in good condition when they
were drawn from the prepositioned stocks; moreover, the equipment
generally stayed operational throughout the fight. For example, the Third
Infantry Division after-action report said that new systems and older
systems proved to be very valuable and the tanks and Bradleys were both
lethal and survivable. Additionally, according to Army Materiel Command
documents, combat personnel reported that their equipment, in many cases,
worked better than what they had at home station. Moreover, operational
readiness data we reviewed showed that major combat

equipment stayed operational, even in heavy combat across hundreds of
miles. In fact, officials from both services agreed that OIF validated the
prepositioning concept and showed that it can successfully support major
combat operations. Moreover, the U.S. Central Command, in an internal
lessons-learned effort, concluded that prepositioned stocks "proved their
worth and were critical in successfully executing OIF."

Some Prepositioned Equipment Was Out-of-Date or Did Not Match Unit Needs

Some of the Army's prepositioned equipment was outdated or did not match
what the units were used to at home station. At times, this required the
units to "train down" to older and less-capable equipment or bring their
own equipment from home. Examples include:

o  	Bradleys-The prepositioned stocks contained some older Bradley
Fighting Vehicles that had not received upgrades installed since Operation
Desert Storm. Such improvements included items like laser range finders,
Global Positioning System navigation, thermal viewers, battlefield
identification systems, and others. In addition, division personnel
brought their own "Linebacker" Bradleys instead of using the outdated
prepositioned stocks that would have required the crew to get out of the
vehicle to fire.

o  	M113 Personnel Carriers-The prepositioned stocks contained many older
model M113A2 vehicles. This model has difficulty keeping up with Abrams
tanks and requires more repairs than the newer model M113A3, which the
units had at home station.

o  	Trucks-The prepositioned stocks included 1960s-vintage model trucks
that had manual transmissions and were more difficult to repair. Most
units now use newer models that have automatic transmissions. The effect
of this was that soldiers had to learn to drive stick shifts when they
could have been performing other tasks needed to prepare for war; in
addition, maintenance personnel were unfamiliar with fixing manual
transmissions.

o  	Tank Recovery Vehicle-The prepositioned stocks contained M-88A1
recovery vehicles. These vehicles have long been known to lack sufficient
power, speed, and reliability. We reported similar issues after Operation
Desert Storm.3 According to data collected by the Army Materiel Command,
these vehicles broke down frequently, generally could not keep up with the
fast-paced operations, and did not have the needed capabilities even when
they were in operation.

3 GAO/NSIAD-92-94.

None of these problems, however, were insurmountable. The U.S. forces had
months to prepare for OIF, and plenty of time to adjust to the equipment
they had available. Additionally, the U.S. forces faced an adversary whose
military proved much less capable than U.S. forces.

Army Faced Spare Parts Shortfalls and Theater Distribution Issues

Our preliminary work also identified shortfalls in available spare parts
and major problems with the theater distribution system, which were
influenced by shortages of trucks and material handling equipment. Prior
to OIF, the Army had significant shortages in its prepositioned stocks,
especially in spare parts. This is a long-standing problem. We reported in
2001 that the status of the Army's prepositioned stocks and war reserves
was of strategic concern because of shortages in spare parts.4 At that
time the Army had on hand about 35 percent of its stated requirements of
prepositioned spare parts and had about a $1-billion shortfall in required
spare parts for war reserves.

Table 1 shows the percentage of authorized parts that were available in
March 2001 in the prepositioned stocks that were later used in OIF. These
stocks represent a 15-day supply of spare and repair parts for brigade
units (Prescribed Load List) and for the forward support battalion that
backs up the brigade unit stocks (Authorized Stockage List). While the
goal for these stocks was to be filled to 100 percent, according to Army
officials the Army has not had sufficient funds to fill out the stocks. In
March 2002, the Army staff directed that immediate measures be taken to
fix the shortages and provided $25 million to support this effort. The
requirements for needed spare and repair parts were to be filled to the
extent possible by taking stocks from the peacetime inventory or, if
unavailable there, from new procurement.

4 GAO-01-425.

Table 1: Status of Army Unit Spare Parts Available in Afloat and Selected
Land-Based Prepositioned Sets in March 2001a

                                    Type of spare 
           Location       Unit type         parts             Percent fill of 
                                                                authorization 
             Afloat     Brigade set           ASL                          63 
                                              PLL                          60 
                      Corps Support           ASL 
                                              PLL                          30 
                    Theater Support           ASL                          18 
                                  1               
                                              PLL                          15 
                    Theater Support               
                                  2           ASL 

PLL

                            Qatar Brigade set ASL 13

PLL 19

Division base ASL

PLL

Legend: ASL= Authorized Stockage List, PLL=Prescribed Load List

Source: Army Materiel Command.

aInformation is provided for prepositioned sets later used in OIF that
were managed by the Army Materiel Command. Army Central Command managed
the Kuwait set.

By the time the war started in March of 2003, the fill rate had been
substantially improved but significant shortages remained. The warfighter
still lacked critical, high-value replacement parts like engines and
transmissions. These items were not available in the supply system and
could not be acquired in time. Shortages in spare and repair parts have
been a systemic problem in the Army over the past few years. Our recent
reports on Army spares discussed this issue5 and, as previously noted, our
2001 report highlighted problems specifically with prepositioned spares.
According to Army officials, the fill rates for prepositioned spare parts-
especially high-value spares-were purposely kept down because of
systemwide shortfalls. The Army's plan to mitigate this known risk was to
have the units using the prepositioned sets to bring their own high-value
spare parts in addition to obtaining spare parts from non-deploying units.

5 GAO-03-705.

Nonetheless, according to the Third Infantry Division OIF after-action
report, spare parts shortages were a problem and there were also other
shortfalls. In fact, basic loads of food and water, fuel, construction
materials, and ammunition were also insufficient to meet the unit
sustainment requirements.

The combatant commander had built up the OIF force over a period of
months, departing from doctrinal plans to have receiving units in theater
to receive the stocks. When it came time to bring in the backup supplies,
over 3,000 containers were download from the sustainment ships, which
contained the required classes of supply-food, fuel, and spare parts,
among others. The theater supply-and-distribution system became
overwhelmed. The situation was worsened by the inability to track assets
available in theater, which meant that the warfighter did not know what
was available. The Third Infantry Division OIF after-action report noted
that some items were flown in from Europe or Fort Stewart because they
were not available on the local market. Taken together, all these factors
contributed to a situation that one Army after-action report bluntly
described as "chaos."

Our recent report on logistics activities in OIF described a theater
distribution capability that was insufficient and ineffective in managing
and transporting the large amount of supplies and equipment during OIF.6
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.

6 GAO-04-305R.

  Continuing Support of Operations Will Likely Delay Reconstitution

Forces are being rotated to relieve personnel in theater. Instead of
bringing their own equipment, these troops are continuing to use
prepositioned stocks. Thus, it may be several years-depending on how long
the Iraqi operations continue-before these stocks can be reconstituted.

The Marine Corps used two of its three prepositioned squadrons (11 of 16
ships) to support OIF. As the Marines withdrew, they repaired some
equipment in theater but sent much of it back to their maintenance
facility in Blount Island, Florida. By late 2003, the Marine Corps had one
of the two squadrons reconstituted through an abbreviated maintenance
cycle, and sent back to sea.7 However, to support ongoing operations in
Iraq, the Marine Corps sent equipment for one squadron back to Iraq, where
it is expected to remain for all or most of 2004. The Marine Corps is
currently performing maintenance on the second squadron of equipment that
was used during OIF, and this work is scheduled to be completed in 2005.

Most of the equipment that the Army used for OIF is still in use or is
being held in theater in the event it may be needed in the future. The
Army used nearly all of its prepositioned ship stocks and its ashore
stocks in Kuwait and Qatar, as well as drawing some stocks from Europe. In
total, this included more than 10,000 pieces of rolling stock, 670,000
repair parts, 3,000 containers, and thousands of additional pieces of
other equipment. According to Army officials, the Army is repairing this
equipment in theater and reissuing it piece-by-piece to support ongoing
operations. Thus far, the Army has reissued more than 11,000 pieces of
equipment, and it envisions that it will have to issue more of its
remaining equipment to support future operations. Thus, it may be 2006 or
later before this equipment becomes available to be reconstituted to
refill the prepositioned stocks. Officials also told us that, after having
been in use for years in harsh desert conditions, much of the equipment
would likely require substantial maintenance and some will be worn out
beyond repair. Figure 2 shows OIF trucks needing repair.

7 Marine Corps officials told us that they focused on getting equipment
repaired to a mission-capable status, but did not return the equipment to
the high standard to which it is normally maintained.

Figure 2: Some Trucks Used in OIF that Need Repair

Both the Army and the Marine Corps have retained prepositioned stocks in
the Pacific to cover a possible contingency in that region. While the
Marine Corps used two of its three squadrons in OIF, it left the other
squadron afloat near Guam. The Army used most of its ship stocks for OIF,
but it still has a brigade set available in Korea and one combat ship is
on station to support a potential conflict in Korea, although it is only
partially filled. Both the Army and the Marine Corps used stocks from
Europe to support OIF. The current status of the services' prepositioned
sets is discussed in table 2.

 Table 2: Current Status of Selected Prepositioning Programs (as of March 2004)

            Location                            Status                        
                          The equipment and supplies from these locations are 
Army Kuwait and Qatar        still in use to support continuing operations 
                                               in Iraq.                       
             Korea       This brigade set of equipment is currently filled to 
                                      approximately 90 percent.               

Afloat 	Equipment and supplies from 10 of 11 ships were downloaded to
support OIF and most of this equipment remains in Iraq or Kuwait. One
combat ship has been partially filled to support two Army battalions. One
ammunition ship remains on station and another is in its maintenance
cycle. The Army is also working to reconstitute equipment for a support
ship and another combat ship, but it is unclear how much equipment will be
available to source these requirements.

Europe 	Stocks in Luxembourg, the Netherlands, and Italy have been
depleted to support ongoing operations.

Marines Afloat (Guam) This 6-ship squadron was not used in OIF and has
almost its full complement of stocks.

Afloat (Mediterranean) 	One ship has been downloaded in support of OIF and
another has been partially downloaded. This squadron's equipment is
currently filled to about half of its requirement and will complete its
normal maintenance cycle in 2005.

Afloat (Diego Garcia) 	This squadron's equipment was used during the first
phase of OIF, was repaired to combat condition but not to normal
standards, and has been downloaded for reuse in Iraq.

Norway 	Stocks in Norway were used to support OIF. Currently, the stocks
have approximately two-thirds of the authorized equipment.

Source: U.S. Army and U.S. Marine Corps data.

Army and Marine Corps maintenance officials told us that it is difficult
to reliably estimate the costs of reconstituting the equipment because so
much of it is still in use. As a result, the reconstitution timeline is
unclear. Based on past experience, it is reasonable to expect that the
harsh desert environment in the Persian Gulf region will exact a heavy
toll on the equipment. For example, we reported in 1993 that equipment
returned from Operation Desert Storm was in much worse shape than expected
because of exposure for lengthy periods to harsh desert conditions. The
Army has estimated that the cost for reconstituting its prepositioned
equipment assets is about $1.7 billion for depot maintenance, unit level
maintenance, and procurement of required parts and supplies. A request for
about $700 million was included in the fiscal year 2004 Global War on
Terrorism supplemental budget, leaving a projected shortfall of about $1
billion. Army Materiel Command officials said they have thus far received
only a small part of the amount funded in the 2004 supplemental for
reconstitution of the prepositioned equipment, but they noted that not
much equipment has been available. Additionally, continuing operations in
Iraq have been consuming much of the Army's supplemental funding intended
for reconstitution. Since much of the equipment is still in Southwest
Asia, it is unclear how much reconstitution funding for its prepositioned
equipment the Army can use in fiscal year 2005. But it is

  Issues Facing the Prepositioning Program

clear that there is a significant bill that will have to be paid for
reconstitution of Army prepositioned stocks at some point in the future,
if the Army intends to reconfigure the afloat and land-based prepositioned
sets that have been used in OIF.

The defense department faces many issues as it rebuilds its prepositioning
program and makes plans for how such stocks fit into the transformed
military. In the near term, the Army and the Marine Corps must focus on
supporting current operations and reconstituting their prepositioning
sets. Moreover, we believe that the Army may be able to take some actions
to address the shortfalls and other problems it experienced during OIF. In
the long term, however, DOD faces fundamental issues as it plans the
future of its prepositioning programs.

                                Near-Term Issues

As it reconstitutes its program, the Army would likely benefit from
addressing the issues brought to light during OIF, giving priority to
actions that would address long-standing problems, mitigate near-term
risk, and shore up readiness in key parts of its prepositioning program.
These include

o  	ensuring that it has adequate equipment and spare parts and
sustainment supplies in its prepositioning programs, giving priority to
afloat and Korea stocks;

o  	selectively modernizing equipment so that it will match unit equipment
and better meet operational needs; and

o  	planning and conducting training to practice drawing and using
prepositioned stocks, especially afloat stocks.

Based on some contrasts in the experiences between the Army and the Marine
Corps with their prepositioned equipment and supplies in OIF, some
officials we spoke to agree that establishing a closer relationship
between operational units and the prepositioned stocks they would be
expected to use in a contingency is critical to wartime success. The
Marines practice with their stocks and the Army could benefit from
training on how to unload, prepare, and support prepositioned stocks,
particularly afloat stocks. While the Army has had some exercises using
its land-based equipment in Kuwait and Korea, it has not recently
conducted a training exercise to practice unloading its afloat assets.
According to Army officials, such exercises have been scheduled over the
past few years, but were cancelled due to lack of funding.

Long-term Issues

The long-term issues transcend the Army and Marines, and demand a
coordinated effort by the department. In our view, three main areas should
guide the effort.

o  	Determine the role of prepositioning in light of the efforts to
transform the military. Perhaps it is time for DOD to go back to the
drawing board and ask: what is the military trying to achieve with these
stocks and how do they fit into future operational plans? If, as indicated
in Desert Storm and OIF, prepositioning is to continue to play an
important part in meeting future military commitments, priority is needed
for prepositioning as a part of transformation planning in the future.

o  	Establish sound prepositioning requirements that support joint
expeditionary forces. If DOD decides that prepositioning is to continue to
play an important role in supporting future combat operations,
establishing sound requirements that are fully integrated is critical. The
department is beginning to rethink what capabilities could be needed. For
example, the Army and Marines are pursuing sea-basing ideas-where
prepositioning ships could serve as offshore logistics bases. Such ideas
seem to have merit, but are still in the conceptual phases, and it is not
clear to what extent the concepts are being approached to maximize
potential for joint operations. In our view, options will be needed to
find ways to cost-effectively integrate prepositioning requirements into
the transforming DOD force structure requirements. For example, Rand
recently published a report suggesting that the military consider
prepositioning support equipment to help the Stryker brigade meet
deployment timelines.8 Such support equipment constitutes much of the
weight and volume of the brigade, but a relatively small part of the costs
compared to the combat systems. Such an option may be needed, since our
recent report revealed that the Army would likely be unable to meet its
deployment timelines for the Stryker brigade.9

o  	Ensure that the program is resourced commensurate with its priority,
and is affordable even as the force is transformed. In our view, DOD must
consider affordability. In the past, the drawdown of Army forces made
prepositioning a practical alternative because it made extra equipment
available. However, as the services' equipment is transformed and
recapitalized, it may not be practical to buy enough equipment for

8 Eric Pelty, John M. Halliday, and Aimee Bower, Speed and Power: Toward
an Expeditionary Army (Santa Monica, Calif.: Rand Arroyo Center, 2003).

9 U.S. General Accounting Office, Army Stryker Brigades: Assessment of
External Logistics Support Should Be Documented for the Congressionally
Mandated Review of the Army's Operational Evaluation Plan, GAO-03-484R
(Washington, D.C.: Mar. 28, 2003).

units at home station and for prepositioning. Prepositioned stocks are
intended to reduce response times and enable forces to meet the demands of
the full spectrum of military operations. Once the future role of
prepositioning is determined, and program requirements are set, it will be
important to give the program proper funding priority. Congress will have
a key role in reviewing the department's assessment of the cost
effectiveness of options to support DOD's overall mission, including
prepositioning and other alternatives for projecting forces quickly to the
far reaches of the globe.

Mr. Chairman, I hope this information is useful to Congress as it
considers DOD's plans and funding requests for reconstituting its
prepositioned stocks as well as integrating prepositioning into the
department's transformation of its military forces.

This concludes my prepared statement. I would be happy to answer any
questions that you or the Members of the Subcommittee may have.

For questions about this statement, please contact William M. Solis at
(202) 512-8365 (e-mail address: [email protected]), Julia Denman at (202)
512-4290 (e-mail address: [email protected]), or John Pendleton at (404)
679-1816 (e-mail address: [email protected]). Additional individuals
making key contributions included Nancy Benco, Robert Malpass, Tinh
Nguyen, and Tanisha Stewart.

  Contacts and Acknowledgments

(350504)

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