Military Transformation: Actions Needed by DOD to More Clearly	 
Identify New Triad Spending and Develop a Long-term Investment	 
Approach (04-AUG-05, GAO-05-962R).				 
                                                                 
In response to a Congressional request, we issued a report in	 
June 2005 on the Department of Defense's (DOD) progress in	 
determining and allocating resources needed to implement the New 
Triad today and in the future. In that report, we made		 
recommendations to the Secretary of Defense to provide greater	 
visibility of the projected spending and future investments for  
DOD's efforts to create the New Triad and acquire future	 
capabilities. On April 28, 2005, we provided DOD with a draft of 
that report for review and comment. DOD did not provide comments 
in time to incorporate them in that report, which went to	 
printing on June 24, 2005. DOD provided its comments to us on	 
June 30, 2005. To present DOD's comments and provide our	 
perspective on them, this report briefly summarizes our June 2005
report's objectives, results, and recommendations, along with	 
DOD's comments and our evaluation of the comments.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-962R					        
    ACCNO:   A32017						        
  TITLE:     Military Transformation: Actions Needed by DOD to More   
Clearly Identify New Triad Spending and Develop a Long-term	 
Investment Approach						 
     DATE:   08/04/2005 
  SUBJECT:   Defense capabilities				 
	     Defense procurement				 
	     Future budget projections				 
	     Defense cost control				 
	     Strategic planning 				 
	     Program evaluation 				 
	     Policy evaluation					 
	     Strategic forces					 
	     DOD Future Years Defense Program			 

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GAO-05-962R

United States Government Accountability Office Washington, DC 20548

August 4, 2005

The Honorable Terry Everett
Chairman
The Honorable Silvestre Reyes
Ranking Member
Subcommittee on Strategic Forces
Committee on Armed Services
House of Representatives

Subject: Military Transformation: Actions Needed by DOD to More Clearly
Identify New Triad Spending and Develop a Long-term Investment Approach

In response to your request, we issued a report in June 2005 on the
Department of Defense's (DOD) progress in determining and allocating
resources needed to

                                       1

implement the New Triad today and in the future. In that report, we made
recommendations to the Secretary of Defense to provide greater visibility
of the projected spending and future investments for DOD's efforts to
create the New Triad and acquire future capabilities. On April 28, 2005,
we provided DOD with a draft of that report for review and comment. DOD
did not provide comments in time to incorporate them in that report, which
went to printing on June 24, 2005. DOD provided its comments to us on June
30, 2005. To present DOD's comments and provide our perspective on them,
this report briefly summarizes our June 2005 report's objectives, results,
and recommendations, along with DOD's comments and our evaluation of the
comments. DOD's comments, which were provided by the acting Assistant
Secretary of Defense for International Security Policy, are included as
enclosure I to this report.

Summary of Objectives, Results, and Recommendations

In our June 2005 report, we determined the extent to which DOD has (1)
identified the projected spending for the New Triad in its Future Year
Defense Program (FYDP) and (2) developed a long-term investment approach
to identify and manage future investments needed to achieve the
synergistic capabilities envisioned for the New Triad.

In its December 2001 Nuclear Posture Review, DOD significantly expanded
the range of strategic capabilities to include not only the old Triad,
which consisted of nuclear

1 See GAO, Military Transformation: Actions Needed by DOD to More Clearly
Identify New Triad Spending and Develop a Long-term Investment Approach,
GAO-05-540 (Washington, D.C.: June 30, 2005).

                      GAO-05-962R Military Transformation

armed intercontinental ballistic missiles, submarine-launched ballistic
missiles, and strategic bombers, but also conventional and nonkinetic
offensive strike and defensive capabilities. The review also called for
revitalizing the U.S. research and development and industrial
infrastructure that would develop, build, and maintain offensive forces
and defensive systems and be capable of responding in a timely manner to
augment U.S. military capabilities when necessary. According to DOD, the
three legs of the New Triad-offensive strike, active and passive defenses,
and responsive infrastructure-are intended to be supported by timely and
accurate intelligence, adaptive planning, and enhanced command and control
capabilities. The review stated that the synergism achieved through the
integration of nuclear and conventional offensive strike and defensive
capabilities would provide the President and Secretary of Defense with a
broad array of military options to better address the spectrum of
potential opponents and contingencies that may arise in the coming
decades. Figure 1 shows the three legs of the New Triad and its supporting
elements.

Figure 1: The New Triad

Note: ICBMs = intercontinental ballistic missiles; SLBMs =
submarine-launched ballistic missiles.

We found that although DOD established its New Triad in 2001, it has not
developed a way to fully identify projected spending for New Triad
programs in its FYDP. In light of the challenges DOD faces in transforming
strategic capabilities in the current fiscal environment, decision makers
need to have the best and most complete data available about the resources
being allocated to the New Triad. Although DOD has identified some New
Triad-related spending in the FYDP, our notional analysis of such spending
included in the FYDP through 2009 indicates that overall spending for the
New Triad could be much greater than DOD's limited analyses have
identified. DOD has not fully identified New Triad spending because the
diversity and scope of the New Triad and ambiguity of the concept make it
difficult for DOD officials to reach agreement on a complete list of
programs, according to DOD officials. Additionally, the current FYDP
structure does not readily identify and aggregate New Triad spending. A
mechanism to aggregate FYDP spending, known as a "virtual major force
program," has been used by DOD to identify space funding and could be

beneficial in tracking New Triad funding, according to some DOD officials
including the Commander of the U.S. Strategic Command. Without some
mechanism to aggregate funding associated with the New Triad, DOD will be
limited in its ability to guide and integrate New Triad spending.

We also found that despite the long lead time generally needed to develop
and acquire new systems and the need to consider long-term affordability
issues, DOD has not developed an overarching and integrated long-term
investment approach for acquiring new capabilities and replacing some or
all of its aging systems that provide New Triad capabilities. Best
practices show that long-term capital planning is needed to help
organizations define direction, establish priorities, and plan future
budgets. While DOD has identified some near-term investments, its
investment plans are incomplete because some key capabilities for the New
Triad have not been fully assessed in context of the New Triad and
long-term replacement of key platforms have not been assessed in the
context of the new security environment and DODwide affordability
challenges. Although DOD recognizes the need for a long-term investment
approach, it has not begun to develop one because its concepts for
nonnuclear strike and missile defense are not fully mature. However,
delaying the preparation of a long-term investment approach puts DOD at
risk of not developing an affordable strategy. Additionally, DOD and
Congress will not have sufficient information to effectively determine
future investment costs, the priorities, and tradeoffs needed to sustain
New Triad implementation. While we agree that some concepts are continuing
to evolve, and that new systems are still under development, we do not
believe that these circumstances preclude DOD from beginning to plan for
the future of the New Triad. As new information becomes available, we
would expect to see adjustments in DOD's plans-that is the nature of
long-term planning.

To strengthen DOD's implementation of the New Triad and provide greater
transparency of resources that are being applied to developing, acquiring,
and sustaining the needed capabilities, we recommended in our June 2005
report that the Secretary of Defense take the following four actions:

o  	Direct the Director, Office of Program Analysis and Evaluation, in
consultation with the Under Secretary of Defense (Comptroller), to (1)
develop and obtain approval of a comprehensive list of program elements in
the FYDP, which support activities for developing, acquiring, and
sustaining New Triad capabilities; (2) modify the FYDP to establish a
virtual major force program for the New Triad by creating new data fields
that would clearly identify and allow aggregation of New Triad-related
program elements to provide increased visibility of the resources
allocated for New Triad activities; and (3) report each year the funding
levels for New Triad activities and capabilities in the department's
summary FYDP report to Congress. The Secretary of Defense should direct
that these three actions be completed at or about the time when the
President's budget for fiscal year 2007 is submitted to Congress.

o  	Direct the Under Secretaries of Defense for Policy and Acquisition,
Technology, and Logistics to develop an overarching and integrated
long-term investment approach for the New Triad that provides decision
makers with information about future joint requirements, projected
resources, spending

priorities and trade-offs, milestones, and funding time lines. As part of
developing and implementing this approach, DOD should leverage the
analyses, assessments, and other information prepared under the Joint
Capabilities Integration and Development System process. The Secretary of
Defense should direct that development of a long-term investment approach
be completed in time for it to be considered in the department's
preparation of its submission for the President's budget for fiscal years
2008 and 2009 and be updated, as needed, to adapt to changing
circumstances.

Agency Comments and Our Evaluation

DOD's comments on a draft of our June 2005 report are summarized below and
reproduced in enclosure I. DOD concurred with one of that report's four
recommendations.

DOD did not concur with our three recommendations to develop and obtain
approval of a comprehensive list of New Triad-related program elements in
the FYDP; modify the FYDP to establish a virtual major force program; and
report funding levels for the New Triad in the department's summary report
to Congress, which DOD addressed as one recommendation in its comments.
DOD believed that developing an official New Triad virtual major force
program would be difficult and would not contribute substantially to
developing coherent long-range investment plans. It believed that a New
Triad virtual major force program would be more difficult to develop than
the one that was created for space because the New Triad is presently much
more complex and difficult to separate from other DOD-wide programs than
the programs for space. DOD stated that while it is fairly straightforward
to identify some program elements that contribute substantially to a
particular New Triad capability, it would be highly subjective and
difficult to attribute other elements to the New Triad. For example, DOD
believed that it would be very hard to determine which conventional strike
program elements to include in the New Triad. It further stated that
categorizing science and technology efforts as relevant to the New Triad
would also be very subjective. DOD believed that placing a program element
in the New Triad virtual major force program would not automatically make
a program a high priority or that the department would set aside funding
for New Triad programs. Furthermore, DOD believed that a list of New Triad
program elements should be more narrowly defined than the notional list
prepared by GAO and that a New Triad major force program should include
only those program elements that are most central to or contribute most
directly to New Triad capabilities.

We continue to believe that each of these three recommendations have merit
and, if implemented collectively, would provide DOD and congressional
decision makers with the most complete accounting of the projected
spending planned for the New Triad over the next several years as they
deliberate the budget and make decisions on the affordability,
sustainability, and trade-offs among efforts to develop and acquire
capabilities. As our June 2005 report states, DOD needs to move beyond a
broad conceptual framework for the New Triad it articulated in December
2001 and begin to identify the program elements currently in its FYDP that
are intended to provide capabilities for the New Triad, whether they are
fully or not fully dedicated to its missions. Establishing a virtual major
force program for the New Triad in the FYDP would provide an important
mechanism for DOD and Congress to continuously

identify and track projected spending, trends, and priorities and enhance
an understanding of the progress made by DOD in developing and shaping New
Triad capabilities. Our notional list of New Triad-related program
elements was intended to provide an illustrative example of how a
comprehensive list could be developed and we agree that it could be more
narrowly defined if necessary. We believe that knowledgeable DOD officials
should be able to agree on the most relevant program elements that make up
the New Triad. DOD predicated the New Triad concept on creating a synergy
between the capabilities provided by nuclear and conventional strike;
active and passive defense; responsive infrastructure; and enhanced
command and control, planning, and intelligence. But without some coherent
and systematic attempt to identify program elements in the FYDP and
aggregate and report on those elements, DOD stakeholders and congressional
decision makers do not have the information they need to understand how
this synergy is being achieved and to make decisions on programs that
affect the creation and success of the New Triad concept. We also believe
that a comprehensive and approved list of New Triad program elements could
provide a foundation for developing long-range investment plans by helping
to better define the New Triad and the capabilities currently being
developed and acquired, their availability, and the scope of those
efforts. Additionally, we believe that Congress could benefit in its
deliberations on funding levels for New Triad-related programs in the
President's budget for fiscal year 2007 if DOD were to fully implement our
recommendations at or about the time that budget is submitted to Congress.

DOD concurred with our recommendation to develop an overarching and
integrated long-term investment approach for the New Triad. In its
comments, DOD stated that its recently completed Nuclear Posture Review
Strategic Capability Assessment provides an initial effort toward that
goal by identifying shortfalls in capabilities that would be used to
develop individual investment strategies. The department stated that these
individual plans and strategies are required as well as an overarching
integration of these efforts. DOD also agreed that it should leverage the
analysis, assessments, and other information prepared under the Joint
Capabilities Integration and Development System process as part of
developing and implementing this approach. We support DOD's efforts in
this direction and look forward to additional actions by the department to
bring this approach about, particularly to support preparation of its
submission for the President's budget for fiscal years 2008 and 2009. Such
a long-term investment approach will not only be of great value to the
department for identifying and prioritizing its resources for acquiring
future New Triad capabilities, but it will assist Congress in its
deliberations on New Triad-related initiatives and programs.

Matters for Congressional Consideration

On the basis of DOD's comments on our recommendations regarding actions
for DOD to take to provide greater visibility of projected New Triad
spending in the FYDP, as discussed above, Congress should consider
requiring the Secretary of Defense to

o  	develop and obtain approval of a comprehensive list of program
elements in the FYDP, which support activities for developing, acquiring,
and sustaining New Triad capabilities;

o  	modify the FYDP to establish a virtual major force program for the New
Triad by creating new data fields that would clearly identify and allow
aggregation of New Triad-related program elements to provide increased
visibility of the resources allocated for New Triad activities; and

o  	report each year the funding levels for New Triad activities and
capabilities in the department's summary FYDP report to Congress.

Congress should also consider requiring DOD to complete these actions at
or about the time when the President's budget for fiscal year 2007 is
submitted to Congress.

We are sending copies of this report to interested congressional
committees; the
Secretary of Defense; the Commander, U.S. Strategic Command; and the
Director,
Office of Management and Budget. We will make copies available to others
upon
request. In addition the report will be available at no charge on the GAO
Web site at
http://www.gao.gov.

If you or your staff have any questions regarding this report, please
contact me at
(202) 512-4402 ([email protected]). Contact points for our Offices of
Congressional
Relations and Public Affairs may be found on the last page of this report.
GAO staff
who made major contributions to this report are listed in enclosure II.

Sincerely yours,

Janet A. St. Laurent
Director, Defense Capabilities

and Management

Enclosures - 2

Enclosure I

                    Comments from the Department of Defense

                                  Enclosure I

                         Now on page 27 of GAO-05-540.

                                  Enclosure I

                                  Enclosure I

                         Now on page 27 of GAO-05-540.

Enclosure II

                     GAO Contact and Staff Acknowledgments

GAO Contact Janet A. St. Laurent (202) 512-4402

Acknowledgments 	In addition to the individual named above, Gwendolyn R.
Jaffe, Mark J. Wielgoszynski, David G. Hubbell, Kevin L. O'Neill, Julie M.
Tremper, and Renee S. McElveen made key contributions to this report.

(350736)

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