Defense Logisitics: Actions Needed to Improve the Availability of
Critical Items during Current and Future Operations (08-APR-05,  
GAO-05-275).							 
                                                                 
GAO has identified spare parts supply as a long-standing	 
Department of Defense (DOD) management problem. In December 2003,
GAO reported on problems with Operation Iraqi Freedom (OIF)	 
logistics support including shortages of spare parts and supplies
in Iraq. This report expands on that effort by assessing (1) what
supply shortages were experienced by U.S. forces in Iraq between 
October 2002 and September 2004 and what impact the shortages had
on their operations, (2) what primary deficiencies in the supply 
system contributed to any identified supply shortages, and (3)	 
what actions DOD has taken to improve the timely availability of 
supplies for current and future operations. To address these	 
objectives, GAO judgmentally selected nine items based on lessons
learned and after-action reports that represented possible	 
shortages with operational impacts.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-275 					        
    ACCNO:   A21139						        
  TITLE:     Defense Logisitics: Actions Needed to Improve the	      
Availability of Critical Items during Current and Future	 
Operations							 
     DATE:   04/08/2005 
  SUBJECT:   Air Force supplies 				 
	     Army supplies					 
	     Defense capabilities				 
	     Internal controls					 
	     Logistics						 
	     Military forces					 
	     Military inventories				 
	     Military operations				 
	     Military systems analysis				 
	     National defense operations			 
	     Naval supplies					 
	     Performance measures				 
	     Spare parts					 
	     Strategic planning 				 
	     Abrams Tank					 
	     Bradley Fighting Vehicles				 
	     DOD Operation Iraqi Freedom			 
	     Iraq						 
	     M1 Tank						 
	     M2 Infantry Fighting Vehicle			 

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GAO-05-275

                 United States Government Accountability Office

                     GAO Report to Congressional Committees

April 2005

DEFENSE LOGISTICS

Actions Needed to Improve the Availability of Critical Items during Current and
                               Future Operations

                                       a

GAO-05-275

[IMG]

April 2005

DEFENSE LOGISTICS

Actions Needed to Improve the Availability of Critical Items during Current and
Future Operations

                                 What GAO Found

U.S. troops experienced shortages of seven of the nine items GAO reviewed.
According to the 2004 National Military Strategy, U.S. forces expect to
have sufficient quantities of the right items at the right time. However,
demand for the seven items exceeded availability sometime between October
2002 and September 2004. The documented impact of these shortages varied
between combat units. For example, while units in the 3rd Infantry
Division reported that tire shortages reduced their operational
capability, forcing them to abandon equipment, the 4th Infantry Division
reported no similar effect.

GAO identified five systemic deficiencies that contributed to shortages of
the reviewed items, including inaccurate Army war reserve spare parts
requirements and ineffective distribution. Annual updates of Army war
reserve parts requirements have not been conducted since 1999. As a
result, the war reserves did not contain enough track shoes, batteries,
and tires to support U.S. forces during initial operations. Effective
distribution relies on a seamless process to promptly move supplies from
the United States to a customer. GAO found that conflicting doctrinal
responsibilities for distribution management, improperly packed shipments,
insufficient transportation personnel and equipment, and inadequate
information systems prevented the timely availability of four of the
items.

Systemic Deficiencies Contributing to Shortages of Seven GAO-Selected
Items

Item Inaccurate Army war reserve requirements Inaccurate supply forecasts
Insufficient and delayed funding Delayed acquisition Ineffective
distribution

                                Batteries                      X X  X   X  
                                    Tires                      X X  X       X 
                      Vehicle track shoes                      X X  X      
                               Body armor                               X   X 
                          Meals Ready-to-                                  
                                      Eat                        X          X 
                               Up-armored                                  
                          HMMWVs and kits                               X  
                     Vehicle generators a                                   X 
                           Chem-bio suits   No shortage identified         
                            Rotor bladesa   No shortage identified         

Source: GAO analysis.

aThese are Marine-Corps-only items.

While U.S. troops developed short-term solutions to manage item shortages
during OIF, DOD and the services have begun to undertake systemic,
long-term changes to fix some supply problems identified. While GAO did
not evaluate their potential for success, the majority of the changes are
focused on distribution, and not on the full gamut of systemic
deficiencies GAO identified.

                 United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Supply Shortages Reduced Operational Capability and Increased

Risk to Troops in Iraq Multiple Supply Chain Deficiencies Contributed to

Supply Shortages DOD Actions to Improve Supply Availability for Current
and

Future Operations Conclusions Recommendations for Executive Action Matter
for Congressional Consideration Agency Comments and Our Evaluation

1 4 9

19

24

48 50 51 53 54

Appendixes

Appendix I:

Appendix II:

Appendix III:

Appendix IV:

Appendix V:

                       Appendix VI: Appendix VII: Appendix VIII: Appendix IX:

Appendix X:

Appendix XI: Appendix XII: Scope and Methodology 57

Assault Amphibian Vehicle Generators 61

Armored Vehicle Track Shoes 67

Interceptor Body Armor 75

Joint Service Lightweight Integrated Suit Technology Suits 82

BA-5590 and BA-5390 Lithium Batteries 87

Marine Corps Helicopter Rotor Blades 96

Meals Ready-to-Eat 100

Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires 107

Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and Add-on-Armor
Kit 117

Comments from the Department of Defense 128

GAO Contacts and Staff Acknowledgments 142

                                    Contents

Tables      Table 1: Systemic Deficiencies Contributing to Shortages of 
                                                                     Seven 
                                 GAO-Selected Items                         5 
                  Table 2: DOD and Joint Guidance on Distribution          16 
               Table 3: Systemic Deficiencies Contributing to Shortages of 
                                                                     Seven 
                                    Supply Items                           25 
               Table 4: War Reserve Requirements, On-Hand Stock, and Items 
                                Requested Worldwide                        26 
              Table 5: Status of On-Hand Army War Reserve Spare Parts      
                          Requirements as of October 2004                  28 
                          Table 6: Item and Supply Manager                 57 
                  Table 7: Organizations Interviewed during Review         58 
              Table 8: Forecasted and Actual Demand for Abrams and Bradley 
                            Track Shoes (March-May 2003)                   69 
                Table 9: CECOM Unfunded Requirements for Fiscal Years 2001 
                                    through 2003                           93 

Figures	Figure 1: Figure 2:

Figure 3: Figure 4:

Figure 5:

Figure 6: Figure 7:

Figure 8: Figure 9:

CENTCOM's Area of Responsibility
Total Military PersonnelDeployed in CENTCOM's Area of
Responsibility in Support of Operation Enduring
Freedom and Operation Iraqi Freedom, December 2002
through September 2004
DOD's Joint Distribution System
Fiscal Year 2003 Army Working Capital Fund Supply
Management Requirements and Cumulative Obligation
Authority Received
Fiscal Year 2003 DLA Supply Management Requirements
and Cumulative Obligation Authority Received
Assault Amphibian Vehicle and Generator
Assault Amphibian Vehicle Generator Demand and Back
Orders for OIF by Quarter (3rd quarter fiscal year 2001
through 4th quarter fiscal year 2004)
Abrams Tank Track
Interceptor Body Armor

                                       10

                                     12 18

                                       32

                                     35 61

63 67 75

77

78

82

Figure 10: Worldwide Demand, Production Output, and Back Orders for Vests
by Quarter (December 2001 through September 2004)

Figure 11: Worldwide Demand, Production Output, and Back Orders for Plates
by Quarter (December 2001 through September 2004)

Figure 12: Joint Service Lightweight Integrated Suit Technology Suit

Contents

Figure 13: BA-5590 Lithium Battery 87

Figure 14: Worldwide Demand, Inventory Levels, and Back Orders for BA-5590
and BA-5390 Lithium Batteries by Month (October 2001 through August 2004)
89

Figure 15: Worldwide Forecasted Requirements, Demand, and Production
Output for BA-5590 and BA-5390 Lithium Batteries by Month (October 2001
through August 2004) 92

Figure 16: Rotor Blades on CH-53E Super Stallion 96 Figure 17: UH-1N Rotor
Blade Demand and Back Orders by Month (March 2003 through September 2004)
97 Figure 18: CH-53E Rotor Blade Demand and Back Orders by Month

(March 2003 through September 2004) 98 Figure 19: Meal Ready-to-Eat 100
Figure 20: Forecasted Requirements, OIF Demand, Production

Output, and Inventory for MREs (December 2002 through

June 2003) 102 Figure 21: M-923 5-ton Truck 107 Figure 22: Worldwide
Demand, Back Orders, and Inventory Level

for the 5-ton Truck Tire by Month (February 2002 through September 2004)
109

Figure 23: Worldwide Demand, Back Orders, and Inventory Level for the
HMMWV Tire by Month (February 2002 through September 2004) 110

Figure 24: TACOM's Actual and Reset Requirements, Funding

Executed and Received by Month, Fiscal Year 2003 114 Figure 25: Up-Armored
HMMWV 118 Figure 26: Add-on-Armor Kit Mounted on HMMWV 119 Figure 27:
Up-Armored HMMWV Requirements, Production Output,

and Redistribution from August 2003 through September 2004 121 Figure 28:
Add-on-Armor Requirements and Production Output, November 2003 through
September 2004 122

Figure 29: Up-Armored HMMWV Funding, Requirements, Production Output by
Month (August 2003 through September 2004) 126

Contents

Abbreviations

AAV Assault Amphibian Vehicle
AMC Army Materiel Command
ATLASS Asset Tracking Logistics and Supply System
CECOM Communications-Electronics Command
CENTCOM U.S. Central Command
DLA Defense Logistics Agency
DOD Department of Defense
HMMWV High-Mobility Multi-Purpose Wheeled Vehicle
JSLIST Joint Service Lightweight Integrated Suit

Technology MRE Meals Ready-to-Eat OIF Operation Iraqi Freedom SAIC Science
Applications International Corporation TACOM Tank-automotive and Armaments
Command

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separately.

A

United States Government Accountability Office Washington, D.C. 20548

April 8, 2005

The Honorable John W. Warner Chairman The Honorable Carl Levin Ranking
Member Committee on Armed Services United States Senate

The Honorable Duncan Hunter Chairman The Honorable Ike Skelton Ranking
Member Committee on Armed Services House of Representatives

To support Operation Iraqi Freedom (OIF), the largest deployment of U.S.
troops since Operation Desert Shield/Desert Storm in 1990, the Department
of Defense (DOD) has undertaken a massive logistics effort,1 moving more
than 2 million short tons of cargo including equipment, spare parts,
supplies, and other items several thousand miles to the Persian Gulf. This
effort started in late 2001 as U.S. Central Command (CENTCOM)2 began
planning for OIF, accelerated as troops deployed in the fall of 2002 and
major combat operations were launched on March 19, 2003, and continues
today while U.S. and coalition forces undertake stabilization efforts in
Iraq. From October 2002 through September 2004, DOD reported spending
$51.7 billion for operating support, including fuel, spare parts, and
facilities management, and $10.7 billion for transportation of personnel
and supplies to sustain3 U.S. forces before, during, and after major
combat operations in

1 DOD defines "logistics" as the science of planning and carrying out the
movement and maintenance of forces. Logistics has six functional areas:
supply, maintenance, transportation, civil engineering, health services,
and other services. This report will focus on supply and transportation.

2 CENTCOM is one of DOD's five geographic combatant commands whose area of
responsibility encompasses 27 countries in Southwest Asia, South and
Central Asia, and the Horn of Africa.

3 DOD defines sustainment as the provision of personnel, logistic, and
other support required to maintain and prolong operations or combat until
successful accomplishment or revision of the mission or of the national
objective.

Iraq. Despite these expenditures, there have been widespread reports of
serious shortages of some critical items needed by U.S. troops.

DOD relies on a number of individual processes and activities, known
collectively as supply chain management, to purchase, produce, and deliver
products and services to the warfighter during contingency operations
consistent with the National Military Strategy. The goal of supply chain
management is to deliver the "right items to the right place at the right
time" for the warfighter. To meet the initial increase in demand during a
contingency, DOD depends on its war reserves-stocks of specifically
designated weapon systems, equipment, spare parts,4 and other items that
are amassed during peacetime. The war reserves are intended to fill the
gap until the national supply system can increase production.5 DOD relies
on defense working capital funds to finance the flow of supplies to the
services. These revolving funds are financed by sales revenue rather than
direct appropriations. Working capital funds allow the Defense Logistics
Agency (DLA) and the services' logistics agencies to purchase needed items
from suppliers. Military units then order items from the logistics
agencies and pay for them with appropriated funds when the requested
items-either from inventory or manufacturers-are delivered to the units.
Supplies are shipped from the United States by air and sea through DOD's
joint distribution system and delivered to deployed units.

Since the 1990s, we have identified DOD's supply chain management as a
high-risk area because of high inventory levels and a supply system that
was not responsive to the needs of the warfighter. In a substantial body
of work, we have examined a range of problems, including inventory
management and shortages of critical spare parts.6 DOD also recognizes

4 Spare parts are defined as repair parts and components, including kits,
assemblies, and subassemblies (both reparable and non-reparable) required
for equipment maintenance.

5 See Centralized Inventory Management of the Army Supply System, Chapter
6, Section I, Paragraph 6-1, c. (3), Army Regulation 710-1 (Apr. 15, 2003)
and GAO, Defense Inventory: Army War Reserve Spare Parts Requirements Are
Uncertain, GAO-01-425 (Washington, D.C.: May 10, 2001).

6 See GAO, Defense Inventory: The Department Needs a Focused Effort to
Overcome Critical Spare Parts Shortages, GAO-03-707 (Washington, D.C.:
June 27, 2003) and Defense Inventory: Analysis of Consumption of Inventory
Exceeding Current Operating Requirements Since September 30, 2001,
GAO-04-689 (Washington, D.C.: Aug. 2, 2004).

supply chain management as a serious issue. In the Quadrennial Defense
Review for 2001, DOD stated its intention to transform its logistics
capabilities to improve the deployment process and implement new logistics
support tools that accelerate logistics integration between the services
and reduce logistics demand and cost. OIF is one of the first major tests
of these new capabilities, and we have reported on the supply chain issues
that have impeded support to the warfighter. For example, after visiting
the theater in 2003, we provided our preliminary observations on the
effectiveness of logistics support during OIF.7 Among the problems we
observed were the unavailability of spare parts, hundreds of backlogged
shipments, and an inability to track shipments at the distribution
centers.

Supplying spare parts has been a long-standing DOD management problem.
Under the Comptroller General's authority, we evaluated the effectiveness
of spare parts and related logistics support being provided to deployed
forces for OIF. Our objectives were to assess (1) what supply shortages
were experienced by U.S. forces in Iraq and what impact the shortages had
on operations, (2) what primary deficiencies in the supply system
contributed to any identified supply shortages, and (3) what actions DOD
has taken to improve the timely availability of supplies for current and
future operations.

We developed detailed case studies of nine supply items that were reported
to be in short supply during OIF. (These items, identified in the Results
in Brief section, were managed by various organizations within DOD
including the Army, the Marine Corps, and DLA.) We chose the items that we
believed presented possible shortages with operational impacts based on
information available in GAO and military reports, military and contractor
lessons-learned studies, and other accounts covering the time period
between October 2002 and September 2004. To identify the extent and impact
of supply shortages, we visited numerous DOD logistics organizations to
obtain data on the production, availability, and distribution of supply
items at the national level. When supply data specifically for OIF were
not available, we used worldwide data since OIF received supply priority.
We also interviewed members of units that had returned from the theater to
determine the extent and impacts of item shortages on their operations. We
identified deficiencies that affected the availability of

7 GAO, Defense Logistics: Preliminary Observations on the Effectiveness of
Logistics
Activities During Operation Iraqi Freedom, GAO-04-305R (Washington, D.C.:
Dec. 18, 2003).

two or more of the case study items. We worked with DOD logistics
agencies, operational units, and service and geographic commands to
evaluate the significance of these deficiencies to DOD's overall logistics
system. We also identified DOD's and the services' short-term and longterm
efforts to address these shortages. We assessed the reliability of the
data we obtained for individual items and determined they were
sufficiently reliable for our purposes. We performed our review from March
2004 through February 2005 in accordance with generally accepted
government auditing standards. A detailed discussion of our scope and
methodology is located in appendix I.

Results in Brief	U.S. troops experienced shortages of seven of the nine
items we reviewed. According to the 2004 National Military Strategy, U.S.
forces expect to have sufficient quantities of the right items at the
right time. During OIF, DOD was responsible for moving millions of tons of
supplies and spare parts to theater. However, demand for seven items we
reviewed exceeded availability sometime between October 2002 and September
2004. These shortages led, in some cases, to a decline in the operational
capability of equipment and increased risk to troops. These items included
generators for assault amphibian vehicles, armored vehicle track shoes,
Interceptor body armor, lithium batteries, Meals Ready-to-Eat, tires for
5-ton trucks and High-Mobility Multi-Purpose Wheeled Vehicles, and
up-armored High-Mobility Multi-Purpose Wheeled Vehicles and add-on armor
kits. For example, in August 2003 the Army's inventory contained only 505
tires for 5-ton trucks which fell far below the worldwide monthly demand
of 4,828 tires, most of which were needed by troops in Iraq. The remaining
two items that we examined-chemical-biological suits and Marine Corps
helicopter rotor blades-did not experience shortages in theater. The
impact of supply shortages on military operations is difficult to quantify
because it varies from one combat unit to another and is not always
apparent in DOD's readiness systems. For example, while units in the 3rd
Infantry Division reported that tire shortages reduced their operational
capability by forcing them to abandon equipment, the 4th Infantry Division
reported that its tire shortages had no such effect. Detailed case
studies, including the extent of shortages and their impacts, contributing
factors, and short-and long-term solutions, for each of the nine items we
studied are in appendixes II through X.

Five systemic supply system deficiencies primarily contributed to the
shortages for the seven items. As discussed in the body of this report,
studies conducted by DOD and defense contractors indicate that

these deficiencies also affected other items in the supply system. The
five deficiencies are identified in table 1.

 Table 1: Systemic Deficiencies Contributing to Shortages of Seven GAO-Selected
                                     Items

                  Inaccurate                                     
                         and                                     
                inadequately                                     
                funded Army  Inaccurate Insufficient   Delayed   Ineffective  
                war reserve  supply     and                      
      Item      requirements forecasts  delayed      acquisition distribution 
                                        funding                  
     Vehicle                                                          X       
generators                                                    
Track shoes       X           X           X                   
Body armor                                             X           X       
    Batteries        X           X           X            X      
      Meals                      X                                    X       
  Ready-to-Eat                                                   
      Tires          X           X           X                        X       
Up-armored                                                    
  High-Mobility                                                  
  Multi-Purpose                                           X      
     Wheeled                                                     
  Vehicles and                                                   
      kits                                                       

Source: GAO analysis.

o 	Inaccurate and inadequately funded Army war reserve requirements.
Annual updates of the Army's war reserve requirements have not been
conducted since 1999. According to officials from the Army Materiel
Command, they had not updated the war reserve requirements because they
had not received the latest operational guidance from Army headquarters.
However, an Army official provided us with copies of the guidance sent to
the Army Materiel Command and attributed the failure to run the model to a
variety of reasons, including problems with new databases. This guidance,
based on the annually updated defense planning guidance, details the force
structure and operations that the Army's war reserve must support. Also,
Army data showed that war reserve requirements had not been not fully
funded for many years. This indicates that the Army has made a risk
management decision to not fund war reserves. This decision forced war
reserve managers to prioritize the use of available funding, and left some
items without a war reserve to support initial operations. The Army's
out-of-date and inadequately funded war reserve requirements for spare
parts negatively affected the availability of three items we reviewed
(armored vehicle track shoes, lithium batteries, and tires). The
underfunding problem continues as only $561.7 million, or 24 percent, of
the Army's $2,327.4 million war reserve requirements were funded as of
October 2004. While this funding information has been reported to

Congress, the likely risk to operations of not fully funding the war
reserve has not. To improve the accuracy and adequacy of Army war reserve
requirements we recommend the Army update the data for its war reserve
model based on the latest defense planning guidance, annually update war
reserve requirements, and disclose to Congress the impact of risk
management decisions to not fully fund the war reserve.

o 	Inaccurate supply forecasts. As indicated by regulation, the Army uses
computer models to forecast item demand. The regulation also indicates
that the Army's model be able to switch to a wartime forecasting method;
however, the model available during pre-OIF planning had no such
capability. While DLA had a model to forecast contingencies, it was not
effective for all items, such as Meals Ready-to-Eat. Therefore, Army item
managers had to manually develop forecasts for OIF, but they did not
always have sufficient or timely information on estimated deployment sizes
or the duration of operations which are needed to forecasted accurate
supply requirements. As a result, they underestimated the demand for some
items. By contrast, Marine Corps item managers forecasted requirements
from operational plans and equipment changes. However, the accuracy of
these requirements has not yet been completely reconciled with actual
usage during OIF. This is particularly important because, while the Marine
Corps may have accurately forecasted requirements and predicted the types
of items needed, the Marine Corps has not confirmed the proper quantities.
DOD's requirements processes were not able to accurately forecast supply
requirements for four items we reviewed (armored vehicle track shoes,
lithium batteries, Meals Ready-to-Eat, and tires). To improve the accuracy
of the Army's prewar planning for supplies, we recommend the Army develop
models that have the capability to accurately forecast operational
requirements and ensure that item managers receive timely data from
operational plans. To improve the accuracy of the Marine Corps' wartime
forecasts, we recommend the service complete its reconciliation of
forecasted requirements with actual OIF consumption data and make needed
adjustments to its requirements.

o 	Insufficient and delayed funding. By regulation, DOD components are
supposed to structure their supply chain processes to provide flexible and
prompt support during crises. During OIF, the Army Materiel Command asked
for additional funding (known as obligation authority) in order to support
the forecasted OIF requirements, but did not receive these funds in a
timely manner. While data are not available

to conclusively determine why the process could not provide more timely
and adequate funding, the Army's multi-stage requirements validation
process may have contributed to the delays. This lack of obligation
authority and delays in its release impeded the availability of three
items we reviewed (armored vehicle track shoes, lithium batteries, and
tires). By contrast, DLA was able to move obligation authority among
accounts to support projected demands and did not require numerous
validations to justify its forecasted requirements. To improve the
sufficiency and timeliness of funding to the Army Materiel Command, we
recommend the Army establish an expeditious supply requirements validation
process that provides accurate information to support timely and
sufficient funding.

o 	Delayed acquisition. Despite requirements that the supply system
provide timely support during crises, specific problems delayed DOD's
acquisition of three important items we reviewed (Interceptor body armor,
lithium batteries, and up-armored High-Mobility Multi-Purpose Wheeled
Vehicles). The lack of key materials and long production lead-time
continue to affect the production of body armor, and DOD has reported the
limitation to Congress. The initial reliance on a single source
manufacturer and long production lead-time initially delayed maximum
production of lithium batteries. DOD's acquisition decision did not
maximize available capacity to produce up-armored High-Mobility
Multi-Purpose Wheeled Vehicles and add-on armor kits nor did it give
Congress visibility over the basis for its acquisition solution. These
acquisition challenges impeded DOD's ability to respond to rapidly
increasing demands. To minimize acquisition delays in the future, we
recommend the Army and Defense Logistics Agency assess the
industrial-base's capacity to meet updated requirements for critical items
within the time frames required by operational plans and provide
visibility to Congress over acquisition of critical items that emerge
during contingencies.

o 	Ineffective distribution. According to DOD guidance, distribution is
the operational process of synchronizing all elements of the logistics
system to deliver the "right things" to the "right place" at the "right
time" to support the combatant commander. We identified several times
where the joint distribution system was not synchronized to support the
combatant commander during OIF. Among the problems causing this lack of
synchronization were (1) conflicting doctrine, or military principles,
defining the authority of the geographic combatant commander to
synchronize the distribution of supplies from the U.S. to

the theater; (2) improper packaging of air shipments from the U.S., which
forced personnel in theater to spend extra time opening and sorting
shipments; (3) insufficient transportation equipment and supply personnel
in theater; and (4) the inability of logistics information systems to
support the requisition and shipment of supplies into and through Iraq. As
a result, DOD was not able to distribute sufficient quantities of four
items we reviewed (assault amphibian vehicle generators, Interceptor body
armor, Meals Ready-to-Eat, and tires). To improve the effectiveness of
distribution we recommend that DOD revise current joint distribution
doctrine to clarify responsibilities and authorities; develop and
exercise, possibly through a mix of simulation and field training, a
deployable supply receiving and theater distribution capability that
includes trained personnel and necessary equipment; and establish common
logistics information systems that support the timely requisition of and
visibility over supplies.

Two of the items we reviewed did not have shortages (chemical-biological
suits and Marine Corps helicopter rotor blades). While acquisition delays
and ineffective distribution resulted in a perceived shortage of
chemical-biological suits among personnel deployed to OIF, we could not
identify situations where suits were unavailable. Similarly, while rotor
blades were identified as a possible shortage, Marine Corps officials and
our analysis of supply data indicated there was no actual shortage.

DOD, the services, and the defense agencies have acted to improve supply
availability. Many short-term solutions to lessen the impact of supply
shortages were instituted during combat operations. For example, as a
result of the lithium battery shortage, the Joint Staff developed the
"critical few list" to improve the availability of specific items that the
services and geographic combatant commands report as critical to their
worldwide operations. DOD is also beginning to make systemic, long-term
changes to correct some of its supply problems. One of the more notable is
the Secretary of Defense's designation of the U.S. Transportation Command
as being responsible for improving distribution. In addition, the Army has
identified four areas of logistics focus for the next 2 years: connecting
the logistician, modernizing theater distribution, improving force
reception, and integrating the supply chain. While we did not evaluate
these efforts' potential for success, we observed that the majority of
them focus only on the distribution aspects of logistics problems
identified during OIF, not the full gamut of supply deficiencies we
identified.

In commenting on a draft of this report, the Department of Defense
concurred with the intent of the recommendations and cited actions it has
taken or will be taking to eliminate the supply chain deficiencies we
noted. While many of the actions cited, if completed, could clearly
resolve some problems, others actions did not appear to fully address the
need to improve the current practices. In addition, no specific timeline
for action was provided; therefore, we modified our recommendations to
require specific completion dates. Therefore, we have added a matter for
congressional consideration that suggests Congress may wish to require DOD
to disclose the risks associated with not fully funding the Army war
reserve. The Department's responses are in appendix XI and our evaluation
of them appears on page 128 of this report.

Background	CENTCOM, whose area of responsibility encompasses 27 countries
in South and Central Asia, the Horn of Africa, the Arabian Peninsula, and
Iraq8 began planning for OIF in late 2001 (see fig. 1).

8 CENTCOM is one of DOD's five geographic combatant commands. The others
are: U.S. European Command, U.S. Pacific Command, U.S. Southern Command,
and U.S. Northern Command.

Starting in mid-2002, CENTCOM began to improve the U.S. military's
infrastructure in Kuwait. This included an expansion of fuel and port
facilities to support the arrival of U.S. military units. Beginning in the
fall of 2002, CENTCOM began to deploy troops to the OIF area of operation.
These deployments continued up to, and beyond, the start of major combat
operations in Iraq on March 19, 2003. According to the Defense Manpower
Data Center, the number of military personnel deployed in CENTCOM's area
of responsibility in support of OIF and Operation Enduring Freedom
steadily increased from over 113,000 in December 2002 to over 409,000 in
May 2003 (see fig. 2). During major combat operations, over 280,000 U.S.
military personnel were deployed in Iraq, Kuwait, and nearby Persian Gulf
nations. All of the services were represented in the theater, but U.S.
Army units formed the bulk of military personnel. After major combat
operations were officially declared over on May 1, 2003, the total number
of personnel in CENTCOM's area of responsibility began to gradually
decrease. However, U.S. and coalition forces continue to conduct
stabilization operations in Iraq and DOD increased the number of military
personnel in Iraq to support the elections in January 2005.

Figure 2: Total Military Personnel Deployed in CENTCOM's Area of
Responsibility in Support of Operation Enduring Freedom and Operation
Iraqi Freedom, December 2002 through September 2004

          Source: Defense Manpower Data Center (data); GAO (timeline).

Organizations Responsible for Logistics

CENTCOM's command authority over units deployed to its area of
responsibility allows it to direct all necessary military actions to
assigned military forces, including units deployed in both Operation
Enduring Freedom in Afghanistan and OIF. Command authority also provides
the geographic combatant commander with directive authority over
logistics.9 The services and other defense components, however, share the
responsibility of supplying U.S. forces.10

The directive authority gives the combatant commander the ability to shift
logistics resources within the theater, but logistics support outside of
the area of responsibility is usually dependent on the services. The
combatant commander relies on the services' logistics components, such as
the U.S. Army Materiel Command (AMC), the U.S. Marine Corps Logistics
Command, and DLA to purchase supplies and manage inventory. AMC has major
subordinate commands that manage supply inventories, such as the
Communications-Electronics Command (CECOM) and the Tank-automotive and
Armaments Command (TACOM). DLA has a role in packaging supplies for
shipment, while the U.S. Transportation Command is responsible for
delivering them to theater. The combatant commander assigns one service as
the lead for logistics support, including transportation, in the
theater.11 During OIF, the Army was the lead service for logistics
support.

War Reserves	The military services rely heavily on their specifically
designated war reserve stock, including weapon systems, equipment, and
spare parts, to equip units when they first arrive in a theater of
operation. The Army's war reserves consist of major items including trucks
and secondary items such as spare parts, food, clothing, medical supplies,
and fuel. Spare parts have the largest dollar value of the Army's
secondary items.

War reserves are protected go-to-war assets that are not to be used for
purposes such as improving peacetime readiness or filling unit shortages.

9 See Doctrine for Logistic Support of Joint Operations, Executive
Summary, p. vi, Joint Publication 4-0 (Apr. 6, 2000).

10 See Joint Publication 4-0, Chapter I, p. I-3-4.

11 See Joint Tactics, Techniques, and Procedures for Joint Theater
Distribution, Chapter II, p. II-7, Joint Publications 4-01.4 (Aug. 22,
2000).

Some of these assets are located in Southwest Asia, the Pacific, Europe,
and on special war reserve ships. War reserves are funded through direct
congressional appropriations that are requested in the services' annual
budget submissions.

AMC is responsible for determining the Army's requirements for war reserve
spare parts.12 To do this, AMC officials use a computer model-the Army War
Reserve Automated Process system. The model uses DOD planning guidance and
Army information on anticipated force structure including a list of the
end items and associated spare parts. For each end item or part, the model
uses data on expected usage and spare parts consumption rates based on
breakage, geography, environment, and rates of equipment loss due to
battle damage.

The Marine Corps Logistics Command and logistics planners from Marine
operational units are responsible for determining annually the adequacy of
war reserve stock based on current operational plans. Once this is
determined, planning officials confirm the availability of the supplies
with DLA and other supporting logistics agencies that manage individual
items.

Operational Requirements	DOD forecasts operational requirements for spare
and repair parts differently than it does for items that result from
rapidly emerging needs. DOD forecasting methods for spare and repair parts
vary by service. The Army normally uses a computer model to forecast its
spare and repair parts requirements based on the average monthly demand
over the previous 24 months. The Marine Corps also uses models and
involves operational and logistics planners at several levels of command
to validate their forecasted requirements.

Operational requirements to support rapidly emerging needs, such as
Interceptor body armor and up-armored High-Mobility Multi-Purpose Wheeled
Vehicle (HMMWV), are developed outside of normal supply forecasting
procedures. They are identified through operational needs statements from
the theater that are validated and resourced by the Army. Units in theater
submit operational needs statements for the items, which are combined by
their higher headquarters into theater requirements.

12 See Army Regulation 710-1, Chapter 6, Section IV, Paragraph 6-24.

The Coalition Forces Land Component Command13 communicates these
requirements to the Department of the Army, where they are validated and
resourced by offices of the Assistant Secretary of the Army (Financial
Management and Comptroller), the Deputy Chief of Staff for Operations, the
Deputy Chief of Staff for Program and Analysis, and the Deputy Chief of
Staff for Logistics and eventually transmitted to the program manager.

Supply Item Funding	Generally, supplies and equipment for
customers-including military units and DOD agencies-are purchased using
defense working capital funds or procurement funds.

Defense Working Capital Funds	Of the nine items we examined, seven are
purchased using defense working capital funds (assault amphibian vehicle
(AAV) generators, armored vehicle track shoes, chemical-biological suits,
lithium batteries, Marine Corps helicopter rotor blades, Meals
Ready-to-Eat (MRE), and tires). Working capital fund managers at the
logistics agencies obligate and spend funds to purchase supplies from
manufacturers and repair items to build up inventories in anticipation of
sales. Military units then order supplies from the logistics agencies.
When the requisitioned supplies are delivered, the units pay for them with
funds that are appropriated annually by Congress. The logistics agencies
then use this revenue to pay the manufacturers and to cover their own
operating costs.

Several funds make up the defense working capital funds, including the
Army Working Capital Fund, the Navy Working Capital Fund (which finances
Marine Corps managed items), and the Defense-wide Working Capital Fund
(which finances Defense Logistics Agency-managed items). AMC uses the Army
Working Capital Fund to purchase and maintain supplies.

Procurement Funds	The remaining two items (Interceptor body armor and
up-armored HMMWVs) are purchased with procurement funding because they are
still in the process of initial issuance. Procurement funds are used to
pay for such expenses as the purchase of weapons and weapon components,
communication and support equipment, munitions, initial and replenishment
spare parts, and modernization equipment.

13 During OIF, CENTCOM's army component, Army Central Command, was placed
in overall command of all ground forces and renamed Coalition Forces Land
Component Command.

Project managers for these items receive congressional appropriations to
fund purchases of additional supplies.

Distribution Doctrine and Process

DOD guidance defines distribution as the operational process of
synchronizing all elements of the logistics system to deliver the "right
things" to the "right place" at the "right time" to support the combatant
commander.14 These elements include physical, financial, information, and
communication networks, which can be divided into two general
categories-the actual movement of supplies (physical networks) and the use
of information technology (financial, information, and communication
networks) to support distribution system activities.15 Table 2 lists the
primary DOD regulation and joint doctrine16 that guide the distribution
process.

                Table 2: DOD and Joint Guidance on Distribution

    Publication number                Title               Date of publication 
      DOD Regulation        DOD Supply Chain Materiel        May 23, 2003     
         4140.1-R             Management Regulations      
Joint Publication 4-0 Doctrine for Logistic Support of    April 6, 2000    
                                 Joint Operations         
     Joint Publication    Joint Doctrine for the Defense    March 19, 2003    
           4-01               Transportation System       
     Joint Publication   Joint Tactics, Techniques, and                       
          4-01.4         Procedures for Joint Theater     
                         Distribution                       August 22, 2000

                             Source: GAO analysis.

14 See Joint Publication 4-01.4, Chapter I, p. I-1.

15 See Joint Publication 4-01.4, Chapter I, p. I-2-3.

16 DOD defines joint doctrine as the fundamental military principles that
guide the employment of forces of two or more services in coordinated
action toward a common objective.

In its guidance, DOD identifies eight fundamental principles of theater
distribution:

1.	Centralized management: Identify one manager who is responsible for
distribution, visibility, and control of items in the theater distribution
system.

2.	Optimize the distribution system: Give distribution managers the
ability to maintain visibility in locations under their control and
provide them with resources to meet changing requirements.

3.	Velocity over mass: Substitute speed and accuracy for large investments
in inventory.

4.	Maximize throughput: Reduce the number of times that supplies must be
opened and sorted.

5. Reduce customer wait time.

6.	Maintain minimum essential stocks: Reduce reliance on large, costly
stockpiles.

7.	Maintain continuous, seamless, two-way flow of resources: Apply the
distribution principles to maintain an integrated and seamless
distribution system.

8.	Achieve time definite delivery: Deliver the right supplies to the
combatant commander at the right place and time.17

Figure 3 illustrates the complexity of DOD's joint distribution system.
The system moves supply items from inventories, vendors, and repair
facilities in the U.S. to deployed units in the theater. The system also
returns items to the U.S. for repair and maintenance.

17 See Joint Publication 4-01.4, Chapter I, p. I-7 and I-8.

Another study, commissioned by the Army Deputy Chief of Staff for
Logistics, is an independent assessment of the Army's logistics experience
in OIF by the RAND Corporation's Arroyo Center. This study focuses on how
Army forces were sustained and the performance of the sustainment system
during combat operations and initial stability and support operations.
RAND's report is currently under review by the Army.

Supply Shortages Reduced Operational Capability and Increased Risk to
Troops in Iraq

During OIF, DOD was responsible for moving over 2 million tons of supplies
and spare parts to theater. U.S. troops experienced shortages of seven of
the nine items GAO selected for review. According to the 2004 National
Military Strategy, U.S. forces expect to have sufficient quantities of the
right items at the right time. However, demand for the seven items
exceeded availability sometime between October 2002 and September 2004.
The overall impact of these shortages on military operations is difficult
to quantify because it varied between combat units and is not always
apparent in DOD's readiness systems. The remaining two items that we
examined did not experience shortages in theater. Detailed case studies
for the nine items are in appendixes II-X.

             Shortages Occurred during OIF for Seven Critical Items

U.S. troops in the OIF theater did not always have sufficient quantities
of seven items that we reviewed. For some items, the shortages occurred
primarily during initial troop deployments and major combat operations in
early 2003; for other items, shortages emerged during the sustainment
period after major combat operations were declared over in May 2003. The
overall impact is difficult to quantify because it differed between units.
For example, while units in the 3rd Infantry Division reported that tire
shortages affected their mission by forcing them to abandon equipment, the
4th Infantry Division reported that their tire shortages had no affect on
their mission. The following describes the shortages for each of the seven
items.

o 	Generators for AAVs. Marine Corps units in Iraq experienced shortages
of generators for their AAVs during deployment and combat operations in
early 2003. The AAV is a landing vehicle that the Marine Corps used as an
armored personnel carrier in Iraq. Without the generator, which provides
electric power, the AAV cannot operate. Although 140 generators were
reported shipped from the U.S., Marine forces in theater reported
receiving only 15. Neither we nor the Marine Corps could find the
remaining 125 in the supply system. While the

service did not document any operational impacts specifically due to
generator shortages, its forces had to strip parts from about 40
nonoperational vehicles to maintain the operational capabilities of other
vehicles.

o 	Track shoes for Abrams Tanks and Bradley Fighting Vehicles. As the
conflict in Iraq continued, track shoes, essential components of combat
vehicles such as Abrams tanks and Bradley Fighting Vehicles, were not
available to meet increasing demands. Although sufficient quantities of
track shoes existed to meet demand at the beginning of combat, by May 2003
actual demand was 5 times the forecasted demand primarily because of the
heavy wear and tear on track shoes as a result of high mileage, poor road
conditions, and extreme desert heat. Major combat units reported that
significant shortages of track shoes negatively affected their operational
capabilities. For example, the 3rd Infantry Division reported in June 2003
that 111 (60 percent) of its 185 Abrams tanks were unable to perform their
missions because of supply shortfalls that included track shoes.
Furthermore, 159 (67 percent) of the division's 237 Bradley Fighting
Vehicles were not mission capable for the same reason.

o 	Interceptor Body Armor. Demand for Interceptor body armor18 exceeded
supply during OIF. The Coalition Forces Land Component commander decided
to increase individual protection by issuing the armor to all troops and
civilians. As a result, demand for the body armor surged, with quarterly
demand rising from a pre-war level of about 8,600 vests and 9,600 plates,
to about 77,000 vests and 109,000 plates by the time the war commenced on
March 2003. Back orders for plates peaked at 598,000 in November 2003,
while back orders for vests reached 328,000 in December. Even though the
services did not report that the lack of body armor impacted their
missions during OIF, there were serious concerns. For example, combat
support units in the Army and Marine Corps were among the last to be
equipped with the armor, increasing the risk to personnel given the
enemy's focus on attacking supply routes.

18 The armor used by U.S. forces during OIF is composed of two primary
components: an Outer Tactical Vest and two Small Arms Protective Insert
plates, which, when combined, provide protection against both shrapnel and
rifle rounds.

o 	Lithium batteries. Army and Marine Corps forces operating in Iraq
experienced severe shortages of lithium batteries, particularly BA-5590s
and BA-5390s, during major combat operations in the spring of 2003. These
nonrechargeable batteries power some 60 critical communications and
electronics systems, such as radios and missile guidance systems.
Worldwide demand for these batteries surged from a peacetime average of
below 20,000 per month prior to September 11, 2001, to a peak rate of over
330,000 in April 2003. As a result, the number of back orders rose rapidly
to 900,000 by May 2003. According to Marine Corps officials, if the war
had continued at the same pace into May 2003 or beyond, Marine units would
have experienced degraded communications capability and increased risk as
a result of battery shortages.

o 	MREs. U.S. forces in Iraq experienced shortages of MREs primarily
during the deployment and major combat phases in February, March, and
April 2003 before normal dining facilities were established. The peak
monthly demand for MREs rose to more than 1.8 million cases, while
inventories dropped to a level of 500,000 cases. In late April when other
food options became available, demand fell rapidly. While certain Army
units reported running out of MREs, available data only shows that they
came close. According to a RAND study, some Army units came within an
estimated 2 days or less of exhausting their on hand quantities.19
Similarly, according to a Center for Naval Analysis study, at times Marine
Corps combat support units had less than 1 day of MREs on hand.20 As a
result, both Army and Marine Corps units were at risk of running out of
food if supply distribution was hindered.

o 	Tires for 5-ton trucks and HMMWVs. The rising demand for truck tires
during and after major combat operations in Iraq nearly exhausted existing
inventories. The demand grew as vehicles were driven long distances and
were modified with add-on-armor. For example, in August 2003, the Army's
inventory contained only 505 tires for 5-ton trucks, which fell far below
the worldwide monthly demand of more than 4,800 tires. As a result, back
orders spiked to over 7,000 for

19 See unpublished research report by RAND Arroyo Center on the
sustainment of Army units in Operation Iraqi Freedom by Eric Peltz and
Marc Robbins.

20 See Center for Naval Analysis, Marine Corps Operations in OIF: Volume
IV-Ground Logistics (Sustainment & Distribution Capacity Management,
Classes I & V (W)),

CRM D0008872.A2/Final (Alexandria, Va.: January 2004), 56-59.

5-ton truck tires and to over 13,000 for HMMWV tires. The shortages
reduced the operational capabilities of these vehicles and negatively
impacted operations in Iraq. For example, 3rd Infantry Division units
reported that tire shortages forced them to abandon equipment, and Marine
Corps units reported stripping and abandoning otherwise good vehicles
because of a lack of tires.

o 	Up-armored HMMWVs and add-on-armor kits. Since the U.S. military began
identifying requirements for these vehicles during the summer of 2003,
there has been a gap between the number of vehicles required and the
number being produced by the industrial base. This new requirement was
based on the need to protect soldiers and Marines executing distribution
and force protection missions. The up-armored HMMWV provides enhanced
protection against rifle rounds and explosive blasts while the
add-on-armor kits21 provide some additional protection to previously
unarmored vehicles. As of September 2004, only 5,330 of the 8,105 required
vehicles were in theater. The overall impact of the shortages of
up-armored HMMWVs and add-on-armor kits is difficult to measure because
units do not report the direct effects of using unarmored HMMWVs. However,
according to a Center for Army Lessons Learned study, the risk of harm to
both personnel and equipment from improvised explosive devices is greatly
reduced when they are transported in an up-armored HMMWV.

Two Items Were Not in Short Supply During OIF

Two items we examined-chemical-biological suits and Marine Corps
helicopter parts-did not experience shortages. In these cases, although
demands were high because of wartime operations, the defense supply system
was able to meet the needs of deployed forces. A discussion of the
availability of the two items follows.

o 	Chemical-biological suits. Although there was a perception that
sufficient quantities of the new Joint Service Lightweight Integrated Suit
Technology (JSLIST) chemical-biological suits were not available during
OIF, our work did not identify any actual shortages in the theater of
operations. Concerns about a shortage of chemical-biological suits

21 These kits, first available in November 2003, consist of armored doors,
armor plates below the doors, an armor plate for the protection of the
seat backs, and a windshield and windows made of ballistic glass.

arose as a result of an October 2002 Congressional request that DOD
provide suits to all military and civilian personnel located in the OIF
theater.22 However, according to DLA, the contracting agent for
chemical-biological suits, and our analysis,23 there were sufficient
quantities of the suits in the inventory to meet the suit demand during
OIF.

o 	Marine Corps helicopter rotor blades. Although concerns were raised
about shortages of helicopter parts for Marine Corps helicopters,
specifically rotor blades, we did not identify any shortages in the
theater of operations. Marine Corps officials reported there were no rotor
blade shortages and our analysis of supply data confirms this. In
addition, the mission capable rates during OIF for the two helicopters we
reviewed-the UH-1N and the CH-53E-were comparable to peacetime rates.

Impact of Shortages
Was Not Always Apparent
in DOD's Readiness
Reporting System

We were not always able to identify the impact of specific shortages
because, although DOD's supply system showed shortages of items in
theater, DOD's readiness reporting systems did not always show the impact
of these shortages on unit operational capability. Such systems as the
Global Status of Resources and Training System and Unit Status Reports are
intended to identify the ability of units to accomplish their missions and
the problems affecting mission performance each month. In addition, other
reporting mechanisms, such as lessons learned reports or after-action
reports, may also disclose the impact of shortages on operations but do
not tie directly to readiness reporting. As a result, we used a variety of
documents, some obtained directly from the units, to identify the impact
of supply shortages.

For our nine items, the information reported through the various readiness
systems, in some cases, was inconsistent with the impact cited in reports.
For example, in July 2003, unit status reports from the 4th Infantry
Division's battalions showed that approximately 145 to 150 of their 176
Bradley Fighting Vehicles were mission capable, translating to a

22 Letter from Subcommittee on National Security, Veterans Affairs, and
International Relations to Secretary of Defense Donald Rumsfeld, October
2, 2002.

23 GAO, Chemical and Biological Defense: U.S. Ability to Meet Protective
Suit Inventory Requirements Faces Risk, GAO-04-290 (Washington, D.C.: Apr.
28, 2004).

mission capability rate of around 84 percent. However, a May 2004 lessons
learned report prepared by the division indicated that the overall mission
capability rate for its Bradleys was 32 percent during the July 2003 time
frame and that the degraded status was due to a shortage of armored
vehicle track shoes and other vehicle suspension items. In a June 2003
status report, four of the 3rd Infantry Division's five infantry
battalions reported that 65 percent of their Bradley vehicles were mission
capable. However a 3rd Infantry Division report for June 2003 showed that
65 percent of the division's Bradleys were non-mission capable because of
supply-related reasons, which unit officials attributed almost exclusively
to track shoe shortages.

There were also instances of readiness information about unit status in
Iraq not being reported. For example, in August 2003, the 4th Infantry
Division's five Armor battalions and one Calvary unit did not enter any
mission capability data into the readiness reporting systems about the
status of their 247 Abrams tanks. However, the May 2004 briefing report
prepared by the division indicated that by July 2003, 28 percent of the
division's tanks were non-mission capable. The primary reason given was
lack of tank shoes and related suspension parts.

Multiple Supply Chain Deficiencies Contributed to Supply Shortages

Five deficiencies contributed to shortages in the supply of seven of the
nine items that we studied. According to DOD data and contractor studies,
these deficiencies also affected other items in the supply system. The
deficiencies were (1) inaccurate and inadequately funded Army war reserve
requirements, (2) inaccurate supply forecasts, (3) insufficient and
delayed funding, (4) delayed acquisition, and (5) ineffective
distribution. Table 3 identifies the deficiencies that affected each of
the seven supply items.

 Table 3: Systemic Deficiencies Contributing to Shortages of Seven Supply Items

Inaccurate and inadequately

funded Army war reserve Inaccurate supply Insufficient and Delayed
Ineffective Item requirements forecasts delayed funding acquisition
distribution

AAV generators X

Armored vehicle track shoes X X X

Interceptor body armor X X

Lithium batteries X X X X

MREs XX

Tires for 5-ton trucks and X HMMWVsX XX

Up-armored HMMWVs and
add-on-armor kits X

Source: GAO analysis.

Inaccurate and Inadequately Funded Army War Reserve Requirements for Spare
Parts Led to Early Shortages during OIF

Army War Reserve Spare Parts Requirements Were Out of Date and Inventory
Was Inadequate

The inaccurate requirements for and poor funding of war reserves affected
the availability of three of the supply items (armored vehicle track
shoes, lithium batteries, and tires). Annual updates of the Army's war
reserve requirements for supply items have not been conducted and, as a
result, the Army did not have an accurate estimate of the spare parts and
other items needed for a contingency such as OIF. In addition, over the
past decade, the Army underfunded its war reserve spare parts, which has
forced managers to allocate money for certain items and not for others.

Army officials told us that annual updates of its war reserve requirements
for spare parts have not been conducted since 1999. AMC uses a computer
model, called the Army War Reserve Automated Process, to determine its
requirements for spare parts in the war reserve. This model is supposed to
be run on the basis of annually updated defense planning guidance and is
designed to support the latest war plans and Army force structure.
According to AMC officials, the model has not been run since 1999 because
the Department of the Army has not provided the latest guidance, which
details the force structure and operations that the Army's war reserve
must support. However, an Army official provided us with copies of the
Army guidance from 2001, 2003, and 2005 that AMC could have used to
initiate computation of war reserve requirements. The Army official stated
that

AMC did not run the model for a variety of reasons such as support for
ongoing missions and problems with the implementation of a new database
and modeling system.24

Because the requirements were out-of-date, the war reserve inventories for
some spare parts were inadequate and could not meet initial wartime
demands. For example, the war reserve requirement for nonrechargeable
lithium batteries (BA-5590s) was not sufficient to support initial
operations in OIF. The requirement for BA-5590s was set at 180,000 to
support the first 45 days of operations, but this amount was considerably
lower than the actual demand of nearly 620,000 batteries recorded during
the first 2 months of the conflict. CECOM officials attributed this
mismatch to inaccurate battery failure and usage rates in the 1999 model.
They also said the model did not include all the communications systems
that used nonrechargeable lithium batteries.

In another example, the war reserve requirement for track shoes for
armored vehicles was inadequate to keep pace with actual demand during the
early months of combat. As table 4 shows, the pre-OIF war reserve
requirement for track shoes for Abrams tanks and Bradley Fighting Vehicles
was, respectively, 5,230 and 5,626; however, in April 2003 the actual
worldwide demand for these tanks was four times higher. The situation was
even worse for 5-ton truck tires.

Table 4: War Reserve Requirements, On-Hand Stock, and Items Requested Worldwide

Supply item

War reserve requirement (March 2003)

War reserve on hand (March 2003)

Items requested worldwide (April 2003)

                     Track shoe (Abrams) 5,230 5,623 23,462

                    Track shoe (Bradley) 5,626 5,695 20,678

                         5-ton truck tire 259 16 4,800

                                 Source: TACOM.

24 This new database, called the Logistics Modernization Program, has only
been implemented at CECOM.

Since the end of major combat operations, war reserve managers have made
manual adjustments to the requirements to reflect supply experiences from
OIF. For example, officials told us that they have adjusted the Army and
the Marine Corps war reserve requirement for BA-5590 and BA-5390 lithium
batteries upward to more than 1.5 million batteries based on the average
monthly demand of 250,000 batteries experienced during OIF multiplied by 6
months. Similarly, war reserve managers at TACOM have increased the
requirements for Abrams and Bradley tank track shoes to 32,686 and 34,864,
respectively. While these actions may correct a particular problem, they
do not address the systemic inaccuracy of the Army's war reserve
requirements.

In prior reports, we have identified problems with the Army's process for
computing the war reserve spare parts requirements. In a 2001 report, we
recommended that the Secretary of Defense direct the Secretary of the Army
to develop and use the best available consumption factors; improve the
methodology used to determine requirements by considering planned
battlefield maintenance practices; and develop industrial-base capacity on
current, fact-based estimates for the war reserve.25 In a 2002 report, we
recommended that the Secretary of Defense direct the Secretary of the Army
to have the Commander of AMC change its process of calculating war reserve
requirements. 26 While the Office of the Secretary of Defense concurred
with these recommendations, the Army has yet to implement them.

Risk Management Decisions Led The Army's war reserve requirements for
spare parts have been to Years of Low Army War significantly underfunded
for many years, indicating that the Army Reserve Funding has made a risk
management decision to not fully fund them. In

November 1999, Army documents indicated that the Army had only $1.3
billion in parts prepositioned, or otherwise set aside for war reserves,
to meet its stated requirement of $3.3 billion. AMC data indicate that a
lack of funding for war reserve spare parts continues to be an issue. As
table 5 shows, as of October 2004, only about 24 percent ($561.7 million
out of $2,327.4 million) of AMC's total spare parts requirement is
currently funded

25 GAO, Defense Inventory: Army War Reserve Spare Parts Requirements Are
Uncertain, GAO-01-425 (Washington, D.C.: May 10, 2001).

26 GAO, Defense Inventory: Improved Industrial Base Assessments for Army
War Reserve Spares Could Save Money, GAO-02-650 (Washington, D.C.: July
12, 2002).

and on hand. Moreover, AMC data show this pattern of underfunding is
expected to continue through fiscal year 2009.

Table 5: Status of On-Hand Army War Reserve Spare Parts Requirements as of
                                  October 2004

                              Dollars in millions

Major subordinate commands Requirement Value on hand Percentage filled Aviation
           and Missile Command Tank-automotive and Armaments Command

                    Aviation                       $331.5          $56.1      
                    Missiles                        98.9            26.8      
       Communications-Electronics Command           344.2           81.6      
        Secondary Item Control Divisiona            197.0           30.2      

                   Armaments                             245.4      70.7      
       Biological and chemical equipment                 117.8      57.0      
                Automotive parts                         992.5     239.3      
                     Total                            $2,327.4     $561.7     

Source: Army Materiel Command.

Note: Totals do not add due to rounding.

aThe Secondary Item Control Division is responsible for items managed by
agencies outside of AMC, such as DLA or the General Services
Administration.

As a result of this low funding, war reserve managers told us that they
must prioritize how the available funding is allocated based on their
professional experience. For example, the war reserve manager for TACOM
reported that he tends to spend his available funds on expensive items
with long production lead-times, such as tank engines, because they are
difficult to acquire on short notice. Conversely, lower cost items with
shorter production lead-times, such as tires, do not receive funding
priority.

The Army accepts the risk of unfunded war reserve requirements in order to
fund other priorities, such as operations and the procurement of new
systems. Although, the Army has reported the amount of war reserve
underfunding to Congress, the risk of not funding the war reserve is not
clearly stated.

Army Supply Forecasts Did Not Accurately Represent Troop Needs in OIF

The Army's requirements process did not accurately forecast the supplies
needed to support U.S. forces during OIF for four of the items we studied
(armored vehicle track shoes, lithium batteries, MREs, and tires). As
indicated by Army regulation,27 AMC normally uses a computer model to
forecast its spare and repair parts requirements. The model uses the
average monthly demand over the previous 24 months to predict future
equipment use and demand. Although the Army regulation28 indicates that
the model should be able to switch to a wartime demand forecasting method,
AMC officials stated the system has no wartime forecasting capability. As
a result, the Army's supply requirements forecasting model could not
forecast the wartime surge in requirements during OIF. In contrast, DLA's
model has the capability to forecast requirements for contingencies, but
it was not completely effective, as in the case of MREs.

Instead of using the model, the Army relied on the expert opinion of item
managers, who manage supply items at AMC's subordinate commands. Item
managers, however, did not have sufficient information on estimated
deployment sizes or duration and intensity of operations to accurately
forecast supply requirements for OIF. According to TACOM officials, AMC
initially directed item managers to use their expert opinion and knowledge
to develop forecasts, without input from operational planners in CENTCOM.
AMC officials stated that Army headquarters did not provide them with
formal guidance on the duration of the conflict, supply consumption, or
size of the deploying force. AMC documents show and their contractors
confirm that AMC gathered some anecdotal information on force size and the
duration of operations in November 2002. However, item managers at AMC's
subordinate commands reported they did not always receive adequate
guidance from AMC. For example, officials at TACOM stated they did not
receive planning guidance on operational plans from AMC to incorporate
into their forecasts of track shoe or tire requirements. The forecasted
monthly requirement for Abrams track shoes was 11,125, which was less than
half of the actual requirement of 23,462 shoes in April 2003. Forecasts
for 5-ton truck tires were also inaccurate. Worldwide demand was
forecasted at 1,497 tires during April 2003, less than a third of the
actual demand of 4,800.

27 See Army Regulation 710-1, Chapter 4, Section I, Paragraph 4-2. 28 See
Army Regulation 710-1, Chapter 4, Section I, Paragraph 4-2, a. (4) (b).

In contrast, officials at CECOM reported that in the summer of 2002,
operational planners consulted them about the number of nonrechargeable
lithium batteries needed to support operations. Subsequently, CECOM
officials presented these new requirements to AMC and the Joint Materiel
Priorities and Allocation Board and received $38.2 million in additional
obligation authority for BA-5590 and BA-5390 batteries.29 Despite these
efforts, demand for batteries outpaced production during OIF combat
operations.

The Marines forecast supply requirements for their initial operations
based on operational plans30 and modeling factors that involve both
operational and logistics planners. Modeling factors include historical
supply data, number of personnel involved in an operation, distance of
operation, and number of days of operation. Normally, the forecasting
process includes many echelons of Marine Corps command. Initially, the 1st
Marine Expeditionary Force headquarters provides operational plans to the
deploying units that determine the supply requirements for an operation.
Once the deploying units forecast a supply requirement, it is returned to
headquarters for review. Deploying units review the supply requirements
again before passing them to the Marine Forces Pacific Command for final
assessment. The Marine Corps Logistics Command, the service's integrated
logistics manager, sends the requirements to DLA and other supply
providers. Supply providers then inform the Logistics Command and the
deploying units about their ability to fill the forecasted requirements.
According to the Marines, they used this process to forecast supply
requirements before deploying to OIF.

After the end of major combat operations, the Marine Corps began an
afteraction review process to analyze the effectiveness of their OIF
supply forecast. As part of this analysis, the 1st Marine Expeditionary
Force assessed the correlation between supply forecasts and supply usage.
This analysis showed that 88 percent of the types of repairable supply
items forecasted were actually needed,31 and 62 percent of the types of

29 The Joint Materiel Priorities and Allocation Board, sets, changes, or
recommends policies for allocating supplies in the DOD system.

30 DOD defines operation plans as plans for the conduct of military
operations in a hostile environment prepared by the commander of a unified
or specified command in response to a requirement established by the Joint
Chiefs of Staff.

31 A secondary repairable is a spare part that when broken is repaired and
returned to inventory rather than replaced.

consumable items forecasted were demanded, in the first 90 days. These
data indicate that a significant number of unneeded items could have been
sent to theater, placing an unnecessary burden on the distribution system.
However, the Marine Corps has not analyzed the accuracy of whether the
quantities forecasted equaled the quantities needed. Without such
analysis, the Marines cannot determine if their forecasting process
provided them with the right items in the right quantity at the right time
during OIF.

Insufficient and Delayed Funding Limited the Availability of Supply Items
for OIF

AMC Did Not Receive Sufficient Obligation Authority from the Department of
the Army to Meet Spare Parts Requirements Promptly

A lack of sufficient funding (obligation authority) within the Army's
working capital fund and delays with the release of funds limited the
availability of three reviewed items (armored vehicles track shoes,
lithium batteries, and tires). The delays may have been due to the Army's
multi-stage process to validate requirements. In contrast, DLA's working
capital fund was able to move sufficient obligation authority among
accounts to support rapidly increasing demands.

According to a DOD regulation,32 DOD components are supposed to structure
their supply chain processes and systems to provide flexible and prompt
support during crises. However, during fiscal year 2003, AMC did not
promptly receive obligation authority to match its stated requirements.
The Department of the Army released $2.9 billion of obligation authority
into the Army Working Capital Fund to buy supplies in October 2002 as part
of the fiscal year 2003 budget cycle (see fig. 4). This amount was based
on the requirements established in the President's Budget prepared 2 years
earlier. By the time fiscal year 2003 began, AMC had identified a new
supply requirement of $4.8 billion to support both peacetime operations
and the ongoing global war on terrorism, but, the obligation authority
provided in October 2002 did not support this revised requirement. While
Army headquarters provided some additional funding to AMC, AMC increased
its supply requirements again in March 2003 to $5.6 billion. However, the
total obligation authority AMC received at that time equaled only $4.7
billion. AMC did not receive sufficient obligation authority to support
the final validated requirements of nearly $6.9 billion until the end of
fiscal year 2003, 4 months after major combat operations ended.

32 See DOD Supply Chain Material Management Regulations, Chapter 1,
C1.3.2.1, DOD Regulation 4140.1-R (May 23, 2003).

Figure 4: Fiscal Year 2003 Army Working Capital Fund Supply Management
Requirements and Cumulative Obligation Authority Received

Dollars in billions

     Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. 2002 2003

Cumulative funding received

Requirements

Reset requirements

Source: GAO analysis of AMC and Department of Army data.

Notes:

(1) Reset is a term used to define bringing a vehicle that was used during
Operation Enduring Freedom and OIF back to a fully mission-capable
(serviceable) condition. Resetting a vehicle involves extensive use of
spare parts.

(2) Numbers are rounded to the nearest tenth of a billion dollars.

In addition to establishing requirements to support its peacetime and
continuing global war on terrorism operations, AMC identified additional
requirements, called reset requirements, of $1.3 billion to support the
repair of items coming back from theater. As figure 4 shows, by the end of
fiscal year 2003, AMC had received $6.9 billion of its total requirement
of $8.2 billion (including reset) in obligation authority, a shortfall of
$1.3 billion.

We could not determine exactly why sufficient funding was not provided to
AMC more quickly, because sufficient records were not available to track

when AMC and its subordinate commands requested additional funding from
Army headquarters or the amounts requested. Similarly, Army headquarters
could not provide information about the timing of its requests for
additional obligation authority to the Office of the Under Secretary of
Defense (Comptroller). However, the Army's requirements validation process
likely contributed to delays in the release of obligation authority into
AMC's Army Working Capital Fund. After AMC completes its internal
validation process and requests additional funding above the programmed
requirement during the year of execution, several organizations within
Army headquarters reexamine AMC's requirements. In the absence of specific
direction in Army regulations, Army headquarters has developed a process
for validating AMC's requirements. While the Office of the Deputy Chief of
Staff for Logistics has the main responsibility for validating AMC's
functional requirements, the Office of Deputy Chief of Staff for
Operations, the Office of the Deputy Chief of Staff for Program and
Analysis, and the Assistant Secretary of Army (Financial Management and
Comptroller) must also review and agree on the requirements. Once these
organizations validate the requirements, the Assistant Secretary of the
Army (Financial Management and Comptroller) requests obligation authority
from the DOD Comptroller. This lengthy process may have delayed the
release of funds and contributed to shortages of tires, track shoes, and
lithium batteries.

The additional time associated with the Army's validation process was
exemplified by events during fiscal year 2003. AMC set its revised supply
requirements to $4.8 billion in October 2002. However, the DOD Comptroller
did not release the first additional obligation authority of $600 million
until January 2003, 3 months later. Army headquarters office released its
next increase of obligation authority of $1.1 billion in March 2003, for a
total of $4.6 billion; nearly 6 months after AMC identified the initial
requirement. Army officials were unable to tell us when they had submitted
their requirements to the DOD Comptroller because they said they often
submitted requests for additional obligation authority during the fiscal
year informally via e-mails and telephone calls. Accordingly, detailed
records were not kept. We were able to confirm that the time between the
releases of obligation authority from the DOD Comptroller to the
department of the Army did not take longer than two weeks. This indicates
that for most of the 6 months, AMC's request for additional obligation
authority was somewhere in the Department of Army's validation process.

In addition to delays in receiving funds, AMC suffered from an overall
lack of sufficient obligation authority for its major subordinate commands
that contributed directly to shortages of tires, track shoes, and lithium
batteries

during OIF. Initial priority was to provide funding to the U.S. Army
Aviation and Missile Command to support critical aviation systems and then
to TACOM for tracked and tactical wheeled vehicles. Without prompt
obligation authority, item managers could not contract for supplies in
anticipation of customer demands. According to item managers, they need
sufficient obligation authority in advance of customer demands in order to
have sufficient supplies available. TACOM officials reported that the lack
of adequate obligation authority prevented them from buying supplies,
including tires and tank track shoes, in anticipation of demands. For
example, in October 2002, TACOM item managers identified total
requirements of nearly $1.4 billion, but only had authority to obligate
approximately $900 million. By May 2003, TACOM's requirements had
increased to over $2.1 billion, but only $1.5 billion in obligation
authority was available. By the end of the fiscal year, TACOM's total
requirement, including funds necessary to reset the force, totaled $2.7
billion, but its obligation authority was less than $2.4 billion. This
shows that obligation authority for tires and tank track shoes lagged
behind requirements, thereby preventing item managers from buying supplies
in anticipation of demand. Similarly, CECOM reported that unfunded
requirements over several prior years affected its purchases of lithium
batteries. CECOM identified requirements of nearly $1.5 billion for fiscal
year 2003, but received less than $1.1 billion in obligation authority for
the year.

DLA Received Sufficient In contrast to the Army, DLA received sufficient
obligation authority from Obligation Authority to Meet the DOD Comptroller
to meet increasing customer supply needs during

                             Customer Supply Needs

OIF. DLA set the requirements for its supply management business area at
$18.1 billion and received $16.5 billion of this amount in obligation
authority in October 2002 (see fig. 5). By February 2003, it had received
obligation authority that kept pace with increasing requirements. As
requirements increased during OIF, the agency was able to request and
receive additional obligation authority to purchase supplies in
anticipation of customer needs. By the end of the fiscal year, DLA's
supply requirements had reached $25.0 billion, and it had received an
equal amount of obligation authority to meet those requirements.

Figure 5: Fiscal Year 2003 DLA Supply Management Requirements and
Cumulative Obligation Authority Received Dollars in billions

Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.

                                   2002 2003

Cumulative funding received

Requirements

Source: DLA.

DLA officials told us they were able to obtain timely increases in
obligation authority from the DOD Comptroller because of their
requirements validation process. The agency conducts an ongoing review of
its requirements throughout the year to ensure they are updated as changes
in demand occur. Agency officials then request additional obligation
authority directly from the DOD Comptroller. This process allowed DLA to
submit requirements and receive increased obligation authority several
times during fiscal year 2003. Agency officials stated that having
accurate requirements ensures that the DOD Comptroller accepts the
requirements without further validation. According to DLA officials, the
DOD Comptroller was responsive to the agency's needs, providing additional
obligation authority within days of a request.

Delayed Acquisition Caused by a Variety of Challenges

Body Armor Production Did Not Support Increasing Demands

The supply system faced several challenges in rapidly acquiring three of
the items we reviewed to meet the emerging demands caused by OIF
(Interceptor body armor, lithium batteries, and up-armored HMMWVs and
kits). According to a DOD regulation,33 supply chain processes and
systems, which include relationships with commercial manufacturers, should
provide flexible and prompt support during crises. The rapid increase in
demand for the three items was not anticipated, and as DOD's supply system
attempted to purchase them, its efforts were impeded by problems that
varied by item. For example, while lithium battery production was limited
by the capacity of a sole source supplier and long production lead-times,
body armor manufacturers faced shortages of the material components of the
armor.

DLA data show that manufacturers of body armor could not meet the surge in
demand for the item's two primary components, plates and vests. For
example, the worldwide demand for plates increased from 9,586 in December
2002 to 108,808 in March 2003 to a peak of 478,541 in December 2003. A
comparison of plate production rates over the same time period shows that
only 3,888 plates were produced during December 2002, 31,162 during March
2003, and 49,746 during December 2003.

Increasing requirements exceeded the manufacturer's capacity to produce
sufficient body armor. For example, in October 2003, CENTCOM expanded
requirements for body armor to include all U.S. personnel in its area of
responsibility. The industrial base could not meet this new requirement
due to a lack of construction materials and long production lead-times.
Vest production was hindered by the limited availability of Kevlar; plate
production was initially slowed due to a lack of a special backing for the
plates and later by the limited availability of the primary component of
the plates, ceramic tiles. In addition, the minimum production lead-time
of 3 months limited the manufacturers' ability to accelerate production
levels to meet increasing demand, especially for plates, which are more
difficult to manufacture than vests. Due to these industrial-base
limitations, body armor was not issued to all troops in Iraq until January
2004, 8 months after major combat operations were declared over.

33 See DOD Regulation 4140.1-R, Chapter 1, C1.3.2.1.

Lithium Battery Production Did Not Support Increasing Demands

Pace of Production of Up-Armored HMMWVs and Kits Did Not Match Maximum
Capacity

Demand for lithium batteries exceeded inventory and production during OIF.
As mentioned earlier in this report, the requirement for lithium batteries
had not been assessed for the war reserve for several years. Worldwide
demand for lithium batteries increased from 38,956 batteries per month in
October 2001 to a peak of 330,600 in April 2003. Concurrent battery
production was 32,000 in October 2001 and 114,772 in April 2003, and thus
was insufficient to meet demand. CECOM expanded battery production from
one to three manufacturers and received $38.2 million to increase
production capacity in late 2002; the 8-fold increase in battery demand
still outstripped production capacity. A 6-month production lead-time for
the batteries precluded the ability of the three manufacturers to meet the
peak demand during April 2003. The Marines reported being down to only a
2-day supply of batteries in CENTCOM's area of responsibility in April
2003, despite OIF's priority on worldwide supply shipments. By late 2003,
the Army was able to acquire enough batteries so that its inventory
exceeded back orders.

Meeting rapidly increasing requirements for armoring HMMWVs also met with
constraints. For example, CENTCOM stated a requirement for 1,407
up-armored HMMWVs to support OIF in August 2003 that grew to 8,105
vehicles in September 2004. Manufacturers were producing 51 up-armored
HMMWVs per month in August 2003. Recognizing the increase in requirements
in February 2004, the Army reached an agreement with the manufacturers to
increase production to 460 vehicles per month by October 2004. However,
the signed agreement with the manufacturer indicated that maximum
production could have been increased to 500 vehicles.

Funding was not available when the requirements increased. As a result,
Army officials stated that the up-armored HMMWV manufacturers were unable
to operate at the maximum capacity. In order to produce vehicles at a
consistent and high rate, the manufacturer needs to be assured of
consistent funding at least 3 months in advance of delivery. While
additional funding was received in fiscal year 2004, program managers
stated they often did not know when the next funding release would occur,
further complicating their procurement planning. As of September 2004,
Army data shows that 5,330 of the 8,105 required up-armored HMMWVs were in
CENTCOM's area of responsibility.

Similar issues affected the delivery of add-on-armor kits from the Army's
depot system even more dramatically. Kit production in the Army's depot
system reached its maximum rate of 3,998 kits per month in April 2004 and

would have met the requirement sooner had the Army not slowed production.
Moreover, additional unused capacity was available for kit production. In
February 2004, a contractor-operated Army facility informed Army depot
managers that it could produce an additional 800 kits per month. While
item managers stated they did not use this contractor-operated facility
due to issues with contract timing and price, they did not have
information about the reason for reducing the level of production at the
government-operated facilities. Army data show that kit production will
meet CENTCOM's September 2004 requirement for 13,872 kits no later than
March 2005.

DOD's Response to Acquisition DOD's response to the various acquisition
challenges presented by these

Challenge Was Inconsistent	items was inconsistent, lacked transparency,
and did not fully exploit all of its capabilities to influence production.
If the Army had forecasted an accurate requirement for the batteries, the
need for additional manufacturers would have been recognized and
production capacity could have been increased on time to better meet the
demand. In the case of the other two items, the rapid increase in demand
was not as predictable and DOD responded differently to each. DOD
officials made a very aggressive effort to focus on and improve the
availability of body armor using regulatory authority to increase
production. DOD also provided visibility over the problem and courses of
action to Congress. By contrast, DOD's response to the need for more armor
protection for HMMWVs was more measured and its acquisition solution was
less transparent. This may have been why members of Congress have
expressed specific concerns about the availability of these items and
designated specific funds for them.

Ineffective Theater Distribution Contributed to Shortages of Supply Items

DOD's inability to distribute sufficient quantities of items to troops
adversely affected the delivery of many items. While all seven items may
have experienced distribution problems, we found that four items (AAV
generators, Interceptor body armor, MREs, and tires) were directly and
negatively affected, causing troops to experience shortfalls. Distribution
is the operational process of synchronizing all elements of the logistics
system to deliver the "right things" to the "right place" at the "right
time" to support the combatant commander. This complex process involves
the

precise integration of doctrine,34 transport equipment, personnel, and
information technology. Among the problems encountered during OIF were (1)
conflicting doctrine defining the authority of the geographic combatant
commander to synchronize the distribution of supplies from the U.S. to
theater; (2) improper packaging of air shipments from the U.S., which
forced personnel in theater to spend time opening and sorting shipments as
they arrived; (3) insufficient transportation equipment and supply
personnel in theater; and (4) the inability of logistics information
systems to support the requisition and shipment of supplies into and
through Iraq.

Conflicting Doctrine Impeded We found that conflicting doctrine impeded
the establishment of a

Effective Distribution	distribution system capable of delivering supplies
to the warfighter smoothly and on time. Distribution begins with the
supplier, ends with the warfighter, and includes all systems, both
physical and informational, needed to move and manage supplies between the
two ends. Currently, joint doctrine institutionalizes separate management
of sections of the end-to-end distribution system by placing
responsibility for logistics support outside the theater with the
individual services and the U.S. Transportation Command.35 However, it
also requires the theater commander to synchronize all aspects of
logistics necessary to support the mission.36 This conflicting doctrine is
contrary to DOD's distribution principle of centralized management, which
prescribes that one manager should be responsible for the end-to-end
distribution of supplies. A SAIC study also reports that joint doctrine
does not contain any specific or prescriptive guidance on how the
combatant commander might ensure a seamless distribution process.37

During OIF, the CENTCOM combatant commander could not synchronize the
distribution process to support the mission, as required by doctrine, with
the level of control that joint doctrine suggests. Instead, the combatant
commander had to rely on other DOD components responsible

34 DOD defines doctrine as the fundamental principles by which the
military forces or elements thereof guide their actions in support of
national objectives. It is authoritative but requires judgment in
application.

35 See Chapter I, p. I-4, I-7, I-8, and I-10, Joint Publication 4-0.

36 See Chapter I, p. I-7, Joint Publication 4-0.

37 SAIC, Objective Assessment of Logistics in Iraq, Contract No.
GS-10F-0091L, Task Order 73510 (March 2004), p78.

for different functions along the distribution process to gain end-to-end
visibility as supplies moved through the distribution system. For example,
as we reported in December 2003,38 although CENTCOM issued a policy
requiring the use of radio frequency identification tags on all
shipments,39 to track assets shipped to and within the theater, tags were
not always used. Officials from various DOD components reported that,
while no data were compiled on the frequency of shipments being labeled
with radio frequency identification tags, only about 30 percent of the
pallets and containers coming into the theater were tagged. Officials gave
various reasons for not following the commander's policy, such as
personnel were not trained to use the technology, tags were not available
to place on loads moving through the system, and requirements to use the
technology were not compatible with current operating systems. In
addition, some Army officials reported that CENTCOM does not have
jurisdiction over their process for shipping and tracking assets.
Therefore, while CENTCOM issued guidance directing the implementation of
an in-transit visibility system that relied on the tags, the command could
not control the organizations outside of theater responsible for applying
the tags to ensure their proper use.

Initial Shipments from the U.S. to DOD's distribution principle of
maximizing throughput calls for reducing

the Theater Were Not Properly the number of times that supplies are opened
and sorted in transit so that

Packaged	distribution to warfighters is prompt. Early in OIF, inefficient
packaging and palletizing of air shipments created supply backlogs in
Kuwait. In turn, these backlogs delayed the delivery of supplies shipped
by air to units in Iraq, which included armored vehicle track shoes, body
armor, and tires. Insufficient information was available to allow us to
link how each individual item was affected by this distribution problem.

According to Army officials, shipments move most efficiently when they are
packed and palletized40 so that they do not have to be unpacked and
reloaded while in transit; sending such "pure" shipments to a single unit
is a

38 GAO-04-305R.

39 Radio frequency identification tags are used to track shipping
containers and pallets and their contents while in transit. The tags
continuously transmit radio signals, which can be read using hand-held or
fixed scanners.

40 DOD uses a pallet, called the 463L pallet, for air shipments. The
pallet is an 88"  * 108" aluminum flat base used to facilitate the loading
and unloading of aircraft.

standard peacetime procedure. During OIF, Army officials expected each
pallet or container to contain supplies for only one unit or location.
However, initial shipments included spare parts and supplies for several
geographically separate units. DLA officials stated that U.S. distribution
centers could not handle the high volume of supplies and many shipments
were loaded with items for more than one customer or "mixed." They also
said that the volume of supplies arriving daily for consolidation into air
shipments overwhelmed distribution centers in the U.S. The facilities were
structured to handle peacetime requirements and lacked the necessary
equipment and personnel to handle the surge capacity associated with
wartime. Officials stated that mixed cargo was often sent to the theater
without being sorted in order to make room for incoming supplies.
Moreover, the lack of sorting continued because of a miscommunication
between CENTCOM and DLA, the shipper. CENTCOM expected the peacetime
practice of pure pallets would continue during OIF, while DLA officials
focused on moving pallets to theater regardless of whether they were pure
or mixed. However, at that same time RAND analysts reported that DLA
facilities were sending pure pallets to U.S. Army units in Europe and
Korea.

Once in theater, mixed shipments had to be manually opened, sorted, and
re-palletized at theater distribution points, causing additional delays.
According to staff at the Theater Distribution Center in Kuwait, some
mixed shipments were not marked with all the intended destinations so the
contents of the shipments had to be examined. Army officials stated that
because mixed pallets of supplies were initially sent to theater, over
9,000 pallets piled up at the center. By the fall of 2003, 30 percent of
the pallets arriving at the center still had to be reconfigured in some
way. The Army and DLA recognized the problem and worked in conjunction
with CENTCOM to establish a "pure palleting" process at the distribution
center in Pennsylvania. This resulted in potentially longer processing
times in the United States in order reduce customer wait time in theater.

According to a RAND study,41 the pallets arriving in theater between
January and August 2003 contained more than 20,000 cardboard boxes of
small items. Over 4,300 boxes, about one in every five, were mixed and may
have been opened and the contents sorted before being forwarded on to

41 See unpublished research report by RAND Arroyo Center on the
sustainment of Army units in Operation Iraqi Freedom by Eric Peltz and
Marc Robbins.

Shortages of Supply Personnel and Transportation Equipment Hampered Supply
Distribution

customers, which further delayed delivery. The RAND study showed that it
took an average of 25 to 30 days for such mixed boxes to travel from a
port in theater, through the theater center, to the supply activity that
ordered it. In contrast, when a box with items for only one unit was
shipped, it took an average of 5 to 10 days to reach the customer.

The lack of sufficient logistics resources, such as trained supply
personnel and cargo trucks, hindered DOD's efforts to move supplies
promptly from ports and theater distribution centers to the units that had
ordered them, as expected under the DOD principle of optimizing the
distribution system. As a result, some troops experienced delays in
receiving MREs and other supplies, thereby reducing operational
capabilities and increasing risk.

According to military personnel, there was a shortage of support personnel
in theater prior to and during the arrival of combat forces. Moreover,
those that arrived were often untrained or not skilled in the duties they
were asked to perform. The effects of these shortages of trained personnel
were most evident at the Theater Distribution Center and resulted in
delays in the processing (receipt, sorting, and forwarding) of supplies,
and backlogs. For example, in the late February to early March 2003 time
frame, the Center had only about 200 reserve personnel and did not reach
its authorized staffing level of 965 supply/support personnel until May
2003. Moreover, when the center opened, it already had an estimated
5,000-pallet backlog and its commander employed ad hoc work details drawn
from surrounding support units to help. Furthermore, organizations outside
of the theater, such as TACOM, sent personnel to Kuwait to ensure that
specific items, such as tires, were properly processed and sent to the
correct customers.

Moreover, according to after-action reports, lessons learned studies, and
discussions with military personnel, the lack of adequate ground
transportation, especially cargo trucks, contributed significantly to the
distribution problems. For example, an Army official with the 377th
Theater Support Command, which was responsible for logistics support in
Kuwait, stated that when combat began his unit needed 930 light/medium and
medium trucks but had only 515 trucks on hand. Although his unit "managed"
with what was available, he said that the shortage of equipment used to
haul supplies into Iraq created a strain on materiel movement. Both the
Marine Corps and the 3rd Infantry Division also reported that available
transportation assets could not meet their capacity requirements. Even
high-priority items, such as food did not always move as intended.
According to a CENTCOM after-action report,

contractors responsible for moving MREs from ports to the Theater
Distribution Center at times had only 50 of the 80 trucks needed. DLA
officials reported that at one time 1.4 million MREs were stored at a port
in theater, awaiting transport to customers.

One cause for the distribution resource problems was the failure of the
force deployment planning process to properly synchronize the flow of
combat and support forces. DOD normally uses time-phased force deployment
data to identify and synchronize the flow of forces during an operation.
Key elements of this process include requirements for military
transportation companies, contractor provided services, and host nation
logistics support. However, the process was "thrown out" in the planning
leading up to OIF. Around November 2002, DOD started to use another method
for deployment planning, referred to as the Request for Forces process.

The Request for Forces process segregated the initial deployment plan into
over 50 separate deployment orders. DOD's priority was for combat forces
to move into theater first. Under this new process, logistics unit
commanders had to justify the flow of their units and equipment into the
theater-often with little success. According to some DOD planners, this
approach did not adequately meet planner needs, especially the needs of
logisticians. Each deployment order required its own transportation
feasibility analysis, which resulted in a choppy flow of forces into the
theater. This in turn caused imbalances in the types of personnel needed
in the theater to handle logistics requirements. Furthermore, a RAND study
suggests that distribution assets, particularly for components such as the
377th Theater Support Command and the 3rd Corps Support Command, were
either deleted from the deployment plan or shifted back in the deployment
timeline.42 As a result, logistics personnel could not effectively support
the increasing numbers of combat troops moving into theater.

DOD took steps to mitigate the impact of some distribution problems, but
these did not always work. For example, according to a RAND report,
priority was given to moving critical supplies, such as food, water,
ammunition, and fuel. Other items, to include spare parts, were moved on a
very limited, opportune basis. As a result, according to one after-action
report, it took nearly 2 weeks after U.S. forces moved into Iraq for the
first

42 See unpublished research report by RAND Arroyo Center on the
sustainment of Army units in Operation Iraqi Freedom by Eric Peltz and
Marc Robbins.

shipment of spare parts to reach combat forces, and this delivery was
inadequate to support an entire division engaged in combat operations.
Moreover, the Army confirmed that after 45 days of enemy engagement,
moving water still consumed over 60 percent of available theater
transportation trucks. A Marine Corps after-action report43 listed repair
parts distribution as a "near-complete failure."

In order to move supplies to the troops, both the Army and Marines
contracted for additional trucks. For example, the Marine Corps contracted
for $25.6 million in services from several commercial trucking companies
to support combat operations. It justified this action by identifying
deficiencies in the provision of transportation support they expected from
other components in theater. However, Army officials stated that its
contractors did not always have sufficient trucks to move supplies as
required because contracts did not specify a level of operational
readiness for trucks. As a result, even if trucks were available, they
were not always functional. In its after-action report, the 3rd Infantry
Division stated that available transportation assets and contracted host
nation support could not meet divisional requirements for carrying
capacity.

Information Systems did not According to military doctrine, financial,
communication, and information

Support Supply Distribution	systems used to support supply distribution
must be accessible, integrated, connected, and contain accurate and
up-to-date information.44 In other words, these systems need to provide a
seamless flow of all types of essential data from the point of production
to the warfighter. However during OIF, the logistics systems used to
order, track, and account for supplies were not well integrated; moreover,
they could not provide the essential information necessary to effectively
manage theater distribution.

Data Transmission Problems Hindered Supply Requisitions

Logistics information systems in use during OIF could not effectively
transmit data, making it difficult to process and track requisitions for
critical supplies. A number of factors limited communications between the

43 U.S. Marine Corps Enduring Freedom Combat Assessment Team, Operation
Iraqi Freedom, Implications for Seabasing, October 22, 2003.

44 See Joint Publication 4-0, Chapter I, p. I-17 through I-19 and Joint
Publication 4-01.4, Chapter I, I-8 and I-9.

various logistics systems, including a lack of bandwidth in the theater to
satisfy all systems users, systems that were incompatible with each other,
units lacking the necessary equipment or being delayed in connecting to
the supply system, and distances being too great for supply activities to
effectively transmit data by radio. For example, the supply activities in
the Army's 3rd Infantry Division only received about 2,500 of the over
10,000 items-including armored vehicle track shoes, lithium batteries, and
tires-they requisitioned between August 2002 and September 2003. Officials
at the 3rd Infantry Division attributed this issue specifically to
communications problems between systems. Army officials also attribute
poor communications as a major factor leading to a $1.2 billion
discrepancy between the amount of supplies shipped to the theater and the
amount actually acknowledged as received, which we reported on in December
2003.45

The Marine Corps similarly experienced communications problems between its
information technology systems during OIF. Marine forces deployed with two
different versions of the Marine Corps Asset Tracking Logistics & Supply
System logistics information system, which were not compatible with each
other. Marine Corps units in the 1st Marine Expeditionary Force were using
the Asset Tracking Logistics & Supply System I for frontline logistics,
while the 2nd Marine Expeditionary Force was using the Asset Tracking
Logistics & Supply System II+ for theater support.46 Therefore,
requisitions from Marine support activities at the front lines could not
be transmitted directly to Marine logistics units in the rear. Instead,
the Marines used other processes, such as e-mail and satellite phone to
requisition supplies. However, this left ordering units without any
information on the status of their requisitions. As a result, many
duplicate orders were submitted and may have unnecessarily added more
cargo to the already overwhelmed theater distribution system. A study by
SAIC also noted that the lack of logistics communications was a weaknesses
during OIF.47 The Army's Deputy Chief of Staff for Logistics has since
provided

45 GAO-04-305R.

46 Generally, the 1st Marine Expeditionary Force served as the combat
force during the operation, while the 2nd Marine Expeditionary Force
provided theater-level supply support.

47 See SAIC, Objective Assessment of Logistics in Iraq, Contract No.
GS-10F-0091L, Task Order 73510 (March 2004) Chapter 5.

satellite communications equipment to the units operating in theater to
help alleviate these communication difficulties.

Available Logistics Information Systems Did Not Provide Adequate
Visibility

Another major problem encountered during OIF was a lack of adequate
visibility over supplies in the distribution system. While the operation
order for OIF called for the use of radio frequency identification,
tracking was limited primarily by a failure to place radio frequency
identification tags on all shipments sent to the theater and a lack of
fixed scanners needed to read radio frequency identification tags. For
example, some ports, such as one we observed in Bahrain, had no scanners
at all.

Another equally challenging problem was that scanners often failed under
the harsh environmental conditions. According to one Army assessment, only
50 percent of the scanners inspected in Kuwait were operational. In
addition to problems with the radio frequency identification technology,
there was no suitable information system infrastructure to track and
identify supply assets. SAIC reported that the Joint Total Asset
Visibility system could not provide commanders with the asset visibility
they needed, while military officials in theater told us they knew of no
joint system that tracked supplies from the point of production to the
warfighter. Rather, logistics personnel relied on a number of unintegrated
tracking systems. As a result, CENTCOM and the major combat forces in the
Army and Marine Corps could not adequately track or identify supplies
moving to and within the theater.

The lack of in-transit visibility over supplies significantly effected
distribution. For example, an Army official responsible for logistics
operations at the Theater Distribution Center noted that incomplete radio
frequency identification tags forced the center's personnel to spend time
opening and sorting incoming shipments. This, in turn, significantly
increased processing time, contrary to DOD's principle of maximizing
throughput. As a result, according to a CENTCOM issue paper, around 1500
Small Arms Protective Inserts plates for body armor were lost. Another
CENTCOM report stated that 17 containers of MREs were left at a supply
base in Iraq for over a week because no one at the base knew they were
there. According to Marine Corps officials, they became frustrated with
their inability to "see" supplies moving towards them and lost trust and
confidence in the logistics system and processes. For example, the

Marines could only verify the receipt of 15 out of 140 AAV generators that
were shipped to them.

Changes to Unit Address Codes Disrupted Logistics Information Systems

The use of new OIF-specific address codes, known as Department of Defense
Activity Address Codes, for ordering supplies limited the effectiveness of
logistics information technology.48 The codes ensure that supplies are
sent to the correct address of the ordering unit and that the correct unit
is charged for the supplies. Because of poor linkages between Army
logistics and financial systems, a problem of where to ship and who to
bill surfaces unless a unit or activity deploys intact. For example, while
some parts of the 3rd Infantry Division remained in the U.S. during OIF,
the majority of the division deployed to Iraq. To ensure that ordered
supplies went to the correct location of a deployed unit and that the unit
was correctly charged, new codes specifically set up for OIF were issued
to deploying entities. Meanwhile, the original codes remained with that
portion of the unit that did not deploy. Approximately 10,000 new codes
were created for OIF. This caused significant disruptions to logistics
information systems as new data had to be manually updated in each system.
Many problems occurred during this process, such as the issuance of
inactive codes, use of codes already assigned to other units, and
incorrect data being input into logistics systems. These problems were
another factor contributing to the $1.2 billion discrepancy between
supplies shipped and supplies received.

Furthermore, there was a delay in updating the master code schedule that
contained all the locations associated with the new codes. This caused
significant problems for the Theater Distribution Center. According to an
April 10, 2003 Theater Distribution Center log entry, "Upwards of 50% of
pallets shipped to Doha and 20-30% of pallets shipped to Arifjan are being
returned/rejected with the reason being, `it doesn't belong here.' The
master [codes] are not being updated when units move in or out and the
[theater distribution center] is double and triple handling cargo." Given
that the center was already experiencing problems with personnel and

48 A Department of Defense Activity Address Code is a six-position numeric
code that uniquely identifies a unit, activity, or organization that has
the authority to requisition and/or receive materiel.

equipment shortages; additional handling of the same supplies increased
their difficulties.

Logistics Personnel Were Not Trained on Some of the Logistics Information
Systems in Use

A lack of adequate training for logistics personnel also negatively
impacted the performance of logistics information systems. For example,
according to a 101st Airborne after-action review, loading codes and
interfacing with data caused problems that training could have resolved.
Lack of training also contributed to problems with asset visibility.
According to a logistics study, units were generally not trained in the
use of radio frequency identification devices. Marine Corps officials
likewise stated that their personnel were untrained in the use of tracking
equipment.

DOD Actions to Improve Supply Availability for Current and Future
Operations

As a result of logistics issues that arose during OIF, DOD, the services,
and the defense agencies have undertaken a number of actions to improve
the availability of equipment and supplies during ongoing and future
operations. Some are short-term actions aimed at improving immediate
supply availability. For example, as a result of the battery shortage, the
Joint Staff Logistics Directorate established in July 2003 a revolving
"critical few list" of approximately 25 items that the services and
various commands report as most critically needed worldwide. The Joint
Staff Logistics Directorate, in conjunction with the services, determines
the causes of the shortages and makes recommendations to the Office of the
Secretary of Defense and the services for corrective action and execution.
Other actions are long-term, systemic changes that are designed to improve
the overall effectiveness of the supply system. While we did not evaluate
the changes' potential for success, we observed that the majority of them
focus on the distribution aspects of logistics problems, not the full
range of supply deficiencies we identified. However, other GAO engagements
are currently underway to assess some of these initiatives. (Specific
short-term and long-term actions related to each item are noted in the
appendixes.)

o 	Inaccurate and inadequately funded war reserve requirements. The Army
has not updated or run its war reserve model in order to systemically
ensure the accuracy of its war reserve requirements. Due to its risk
management decisions, it has also not funded its war reserve requirements.
However, the Army has made manual changes to its war reserve inventory
levels, based on the usage of certain items during OIF.

o 	Inaccurate supply forecasts. DOD and the services have not undertaken
systemic actions specifically aimed at improving the accuracy of supply
forecast. However, DLA has undertaken action to improve its customer
support through its Customer Relationship Management program, which could
potentially improve its ability to forecast customer demands.

o 	Insufficient and delayed funding. The Army has not undertaken long-term
actions to expedite its funding process during contingencies to be more
responsive to customer needs. However, it has undertaken short-term
actions to obtain additional funding for specific supply items. For
example, AMC directed funding towards armored vehicle track shoes.

o 	Delayed acquisition. DOD has not undertaken long-term actions to
address acquisition issues that contributed to shortages of certain case
study items. However, DLA has undertaken other actions to improve its
ability to leverage industrial-base capabilities. DLA seeks to improve
industrial-base support through its collaborative planning initiatives
with industry. For example, its Strategic Materiel Sourcing program
establishes long-term contracts for approximately 500,000 (of a total 4.6
million) items the agency considers critical to its customers' needs. In
addition, its Strategic Supplier Alliances program establishes formal
relationships with the agency's top 32 sole source suppliers.

o 	Ineffective distribution. DOD has undertaken many initiatives to
improve its distribution system, including the Secretary of Defense's
designation of the U.S. Transportation Command as the Distribution Process
Owner. According to a Secretary of Defense memorandum,49 the U.S.
Transportation Command is responsible for improving the overall efficiency
and interoperability of distribution-related activities. In January 2004,
the command established a CENTCOM Deployment and Distribution Operations
Center, which is responsible for directing airport, seaport, and land
transportation operations within the OIF theater. DOD's Pure Pallet
initiative seeks to reduce inefficiencies in the distribution process and
improve in-transit tracking of shipments by building containers and
pallets with radio frequency identification tags that are designated to
units within a specific geographic location.

49 Secretary of Defense, "Actions to Improve Logistics and Global Supply
Chain Management," Memorandum (Washington D.C.: Sept. 16, 2003).

The Army and DLA have also undertaken numerous actions to improve the
distribution system. The Army has identified four areas of focus for the
next 2 years: (1) "Connect Army Logisticians" by using technology to
provide logisticians and warfighters with real-time visibility over
distribution and warfighter requirements, (2) "Modernize Theater
Distribution" by developing a distribution-based logistics system to
support the warfighter, (3) "Integrate the Supply Chain" by providing a
system wide view of the supply chain through the integration of processes,
information, and responsibilities, and (4) "Improve Force Reception" by
enhancing the Army's ability to deploy forces to theaters of operation by
establishing an early port opening capability that will result in-theater
expansion and increased theater sustainment. Furthermore, the Army has
expanded its Rapid Fielding Initiative, which accelerates acquisition and
fielding processes to ensure that troops deploy with high-priority items.
DLA has also expanded its Forward Stocking Initiative by opening a fifth
forward stock depot in Kuwait to reduce customer wait time and
transportation costs. Moreover, AMC and DLA have formed a partnership in
which they will explore the use of commercial systems to increase supply
readiness, improve in-transit visibility, cut costs, and improve parts
resupply to field locations.

Conclusions	In times of war, the defense supply system needs to be as
responsive and agile as the combat forces that depend upon it. In the
Quadrennial Defense Review for 2001, DOD stated its intention to transform
its logistics capabilities to improve the deployment process and implement
new logistics support tools that accelerate logistics integration between
the services and reduce logistics demand and cost. OIF tested this system
as well as industry's capability to meet rapidly increasing demands, and,
in many instances, the system failed to respond quickly enough to meet the
needs of modern warfare. While units in Iraq achieved success on the
battlefield, the supply chain did not always adequately support the troops
and combat operations. A number of problems prevented DOD from providing
supply support to its combat forces at many points in the process, which
reduced operational capabilities and forced combat commanders to accept
additional risk in completing their missions. An inability to adequately
predict the needs of warfighters at the onset of the war, coupled with a
slow process for obtaining additional resources once those needs were
identified, resulted in critical wartime shortages. In addition, even when
sufficient supply inventories were available within the system, they were
not always delivered to the combat forces when they needed them. All of
these problems were influenced to some extent by a

lack of accurate and timely information needed to support processes and
decisions.

Unless DOD's logistics process improves the availability of critical
supplies during wartime, combat forces engaged in future operations will
likely be exposed to risks similar to those experienced in Iraq. These
risks will continue to exist unless DOD is able to improve the
availability of war reserve supplies at the start of operations and
overcomes problems forecasting accurate wartime demands. Moreover, delays
in the Army's funding processes will continue to place U.S. troops at risk
by not enabling AMC to swiftly meet surges in wartime demands. In
addition, future combat operations may be adversely affected unless DOD is
able to anticipate acquisition delays that could affect the availability
of critical supplies and provide transparency into how it expects to
mitigate production risks. Finally, merely increasing the availability of
supplies in the inventory will not help combat forces in the field. Troops
will continue to face reduced operational capabilities and unnecessary
risks unless DOD's supply chain can distribute the right supplies to the
right places when warfighters need them.

While DOD took immediate steps to overcome some shortages, and is
beginning to develop solutions to some of the problems identified during
OIF, most systemic solutions have tended to center on resolving
distribution problems. If supply logistics transformation is to be
successful, DOD's supply chain reform will need to include solutions for
the full gamut of identified deficiencies contributing to supply shortages
during OIF. An integrated approach to addressing all of these deficiencies
will increase DOD's potential to achieve responsive, consistent, and
reliable support to warfighters, a goal envisioned in the National
Military Strategy and its logistics concepts and necessary to support the
continued dominance of the U.S. military.

Recommendations for 	To improve the effectiveness of DOD's supply system
in supporting deployed forces for contingencies, we recommend that the
Secretary of

Executive Action	Defense direct the Secretary of the Army to take the
following three actions and specify when they will be completed:

o 	Improve the accuracy of Army war reserve requirements and transparency
about their adequacy by

o 	updating the war reserve models with OIF consumption data that validate
the type and number of items needed,

o 	modeling war reserve requirements at least annually to update the war
reserve estimates based on changing operational and equipment
requirements, and

o 	disclosing to Congress the impact on military operations of its risk
management decision about the percentage of war reserves being funded.

o 	Improve the accuracy of its wartime supply requirements forecasting
process by

o 	developing models that can compute operational supply requirements for
deploying units more promptly as part of prewar planning and

o 	providing item managers with operational information in a timely manner
so they can adjust modeled wartime requirements as necessary.

o 	Reduce the time delay in granting increased obligation authority to the
Army Materiel Command and its subordinate commands to support their
forecasted wartime requirements by establishing an expeditious supply
requirements validation process that provides accurate information to
support timely and sufficient funding.

We also recommend that the Secretary of Defense direct the Secretary of
the Navy to improve the accuracy of the Marine Corps' wartime supply
requirements forecasting process by completing the reconciliation of the
Marine Corps' forecasted requirements with actual OIF consumption data to
validate the number as well as types of items needed and making necessary
adjustments to their requirements. The department should also specify when
these actions will be completed.

We recommend that the Secretary of Defense direct the Secretary of the
Army and Director of the Defense Logistics Agency to take the following
two actions:

o 	minimize future acquisition delays by assessing the industrial-base
capacity to meet updated forecasted demands for critical items within

the time frames required by operational plans as well as specify when this
assessment will be completed and

o 	provide visibility to Congress and other decision makers about how the
department plans to acquire critical items to meet demands that emerge
during contingencies.

We also recommend the Secretary of Defense take the following three
actions and specify when they will be completed:

o 	revise current joint logistics doctrine to clearly state, consistent
with policy, who has responsibility and authority for synchronizing the
distribution of supplies from the U.S. to deployed units during
operations,

o 	develop and exercise, through a mix of computer simulations and field
training, deployable supply receiving and distribution capabilities
including trained personnel and related equipment for implementing
improved supply management practices, such as radio frequency
identification tags that provide in-transit visibility of supplies, to
ensure they are sufficient and capable of meeting the requirements in
operational plans, and

o 	establish common supply information systems that ensure the DOD and the
services can requisition supplies promptly and match incoming supplies
with unit requisitions to facilitate expeditious and accurate
distribution.

Matter for To improve visibility over the adequacy of the Army's war
reserves,

Congress may wish to consider requiring the Secretary of Defense
toCongressional provide it information that discloses the risks associated
with not fullyConsideration funding the Army war reserve. This report
should include not just the level

of funding for the war reserve, which is currently reported, but timely
and accurate information on the sufficiency of the war reserve inventory
and its impact on the Army's ability to conduct operations.

Agency Comments and Our Evaluation

In written comments on a draft of this report, DOD agreed with the intent
of the recommendations and cited actions it has or is taking to eliminate
supply chain deficiencies. Some of the actions could resolve the problems
we identified when completed. Because DOD did not specify dates for
completing all of its actions, we modified our recommendations to require
specific time lines for their completion. DOD is taking other actions that
are not sufficient to fulfill our recommendations and, in several cases
the department's comments did not specifically address how it plans to
improve current practices. In addition to our evaluation below, we address
each of DOD's comments in appendix XI where its complete response is
reprinted.

The department cited several actions it is taking to improve the accuracy
of war reserve requirements, support prewar planning through supply
forecasting, minimize future acquisition delays, and improve supply
distribution. However, it did not clearly identify time lines for fully
implementing most of these actions. For example, initiatives to improve
modeling and data for determining war reserves had no dates for
implementation. In some cases, the department provided tentative
schedules, such as with the fielding of the Army's Logistics Modernization
Program to improve supply forecasting, which it expects to be in full use
in fiscal year 2007. In another instance, it provided a May 2006 deadline
for the developing an information technology plan to improve distribution,
but did not indicate when the plan's recommendations will be implemented.
Therefore, we have modified our recommendations to require that DOD
specify when these actions will be completed.

In two instances DOD cited actions we do not consider sufficient to
fulfill our recommendations. The department stated that its annual
Industrial Capabilities Report to Congress, as well as the budget process
and other forums, provide adequate information on acquisition of critical
items. While we agree that the report provided visibility about some
items, such as body armor, it did not identify concerns about acquiring
up-armored HMMWVs and kits. Therefore, we do not believe current reporting
forums provide Congress with the consistent visibility and information
needed to make informed decisions on actions that could speed the
acquisition of critical items. In another instance, DOD cites the
establishment of the Deployment and Distribution Center in CENTCOM as its
means of testing improvements to distribution capabilities. While the
center may improve deployable logistics capability, the department did not
commit to actions, as we recommended, that would ensure through simulation
and field

training that there are sufficient trained personnel and equipment to meet
the requirements of the operational plans-a problem in theater before and
during the arrival of combat forces. Therefore, we continue to believe
these recommendations have merit.

DOD did not commit to any specific action to improve transparency to
Congress of the risks associated with inadequately funding Army war
reserves. The department said this risk is already reported to Congress in
the budget process and a number of other ways. As stated in this report,
the methods cited by DOD, such as the budget documentation, do not ensure
consistent transparency by clearly stating the operational risks of
underfunding the Army war reserves. Therefore we believe our
recommendation has merit and have added a matter for congressional
consideration that suggests Congress may wish to require DOD to disclose
the risks associated with not fully funding the Army war reserve.

While DOD agreed with the intent of three recommendations, it did not
commit to any specific actions to address them. The recommendations would
(1) ensure item managers are provided operational information in a timely
manner, (2) reduce the time delay in granting increased obligation
authority to AMC and its subordinate commands, and (3) revise joint
doctrine to clarify responsibility and authority for synchronizing
distribution. We believe that these recommendations have merit and have
cited the reasons in our comments in Appendix XI.

We are sending copies of this report to the appropriate congressional
committees; the Secretary of Defense; the Secretaries of the Army and the
Navy; the Commandant of the Marine Corps; the Commander, U.S. Central
Command; the Commander, U.S. Transportation Command; the Director of the
Defense Logistics Agency; and other interested parties.

If you or your staff members have any questions regarding this report,
please contact me at (202) 512-8365. Key contributors to this report are
listed in appendix XII.

William M. Solis, Director Defense Capabilities and Management

Appendix I

                             Scope and Methodology

To address our objectives, we employed a case study approach, selecting
nine supply items with reported shortages as a way to assess the
availability of supplies and spare parts during Operation Iraqi Freedom
(OIF). We judgmentally selected the nine items because we believed they
presented possible shortages with operational impacts based on our prior
work on OIF logistics and other sources such as military "after-action"
reports on OIF operations, military and contractor "lessons learned"
studies, briefings, congressional testimonies, and interviews with
Department of Defense (DOD) and military service officials covering the
time period between October 2002 and September 2004. We selected the items
to encompass a variety of supply sources and users within DOD, the Army,
and the Marine Corps. The items we selected and the supply sources for
each item are shown in table 6.

              Table 6: Item and Supply Manager Item Supply manager

Assault Amphibian Vehicle (AAV) generators	Defense Logistics Agency
(Defense Supply Center Columbus) and Marine Corps Logistics Command

Armored vehicle track shoes Army Materiel Command (Tank-automotive and
Armaments Command)

Interceptor body armor Defense Logistics Agency (Defense Supply Center
Philadelphia)

Chemical-biological suits Defense Logistics Agency (Defense Supply Center
Philadelphia)

Lithium batteries Army Materiel Command (Communications-Electronics
Command)

Helicopter rotor blades Naval Inventory Control Point Philadelphia

Meals Ready-to-Eat (MRE) Defense Logistics Agency (Defense Supply Center
Philadelphia)

Tires for 5-ton trucks and High-Mobility Multi-Purpose Army Materiel
Command (Tank-automotive and Armaments Command) Wheeled Vehicles (HMMWV)

Up-armored HMMWVs and add-on armor kits	Program Executive Office Combat
Support and Combat Service Support, Warren, Mich.

Source: GAO.

Note: The Defense Logistics Agency (DLA) became the manager of lithium
batteries in October 2004.

To verify the existence of reported shortages and to determine their
extent, we interviewed DOD logistics officials and industrial-base
suppliers. We also collected and analyzed supply data, such as
requirements, customer demands, inventory levels, production levels, back
order quantities, and funding levels, for the period between September
2001 through September 2004 for the selected items. We considered an item
to be in short supply if the data we obtained showed that demands placed
by the warfighter exceeded availability in the supply system. To determine
the impact of

                        Appendix I Scope and Methodology

shortages for the selected items, we interviewed officials in Army and
Marine Corps combat forces that were deployed in OIF and also reviewed DOD
and military services' after-action reports, lessons learned studies,
readiness reports, and other documents. For a complete list of these
organizations, see table 7.

Table 7: Organizations Interviewed during Review

     Office of the Under Secretary of Defense (Comptroller), Arlington, Va.

Joint Staff Directorate of Logistics, Arlington, Va.

Office of the Under Secretary of Defense for Acquisition, Technology, and
                           Logistics, Arlington, Va.

U.S. Central Command, MacDill Air Force Base, Fla.

U.S. Pacific Command, Camp Smith, Hawaii

            U.S. Transportation Command, Scott Air Force Base, Ill.

U.S. Army

Assistant Secretary of the Army for Financial Management and Comptroller,
                                 Arlington, Va.

  Assistant Secretary of the Army for Acquisition, Logistics, and Technology,
                                 Arlington, Va.

  Program Executive Office Combat Support and Combat Service Support, Warren,
                                     Mich.

Office of the Deputy Chief of Staff (Logistics), Arlington, Va.

Office of the Deputy Chief of Staff (Operations), Arlington, Va. U.S. Army
Central Command/Coalition Forces Land Component Command (Logistics), Fort
McPherson, Ga. U.S. Army Forces Command, Fort McPherson, Ga. U.S. Army Materiel
 Command Office of the Deputy Chief of Staff (Budget Management), Fort Belvoir,
                                      Va.

Office of the Deputy Chief of Staff (Logistics), Fort Belvoir, Va.
Communications-Electronics Command, Fort Monmouth, N.J. Tank-automotive
and Armaments Command, Warren, Mich.

Ground Systems Industrial Enterprise, Rock Island, Ill.

Anniston Army Depot, Anniston, Ala.

Lima Army Tank Plant, Lima, Ohio 3rd Infantry Division, Fort Stewart, Ga.
4th Infantry Division & III Corps, Fort Hood, Tex. 101st Airborne Division
(Air Assault), Fort Campbell, Ky.

                        Appendix I Scope and Methodology

                         (Continued From Previous Page)

     U.S. Marine Corps Headquarters Marine Corps, Installation and Logistic
                           Department, Arlington, Va.

Marine Forces Pacific, Camp Smith, Hawaii

Marine Corps Logistics Command, Albany, Ga.

         Marine Corps Aviation Supply Logistics Office, Arlington, Va.

Marine Corps Systems Command, Quantico, Va.

1st Marine Expeditionary Force, Camp Pendleton, Ca.

2nd Marine Expeditionary Force, Camp Lejeune, N.C.

3rd Marine Air Wing, Miramar, Calif.

Naval Inventory Control Point Philadelphia, Pa.

National Guard Bureau, Arlington, Va.

Defense Logistics Agency

            Defense Logistics Agency Headquarters, Fort Belvoir, Va.

Defense Supply Center Columbus, Ohio

Defense Supply Center Philadelphia, Pa.

RAND Arroyo Center, Santa Monica, Ca.

AM General Corporation, Mishawaka, Ind.

Armor Holdings, Inc. (formerly O'Gara-Hess Eisenhardt), Fairfield, Ohio

Source: GAO.

To determine what deficiencies contributed to identified supply shortages,
we interviewed officials and collected documentation from DOD's supply
management organizations. On the basis of case studies, we identified
deficiencies that affected the supply of two or more of the items. We
analyzed data from DOD logistics agencies, operational units, and service
and geographic commands to evaluate the significance of these deficiencies
to DOD's overall logistics system. We also reviewed prior GAO reports, DOD
and military services' after-action reports, military and contractor
lessons learned studies, DOD directives and regulations, and reports by
DOD and external experts, including Accenture, the Center for Naval
Analysis, the RAND Corporation's Arroyo Center, the Science Applications
International Corporation, and the U.S. Army Audit Agency. In addition, we
analyzed supply data for each item to identify and corroborate
deficiencies contributing to item shortages.

To determine what actions DOD has taken to improve the availability of
supplies for current and future operations, we collected data from
military service and joint command headquarters personnel to identify
short-and long-term efforts to address supply shortages. However, we did
not evaluate their potential for success. We also reviewed DOD logistics
and

Appendix I Scope and Methodology

strategic planning documents that provide guidance on improving logistics
support for military readiness.

We assessed the reliability of the supply data we obtained by interviewing
agency officials knowledgeable about the data and corroborated it with
other information about supply shortages gathered from other DOD and
military service organizations. When data specifically for Iraq were not
available, we used worldwide data since OIF received supply priority. With
the exception of data on track shoes, we determined that the data were
sufficiently reliable for our purposes. In the case of track shoes, we
determined that the data provided by the Army's Tank-automotive and
Armaments Command (TACOM) were not sufficiently reliable for our purposes
and did not use it. However, we were able to identify relevant information
from TACOM's periodic reporting to describe the item's supply status. We
determined that these data were sufficiently reliable for our purposes. In
the case of lithium batteries, the Communications-Electronics Command
(CECOM) switched database systems in July 2003. We determined that the
data from the new system were sufficiently reliable for the purposes of
showing trends and graphing, but we based our findings on program data
prior to the system change. We also identified relevant information from
other DOD sources to confirm reported shortages of lithium batteries. The
limitations of data collected for armored vehicle track shoes and lithium
batteries are included in appendixes III and VI, respectively. We also
determined that funding data were sufficiently reliable for our purposes
by comparing data received from multiple sources within DOD.

We performed our audit from March 2004 through March 2005 in accordance
with generally accepted government auditing standards.

Appendix II

                      Assault Amphibian Vehicle Generators

Background	The Marine Corps' AAV is a full-tracked landing vehicle
designed to carry up to 25 people from ship to shore and is used as an
armored personnel carrier on land. The Marine Corps used more than 550
AAVs to transport personnel during operations in OIF. Among the critical
parts of the AAV is its generator, which provides needed electrical power
(see fig. 6).

Figure 6: Assault Amphibian Vehicle and Generator

Source: DOD.

The supply and distribution of AAV generators is a shared responsibility.
The Marine Corps Logistics Command manages the supply of repairable
generators; the Defense Supply Center Columbus supplies new generators.
During OIF, the 2nd Force Service Support Group was responsible for moving
supply shipments from the port to Iraq, and the 1st Service Support Group1
had responsibility for moving supplies once they reached Iraq. The 3rd
Assault Amphibian Battalion, part of the 1st Marine Expeditionary Force,
was in charge of maintenance for all AAVs in theater.

1 These support groups belong, respectively, to the 2nd Marine
Expeditionary Force, which generally provided theater-level supply support
for OIF, and the 1st Marine Expeditionary Force, which generally served as
the combat force for OIF.

                                  Appendix II
                      Assault Amphibian Vehicle Generators

Extent and Impact of Shortages

AAV generators were not available to the warfighter at some point between
October 2002 and September 2004. We consider generators to have been a
shortage because 84 were ordered, but only 15 were received. The Marine
Corps' 3rd Assault Amphibian Battalion experienced a shortage of
generators needed to repair AAVs during and after major combat operations
in Iraq, according to officials. Both the Marine Corps Logistic Command
and GAO have reported that the long distances the vehicles traveled,
combined with combat conditions, placed the equivalent of 5 years of wear
and tear on the vehicles over a 6- to 8-week period. As a result of this
accelerated wear and tear, the vehicles' parts-including generators-wore
out quickly. To meet the rapid rise in demand (see fig. 7), the battalion
submitted orders for 84 generators between January and June 2003.
According to supply management data, the Defense Supply Center Columbus
sent 64 new generators and the Marine Corps Logistics Command sent 76
repaired generators2-a total of 140-to the theater during major combat
operations. However, the battalion reported that it received only 15
generators. Officials from the 1st Force Service Support Group in Iraq
stated they did not know why they did not receive all of the generators
shipped from the Marine Corps Logistics Command and the Defense Supply
Center Columbus.

2 The Marine Corps Logistics Command, Albany, Ga. used repairable
generators obtained from its Foreign Military Sales program. Under this
program, the U.S. government authorizes the sale or transfer of military
equipment, including spare parts, to foreign countries either through
government-to-government agreements or through direct sales from U.S.
manufacturers.

Appendix II
Assault Amphibian Vehicle Generators

Figure 7: Assault Amphibian Vehicle Generator Demand and Back Orders for
OIF by Quarter (3rd quarter fiscal year 2001 through 4th quarter fiscal
year 2004) Number of generators

                  July Oct. Jan. Apr. July Oct. Jan. Apr. July

2002 2003 2004

Quarter

OIF demand

OIF back orders

Source: Defense Supply Center Columbus.

While a 3rd Assault Amphibian Battalion official stated their demand for
generators exceeded the number received in theater, they did not report
any decline in AAV operational readiness. The reported operational
readiness of AAVs in the Iraqi theater remained at about 89 percent most
of the time between February 2003 and October 2003.3 However, in order to
maintain this readiness rate, a 3rd Assault Amphibian Battalion official
noted that spare parts from about 40 non-operational vehicles were used to
support combat capable vehicles.

3 The operational readiness rate refers to the capability of equipment
other than aircraft to perform the mission or functions for which it is
organized or designed and may be used in general terms to express a level
or degree of readiness.

                                  Appendix II
                      Assault Amphibian Vehicle Generators

Causes of Shortages	Poor asset visibility in the Marine Corps' in-theater
distribution system contributed to the shortage of generators needed to
repair AAVs. Although good asset visibility is one of the main tenets of
logistics supply systems,4 the Marines had difficulty maintaining
visibility over the 140 generators shipped to the theater. Marine Corps
Logistics Command and Defense Supply Center Columbus officials tracked
generators to the theater, but their visibility over these shipments ended
there. Once the generators arrived in theater, the 2nd Force Service
Support Group became responsible for maintaining visibility of supply.
However, they stated they did not have visibility of the generators
shipped into Iraq. The 1st Force Service Support Group, which directly
supported units fighting in Iraq, also indicated an inability to track
requisitioned supplies. While 15 of the generators were received by the
3rd Assault Amphibian Battalion, neither the Marine Corps' Force Service
Support Groups nor we were able to track the remaining 125 generators.

A contributing factor to the shortage of generators was difficulties the
Marine Corps faced in maintaining visibility over requisitioned and
warehoused spare parts because of incompatible and unstable software and
other visibility systems. Before OIF began, the Marines experienced
difficulties maintaining visibility over the generators in their
in-theater distribution center in Kuwait. Defense Supply Center Columbus
officials reported that generators were shipped to the theater to support
requirements forecasted by deploying units. However, according to an
official with the 3rd Assault Amphibian Battalion, instead of being
delivered to the units, generators were warehoused in the distribution
center. One reason for the poor asset visibility at the warehouse in
February 2003, was the failure of the warehousing software-Storage
Retrieval, Automated, Tracking, Integrated System-to work properly.
Moreover, the 1st Force Service Support Group used one version of the
Asset Tracking Logistics and Supply System (ATLASS) requisitioning
software in theater, while the 2nd Force Service Support Group used
another version, ATLASS II+. Because the two versions could not interface,
personnel of the 1st Force Service Support Group reported that they
reentered requisition information manually to move data between the
systems. Personnel at the Marine's distribution center in Kuwait entered
requisitions into the Supported Activity Supply System, a stand-alone

4 Joint Tactics, Techniques, and Procedures for Joint Theater
Distribution, Chapter I,

p. I4, Joint Pub 4.01.4 (Aug. 22, 2000).

                                  Appendix II
                      Assault Amphibian Vehicle Generators

inventory system. According to Marine Corps Logistics officials, neither
system could track requisitions or parts related to them through the
supply requisition process.

In addition, Marine Corps personnel were expected to use radio frequency
identification5 technology to help maintain asset visibility during supply
distribution. According to 2nd Force Service Support Group personnel,
Marine units in theater did not have sufficient training or equipment to
read the tags in order to support the use of this technology.

Efforts to Improve Availability

Short-term Efforts	When the supply system did not respond to the demand
for generators, Marine Corps personnel noted that units went outside the
supply system, through e-mail and telephone communications, to locate
supplies, such as generators, for AAVs and other equipment.

To minimize data entry errors, Marine Corps personnel developed an
electronic process to transfer data between the ATLASS and ATLASS II+
software systems. According to logistics personnel, to improve visibility
of requisitions through the system, the Marine Corps streamlined its
requisitioning process by using ATLASS to enter requisitions into the
Supported Activity Supply System and by eliminating the use of ATLASS II+
in theater.

To support greater use of radio frequency identification tags in theater,
the Marine Corps, according to the 2nd Force Service Support Group
officials, has provided training to personnel deploying to Iraq and
increased the use of the technology to improve asset visibility.

5 Radio frequency identification tags are used to track shipping
containers and pallets and their contents while in transit. The tags
continuously transmit radio signals, which can be read using hand-held or
fixed scanners.

                                  Appendix II
                      Assault Amphibian Vehicle Generators

Long-term Efforts	According to 2nd Service Support Group officials, the
Marine Corps is evaluating an Army information system that monitors assets
moving through the supply system to determine if the Army's system can be
adapted for Marine Corps use.

The 2nd Marine Expeditionary Force has developed a Marine Air-Ground Task
Force Distribution Center initiative. The Marines stated that the
initiative, implemented in September 2004, helps them manage the
distribution system by bringing together the Traffic Management Office,
deployed supply units, and transportation assets to replicate the
in-theater supply process. The initiative will enable them to fully
replicate the supply system, including the use of radio frequency
identification tags and satellite transponders.

Appendix III

                          Armored Vehicle Track Shoes

Background	During OIF, U.S. forces relied heavily on armored vehicles such
as Abrams tanks and Bradley Fighting Vehicles.1 For example, at the
beginning of combat operations in Iraq, the 3rd Infantry Division had a
fleet of 252 Abrams tanks and 325 Bradley Fighting Vehicles drawn from
Army prepositioned stock. Troops used Abrams tanks to lead attacks in
urban areas with the support of infantry equipped with Bradley Fighting
Vehicles. Army officials said that Abrams tanks and Bradley Fighting
Vehicles were extremely effective for operations in urban terrain.
Critical components of both types of armored vehicles are the track that
enables the vehicles to move, which are composed of dozens of metal shoes2
(see fig. 8).

Figure 8: Abrams Tank Track

                                 Source: TACOM.

1 Abrams tanks and Bradley Fighting Vehicles are the Army's dominant
ground combat vehicles. Both provide mobile firepower while protecting
crews from the combat environment.

2 Each vehicle has a track assembly that rotates on each side. Each track
assembly consists of a number of track shoes attached together to form an
endless track. The metal track shoes engage the teeth of the track drive
sprockets, which allows power to be transferred from the vehicle to the
track. As the sprocket moves the track, it moves the vehicle. An Abrams
tank has 156 track shoes; a Bradley Fighting Vehicle has 166.

                    Appendix III Armored Vehicle Track Shoes

The Army's TACOM Track and Roadwheel Group buys the track shoes that are
used on Abrams tanks and Bradley Fighting Vehicles. Goodyear is the sole
source supplier of Abrams track shoes and the major producer of Bradley
track shoes. VAREC also produces Bradley track shoes. In fiscal year 2003,
TACOM reported spending $195.2 million to purchase track shoes for all
tanks and vehicles. However, worldwide demand for Abrams and Bradley track
shoes totaled $257.4 million. Of the $195.2 million, TACOM reportedly
spent $98.6 million on Abrams track shoes and $52.4 million on Bradley
track shoes.

We were unable to obtain reliable data on forecasted requirements,
demands, back orders, and inventory for track shoes from TACOM's Track and
Roadwheel Group. The group's officials told us that because the models and
studies used to compute the data can produce inaccurate results, they
could not validate the data. As a result, we were unable to document the
extent of shortages based on these data. However, group officials were
able to provide us with data used to inform AMC on the status of track
shoe shortages. According to TACOM, these data are based on information
provided by units in theater and best represent true demand. We
corroborated this secondary data with classified data and used it in our
analysis.

Extent and Impact of Shortages

Track shoes for the Abrams tanks and Bradley Fighting Vehicles were not
available to the warfighter at some time between October 2002 and
September 2004. We consider this item to have a shortage because demand
exceeded the amount of inventory available to meet the needs of the war
fighters.

U.S. forces and logistics personnel reported critical shortages of track
shoes for Abrams tanks and Bradley Fighting Vehicles during OIF, and these
shortages negatively affected their mission. In undertaking their mission,
U.S. forces subjected these tanks and vehicles to the equivalent of 3
years of high-intensity training during major combat operations in Iraq.
Because of the extensive mileage placed on the tanks and Bradley
vehicles-exacerbated by bad road conditions and extreme heat-vehicle
parts, particularly track shoes, wore out quickly.

Although TACOM was able to meet the track shoe demands of units preparing
to deploy as well as those already deployed in OIF, it began to experience
difficulties in providing track shoes to units in theater around April
2003. The demand for Abrams tank and Bradley Fighting Vehicle track

Appendix III Armored Vehicle Track Shoes

shoes in May 2003 was 5 times the March 2003 forecasted demand (see table
8). To meet the surge in demand for Abrams track shoes, TACOM negotiated
with Goodyear to increase the production rate from 15,000 Abrams track
shoes per month (from the normal peacetime rate of 10,000 per month) to
17,000 per month for December 2002, then to 20,000 per month in May 2003,
and to 25,000 per month in July 2003. However, these increases in
production still were not sufficient to meet OIF demands. In May 2003, for
example, the actual demand for Abrams track shoes rose to more than
55,000.

Table 8: Forecasted and Actual Demand for Abrams and Bradley Track Shoes
(March-May 2003)

Abrams track shoes Bradley track shoes March 2003 forecasted demand 11,125
                                     12,787

                     April 2003 actual demand 23,462 20,678

                      May 2003 actual demand 55,313 55,875

Source: TACOM.

As a result of track shoe shortages, some Abrams tanks and Bradley
Fighting Vehicles could not operate during the summer months in 2003. For
example, the 4th Infantry Division reported it could not obtain sufficient
quantities of track shoes to meet operational needs. At one point during
post-combat operations, the division had an operational requirement for
23,626 Abrams track shoes, of which 8,002 were shipped, but only 1,028
were received. To support the Bradley Fighting Vehicles, the division had
an operational requirement of 29,911 track shoes, of which 4,591 were
shipped, but only 744 were received. As a result of its inability to
obtain more track shoes and other suspension parts, the 4th Infantry
Division reported its readiness rates for both types of combat vehicles
deteriorated. For example, one of its brigades reported that 11 of its 44
Abrams tanks were unavailable during post combat operations because of the
lack of track shoes.

Track shoe shortages also negatively impacted the 3rd Infantry Division.
On June 11, 2003, the division reported that of the 185 Abrams tanks it
had on hand, 111 (60 percent) were deemed "non-mission capable due to
supply." For the 237 Bradley Fighting Vehicles it had on hand, 159 (67
percent) were deemed non-mission capable due to supply. According to 3rd
Infantry Division officials, the reason tanks and vehicles were

                    Appendix III Armored Vehicle Track Shoes

unavailable was because replacement track shoes were not available to the
units. For example, between April 16-18, 2003, one divisional supply
support activities in Kuwait had 22,074 Abrams track shoes and 18,762
Bradley track shoes on back order.

To alleviate the impact of track shoe shortages on Bradley Fighting
Vehicle readiness, theater commanders wanted to bring an additional 1,407
uparmored HMMWVs into theater. However, as detailed in appendix X, the
procurement of additional up-armored HMMWVs was also problematic.

Causes of Shortages	Inaccurate war reserves requirements, inaccurate
forecasted requirements, and erratic funding affected TACOM's ability to
provide track shoes.

Inaccurate War Reserve Requirements

Inaccurate war reserves requirements negatively affected TACOM's ability
to provide track shoes to units in theater at the beginning of OIF.
Governed by Army Regulation 710-1, war reserves are intended to provide
the Army with interim support to sustain operations until it can be
resupplied with materiel from the industrial base. For TACOM, the war
reserve requirement for 3,635 Abrams track shoes and 1,800 Bradley track
shoes identified in September 2001 was not enough to support OIF demands.
Although the war reserve requirement increased in December 2002, the new
requirement for 5,230 Abrams track shoes and 5,626 Bradley track shoes was
still not enough to meet demands.

To more accurately reflect track shoe usage in OIF, TACOM officials, in
December 2003, increased the war reserves requirements to 32,686 Abrams
track shoes and 34,864 Bradley track shoes. TACOM officials made the
change manually rather than using the Army War Reserve Automated Process,3
which was last run in fiscal year 1999. Since then, the number and type of
vehicles have changed, but the official process has not been performed
again to update the requirements. TACOM officials have been waiting for
input based on the defense planning guidance from the Department of the
Army to initiate a new process. At the time of our

3 According to Army Regulation 710-1, Chapter 6, paragraphs 6-25 and 6-26,
AMC is to compute requirement levels based on guidance from the Department
of Army Headquarters using the Army War Reserve Automated Process system.
This system is a process that computes requirements for repair parts and
minor secondary items and several auxiliary processes that support the
requirement process.

                    Appendix III Armored Vehicle Track Shoes

review, they were not certain when they would receive the guidance. Until
the model is run, TACOM officials will continue to make manual changes to
war reserves requirements.

In addition, both we and Accenture have questioned the validity of the
Army's war reserve requirements. In a 2001 report, we found that war
reserve requirements could be inaccurate because the calculations were not
updated to reflect new consumption rates; requirements determination
methodology might not be consistent with planned battlefield maintenance
practices; and requirements were based on internal estimates of what the
industrial-base could provide rather than on well-defined industry data
itself.4 A 2003 study by Accenture concluded that part of the reason for
the low war reserve requirements was that the forecasting process is labor
intensive, time consuming, and suffers from inaccurate input data.5

Inaccurate Forecasted Requirements

In fiscal year 2003, TACOM underestimated the amount of Abrams and Bradley
track shoes needed worldwide. Although TACOM revised its requirements at
the end of each quarter, its estimates for Abrams and Bradley track shoes
still fell short.

For example, in April 2003 the forecasted monthly requirement for Abrams
track shoes was 11,125, which was less than half of the actual demand of
23,462 shoes. The track shoe budget forecasts further illustrate the
discrepancy between forecasted and actual requirements. Based on its
budget-forecasting tool, TACOM forecasted it would need $46.8 million for
Abrams track shoe purchases for fiscal year 2003. At the end of the year,
actual demands for Abrams track shoe totaled $194.9 million-a 416 percent
increase. For Bradley track shoes, the group forecasted it would need
$17.8 million in fiscal year 2003 to meet customer demands. However,
actual demands totaled $62.6 million-a 351 percent increase- by the end of
the fiscal year.

4 GAO, Army War Reserves Spare Parts Requirements are Uncertain,
GAO-01-425 (Washington, D.C.: May 2001).

5 Accenture, TACOM Track Study: Findings, Solutions & Recommendations,
December 19, 2003.

Appendix III Armored Vehicle Track Shoes

Even if TACOM's revised track shoe estimates had been accurate, it would
have been too late to meet the summer 2003 demand. In order to have
supplies on hand when demands are received, item managers need to award
contracts allowing for sufficient procurement lead-time.6 TACOM officials
explained that track shoe manufacturers need an average of 4 to 6 months
to produce and deliver track shoes once they receive a contract. The high
demands for track shoes in the late spring and summer of 2003 were not
forecasted in October 2002, which would have been the time when contracts
should have been awarded so that TACOM could adequately meet customer
needs.

The failure to forecast the high demand experienced during the early
months of OIF was partly due to the requirements forecasting model used
and to the lack of information and guidance provided to TACOM. In its
conclusions, the Accenture study on track shoe shortages found that the
requirements forecasting model failed to accurately forecast future
demands because the model uses a simple moving average based on 24 months
of historical demand7 that does not support dynamic changes in item usage.
This meant that large increases in demand during the last couple of months
of the 24-month period would not result in a corresponding increase in the
forecasted demand. In addition, TACOM officials stated they did not
receive adequate planning guidance on operational plans from AMC prior to
the onset of combat operations that they could incorporate into their
forecasts for track shoes. Consequently, TACOM determined the requirements
based on the model and on the item managers' expertise and knowledge of
the item, as allowed under Army Regulation 710-1.

Subsequent requirements throughout fiscal year 2003 also were understated.
TACOM officials reported that although they regularly requested
information about the track shoes' usage and durability, which would have
helped them better gauge actual demand, they received limited information
and input from units in the field. As OIF continued throughout 2003, TACOM
held teleconferences with AMC Logistics Support Element

6 A lead-time is the interval in months between the initiation of
procurement action and the item's receipt into the supply system.

7 Army Regulation 710-1 states that an active database of the past
24-month demand history should be used to compute future demand. However,
the length of the demand base used to forecast requirements can vary from
the standard 24 months.

                    Appendix III Armored Vehicle Track Shoes

representatives and with units in theater to obtain updated information
about item usage.

Erratic Funding for Track Shoe Production

During fiscal year 2003, TACOM did not receive sufficient obligation
authority in time to buy track shoes to meet growing demands. TACOM's
total funding requirements in fiscal year 2003 amounted to $257.4 million-
$194.9 million for Abrams track shoes and $62.5 million for Bradley track
shoes. TACOM officials told us that they could not buy sufficient track
shoes because they had received only $216 million in obligation authority
to buy all of the items they managed. However, TACOM spent only $151.0
million on track shoes-$98.6 million for Abrams tanks and $52.4 million
for Bradley Fighting Vehicles.

In addition to insufficient obligation authority, the uncertainty of the
funding flow affected the manufacturer's ability to produce track shoes. A
primary producer of track shoes for TACOM, Goodyear, was in danger of
closing down its track shoe production plant in April 2003 because of a
lack of contracts. TACOM officials stated that they could not award
contracts consistently because they did not know how much obligation
authority they would receive or when the next allotment would arrive.
Because of the acute shortage of track shoes, TACOM immediately awarded
contracts to Goodyear whenever obligation authority became available. As a
result of accelerated deliveries, Goodyear reported that it had a very low
level of remaining workload and was in danger of closing down the track
shoe production plant unless it received additional contracts.

According to TACOM officials, additional obligation authority was
aggressively requested throughout fiscal year 2003 to support purchases of
track shoes as well as other supply items. As an item critical to mission
success, officials stated that track shoes usually receive more funding
than other commodities managed by TACOM; however, releases of additional
obligation authority were delayed in some instances. TACOM officials
stated that when they need additional obligation authority, they request
it from AMC, which then requests it from Army headquarters. These requests
must be validated and justified (based on past sales) at each level before
the Office of the Under Secretary Defense (Comptroller) approves for the
release of additional obligation authority. TACOM officials expressed
frustration with the process and complained that both AMC and Army
Headquarters were not aggressively pursuing the issue and did not fully
grasp the magnitude of impact to units in theater because of the lack of
obligation authority provided to item managers.

                    Appendix III Armored Vehicle Track Shoes

Efforts to Improve Availability

Short-term Efforts	To address inaccuracies in war reserve requirements,
TACOM has manually updated its requirements levels for track shoes, rather
than wait for AMC to implement the next Army War Reserve Automated
Process.

To overcome inaccuracies in the requirements forecasting model, TACOM
depended on item managers' judgment and expertise to determine demand more
accurately. Item managers worked with available information provided by
AMC and with input from units in theater. In addition, priority was given
to the Iraqi theater of operations and available track shoe production was
shipped to support units in Iraq. TACOM worked with theater commanders to
expedite and prioritize shipments of track shoes.

To address funding shortfalls, TACOM continually requested that any
additional obligation authority be made available to buy track shoes
during fiscal year 2003. Because track shoes were considered critical
missionessential items and their shortage greatly impacted theater
operations, officials from the Track and Roadwheel Group said that they
usually received more funding and attention than other supply groups
within TACOM. For example, in June 2003, the Track and Roadwheel Group
received $64 million that was specifically meant to prevent Goodyear from
closing down its track shoe production plant. In August 2003, TACOM
received an additional $70 million for track shoe purchases.

To improve track shoe availability during OIF, the Army made a $5.2
million investment in Goodyear production facilities to meet the surge
requirements and to sustain the viability of the track shoe supplier.8

Long-term Efforts	At the time of this review, TACOM officials did not
identify any long-term efforts to correct problems identified with war
reserves, requirements, or funding shortfalls.

8 According to the Annual Industrial Capabilities Report to Congress in
February 2004, Goodyear required an annual minimum production requirement
of about 264,000 track shoes to meet its business case.

Appendix IV

                             Interceptor Body Armor

Background	The U.S. military's new Interceptor body armor is composed of
two primary components: an Outer Tactical Vest and two Small Arms
Protective Insert plates (see fig. 9). The Outer Tactical Vest consists of
a combination of a soft fabric vest and para-aramid fiber panels that
provide protection against shrapnel and 9 mm ammunition. The plates
consist of a combination of ceramic tiles and polyethylene fiber 1 that,
when inserted into the vest, provide protection against rifle rounds up to
7.62 mm. The vest accepts two plates, one for the front and one for the
back. Additional attachments can increase protection.2

The new body armor provides improved protection and weigh less than the
older version-the Personnel Armor System for Ground Troops, or "flak"
vest-which protects only against shrapnel. The new body armor weighs 16.4
pounds, while the older vest weighs 25.1 pounds.

Figure 9: Interceptor Body Armor

Source: U.S. Army Natick Soldier Center.

1 The ceramic tile is composed of various ceramic composites such as boron
carbide, silicon carbide, and aluminium oxide. The tile is backed by
multiple layers of polyethylene fiber.

2 Additional attachments include throat and groin protectors.

                       Appendix IV Interceptor Body Armor

The Army planned to issue the Interceptor body armor to U.S. forces over
an 8-year period between 2000 and 2007. It began to distribute the armor
to military personnel during Operation Enduring Freedom. On the basis of
the armor's effectiveness the Army decided to accelerate its fielding for
OIF.

DLA's Defense Supply Center Philadelphia manages the Interceptor body
armor for the Army. The Marine Corps has its own version of the body armor
that is constructed with the same materials as the Army version. The
Marine Corps Systems Command and the U.S. Army Robert Morris Acquisition
Center manage it for the Marine Corps. Both services rely on the same
manufacturers.

Extent and Impact of Shortages

Interceptor body armor was not available in sufficient quantities to
U.S. military forces in Iraq sometime between October 2002 and
September 2004. We consider this item to have a shortage because demand
exceeded the production output necessary to meet the needs of the
war fighter. While there were shortages of Interceptor body armor during
OIF, Coalition Forces Land Component Command officials stated that
military personnel deployed with either the vest component of the new
body armor or the old body armor. CENTCOM officials stated that all
personnel in Iraq had the new armor by January 2004; 8 months after
combat operations were declared over.

The new body armor was initially intended for limited numbers of
personnel, such as dismounted infantry, however, this changed during OIF.
In May 2003, the Army changed the basis of issue to include every soldier
in
Iraq. Then in October 2003, CENTCOM further expanded issuance of the
body armor to include all U.S. military and DOD civilian personnel working
within CENTCOM's area of responsibility including Iraq, Kuwait, and
Afghanistan.

Demand for the vest component part of Interceptor body armor increased
rapidly both at the beginning of OIF, when troops began combat operations,
and again in late 2003 during stabilization operations. Worldwide
quarterly
demand for vests rose from 8,593 in December 2002 to 77,052 in
March 2003-the onset of combat operations. The demand for vests
continued to spike upward topping out at 210,783 in December 2003. The
number of back orders also rapidly increased over this period of time
(see fig. 10). By December 2003 the worldwide number of back orders
reached 328,023 with DLA mandating that OIF requisitions receive priority.

                       Appendix IV Interceptor Body Armor

In contrast, during December 2003 the number of vests actually produced to
meet demand was only 23,900.

September 2004) Number of vests 350,000

300,000

250,000

200,000

150,000

100,000

50,000

0 Dec. Mar June Sept. Dec. Mar June Sept. Dec. Mar June Sept. 2001 2002
2003 2004

Demand Production output Back orders

Source: DLA.

Notes: Back order data were not available for the period between October
2002 and February 2003.

Similarly, the demand for plates increased with the onset of combat
operations and again during stabilization operations in late 2003. The
demand for plates increased more than ten-fold, from a quarterly demand of
9,586 plates in December 2002 to a quarterly demand of 108,808 plates in
March 2003 at the beginning of OIF. As figure 11 shows, with the change in
the basis of issue for the Interceptor body armor in October 2003, the
demand for plates rose rapidly again, peaking at 478,541 plates in
December 2003. In addition, during late 2003, the number of back orders
for plates also increased rapidly. By November 2003, the number of
worldwide back orders peaked at 597,739 plates, with DLA giving OIF
requisitions priority. In contrast, during this month, production output
totaled only 40,495 plates.

                       Appendix IV Interceptor Body Armor

Figure 11: Worldwide Demand, Production Output, and Back Orders for Plates
by Quarter (December 2001 through

September 2004) Number of plates 600,000

500,000

400,000

300,000

200,000

100,000

0 Dec. Mar June Sept. Dec. Mar June Sept. Dec. Mar June Sept.

2001 2002 2003 2004

Demand Production output Back orders

Source: DLA.

Note: Back order data were not available for the period between October
2002 and February 2003.

Military officials expressed serious concerns over the shortage of
Interceptor body armor. Army officials stated that soldiers' morale
declined as units waited for the armor to reach theater. Because of the
shortages, CENTCOM officials stated they prioritized the issue of the new
body armor to those who were most vulnerable. In addition, there was a
lack of body armor among support personnel, such as the Army's 377th
Theater Support Command, while insurgents were attacking and interdicting
supply routes in Iraq. Because of the shortages, many individuals bought
body armor with personal funds. The Congressional Budget Office estimated
(1) that as many as 10,000 personnel purchased vests, (2) as many as
20,000 purchased plates with personal funds, and (3) the total cost to
reimburse them would be $16 million in 2005.3

3 The Congressional Budget Office's estimate for H.R. 4200, National
Defense Authorization Act for Fiscal Year 2005, p. 16.

                       Appendix IV Interceptor Body Armor

Causes of Shortages	Temporary shortages of the Interceptor body armor
occurred because of acquisition delays related to lack of key materials
and distribution problems in theater.

Lack of Critical Materials Delayed Acquisition

A lack of sufficient quantities of key materials used to make vests and
plates delayed acquisition to meet the increasing demand for Interceptor
body armor. According to DLA officials, shortages of critical materials
still limit worldwide production to approximately 35,000 vests and 50,000
plates per month. A production lead-time of three months has also limited
the industrial-base's capacity to accelerate its production levels to meet
increasing demand.

DLA officials stated that the production of vests and plates was impaired
by a limited availability of critical materials. The shortfall of vests
was due to a lack of Kevlar, a para-aramid fiber that was in short supply.
DuPont Chemicals is the only domestic producer of the para-aramid fiber
panels used in the vests. However, an exception under the Defense Federal
Acquisition Regulation Supplement4 allowed vest contractors to use Twaron5
fiber panels manufactured in the Netherlands as a replacement for Kevlar
fiber panels.

The shortfall in ceramic plates was due to insufficient quantities of two
materials needed to produce them. The initial shortfall was due to the
limited availability of SpectraShield.6 Until April 2004, Honeywell was
the only domestic producer of SpectraShield, and it had other competing
commercial requirements for the material. Plate producers responded to the
limited availability of SpectraShield by manufacturing modified plates
that replaced SpectraShield with Kevlar and other para-aramid fiber
materials. While these plates met ballistic protection requirements, they
weighed a half pound more and required a service waiver for acceptance.

4 The Defense Federal Acquisition Regulation Supplement, Part 225 governs
the acquisition of foreign products and services.

5 Twaron is a para-aramid fiber that can be substituted for Kevlar.

6 SpectraShield is a polyethylene fiber used as a backing for the ceramic
plate and is the only material that meets Army and Marine Corps ballistic
protection and weight requirements for the new body armor.

                       Appendix IV Interceptor Body Armor

In April 2004, DSM Dyneema, a foreign firm that produces Dyneema, a
SpectraShield-equivalent, opened a production facility in the U.S. and
began to produce and sell the product. SpectraShield and Dyneema are the
only materials that meet the services' ballistic protection and weight
requirements for Interceptor body armor. Due to their limited
availability, both materials are under Defense Priorities and Allocation
System control.7 Plate production was later constrained by the limited
availability of ceramic tiles. According to DLA, current production output
is subject to further increase as DSM Dyneema increases its Dyneema
production and additional ceramic tiles are qualified as meeting
specification requirements.

                   Accelerated Fielding Affected Distribution

Attempts to accelerate fielding of the new body armor met with some
success, but also caused problems. According to an Army Office of the
Inspector General report,8 accelerated fielding resulted in supplying body
armor to soldiers at a much faster pace than normal. The armor was
distributed in some cases virtually directly from the factory to the
warfighter. The report stated that the accelerated fielding did not allow
time for the project manager to coordinate with units and allow them to
establish sufficient accountability in theater, as required by Army
regulations. However, lack of in-transit visibility, inaccurate reporting
of on-hand quantities, lag time in recording receipt of plates, and other
accounting errors resulted in temporary loss of visibility of between
5,000 and 30,000 sets of plates.

7 The Defense Priorities and Allocation System assures the timely
availability of industrial resources to meet current national defense and
emergency preparedness requirements.

8 Department of the Army, Office of the Inspector General, Special
Inspection of the
Processes Used to Provide Body Armor to U.S. and Coalition Forces in
Operation Iraqi
Freedom and Operation Enduring Freedom, December 2003-February 2004,
April 20, 2004.

                       Appendix IV Interceptor Body Armor

Efforts to Improve Availability

Short-term Efforts	To meet the surging demand for plates, DOD used
authority under the Defense Production Act9 to allocate production of
SpectraShield. More specifically, the Office of the Deputy Under Secretary
of Defense (Industrial Policy) used its authority under the Defense
Priorities and Allocation System to direct Honeywell to accelerate
deliveries of SpectraShield in support of OIF on six occasions in 2003.
According to the Acting Under Secretary of Defense (Acquisition,
Technology, and Logistics), Honeywell did this at the expense of its
commercial orders. To increase industrial-base production capacity, DLA
stated that it increased its number of vest suppliers from 1 to 4; plate
manufacturers from 3 to 8 (including manufacturers of overweight plates);
and ceramic tile suppliers from 4 to 10 (including suppliers of overweight
tiles).

Long-term Efforts	DLA has recommended that it have management of
Interceptor body armor requirements for all of the services. It has
recommended that the services establish war reserve stock levels for the
new body armor to mitigate lead-time in industrial-base production. It has
also requested the authority to purchase and maintain an inventory of
materials necessary for producing vests and plates as well as contract
with vendors who have the capacity to use such stored materials during
times of high demand.

9 The Defense Production Act is the primary legislation for ensuring that
industrial resources and critical technology items essential for national
defense are available when needed.

Appendix V

Joint Service Lightweight Integrated Suit Technology Suits

Background	JSLIST is a protective clothing ensemble that includes a
lightweight chemical-biological protective suit, multi-purpose over-boots,
and gloves (see fig. 12). When combined with a chemical protective mask,
JSLIST provides protection from chemical and biological agents. The suit
can be worn over a uniform and body armor. Once it is removed from the
packages, the suit can provide protection for 45 continuous days. However,
once exposed to an agent, it must be replaced within 24 hours. The sealed
suit package has a shelf life of 14 years. The U.S. military began
fielding JSLIST in November 2002. Before then, the Army relied on the
Battle Dress Overgarment and the Marine Corps depended on the Saratoga
suit.

Source: The Army's Soldier Biological and Chemical Command.

Although the military services manage their own inventories of JSLIST
suits, DLA serves as the contracting agent. The largest producer is the
National Institute for the Severely Handicapped. The primary
subcontractor, Blu:cher, a German company, makes the suit's filter fabric
liner. A critical component of the liner is the carbon beads, which absorb
chemical and biological agents. The carbon beads are produced for
Blu:cher-through a sole source contract-by a Japanese company, Kureha.

     Appendix V Joint Service Lightweight Integrated Suit Technology Suits

Extent and Impact of Perceived Shortages during OIF

JSLIST was perceived to not be available for the warfighter between
October 2002 and September 2004; however, we do not consider this a
shortage because all personnel in theater were issued a JSLIST or Saratoga
suit and the required spare by February 22, 2003. Some Army officials in
theater, as well as National Guard officials in the U.S., indicated a
shortage of JSLIST; however our analysis indicated no actual shortage.
Despite this perception of a shortage, neither the Army nor Marine Corps
indicated any impact on operational capabilities of deployed units. The
Army began to field additional JSLIST suits to units deployed in theater
in November 2002, in response to a congressional request.1 By February 22,
2003, the Army's Central Command reported that every Army unit had two
suits for every soldier in theater; moreover, the theater supply base had
one spare suit for every soldier. Similarly, the Marine Corps reported it
had sufficient stock during OIF to issue one Saratoga suit2 and hold two
additional suits for each Marine.

Reasons for Perceived 	The perception of a JSLIST shortage emerged in late
2002 and early 2003 because of a change in requirements, poor asset
visibility, and concerns

Shortages about production capacity.

Requirements Changed in Fall 2002

Changes in requirements increased the demand for JSLIST. Before October
2002, the Army's and Marine Corps' requirements called for one
chemical-biological protective suit and one backup for each soldier or
marine in theater. To meet this requirement, the services planned to use
the older suits (e.g., the Army's Battle Dress Overgarment and the
Marine's Saratoga suit) and eventually supplemented them with the newer
JSLIST. In October 2002, however, the House Committee on Government Reform
requested that DOD direct the services to issue JSLIST to all U.S. forces
stationed in the Middle East, thereby increasing the servicewide demand
for JSLIST. According to Marine Corps officials, this request expanded the
number of personnel who needed suits to include not only DOD military

1 The congressional request was prompted by our finding that DOD could not
easily identify, track, and locate defective Battle Dress Overgarments.
The Committee's request was subject to available inventories and urgent
deployment constraints.

2 The Saratoga suit is considered equivalent to the JSLIST in protection
against chemical and biological agents. Therefore, the use of the Saratoga
suit by the Marine Corps was sufficient to meet the congressional request.

     Appendix V Joint Service Lightweight Integrated Suit Technology Suits

personnel but also DOD civilian contractors and members of other external
organizations. Although Marine Corps officials state they planned to
provide protective suits for non-military personnel before the
congressional request, and had acquired and stocked 400 sets of Saratoga
suits for this eventuality, they found more personnel than expected who
needed the protective gear. Although the services were required to provide
suits for all personnel in theater, there was no DOD policy to guide the
procurement of these items.

Although the availability of JSLIST was sufficient, the sizes of the
available suits were a problem for some soldiers. Initial orders for
JSLIST did not take into account the fact that the suits would be worn
over body armor and, thus, larger sizes were needed. According to DLA
officials, units also did not consider that some National Guardsmen and
reservists would need larger suits than those typically stocked to support
the active-duty forces.

Lack of Asset Visibility	In some cases, the poor visibility3 over National
Guard and Army Reserve supply inventories affected the perceived
nonavailability of JSLIST. For example, Army officials noted that some
National Guard and reserve units could not promptly find a sufficient
number of JSLIST in their inventory to meet requirements. Their inventory
systems did not provide visibility over inventory in different locations.4
As a result, Army officials said the deployment of National Guard and
reservist personnel was delayed until a sufficient number of JSLIST were
located within their inventory.

3 DOD defines visibility as the capability to provide users with timely
and accurate information on the location, movement, status, and identity
of units, personnel, equipment, material, and supplies.

4 GAO, DOD Business Systems Modernization: Billions Continue to Be
Invested with Inadequate Management Oversight and Accountability,
GAO-04-615 (Washington, D.C.: May 27, 2004) found that asset visibility
was not maintained over JSLIST suits at the unit level. We also found in
GAO, DOD Management: Examples of Inefficient and Ineffective Business
Processes, GAO-02-873T (Washington, D.C.: June 25, 2002) that DOD's
visibility system did not provide accurate information about the
quantities and location of JSLIST suits in its inventory.

     Appendix V Joint Service Lightweight Integrated Suit Technology Suits

Production Concerns	Although DLA reported operational unit concerns about
the production of carbon beads, the agency was able to meet suit demand
during OIF. Because of the single source subcontractor's limited ability
to produce carbon beads, the total monthly production was limited to
70,000 to 80,000 suits. DLA officials stated this level of production was
sufficient to meet JSLIST requirements and prior GAO analysis supports
their claim.5 However, DLA officials noted they are concerned about their
ability to meet the services' current requirement to replace the 400,000
to 500,000 suits issued in OIF.

Efforts to Improve Availability

Short-term Efforts	To meet the additional requirement to supply DOD
civilian contractors and other non-military personnel with JSLIST, Army
officials noted that suits were shipped directly to the theater for issue.
In addition, Marine Corps officials reported drawing on their
prepositioned war reserve stocks to meet the additional requirement.

To meet the demand for larger sizes, the Director of DLA testified that
DLA provided 2,000 custom-made suits for personnel outside the original
size range.6 Moreover, Army officials said that Federal Express was used
to expedite the shipment of these suits.

Long-term Efforts	To meet suit requirements for all personnel in theater,
Army officials report that DLA has introduced four larger suit sizes into
its inventory.

As part of an effort to improve asset visibility, the Department of the
Army has implemented an Individual Protective Equipment Centralized

5 GAO, Chemical and Biological Defense: U.S. Ability to Meet Protective
Suit Inventory Requirements Faces Risk, GAO-04-290 (Washington, D.C.:Apr
28, 2004).

6 Statement by Vice Admiral Keith W. Lippert, Director of the Defense
Logistics Agency, before the Subcommittee on Readiness, House Armed
Service Committee, March 30, 2004.

Appendix V Joint Service Lightweight Integrated Suit Technology Suits

Management Initiative designed to provide units with visibility and
shelf-life management of inventory in the United States.

To increase production capability, DLA officials stated that they worked
in conjunction with DOD to increase the production capability of the
existing industrial base and to develop new protective suits for future
use. For example, DLA officials stated that Blu:cher is conducting
research to develop an alternative carbon bead in order to reduce reliance
on a sole source producer. In addition, they announced that in June 2004,
the JSLIST Additional Source Qualification program at Quantico, Virginia,
accepted the use of a new bead from Blu:cher, which will be available for
future suits.

Appendix VI

                     BA-5590 and BA-5390 Lithium Batteries

Background	BA-5590 and BA-5390 nonrechargeable lithium batteries1 provide
a portable power source for nearly 60 critical military communication and
electronic systems, including the Single Channel Ground and Airborne Radio
System, the Javelin missile guidance system, and the KY-57 transmission
security device. U.S. troops depend on these systems to communicate,
acquire targets, and gain situational awareness on the battlefield. The
BA-5590 was developed specifically for military use more than a decade ago
and, according to military officials, is the most widely used
communications battery in the supply system (see fig. 13). The BA-5390
served as a substitute battery when shortages of BA-5590s occurred during
OIF. Prior to the start of Operation Enduring Freedom, the Army was moving
to a rechargeable battery at the direction of the Environmental Protection
Agency. Funding was provided for the environmentally safe battery, not the
disposable lithium battery. However, these disposable batteries are
welladapted to fast-paced mobile operations because they do not have to be
recharged.

Source: DOD.

Before OIF, SAFT manufactured all BA-5590 lithium batteries for the
U.S. military. In late 2002, Ultralife Batteries started supplying
BA-5390s to

1 These are part of the 5X90 family of lithium batteries. The BA-5590
contains lithium sulfur dioxide (Li/SO2) cells and has a use-life of about
24 hours. The BA-5390 contains lithium manganese dioxide (Li/MnO2) cells
and has a use-life of about 36 hours. Both batteries have a shelf life of
5 years.

                                  Appendix VI
                     BA-5590 and BA-5390 Lithium Batteries

the military and in early 2003 Eagle-Picher Technologies began delivering
BA-5590s to augment SAFT's output.

Before and during OIF, CECOM's Logistics and Readiness Center bought and
managed DOD's family of lithium batteries. As of September 30, 2004, this
responsibility was transferred to DLA's Defense Supply Center Richmond.
CECOM, however, will continue to be responsible for technical issues
related to lithium batteries.

During the time period covered by our review, CECOM used several methods
to derive inventory management data. Before July 2003, CECOM used the old
Commodity Command Standard System. We consider data derived from this
legacy system to be sufficiently reliable for our purposes. In July 2003,
CECOM converted to a new database, the Logistics Modernization Program,
which encountered stabilization and data clean-up issues. To overcome
these issues, CECOM item managers obtained inventory management
information from the Logistics Modernization Program as well as manual
computations. While these data are sufficiently reliable for the purpose
of showing trends and graphs, our findings rely primarily on data from the
Commodity Command Standard System from the period before July 2003.

Extent and Impact of Shortages

Nonrechargeable lithium batteries, specifically BA-5590s and BA-5390s,
were available in limited quantities to the warfighter between October
2002 and September 2004. We consider this to be a shortage because the
monthly demand and back orders for these batteries exceeded the monthly
inventory that CECOM had available to supply U.S. forces in OIF.

While demand for nonrechargeable lithium batteries increased dramatically
after September 11, 2001, it quickly outpaced the available supply, as
U.S. troops began preparing for combat operations in Iraq. Demand rose
from a peacetime average of below 20,000 batteries2 per month before
September 2001 to an average of 38,313 batteries per month after the
United States launched the global war on terrorism and Operation Enduring
Freedom in Afghanistan.3 In January 2003, as thousands of troops

2 BA-5590 and BA-5390 batteries are distributed in packages of four
batteries. In this report, we use the number of individual batteries.

3 According to CECOM officials, demand represents worldwide demand.

                                  Appendix VI
                     BA-5590 and BA-5390 Lithium Batteries

were deploying to the Gulf region, the number of batteries requisitioned
surged to 140,000 and, in April 2003 during major combat operations, the
number peaked at 330,600 (see fig. 14). When major combat operations were
declared over in May 2003, demand began to fall. Since the fall of 2003,
the demand has leveled off to an average of about 62,000 per month.

Number of batteries 1,000,000 900,000 800,000 700,000 600,000 500,000
400,000 300,000 200,000 100,000 0 Oct. Dec. Feb. Apr. June Aug. Oct. Dec.
Feb. Apr. June Aug. Oct. Dec. Feb. Apr. June Aug.

2001 2002 2003 2004

Demand Inventory Back orders

Source: CECOM.

Note: Data on inventory and back orders was not available for October and
November 2001.

U.S. troops encountered severe shortages of nonrechargeable lithium
batteries because inventory levels (including on-hand and war reserve
stocks) were low. As figure 14 shows, inventory levels remained on average
below 15,000 batteries during 2002 and into early 2003, increasing only in

                                  Appendix VI
                     BA-5590 and BA-5390 Lithium Batteries

May 2003 after major combat operations were declared over and demand began
to decline. At the same time, the number of back-ordered batteries grew to
about 250,000 in January 2003 and, by May 2003, had nearly quadrupled to
900,000. As demand fell and requisitions were filled, the number of back
orders began to drop in the summer of 2003 and, by the end of 2003,
inventory levels exceeded back orders.

Army and Marine Corps units faced critically low supplies of BA-5590s and
BA-5390s during the spring of 2003. On March 24, 2003, a few days after
combat operations began, the Marines reported they were down to less than
a 2-day supply (rather than the required 30-day, on-hand safety level). In
early April, Marine officials projected that, given existing worldwide
inventories, production capacity, and consumption rates, they would
experience degraded communications capacity by early May if the war
continued at the same pace. To mitigate the shortages, the military took
some actions, including requiring stationary units to use alternative
power sources (e.g., rechargeable batteries) and instituting a weekly
Materiel Priority Allocation Board4 meeting to apportion batteries to
combat units that needed them the most.

Causes of the 	The critical shortages of BA-5590s and BA-5390s during OIF
resulted from four related conditions: inadequate war reserve
requirements, inaccurate

Shortages	forecasted requirements, lack of full-funding, and acquisition
delays due to industrial-base limitations.

Inadequate War Reserve The Army's war reserve requirements for
nonrechargeable lithium batteries

Requirements	were not sufficient to support initial operations. According
to Army Regulation 710-1, the war reserve is intended to provide the Army
with interim support to sustain operations until it can be resupplied with
material from the industrial base. According to CECOM officials, before
OIF, the war reserve requirement for BA-5590s was set at about

4 The Joint Materiel Priorities and Allocation Board-which performs duties
for the Chairman, Joint Chiefs of Staff-sets, changes, or recommends
priorities for allocating supplies in the DOD system when competing
requirements among DOD components cannot be resolved.

                                  Appendix VI
                     BA-5590 and BA-5390 Lithium Batteries

180,000 batteries to sustain the first 45 days of war.5 However, this
amount was considerably below the actual demand of nearly 620,000
batteries recorded during March and April 2003. Officials stated that the
low pre-war requirement was generated by the Army's war reserve model,6
which was last updated in 1999; moreover, this model used inaccurate
battery failure rates and did not include all of the equipment that used
nonrechargeable lithium batteries. Based on their experience during OIF,
CECOM officials have increased the current Army and Marine Corps war
reserve requirement for BA-5590s and BA-5390s to more than 1.5 million
total batteries, an amount equal to OIF's average monthly demand of
250,000 batteries times 6 months of continuous combat operations. War
reserve planners expected inventories to reach the 1.5 million mark by
February 2005.

Inaccurate Forecasted Requirements

In addition to low war reserves, CECOM's official monthly forecasted
requirements for nonrechargeable lithium batteries were far below those
needed to meet a wartime contingency. Forecasted requirements are
developed primarily on the basis of actual demand data for an item from
the preceding months7 and are used to support funding requests to purchase
additional supplies. In 2002, CECOM increased its monthly forecasted
requirements from a monthly peacetime norm of 24,000 batteries to a
monthly average of 36,000 in response to the global war on terrorism (see
fig. 15). These monthly requirements grew to nearly 60,000 in March 2003
when combat operations began in Iraq, but this number was only one-fifth
of the actual demand recorded that spring. Forecasted requirements
continued to lag behind demand until mid-summer when they caught up.
According to officials from Central Command Joint Logistics, the pre-OIF
monthly requirement figures were low because some combatant commanders did
not submit their requirements and estimates did not reflect all battery
usage; as a result, officials said that calculating requirements was
purely guesswork.

5 BA-5390s were not part of the pre-OIF war reserve inventory because the
U.S. military did not use them until the fall of 2002.

6 Army War Reserve Automated Process computes requirements for secondary
items, such as spare parts, for the war reserve.

7 CECOM's change in the demand base to 6 months was reflected in the April
2003 forecasted requirements.

                                  Appendix VI
                     BA-5590 and BA-5390 Lithium Batteries

Number of batteries 350,000

300,000

250,000

200,000

150,000

100,000

50,000 0

Oct. Dec. Feb. Apr. June Aug. Oct. Dec. Feb. Apr. June Aug. Oct. Dec. Feb.
Apr. June Aug. 2001 2002 2003 2004

Requirements Demand Production output

                                 Source: CECOM.

Notes:

(1) The jump in forecasted requirements in April 2003 was the result of
reducing the demand base to 6 months to calculate requirements.

(2) According to CECOM, fluctuations in production output after July 2003
reflect changes in deliveries from one month to the other.

In the summer of 2002, CECOM and AMC officials developed a more realistic
contingency requirement for nonrechargeable lithium batteries. Using
information from the Operation Plan and other sources, they forecasted a
need for 300,000 to 325,000 batteries per month.8

8 CECOM officials stated that this figure included a Marine Corps
requirement.

                                  Appendix VI
                     BA-5590 and BA-5390 Lithium Batteries

As figure 15 shows, this estimate closely paralleled the actual demand of
330,000 at the height of major combat operations in April 2003. CECOM
officials presented this requirement to AMC and the Joint Materiel
Priorities and Allocation Board in the fall of 2002 to bolster their
request for $38.2 million of additional obligation authority to ramp up
BA-5590 and BA-5390 production. They received the funding in early
December 2002.

Army Decisions Did Not Provide Full Funding for Batteries

The Army's risk-based decision not to fund full requirements for CECOM,
particularly lithium nonrechargeable batteries, during several years prior
to OIF compounded the shortage problem. As table 9 shows, CECOM had
unfunded requirements ranging from $85 million to $419 million for the 3
fiscal years up to and including OIF. In fiscal year 2003, for example,
CECOM identified requirements for the command of nearly $1.5 billion, but
received less than $1.1 billion in obligation authority for the year,
resulting in an unfunded requirement of $419 million, or more than 28
percent of the total amount required.

The command's unfunded requirements specifically for BA-5590 lithium
batteries varied from a high of $4.2 million in fiscal year 2001 to a low
of $1.2 million in fiscal year 2002. However, the low figure for fiscal
year 2002 occurred because AMC directed CECOM to spend $11.5 million to
specifically support its BA-5590 requirement. Our analysis shows that even
if CECOM had been able to fund 100 percent of its BA-5590 battery
requirement in fiscal year 2002, it would not have been able to meet the
growing demands from the global war on terrorism. A fully funded
requirement ($22.6 million) would have provided about 33,000 batteries per
month, and actual demand exceeded that for most of the year.

Table 9: CECOM Unfunded Requirements for Fiscal Years 2001 through 2003

                              Dollars in millions

Fiscal year 2001 2002 2003

                       CECOM requirements 498 568 1474.7

                     CECOM unfunded requirements 85 207 419

                       Percent unfunded 17.1% 36.4% 28.4%

Source: CECOM and AMC data.

                                  Appendix VI
                     BA-5590 and BA-5390 Lithium Batteries

             Acquisition Delays Due to Industrial-Base Limitations

The surge in demand for nonrechargeable lithium batteries exceeded the
amount that the industrial base could produce, thereby delaying
acquisition. Before OIF, CECOM had contracted with only one qualified
producer, SAFT, to make BA-5590s. To support the global war on terrorism,
SAFT doubled its production from 32,000 batteries per month in October
2001 to 60,000 per month in September 2002. After receiving $38.2 million
in additional obligation authority in December 2002, CECOM increased its
orders for BA-5590s with SAFT and added BA-5590s to its contract with
Eagle-Picher. It also contracted with Ultralife to make a substitute
battery, the BA-5390. According to CECOM officials, both batteries have a
6-month production lead time.9 Despite CECOM's efforts, the long lead-time
precluded the ability of these three producers to meet the surge in demand
during major combat operations. Army officials stated that if they had
received funding earlier they would have been able to mitigate the effects
of this long lead time. As figure 15 shows, while production output
increased to over 100,000 batteries per month in the spring of 2003, it
did not approach 200,000 until the late summer of 2003 or reach its peak
of 250,000 until early in 2004.

A recent study identified a limited industrial base as the primary cause
of the BA-5590 battery shortage. A March 2004 Science Applications
International Corporation report concluded that battery shortages and lack
of availability were an industrial-base challenge.10 The supplier was not
able to increase production to meet the unforecasted six-fold increase in
demand.

Efforts to Improve Availability

Short-term Efforts	To overcome production constraints, CECOM negotiated
with two other producers, in addition to SAFT, to manufacture BA-5590s and
BA-5390s. It also worked with the three producers to augment battery
production by

9 According to CECOM this relatively long lead-time includes time for
testing.

10 Science Applications International Corporation (SAIC), Objective
Assessment of Logistics in Iraq (March 2004).

                                  Appendix VI
                     BA-5590 and BA-5390 Lithium Batteries

going to a 24/7 schedule. In addition to expedite shipments, CECOM had
SAFT bypass the depot and ship batteries directly to Charleston Air Force
Base for air shipment to the theater. According to CECOM, a capital
investment of $5 million was made in the three producers in May 2003 to
expand their production capacity.

DOD took a number of actions to get the limited supply of nonrechargeable
batteries to units that needed them most. According to CENTCOM, the Joint
Chiefs of Staff issued a directive to send all available BA-5590s and
BA-5390s to CENTCOM's area of responsibility until June 2003. The Joint
Staff also put these batteries on the "critical few list," which focused
attention on improving the availability of specific items the services and
geographic combatant commands reported as critical to their worldwide
operations. CECOM and Marine Corps officials said they shifted available
batteries from military installations worldwide and also bought batteries
on the commercial market. The Army, Marines, and Coalition Forces Land
Component Command also directed troops, especially those in rear units, to
use rechargeable batteries when possible. In addition, the Army required
soldiers to use rechargeable batteries for garrison duty and training and
to maximize their use during peacekeeping operations. Marine combat units
were instructed to do everything possible to reduce nonrechargeable
battery consumption rates. Moreover, Coalition Forces Land Component
Command was appointed the theater's item manager for batteries, with
responsibility for prioritizing and releasing batteries to units.

Long-term Efforts	To correct problems with war reserve requirements, CECOM
officials said they set the current war reserve requirement for BA-5590s
and BA-5390s to more than 1.5 million batteries to better reflect the
experiences in OIF. This requirement was expected to be filled by February
2005.

To improve battery availability, the Deputy Under Secretary of Defense for
Logistics and Materiel Readiness, in January 2004, directed the transfer
of battery inventory management from CECOM to DLA as of September 30,
2004.

In terms of technological efforts, CECOM officials said they are
developing newer, lighter-weight rechargeable batteries that could be
powered by solar panels or other energy sources while troops are on the
move to reduce dependence on disposable batteries.

Appendix VII

                      Marine Corps Helicopter Rotor Blades

Background	During Operation Iraqi Freedom, the Marine Corps relied on a
variety of helicopters to support its forces during combat operations.
These include the UH-1N Huey, a twin-engine utility helicopter used in
command and control, re-supply, casualty evacuation, liaison, and troop
transport, and the CH-53E Super Stallion, a triple-engine cargo helicopter
used to transport heavy equipment and supplies. Both types of helicopters
require numerous spare parts, including rotor blades, to maintain their
operational status (see fig. 16). In Iraq, Marines reported that enemy
fire and harsh environmental conditions, such as heat, sand, and
unimproved airfields, increased the wear and tear on the rotor blades.

                                  Source: DOD.

All Marine Corps helicopter spare part supplies, including rotor blades,
are managed by the Naval Inventory Control Point Philadelphia.

No Supply Shortages There were no shortages of rotor blades between
October 2002 and

September 2004, although there were indications of concern due toExisted
During increased wear and tear caused by operating from unimproved
airfields, Operation Iraqi the harsh environment, and back orders. We do
not consider this a shortage Freedom because the supply system filled back
orders within 2 months and Marine

Corps officials from the 3rd Marine Air Wing reported no major supply
shortages of rotor blades for the UH-1N and CH-53E helicopters during OIF.

                                  Appendix VII
                      Marine Corps Helicopter Rotor Blades

The supply system was able to provide a sufficient replacement quantity of
UH-1N and CH-53E rotor blades despite increased demands. For example, the
Marine Corps took the forecasted 16 UH-1N helicopter rotor blades, to
Iraq. As figure 16 shows, from March 2003 through August 2004, the Marines
requisitioned 22 additional rotor blades to support their mission, and the
supply system met those demands by filling orders within 2 months of
receiving the order.

In addition, air wings from outside the theater supported the demand in
Iraq by providing rotor blades from various air stations, ship supply, and
Marine Aviation Logistics squadrons. As a result, the Marines were able to
maintain a mission capable rate for the UH-1N of 75.4 percent during OIF,1
compared with a peacetime rate of 79.9 percent in 2000.2 To date, the
Naval Inventory Control Point Philadelphia continues to meet UH-1N rotor
blade demands for OIF.

6

4

2

0 Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May
June July Aug. Sep.

2003 2004

UH-1N demand UH-1N back order Source: Naval Inventory Control Panel,
Philadelphia.

1 Mission capable is defined as the material condition of an aircraft
indicating it can perform at least one and potentially all of its
designated missions.

2 The Marine Corps provided fiscal year 2000 as a representative peacetime
year.

                                  Appendix VII
                      Marine Corps Helicopter Rotor Blades

The 3rd Marine Air Wing took 33 of the forecasted requirement of 64 rotor
blades to support CH-53E helicopters in Iraq. As figure 18 shows, 55
additional rotor blades were ordered through the supply system, with 14 on
back order from March 2003 through September 2004. The supply system met
those demands by filling orders within 1 month of receiving the order. As
a result, the Marines were able to maintain a mission capable rate for the
CH-53E helicopter of 67.5 percent during combat operations, compared with
a peacetime rate of 72.3 percent in 2000.

Number of CH-53E rotor blades

14

12

10

8

6

4

2

0 Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May
June July Aug. Sep.

2003 2004

CH-53E demand CH-53E back order Source: Naval Inventory Control Panel,
Philadelphia.

Marine Corps officials stated that there were no shortages of rotor blades
for UH-1N and CH-53E helicopters and our analysis of the 3rd Air Wing's
demand and the supply system's ability to promptly provide rotor blades
during OIF supports their assertion.

                                  Appendix VII
                      Marine Corps Helicopter Rotor Blades

                              Efforts to Maintain
                               Rotor Blade Supply

Short-term Efforts	Even though they were able to get enough rotor blades
from the supply system to meet their demands, Marines took a number of
actions during OIF to extend the life of rotor blades in theater. Marines
improved the durability of CH-53E rotor blades and other bladed helicopter
parts by coating them with titanium paint and a tape covering in order to
protect the leading edge of the blade from sand erosion. In addition, as
the pace of combat operations slowed, Marines built permanent airfields
with paved landing areas, which decreased blade erosion during take-off
and landing.

Long-term Efforts	The Marine Corps and Naval Inventory Control Point
Philadelphia attribute their ability to provide rotor blades to using
models to determine numbers and timing of spare parts and upgrades to
sustain helicopter operations. The Marine Corps and the Naval Inventory
Control Point Philadelphia maintain a 5-year old system, the Common Rate
Calculation System/Common Application Development System, which uses
4-year historical demand data for the entire aircraft community for
particular helicopters, engineering data and worldwide environmental
factors to produce more accurate demand projections.

Appendix VIII

Meals Ready-to-Eat

Background	The standard military ration for the individual combatant is a
prepackaged, self-contained ration known as a MRE (see fig. 19). A MRE
consists of 1,300 calories per bag and is designed to sustain an
individual engaged in heavy activity, such as military training or actual
military operations, when normal food service facilities are not
available. MREs are issued in cases of 12 and MREs have a shelf life of 3
years when stored at 80DEGF.

                                  Source: DLA.

DLA's Defense Supply Center Philadelphia manages the MRE supply for all
services. It has supplied a total of 5.1 million MRE cases for OIF.

Extent and Impact of 	MREs were not available to the warfighter at some
point between October 2002 and September 2004. We consider this item to
have a

Shortages	shortage because demand exceeded the amount available to meet
the needs of the warfighters.

Appendix VIII Meals Ready-to-Eat

As figure 20 indicates, as the demand for MREs in OIF grew between
December 2002 and March 2003, the worldwide inventory declined. A shortage
of MREs began in February 2003 and continued into March 2003 when monthly
demand peaked at 1,810,800 cases, although only 500,000 cases were
available in the inventory. Figure 20 also shows the production output of
MREs increased from December 2002 through April 2003. As a result of DLA's
actions to maintain an industrial base capable of a large surge in
production, the industrial base was able to increase its monthly
production of MREs.1 Consequently, DLA never reported any back orders for
MREs during OIF. In late April 2003, as U.S. forces transitioned from MREs
to other food consumption options, monthly demand decreased significantly
to 650,000 MRE cases. That month, the industrial base produced 1.3 million
cases. From May 2003 on, a sufficient quantity of MREs were available in
inventory to meet demand.

1 After Desert Shield/Desert Storm, DLA established a "War Stopper"
program to ensure sufficient wartime surge capacity for critical items. It
took preemptive steps, such as establishing surge contracts and investing
funds in equipment and facilities, to ensure that these items would be
available in sufficient quantities during contingency operations.

Appendix VIII Meals Ready-to-Eat

Cases of MREs

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

                 December January February March April May June

2002 2003

Forecasted requirements
OIF demand
Production output
Inventory

Source: DLA.

Army and Marine Corps units did not always have all the MREs they needed.
According to CENTCOM after-action reports, Army combat units were supposed
to arrive in theater with a 7 to 10 day supply of MREs. However, CENTCOM
reported that many units did not arrive with this quantity, thereby
placing a strain on the in-theater inventory. An analysis of Army
logistics reports by the RAND Corporation indicated that some units came
within 2 days or less of exhausting on-hand quantities. According to the
2nd Force Service Support Group, Marine Corps combat units averaged a 6-
to 8-day supply throughout the war, but there were times when some forces
had less than 1-day on-hand supply. Marine Corps' Combat Service Support
Companies, which directly support combat units, also reported critical
shortages of MREs. According to the 1st Force Service Support Group,
direct support units were supposed to maintain a 2-day supply. However,
according to a study by the Center for Naval Analysis, there were times in
late March and mid-April 2003 when direct support units had less than a
1-day supply.

                        Appendix VIII Meals Ready-to-Eat

Causes of Shortages	Problems with requirements planning, the release of
Operations and Maintenance funding,2 and distribution contributed directly
to shortages of MREs in theater.

Requirements Not Accurately Forecasted

DLA's forecasted requirements did not support MRE customer demand for the
first month of combat operations because of rapid changes in the size of
troop deployments. DLA's forecasted requirement for March 2003 was 996,556
cases of MREs; this number fell short of meeting the customer demand of
1,810,800 cases. The March 2003 forecasted requirement did not include
data that anticipated initial in-theater personnel levels would be doubled
because of a faster deployment of certain units. In a lesson-learned
report, CENTCOM stated that the forecasted MRE requirement for the period
of deployment was predicated on a 30-day supply for 50,000 personnel. This
forecast was quickly exceeded by the deployment of 100,000 personnel
during that 30-day period. The resulting demand placed a strain on
existing in-theater MRE inventories. However, DLA's model provided
accurate planning estimates for MRE customer demand for all other months.

Funding Was Not Available When Needed

The Army experienced a delay in the release of operations and
maintenance funding for MREs, despite DOD requirements that supply
chain processes provide timely support during crises. Although the Army
wanted to submit MRE requisitions to DLA in September 2002, it could not
do so because it lacked the Operations & Maintenance funding necessary
to purchase them. When the Army submitted the requisitions in
December 2002, DLA shipped MREs to Kuwait. However, this 4-month
delay in funding contributed to the shortage of MREs by delaying
shipments of MREs into the theater.

The Marine Corps faced a similar funding problem that delayed the
processing of ration requests for OIF. As reported in a Marine Corps
lessons-learned report, a January 6, 2003, request for a withdrawal
of rations from the war reserve was delayed due to lack of available
operations and maintenance funding from Headquarters Marine Corps. The
Marine Corps provided notification of partial funding and the Marine

2 The operations and maintenance budget covers the costs of purchasing
supply items associated with carrying out military operations.

                        Appendix VIII Meals Ready-to-Eat

Corps' first request for rations was passed to DLA on January 16, 2003.
Funding was available to provide for the remainder of the requirement and
funded requisitions were passed to DLA on February 10, 2003, 5 days before
the Marines' required delivery date of February 15, 2003.

Numerous Distribution Problems Impeded Supply

Inaccurate Delivery Time Forecasts

Limited Materiel Handling Equipment and Transportation Assets

A number of distribution problems in the logistics supply chain hampered
MRE availability.

One problem was that actual MRE delivery times exceeded the forecasted
delivery times. Most MREs were transported by ship from the U.S. to a
seaport of debarkation in theater and then by ground transportation to
combat units. CENTCOM officials estimated it would take 30 to 45 days to
transport MREs from the United States to a warehouse in theater. However,
they stated that the actual total time to move these rations averaged 49
days: 31 days for transit to the theater, 3 days to gain a berth at port,
5 days to discharge supplies, and 10 days for movement from the port to
the theater warehouse. Officials also noted that there were times when it
took as long as 60 days to transport MREs from the United States to
Kuwaiti ports because multiple, rather than single, vessels were used in
the transport process-a factor that initial delivery time estimates did
not take into account.

The lack of sufficient materiel handling equipment3 and transportation
assets in theater up to and during combat operations caused delays in
unloading supplies from ships and transporting them to combat units.
Because of the lack of adequate handling equipment, logistics personnel
could not efficiently unload the large shipments of MREs arriving at ports
in Kuwait, resulting in a backlog of ships waiting to be unloaded. DLA
officials stated that, at one point in time, 1.4 million MREs were sitting
at a port in theater, waiting to be processed. In addition, there were
insufficient transportation assets to move MREs from ports to theater
distribution warehouses. In particular, local contractors responsible for
delivering rations did not have sufficient trucks to make regular
deliveries to theater distribution warehouses. In addition, there were
insufficient materiel handling equipment and transportation assets to move
MREs from storage

3 Materiel handling equipment refers to mechanical devices that allow
supplies to be handled easily and economically to, through, and from
production facilities, in warehouses and storage, and in receiving and
shipping areas.

                        Appendix VIII Meals Ready-to-Eat

locations to combat units. For example, according to one OIF after-action
report there were times when 80 trucks were needed to move rations forward
but only 50 were available.

Poor In-transit Visibility	Poor in-transit visibility also delayed
distribution of MRE shipments in several ways. CENTCOM officials stated
that logistics personnel could not always rely on radio frequency
identification device technology to account for shipments. Despite a
CENTCOM requirement that radio frequency identification device tags be
used for all shipments to theater, CENTCOM estimated initial use was only
about 30 percent. Among other problems experienced were the failure to
attach tags to all containers and a lack of sufficient tracking devices to
read tags in order to identify subsistence items stored in containers. As
a result, logistics personnel stated they had to manually review all
packing documents to identify the contents of containers, thereby slowing
down the distribution of supplies.

Because of poor tracking, sufficient supplies of MREs sometimes existed
but were not visible. For example, during the MRE shortage, a DOD official
found over 17 20-foot containers with MREs at a supply base located
halfway to Baghdad; the MREs were there for a week because no one knew
they were there.

Efforts to Improve Availability

Short-term Efforts	To reduce MRE consumption during the shortage, Army and
Marine Corps officials stated that units switched to alternate feeding
methods such as Unitized Group Rations. CENTCOM reported working with
various carriers and the (Military) Surface Deployment and Distribution
Command4 to use sustainment packages weeks ahead of their scheduled issue
dates.

To improve the distribution of MREs, military officials formed a joint
working group including members from DLA, the Coalition Forces Land
Component Command, CENTCOM, and U.S. Transportation Command.

4 This command, formerly known at the Military Traffic Management Command,
provides global surface deployment command and control and distribution
operations.

                        Appendix VIII Meals Ready-to-Eat

This group communicates regularly to improve in-transit visibility over
rations. CENTCOM officials stated that due to the lateness of ships
arriving in theater, DLA located additional rations in other theaters that
were shipped to OIF.

Long-term Efforts	To ensure timely visibility of anticipated requirements,
DLA has recommended that collaboration between it, the Combatant Commands,
and the services be enhanced. To improve the timeliness of funding, DLA is
working with the services to refine their plans for releasing funding
early in the deployment process. To deal with distribution problems in
theater, the Secretary of Defense in September 2003 designated the U.S.
Transportation Command as the Distribution Process Owner. The
Transportation Command established a Deployment and Distribution
Operations Center in January 2004. The center is responsible for improving
the distribution process within theater by directing airport, seaport, and
land transportation operations.

Appendix IX

Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires

Background	The U.S. Army depends on a variety of trucks and other vehicles
to support combat operations. During OIF, it relied on the 5-ton capacity
cargo truck to transport all types of supplies and on the HMMWV to carry
troops and armaments, as well as to serve as an ambulance and scout
vehicle. The 5-ton truck (fig. 21) is outfitted with six radial tires and
the HMMWV with four radial tires. The tires are specific to each type of
vehicle and are not interchangeable.

                                  Source: DOD.

The Army's TACOM Tire Group manages the tire inventory for wheeled
vehicles, including the 5-ton truck and the HMMWV, for U.S. forces
worldwide. These tires are produced for the military by several
manufacturers, including Goodyear and Michelin.

Extent and Impact of 	Tires for the 5-ton truck and the HMMWV were not
available to the warfighter at some time between October 2002 and
September 2004.

Shortages	We consider this item to have a shortage because demand exceeded
the amount of inventory available to meet the needs of the warfighters.
U.S. forces and logistics personnel reported critical shortages of 5-ton
truck and HMMWV tires during OIF that negatively impacted their mission.
According to TACOM officials, the increased pace of the operations

Appendix IX Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle
Tires

resulted in high-vehicle mileage that caused significant wear and tear on
these tires.

Prior to the onset of OIF in March 2003, TACOM had no back orders for
5-ton truck tires and reported it was able to support demands from
customers worldwide. However, as figure 22 shows, back orders started to
accumulate after OIF began and, by October 2003, the number had peaked at
7,063 tires per month. Similarly, worldwide demand for tires rose after
March 2003. As figure 22 indicates, this demand increased fourfold over
the course of 1 year, climbing from a peacetime level of 1,189 tires in
April 2002 to a wartime level of 4,800 tires in April 2003. While demand
remained high during the summer of 2003, inventory levels dropped to below
1,000 and were insufficient to meet customer needs. For example, in August
2003 when demand reached 4,828 tires, TACOM recorded only 505 tires in its
inventory worldwide.1 According to TACOM officials, demands from OIF
received priority and much of the available inventory supported operations
in Iraq.

1 Inventory as depicted in figure 22 does not include war reserve stock.
As of October 2004, there were 2 5-ton truck tires in war reserves.

Appendix IX Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires

Figure 22: Worldwide Demand, Back Orders, and Inventory Level for the
5-ton Truck Tire by Month (February 2002 through

September 2004) Number of tires 8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

Feb. Apr. June Aug. Oct. Dec. Feb. Apr. June Aug. Oct. Dec. Feb. Apr. June
Aug. Sep.

2002 2003 2004

Demand Inventory Back orders

Source: TACOM.

TACOM reported no back orders for HMMWV tires prior to OIF. However, as
figure 23 shows, back orders began to increase in April 2003 and peaked at
13,778 tires in September 2003 as demand increased and industry took
several months to respond. According to TACOM officials, back orders
accumulated because of the increasing demands coming from OIF. Worldwide
demand rose rapidly in June 2003, peaked at 16,977 tires in August 2003,
and gradually declined during the winter months (see fig. 23). Over the
span of 1 year, worldwide demand increased more than four-fold, from a
peacetime rate of 3,251 tires per month in June 2002 to 15,224 tires per
month in June 2003. While demand grew during the summer of 2003, inventory
levels were insufficient to meet customer needs. For example, in

Appendix IX Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires

July 2003, TACOM recorded only 4,286 HMMWV tires in its inventory, but had
demands for a total of 14,435 tires. Fluctuating demands were caused by
the intensity of the war fight and the changing mixture of weapons systems
employed.

Figure 23: Worldwide Demand, Back Orders, and Inventory Level for the
HMMWV Tire by Month (February 2002 through September 2004)

Number of tires 100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000 0

Feb. Apr. June Aug. Oct. Dec. Feb. Apr. June Aug. Oct. Dec. Feb. Apr. June Aug.
                                     Sept.

2002 2003 2004

Demand Inventory Back orders

Source: TACOM.

Army and Marine Corps units reported that tire shortages negatively
affected operations in Iraq.2 Units of the 3rd Infantry Division reported
that they could not get the required number of tires to support their
mission and that the shortage of tires forced them to leave vehicles and
supplies behind. In addition, TACOM reported in June 2003 that it could
only provide 64 percent of the spare parts, including tires that the 4th
Infantry Division

2 Units in Iraq reported shortages of tires in general, and not solely the
5-ton or the HMMWV radial tires.

Appendix IX Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires

considered urgent. Although the 4th Infantry Division reported shortages
in theater, it did not report any mission impact due to tire shortages. In
an after-action report, the U.S. Marine Corps documented that
cannibalization, stripping, and abandoning otherwise good vehicles
occurred because of the lack of spare tires.

Causes of Shortages	Problems with war reserve stocks, forecasted
requirements planning, funding, and distribution contributed to shortages
of the 5-ton and HMMWV radial tires during OIF.

Insufficient War Reserves Stock

The number of tires in war reserve stocks was not sufficient to support
customer demands when OIF began. According to Army regulations, war
reserve stocks are intended to meet the initial increase in demand during
wartime and to fill the gap until the national supply system can increase
production. In December 2002, TACOM officials managing war reserves
established a requirement for 259 tires for 5-ton trucks. However,
officials
had only 38 tires on hand at that time, and 3 months later in March 2003,
they had only 16 tires on hand. As of October 2004, the war reserve
requirement for the 5-ton truck tire remained at 259 tires, but there were
only 2 tires in the inventory. As figure 22 shows, the demand for 5-ton
truck tires was always higher than 259 tires, starting with 978 tires in
February 2002 and continuing throughout OIF. Therefore, the war reserve
requirement of 259 tires was too low to support initial demands from units
in theater.

For HMMWV radial tires, TACOM managers had a sufficient number
of tires to meet the war reserve requirement of 1,505 tires in
December 2002. In March 2003, managers increased the HMMWV tire war
reserve requirement to 7,908 tires, but they failed to adequately stock
tires
in the inventory. At that time, they only had 1,483 tires on hand. As of
October 2004, the war reserve requirement for HMMWV tires remained at
7,908 tires, but there were only 3,764 tires in the inventory.

TACOM officials told us that they do not adequately stock tires in the war
reserves because they lack the necessary funding. This was the result of
risk based decisions about how to allocate DOD funds. As of October 2004,
TACOM's war reserve requirements for all items it manages
(including tires) totaled $1,355.7 million. However, it has received only
$828.9 million to support those requirements. As a result, TACOM officials
have used a risk management approach to prioritize the funding of their

Appendix IX Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires

requirements. For example, they gave funding priority to more expensive
items, such as tank engines, which have long lead-times and are difficult
to procure, rather than to less expensive items, such as tires, which can
be produced faster. When OIF began, tires stocked in war reserves were
inadequate to support initial customer demands because of these decisions.

Inaccurate Forecasted Requirements

TACOM's forecasted requirements for vehicle tires underestimated the
actual demand for tires during fiscal year 2003. For example, TACOM
forecasted that worldwide requirements,3 for the 5-ton truck tire would
reach 1,497 tires per month in April 2003; however, the actual demand for
this tire rose to 4,800 for that month, more than three times higher than
the forecasted requirements. Similarly, TACOM forecasted that customers
would need 5,800 HMMWV tires per month in June 2003; instead, actual
worldwide demand for HMMWV tires grew to 15,224 per month, three times
higher than the forecasted amount.

In June 2003, TACOM changed its requirements forecasting model for tires
and other spare parts from a 12-month average demand base to a 30-day
average demand base to respond to the sharp increase in actual demand.
According to TACOM officials, the 12-month average demand base model did
not react quickly enough to actual demands, which were at times three or
four times higher than the monthly forecasted requirements. By changing
the model to a 30-day average demand base, TACOM was able to stock up on
inventory faster.

In setting forecasted requirements for tires, TACOM officials stated they
relied heavily on past historical demand data because it received little
guidance on the expected demand activities or operational plans from Army
headquarters. TACOM expected an increase in demand for fiscal year 2003
because of the growing demand from southwest Asia, especially Kuwait,
prior to the onset of OIF. Officials from TACOM's Tire Group told us they
put an emphasis on past historical demand data to forecast their future
requirements. Similarly, TACOM's Track and Roadwheel Group reported that
they relied on historical data, including information from Operation
Desert Storm/Shield and operations in Bosnia, to help them forecast future
requirements in the absence of official guidance.

3 TACOM's worldwide forecasted requirements included those for OIF.
According to TACOM officials, much of the worldwide demand was driven by
demand from OIF.

Appendix IX Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires

Insufficient and Erratic Funding

According to TACOM officials, the Tire Group did not receive adequate
funding (referred to as obligation authority) from the Department of the
Army's working capital fund to buy additional tires to meet customers'
needs. Furthermore, when obligation authority became available, they did
not receive it promptly. In fiscal year 2003, TACOM had worldwide demands
for tires totaling $246.3 million; however, it received only $212 million
in obligation authority, about 86 percent of its total requirements. By
comparison, during the same fiscal year, TACOM received about $118.5
million worth of requisitions for all tires needed in OIF. As TACOM
exhausted its obligation authority during fiscal year 2003, additional
releases came in sporadically. For example, in July 2003, TACOM reported
that it had used all of its obligation authority but still had $22 million
worth of contracts that needed funding; by August 2003, however, TACOM
reported that it had funds available to continue awarding contracts.4
TACOM's Tire Group complained that the `stop-start' funding releases
complicated their efforts in maintaining a consistent supply of tires from
tire manufacturers by preventing them from providing a steady stream of
funds in advance of production lead-time.

TACOM's Tire Group also did not know when or how much the next release of
obligation authority would be. In order to ensure that the industrial base
could provide supplies promptly, TACOM needed funding at least one
procurement lead-time (e.g., the time it takes a manufacturer to make and
deliver the tire) in advance of the delivery date. For most tires, the
procurement lead-time is 3 to 6 months. Therefore, in order to meet
unexpected surges in demand, TACOM needed to have funding available 3 to 6
months prior to the surge.

In addition to the Tire Group, TACOM as a whole was underfunded in fiscal
year 2003. Figure 24 shows that throughout fiscal year 2003, TACOM was
funded below its actual requirements. At the beginning of fiscal year
2003, TACOM identified its requirements at $1,357 million; however, it was
provided with only $885 million in obligation authority. By May 2003,
TACOM came close to using all of its obligated authority without any
assurance that additional funding would arrive. As a result, TACOM
officials asked their support groups to conserve funding for the most
critical items until additional funding arrived. However, in June 2003

4 The primary long-term contract was with Goodyear while Michelin provided
some additional tires.

Appendix IX Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires

TACOM received additional funding, which allowed item managers to resume
awarding contracts for supplies. For fiscal year 2003, TACOM identified
its actual requirements at $2,726 million (including $345 million for
reset)5 but it received only $2,379 million in obligation authority.

Dollars in millions 3,000

2,500

2,000

1,500

1,000

     Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. 2002 2003

Cumulative funding executed

Actual requirements

Reset requirements Funding received Source: GAO analysis of TACOM data.

5 Reset is a term used to define bringing a vehicle that was used during
Operation Enduring Freedom and OIF back to a fully mission-capable
(serviceable) condition so that units can be combat-ready for other
deployments. Resetting a vehicle involves extensive use of spare parts to
bring the vehicles up to a fully mission-capable condition.

Appendix IX Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires

Constraints in the Distribution Process

Distribution constraints, both in the continental U.S. and in OIF,
contributed to customers not receiving supplies. The distribution system
was not prepared to handle the volume of supplies ordered by customers or
the speed with which supplies needed to be delivered.

In the summer of 2003, the Defense Distribution Center Susquehanna,
Pennsylvania, became overwhelmed by the volume of incoming shipments from
contractors delivering supplies for units in Iraq. Because of the
increased volume, the center gave contractors delivery appointment times
that were 2 to 3 weeks in the future, thereby delaying the delivery and
processing of many items, including tires.

Once tires were in the distribution center's warehouse, the requirement to
build pallets to ship them to the theater caused further delays. Officials
told us that the backlog of pallet building resulted in delays of up to 30
days or more before tire shipments could be released from the center. To
alleviate this backlog, all tires shipped in and after June 2003 were
diverted to the Defense Depot Red River, Texas, to be palletized and
shipped directly to aerial ports of embarkations at Charleston and Dover
Air Force Base.

Once tires were shipped from the U.S., TACOM lost all visibility of tire
shipments within CENTCOM's area of responsibility. At the Port of Kuwait,
containers could not be identified because radio frequency identification
tags that should have been on the pallets were lost during shipment, thus
increasing processing time. In addition, once these shipments left the
port, receipts were not posted at the customer supply support center to
verify delivery. Officials also stated that because of the lack of
in-transit visibility, shipments were frequently diverted to other
destinations without TACOM's knowledge or authorization.

Efforts to Improve 	TACOM initiated several temporary actions and one
long-term action to improve the availability of tires to customers in the
field. However, TACOM

Availability	officials did not identify efforts to improve funding
problems experienced during OIF, and they told us that they are not aware
of any initiatives at AMC headquarters or the Department of the Army that
address funding issues.

Appendix IX Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires

Short-term Efforts	To ensure that forecasted requirements better reflected
actual demands, in June 2003, TACOM's Tire Group changed the average
demand base it used to calculate requirements from 12 months to 30 days.
By making this change, the Tire Group captured demand data in real-time
and allowed item managers to better estimate future requirements. As
result, item managers were able to justify procuring more tires to meet
future demands.

To ensure continuous production while awaiting additional obligation
authority, officials from TACOM's Tire Group noted persuading
manufacturers to continue making tires. Tire manufacturers continued
making tires while waiting for contracts and made capital investments to
procure more tire molds, enabling them to increase production once
contracts were awarded and obligation authority became available.

To ensure quicker distribution of tires to customers in theater, TACOM
sent a group of supply personnel to Camp Arifjan in Kuwait to expedite the
processing of TACOM's shipments of tires and other spare parts. In
response to complaints that TACOM's tire and spare parts shipments were
being diverted and not reaching the right customers, TACOM's supply
personnel also helped to look for these shipments and get them delivered.

Long-term Efforts	To help solve the long-term distribution problems in
theater, in September 2003 the Secretary of Defense designated the U.S.
Transportation Command (TRANSCOM) as DOD's Distribution Process Owner.
TRANSCOM established a Deployment and Distribution Operation Center in
January 2004. Under the control of CENTCOM, this center is responsible for
improving the distribution process within theater by directing all
airport, seaport, and land transportation operations.

Appendix X

Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and Add-on-Armor
Kit

Background	The HMMWV is a highly mobile, diesel-powered, four-wheel-drive
vehicle with a 4,400 pound payload. Using common components and kits, the
HMMWV can be configured to become a troop carrier, armament carrier,
shelter carrier, ambulance, anti-tank missile carrier, or scout vehicle.
The initial number and type of HMMWVs in each unit is based on standard
equipment lists. According to officials, they are the most numerous U.S.
military vehicles in CENTCOM's area of responsibility. The Army reported
that there were 18,656 vehicles-both armored and unarmored-in theater, as
of July 2004.1

Up-Armored HMMWV	One version of the HMMWV is a production model known as
an Up-Armored HMMWV, also designated as the M1114 model (see fig. 25).
This model is produced by AM General Corporation and armored by
O'Gara-Hess Eisenhardt, requirements for CENTCOM's area of operations,
including Iraq and Afghanistan, call for this up-armored variant. The
M1114 model of the vehicle features ballistic-resistant windows and
steel-plate armor on the doors and underside to protect against rifle
rounds and explosive blasts, fragmentation protection, and additional
armor for the turret gunner on the roof to protect against artillery, as
well as a powerful air conditioning system.

1 The U.S. Army recognizes three levels of armor protection for HMMWVs in
Iraq. Level 1 is the Up-armored HMMWV, level 2 is a HMMWV with an
add-on-armor kit, and level 3 is fieldimprovised armor.

     Appendix X Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
                                Add-on-Armor Kit

                                  Source: DOD.

Add-on-Armor Kits	In order to provide armor protection to existing
unarmored HMMWVs in theater, the Army has developed an add-on-armor kit to
be mounted on vehicles. The basic kit includes armored doors, under-door
armor plates, seat-back armor, ballistic glass windows, and a heavy-duty
air conditioning system. Seven Army depots and arsenals, managed by the
Ground Systems Industrial Enterprise,2 currently produce the kits. The
Army began shipping the kits to Iraq by mid-November 2003 and started mass
production at their depots in December 2003. The Army also contracted with
O'Gara Hess Eisenhardt to produce additional armor kits to meet theater
requirements.

2 Ground System Industrial Enterprise is a TACOM organization responsible
for managing TACOM's arsenals and depots.

     Appendix X Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
                                Add-on-Armor Kit

                                  Source: DOD.

Requirements for up-armored HMMWVs and add-on-armor kits are identified
through operational needs statements directly from the theater that are
validated and resourced by the Army. Units in theater submit the
statements for the items, which are combined by their higher headquarters
into bulk Coalition requirements. The Coalition Forces Land Component
Command communicates these requirements for vehicles and kits to the
Department of the Army, where they are validated and resourced by the
Army's Deputy Chiefs of Staff and eventually transmitted to the Program
Executive Office-Combat Service and Combat Service Support Tactical
Vehicles, who manages the procurement of both the up-armored HMMWVs and
the add-on-armor kits.

Extent and Impact of 	Up-armored HMMWVs and add-on-armor kits were not
available to the warfighter at some time between October 2002 and
September 2004. We

Shortages	consider this item to have a shortage because vehicles and kits
were not available to meet the validated requirements developed by the
warfighters. The Army has been consistently unable to meet recurring
spikes in demand for vehicles and kits. However, the overall impact of the
Army's inability to deliver the vehicles and kits is difficult to measure.

     Appendix X Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
                                Add-on-Armor Kit

Extent of Up-Armored HMMWV Shortages

Since the Coalition Forces Land Component Command first began identifying
up-armored HMMWV requirements for CENTCOM's area of responsibility in the
summer of 2003, there has been a gap between the number of vehicles
required and the number of vehicles the industrial base is producing. By
September 2004, TACOM and the Army had provided 5,330 of the 8,105
required vehicles in theater. To meet Coalition Forces Land Component
Command's requirements, the Army program managers worked with O'Gara-Hess
Eisenhardt to produce an additional 2,533 new up-armored HMMWVs and the
Department of the Army redistributed an additional 2,797 existing vehicles
to Iraq from elsewhere in the world. Figure 27 shows that Coalition Forces
Land Component Command requirements for vehicles increased faster than
O'Gara-Hess Eisenhardt was producing them, with requirements growing from
1,407 vehicles in August 2003 to 8,105 vehicles by September 2004. The
Army worked with the manufacturers to increase production from 51 vehicles
per month in August 2003 to 400 vehicles per month in September 2004.
According to Army officials, O'Gara-Hess Eisenhardt will increase
production to its maximum capacity of 550 vehicles per month and will meet
current requirements by March 2005.

     Appendix X Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
                                Add-on-Armor Kit

Number of vehicles 9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. 2003 2004

Extent of Add-on-Armor Kit Shortages

As of September 2004, the Army supplied 8,771 of the 13,872 Add-on Armor
kits required by CENTCOM but still needed 5,101 additional kits to meet
all requirements. The Ground Systems Industrial Enterprise depots and
arsenals were required to produce 12,372 while O'Gara-Hess Eisenhardt was
required to produce the remaining 1,500 kits. As shown in figure 28, by
September 2004 the validated requirement of 8,400 kits grew to 13,872. To
meet the 8,400 requirement, program managers worked with several Army
depots to increase production from 35 kits a month in December 2003 to 600
kits per month by July 2004. At this production level, theater
requirements would have been met by August 2004. However during this same
month, Coalition Forces Land Component Command increased the requirement
to 13,872 kits. Army officials stated that it would take 3 to 4 months to
meet this new demand and accordingly expected the requirement to be met by
early 2005.

Requirements
Cumulative Up-Armored HMMWV redistribution
Cumulative Up-Armored HMMWV production output

                       Source: GAO analysis of Army data.

Appendix X Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
Add-on-Armor Kit

Figure 28: Add-on-Armor Requirements and Production Output, November 2003
through September 2004

Number of AOA kits 16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000 0

Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.

2003 2004

Requirements

Cumulative production output

Source: GAO analysis of Army data.

The overall impact of up-armored vehicle and add-on-armor kit shortages is
difficult to measure because units do not report the direct effects of
using unarmored HMMWVs, but the reason for increasing requirements is well
documented. Current HMMWVs are protected only by canvas tops and have no
additional armor protection. According to the Center for Army Lessons
Learned, the harm to both personnel and equipment from improvised
explosive devices is greatly reduced when traveling in an up-armored
HMMWV.3 This has generated a theater-wide concern for increased vehicle
protection. While units have used field-improvised steel enclosures and
other modifications to increase vehicle protection, up-armored vehicles
and add-on-armor kits provide better protection. The center specifically
mentions that the up-armored HMMWVs would improve the force protection of
civil affairs teams as well as provide ideal

3 Center for Army Lessons Learned, Initial Impressions Report, Operation
Iraqi Freedom, May 2004.

     Appendix X Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
                                Add-on-Armor Kit

transport for teams of engineers operating in the constricted urban
environments of Iraq.

Causes of Shortages	There are two primary causes for the shortages of
up-armored vehicles and add-on-armor kits. First, a decision was made to
pace production rather than use the maximum available capacity. Second,
funding allocations did not keep up with rapidly increasing requirements.

Production Was Not Paced to Match Maximum Capacity

DOD paced the production of armor for HMMWVs to meet initial CENTCOM
requirements, but did not use the maximum available production capacity as
the requirements increased dramatically after the onset of OIF. According
to Army officials, the total Army up-armored HMMWV requirement prior to
OIF was approximately 360 vehicles per year, to be produced at a rate of
30 vehicles per month. However, beginning in August 2003, Coalition Forces
Land Component Command developed new requirements for additional
up-armored HMMWVs based on requests from units in theater; the requirement
increased 576 percent from 1,407 to 8,105 vehicles by September 2004.
There was also a significant increase in the requirement for kits. In
November 2003, the initial requirement for Add-on Armor kits was 8,400
kits. By September 2004, the requirement had increased to 13,872 kits.

O'Gara-Hess Eisenhardt, the sole producer of the up-armored HMMWV,
increased production, in accordance with agreements with the Army;
however, that rate of production has not been sufficient to meet
increasing demands. The schedule of monthly production increases agreed to
by the Army and O'Gara-Hess Eisenhardt was based on meeting existing
requirements established at a particular time as well as funding
constraints. For example, the Army had requirements of 4,149 vehicles in
February 2004 to meet CENTCOM's needs. In meeting this requirement, the
Army redistributed over 3,000 existing up-armored HMMWVs to CENTCOM's area
of responsibility and agreed to have O'Gara-Hess Eisenhardt to produce the
rest of the vehicles. The Army had planned to meet the February 2004
requirement by July 2004 without having O'Gara-Hess Eisenhardt reach its
maximum capacity.

As shown in figure 27, the vehicle production rate has increased every
month from 51 vehicles in August 2003 to 400 vehicles by September 2004,
with a planned production of 460 vehicles per month by October 2004.

Appendix X Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
Add-on-Armor Kit

However, the signed agreement with O'Gara-Hess Eisenhardt indicates that
the maximum production could have been increased to 500 vehicles per month
in October 2004 if needed. Interviews with Army and contractor personnel
indicated that there were other constraints on production, such as the
availability of communication equipment.

Despite increasing requirements for the add-on-armor kits, additional
available production capacity was not used. Prior to CENTCOM's requirement
for 8,400 kits in November 2003, the Army had already begun designing and
shipping some `pilot' kits in theater. When it received the requirements
in 2003 for 8,400 kits, the Ground Systems Industrial Enterprise's depots
and arsenals began ordering raw materiel such as steel and ballistic glass
and ramped up production from 35 kits per month in December 2003 to 3,998
kits per month in April 2004. As total production neared the 2003
requirement, production was slowed to 333 per month by September 2004.
Because the kits take three to four months to produce, it was not until
January 2004 that the depots and arsenals began shipping substantial
quantities to theater.

Our review of Army data and interviews with Army officials shows that
additional capacity to produce kits was available within the Ground
Systems Industrial Enterprise system. Managers at Ground Systems
Industrial Enterprise indicated that seven arsenals and depots could have
maintained the maximum level of production without affecting other
operations at the depot, filling the kit requirement early in 2004. In
addition, in February 2004, a contractor operated Army facility informed
the Ground Systems Industrial Enterprise managers that it could produce
another 800 4-door kits per month. While the managers stated that they did
not use the contract operated facility due to issues with contract timing
and price, they did not have information on the decision to slow the pace
of production.

DOD decision makers determined the pace at which both up-armored HMMWVs
and kits would be produced, but did not inform Congress about the total
available production capacity. We have not been able to determine what
criteria were used to set the pace of production; however, in both cases,
additional production capacity was available, particularly for the kits.
As a result of the lack of visibility into and acceptance of decisions
made about the rate of production, DOD received criticism about the
availability of armored vehicles in Iraq.

     Appendix X Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
                                Add-on-Armor Kit

Funding for Up-Armored HMMWV Production Was Not Received in a Timely or
Predictable Manner

While funds were available to support the planned pace of production of
up-armored HMMWVs,4 program managers were not aware of the time frame for
releasing funds. Although TACOM received over $1.4 billion between fiscal
years 2003 and 2004 to produce 7,502 vehicles, it was not released in a
timely and predictable manner. Figure 29 shows that in August 2003, the
managers received requirements for 1,407 vehicles. However, it had
received funding to produce only 648 vehicles. By October 2003, program
managers had a requirement to produce 3,279 vehicles, but received funding
to produce only 1,456 vehicles. Significant differences continued until
April 2004, when requirements reached 4,454 vehicles and the program
managers received funding to produce 4,320 vehicles.

4 Neither AM General nor O'Gara-Hess Eisenhardt reported that the Army was
not able to pay them for the vehicles they produced.

     Appendix X Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
                                Add-on-Armor Kit

Number of vehicles 9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

     Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.

2003 2004

Requirements

Funded requirements

Cumulative Up-Armored HMMWVs redistribution

Cumulative Up-Armored HMMWVs production output

Source: GAO analysis of Army data.

The disbursement of funds affected program managers' ability to plan and
contract with O'Gara-Hess Eisenhardt to produce sufficient quantities of
up-armored HMMWVs. As shown in figure 29, requirements increased in June
2004 to 6,223 vehicles and again in August to 8,105 vehicles. However,
additional funding-$572 million-was not received until August 25, 2004 to
meet demands. As a result, Army officials stated it could not ask
O'Gara-Hess Eisenhardt to ramp up to its maximum capacity of 550 vehicles
per month because it did not have the funding at the time requirements
increased. Furthermore, program managers explained that if O'Gara-Hess
Eisenhardt is to efficiently produce vehicles at a consistent and high
rate, the company should be assured of consistent funding at least 3
months in advance of delivery. The program officials stated that they did
not know when funding would come, how many disbursements they would be
receiving in a given fiscal year, or what amount of funding to expect,
thus further complicating their procurement planning.

     Appendix X Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and
                                Add-on-Armor Kit

Efforts to Improve Availability

Short-term Efforts	The major short-term solution to the up-armored HMMWV
funding issue has been the receipt of additional funding from
congressional increases, supplemental funding, and Office of Secretary of
Defense additions. For fiscal years 2003 and 2004, the Army received over
$1.4 billion to produce 7,502 up-armored HMMWVs to meet worldwide
requirements, including 8,105 vehicles required for CENTCOM's area of
operation, mostly from congressional increases and supplementals.
Specifically in fiscal year 2004, the Army received $1.19 billion in
congressional plus-ups, supplementals, and Office of Secretary of Defense
additions above its $51.7 million received in the President's Budget to
produce more up-armored HMMWVs.

To meet continuing needs for force protection, Congress recommended $865
million in the 2005 appropriations bill to be used by the Army to armor
additional HMMWVs and other vehicles. As part of the Rapid Response Force
Protection Initiative, Congress intends the funds to be used to purchase
and modify a variety of vehicles currently used in theater to respond
rapidly to the threat of improvised explosive devices and mortar attacks
experienced by deployed U.S. forces.

To improve the industrial capability, the Army worked with O'Gara-Hess
Eisenhardt as well as Army depots to increase production of vehicles and
kits. For example, program managers worked with O'Gara-Hess Eisenhardt to
increase up-armored HMMWV production from an average of 30 vehicles a
month to 400 vehicles a month by September 2004. The company plans to
increase production to a maximum 550 vehicles a month to meet current
requirements by March 2005. Army also ran 24-hour assembly lines at its
depots and produced over 1,000 add-on-armor kits per week between March
and April 2004 when materials were available to make the kits.

Long-term Efforts	At the time of this review, Army officials had not
identified any long-term efforts to improve the availability of up-armored
HMMWVs or add-on-armor kits.

                                  Appendix XI

                    Comments from the Department of Defense

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

Appendix XI
Comments from the Department of Defense

Note: Page numbers in the draft report may differ from those in this
report.

See comment 1.

Appendix XI
Comments from the Department of Defense

                                 See comment 2.

                                 See comment 3.

Appendix XI
Comments from the Department of Defense

                                 See comment 4.

                                 See comment 5.

Appendix XI
Comments from the Department of Defense

                                 See comment 6.

                                 See comment 7.

Appendix XI
Comments from the Department of Defense

                                 See comment 8.

Appendix XI
Comments from the Department of Defense

                                 See comment 9.

                                See comment 10.

Appendix XI
Comments from the Department of Defense

                                See comment 11.

                                See comment 12.

Appendix XI
Comments from the Department of Defense

                                  Appendix XI
                    Comments from the Department of Defense

GAO's Comments The following are GAO's comments on DOD's letter dated March 23,
                                     2005.

1.

2.

3.

4.

The department cited action it is taking to improve modeling and data for
determining war reserves that may meet our recommendation to update the
war reserve models, once it is fully implemented. We agree that by
developing a methodology that will capture and use OIF consumption data to
update the model within the Army War Reserve Requirements Automated
Process, DOD should improve the accuracy of the Army's war reserve
requirement. However, the department provided no timeline for the
implementation of this effort. Therefore we modified our recommendation to
require that DOD specify when this action will be completed.

We agree that the department's decision to conduct annual updates of the
Army War Reserve Requirements Process to compute new war reserve
requirements to keep pace with Army, DOD and joint operational guidance
should improve the accuracy of the requirements, as long as the updates
are conducted as required.

DOD did not commit to any specific action to address our recommendation to
disclose the risks associated with the percentage of war reserves being
funded. After acknowledging a lack of adequate funding and the associated
risk of such underfunding to the availability of war reserve items, DOD
noted the Army was already reporting these risks to Congress in various
forums. However, as noted in this report, budget documentation does not
clearly state the risk of underfunding the war reserves; and we believe
the other methods cited by DOD in its comments do not ensure consistent
transparency to Congress of risks to military operations. We continue to
believe our recommendation has merit and should be implemented. In
addition, we have added a matter for Congressional consideration that
suggests Congress may wish to require DOD to disclose the risks associated
with not fully funding the Army war reserve.

The near and long-term actions DOD cited to improve modeling support for
prewar planning could address our recommendation when completed. However,
we remain concerned because their effectiveness will not be known until
these initiatives are fully implemented years from now. After agreeing
that the Army currently lacks a dynamic forecasting system, the department
stated that for the near-term it has been implementing a new database to
compute demand changes during

Appendix XI
Comments from the Department of Defense

contingency operations that will work in conjunction with the current
supply forecasting system, but did not state when the change would be
completed. Moreover, according to DOD, the long-term solution to the
Army's forecasting problem is fielding of a new supply management system,
the Logistics Modernization Program. However, the full implementation of
this initiative is tentatively scheduled for fiscal year 2007, but could
be affected by events. Furthermore, as indicated in this report, there are
also issues with the reliability of the data used in the Logistics
Modernization Program that may affect its ability to properly forecast
demands. Therefore, we continue to believe our recommendation has merit
until these actions are fully implemented. We have also modified our
recommendation to require that DOD specify when these actions will be
completed.

5.	The department did not commit to any specific actions to ensure item
managers are provided operational information in a timely manner so they
can improve the accuracy of modeled wartime forecasts. In the report, we
noted the importance of item managers in setting requirements for supplies
during OIF and cited concerns about failure to provide them operational
information promptly. Furthermore, DOD noted that Army weapon system
(item) managers made stockage decisions for OIF largely based on
historical data that proved to be understated because operational tempo
was as much as 12 times higher than normal peacetime rates. However, DOD's
response did not mention how it would better equip these managers to
affect wartime forecasts if necessary. We believe that until and even
after the proposed improvements to modeling are successfully implemented,
item managers will remain a vital part of forecasting operational supply
requirements. Therefore, we continue to believe our recommendation has
merit.

6.	DOD's response to our recommendation to reduce the time delay in the
Army's process for granting increased obligation authority to the Army
Materiel Command noted the validation process is necessary and must be
expeditious, but did not cite any specific actions it would be taking to
achieve that end. We agree with the department that an appropriate
validation process is critical to justifying additional obligation
authority or a cash infusion, particularly in light of the size of the
increases over budgeted amounts. Our recommendation did not ask the Army
to sacrifice due diligence in this process. Rather, our concern is, as
noted in this report, AMC did not receive sufficient obligation authority
to support meet its requirements until four months after major combat

Appendix XI
Comments from the Department of Defense

operations ended. As shown in this report, the cause for this delay was
the time consuming process used by the Army to validate AMC's requests,
not the Office of Secretary of Defense's process for delivering the funds.
As we reported, without an expeditious funding approval process, item
managers had difficulty buying supplies in a timely manner in the right
quantity to meet war fighter needs, resulting in decreased operational
capabilities and increased risk. Therefore, we continue to believe our
recommendation has merit. We have also modified our recommendation to
require that DOD specify when this action will be completed.

7.	We agree with the department's actions in response to our
recommendation that the Navy improve the accuracy of the Marine Corps'
wartime supply forecasting process. The planned actions should, when
completed, improve the accuracy of that process. However, DOD provided no
clear schedule for the implementation of this initiative. Therefore, we
have also modified our recommendation to require that DOD specify when
this action will be completed.

8.	DOD's response to our recommendation cites Army and DLA actions to
minimize future acquisition delays by assessing the industrial base
capacity to meet updated forecasted demands for critical items, that when
fully implemented, could achieve the intent of the recommendation. The
Army Regulation 700-90, dated December 2004 established a framework for
systematically assessing the industrial base's ability to support
requirements. As noted in our report, the Joint Chiefs of Staff Critical
Few List identifies rapidly emerging or critical items at the service and
geographic command level and the Rapid Fielding Initiative accelerates
acquisition of high priority items for troops. In combination, these and
other initiatives may provide a means to reduce acquisition delays. In
addition, DLA's review of industry and continued use of War Stopper
funding to invest in industrial capacity, should help DOD avoid some
future acquisition delays. Therefore, we have also modified our
recommendation to require that DOD specify when these actions will be
completed.

9.	DOD did not commit to any action to provide consistent visibility to
Congress and other decision makers about how the department plans to
acquire critical items to meet emerging demands. It stated that it already
addresses this recommendation annually through the Industrial Capabilities
Report Congress and other forums. While we agree that DOD provided
visibility about some items, such as body armor in the

Appendix XI
Comments from the Department of Defense

February 2004 Industrial Capabilities Report, neither the report or the
other forums addressed the issues we identified about the acquisition of
up-armored HMMWVs and kits. Providing clear information in consistent
manner for critical items with rapidly emerging demands could have
clarified the department's acquisition challenges and equipped Congress to
allocate funds or take other actions to increase the speed of acquisition.

10. In response to our recommendation to clarify responsibility and
authority for synchronizing distribution of supplies, DOD stated it had
appointed U.S. Transportation Command as the responsible organization for
distribution in September 2003. However, neither the command nor the
department have committed to revising joint doctrine to clarify how the
command will interact with the services and geographic commands to
accomplish this. As mentioned in our report, current doctrine prescribes a
disjointed distribution management structure that does not support the
timely delivery of supplies to the war fighter. While it is taking steps
to analyze distribution processes, we believe DOD must also commit to
making institutional changes through joint doctrine to ensure the
geographic combatant commander benefits from a seamless distribution
process. Therefore, we continue to believe our recommendation has merit.
We have also modified our recommendation to require that DOD specify when
this action will be completed.

11. DOD cited the establishment of the Deployment and Distribution Center
in CENTCOM as its means of responding to our recommendation to develop and
exercise deployable supply receiving and distribution capabilities. While
this center may test a forward deployable logistics capability based on a
cadre of logistics experts with enhanced communications capabilities, we
do not see the department's commitment to ensuring through simulation and
field training that there are sufficient number trained personnel and
related equipment to meet the requirements of operational plans. As noted
in our report, the lack of sufficient logistics resources in theater
before and during the arrival of combat forces hindered DOD's efforts to
move supplies promptly from ports to units. We believe having a
preestablished deployable capability that includes sufficient and trained
personnel, at all levels of command; communications systems; and necessary
equipment will speed the establishment of a theater distribution system.
Therefore, we believe additional actions are necessary to fully address
our recommendation. We have also modified

Appendix XI
Comments from the Department of Defense

our recommendation to require that DOD specify when these actions will be
completed.

12. DOD stated that it is taking a number of actions to develop a holistic
information technology plan to improve distribution. According to DOD,
this plan, which is expected to be completed in May 2006, will recommend
systems integration solutions to synchronize end-to-end distribution. We
remain concerned that until this plan is completed and its recommendations
fully implemented, DOD and the services will not be able to achieve their
goal of distributing the right supplies to the right places when war
fighters need them. Therefore we have also modified our recommendation to
require DOD to specify when the plan's recommendations will be
implemented.

Appendix XII

                     GAO Contacts and Staff Acknowledgments

GAO Contacts	Richard G. Payne, (757) 552-8119 John W. Lee, (202) 512-8329

Acknowledgments	In addition to those named above, Nancy L. Benco, John C.
Bumgarner, Michele C. Fejfar, Emily Gupta, Shvetal Khanna, Harry A.
Knobler, Kenneth R. Knouse, Jr., Elizabeth D. Morris, Tinh T. Nguyen,
Kenneth E. Patton, Terry L Richardson, Cary B. Russell, Rebecca Shea,
Christopher W. Turner, John W. Vanschaik, Jason G. Venner, Gerald L.
Winterlin, and John C. Wren made key contributions to this report.

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