Military Readiness: DOD Needs to Identify and Address Gaps and	 
Potential Risks in Program Strategies and Funding Priorities for 
Selected Equipment (25-OCT-05, GAO-06-141).			 
                                                                 
With continued heavy military involvement in operations in Iraq  
and Afghanistan, the Department of Defense (DOD) is spending	 
billions of dollars sustaining or replacing its inventory of key 
equipment items while also planning to spend billions of dollars 
to develop and procure new systems to transform the department's 
warfighting capabilities. GAO developed a red, yellow, green	 
assessment framework to (1) assess the condition of 30 selected  
equipment items from across the four military services, and (2)  
determine the extent to which DOD has identified near- and	 
long-term program strategies and funding plans to ensure that	 
these items can meet defense requirements. GAO selected these	 
items based on input from the military services, congressional	 
committees, and our prior work. These 30 equipment items included
18 items that were first assessed in GAO's 2003 report. 	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-141 					        
    ACCNO:   A40357						        
  TITLE:     Military Readiness: DOD Needs to Identify and Address    
Gaps and Potential Risks in Program Strategies and Funding	 
Priorities for Selected Equipment				 
     DATE:   10/25/2005 
  SUBJECT:   Combat readiness					 
	     Defense capabilities				 
	     Equipment maintenance				 
	     Inventory control					 
	     Military aircraft					 
	     Military forces					 
	     Military inventories				 
	     Military land vehicles				 
	     Strategic planning 				 
	     Abrams Tank					 
	     AH-1W Helicopter					 
	     AH-64 Helicopter					 
	     Apache Helicopter					 
	     Arleigh-Burke Class Destroyers			 
	     Assault Amphibian Vehicle				 
	     AV-8B Aircraft					 
	     B-1 Bomber 					 
	     B-2 Aircraft					 
	     Bradley Fighting Vehicle				 
	     C-5 Aircraft					 
	     CH-46E Helicopter					 
	     CH-47 Helicopter					 
	     CH-53E Helicopter					 
	     Chinook Helicopter 				 
	     DDG-51 Destroyer					 
	     DOD Future Years Defense Program			 
	     EA-6B Aircraft					 
	     Eagle Aircraft					 
	     F-15 Aircraft					 
	     F-16 Aircraft					 
	     F/A-18 Aircraft					 
	     Family of Medium Tactical Vehicles 		 
	     FFG-7 Class Frigate				 
	     Fighting Falcon Aircraft				 
	     Galaxy Aircraft					 
	     Harrier Aircraft					 
	     Heavy Expanded Mobility Tactical Truck		 
	     High Mobility Multipurpose Wheeled 		 
	     Vehicle						 
                                                                 
	     Hornet Aircraft					 
	     KC-135 Aircraft					 
	     Kiowa Helicopter					 
	     Lancer Aircraft					 
	     LAV-25 Light Armored Vehicle			 
	     LPD-4 Amphibious Transport Dock Ship		 
	     M113 Armored Personnel Carrier			 
	     M1A1 Tank						 
	     OH-58D Helicopter					 
	     Oliver Hazard Perry Class Frigate			 
	     Orion Aircraft					 
	     P-3 Aircraft					 
	     Prowler Aircraft					 
	     Sea Knight Helicopter				 
	     Spirit Aircraft					 
	     Standard Surface-to-Air Missile			 
	     Strike Eagle Aircraft				 
	     Super Cobra Helicopter				 
	     Super Stallion Helicopter				 
	     Iraq						 
	     Afghanistan					 

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GAO-06-141

                 United States Government Accountability Office

                     GAO Report to Congressional Committees

October 2005

MILITARY READINESS

DOD Needs to Identify and Address Gaps and Potential Risks in Program Strategies
                 and Funding Priorities for Selected Equipment

                                       a

GAO-06-141

[IMG]

October 2005

MILITARY READINESS

DOD Needs to Identify and Address Gaps and Potential Risks in Program Strategies
and Funding Priorities for Selected Equipment

What GAO Found

While the fleet-wide condition of the 30 equipment items GAO selected for
review varied, GAO's analysis showed that reported readiness rates
declined between fiscal years 1999 and 2004 for most of these items. The
decline in readiness, which occurred more markedly in fiscal years 2003
and 2004, generally resulted from (1) the continued high use of equipment
to support current operations and (2) maintenance issues caused by the
advancing ages and complexity of the systems. Key equipment items-such as
Army and Marine Corps trucks, combat vehicles, and rotary wing
aircraft-have been used well beyond normal peacetime use during
deployments in support of operations in Iraq and Afghanistan. DOD is
currently performing its Quadrennial Defense Review, which will examine
defense programs and policies for meeting future requirements. Until the
department completes this review and ensures that condition issues for key
equipment are addressed, DOD risks a continued decline in readiness
trends, which could threaten its ability to continue meeting mission
requirements.

The military services have not fully identified near- and long-term
program strategies and funding plans to ensure that all of the 30 selected
equipment items can meet defense requirements. GAO found that, in some
cases, the services' near-term program strategies have gaps in that they
do not address capability shortfalls, funding is not included in DOD's
2006 budget request, or there are supply and maintenance issues that may
affect near-term readiness. Additionally, the long-term program strategies
and funding plans are incomplete for some of the equipment items GAO
reviewed in that future requirements are not identified, studies are not
completed, funding for maintenance and upgrades was limited, or
replacement systems were delayed or not yet identified. Title 10 U.S.C. S:
2437 requires the military services to develop sustainment plans for
equipment items when their replacement programs begin development, unless
they will reach initial operating capability before October 2008. However,
most of the systems that GAO assessed as red had issues severe enough to
warrant immediate attention because of long-term strategy and funding
issues, and were not covered by this law. As a result, DOD is not required
to report sustainment plans for these critical items. For the next several
years, funding to sustain or modernize aging equipment will have to
compete with other DOD priorities, such as current operations, force
structure changes, and replacement system acquisitions. Without developing
complete sustainment and modernization plans and identifying funding needs
for all priority equipment items, DOD may be unable to meet future
requirements for defense capabilities. Furthermore, until DOD develops
these plans, Congress will be unable to ensure that DOD's budget decisions
address deficiencies related to key military equipment.

GAO's red, yellow, and green assessments of the condition, program
strategies, and funding plans for the 30 selected military equipment items
are shown on the following page.

United States Government Accountability Office GAO's Assessment Summary of
30 Selected Equipment Items

                                          Near-term program Long-term program 
                                          strategy and      strategy and      
            Equipment           Condition funding plan      funding plan      
               Army                                         
           Abrams Tank                                      
     Bradley Fighting Vehicle                               
      M113 Armored Personnel                                
             Carrier                                        
     Heavy Expanded Mobility                                
          Tactical Truck                                    
High Mobility Multi-Purpose                              
         Wheeled Vehicle                                    
    Family of Medium Tactical                               
             Vehicles                                       
AH-64 A/D Apache Helicopter                              
CH-47 D/F Chinook Helicopter                             
     OH-58D Kiowa Helicopter                                
           Marine Corps                                     
         M1A1 Abrams Tank                                   
      Light Armored Vehicle                                 
    Command and Control and 25                              
             variants                                       
    Assault Amphibian Vehicle-                              
Personnel, C2, and Recovery                              
             variants                                       
     Medium Tactical Vehicle                                
           Replacement                                      
        AV-8B Harrier Jet                                   
AH-1W Super Cobra Helicopter                             
CH-46E Sea Knight Helicopter                             
      CH-53E Super Stallion                                 
            Helicopter                                      
               Navy                                         
    DDG-51 Arleigh Burke Class                              
            Destroyer                                       
    FFG-7 Oliver Hazard Perry                               
          Class Frigate                                     
    LPD-4 Amphibious Transport                              
            Dock Ship                                       
    F/A-18 Hornet/Super Hornet                              
             Aircraft                                       
      EA-6B Prowler Aircraft                                
        P-3 Orion Aircraft                                  
        Standard Missile-2                                  
      Surface-to-Air Missile                                
            Air Force                                       
     F-15 Eagle/Strike Eagle                                
             Aircraft                                       
       F-16 Fighting Falcon                                 
             Aircraft                                       
        B-1 Lancer Bomber                                   
        B-2 Spirit Bomber                                   
       C-5 Galaxy Transport                                 
             Aircraft                                       
KC-135 Stratotanker Aircraft                             

Red indicates a problem or issue that is prevalent and severe enough to
warrant immediate attention by DOD, the military services, and/or
Congress.

Yellow indicates the existence of a problem or issue that warrants
attention by DOD, the military services, and/or Congress, and if left
unattended may worsen.

Green indicates that we did not identify any specific problems or issues
at the time of our review or that any existing problems or issues we
identified are either not severe enough in nature to warrant additional
action or are already being addressed by DOD, the military services,
and/or Congress.

Source: GAO analysis of military service data.

Contents

  Letter

Results in Brief
Background
Condition of Some Selected Equipment Has Been Degraded by the

High Pace of Operations and the Advanced Age or Complexity of the Systems

Services Near-and Long-Term Program Strategies and Funding Plans Exist for
Most Equipment Reviewed, but Some Gaps Remain

Conclusions
Recommendations
Matter for Congressional Consideration
Agency Comments and Our Evaluation

1 5 9

10

15 25 26 26 27

Appendixes                                                             
                Appendix I:             Scope and Methodology              31 
               Appendix II:    Assessments of Selected Equipment Items     39 
                                                Army                       40 
                                            Marine Corps                   70 
                                                Navy                       94 
                                              Air Force                   112 
              Appendix III:    Agency Comments from the Department of     131 
                                               Defense                    
              Appendix IV:      GAO Contact and Staff Acknowledgments     142 

Tables	Table 1: Table 2:

Table 3: Table 4:

Primary Reasons for Rating Condition as Yellow or Red for
Selected Equipment Items
Primary Reasons for Rating Near-term Program Strategies
and Funding Plans as Yellow or Red for Selected
Equipment Items
Unfunded Requirements for Four Selected Marine Corps
Equipment Items, Fiscal Year 2006 (dollars in millions)
Primary Reasons for Rating Long-term Program Strategies
and Funding Plans as Yellow or Red for Selected
Equipment Items

                                       12

                                     17 18

                                       21

Figures	Figure 1: Assessment Summary of 30 Selected Equipment Items 6
Figure 2: Abrams Main Battle Tank 40

Figure 3: Average Mission Capable Rates for Army Abrams Tanks,

Fiscal Years 1999 - 2004 42
Figure 4: Bradley Fighting Vehicle 44
Figure 5: Average Mission Capable Rates for Army Bradley

Fighting Vehicles, Fiscal Years 1999 - 2004 45
Figure 6: M113 Armored Personnel Carrier 47
Figure 7: Average Mission Capable Rates for Army M113 Vehicles,

Fiscal Years 1999 - 2004 48
Figure 8: Heavy Expanded Mobility Tactical Truck 49
Figure 9: Average Fully Mission Capable Rates for Army HEMTTs,

Fiscal Years 1999 - 2004 51
Figure 10: High Mobility Multi-Purpose Wheeled Vehicle 54
Figure 11: Average Fully Mission Capable Rates for Army High

Mobility Multi-Purpose Wheeled Vehicles, Fiscal Years

1999 - 2004 55
Figure 12: 5-ton Family of Medium Tactical Vehicle 57
Figure 13: Average Fully Mission Capable Rates for Army Family of

Medium Tactical Vehicles, Fiscal Years 1999 - 2004 58
Figure 14: AH-64 Apache Helicopter 60
Figure 15: Fleet Average Mission Capable Rates for Army AH-64 A/D

Apache Helicopters, Fiscal Years 1999 - 2004 62
Figure 16: CH-47D Chinook Helicopter 64
Figure 17: Fleet Average Mission Capable Rates for Army Chinook

CH-47D/F Helicopters, Fiscal Years 1999 - 2004 65
Figure 18: OH-58D Kiowa Helicopter 67
Figure 19: Fleet Average Mission Capable Rates for Army OH-58D

Kiowa Helicopters, Calendar Years 1999 - 2004 68
Figure 20: M1A1 Abrams Tank 70
Figure 21: Average Material Readiness Rates for Marine Corps M1A1

Abrams Tanks, Fiscal Years 1999 - 2004 71
Figure 22: Light Armored Vehicle 73
Figure 23: Average Material Readiness Rates for Marine Corps

LAV-25 and LAV C-2, Fiscal Years 1999 - 2004 74
Figure 24: Assault Amphibian Vehicle 76
Figure 25: Average Material Readiness Rates for Marine Corps

Assault Amphibian Vehicles, Fiscal Years 1999 - 2004 77
Figure 26: Marine Corps Medium Tactical Vehicle Replacement 79
Figure 27: Average Material Readiness Rates for Marine Corps

Medium Tactical Vehicle Replacement Fleet, Fiscal Years
2003 - 2004 80
Figure 28: AV-8B Harrier Jet 81

Figure 29: Average Mission Capable Rates for Marine Corps AV-8B

Aircraft, Fiscal Years 1999 - 2004 82
Figure 30: AH-1W Super Cobra 84
Figure 31: Average Mission Capable Rates for Marine Corps AH-1W

Helicopters, Fiscal Years 1999 - 2004 85
Figure 32: CH-46E Sea Knight Helicopter 86
Figure 33: Average Mission Capable Rates for Marine Corps CH-46E

Helicopters, Fiscal Years 1999 - 2004 88
Figure 34: CH-53E Super Stallion Helicopter 90
Figure 35: Average Mission Capable Rates for Marine Corps CH-53E

Helicopters, Fiscal Years 1999 - 2004 92
Figure 36: DDG-51 Arleigh Burke Class Destroyer 94
Figure 37: FFG-7 Oliver Hazard Perry Class Frigate 96
Figure 38: LPD-4 Amphibious Transport Dock Ship 98
Figure 39: F/A-18 Hornet/Super Hornet Aircraft 100
Figure 40: Average Mission Capable Rates for Navy F/A-18 Aircraft,

Calendar Years 1999 - 2004 101
Figure 41: EA-6B Prowler 103
Figure 42: Average Mission Capable Rates for Navy EA-6B Aircraft,

Calendar Years 1999 - 2004 104
Figure 43: P-3 Orion Aircraft 106
Figure 44: Average Mission Capable Rates for Navy P-3 Aircraft,

Calendar Years 1999 - 2004 107
Figure 45: Standard Missile-2 Surface-to-Air Missile 109
Figure 46: F-15 Eagle 113
Figure 47: Average Mission Capable Rates for Air Force F-15 Eagle

and Strike Eagle Aircraft, Fiscal Years 1999 -2004 114
Figure 48: F-16 Fighting Falcon 116
Figure 49: Average Mission Capable Rates for Air Force F-16

Fighting Falcon Aircraft, Fiscal Years 1999 - 2004 117
Figure 50: B-1 Lancer Bomber 119
Figure 51: Average Mission Capable Rates for Air Force B-1 Lancer

Bombers, Fiscal Years 1999 -2004 120
Figure 52: B-2 Spirit Bomber 122
Figure 53: Average Mission Capable Rates for Air Force B-2 Spirit

Bombers, Fiscal Years 1999 -2004 123
Figure 54: C-5 Galaxy Transport Aircraft 125
Figure 55: Average Mission Capable Rates for Air Force C-5 Galaxy

Transport Aircraft, Fiscal Years 1999 - 2004 126
Figure 56: KC-135 Stratotanker 128
Figure 57: Average Mission Capable Rates for Air Force KC-135

Stratotanker Aircraft, Fiscal Years 1999 - 2004 129

Abbreviations

AAV Assault Amphibian Vehicle
ARNG Army National Guard
C2 Command and Control or Command and Communications
DOD Department of Defense
FMTV Family of Medium Tactical Vehicles
FYDP Future Years Defense Program
GWOT Global War on Terrorism
HEMTT Heavy Expanded Mobility Tactical Truck
HMMWV High Mobility Multi-Purpose Wheeled Vehicle
LAV Light Armored Vehicle
MTVR Medium Tactical Vehicle Replacement
OSD Office of the Secretary of Defense
USAR U.S. Army Reserve

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A

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

October 25, 2005

Congressional Committees

The Department of Defense (DOD) is spending billions of dollars sustaining
and transforming the current military force structure while it is heavily
involved in operations in Iraq and Afghanistan. All of the military
services have been utilizing selected equipment items for operations in
Iraq and Afghanistan and must plan to sustain, recapitalize, or replace
their existing equipment, while concurrently planning to spend billions of
dollars to develop and procure new systems that will transform DOD's
war-fighting capabilities.

In December 2003, we reported that the condition of 25 selected military
equipment items varied from very good to very poor and that, although the
services had program strategies for sustaining, modernizing, or replacing
most of the items reviewed, there were some gaps in those strategies.1 The
report further stated that for 15 of the items reviewed, the funding
requested by DOD did not appear to match the services' program strategies
to sustain or replace the items. In that report, we recommended that the
Secretary of Defense reassess the program strategies and funding
priorities for key equipment items to ensure that the equipment items are
sustained until replacement items are fielded. We also recommended that
DOD highlight for Congress the risks involved in not fully funding the
sustainment of these equipment items and the steps the department is
taking to address those risks. Congress included a provision in the Ronald
W. Reagan National Defense Authorization Act for Fiscal Year 20052 that
amends Title 10 of the U.S. code to require that, whenever a new major
defense acquisition program begins development, the defense acquisition
authority responsible for that program shall develop a sustainment plan
for the existing system until the system under development replaces that
system.

Since our December 2003 report, DOD's continued operations in Iraq and
Afghanistan have resulted in additional wear and tear on military
equipment. In fiscal years 2004 and 2005, the President requested, and

1GAO, Military Readiness: DOD Needs to Reassess Program Strategy, Funding
Priorities, and Risks for Selected Equipment, GAO-04-112 (Washington,
D.C.: December 2003).

2Pub. L. No. 108-375 S: 805 (2004) (codified at 10 U.S.C. S: 2437).

Congress appropriated, supplemental funds for ongoing military activities
in Iraq and Afghanistan that included funds to refurbish and replace
vehicles, weapons, and equipment used in the operations.3 In February
2005, the President presented Congress with his fiscal year 2006 budget
request and out-year projections that contained changes in DOD spending
plans and delayed the fielding of some equipment replacement systems, as
documented in DOD's Program Budget Decision 753. Congress is currently
considering this request as well as over $40 billion in additional fiscal
year 2005 supplemental appropriations to include in the fiscal year 2006
regular defense appropriation. The military services have also begun
developing the justification to request additional 2006 supplemental
appropriations. While supplemental funds may enable DOD to meet near-term
war-related equipment needs, the toll of continuing operations has raised
concerns about the ability of DOD's long-term programming and funding
strategies to meet equipment needs.

DOD recognizes that additional wear and tear is being put on equipment
used to support ongoing operations in Iraq and Afghanistan and has
conducted a study to measure the effects of the sustained use of equipment
at levels beyond normal peacetime use and in operations outside of the
equipment's normal operating parameters. According to this study,
equipment is being used at much higher rates in combat operations than it
is in routine peacetime missions. In Iraq and Afghanistan, usage rates
have run two to eight times higher than comparable peacetime rates. In
Iraq, for example, Army Bradley Fighting Vehicles have been used at six
times their peacetime rates. Moreover, equipment is also employed in
harsher environments and in more demanding ways in these combat
operations. Although initial results of this study and related costs have
been released, DOD is continuing to assess the effects of high operating
rates and harsh conditions on equipment.

Since congressional interest in the wear and tear being placed on military
equipment and the funding needed to reconstitute this equipment remains,
we conducted an analysis of 30 selected military equipment items,
including 18 items from our December 2003 report, to update your
committees on which key equipment items warrant attention by DOD

3Emergency Supplemental Appropriations Act for Defense and for the
Reconstruction of Iraq and Afghanistan, 2004, Pub. L. No. 108-106 (2003);
Department of Defense Appropriations Act, 2005, Pub. L No. 108-287,
(2004); and Emergency Supplemental Appropriations Act for Defense, the
Global War on Terror, and Tsunami Relief, 2005, Pub. L. No. 109-13.

and/or Congress. The specific objectives of this review were to (1) assess
the fleet-wide condition of selected key equipment items and (2) determine
the extent to which DOD has identified near-and long-term program
strategies and funding plans to ensure that selected key equipment items
can meet requirements. Our assessments apply only to the 30 equipment
items we reviewed; therefore, the results cannot be projected to the
entire inventory of DOD equipment.

We selected the 30 equipment items based upon input from the military
services, congressional committees, and our prior work. To assess the
condition of these equipment items, we obtained fleet-wide data on
equipment age, expected service life, and other specific service
performance indicators such as mission capable rates,4 utilization rates,5
and various other metrics for fiscal years 1999 through 2004. Our
observations and assessments were made across the military services- Army,
Air Force, Navy, and Marine Corps-for both the active duty inventory as
well as equipment in the National Guard and reserve forces. In assessing
fleet-wide equipment condition, we also considered the extent to which
each equipment item was used for operations in Iraq or Afghanistan and its
associated performance indicators while deployed.6 Our review of DOD's
near-and long-term program strategies for these equipment items focused on
the extent to which the services have developed or updated their plans to
sustain, modernize, or replace7 the equipment items in order to meet
mission requirements. Our review of near-and long-term funding plans
focused on the extent to which the funding for the strategies is projected
in the Future Years Defense Program (FYDP).8 According to DOD officials,
the FYDP takes the services' priorities into consideration, while

4Mission capable rates are measures of material condition that indicate
the equipment can perform at least one and potentially all of its
designated missions.

5Utilization rates refer to flying hours, tank miles, and steaming days.

6If we were able to collect data on deployed mission capable rates for the
selected equipment items, we discussed this information in the relevant
appendix section.

7Sustaining refers to maintaining the equipment to prolong its operations;
modernizing refers to upgrading equipment items or replacing specific
parts; and replacing refers to complete replacement of one equipment item
with a new equipment item, e.g., the Marine Corps plans to replace the
CH-46E with the MV-22 Osprey.

8The Future Years Defense Program reflects the department's official
projection of the forces and resources needed to support the programs
approved by the Secretary of Defense for the biennial budget years and the
following 4 years.

balancing future investment and risk. We defined the near term as fiscal
years 2005, 2006, and 2007, and the long term as fiscal years 2008 and
beyond.

To determine which equipment items require additional attention by the
department, the military services, and/or Congress, we developed an
assessment framework based on three criteria: (1) the extent of the
existence of a problem or issue, (2) the severity of the problem or issue,
and (3) how soon the problem or issue needs to be addressed. To indicate
the existence, severity, or urgency of problems identified for the 30
selected equipment items, we used a traffic light approach-red, yellow, or
green-as follows:

o 	 Red indicates a problem or issue that is prevalent and severe enough
to warrant immediate attention by DOD, the military services, and/or
Congress.

o 	 Yellow indicates the existence of a problem or issue that warrants
attention by DOD, the military services, and/or Congress, and if left
unattended may worsen.

o 	Green indicates that we did not identify any specific problems or
issues at the time of our review or that any existing problems or issues
we identified are either not severe enough in nature to warrant additional
action or are already being addressed by DOD, the military services,
and/or Congress.

While we attempted to obtain consistent metrics for each of the three
categories across all four of the military services, data availability
varied significantly by service and type of equipment. Our assessments,
therefore, are based on the data available from multiple sources; however,
we did not independently verify the data provided by these sources. Our
assessments also represent the problems and issues we identified at the
specific point in time that we conducted our work, and can change quickly
given current events. Although our assessments for each of the three
categories- condition, near-term program strategies and funding plans, and
long-term program strategies and funding plans-are largely qualitative in
nature and are derived from consensus judgments, our analyses are based on
data provided by the military services and discussions with military
service officials and program managers for the individual equipment items.
We assessed the reliability of the services' equipment readiness data by
(1) comparing key data elements to our observations of equipment items at

selected units, (2) reviewing relevant documents, and (3) interviewing
knowledgeable officials. We determined that the data obtained from DOD,
the military services, and the combatant commands were sufficiently
reliable for our use. For a complete description of our methodology, see
appendix I. Appendix II contains our detailed assessments for each of the
30 equipment items. We performed our review from July 2004 through July
2005 in accordance with generally accepted government auditing standards.

Results in Brief	Our assessments of the fleet-wide condition and near-and
long-term program strategies and funding plans for the 30 military
equipment items that we included in our review indicate that the items
range from some that have severe problems and require immediate attention
to those that do not have problems or issues warranting action by the DOD,
military services, and/or Congress, as shown in figure 1. Specifically, we
identified severe problems and issues related to the fleet-wide condition
and/or program and funding strategies of the Army's Bradley Fighting
Vehicle, M113 Armored Personnel Carrier, and CH-47D/F helicopter; the
Marine Corps' M1A1 tank, CH-46E helicopter, and CH-53E helicopter; the
Navy's P-3 aircraft and Standard Missile-2; and the Air Force's KC-135
aircraft and we rated all of these military equipment items as red in
figure 1. For example, the Marine Corps' CH-46E helicopter received a red
rating for its near-term program strategy and funding plan because the
service may be unable to meet its near-term requirements due to potential
aircraft and repair parts shortages. The fleet-wide condition or program
strategies of many of the other equipment items shown as yellow in figure
1, while not yet severe enough to warrant immediate action by DOD, the
military services, and/or Congress, also showed signs of problems that, if
not addressed, could become severe. For example, we assessed the
fleet-wide condition of the Army's Abrams tank as yellow because, while it
generally met or exceeded the service mission capable goal, the rates were
on a downward trend as a result of shortages of both spare parts and the
trained personnel needed to replace these parts and to repair the
equipment items. Reserve military technicians who repair this equipment at
home are, in many cases, currently deployed overseas.

Figure 1: GAO's Assessment Summary of 30 Selected Equipment Items

                                          Near-term program Long-term program 
                                          strategy and      strategy and      
            Equipment           Condition funding plan      funding plan      
               Army                                         
           Abrams Tank                                      
     Bradley Fighting Vehicle                               
      M113 Armored Personnel                                
             Carrier                                        
     Heavy Expanded Mobility                                
          Tactical Truck                                    
High Mobility Multi-Purpose                              
         Wheeled Vehicle                                    
    Family of Medium Tactical                               
             Vehicles                                       
AH-64 A/D Apache Helicopter                              
CH-47 D/F Chinook Helicopter                             
     OH-58D Kiowa Helicopter                                
           Marine Corps                                     
         M1A1 Abrams Tank                                   
      Light Armored Vehicle                                 
    Command and Control and 25                              
             variants                                       
    Assault Amphibian Vehicle-                              
Personnel, C2, and Recovery                              
             variants                                       
     Medium Tactical Vehicle                                
           Replacement                                      
        AV-8B Harrier Jet                                   
AH-1W Super Cobra Helicopter                             
CH-46E Sea Knight Helicopter                             
      CH-53E Super Stallion                                 
            Helicopter                                      
               Navy                                         
    DDG-51 Arleigh Burke Class                              
            Destroyer                                       
    FFG-7 Oliver Hazard Perry                               
          Class Frigate                                     
    LPD-4 Amphibious Transport                              
            Dock Ship                                       
    F/A-18 Hornet/Super Hornet                              
             Aircraft                                       
      EA-6B Prowler Aircraft                                
        P-3 Orion Aircraft                                  
        Standard Missile-2                                  
      Surface-to-Air Missile                                
            Air Force                                       
     F-15 Eagle/Strike Eagle                                
             Aircraft                                       
       F-16 Fighting Falcon                                 
             Aircraft                                       
        B-1 Lancer Bomber                                   
        B-2 Spirit Bomber                                   
       C-5 Galaxy Transport                                 
             Aircraft                                       
KC-135 Stratotanker Aircraft                             

Red indicates a problem or issue that is prevalent and severe enough to
warrant immediate attention by DOD, the military services, and/or
Congress.

Yellow indicates the existence of a problem or issue that warrants
attention by DOD, the military services, and/or Congress, and if left
unattended may worsen.

Green indicates that we did not identify any specific problems or issues
at the time of our review or that any existing problems or issues we
identified are either not severe enough in nature to warrant additional
action or are already being addressed by DOD, the military services,
and/or Congress.

Source: GAO analysis of military service data.

While the fleet-wide condition of 30 equipment items we selected for
review varied by service, level of current use, and age, our analysis
showed that reported readiness rates9 are declining between fiscal years
1999 and 2004 for most of these items, particularly for those equipment
items we rated as red or yellow in figure 1. The decline in readiness,
which occurred more markedly in fiscal years 2003 and 2004, generally
resulted from (1) the continued high use of equipment to support current
operations and (2) maintenance issues resulting from the advancing ages
(such as equipment that is more than 20 years old) and complexity (such as
Navy ships, which are systems of systems) of the equipment items. Some key
equipment items-such as Army and Marine Corps trucks, combat vehicles, and
helicopters-have been used well beyond normal peacetime use while
deployed. For example, according to Marine Corps officials, the Assault
Amphibian Vehicles experienced utilization rates as high as 11 times the
normal peacetime rates while operating in Iraq. Army and Marine Corps
officials stated that a complete inspection of the deployed equipment will
be necessary once it returns from theater before the full extent of its
readiness deficiencies can be known. Many of the selected systems have
either a fleet-wide average age of more than 20 years, such as the Navy's
LPD-4 Amphibious Transport Dock Ship, or entered the inventory prior to
the 1980s, such as the Air Force's KC-135 Stratotanker aircraft. These
systems are likely to reach the end of their useful lives in this decade
unless major modernizations, some of which are planned or underway, are
made. Some of the problems degrading the fleet-wide condition of these
aging systems include maintenance problems due to parts shortages or
obsolescence, shortages of trained maintenance personnel, corrosion,
deferred maintenance, and airframe fatigue. For 8 of the 30 items in this
review we did not identify any specific problems that warrant additional
attention by DOD, the military services, or Congress, or that previously
identified problems were already being addressed, so we assessed their
fleet-wide condition as green. Also, DOD is currently performing its
Quadrennial Defense Review, which will examine defense programs and
policies for meeting future requirements.10 Until the department completes
this review and ensures that condition issues for key equipment items are

9The military services report readiness on selected military equipment
based upon mission capable or operational readiness rates.

10The Quadrennial Defense Review is a comprehensive internal review of its
forces, resources, and programs that DOD performs every 4 years. The next
review is scheduled to be completed in February 2006.

addressed, DOD risks a continued decline in readiness trends, which could
threaten its ability to continue meeting mission requirements.

The military services have not fully identified near-and long-term program
strategies and funding plans to ensure that all of the 30 selected
equipment items can meet defense requirements. For the 30 selected
equipment items, we found that some of the services' near- and long-term
program strategies have gaps, and we rated them as red or yellow, as shown
in figure 1, depending on the severity of the problem and how soon it
needs to be addressed. Our analysis found, in some cases the services'
near-term program strategies do not address capability shortfalls, full
funding is not included in DOD's 2006 budget request, or there are supply
and maintenance issues that may affect near-term readiness. For example,
the Marine Corp's CH-46E Sea Knight helicopter was rated red because the
service may not be able to meet near-term requirements because of
potential aircraft and parts shortages caused by the age of the aircraft.
Additionally, the long-term program strategies and funding plans are
incomplete for some of the equipment items we reviewed in that future
requirements are not fully identified, studies are not completed, funding
for maintenance and technological upgrades may not be available, or
replacement systems were delayed or not yet identified. For example, the
Army's Bradley Fighting Vehicle received a red rating because the Army has
not fully identified the future requirements and funding for this item.
Services' near-term program strategies to sustain or modernize equipment
and address current condition issues include "resetting" or
"reconstituting" (i.e., restoring) equipment back to its predeployment
status, remanufacturing or recapitalizing equipment, procuring new
equipment, improving equipment through safety or technological upgrades,
or improving maintenance practices. Services' long-term program strategies
include improving the equipment through more complex maintenance or
upgrades, or replacing the equipment with newer, more modern equipment,
including those associated with DOD's force structure changes. Title 10
U.S.C. S: 2437 requires the military services to develop sustainment plans
for equipment items when their replacement programs begin development,
unless they will reach initial operating capability before October 2008.
Many of our selected military equipment items are not currently covered by
this law because their replacement systems have either not begun
development or will reach operational capability before October 2008. As a
result, DOD is not required to report sustainment plans for these critical
items. Most of the equipment items rated red and warranting immediate
attention because of long-term planning and funding issues were not
covered by this act. For the next several years, funding to sustain or

modernize aging equipment will have to compete for funding with other DOD
priorities, such as current operations, force structure changes, and
replacement system acquisitions. Without sufficient plans that provide for
sustaining and modernizing all key equipment systems through the end of
their expected useful lives and without identifying the risks associated
with not fully funding or developing sustainment plans, DOD may be unable
to meet future requirements for defense capabilities. Furthermore, until
DOD develops these plans, Congress is unable to track the progress of
equipment sustainment and modernization, or provide effective oversight.

We are recommending that the Secretary of Defense, in consultation with
the secretaries of the military services, reassess the near- and long-term
program strategies for sustaining and modernizing key equipment to ensure
that the plans for those items that are needed to meet future defense
capabilities, particularly those items not covered by 10 U.S.C. S: 2437,
are complete and will ensure that DOD can sustain the equipment until it
reaches the end of its serviceable life or a replacement system is
fielded. We are further recommending that the Secretary of Defense provide
this information in a report to Congress, at the same time the department
submits its annual budget request, to ensure that Congress has the
visibility it needs to provide effective oversight over DOD's program
strategies.

In commenting on a draft of this report, the department partially
concurred with our first recommendation but did not agree that it should
report their plans to Congress. Therefore, we are also suggesting that the
Congress require the Secretary of Defense to report on program strategies
and funding plans to ensure that DOD's budget decisions address
deficiencies related to key military equipment. DOD's comments and our
evaluation are discussed in detail in a later section of this report.

Background	The September 2001 Quadrennial Defense Review outlined a
strategy to sustain and transform the military force structure that had
been in place since the mid-1990s. In that review, DOD committed to
selectively recapitalize older equipment items, which the department
recognized as being neglected for too long, to meet near-term challenges
and to improve near-term readiness. DOD is currently conducting a new
Quadrennial Defense Review, with the report scheduled to be issued in
February 2006. The results of this Quadrennial Defense Review could
identify changes to DOD's future force structure and capabilities, thereby
impacting the funding needed for both current and replacement systems.

Based on DOD guidance, the services develop a Program Objective Memorandum
that details the specific programs and funding needed to meet DOD
requirements as determined by the Quadrennial Defense Review. As part of
this process, the services analyze alternative force structure, weapons
systems, and support systems together with their multiyear resource
implications and evaluate various trade-off options. Basically, it is a
process for balancing and integrating resources among the various programs
according to service and DOD priorities.

The annual FYDP contains DOD's estimates of future funding needs for
programs and priorities. Through the FYDP, DOD projects costs for each
element of those programs through a period of either 5 or 6 years on the
basis of proposals made by each of the military services. The Office of
the Secretary of Defense considers the service proposals and the policy
choices made by the current administration and, where needed, makes
adjustments. For example, in preparing its 2006 budget, DOD made a number
of significant changes in its long-term acquisition plans to meet budget
targets established by the White House, as documented in Program Budget
Decision 753. The 2005 FYDP extended from fiscal year 2005 to fiscal year
2009 and the 2006 FYDP extended from fiscal year 2006 to fiscal year 2011.

  Condition of Some Selected Equipment Has Been Degraded by the High Pace of
  Operations and the Advanced Age or Complexity of the Systems

While the condition of the 30 equipment items11 we reviewed varied, we
found that average fleet-wide readiness rates for most of these items
declined between fiscal years 1999 and 2004. The decline in readiness
generally resulted from the high pace of recent operations and the
advanced age or complexity of the equipment systems. Therefore, we rated
the fleet-wide condition of 22 of the selected equipment items as red or
yellow. However, 8 of the 30 items-including several tactical fighter
aircraft and some newer equipment items such as the Marine Corps' Medium
Tactical Vehicle Replacement-were assessed as green (see fig. 1),
indicating that we found no specific problems that warrant additional
attention by DOD, the services, or Congress or that problems were already
being addressed. DOD is currently conducting a Quadrennial Defense Review
that will examine defense programs and policies and may change some
equipment requirements.

11Appendix II contains our detailed assessments for each of the 30
equipment items.

Eighteen of the equipment items we reviewed for this report were also
included in our December 2003 report, and 12 of these equipment items
received the same condition assessment in both analyses.12 For example,
the surface ships examined in this study, the Navy's DDG-51 Arleigh Burke
Class Destroyer, the FFG-7 Oliver Hazard Perry Class Frigate, and the LPD4
Amphibious Transport Dock Ship received yellow condition ratings in both
studies, as did the Air Force's B-2 Spirit Bomber, the C-5 Galaxy
Transport Aircraft, and the KC-135 Stratotanker Aircraft. However, for 6
of the items, the assessment changed-3 systems' fleet-wide condition
improved, 2 going from red to yellow and 1 from yellow to green, and 3
systems' condition degraded, going from green to yellow. The condition
assessments for the Marine Corps' CH-46E helicopter and the Navy's F/A-18
aircraft and Standard Missile-2 improved due, in part, to additional
maintenance efforts and improvements that appear to address the condition
concerns noted in our previous report. The condition assessments for the
Army's Abrams tank and Heavy Expanded Mobility Tactical Truck and the
Marine Corps' Light Armored Vehicle went from green to yellow largely as a
result of increased use in ongoing operations overseas.

Some Selected Equipment Items Have Significant Condition Issues that
Warrant Additional Attention by DOD, the Military Services, and/or
Congress

For many of the equipment items included in our assessment, average
fleetwide readiness rates have declined, generally due to the high pace of
recent operations or the advanced age or complexity of the systems. We
assessed the fleet-wide condition of 3 equipment items as red, indicating
that immediate attention is warranted by DOD, the services, and/or
Congress to address problems or issues. In addition, we assessed the
fleet-wide condition of 19 items as yellow, indicating that attention is
warranted to address existing problems that, if left unattended, may
worsen. Table 1 below shows the primary reasons used to rate selected
equipment items' condition and our assessment of those items as either red
or yellow.

12The only question that appeared in both reports concerned the condition
of equipment. In the earlier report, strategy and funding were assessed
separately. See GAO-04-112.

Table 1: Primary Reasons for Rating Condition as Yellow or Red for
Selected Equipment Items

Reason Yellow rating Red rating

High pace of operations increasing utilization beyond planned usage

Army

o  Abrams Tank

o  Bradley Fighting Vehicle

o  Heavy Expanded Mobility Tactical Truck

o  AH-64A/D Apache Helicopter Marine Corps

o  Light Armored Vehicle

o  Assault Amphibian Vehicle

o  AV-8B Harrier Jet

o  AH-1W Super Cobra Helicopter

o  CH-46E Sea Knight Helicopter

o  CH-53E Super Stallion Helicopter

Army

o  CH-47D/F Chinook Helicopter

Marine Corps

o  M1A1 Abrams Tank Maintenance issues resulting from the advancing ages
and complexity of the equipment items

Navy

o  DDG-51 Arleigh Burke Class Destroyer

o  FFG-7 Oliver Hazard Perry Class Frigate

o  LPD-4 Amphibious Transport Dock Ship

o  EA-6B Prowler Aircraft

o  Standard Missile-2 Air Force

o  B-1 Lancer Bomber

o  B-2 Spirit Bomber

o  C-5 Galaxy Transport Aircraft

o  KC-135 Stratotanker Aircraft

Navy

o  P-3 Orion Aircraft

                 Source: GAO analysis of military service data.

High Pace of Operations Although selected equipment items have been able
to meet wartime Increasing Utilization Beyond requirements, the high pace
of recent operations appears to be taking a toll

                                 Planned Usage

on selected equipment items and fleet-wide mission capable rates have been
below service targets, particularly in the Army and Marine Corps. Further,
according to officials, the full extent of the equipment items'
degradation will not be known until a complete inspection of deployed
equipment is performed. Elevated flying hours in Iraq and Afghanistan,
coupled with the harsh desert environment, have negatively impacted
helicopters. For example, our assessment of the Army's CH-47D/F Chinook
helicopter's condition as red reflects this platform's mission capable
rates, which were consistently below service goals. Officials stated that
the aircraft is currently being flown in Iraq and Afghanistan at three
times more than planned peacetime rates. This usage has increased the
amount of maintenance and number of parts needed to sustain the aircraft,
which in turn has negatively impacted overall readiness. Ground equipment
has also

Maintenance Issues Resulting from the Advancing Ages and Complexity of the
Equipment Items

been affected by high wartime usage. For example, the Marine Corps' M1A1
Abrams tank fleet, also rated as red for condition, is being negatively
impacted by operations in Iraq and a shortage of equipment maintainers due
to transfers of personnel to units that are deploying. This system failed
to meet its service readiness goals and recent trends indicate a steady
decline away from these targets.

Several heavily used equipment items included in our review did not have
mission capable rates below their target; however, these rates have
recently declined, primarily due to the high wartime usage. For example,
while the Army's Abrams Tanks and Bradley Fighting Vehicles met or
exceeded the Army mission capable goals, they are both on a downward trend
due to a shortage of spare parts and trained technicians. The shortage of
spare parts is driven by the number of vehicles either deployed or being
reset to a predeployment condition and the shortage of trained technicians
is primarily due to the number of deployed National Guard military
technicians. Both of these tracked vehicles have experienced high use in
operations overseas in the past and will likely do so in the future.
Similarly, while the readiness rates of the Marine Corps' Assault
Amphibian Vehicle varied by vehicle type in recent years, the gap between
mission capable rates and service goals increased, indicating a decline in
the material condition of this equipment.

While not all of the equipment included in our review has been heavily
used in recent overseas operations, in some cases, the advanced age or
complexity of the equipment items have contributed to readiness declines.
Many of the selected systems have either a fleet-wide average age of more
than 20 years, such as the Navy's LPD-4 Amphibious Transport Dock Ship, or
entered the inventory prior to the 1980s, such as the Air Force's KC-135
Stratotanker aircraft. These systems are likely to reach the end of their
useful lives in this decade unless major modernizations, some of which are
planned or underway, are made. Some of the problems degrading the
fleetwide condition of these aging systems include maintenance problems
due to parts shortages or obsolescence, shortages of trained maintenance
personnel, corrosion, deferred maintenance, and airframe fatigue. For
example, the Navy's P-3 Orion aircraft, while not as heavily tasked as
Army and Marine Corps helicopters, have played an important role in
overseas operations as a reconnaissance and surveillance asset despite
consistently missing their mission capable goals by a significant
percentage. The condition of the P-3 fleet, which has an average age of
over 24 years, has been primarily degraded by the effects of structural
fatigue on its airframe

and the obsolescence of communication, navigation, and primary warfighting
systems in this aircraft.

Some Air Force equipment also has age-related condition issues that
warrant attention and therefore received yellow ratings. For example,
mission capable rates for the C-5 Galaxy Transport Aircraft were
consistently below Air Force goals between fiscal years 1999 and 2004.
Officials stated that the size and age of the C-5 aircraft make it
maintenance intensive, and that component items on the aircraft are older,
making it difficult to find manufacturing sources for some parts,
particularly avionics and engine components. In addition, the KC-135
Stratotanker aircraft has not met its mission capable goals due to issues
associated with age and corrosion, such as problems with the landing
gear's steel brakes.

Similarly, Navy surface ships examined in this study had a number of
issues related to condition and these vessels also received yellow
ratings. The Navy is challenged to maintain surface ships that are, in
reality, a system of systems. The failure of any one of these complex
systems affects the entire ship. For example, the DDG-51 Arleigh Burke
Class Destroyer, the FFG-7 Oliver Hazard Perry Class Frigate and the LPD-4
Amphibious Transport Dock Ship all had problematic subsystems, for
example, operating with limited communication ability or bandwidth, which
affects their day-to-day operations such as on-line training and personnel
activities. Older ships, such as the FFG-7 class which is, on average,
almost 21 years old and the LPD-4 class with an average age of 37 years,
may be more challenging because as the ships age, more maintenance will be
required. Other older Navy equipment also had condition issues in need of
attention. For example, the EA-6B Prowler consistently missed the Navy's
mission capable goal due to problems with communications equipment and
wings.

Some Selected Equipment Items Are in Favorable Condition

Our analysis showed that the fleet-wide condition of over one quarter of
the equipment items included in our review was generally favorable, and
consequently, we assessed the condition of 8 of the 30 selected military
equipment items as green, as shown in figure 1. Not all equipment has been
heavily used for operations in Iraq and Afghanistan, and for some items,
use has not increased significantly from that of planned peacetime
operations. This was the case for several tactical fighter aircraft. In
our assessment, all three selected aircraft that provide this capability,
the Air Force's F-15 Eagle/Strike Eagle and F-16 Fighting Falcon, and the
Navy's F/A-18 Hornet/Super Hornet, were at or near-service mission capable
rate goals.

Moreover, we found that new equipment that has been heavily tasked in
recent operations appears to be performing well. For example, the Family
of Medium Tactical Vehicles has exceeded the Army's fully mission capable
rate goals despite operating overseas at a rate that is nine times higher
than in peacetime. In addition, the Marine Corps' Medium Tactical Vehicle
Replacement vehicles are being aggressively used in support of operations
in Iraq, but also met their mission capable goals for fiscal years 2003
and 2004. These trucks are both relatively new; the Family of Medium
Tactical Vehicles is on average 6 years old and the Medium Tactical
Vehicle Replacement is on average 3 years old.

In addition, we assessed the fleet-wide condition of some older equipment
items favorably. For example, the average age of the Army's OH-58D Kiowa
is about 13 years with a life expectancy of 20 years; however, these
reconnaissance helicopters have met or exceeded their mission capable
goals from 1999 through 2004 while exceeding their planned flight hours in
recent operations. With an average age of almost 16 years, the M113
Armored Personnel Carrier has not experienced a significant decline in
mission readiness as a result of recent operations in Iraq and
Afghanistan. The Army's High Mobility Multi-Purpose Wheeled Vehicles
(HMMWV) are experiencing usage (i.e., operational tempo)13 that is six
times their normal peacetime rate. Despite concerns over the availability
of their armored protection,14 these vehicles exceeded Army readiness
goals for the past 6 years and received a green rating.

  Services Near- and Long-Term Program Strategies and Funding Plans Exist for
  Most Equipment Reviewed, but Some Gaps Remain

The military services have identified near-and long-term program
strategies and funding plans to ensure that most of the 30 selected
equipment items can meet defense requirements, but some gaps remain. For
the 30 selected equipment items, we found that 20 of the services'
nearterm program strategies have gaps in that they do not address
capability shortfalls, full funding is not included in DOD's 2006 budget
request, or there are supply and maintenance issues that may affect
near-term readiness. Additionally, the long-term program strategies and
funding plans are incomplete for 22 of the equipment items we reviewed in
that future requirements are not fully identified, studies are not
completed, funding for

13An operational tempo of 6:1 equates to putting 6,000 miles in a war-time
1-year period versus 1,000 miles under a normal peacetime operational
tempo.

14In early 2005, officials stated that all vehicles entering Iraq would
have armor.

maintenance and technological upgrades may not be available, or
replacement systems are delayed or not yet identified. DOD is required to
develop sustainment plans in 10 U.S.C. S: 2437, but this statute only
applies to 9 of the selected equipment items.15 Although the services have
identified near- and long-term program strategies and funding for most of
the equipment items we reviewed, the gaps we identified may threaten DOD's
ability to meet some future capability requirements.

Services Have Not Fully Identified Near-Term Program Strategies and
Funding Plans for Some Selected Equipment

The services have not fully identified near-term program strategies and
funding plans for 20 of the 30 equipment items we reviewed, including 7 of
the 9 selected items covered by 10 U.S.C. S: 2437. One of the items that
will not be covered by this statute, the Marine Corps' CH-46E Sea Knight
helicopter, was the only item we assessed as red for its near-term program
strategy and funding plan because it may be unable to meet its near-term
requirements. We assessed the near-term program strategies and funding
plans of 19 of the 30 equipment items in our review as yellow because the
services' program strategies for sustaining equipment lack sufficient
planning or full funding to meet near-term requirements. Alternatively,
the services have planned program and funding strategies to correct
equipment deficiencies or improve equipment capabilities and safety for 10
of the 30 equipment items in our review so that the equipment items can
meet nearterm requirements, so we assessed their near-term program
strategies and funding plans as green as shown in figure 1. The services'
near-term program strategies to sustain or modernize equipment and address
current condition issues include restoring equipment back to its
predeployment condition, remanufacturing or recapitalizing equipment,
procuring new equipment, improving equipment through safety or
technological upgrades, or improving maintenance practices. Table 2 below
shows the primary reasons used to rate selected equipment items' near-term
program strategies and funding plans and our assessment of those items as
either red or yellow. Without developing complete near-term plans and
identifying the associated funding needs to ensure that all key equipment
items can be sustained and modernized-and assessing the risk involved if
gaps in these strategies are not addressed-DOD may be unable to meet some
future requirements for defense capabilities.

15This act applies or will soon apply to the following equipment items
included in our review based upon the replacement system beginning
development : Marine Corps' M1A1, Light Armored Vehicle, Assault Amphibian
Vehicle, AV-8B Harrier jet, and CH-53E; the Navy's F/A18, EA-6B, and P-3;
and the Air Force's F-16.

Table 2: Primary Reasons for Rating Near-term Program Strategies and
Funding Plans as Yellow or Red for Selected Equipment Items

Reason Yellow rating Red rating

Existing plans do Marine Corps
not address  o  Assault Amphibian Vehicle
capability shortfalls Navy

o  FFG-7 Oliver Hazard Perry Class Frigate

o  LPD-4 Amphibious Transport Dock Ship

o  EA-6B Prowler Aircraft

o  P-3 Orion Aircraft

Strategy not fully Army funded in DOD's  o  Bradley Fighting Vehicle
fiscal year 2006  o  M113 Armored Personnel Carrier budget  o  Heavy
Expanded Mobility Tactical Truck

o  High Mobility Multi-Purpose Wheeled Vehicle

o  Family of Medium Tactical Vehicles Marine Corps

o  M1A1 Abrams Tank

o  Light Armored Vehicle

o  AH-1W Super Cobra Helicopter

o  CH-53E Super Stallion Helicopter

Anticipated parts Army Marine Corps shortages and  o  Abrams Tank  o 
CH-46E Sea maintenance issues  o  CH-47D/F Chinook Helicopter Knight
Helicopter

Navy

o  F/A-18 Hornet/Super Hornet Aircraft Air Force

o  C-5 Galaxy Transport Aircraft

o  KC-135 Stratotanker Aircraft

                 Source: GAO analysis of military service data.

Existing Near-Term Plans for Some of the services' near-term program
strategies do not address the Some Selected Equipment Items issues that
affect the condition of the equipment in the near-term, thus 5 of Do Not
Address Capability the 30 selected equipment items received a yellow
rating as shown in table Shortfalls 2. For example, the Marine Corps
identified a shortfall in the capability of

the Assault Amphibian Vehicle to conduct parts of their war-fighting
doctrine; however, instead of upgrading its capabilities, their plan is to
return the capability of the vehicle to its original condition while they
await its replacement. Although the Navy has a plan to correct serious
LPD-4 Amphibious Transport Dock ship class deficiencies, those ships that
are

within 5 years of decommissioning can, by law,16 only receive safety
modifications, resulting in a wide variance in the condition of ships in
the class. Furthermore, while the Navy is making structural inspections
and repairs to ensure that there will be sufficient P-3 Orion aircraft to
meet dayto-day requirements next year, they have not funded some
improvements to communications and defense systems, which will continue to
degrade the ability of this aircraft to fulfill all of its missions.

Some Near-Term Strategies Are The full funding requirements for nine of
the Marine Corps and Army near-

Not Fully Funded in DOD's term strategies we reviewed were not included in
DOD's fiscal year 2006

Fiscal Year 2006 Budget Request 	budget request; therefore, we rated these
equipment items as yellow as shown in table 2. According to service
officials, the services submit their budgets to DOD and the department has
the authority to increase or decrease the service budgets based upon the
perceived highest priority needs. As shown in table 3 below, the Marine
Corps identified requirements that were not funded in DOD's 2006 budget
request totaling $314.7 million for four of its selected equipment items.

Table 3: Unfunded Requirements for Four Selected Marine Corps Equipment
Items, Fiscal Year 2006 (dollars in millions)

               Marine Corps equipment item Unfunded requirements

                            M1A1 Abrams Tank $ 86.4

                          Light Armored Vehicle 113.0

AH-1W Super Cobra Helicopter

CH-53E Super Stallion Helicopter

                                  Total $314.7

Source: DOD data.

The four equipment items for which the Marine Corps did not request
funding are a concern because a capability or need that the service
identified as a priority may not receive funding unless Congress
intervenes. For example, the Marine Corps identified but did not request
$113 million in funding needed to complete the standardization of its
older Light

1610 U.S.C. S: 2241, note provides that, except for safety modifications,
funds should not be used for the modification of an aircraft, weapon,
ship, or other equipment that the military department concerned plans to
retire or otherwise dispose of within 5 years after completion of the
modification.

Anticipated Parts Shortages and Maintenance Issues May Affect Equipment
Condition and Indicate Near-Term Planning and Funding Concerns

Armored Vehicles. The Marine Corps also identified funding shortages in
its tank remanufacturing program for fiscal years 2006 and 2007, noting
that only 33 percent of the plan has been funded.

In addition, for five of the selected Army items, DOD has not included
funding for part of the near-term program strategies in its regular 2006
budget request. Instead the Army is relying on supplemental appropriations
or congressional adjustments to their regular appropriations to fund these
activities and we rated these items yellow given the uncertainty of future
supplemental appropriations or congressional adjustments. For example, the
Army requested $1.4 billion in the fiscal year 2005 supplemental in order
to accelerate recapitalization of the Bradley Fighting Vehicles by
producing 93 vehicles to replace combat losses and 554 to meet its
modernization needs, and has begun planning another request for
supplemental appropriations to fund other near-term procurement
requirements associated with their transformational objectives. Further,
in the past, the Army has consistently relied on supplemental
appropriations and congressional adjustments for the M113 Armored
Personnel Carrier, and included $132 million in the fiscal year 2005
supplemental funding request to recapitalize vehicles deployed for
Operation Iraqi Freedom.

Anticipated parts shortages or maintenance issues may affect the services'
ability to maintain adequate condition of 6 of the 30 selected equipment
items we reviewed; therefore, we assessed their near-term program
strategies and funding plans as yellow or, in one case, red as shown in
table

2. Of the 30 equipment items we reviewed, the Marine Corps' CH-46E Sea
Knight helicopter received a red rating for its near-term program strategy
and funding plan because the service may be unable to meet its near-term
requirements due to potential aircraft and repair parts shortages caused
by the age of the aircraft. Because of fielding delays of its replacement
aircraft, the MV-22, the CH-46E will not be retired as originally
scheduled, which may lead to additional repair parts shortages. The
uncertainty in whether the near-term program strategy addresses existing
parts shortages is also a concern for items such as the Navy's F/A-18
Hornet/Super Hornet aircraft and resulted in a yellow rating. Although the
Navy is currently able to maintain readiness for the Super Hornet fleet,
there is an anticipated shortage for critical spare parts like extra fuel
tanks and bomb racks, and the current program strategy does not fund the
efforts necessary to ensure adequate replacements. Additionally, we rated
the Air Force's KC-135 Stratotanker aircraft as yellow because officials
expect its age-related maintenance issues, such as fuel bladder leaks and
parts obsolescence, to increase, resulting in additional maintenance
requirements. Officials also

stated that the severity of potential problems from newly discovered
corrosion remains unknown, so the potential exists for additional
maintenance requirements.

Some Selected Equipment Items We rated 10 of the 30 equipment items
examined in this review as green, as

Have No Near-Term Program shown in figure 1, because we did not identify
any significant program or

Strategy or Funding Issues of funding issues in the near term. The
services had identified program and

Concern 	funding strategies to correct these equipment items' immediate
deficiencies, or to improve the platforms' capabilities. For the selected
equipment items that are being heavily used for operations in Iraq and
Afghanistan and received a green rating, such as the Army's AH-64A/D
Apache helicopter and the Marine Corps' AV-8B Harrier jet, the services
are using a combination of activities, including restoring the equipment
to predeployment status, remanufacturing or recapitalizing the equipment,
or procuring new equipment. For example, the Army is restoring the Apache
helicopters being used in combat while concurrently remanufacturing the
older AH-64A variants into newer AH-64D variants. In some cases, the
services have funded plans that upgrade the equipment items to address
structural or safety concerns and improve combat capabilities, such as for
the Air Force's F-15 and F-16 fighter aircraft and the Navy's DDG-51
Arleigh Burke Class destroyers. For other items, the services modified
their maintenance practices to increase efficiencies and address concerns.
For example, the Air Force modified its stealth maintenance procedures on
its B-2 Spirit bomber, thus reducing the steps and time required to
conduct it.

Services Lack Complete Long-Term Program Strategies and Funding Plans for
Selected Equipment

The services have not developed or fully funded the long-term program
strategies for 21 of the 30 selected equipment items. Title 10 U.S.C. S:
2437, which requires that DOD develop sustainment plans, applies to only 9
of the selected equipment items. We assessed 7 of the selected equipment
items as red, only 2 of which will be covered by this statute, because the
services' program strategies and funding plans to meet long-term
requirements are not fully identified, studies to determine future system
requirements are not complete, funding for maintenance or technological
upgrades may not be available, or replacement systems were delayed or not
identified, and in some cases, the selected equipment items may be unable
to meet their long-term requirements. We assessed the long-term program
strategies and funding plans of 14 of the selected equipment items in our
review as yellow because they are experiencing similar gaps in their
long-term program strategies and funding plans, but the consequences would
be less severe. Alternatively, we assessed the long-term program
strategies and funding plans of 9 of the 30 equipment items in our review
as

green, as shown in figure 1, because the services have program strategies
and funding planned to improve or upgrade equipment capabilities and
safety or replace the equipment items so that they can meet long-term
requirements. Some of the services' long-term program strategies include
improving or modernizing the equipment through upgrades, recapitalizing
older models to newer ones, or replacing the equipment with newer, more
modern equipment, including those associated with DOD's force structure
changes.

Table 4 below shows the primary reasons used to rate selected equipment
items' long-term program strategies and funding plans and our assessment
of those items as either red or yellow. As with incomplete near-term
strategies, without complete long-term plans to ensure that all key
equipment items can be sustained and modernized-and assessing the risk
involved if gaps in these strategies are not addressed-DOD may be unable
to meet some future defense requirements.

Table 4: Primary Reasons for Rating Long-term Program Strategies and
Funding Plans as Yellow or Red for Selected Equipment Items

Reason Yellow rating Red rating

Future strategy Army Army
and funding  o  Heavy Expanded Mobility Tactical  o  Bradley Fighting
Vehicle
requirements are Truck  o  M113 Armored Personnel
not fully identified  o  High Mobility Multi-purpose Carrier

Wheeled Vehicle

o  Family of Medium Tactical Vehicles Marine Corps

o  M1A1 Abrams Tank

o  Light Armored Vehicle

DOD awaiting Air Force Air Force
studies needed to  o  C-5 Galaxy Transport Aircraft  o  KC-135
Stratotanker Aircraft
develop strategies

Availability of Marine Corps Navy
funding for  o  AH-1W Super Cobra Helicopter  o  P-3 Orion Aircraft
maintenance and Navy  o  Standard Missile-2
technological  o  DDG-51 Arleigh Burke Class
upgrades affecting Destroyer
strategies  o  FFG-7 Oliver Hazard Perry Class

Frigate

o  LPD-4 Amphibious Transport Dock Ship

o  EA-6B Prowler Aircraft

                         (Continued From Previous Page)

                        Reason Yellow rating Red rating

                 Replacement               Marine Corps          Marine Corps 
                             o  Assault Amphibian       o  CH-46E Sea Knight  
                 systems are Vehicle                    
              delayed or not       o  AV-8B Harrier Jet            Helicopter 
                  identified                       Navy       o  CH-53E Super 
                                                                     Stallion 
                             o  F/A-18 Hornet/Super                Helicopter 
                             Hornet                     
                                               Aircraft 

                 Source: GAO analysis of military service data.

Future Strategy and Funding At this time, DOD has not fully identified the
future requirements or the Requirements Are Not Fully long-term funding
needs for seven of our selected equipment items,

Identified

DOD Awaiting Studies to Develop Strategies

resulting in red or yellow assessments as shown in table 4, depending on
the urgency or severity of the gaps in program strategies or funding
plans. The Army's lack of identified future requirements and funding plans
led us to assess its Bradley Fighting Vehicle and M113 Armored Personnel
Carrier as red. In some cases, follow-on system requirements have not been
established, but the services have plans to sustain the items until the
replacement system is available, so we assessed these items as yellow. For
example, the Marine Corps plans to replace its M1A1 Abrams tank and Light
Armored Vehicle with the Marine Air-Ground Task Force Expeditionary Force
Fighting Vehicle, although at the time of our review, they had not
completely identified the program requirements or funding needed for the
replacement vehicle. However, they do have plans in place to ensure that
both the M1A1 and Light Armored Vehicle are available until the Marine
Air-Ground Task Force Expeditionary Force Fighting Vehicle is fielded and
have received supplemental funding for these plans.

The Army recently finalized the strategy for its wheeled vehicles, such as
the HMMWV, but some procurement and recapitalization plans have not been
fully funded or specific actions or time frames were not included.
Therefore, we assessed the three Army wheeled vehicles' long-term program
strategies and funding plans as yellow. For example, we noted that the
Army's Tactical Wheeled Vehicle and Trailer Modularity and Modernization
Strategy showed anticipated procurements for the HMMWV that were not
reflected in DOD's 2006 budget request. Further, while the strategy notes
that future block upgrades for the Family of Medium Tactical Vehicles are
planned and describes the sustainment programs it will include, it does
not identify any specific actions or time frames for these upgrades.

DOD has not yet completed studies so that it can fully identify the
program strategies and funding plans needed for 2 of the 30 selected
equipment

items assessed in this review. As shown in table 4, we assessed the
longterm program strategy and funding plan for the Air Force's KC-135
Stratotanker aircraft as red because the congressionally mandated study to
determine its replacement has experienced, and may continue to experience
delays. Meanwhile the KC-135 fleet, with an average age of about 44 years,
continues to experience age-related problems and delays in fielding a
replacement further exacerbate problems in maintaining the existing fleet
over the long term. We assessed the long-term program strategy and funding
plan for the Air Force's C-5 transport aircraft, with an average fleet age
of about 26 years, as yellow because the Air Force remains uncertain about
the size of the final C-5 fleet and whether to fund some additional C-5
aircraft upgrades while awaiting completion of DOD's Mobility Capabilities
Study. This study is expected to be completed in the summer of 2005;
however, at the time this report was issued, results were not available.

Availability of Funding for The availability of funding for ongoing
maintenance and technological

Maintenance and Technological upgrades in past and future years may affect
the long-term program

Upgrades Affecting Strategies	strategies and funding plans for seven of
the selected equipment items. As shown in table 4, we assessed the
long-term strategies and funding plans for two items, the Navy's P-3 Orion
aircraft and the Standard Missile-2, as red because the limited funding
for maintenance and technological upgrades may have serious consequences,
such as negatively affecting their ability to meet war-fighting
requirements. The Navy has identified a plan to address the obsolescence
of the mission systems in the P-3 Orion aircraft over the long term, but
at this time has not officially approved or funded this plan. In addition,
the Standard Missile-2, which has recently seen improved readiness ratings
because DOD increased operation and maintenance funding, is not scheduled
for the same level of funding in the long term, which may reduce the
number of available missiles.

DOD budget decisions to reduce funding for maintenance and upgrades have
the potential for adversely affecting five items, so we assessed the
long-term program strategies and funding plans for these items as yellow.
For example, decreases in the Navy's planned operation and maintenance
funding across all surface ships in the fleet may result in deferred
maintenance and may adversely affect the future material condition of the
three classes of ships included in this review, the DDG-51 Arleigh Burke
Class destroyers, the FFG-7 Oliver Hazard Perry Class frigates, and the
LPD-4 Amphibious Transport Dock ships.

Long-Term Program Strategies Affected Because Replacement Systems for
Selected Equipment Are Delayed or Not Identified

Some Selected Equipment Items Have No Long-Term Program Strategy and
Funding Issues of Concern

Replacement systems have either been delayed or are not yet identified for
5 of the 30 selected equipment items examined in this review and we rated
these items as red or yellow as shown in table 4. Two of these items were
assessed as red because of the urgency and severity of the delays impact
on the services' capabilities and ability to meet future requirements. For
example, we assessed the long-term program strategy and funding plan for
the Marine Corps' CH-53E Super Stallion Helicopters as red because the
Marine Corps has not identified a replacement for the CH-53E Super
Stallion despite an initial fielding planned for 2015. According to
officials, the Marine Corps must maintain enough CH-53E helicopters to
support Marine Corps operations until the initial fielding of the Heavy
Lift Replacement aircraft. Officials estimate that, if the current high
usage rate and expected attrition rates hold true, the number of CH-53E
helicopters may fall below the number necessary to remain in service until
the Heavy Lift Replacement becomes available.

The remaining three items' long-term program strategies and funding plans
were assessed as yellow because the effect of the uncertainties or delays
do not appear to be as urgent or severe. In some instances, delays and
uncertainties affecting the sustainment programs of selected equipment
items are related to DOD difficulties in acquiring their replacements. For
example, uncertainty over the potential for delays in the Joint Strike
Fighter Program affects the long-term strategy and funding for the Marine
Corps' AV-8B Harrier jet and the Navy's F/A-18 fighter aircraft and these
systems were rated yellow.17

We determined that 9 of the 30 selected equipment items examined in this
review have no significant program or funding issues in the long term and
therefore received green ratings as shown in figure 1. For example, the
Air Force's F-15 aircraft upgrades are fully funded and designed to keep
the aircraft viable and functioning through at least 2025. In addition,
the Marine Corps' plans provide sufficient numbers of Medium Tactical
Vehicle Replacement vehicles to equip all of its units in the long term.
Moreover, the Army has reprogrammed funds from the cancellation of the
Comanche program to fund other aviation modernization strategies,
including those

17GAO reviews over the past 30 years have found consistent problems with
weapon acquisitions such as cost increases, schedule delays, and
performance shortfalls. In our most recent study of these problems, GAO
assessed 54 programs, including the Joint Strike Fighter, and found that
the majority of the programs assessed are costing more and taking longer
to develop. See, GAO, Defense Acquisition: Assessment of Selected Major
Weapons Programs, GAO-05-301 (Washington, D.C.: March 2005).

that improve the capability and lifespan of the CH-47D/F Chinook and the
AH-64A/D Apache helicopters.

Conclusions	Since our last review of the condition of selected military
equipment in 2003, overall readiness rates for most selected equipment
items have continued to decline and some of the services' near-and
long-term program strategies lack complete sustainment and modernization
plans or are not fully funded. Continued high use of these equipment items
to support current operations and the advancing ages of the systems
suggest that DOD will be challenged in meeting future equipment
requirements without significant upgrades to its inventory. Furthermore,
because activities to refurbish and replace vehicles, weapons, and
equipment used for operations in Iraq and Afghanistan are being funded
primarily through supplemental appropriations as opposed to being
programmed in DOD's Future Years Defense Program, future funding is
uncertain. Moreover, DOD faces challenges to sustain and modernize its
current equipment while continuing these operations and transforming to a
new force structure. DOD is currently conducting its Quadrennial Defense
Review, which could change the future requirements for some military
equipment. In light of these challenges, it is increasingly important that
DOD focus its resources on the equipment items that are key to meeting
future defense requirements. Without a more focused investment strategy,
DOD runs the risk of a continued decline in future equipment readiness.
While DOD is required to provide sustainment plans, including time frames
and projected budgetary requirements, for some military equipment in
accordance with 10 U.S.C. S: 2437, this statute does not apply to many key
military equipment items we reviewed. For example, those equipment items
that do not have a replacement system in development are not covered by
this statute. In fact, most of the equipment items that we assessed as red
because of long-term strategy and funding issues were not covered by this
statute. Without developing complete sustainment and modernization plans
and identifying funding needs for all priority equipment items, including
those not already covered by law through the end of their expected useful
lives, DOD risks not being able to meet some future equipment
requirements. Furthermore, without communicating these plans and funding
needs to Congress, lawmakers will not have the clear picture of DOD's
progress on equipment sustainment and modernization they need to provide
effective oversight over these processes.

Recommendations	To ensure that DOD can sustain key equipment items to meet
future equipment requirements and to provide greater visibility over key
equipment items to Congress, we recommend that, after the department
completes its Quadrennial Defense Review, the Secretary of Defense, in
consultation with the Secretaries of the Military Services, take the
following two actions:

o 	Reassess the near-and long-term program strategies for sustaining and
modernizing key equipment, particularly those items not covered by 10
U.S.C. S: 2437, to ensure that the plans are complete and that the items
are sustainable until they reach the end of their serviceable life or a
replacement system is fielded. Specifically, this reassessment should

o 	detail the strategies to sustain and modernize key equipment systems
until they are retired or replaced;

o 	report the costs associated with the sustainment and modernization of
key equipment and identify these funds in the Future Years Defense
Program; and

o 	identify the risks involved in delaying or not fully funding the
strategies, and the steps the department is taking to mitigate the
associated risks, for those strategies that are delayed or are not fully
funded.

o 	Provide the information in the above recommendation to Congress at the
same time the department submits its annual budget request, to ensure that
Congress has the visibility it needs to provide effective oversight over
DOD's program strategies.

  Matter for Congressional Consideration

Congress should require the Secretary of Defense to report on program
strategies and funding plans to ensure that DOD's budget decisions address
deficiencies related to key military equipment. We suggest that this
report be provided in conjunction with DOD's annual budget submissions and
reflect the results of the department's Quadrennial Defense Review.
Specifically, as stated in our recommendations, the report should (1)
detail the strategies to sustain and modernize key equipment systems until
they are retired or replaced; (2) report the costs associated with the
sustainment and modernization of key equipment and identify these funds in
the Future Years Defense Program and; (3) describe the risks involved in
delaying or

not fully funding the strategies, and the steps the department is taking
to mitigate the associated risks, for those strategies that are delayed or
are not fully funded.

  Agency Comments and Our Evaluation

In written comments on a draft of this report, DOD partially concurred
with our recommendation that it should reassess the near and long-term
program strategies for sustaining and modernizing key equipment after the
department's Quadrennial Defense Review, but did not concur with our
recommendation that the department report these plans to Congress. The
department's written comments are reprinted in their entirety in appendix

III.

In partially concurring with our first recommendation that it should
reassess the near- and long-term program strategies for sustaining and
modernizing key equipment, the department stated that, through its current
budget processes, it is already executing an annual procedure to assess
program strategies to ensure equipment sustainment and modernization that
can support the most recent defense strategy. According to the department,
these budget reviews consider strategies and costs to sustain and
modernize equipment, and the risks incurred by not fully funding these
strategies; therefore, the resulting budget reflects the department's best
assessment of a balanced, fully funded budget that most efficiently
accomplishes the national security mission within its limited resources.

While we acknowledge that these budget processes may provide a
department-level review of what is needed to accomplish the national
security mission, the department's budget processes and the Future Years
Defense Program do not provide detailed strategies that include
identifying both the costs associated with sustaining and maintaining key
equipment and the risks involved in delaying or not fully funding the
strategies. Without detailed plans, the department does not have
sufficient information to ensure that adequate funding is provided or that
it is taking the necessary steps to mitigate risks associated with
strategies that are delayed or are not fully funded. We continue to
believe that the department, in conjunction with the military services,
needs to develop a more comprehensive and transparent approach for
assessing the condition of key equipment items, developing program
strategies to address critical equipment condition deficiencies,
prioritizing the required funding, and mitigating risks associated with
delaying or not fully funding these strategies upon completion of the
Quadrennial Defense Review. Therefore, we continue to believe our
recommendation has merit.

The department did not concur with our second recommendation that the
Secretary of Defense provide detailed strategies and costs of sustaining
key equipments items and the associated risks in delaying or not fully
funding these strategies in an annual report to Congress to ensure that
Congress has the visibility it needs to provide effective oversight over
DOD's program strategies. DOD believes that submitting an additional
report concurrent with the annual budget would be a duplication of effort.

We believe that the information included in the President's Budget does
not provide Congress with sufficient information on the strategies,
funding, and risks associated with maintaining key equipment items until
their replacement systems are fielded. In our report, we identify a number
of examples of inconsistencies between the program strategies and the
funding needed to sustain and maintain key equipment items not reported in
the department's budget documents. The department is not currently
required to report sustainment plans for some of these critical items to
Congress. We believe that Congress needs to be assured that DOD's budget
decisions address deficiencies related to key military equipment that must
be maintained and sustained until the end of their serviceable lives,
including those currently not covered by Title 10 U.S.CS: 2437. Therefore,
we have added a Matter for Congressional Consideration.

Lastly, DOD provided technical comments concerning our assessments of
specific equipment items in appendix II. We reviewed and incorporated
these technical comments, as appropriate. In some instances, the data the
department provided in its technical comments resulted from program and
funding decisions that were made subsequent to our review. In one case, we
changed our original color-coded assessment of a key equipment item based
on these decisions. The Army approved the replacement for the OH58D Kiowa
Helicopter, the Armed Reconnaissance Helicopter, and therefore we changed
our original assessment of the Kiowa's long-term program strategy and
funding plans from a yellow rating to a green rating.

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

If you or your staff have questions, please contact me on (202) 512-8365
or by e-mail at [email protected]. Contact points for our Offices of

Congressional Relations and Public Affairs may be found on the last page
of this report. Major contributors to this report are included in appendix
IV.

William M. Solis Director, Defense Capabilities and Management

List of Congressional Committees

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

The Honorable Ted Stevens Chairman The Honorable Daniel K. Inouye Ranking
Minority Member Subcommittee on Defense Committee on Appropriations United
States Senate

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

The Honorable C. W. Bill Young Chairman The Honorable John P. Murtha
Ranking Minority Member Subcommittee on Defense Committee on
Appropriations House of Representatives

Appendix I

Scope and Methodology

To update congressional committees on key equipment items that warrant
immediate attention by the Department of Defense (DOD) and/or Congress, we
conducted an analysis of 30 selected military equipment items. We
performed an independent evaluation of the (1) condition of key equipment
items and (2) services' near-and long-term program strategies and funding
for the sustainment, modernization, or replacement of these equipment
items.

This report follows our December 2003 report1 which assessed the
condition, program strategy, funding, and wartime capability of 25
selected military equipment items. The current report increases the number
of equipment items to 30, and instead evaluates the condition, near-term
program strategy and funding plans, and long-term program strategy and
funding plans of each system. These changes reflect the current
operational environment, and the critical linkage between a successful
program strategy and funding. We examined the near and long terms
separately to delineate the impact of current operations on the near term
and their possible effect on long-term transformational efforts.

To select the 30 equipment items we reviewed, we included 18 of the
equipment items reviewed in our December 2003 report, and based upon input
from the military services, your offices, and our prior work, we
judgmentally selected an additional 12 items. We did not include 7 of the
25 items from our previous review so that we could focus on other selected
systems that we believed were more in need of examination. Our final
selections included those items that the military services believed were
most critical to their missions, and which have been in use for a number
of years. The 30 equipment items include 9 from the Army, 6 from the Air
Force, 7 from the Navy, and 8 from the Marine Corps. Our observations and
assessments were made on active duty inventory as well as equipment in the
National Guard and reserve forces; including reserve equipment represents
another difference between this review and our December 2003 report. Our
assessments apply only to the 30 equipment items we reviewed, and the
results of our assessments cannot be projected to the entire inventory of
DOD equipment. Because Section 805 of the Ronald W. Reagan National
Defense Authorization Act for Fiscal Year 2005-which amends Title 10 of
the U.S. code (Pub. L. No. 108-375, S: 805.)-does not apply to existing
systems for which a replacement system will reach initial

1GAO, Military Readiness: DOD Needs to Reassess Program Strategy, Funding
Priorities, and Risks for Selected Equipment, GAO-04-112 (Washington,
D.C.: Dec. 19, 2003).

operational capability before October 1, 2008, we did not assess
compliance with this section of the act.

Each equipment item was assessed individually on its condition, and
nearand long-term program strategy and funding. To determine which
equipment items require additional attention by the department, the
military services, and/or Congress, we developed an assessment framework
based on three criteria: (1) the extent of the existence of a problem or
issue, (2) the severity of the problem or issue, and (3) how soon the
problem or issue needs to be addressed. To indicate the existence,
severity, or urgency of problems identified for the 30 selected equipment
items, we used a traffic light approach-red, yellow, or green-as follows:

o 	 Red indicates a problem or issue that is prevalent and severe enough
to warrant immediate attention by DOD, the military services, and/or
Congress.

o 	 Yellow indicates the existence of a problem or issue that warrants
attention by DOD, the military services, and/or Congress, and that if left
unattended may worsen.

o 	Green indicates that we did not identify any specific problems or
issues at the time of our review, or that any existing problems or issues
we identified are either not severe enough in nature to warrant immediate
action, or already being addressed by DOD, the military services, and/or
Congress.

Individual assessments were based on systematic decisions with clear and,
wherever possible, measurable criteria. Input from relevant officials-
program managers, unit staffs, operators, maintainers, and engineers-was
incorporated in every step of the process.

We interviewed officials from components (active, guard, and reserve
forces) of all four of the military services, two selected combatant
commands, and several major service commands. We visited selected units
and maintenance facilities to observe the equipment items during operation
or under maintenance. We also discussed deployed and nondeployed equipment
condition, program strategy, and funding with program managers and
equipment operators and maintainers, and included these indicators where
appropriate. The specific military activities we visited or obtained
information from include the following:

o 	Office of the Assistant Secretary of Defense, Reserve Affairs,
Arlington, Va.;

o  U.S. Air Force, Air Combat Command, Langley Air Force Base, Va.;

o  U.S. Air Force, Air Mobility Command, Scott Air Force Base, Ill.;

o 	U.S. Air Force Materiel Command, Wright Patterson Air Force Base, Ohio;

o  U.S. Air Force, Ogden Air Logistics Center, Hill Air Force Base, Utah;

o 	U.S. Air Force, Oklahoma City Air Logistics Center, Tinker Air Force
Base, Okla.;

o  U.S. Air Force, Pacific Command, Hickam Air Force Base, Hawaii;

o 	U.S. Air Force, Plans and Programs, Air Force Headquarters, Arlington,
Va.;

o  U.S. Air Force Reserve Command, Robins Air Force Base, Ga.;

o 	U.S. Air Force, Warner Robins Air Logistics Center, Robins Air Force
Base, Ga.;

o  U.S. Air National Guard, Headquarters, Andrews Air Force Base, Md.;

o  U.S Air National Guard, Hickam Air Force Base, Hawaii;

o  U.S. Army, Headquarters, Arlington, Va.;

o  U.S. Army National Guard, Headquarters, Arlington, Va.;

o 	U.S. Army National Guard, 81st Brigade, Washington National Guard, Camp
Murray, Wash.;

o  U.S. Army National Guard, Hawaii National Guard, Ft. Ruger, Hawaii;

o  U.S. Army, Anniston Army Depot, Anniston, Ala.;

o  U.S. Army Aviation and Missile Command, Redstone Arsenal, Ala.;

o  U.S. Army, Corpus Christi Army Depot, Corpus Christi, Tex.;

o  U.S. Army, Directorate of Logistics, Fort Lewis, Wash.;

o  U.S. Army, First Army, Ft. Gillem, Ga.;

o  U.S. Army, Fifth Army, Ft. Hood, Tex.;

o  U.S. Army Forces Command, Ft. McPherson, Ga.;

o  U.S. Army, 4th Infantry Division, Ft. Hood, Tex.;

o  U.S Army Headquarters, Arlington, Va.;

o  U.S. Army Material Command, Ft. Belvoir, Va.;

o  U.S. Army, Pacific, Ft. Shafter, Hawaii;

o  U.S. Army Reserve Command, Ft. McPherson, Ga.;

o 	U.S. Army Tank - Automotive and Armaments Command, Warren, Mich.;

o  U.S. Army, III Corps, Ft. Hood, Tex.;

o  U.S. Central Command, McDill Air Force Base, Tampa, Fla.;

o 	U.S. Marine Corps, Aviation Plans, Policies, Programs, Budgets, Joint
and External Matters Branch, Arlington, Va.;

o 	U.S. Marine Corps, Aviation Weapons Systems Requirements Branch,
Pentagon, Arlington, Va.;

o 	U.S. Marine Corps, Installations and Logistics, Navy Annex, Arlington,
Va.;

o 	U.S. Marine Corps, Logistics Plans, Policies and Strategic Mobility
Division, Navy Annex, Arlington, Va.;

o  U.S. Marine Corps, 3rd Marine Air Wing, Miramar, Calif.;

o 	U.S. Marine Corps, I Marine Expeditionary Force, Camp Pendleton,
Calif.;

o  U.S. Marine Corps, Marine Forces Pacific, Camp Smith, Hawaii;

o  U.S. Marine Corps, Marine Forces Atlantic Command, Norfolk, Va.;

o 	U.S. Marine Corps, Naval Air Systems Command, Naval Air Station,
Patuxent River, Md.;

o 	U.S. Marine Corps, Programs and Resources, Office of the Deputy
Commandant, Pentagon, Arlington, Va.;

o  U.S. Marine Corps, Reserve Command, New Orleans, La.;

o  U.S. Marine Corps Systems Command, Quantico, Va.;

o 	U.S. Marine Corps, Army Tank Automotive and Armaments Command, Warren,
Mich.;

o  U.S. Navy, Commander Fleet Forces Command, Norfolk, Va.;

o 	U.S. Navy, Commander Electronic Attack Wing, Pacific, Whidbey Island,
Wash.;

o 	U.S. Navy, Commander Patrol and Reconnaissance Wing 10, Whidbey,
Island, Wash.;

o  U.S. Navy, Commander Strike Fighter Wing, Atlantic, Virginia Beach,
Va.;

o  U.S. Navy, Commander Strike Fighter Wing, Pacific, Lemoore, Calif.;

o  U.S. Navy, Commander, U.S. Pacific Fleet, Pearl Harbor, Hawaii;

o  U.S. Navy, Headquarters, Washington, D.C.;

o  U.S. Navy, Naval Air Systems Depot, Jacksonville, Fla.;

o  U.S. Navy, Naval Air Systems Depot, North Island, Coronado, Calif.;

o  U.S. Navy, Naval Air Systems Command, Patuxent River, Md.;

o  U.S. Naval Reserve Command, New Orleans, La.;

o  U.S. Navy, Naval Sea Systems Command Washington, D.C.;

o 	U.S. Navy, Naval Surface Force/US Naval Air Force-Atlantic, Norfolk,
Va.;

o 	U.S. Navy, Naval Surface Force/US Naval Air Force-Pacific, San Diego,
Calif.;

o  U.S. Navy, Naval Weapons Station, Seal Beach, Calif.; and

o  U.S. Pacific Command, Camp Smith, Hawaii.

Assessments on the condition of these 30 equipment items were based on a
comparison of readiness metrics against service goals, and the existence,
severity, or urgency of condition problems. We obtained data on equipment
age, expected service life, mission capable rates,2 utilization rates,3
and various other metrics for fiscal years 1999 through 2004. Readiness
metrics, such as material readiness rates and mission capable rates, were
a primary component of our assessments. We were particularly cognizant not
only of whether the equipment item met its readiness goals but, if it
failed to meet this metric, we examined the gap between the readiness
achieved by these equipment items and the services readiness
objectives--and the significance of that difference. Equipment items were
further evaluated against metrics such as utilization rates,
cannibalization rates, failure rates, and depot maintenance data. We
gauged the significance of the rates and data as they reflected on the
item's condition. Further, this analysis also evaluated the extent to
which each of the equipment items is being used for current operations,
and their performance while deployed. Finally, we assessed specific
problems with each item that may or may not have been captured in other
metrics.

Our evaluations of DOD's near- and long-term program strategy and funding
plans were based on the existence of near-and long-term plans, and the
extent to which there were gaps in funding for these plans as projected in

2Mission capable rates are measures of material condition that indicate
the equipment can perform at least one and potentially all of its
designated missions.

3Utilization rates refer to flying hours, tank miles, and steaming days.

DOD's Future Years Defense Program (FYDP).4 Both near- and long-term plans
include sustainment, modernization, or recapitalization of the equipment
items in order to meet mission requirements.5 Near-term plans are those
that address current condition problems, as well as those projected until
2007; long-term plans address issues anticipated from 2008 until the
replacement system enters the inventory or until the system reaches the
end of its expected service life. We first assessed whether nearand
long-term plans were realistic and comprehensive. For our short-term
assessment, we examined whether the plans meet near-term requirements and
address issues related to current condition and the need for near-term
technological upgrades. For our long-term evaluation, we considered if
modernizations or sustainment plans were sufficient given the timing of
the replacement and the expected service life of the equipment item. Next,
we determined the extent to which there were gaps in funding for both
nearand long-term programs as projected in the FYDP. We then considered
whether the strategy and its funding, in the near and long term, addressed
other concerns which might significantly affect the program.

While we attempted to obtain consistent metrics for each of the three
categories across all four of the military services, data availability
varied significantly by service and type of equipment. Our assessments are
based on the data available from multiple sources, and represent the
problems and issues we identified at the specific point in time that we
conducted our work. These can change quickly given current events.
Although our assessments for each of the three categories--condition,
near-term program strategies and funding plans, and long-term program
strategies and funding plans--are largely qualitative in nature and are
derived from consensus judgments, our analyses are based on data and
information provided by the military services and discussions with
military service officials and program managers for the individual
equipment items. We assessed the reliability of the services' equipment
readiness data by (1) comparing key data elements to our observations of
equipment items at selected units, (2) reviewing relevant documents, and
(3) interviewing knowledgeable officials. We determined that the data
obtained from DOD, the military services, and the combatant commands were
sufficiently reliable for our use. We performed our review from July 2004
through July

4The Future Years Defense Program reflects the department's official
projection of the forces and resources needed to support the programs
approved by the Secretary of Defense for the biennial budget years and the
following 4 years.

5We did not independently verify or validate the requirements as part of
this audit.

2005 in accordance with generally accepted government auditing standards.

Appendix II

                    Assessments of Selected Equipment Items

For the 30 equipment items, each assessment provides the status of the
equipment item at the time of our review. The profile presents a general
description of the equipment item. Each assessment area-condition,
nearterm program strategy and funding, and long-term program strategy and
funding-includes a green, yellow, or red rating indicating the existence,
severity, or urgency of problems identified based on our observations of
each equipment item, discussions with service officials, and reviews of
service-provided metrics.

  Army

Abrams M1A1/M1A2 Tank	First delivered in the early 1980s, the Abrams is
the Army's main battle tank and destroys enemy forces using enhanced
mobility and firepower. Variants of the Abrams include the M1,1 M1A1, and
M1A2 and there are a total of 5,848 tanks of all variants in the fleet.
The M1A1 and M1A2 have a 120 mm main gun, a powerful turbine engine, and
special armor. There are 5,109 M1A1 and M1A2 tanks in the inventory, and
their estimated average age is 12 years. Officials state that in the
future, the Army is planning to use only a two-variant fleet of the
Abrams, consisting of the M1A1 Abrams Integrated Management and the
upgraded M1A2 System Enhancement Program-the primary difference being the
digital architecture of the System Enhancement Program variant. The M1
variant is expected to be phased out by 2015. The Abrams is expected to
remain in the Army's inventory until at least 2045.

Figure 2: Abrams Main Battle Tank

Source: Defense Visual Information Center.

1There are 739 M1 tanks in the Army's inventory averaging 20 years in age
and they are found primarily in the National Guard. The M1 is similar to
the M1A1 and M1A2 except that it possesses a 105 mm cannon and lacks the
special armor protection. Due to its age and limited usage, our analysis
did not include this variant.

Condition

In our previous report we assessed the condition of the Abrams Tank as
green because it consistently met its mission capable goal of 90 percent
from fiscal year 1998 through fiscal year 2002.2 However, in this review
we assessed the condition of the Abrams Tank as yellow because, while it
generally met or exceeded the Army's mission capable goal between fiscal
years 1999 and 2003 as shown in figure 3 below, the rates declined between
fiscal years 2003 and 2004. According to program officials, the recent
downward trend is a result of parts and technician shortages. Officials
stated that the shortage in parts is driven by the number of vehicles
either deployed or being reset to a predeployment condition and the
shortage of technicians is primarily due to the number of deployed
National Guard military technicians. Additionally, as of September 2004
there were a relatively small percentage of Abrams tanks, around 5
percent, deployed in support of operations in Iraq. Due to the high use in
theater, these operations may accelerate the aging process of the tank
fleet.

2GAO, Military Readiness: DOD Needs to Reassess Program Strategy, Funding
Priorities, and Risks for Selected Equipment, GAO-04-112 (Washington,
D.C.: Dec. 19, 2003).

Figure 3: Average Mission Capable Rates for Army Abrams Tanks, Fiscal
Years 1999

- 2004 Percent

100

95

90

85

80

0 1999 2000 2001 2002 2003

Fiscal year

                                  Active M1A1

                                  Active M1A2

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding for the Abrams tank
as yellow because while the Army possesses plans for resetting tanks as
they return from operations in Iraq and recapitalizing the fleet to ensure
that the tank's systems remain updated, they continue to identify
shortages of repair parts and technicians as major causes of decreased
material readiness. Without adequately addressing these issues, the
condition of the Abrams fleet could be significantly impacted in the near
term. Another potential issue affecting the Abrams in the near term is a
break in the production line, which is being used to retrofit a lesser
variant Abrams to the M1A2 System Enhancement Program, occurring in fiscal
years 2006 and 2007. Army officials plan to mitigate this issue by
providing $40 million to maintain critical skills at the production
facilities until production resumes in fiscal year 2008.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding for the Abrams tank
as green because the Army has identified a plan to reduce the current
inventory of 5,109 to about 3,000 tanks in keeping with current Army
transformation plans and has programmed funding to recapitalize the
remaining fleet. The Army plans to move to a two-variant fleet of the
Abrams, the M1A1 Abrams Integrated Management and M1A2 System Enhancement
Program, which they plan to utilize until at least 2045. Officials believe
this plan should reduce maintenance costs as the service will have reduced
maintenance and logistics requirements from the current fleet arrangement.
As noted in our previous report, the Army reduced the original number of
recapitalized M1A2 System Enhancement Program tanks from 1,174 to 588. In
the fiscal year 2006 President's Budget, the Army identified funding to
increase the number of M1A2 System Enhancement Program tanks to 803. This
increase realigns the recapitalization funding with the Army's upgrade
schedule so that they are on target to meet their current transformation
plans.

Bradley Fighting Vehicle	Brought into service in 1981, the Army uses the
family of Bradley Fighting Vehicles to provide armored protection and
transportation to infantry units. The Bradley is able to close with and
destroy enemy forces in support of mounted and dismounted infantry and
cavalry combat operations. The Bradley Fighting Vehicle family currently
consists of two vehicles: the M2 Infantry Fighting Vehicle and the M3
Cavalry Fighting Vehicle. There are four variations of each of these two
vehicles: the A0, A2, A2 Operation Desert Storm, and A3, each having
different capabilities and technology. For example, the A3 variants
possess all of the capabilities as the A2 variants, but utilize a digital
architecture, which is compatible with the Army's net-centric warfare
plans and the M1A2 System Enhancement Program Abrams tank. The Army
currently maintains 6,583 M2 and M3 variants of the Bradley in their fleet
and plans to use the Bradley Fighting Vehicle until at least 2045.

                       Figure 4: Bradley Fighting Vehicle

                   Source: Defense Visual Information Center.

Condition

We assessed the condition of the Bradley as yellow because, as shown in
figure 5 below, the vehicles nearly met or exceeded the Army's readiness
goal of 90 percent between fiscal years 1999 and 2002; however, the
mission capable rates showed a downward trend between fiscal years 2002
and 2004. According to officials, Operation Iraqi Freedom demands and
efforts to reset the vehicles to their predeployment status have had a
significant impact on repair parts availability. The National Guard has
experienced further difficulty with availability of trained maintainers
due to the high pace of operations that has resulted in the need to
transfer personnel among units to fill shortages. Additionally, program
officials stated that the composition of the fleet of Bradley Fighting
Vehicles is insufficient to meet all of the Army's current requirements,
especially those associated with training and predeployment exercises.
However, the Bradley vehicles are able to meet all of their operational
requirements.

Figure 5: Average Mission Capable Rates for Army Bradley Fighting
Vehicles, Fiscal
Years 1999 - 2004
Percent

100

95

90

85

80

75

70

0 1999 2000 2001 2002 2003

Fiscal year

                                     Active

                                      ARNG

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and

Funding We assessed the near-term program strategy and funding of the
Bradley program as yellow because the Army does not currently possess a
funding strategy through regular appropriations for developing the proper
composition of the Bradley Fighting Vehicles fleet to meet the Army's
nearterm transformation requirements. The Army requested $1.4 billion in
the fiscal year 2005 supplemental for the Bradley Fighting Vehicle in
order to accelerate the recapitalization of vehicles by producing 93
vehicles to replace combat losses and 554 others for the Army's modularity
needs. Without having funding programmed for the A2 or the A3 variants of
the Bradley, Army officials have begun planning for the fiscal year 2006
supplemental in order to fulfill Army transformation plans. Program
officials stated that the Army is relying on supplemental funding and
Office of the Secretary of Defense (OSD) reprogramming actions in order to
meet equipment requirements for the Army's transformation plans.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the Bradley
Fighting Vehicles as red because the Army plans to significantly increase
the number of vehicles and change the composition of the fleet but has not
established a long-term funding strategy. Officials stated that the Army
plans to convert to a fleet of Bradley vehicles which will be aligned with
the Abrams tank fleet. The A3, matched with the M1A2 System Enhancement
Program tank, and a lesser variant, operating with the M1A1 Abrams
Integrated Management tank, will make up the Army's future Brigade Combat
Teams.3 Neither the A3 variant nor the lesser variants, which officials
believe will be the A2 and the Operation Desert Storm variant, have
long-term program funding identified.

M113 Armored Personnel Carrier

The Army uses the M113 Armored Personnel Carrier in its primary mission of
personnel transportation on the battlefield, though there are many other
combat support missions for the family of vehicles, including command and
control, cargo transportation, and battlefield obscuration. The Army
originally introduced the M113 family of vehicles in 1960. The current
fleet of M113A2 and A3 Personnel Carriers, totaling 7,579, has an average
age of almost 16 years.4 Prior to operations in Iraq the Army planned to
discontinue use of the M113; however, the Army now plans to utilize the
M113 Armored Personnel Carrier through 2045 in accordance with its latest
modularity plans. The A3 variant of the M113 has a digital architecture,
increased suspension, and is capable of carrying add-on-armor kits to
provide additional protection for the troops.

3Brigade Combat Teams are the foundation of the Army's new modularized
force structure.

4There are approximately 15,785 vehicles that use the common M113 chassis.
However, our analysis only focused on the M113A2 and A3 personnel
carriers.

Figure 6: M113 Armored Personnel Carrier

Source: GAO.

Condition

We assessed the condition of the M113 as green because, as shown in figure
7 below, the mission capable rates have been near the Army's goal of 90
percent between fiscal years 1999 and 2004. As of September 2004, the Army
had 666 A2 and A3 variants in Operation Iraqi Freedom, or roughly 10
percent of the combined fleet. The M113 family of vehicles has not
experienced a significant decline in mission readiness as a result of
recent operations in Iraq and Afghanistan. The National Guard has
generally maintained its M113 vehicles at a higher readiness rate than the
active units of the Army.

Figure 7: Average Mission Capable Rates for Army M113 Vehicles, Fiscal
Years 1999

- 2004 Percent

100

95

90

85

80

0 1999 2000 2001 2002 2003

Fiscal year

                                     Active

                                      ARNG

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the M113 as
yellow because the Army has consistently relied on supplemental funding,
congressional adjustments, and OSD reprogramming actions in order to
complete modifications on the M113 family of vehicles. The Army requested
$132 million in DOD's fiscal year 2005 supplemental funding request to
Congress in order to recapitalize 368 M113s. This represents about 55
percent of the vehicles that were deployed to Operation Iraqi Freedom in
September 2004. Due to its armor protection, the M113 has been used in
place of less armored vehicles, such as High Mobility Multi-Purpose
Wheeled Vehicles, in Operation Iraqi Freedom.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding for the M113 as red
because the Army has not identified either a long-term procurement or
maintenance strategy for the M113. The Army's funding strategy for the
M113 family of vehicles has been impacted by the Army's plans to remove
these vehicles from service. However, according to Army officials, the
M113 family of vehicles will continue to play a significant role as the
Army transitions into the new modular force.

Heavy Expanded Mobility Tactical Truck

The Heavy Expanded Mobility Tactical Truck (HEMTT) is used extensively to
provide transport capabilities for resupply of the combat vehicles and
weapons systems used by heavy combat forces and support units. The five
basic HEMTT variants are used to transport ammunition, petroleum, oils and
lubricants, and missile systems, and can also serve as a recovery vehicle
for other vehicle systems. There are approximately 12,700 HEMTTs in the
Army's inventory. The average age of the HEMTT fleet is about 15 years,
and although the expected useful life is 20 years, the HEMTTs are expected
to remain in the Army's inventory through 2030.

                Figure 8: Heavy Expanded Mobility Tactical Truck

                       Source: Oshkosh Truck Corporation.

Condition

In our previous report we assessed the condition of the HEMTT as green
because the mission capable rates were close to the Army's goal for fiscal
years 1998 to 2002.5 However, in this review we assessed the condition as
yellow. While the fully mission capable rates for the HEMTTs were near the
Army's goal from fiscal years 1999 through 2003, the trend since fiscal
year 2002 for both active and reserve components has been declining, as
shown in figure 9 below. In one of the Army's fiscal year 2004 readiness
reports to DOD, the high pace of operations and aging fleet were cited as
factors affecting HEMTT readiness for the active component. The decline in
readiness rates for the U.S. Army Reserves was attributed to the lack of
maintenance technicians. Program management officials said that the
failure to meet readiness goals was also due to parts problems. According
to Army officials, approximately 12-15 percent of the HEMTT fleet is in
theater and is being used at rates 10 times higher than during peacetime.
In a February 2005 statement to congressional committees, Army officials
stated that all wheeled vehicles being used in Iraq and Afghanistan would
be armored by March 2005. Despite concerns over armor protection, Army
officials that we visited stated that the HEMTTs have performed as
intended in theater without any significant issues.

5GAO-04-112.

Figure 9: Average Fully Mission Capable Rates for Army HEMTTs, Fiscal
Years 1999

- 2004 Percent

100

95

90

85

80

0 1999 2000 2001 2002 2003

Fiscal year

                                     Active

                                      ARNG

                                      USAR

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy for the HEMTT as yellow because
the Army's near-term strategy for sustaining, modernizing, and procuring
HEMTTs has not been fully funded. In addition, the program received
significant funding from supplemental appropriations and a congressional
adjustment in fiscal years 2004 and 2005, the remanufacture and upgrade
program has continued at a slower pace than planned, and at the time of
the fiscal year 2006/2007 budget estimate submission, the impact of
modularity changes on the final acquisition objective was still unknown.
The Army's Tactical Wheeled Vehicle and Trailer Modularity and

Modernization Strategy6 has been updated several times and has undergone
significant changes. In addition, the strategy states that while
investment is not sufficient to meet the Army's goals, it does address its
most critical requirements. In fiscal year 2004 the family of heavy
tactical vehicles, which includes the HEMTTs, was authorized an additional
$47 million in supplemental funding and another $39 million in
congressional adjustments and DOD's fiscal year 2005 supplemental funding
request for $74.3 million was to replace combat losses and procure
additional vehicles to equip, backfill, and modularize various Army units.
The Army is planning to include another request for additional HEMTTs in
DOD's fiscal year 2006 supplemental budget request. The Extended Service
Program, which the Army uses to remanufacture and upgrade existing HEMTTs,
has continued at the slower pace noted in our December 2003 report,7 but
the justification for an additional $90.3 million included in the fiscal
year 2005 supplemental funding request cited the program's importance to
the Army's modularization efforts. Finally, while the Army's acquisition
objective for HEMTTs has continued to increase, it still may not meet the
Army's modularity requirements.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding for the HEMTT as
yellow because the Tactical Wheeled Vehicle and Trailer Modularity and
Modernization Strategy for both procurement and recapitalizations8 has not
been fully funded and the Army's plans and funding for procurement,
recapitalization, and sustainment of its oldest models are continuing to
evolve. The strategy has been updated several times and has undergone
significant changes. The June 2005 version of the strategy concluded with
a statement that while investment is adequate to address the Army's most
critical requirements, it still falls short of the Army's goals. In
addition, the goals have changed significantly. For example, in the fiscal
year 2006/2007 budget estimate, dated February 2005, the Army acquisition
objective for

6The Army's Tactical Wheeled Vehicle and Trailer Modularity and
Modernization Strategy lays out a comprehensive strategy for meeting
modularity requirements and modernizing the current tactical wheeled
vehicle fleet.

7GAO-04-112.

8The HEMTT Extended Service Program is a recapitalization program that
supports modularity by remanufacturing and upgrading existing HEMTT
vehicles.

HEMTTs was 14,269, but in July 2005 the goal was 17,850. Funding plans
also continue to change. In our December 2003 report, we noted that the
Army had reduced funding for the recapitalization program which was used
to upgrade HEMTTs. Currently, the June 2005 version of the strategy shows
that the Army plans to recapitalize 4,726 HEMTTs between fiscal years 2012
and 2018. However, past history shows that this may not occur. For
example, while the fiscal year 2003 budget estimate shows that the Army
originally planned to recapitalize 608 HEMTTs in fiscal year 2004, the
fiscal year 2005 budget estimates show that only 129 were recapitalized.
The Army's plans to eliminate its oldest HEMTT models, which can reduce
fleet operating and support costs, have also been scaled down. In a fiscal
year 2004 draft, the strategy stated that 9,200 of the oldest HEMTT models
would be eliminated by fiscal year 2018. In a 2005 version however, that
number was reduced to 7,728. In addition to receiving regular
appropriations for procuring, recapitalizing, and sustaining HEMTTs, the
Army is also relying on funds received through OSD's reprogramming actions
to support its long-term strategy for HEMTTs. The June 2005 version of the
Army's strategy shows that between fiscal years 2006 and 2011, an
additional 3,559 HEMTTs and other heavy vehicles will be procured with
funds received through OSD's reprogramming actions.

High Mobility Multi-Purpose The High Mobility Multi-Purpose Wheeled
Vehicle (HMMWV) is a light,

Wheeled Vehicle	highly mobile, diesel-powered, four-wheel-drive vehicle
that has six configurations: troop carrier, armament carrier, shelter
carrier, ambulance, missile carrier, and Scout vehicle. There are
approximately 120,000 HMMWVs in the Army's inventory. HMMWVs entered the
Army's inventory in 1985. Currently, the average age of the HMMWV fleet is
about 13 years and the expected service life of HMMWVs is 15 years. The
HMMWV represents 50 percent of the Army's total tactical truck fleet.

                   Source: Defense Visual Information Center.

Condition

We assessed the condition of the HMMWV as green because, as shown in
figure 11, it exceeded the Army's fully mission capable goal from fiscal
years 1999 through 2004 for both the active and reserve components.
However, Army officials noted that the HMMWVs supporting Operation Iraqi
Freedom are experiencing usage (i.e., operational tempo)9 that is six
times their normal peacetime usage rate. HMMWV production has now
transitioned primarily to the Up-Armored platforms to enhance force
protection and mobility for deployed units. While the Up-Armored variant
is built to support the weight of the vehicle's armor, Army officials have
expressed concern regarding the long-term impact from the stress placed on
the frame, engines, and transmissions by the additional weight of add-on
armor that the HMMWVs were not reinforced to handle. DOD has initiated

9An operational tempo of 6:1 equates to putting 6,000 miles in a wartime
1-year period versus 1,000 miles under a normal peacetime operational
tempo.

a Stress Study to try and quantify the effects of high usage, additional
weight, and harsh operating conditions on future maintenance/replacement
needs of vehicles such as the HMMWV. In February 2005, in a statement to
congressional committees, Army officials stated that all wheeled vehicles
being used in Iraq and Afghanistan would be armored by March 2005.

Figure 11: Average Fully Mission Capable Rates for Army High Mobility
Multi-

Purpose Wheeled Vehicles, Fiscal Years 1999 - 2004 Percent

100

95

90

85

80

0 1999 2000 2001 2002 2003

Fiscal year

                                     Active

                                      ARNG

                                      USAR

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding for the HMMWV as
yellow because the Army has not fully funded its Tactical Wheeled Vehicle
and Trailer Modularity and Modernization Strategy and the Army Acquisition
Objective continues to change. In the near term, in addition to receiving
regular appropriations, the Army has received additional funding for
HMMWVs from supplemental appropriations and congressional

adjustments. In fiscal year 2004, the Army received $239 million of
supplemental funds and about $39 million in congressional adjustments. In
fiscal year 2005 the Army requested almost $290 million in supplemental
funds to procure HMMWVs to activate units and to supply existing units. An
additional $31 million in supplemental funds was requested to replace
combat losses and another $123 million was requested to begin
recapitalizing older HMMWV models and converting them to newer models
capable of accepting the add-on armor. The June 2005 version of the Army's
strategy shows that it is planning to request additional supplemental
funding in fiscal year 2006. The Army's Acquisition Objective for HMMWVs
has increased significantly since 2001. In the Army's fiscal year 2002
amended budget estimate, submitted in June 2001, the Army's Acquisition
Objective for HMMWVs was about 121,000 whereas in an April 2004 version of
the Army's plan, the Army was projecting a need for 145,000 HMMWVs.
Currently, neither the fiscal year 2006/2007 nor the June 2005 version of
the Army's plan show the Army's Acquisition Objective for HMMWVs. Army
officials noted in an August 2004 version of the strategy that they had
resourced all known Global War on Terrorism (GWOT) requirements and their
projected battle losses.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding for the HMMWV as
yellow because again, the Army has not fully funded its Tactical Wheeled
Vehicle and Trailer Modularity and Modernization Strategy. In addition,
the Army's initial plans for the HMMWV recapitalization programs have been
significantly reduced. The June 2005 version of the Army's strategy shows
anticipated procurement requirements of about 30,000 vehicles between
fiscal years 2008 and 2011. However, the Army's fiscal year 2006/2007
budget request is only for about 18,000 vehicles during those years. The
Army is planning on using funds resulting from OSD reprogramming actions
to procure the additional 12,000 vehicles needed to meet requirements for
those fiscal years. In the long term, according to an August 2004 version
of the strategy, the Army plans to eliminate about 45,000 of its oldest
models by fiscal year 2018. About 19,000 of the oldest models would be
converted to newer models capable of handling add-on armor kits in order
to provide better soldier protection through a recapitalization program.
However, those plans, and the associated costs, continue to change. For
example, a February 2005 version of the strategy estimated a cost of about
$1.8 billion to recapitalize 20,114 HMMWVs for fiscal years 2008 through
2011, but the Army's fiscal

year 2006/2007 budget request, dated February 2005, contained about $1.9
billion in order to recapitalize 17,694 vehicles during those years. The
June 2005 version of the Army's plan shows an estimated cost of about $2
billion to recapitalize 16,522 HMMWVs between fiscal years 2008 and 2011.

Family of Medium Tactical Vehicles

The Family of Medium Tactical Vehicles (FMTV) is a series of vehicles
based on a common chassis which vary by payload and mission requirements.
It is currently the only medium fleet vehicle that is in production with
state-of-the-art technology. The FMTV includes the Light Medium Tactical
Vehicle with a 2.5-ton capacity in both the cargo and van models and the
Medium Tactical Vehicle with a 5-ton capacity in the cargo, tractor,
wrecker, and dump truck models. The FMTV is the replacement for the
obsolete and maintenance-intensive 2.5-and 5-ton trucks, some of which
have been in the Army's inventory since the 1960s. The FMTV's missions
include performing local and line hauling, unit resupply, and other
missions in combat, combat support, and combat service support units.
FMTVs are rapidly deployable and can operate in various terrains and in
all climatic conditions. The commonality of parts across the various
models is intended to reduce both the logistics burden and operating and
support costs. The FMTVs entered the Army inventory in 1996 and currently
there are approximately 19,400 vehicles with an average age of about 6
years. The average useful life is expected to be between 20 and 22 years.

                               Source: U.S. Army.

Condition

We assessed the condition of the FMTV as green because, as shown in figure
13, it exceeded the Army's fully mission capable goal from fiscal years
1999 through 2004 for both the active and reserve components with the
exception of the National Guard in fiscal year 2000. Despite operating
during GWOT operations at a rate that is nine times higher than in
peacetime, officials stated that the FMTVs are not experiencing any
problems. However, in response to concerns about armored protection, Army
officials, in a February 2005 statement to congressional committees,
stated that all wheeled vehicles being used in Iraq and Afghanistan would
be armored by March 2005.

Figure 13: Average Fully Mission Capable Rates for Army Family of Medium
Tactical

Vehicles, Fiscal Years 1999 - 2004 Percent

100

95

90

85

80

75

70

0 1999 2000 2001 2002 2003 2004

Fiscal year

Active ARNG USAR

Goal

Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding for the FMTV as
yellow because the Army's Tactical Wheeled Vehicle and Trailer Modularity
and Modernization Strategy is not fully funded and states that although
planned investment is adequate to address critical requirements, it still
falls short of the Army's goals. According to an April 2004 version of the
strategy, the Army did not consider it to be either cost or operationally
effective to recapitalize older model vehicles. Instead, the Army's plan
is to meet readiness and operational shortfalls through replacement with
newer, technologically improved vehicles. However, this plan will not fill
the Army's goals in the near term. For example, the fiscal year 2005
budget estimate states that procurement of FMTVs through fiscal year 2005
will only fill approximately 32 percent of the Army's Acquisition
Objective for FMTVs. Funding for FMTVs in the near term relies on
supplemental appropriations, congressional adjustments, and OSD
reprogramming actions, in addition to regular appropriations. For example,
in fiscal year 2004, the FMTV program was authorized about $3.4 million
from DOD's supplemental funding request and received another $34 million
as a congressional adjustment. DOD's fiscal year 2005 supplemental funding
request included $217 million for the Army to procure FMTV trucks to
replace those lost in theater and to support modularity requirements. The
Army also added an additional $122.5 million in the fiscal year 2005
supplemental funding request to meet modularity requirements and to
replace combat losses of the 2.5-ton FMTV vehicles. The June 2005 version
of the plan shows that for fiscal year 2006, the Army is not planning to
request supplemental funding, but in fiscal year 2007, they are planning
to use additional funds received as a result of OSD reprogramming actions
to procure additional FMTVs to fill unit shortfalls.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding for the FMTV as
yellow because again, the Army has not fully funded its Tactical Wheeled
Vehicle and Trailer Modularity and Modernization Strategy and although an
April 2004 version of the strategy states that an incremental upgrade
modernization strategy that will include a combination of field
modernizations and new procurement is envisioned, no specific actions or
time frames are identified. The June 2005 version of the Army's plan shows
that, between fiscal years 2008 and 2011, the Army is planning to continue

using OSD reprogrammed funds to procure FMTVs in order to fill unit
shortfalls. In addition, the June 2005 plan shows that the Army plans to
remove 25,000 of the old model 2.5-ton and 5-ton trucks from the
inventory. FMTV production has been done in phases. As reported in an
April 2004 version of the strategy, the first two phases together will
deliver over 20,000 vehicles. The third phase is scheduled to begin in
fiscal year 2005 and the fourth phase, an outgrowth of vehicle component
design and integration under ongoing program technology/insertion efforts,
does not have an identified start date but is planned to begin shortly
after the completion of the current production contract.

AH-64 A/D Apache Helicopter

The Apache is a multimission aircraft designed to perform rear, close,
deep operations and precision strikes, armed reconnaissance, and security
during the day, at night, and in adverse weather conditions. There are two
Apache variants: the AH-64A, which entered service in 1984, and the AH64D
Longbow, an improved version of the AH-64A, which entered service in 1998.
The Army plans to convert most of the AH-64A helicopters into AH64D
models, and to improve the safety features on the remaining AH-64A models.
In total, there are about 703 Apache helicopters in the Army's inventory:
263 A models and 440 D models. The average fleet age of the A model is
about 13 years, and the average age of the D model fleet is about 4 years.

Source: Defense Visual Information Center.

Condition

Our assessment of the Apache's condition as yellow is unchanged since our
prior report. As shown in figure 15, the average mission capable rates for
the AH-64A models have been below the Army's goal between fiscal years
1999 and 2004, and the average mission capable rates for the AH-64D fleet
have been above goal for 3 of the 6 years. In our December 2003 report,
safety restrictions were cited as the cause of not meeting mission capable
goals but since then, all of the issues have been addressed throughout the
fleet.10 However, according to officials, elevated flying hours in Iraq
and Afghanistan, coupled with the harsh environment, continue to increase
demands for limited spare parts and for maintenance for such items as
engines and rotor blades. Officials further stated that the peacetime
usage rate for the AH-64 is 15 hours a month and the actual number of
flight hours is averaging 31 hours per month in Iraq and 55 per month in
Afghanistan. Despite these challenges, officials stated that the AH-64 is
capable of conducting its mission and, between February 2003 and December
2004, its mission capable rates in both Iraq and Afghanistan exceeded the
Army's goal.

10The five restrictions identified in last year's report were aircraft
Teflon bushings, transmissions, the main rotor blade attaching pins,
generator power cables, and the auxiliary power unit clutch. The bushings,
rotor blade attaching pins, and power cable issues have been resolved. The
corrections for the transmission should be completed across the fleet by
2009 and the clutch should be completed in July 2005.

Figure 15: Fleet Average Mission Capable Rates for Army AH-64 A/D Apache

Helicopters, Fiscal Years 1999 - 2004

Percent

100

90

80

70

60

50

0 1999 2000 2001 2002 2003

Fiscal year

                                   64A Actual

                                   64D Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding for the Apache as
green because the Army has recapitalization and sustainment strategies,
both of which are funded. As stated in our December 2003 report, the
Apache Recapitalization Program addresses cost, reliability, and safety
problems, fleet groundings, aging aircraft, and obsolescence. The Army is
continuing to remanufacture the AH-64A models to AH-64D models with the
remaining helicopters beginning conversion during fiscal year 2005. In
addition, Apaches that have been deployed are being returned to
predeployment conditions through a combination of unit and contractor
actions. The Army received an additional $321.1 million in the fiscal year
2005 supplement to replace 13 Apaches that were lost in theater.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding for the Apache as
green because the Army's modernization strategy to improve combat
capability and aircraft safety appears likely to allow the Apache to
remain in service until 2040 and, as we reported previously, is consistent
with the Army's stated requirements. A total of 597 AH-64A models will be
converted to AH-64D models by fiscal year 2010. All remaining AH-64A
models are scheduled to receive additional reliability and safety
modifications as part of the Army's response to concerns of the Office of
the Secretary of Defense and Congress. There are plans for additional
upgrades to AH-64D models and funding to support the Army's current
long-term strategy has been programmed through fiscal year 2020.

CH-47D/F Chinook Helicopter

The CH-47 helicopter is a twin-engine, tandem rotor helicopter designed
for transporting cargo, troops, and weapons, and is the only Army
helicopter that can operate at high altitudes. By 1994, all CH-47 models
were upgraded to the CH-47D version, which comprises the Army's heavy lift
fleet. The CH47D will be replaced by the CH-47F, a remanufactured version
of the CH47D with a new digital cockpit and modified airframe to reduce
vibrations. The CH-47F was approved for full-scale production in November
2004, and officials state the Army plans to convert the entire fleet by
fiscal year 2018. There are 395 CH-47D models and 3 CH-47F models in the
Army inventory, but the CH-47F models are not assigned to units. The
average age of the CH-47D model is about 17 years. Army aircraft generally
have life cycles of 20 years.

Source: Defense Visual Information Center.

Condition

Our assessment of the CH-47D's condition as red is unchanged since our
prior report.11 Mission capable rates for the fleet, as shown in figure
17, were consistently below service goals for fiscal year 1999 through
fiscal year 2004. Officials stated that the aircraft is currently being
flown in Iraq and Afghanistan three times more than planned peacetime
rates, with the CH-47D flying 200 hours in 6 months when it was originally
planned to fly 200 hours in 18 months. Deployment cycles for the CH-47D
are often longer than other equipment. While most Army helicopters remain
in theater for about a year, officials report that some CH-47D helicopters
have been in theater for almost 2  1/2 years. This usage, particularly in
a desert environment, has increased the amount of maintenance and number
of parts needed to sustain the aircraft, which in turn has negatively
impacted overall readiness. According to officials, current shortages of
CH-47D helicopters and the requirement to fill nearly simultaneous
competing priorities with limited resources may require additional CH-47D
helicopters to remain in theater as stay-behind equipment. Despite these
challenges, officials state that the CH-47D has proven itself in theater.
For example,

11GAO-04-112.

between February 2003 and December 2004 the CH-47D's mission capable rates
in Afghanistan exceeded the Army's goal.

Figure 17: Fleet Average Mission Capable Rates for Army Chinook CH-47D/F

Helicopters, Fiscal Years 1999 - 2004

Percent

100

90

80

70

60

50

0 1999 2000 2001 2002 2003

Fiscal year

                                     Active

                                   ARNG/USAR

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy for the Chinook as yellow
because the Army has plans to address the issues affecting the current
condition but has yet to implement all of the solutions. Officials stated
that the components that affect readiness the most can be repaired at the
depot; however, the emphasis (e.g., transportation priorities) is on
pushing parts to units but not necessarily returning the broken parts to
the depot for repair. According to officials, the Army is working in
coordination with depot personnel to become more efficient at identifying
and returning the broken parts for repair, as well as developing
relationships with original equipment manufacturers to allow for a faster
replacement of spare parts.

However, whether these efforts will be successful and the degree to which
they resolve parts shortages remains to be seen.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy for the CH-47 as green because
the Army has and is funding a modernization strategy to improve the CH-47
capability and lifespan. The Army plans to have a final CH-47F fleet size
of 452 aircraft, to include 397 CH-47F aircraft that were remanufactured
from the CH-47D and 55 new build CH-47F aircraft. Officials stated that
conversion from the CH-47D to the CH-47F adds about 20 years to the
service life of an aircraft, as well as improving performance and reducing
overall operations and sustainment costs.

OH-58D Kiowa Helicopter	The Kiowa is a multimission armed reconnaissance
helicopter designed to support combat and contingency operations.
Deliveries of the OH-58D began in 1985, and the last new one was delivered
to the Army in 1999. There are 354 Kiowa helicopters in the Army's
inventory, and their average age is about 13 years. While the expected
service life for an OH-58Ds is 20 years, the Army plans to retire the
entire OH-58D fleet by fiscal year 2013 and to replace it with the Armed
Reconnaissance Helicopter.

                   Source: Defense Visual Information Center.

Condition

We assessed the condition of the Kiowa as green because the mission
capable rates have been consistently above service goals for calendar
years 1999 through 2004. As seen in figure 19, the OH-58D has remained at
or above the 80 percent mission capable rate. Further, 96 OH-58Ds have
deployed to support operations in Iraq and Afghanistan and have exceeded
their planned flight hours; specifically, peacetime average usage for the
OH58D is about 20 hours per month, but the actual flight hours for
deployments has averaged between 80 and 100 hours per month. The Army
attributes higher readiness rates of the OH-58D in part to simple design
and a lighter airframe. For example, the OH-58D's mission capable rates in
Iraq between February 2003 and December 2004 almost met the Army's goal.
In addition, routine maintenance is performed on the Kiowa after every 40
hours of operation instead of the 300-400 hours for other aircraft, and
the original equipment manufacturer, Bell Helicopter, conducts the
depot-level repairs.

Figure 19: Fleet Average Mission Capable Rates for Army OH-58D Kiowa
Helicopters, Calendar Years 1999 - 2004

                                 Percent 100 95

                                       90

                                       85

                                       80

                                       75

                                      70 0

1999 2000 2001 2002 2003

                                      Year

                                     Actual

                                      Goal

Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding for the OH-58D as
green because the Army's plans and funding will allow the aircraft to meet
its requirements in the near term. The OH-58D reset and safety enhancement
programs, which are fully funded, include safety enhancements, weight
reduction, and other maintenance actions. Funding for the Kiowa since
fiscal year 1999 has been near Army requests.12 Additionally, due to the
planned replacement of the Kiowa beginning in fiscal year 2008, public law
limits funds that can be spent on the aircraft to

12Fiscal year 2003 funding authorizations were about 7 percent less than
requested, and fiscal year 2004 funding authorizations were about 11
percent more than requested.

basic sustainment, maintenance and safety measures.13 For that reason
Kiowa battle losses are not being replaced; however, according to the
Army, the existing fleet is sufficient to meet requirements over the next
1-3 years, even at higher usage rates.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding for the Kiowa as
green because the Army has a funded strategy to field its replacement, the
Armed Reconnaissance Helicopter. According to the Army, this aircraft is a
relatively inexpensive armed aerial platform that will integrate a
commercial off the shelf aircraft with non-developmental mission equipment
packages to the extent possible. The Army's acquisition objective is to
have a fleet of 368 armed reconnaissance aircraft. The plan is for the
Kiowa to be phased out of the Army's inventory beginning in fiscal year
2008 as the Armed Reconnaissance Helicopter is fielded.

1310 U.S.C. S: 2241, note. This law provides that, except for safety
modifications, funds should not be used for the modification of an
aircraft, weapon, ship, or other equipment that the military department
concerned plans to retire or otherwise dispose of within 5 years after
completion of the modification.

                                  Marine Corps

M1A1 Abrams Tank	First delivered to the Marine Corps at the beginning of
Operation Desert Storm, the Abrams is the Marine Corps' main battle tank
and destroys enemy forces using enhanced mobility and firepower provided
by a powerful turbine engine and a 120 millimeter main gun. The Marine
Corps possesses only one variant of the Abrams, the M1A1. The M1A1 variant
fleet consists of a depleted uranium turret version and a "Plain Jane"
version, which lacks the enhanced armor. There are 403 M1A1 tanks in the
inventory, and the estimated average age is 16 years. The Marine Corps
plans to use the M1A1 as its main battle tank until it is replaced by the
Marine Air-Ground Task Force Expeditionary Family of Fighting Vehicles
which is planned to be fielded in 2025.

Source: Defense Visual Information Center.

Condition

We assessed the condition of the Abrams tank fleet as red because the
Marine Corps has failed to meet its stated readiness goal of 90 percent on
several occasions during the fiscal years 1999 to 2004 period and, as
shown in figure 21, recent readiness trends indicate a steady decline away
from the readiness goal. Marine Corps officials attribute the decline of
the condition of the tank fleet to the demand on equipment as a result of
operations in support of the Operation Iraqi Freedom and Marine Corps
manpower levels. Since 2003, the Marine Corps has deployed tanks to
Operation Iraqi Freedom, a theater where equipment has been used
aggressively in rugged environments. Shortages of maintenance personnel
are a result of the transfers of personnel to units that are deploying and
unit staffing levels.

Figure 21: Average Material Readiness Rates for Marine Corps M1A1 Abrams
Tanks,
Fiscal Years 1999 - 2004
Percent

100

95

90

85

80

75

70

65

60

0 1999 2000 2001 2002 2003 2004

Fiscal year

Actual Goal

Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the M1A1 Abrams
tank fleet as yellow because the Marine Corps has not fully funded its
tank remanufacture program and has identified additional unfunded
priorities for fiscal year 2006. The Marine Corps is conducting a
remanufacture program on the M1A1 tank that is intended to improve the
quality of the existing equipment by applying all equipment modifications
and replacing worn components. The Marine Corps has fully funded the
remanufacture of 79 tanks during fiscal year 2005; however, it only
identified funding for about 33 percent of the scheduled tank
remanufactures during fiscal years 2006 and 2007. Marine officials believe
that they will be able to meet all remanufacturing requirements because
the tank program has identified similar funding requirement to Marine
Corps Logistics Command in the past and has received sufficient funding to
meet the remanufacture needs. The Marine Corps identified $77 million in
unfunded priorities for the Abrams program in fiscal year 2006. The
majority of this amount, $40 million, is to support continued depot
maintenance operations and the remainder is to procure Firepower
Enhancement Program suites, which increase the detection, recognition, and
identification of targets.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the M1A1 Abrams
tank fleet as yellow because the Marine Corps has not completely
identified the program requirements or funding for its replacement system,
the Marine Air-Ground Task Force Expeditionary Family of Fighting
Vehicles; however, they are taking steps to increase the service life of
the M1A1. The Marine Air-Ground Task Force Expeditionary Family of
Fighting Vehicles is scheduled to be the replacement for the Abrams tank
and other Marine Corps ground fighting systems. In order to extend the
life of the current fleet of Abrams tanks, the Marine Corps has identified
funding for 80 percent of the scheduled tank remanufactures during fiscal
years 2008 and 2009. The Marine Corps has tentatively established plans to
conduct a Service Life Extension Program for the M1A1 fleet in future
years. As this program is to start in years beyond the current Future
Years Defense Program budget, no funding has been identified currently.
The Service Life Extension Program may be essential to ensure that the
current fleet of Abrams tanks remains serviceable until the replacement
vehicle is fielded.

Light Armored Vehicle - C2 and 25 Variants

The LAV-C2 Command and Control and the LAV-25 are two variants from the
family of Light Armored Vehicles (LAV) that we included in our review.
Both variants are all-terrain, all-weather vehicles with night
capabilities and can be fully amphibious within 3 minutes. The LAV-C2
variant is a mobile command station providing field commanders with the
necessary resources to command and control Light Armored Reconnaissance
units. The average age of the LAV-C2 is 18 years and there are 50 in the
inventory. The LAV-25 provides rapid maneuverability, armor protection,
and firepower to the Light Armed Reconnaissance units. The average age of
the LAV-25 is 19 years and there are 407 in the inventory. The family of
Light Armored Vehicles is expected to be replaced by the Marine Air-Ground
Task Force Expeditionary Family of Fighting Vehicles.

                           Source: U.S. Marine Corps.

Condition

In our previous report we assessed the condition of the LAV-C2 as green
because the Marine Corps had initiated a fleet-wide Service Life Extension
Program to extend the service life of the vehicle.14 However, in this
review

14GAO-04-112.

we assessed both the LAV-C2 and the LAV-25 variants of the Light Armored
Vehicles and we assessed the condition of these vehicles as yellow. While
the material readiness rates15 for the two variants were near the
readiness goal of 85 percent between fiscal years 1999 and 2004 (see fig.
23); the overall material readiness rate trend declined during this
period. Marine Corps officials stated that despite the fact that the
vehicles did not meet the Marine Corps' readiness goal they were able to
fulfill all mission requirements during this period. However, the
vehicle's high usage in support of contingency operations has placed a
strain on the supply system and has led to shortages of key Light Armored
Vehicle components, such as struts and drive train components.

Figure 23: Average Material Readiness Rates for Marine Corps LAV-25 and
LAV C-2,
Fiscal Years 1999 - 2004
Percent

100

95

90

85

80

75

70

0 1999 2000 2001 2002 2003 2004

Fiscal year

LAV-C2 Actual LAV-25 Actual Goal

Source: GAO analysis of military service data.

15The material readiness rate reflects the operational capability of
Marine Corps ground equipment and is comparable to mission capable rates.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the Light
Armored Vehicle as yellow because although a service life extension
program and some upgrades are planned and funded, there are some essential
program requirements that remain unfunded. A service life extension
program designed to improve the quality and extend the life of the
vehicles has already been performed on a majority of the vehicles. In
addition to the service life extension program, the LAV-C2 and LAV-25 are
planned to receive upgrades to address capabilities deficiencies. The
upgrade to the LAV-C2 will enhance communications capabilities, affording
more commonality with other vehicles and helicopter systems. The upgrade
to the LAV-25 will enhance target recognition and the lethality upgrade
will increase the fire power of the vehicle's 25-millimeter main gun. A
program is also funded to address any obsolescence issues. Additionally,
as a result of force structure changes, the Marine Corps is establishing
five new light armored reconnaissance units and has received fiscal year
2005 supplemental appropriations to purchase new upgraded vehicles to
equip these units and begin upgrades on the legacy fleet. However, the
Marine Corps has identified $113 million as an unfunded requirement that
is needed to complete the standardization of the older LAVs.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the Light
Armored Vehicle as yellow because while the Marine Corps has not
completely identified the requirements for its replacement system or
established associated program strategy or funding, the completion of the
near-term plans may help the Marine Corps sustain its fleet of LAVs until
the replacement is fielded. Both the LAV-C2 and the LAV-25 upgrades to
address capabilities deficiencies have achieved or will achieve initial
operational capability by fiscal year 2009.

Assault Amphibian Vehicle	Three variants represent the family of Assault
Amphibian Vehicles (AAV). The AAVs are armored full-tracked landing
vehicles. The Personnel variant carries troops from ship to shore and to
inland objectives and there are 930 in the inventory. The C2 Command and
Communications variant provides a mobile task force communication center
in water operations

and from ship to shore and to inland areas and there are 76 in the
inventory. The Recovery variant recovers similar or smaller sized
vehicles. It also carries basic maintenance equipment to provide field
support maintenance to vehicles in the field. There are 51 Recovery
variants in the inventory. The average age of the vehicle is 28.6 years.
All of the AAVs will be remanufactured under the Reliability, Availability
and Maintainability/Rebuild to Standard upgrade program, which began in
1998 to lengthen the vehicle's expected service life. The fleet of AAVs is
scheduled to be replaced by the Expeditionary Fighting Vehicle beginning
in 2010.

Source: Defense Visual Information Center.

Condition

Our assessment of the condition of the AAV fleet as yellow is unchanged
since our prior report.16 Although the fleet material readiness rates
varied by vehicle type and by year, as shown in figure 25, the overall
readiness trend for the fleet during the fiscal years 1999 to 2004 period
declined.

16GAO-04-112.

Despite the declining material readiness, Marine Corps officials stated
that the AAVs were able to meet all operational requirements. Wartime
utilization rates for the vehicles in Operation Iraqi Freedom were as high
as 11 times the normal peacetime rate.

Figure 25: Average Material Readiness Rates for Marine Corps Assault
Amphibian

Vehicles, Fiscal Years 1999 - 2004 Percent

100

95

90

85

80

75

70

0 1999 2000 2001 2002 2003

Fiscal year

                                 AAV-Personnel

                           AAV-Command/Communications

                                  AAV-Recovery

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the condition of the near-term program strategy and funding of
the AAV fleet as yellow because while the Marine Corps is completing the
Reliability, Availability, and Maintainability/Rebuild to Standard upgrade
on all of the remaining 377 vehicles in its fleet, this upgrade only
returns the vehicle to its original operating condition and does not add
any upgraded capability. While Marine Corps officials stated that the
vehicles have been able to perform all of their operational requirements,
the AAVs lack some

capabilities in areas such as target acquisition (day and night) and
land/water mobility, which are needed to carry out their warfighting
doctrine-Operational Maneuver from the Sea. The Reliability, Availability,
and Maintainability/Rebuild to Standard upgrade program for 327 of the 377
vehicles has been funded through regular Marine Corps procurement
appropriations, supplemental appropriations, and congressional adjustments
over the past few years. Funding for the conversion of the remaining 50
vehicles, plus 8 for future replacements of combat losses, was included in
the fiscal year 2005 supplemental request. In addition to funding the
upgrades, the requested procurement will also fund engineering changes to
help sustain the AAV fleet and purchase add-on armor.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the AAV fleet as
yellow because while the Marine Corps will have completed an extensive
upgrade of the fleet with the Reliability, Availability, and
Maintainability/Rebuild to Standard program, the timely fielding of the
Expeditionary Fighting Vehicle remains in question. DOD reduced funding,
thus delaying the initial fielding of the Expeditionary Fighting Vehicle
to fiscal year 2010, 4 years past the original date. Operators and
maintainers we spoke with are concerned about the delay because the
Reliability, Availability, and Maintainability/Rebuild to Standard program
is expected to help the AAV fleet serve until the Expeditionary Fighting
Vehicle is fully fielded, but the current rate of usage in Operation Iraqi
Freedom could significantly shorten the serviceable life of the current
fleet. Officials expect that all Reliability, Availability, and
Maintainability/Rebuild to Standard vehicles will need to go through an
Inspect and Replace Only As Necessary maintenance program17 since they
will have to stay in the fleet longer than expected.

17During an Inspect and Replace Only As Necessary maintenance program,
vehicles are disassembled and inspected for deficiencies and only those
deficiencies that are identified are repaired or replaced.

Marine Corps Medium The Medium Tactical Vehicle Replacement (MTVR) is a
family of trucks Tactical Vehicle with 7-ton capacity that consists of six
variants. Comprising the Medium Replacement Tactical Vehicle Replacement
fleet is a standard 7-ton cargo variant, an

extended bed 7-ton vehicle, a dump truck, and a wrecker. The MTVR began
replacing two aging variants of 5-ton vehicles in fiscal year 2002. The
MTVR is capable of moving personnel and cargo cross country in support of
maneuver units. The MTVR has increased capabilities compared to the 5-ton
truck and is capable of being delivered by cargo aviation assets.

Source: U.S. Marine Corps.

Condition

We assessed the condition as green because, as can be seen in figure 27,
the Medium Tactical Vehicle Replacement fleet has met the Marine Corps'
stated material readiness goal of 85 percent for the 2 years that data
were available, fiscal years 2003 and 2004. Though the MTVRs are being
aggressively used in support of Operation Iraqi Freedom, officials stated
that they are fairly easy to maintain and there are sufficient repair
parts to meet current requirements. Officials also attribute much of the
Marine Corps' success at keeping high material readiness rates to the
maintenance personnel.

Figure 27: Average Material Readiness Rates for Marine Corps Medium
Tactical

Vehicle Replacement Fleet, Fiscal Years 2003 - 2004

Percent

100

95

90

85

80

0 2003

Fiscal year

                                     Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the MTVR as
green because, despite experiencing some combat losses and the lack of
funding to replace these losses, the Marine Corps has made plans to meet
7ton vehicle demands of the Marine Corps in the short term. The Marine
Corps possesses an indefinite delivery/indefinite quantity contract with
Oshkosh Trucks, which allows it to increase the number of vehicles in the
fleet without negotiating a new contract. The Marine Corps has utilized
this contract to procure an additional 1,850 MTVR upgrade armor kits,
which will be used to provide additional protection to deploying Marine
Expeditionary Units and as a reserve for Marine Expeditionary Brigades. In
the fiscal year 2006 Unfunded Programs List, the Marine Corps identified
$1.4 million to procure seven new MTVRs that will help replace actual and
projected combat losses.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the MTVR as
green because the Marine Corps plans provide sufficient numbers of MTVRs
to equip all Marine Corps units in the long-term. Marine Corps officials
stated that they have plans to reconstitute equipment returning from
deployment and may rotate equipment between deploying units and
prepositioned forces. The officials believe that these actions could
balance out the usage rates of the fleet and therefore maintain the
fleet's life expectancy. As discussed in the near-term program strategy
and funding, the Marine Corps possesses an indefinite delivery/indefinite
quantity contract with the original equipment manufacturer and program
officials believe the Marine Corps can source equipment in the future to
meet requirements.

AV-8B Harrier Jet	The AV-8B Harrier Jet's mission is to attack and destroy
surface targets during day and night conditions and to escort assault
support aircraft. It has a short takeoff and vertical landing capability
to enable it to deploy and operate from amphibious assault ships and
remote tactical landing sites. There are 154 in inventory (131 combat
capable aircraft, 17 noncombat capable training aircraft, and 6 aircraft
in storage), with an average age of 9 years. The Joint Strike Fighter is
expected to replace the AV-8B beginning in 2012.

Source: Defense Visual Information Center.

Condition

We assessed the condition of the AV-8B as yellow because it consistently
failed to meet the Marine Corps' mission capable rate goal of 76 percent
between fiscal years 1999 and 2004 (see fig. 29 below). However, despite
missing the mission capable goal, the mission capable trend showed some
improvement through fiscal year 2003. Further, the AV-8B aircraft
nonmission capable rates for maintenance and supply also showed
improvement during that time frame. Marine Corps officials commented
favorably on the aircraft's performance in support of operations in Iraq
and Afghanistan, and the aircraft's wartime utilization was about one and
onehalf times the normal peacetime rate. A defense panel has analyzed past
problems with the aircraft and they have recommended improvements to
maintenance cycles and technician availability.

Figure 29: Average Mission Capable Rates for Marine Corps AV-8B Aircraft,
Fiscal
Years 1999 - 2004
Percent

                                      100

                                       95

                                       90

                                       85

                                       80

75 70 65 60

0

Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the AV-8B as
green because the Marine Corps has several initiatives and programs
established and funded to improve the capabilities, safety, and
reliability of the aircraft. The Marine Corps has procured, either through
upgrades or remanufacture, 93 aircraft with radar/night attack which
increases the ability of the aircraft to complete assigned missions in a
greater variety of weather and light conditions. Officials also report
that they have fully equipped all AV-8B aircraft with LITENING pods which
increase image resolution for ground targeting. The Marine Corps has also
developed new maintenance practices and policies that will increase
readiness and decrease downtime spent in maintenance. According to Marine
Corps officials, as a result of these policies the Marine Corps has seen
an approximately 66 percent increase in the serviceable life of the
aircraft.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the AV-8B as
yellow given the potential for delays in the Joint Strike Fighter program
which will require the AV-8B to fly longer than expected. Increasing
program costs and unproven critical technologies could further delay the
Joint Strike Fighter program's initial entry into service, which is
currently planned for 2012 with complete fielding in 2024. The Marine
Corps currently plans to fly the AV-8B until the 2011-2020 time frame.
Marine Corps officials note that funding is sufficient to execute the
long-term program strategy for the AV-8B through the Future Years Defense
Program.

AH-1W Super Cobra The AH-1W Super Cobra is a day/night, marginal weather,
Marine Corps,

Helicopter	attack helicopter that provides en route escort and protection
of troop assault helicopters, landing zone fire suppression during the
assault phase, and fire support during ground escort operations. There are
179 aircraft in the inventory with an average age of 15 years.

Source: Defense Visual Information Center.

Condition

As in our prior report,18 we assessed the condition of the AH-1W Super
Cobra as yellow because the aircraft consistently failed to meet its
mission capable rate goal of 85 percent during the fiscal year 1999 to
2004 period, as shown in figure 31. Despite the aircraft's low mission
capable rates, officials stated that the AH-1W was able to meet all of its
mission requirements during this period. Further, the AH-1W upgrade
program may decrease maintenance needs due to parts commonality with other
Marine Corps utility helicopters. The AH-1W has served in both Operation
Enduring Freedom and Operation Iraqi Freedom and deployed mission capable
rates were higher than for those aircraft that were not deployed. The
aircraft wartime utilization is about two times that of peacetime
operations. The Marine Corps rotates the Super Cobras out of these
theaters and conducts depot-level maintenance on the aircraft upon their
return.

18GAO-04-112.

Figure 31: Average Mission Capable Rates for Marine Corps AH-1W
Helicopters,

Fiscal Years 1999 - 2004

Percent

100

95

90

85

80

75

70

65

60

0 1999 2000 2001 2002 2003

Fiscal year

                                     Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the AH-1W as
yellow because while the Marine Corps has established a program to
remanufacture the current fleet of AH-1W Super Cobras to a more capable
AH-1Z, they may experience a shortage of AH-1Ws during the remanufacturing
process. Officials stated that they may be short as many as 40 AH-1Ws due
to operational requirements and forecasts for future attrition. Marine
Corps officials further stated that if there is a shortfall, it would
largely occur in the reserves due to the current operational requirements
for the active squadrons. This could seriously impact the reserve air
wing's ability to train pilots and meet operational requirements in the
future. Additionally, the Marine Corps identified $50 million in unfunded
requirements for engineering efforts associated with the remanufacturing
program.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding for the AH-1W Super
Cobra as yellow because, as discussed in the near-term program strategy
and funding, the Marine Corps potentially faces many years of AH1W
shortages as the remanufacturing effort and future operational
requirements place demands on the fleet. According to Marine Corps
officials, if the upgrade program remains on schedule, the entire fleet of
AH-1W will be upgraded to the AH-1Z by fiscal year 2017.

CH-46E Sea Knight The CH-46E Sea Knight helicopter provides all-weather,
day/night, and

Helicopter	night vision goggle assault transport of combat troops,
supplies, and equipment during amphibious operations ashore. The total
inventory of CH-46Es is 223 and the average age is 36 years. The Marine
Corps plans to replace the fleet of CH-46E with the MV-22 tilt rotor
aircraft beginning in 2007.

                   Source: Defense Visual Information Center.

Condition

In our previous report, the CH-46E received a red rating because the
aircraft consistently failed to meet mission capable goals.19 However, in
this review we rated the condition of the CH-46E as yellow because
although the mission capable rate trend is declining as shown in figure
33, rates were near the goal of 80 percent between fiscal years 1999 and
2004. Further, deployed mission capable rates were higher than nondeployed
aircraft. Marine Corps officials noted that the CH-46E was able to meet
mission requirements for operations in Iraq and Afghanistan, and the
aircraft's wartime utilization was three times the normal peacetime rate.
To help improve the condition of the aircraft, the Marine Corps has
completed an analysis on the airframe and all major aircraft subsystems
and has established a calendar-based depot maintenance cycle.
Additionally, as of the end of August 2005, 234 engine upgrades have been
completed. The engine upgrade is expected to improve capability and reduce
maintenance requirements. However, Marine Corps officials stated that
sustainment of the aircraft is still a concern due to its age and the fact
that the aircraft may have to be in service longer due to fielding delays
and funding cuts for the MV-22.

19GAO-04-112.

Figure 33: Average Mission Capable Rates for Marine Corps CH-46E
Helicopters,

Fiscal Years 1999 - 2004

Percent

100

95

90

85

80

75

70

0 1999 2000 2001 2002 2003

Fiscal year

                                     Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding for the CH-46E as
red because the Marine Corps may be unable to meet its near-term
operational requirements due to aircraft and potential repair part
shortages caused by the age of the aircraft. Despite funding upgrades and
modifications to the CH-46E to improve its safety, reliability, and
survivability, repair parts may not be available through normal
procurement lines because some of the original production lines have been
closed. The Marine Corps is planning to rely on retiring aircraft to
provide replacement parts for operating aircraft. Due to fielding delays
of the MV22, the CH-46E will not be retired at the pace anticipated and,
according to Marine Corps officials this could lead to some repair parts
shortages. Given the continued demands to support operations in Iraq and
Afghanistan, pilot training, and the current scheduled fielding of the
MV-22, the Marine Corps may be short one CH-46E squadron for a period of 2
years starting in

January 2006. Marine Corps officials stated that this squadron is
necessary to support current contingency operations and operational plans
developed at combatant command headquarters. They also stated that they
are considering options to mitigate these issues by engineering repair
parts to extend the serviceable life of aircraft components and utilizing
other types of aircraft to fill in for the decommissioned squadron.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding for the CH-46E as
red because delays in the MV-22 fielding will force the CH-46E to continue
flying much longer than planned and this could impact the Marine Corps'
ability to support future operations. DOD reduced procurement funding for
the MV-22 aircraft in its 2006 budget request, which delays the full
authorized fielding of all MV-22 squadrons until fiscal year 2016 versus
2011. This delay will force some squadrons, especially in the reserves, to
continue to fly the older CH-46E despite the fact that it may not be able
to support Marine Corps operational doctrine. Operational Maneuver from
the Sea, a Marine Corps war-fighting doctrine, calls for forces to cross
great distances to engage an enemy. These requirements currently exceed
the capabilities of the CH-46E.

CH-53E Super Stallion The CH-53E Super Stallion helicopter provides
assault support by

Helicopter	transporting heavy weapons, equipment (such as High Mobility
Multi-Wheeled Vehicles and Light Armored Vehicles), supplies, and troops.
The CH-53E is capable of in-flight refueling. The average age is 17 years
and there are 147 CH-53Es in the inventory. The expected replacement for
the CH-53E is the Heavy Lift Replacement, but the requirements are still
being determined. The Heavy Lift Replacement is expected to enter service
in 2015.

                           Source: U.S. Marine Corps.

Condition

We rated the condition of the CH-53E as yellow because the aircraft did
not meet its mission capable goal of 70 percent in some years and between
fiscal years 2003 and 2004 the mission capable rates declined as shown in
figure 35. The aircraft wartime utilization is about two times that of
peacetime operations, and the aircraft mission capable rates for deployed
aircraft are higher than those for aircraft that are not deployed.
According to Marine Corps officials, fatigue issues related to age, as
well as structural cracks in the tail boom area of the aircraft, have been
ongoing problems with the CH-53E fleet. The higher-than-expected usage
rates in Operations Iraqi and Enduring Freedom have accelerated the need
to repair these areas. The Marine Corps is addressing the structural
cracks and engine upgrades through several programs. The engine upgrades
are expected to improve capability and reduce maintenance requirements.
Further, despite the declining readiness rates, officials stated that the
CH-53E was able to meet all operational requirements.

Figure 35: Average Mission Capable Rates for Marine Corps CH-53E
Helicopters,

Fiscal Years 1999 - 2004

Percent

100

90

80

70

60

50

0 1999 2000 2001 2002 2003

Fiscal year

                                     Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the CH-53E as
yellow because, although the Marine Corps has several initiatives underway
that will help sustain and improve capabilities of the CH-53E, some of the
upgrades and safety issues are on the service's fiscal year 2006 unfunded
program list. The Marine Corps has received funding from congressional
adjustments and supplemental appropriations to fully outfit their CH-53E
squadrons with aircraft armor systems, but it lacks sufficient funds to
upgrade all engines or completely field diagnostic systems. According to
Marine Corps officials, the diagnostic systems assist maintainers by
identifying maintenance issues ahead of scheduled maintenance programs and
will reduce the maintenance man hours required to support the aircraft.
The Marine Corps identified $30.6 million for these diagnostic systems and
engine upgrades as unfunded priorities in fiscal year 2006.

Long-Term Program Strategy and Funding

We rated the long-term program strategy and funding of the CH-53E as red
because the requirements for the Heavy Lift Replacement, the replacement
aircraft for the CH-53E, are still being established despite an initial
fielding planned for 2015. According to officials, the Marine Corps must
maintain at least 120 CH-53Es until the initial fielding of the Heavy Lift
Replacement in order to support Marine Corps operations. Repair of the
structural cracks found in the aircraft is critical to maintaining an
adequate inventory of CH53Es until the Heavy Lift Replacement becomes
operational. Officials estimate that, if the current high usage rate and
estimates of attrition hold true, the number of CH-53Es may fall below the
number necessary to remain in service until the Heavy Lift Replacement
becomes available unless required funding and maintenance are available.

  Navy

DDG-51 Arleigh Burke Class Destroyer

Arleigh Burke Class Destroyers (DDG-51 class) provide multimission
offensive and defensive capabilities and can operate independently or as
part of a carrier strike group, surface action group, or expeditionary
strike group. The primary missions of the Arleigh Burke Class Destroyers
are the destruction of enemy cruise missiles, aircraft, surface ships, and
submarines and to attack land targets in support of joint or combined
operations. The first ship of this class was commissioned in 1991. The
Navy plans to build 62 ships of this type and 47 of these platforms have
been commissioned to date. The average age of DDG-51s in the fleet is 6.45
years. The final DDG-51 class ship will be delivered in fiscal year 2011.

                   Source: Defense Visual Information Center.

Condition

We assessed the condition of the DDG-51 class as yellow due to maintenance
issues related to major ship systems and bandwidth limitations experienced
by this ship class. Similarly, this ship class received

a yellow rating in our previous report.20 Each year a number of ships in
the DDG-51 class are evaluated by Navy inspectors; most of the DDG-51
class ships inspected in recent years have done well in important
inspection areas, such as the destroyer's electrical and combat systems.
However, areas such as the environmental protection systems and damage
control systems performed poorly in these evaluations. For example,
watertight doors are problematic in this type of ship and generally are in
poor condition in all surface ships. In addition, the DDG-51 also has
issues with corrosion, insufficient bandwidth for Web-based communication,
and cracks on its bow, or the front, of the ship. Sufficient bandwidth is
critical to the ability of these ships to operate with the rest of the
Navy, which relies heavily on the internet for day-to-day operations.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the DDG-51 class
as green because the Navy has an effective strategy to address nearterm
condition and concerns and sufficient funding is available for these
plans. The Navy strategy identifies classwide deficiencies, prioritizes
their importance, and then addresses the most significant issues. The Navy
closely monitors corrosion, and has taken preventative measures to reduce
its impact. Finally, the Navy will install Super High Frequency
capabilities in the DDG-51 class to improve bandwidth limitations, and a
review of the bow cracks is in progress.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the DDG-51 class
as yellow because the Navy has a strategy to address long-term condition
and concerns, but it is not fully funded. The Navy plans a Midlife
Modernization to ensure that the DDG-51 class of ships remains a relevant
fleet asset for its full life expectancy. The fully funded modernizations
are scheduled to begin in fiscal year 2010, and include upgrades to DDG-51
combat systems that may reduce personnel costs. However, the Navy has
reduced planned future operation and maintenance funding across all
surface ships in the fleet. These reductions have the potential to affect
the

20GAO-04-112.

material condition of the DDG-51 class, and cause higher costs in later
years to make up for deferred maintenance. The DDG-51 class is expected to
remain in the fleet until fiscal year 2046.

FFG-7 Oliver Hazard Perry Oliver Hazard Perry Class Frigates (FFG-7 class)
are surface combatants

Class Frigate	with antisubmarine warfare and limited antiair warfare
capabilities. Frigates conduct escort for amphibious expeditionary forces,
protection of shipping, maritime interdiction, and homeland defense
missions. There are 30 FFGs in the fleet, with an average age of 20.8
years. The FFG-7 class is expected to remain in service until 2019. There
is no planned replacement for this ship; however, the Littoral Combat Ship
will perform many of the missions currently performed by these ships.

                   Source: Defense Visual Information Center.

Condition

We assessed the condition of FFG-7 class as yellow, the same rating it
received in the last report,21 due to maintenance issues related to major
ship systems and bandwidth limitations experienced by this ship class.
These frigates operate using diesel engines and these systems' older
engines need more maintenance than modern gas turbine engines.
Additionally, the water and ventilation systems must be replaced to ensure
that the ship can operate until it reaches the end of its required service
life. Each year a number of ships in the FFG-7 class are evaluated by Navy
inspectors, and they have also found shortfalls in damage control
equipment and the environmental protection systems of these ships.
Moreover, these frigates have only a limited amount of bandwidth and this
affects their ability to operate with the rest of the Navy, which relies
heavily on electronic communications for its day-to-day operations. Naval
inspectors determined that other systems on board FFG-7 class ships were
in good condition, including its propulsion and combat systems.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding for the FFG-7 class
as yellow because the Navy's near-term plan to correct FFG-7 class
condition problems does not address all issues. The Navy has decided not
to install a Super High Frequency communication system on these ships to
improve their access to bandwidth and improve their access to Web-based
communication. Instead, these ships will continue to operate with a
limited amount of available bandwidth in the future, despite the Navy's
increasing use of the internet to share operational, training, and
personnel data.

Long-Term Program Strategy and Funding

We assessed the long-term strategy of the FFG-7 class as yellow because of
plans to decrease future operation and maintenance funding. The Navy plan
to modify and modernize the FFG-7 fleet will be complete by fiscal year
2011; however, these modifications may not address all of the

21GAO-04-112.

problems that may arise in the aging FFG-7 class. DOD intends to decrease
the amount of operation and maintenance funding available for its surface
ships in the future, which may limit the Navy's ability to address any
emerging maintenance issues. While all surface ships will likely have
maintenance funding cuts, the FFG-7 class and other older ships may be the
most affected by these shortfalls.

LPD-4 Amphibious Austin-class amphibious transport dock ships (LPD-4
class) are warships

Transport Dock Ship	that embark, transport, and land elements of a Marine
landing force and its equipment. Austin class ships also act as helicopter
refueling stations and limited casualty receiving and treatment ships.
There are currently 11 LPD4 class ships in the inventory with an average
age of 37 years. The LPD-4 class ships are expected to remain in the fleet
until 2014. The San Antonioclass LPD-17 is beginning to replace the LPD-4
class in fiscal year 2005.

                   Source: Defense Visual Information Center.

Condition

We assessed the condition of the LPD-4 class as yellow due to maintenance
issues related to major ship systems and bandwidth limitations experienced
by this ship class. The LPD-4 received the same yellow rating

in our previous report.22 Insufficient air conditioning is a habitability
concern on many LPD-4 class ships, especially given current operations in
high-temperature regions. The LPD-4 class also has issues with electrical
systems, propulsion, and insufficient bandwidth for Web-based
communication. Sufficient bandwidth is critical to the ability of these
ships to operate with the rest of the Navy, which relies heavily on the
internet for day-to-day operations. While these maintenance issues are
significant, some LPD-4 class ships have completed an Extended
Sustainability Program that addressed the most severe maintenance problems
affecting this class.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the LPD-4 class
as yellow because the Navy has a plan to address near-term condition and
concerns, but it excludes those ships scheduled to decommission within 5
years and the decommission dates have historically slipped. The Navy is in
the midst of an Extended Sustainability Program that corrects serious
LPD-4 class deficiencies, for example, its inadequate onboard electrical
system. The Navy has selected 5 of 11 LPD-class ships for this program,
and will have completed 4 by the end of fiscal year 2005. The ships that
will not undergo the Extended Sustainability Program are all within 5
years of decommissioning, and therefore can only undergo normal repairs
and maintenance. In the past, this decommissioning date has been moved
back by several years, but ships have retained their decommissioning
status- thus preventing any upgrades or modernizations. This will lead to
a wide variance of condition between different ships in the LPD-4 class.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the LPD-4 class
as yellow because of plans to decrease future operation and maintenance
funding, and uncertainty concerning the LPD-4's service life. The Navy has
reduced planned future operation and maintenance funding across all
surface ships in the fleet. These reductions have the potential to affect
the material condition of the LPD-4 class. Additionally, procurement of
the

22GAO-04-112.

LPD-4 class replacement, the LPD-17 class, has been reduced from 12 ships
to 9. However, the Navy requirement remains the same-the ability to
transport two and a half Marine Expeditionary Brigades.

F/A-18 Hornet/Super Hornet The F/A-18 is an all-weather fighter and attack
aircraft with 6 models: the

Aircraft	F/A-18 A, B, C, and D, also known as the Hornet; and the E and F
also known as the Super Hornet. The capabilities of the Hornet and Super
Hornet include fighter escort, fleet air defense, force projection, and
close and deep air support. The current inventory of F/A-18's is 914: A,
123; B, 28; C, 396; D, 139; E, 102; and F, 126. The average age in years
is: A, 18.5; B, 20.2; C, 12.7; D, 12.1; E, 2.5; and F, 2.4. The Navy plans
to gradually replace the Hornet with the Super Hornet and the Joint Strike
Fighter.

                   Source: Defense Visual Information Center.

Condition

We assessed the condition of the F/A-18 as green given that it generally
is available in sufficient numbers to meet Navy requirements and though
mission capable goals vary, all models are close to or exceed mission
capable goals between calendar years 1999 and 2004, as shown in figure 40.
Additionally, all variants of the F/A-18 consistently meet their daily
availability requirements. In our previous study, the condition of the
F/A-18 was rated yellow because it missed its mission capable goals, but
including the daily availability factor in our analysis improved its
rating to green.

However, both the Hornet and Super Hornet have deficiencies with fuel
systems and the Super Hornet also has deficiencies with cockpit canopies,
all of which degrade mission capable rates. In addition, the Navy is
beginning a long-term effort to replace the overstressed center section of
the Hornet fuselage, the center barrel. This effort addresses the
predictable rate of wear and deterioration on the aircraft due to factors
such as carrier takeoff and landings and increases the expected service
life of the aircraft. The aircraft is not available for operations during
the 1 year scheduled for this process. According to officials, during this
period the Navy takes advantage of aircraft time out of service to conduct
scheduled maintenance and other modifications on those aircraft.

Figure 40: Average Mission Capable Rates for Navy F/A-18 Aircraft,
Calendar Years 1999 - 2004 Percent Percent 100

90 80 70 60 50

0 1999 2000 2001 2002 2003 2004

Year

F/A-18C Actual F/A-18D Actual F/A-18C Goal F/A-18D Goal

90 80 70 60 50

0 1999 2000 2001 2002 2003 2004

Year

F/A-18E Actual F/A-18F Actual F/A-18E Goal F/A-18F Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the F/A-18 as
yellow because some funding is not identified for their program strategy,
which includes important Hornet modernizations, and the Super Hornet lacks
critical spare parts. The Navy is unable to fund improved detection and
targeting systems for the Hornet, for example, the Advanced Targeting
Forward Looking Infrared system, and the Joint Helmet Mounted Cueing
System. Similarly, the Super Hornet will, in the near term, experience
shortfalls in the availability of Government Furnished Equipment:
equipment directly acquired by the government and subsequently made
available to a contractor. These equipment shortfalls for the Super Hornet
include extra fuel tanks and bomb racks.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the F/A-18 as
yellow because of the uncertain status of its replacement, the Joint
Strike Fighter, and the complexity of the center barrel replacement
effort. The Navy has plans to maintain enough operational F/A-18 aircraft
to meet the Navy's tactical air requirements until the Joint Strike
Fighter is available by replacing the center barrels of 40 Hornets per
year, a challenging goal given the complex nature of this effort. The
Joint Strike Fighter is already behind schedule and a number of its
critical technologies are immature, indicating that it may be delayed even
further. Program officials confirmed that another delay in arrival of the
Joint Strike Fighter would require the F/A-18 program to seek other
alternatives to meet requirement goals, such as to replace more center
barrels on Hornets, manage the normal wear and tear on the aircraft, or
procure additional Super Hornets. Moreover, center barrel stress is not
the only factor used when determining the expected service life of an
aircraft; flying hours and takeoff and landings also impact the F/A 18's
life expectancy. If Hornets are required to operate longer than currently
planned, these aging aircraft may not be available in sufficient numbers
to meet Navy requirements for tactical aircraft.

EA-6B Prowler Aircraft	The EA-6B Prowler provides Electronic Attack and
Anti-Radiation Missile capabilities against enemy radar and communications
systems. The Prowler's primary mission is to support strike aircraft and
ground troops by jamming enemy radar, data links, and communications. The
current

inventory is 119 with an average age of 21.9 years. The Prowler fleet
consists of carrier-based squadrons, and land-based expeditionary
squadrons. The expeditionary capability will be replaced by the Air
Force's B-52 electronic jammer suites, while the EA-18G Super Hornet
Airborne Electronic Attack aircraft will begin to replace the
carrier-based capabilities in 2009.

Source: Defense Visual Information Center.

Condition

We assessed the condition of the EA-6B as yellow, as we did in our
previous report,23 because it consistently misses the Navy's mission
capable goal of 73 percent between calendar years 1999 and 2004, as shown
in figure 42, due to a number of maintenance problems. However, Navy
officials believe the EA-6B will meet its daily availability requirements
later this year. Much of this improvement is due to replacement of the
center wing, which had shown signs of fatigue due to the stress of
operations, on a number of these aircraft. The Navy will have completed
this complex effort, which removed aircraft from the fleet for a number of
months, on enough Prowlers to meet their requirements. Despite this
improvement, the EA-6B's mission capable rates have been degraded by
problems with communications equipment,

23GAO-04-112.

canopies, and wings. Other problems with fuel cells and environmental
control systems have also diminished mission capable rates. The EA-6B's
utilization rates have also been high, given its role as a high-demand
asset in current operations.

Figure 42: Average Mission Capable Rates for Navy EA-6B Aircraft, Calendar
Years
1999 - 2004
Percent

                                     100 90

                                       80

70

60

50

0 1999 2000 2001 2002 2003

Year

                                     Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the EA-6B as
yellow because the Navy has not funded all of its short-term requirements.
The Navy has plans to address the major degraders of mission capable
rates; however, not all of these plans are fully funded. Navy plans
include replacing aging center wing sections in the EA-6B fleet. The
condition of the Prowler fleet will continue to improve in the near term
because of this funded initiative. Additionally, EA-6B officials have been
working with manufacturers to correct canopy deficiencies and have
resolved this problem. Current Navy plans for purchasing canopies are also
fully funded

for all aircraft. However, currently no plans or funding have been
identified to correct communications equipment issues. Furthermore, the
Navy has not fully funded equipment that improves the EA-6B's ability to
use its unique electronic warfare capabilities to counter an emerging
threat.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the EA-6B as
yellow because only a limited number of aircraft will receive an upgrade
that is critical to transition the EA-6B fleet to the EA-18G aircraft. In
the long term, the Navy has outlined an effective strategy to modernize
and replace the Prowler. This strategy includes wing replacement and
Improved Capability III upgrades on the EA-6B. The Prowler's capabilities
will be replaced by the EA-18G and Air Force B-52 electronic jammer
suites. However, this strategy has not been fully funded. Specifically,
the Navy has a stated requirement to provide the Improved Capability III
upgrade on 21 aircraft, but has only funded the upgrade for 14 aircraft.
This improved third-generation capability is a significant technology leap
beyond the EA-6B's current jamming capabilities, and according to program
officials, an important component in the Navy's transition to the EA-18G.
Moreover, aircraft with this capability will be used by the Marine Corps
until 2015, at which time they plan to replace their EA-6B aircraft with a
version of the Joint Strike Fighter. The Joint Strike Fighter is already
behind schedule and a number of its critical technologies are immature,
indicating that it may be delayed even further.

P-3 Orion Aircraft	The P-3 Orion is a four-engine turboprop antisubmarine
and maritime surveillance aircraft. It provides undersea warfare;
antisurface warfare; and Command, Control, Communications, Computers,
Intelligence, Surveillance, and Reconnaissance capabilities to naval and
joint commanders. There are 173 aircraft in the fleet and their average
age is 24.4 years. The Navy will replace P-3 capabilities with the
Multi-mission Maritime Aircraft in 2013, and the Broad Area Maritime
Surveillance Unmanned Aerial Vehicle.

                   Source: Defense Visual Information Center.

Condition

We assessed the condition of the P-3 as red because it has consistently
missed its mission capable goals by a significant percentage, as shown in
figure 44, and the Orion is not available in sufficient numbers to meet
dayto-day Navy requirements. Overall, the condition of the P-3 has been
primarily degraded by the effect of structural fatigue on its airframe and
the obsolescence of communication, navigation, and primary war-fighting
systems. To address airframe issues, specifically cracks in the aircraft's
wings, the Navy has instituted a special structural inspection and repair
program. A number of aircraft are currently undergoing these special
structural inspections and repairs, and are not available for fleet
operations. Moreover, the obsolescence of the communication, navigation,
and war-fighting systems resulted in only about 26 percent of these
aircraft being rated as fully capable of performing all of their missions
last year.

Figure 44: Average Mission Capable Rates for Navy P-3 Aircraft, Calendar
Years
1999 - 2004
Percent

                                     100 90

80

70

60

50

0 1999 2000 2001 2002 2003

Year

                                     Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the P-3 as
yellow because the Navy's near-term plans do not address all condition and
obsolescence issues. However, the Navy will have completed enough
structural inspections and repairs to ensure that there are sufficient P-3
Orions available to meet day-to-day requirements next year. While this
mitigates serious airframe issues, obsolescence of electronics and avionic
systems will continue to degrade the ability of this aircraft to fulfill
all of its missions. The Navy will address some of these obsolescence
issues in the short term, such as installing an improved high-frequency
radio. However, other needed improvements have not been funded, for
example, efforts to improve the aircraft's over the horizon communications
and upgrades for the aircraft's missile defense system.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the P-3 as red
because while the Navy has identified what can be done to address the
obsolescence of the mission systems over the long term, this program has
not been approved or funded. The Navy plan, known as the Anti-submarine
Maritime Improvement Program, ensures the continued relevance of the P3
mission systems until the Multi-mission Maritime Aircraft is operational.
This improvement program has not been fully approved, nor has it been
funded. The obsolescence of its mission system may have a significant
impact on its war-fighting capabilities. Moreover, it is still not certain
that the fixes identified for the P-3 airframe will ensure that sufficient
numbers of this aircraft will be available until it is fully replaced in
2019.

Standard Missile-2 Surfaceto-Air Missile

The Standard Missile-2 is a medium to long-range, shipboard surface-to-air
missile. The primary mission of the Standard Missile-2 is fleet area air
defense and ship self-defense; its secondary mission is antisurface ship
warfare. There are four different blocks of the Standard Missile-2 in
service (III, IIIA, IIIB, and IV). The inventories of these blocks are
classified, but over 88 percent of the inventory is greater than 11 years
of age, and some blocks are older and less capable than others The
capabilities of the Standard Missile-2 will be replaced by the Standard
Missile-6 Extended Range Active Missile beginning in fiscal year 2009.

Source: U.S. Navy.

Condition

We assessed the condition of the Standard Missile-2 as yellow because it
has consistently failed to meet its asset readiness goal of 87 percent.
The asset readiness goal is the missile equivalent of the mission capable
goal. Timely certifications of missiles-assessments of equipment condition
and necessary repair and replacement of missile components-are critical to
these readiness rates. These certifications must be done approximately
every 4 years and a missile is not ready for issue until certified. These
assessments have not been done at a rate sufficient to meet asset
readiness goals. In GAO's previous study, the condition of the Standard
Missile-2 was rated red; however, the asset readiness rates of these
missiles have improved since that time.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy and funding of the Standard
Missile-2 as green because the Navy has a plan to address near-term
condition, and the missile's inventory meets Navy requirements in the near
term. The Navy has been able to deliver a more maneuverable version of
this missile-the Block IIIB-MU-ahead of schedule. In addition, the Navy
has increased the amount of operation and maintenance funding over the
next couple of years to maintain the asset readiness rate close to the
goal. Both of these steps will allow the Navy to meet inventory
requirements in the near term.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy and funding of the Standard
Missile-2 as red because future funding shortfalls will significantly
affect missile availability. The Navy plans to meet requirements by
procuring new missiles and modernizing existing ones. However, the new
procurements and missile modernizations are not in sufficient numbers to
allow the Navy to meet inventory requirements in the long term.
Furthermore, the operation and maintenance funding planned for the long
term is not sufficient for the Navy to meet asset readiness goals. Funding
for certifications was limited until fiscal year 2004; subsequently,
increased funding improved assets readiness rates. Funding will be limited
again beginning in fiscal year 2007, affecting the long-term availability
and ready-

for-issue rate of the Standard Missile-2. While the Standard Missile-6 is
currently ahead of schedule, this weapon will not be available in a timely
manner or in sufficient numbers to allow the Navy to meet long-term
inventory requirements.

Air Force 	For the six Air Force aircraft in this appendix, fiscal year
2004 data are through July 2004.

F-15 Eagle and Strike Eagle	There are two types of F-15 aircraft: the F-15
Eagle (A-D variants) and the F-15E Strike Eagle. The F-15 A and F-15C are
single-seat, supersonic fighter aircraft used for air-to-air combat, and
the B and D variants are their dualseat training counterparts. The F-15E
Strike Eagle is a dual-seat, supersonic fighter aircraft used for both
air-to-air combat and air-to-ground combat. There are 513 F-15 Eagles and
221 F-15E Strike Eagles in the Air Force inventory, and the average age
depends upon the variant, with F-15 Eagles ranging from about 21 years to
26 years, and the F-15E Strike Eagles averaging about 12 years. The F/A-22
is the designated replacement for the F-15 Eagle. The Air Force plans to
retire most of the F-15 Eagle fleet, retaining 179 F-15C/D variants beyond
2015 to augment the F/A-22 through 2025, while maintaining the entire
fleet of F-15Es through at least 2025.

                   Source: Defense Visual Information Center.

Condition

We assessed the condition of the F-15 C/D and F-15E as green because
mission capable rates have been near the Air Force's stated goal and have
either improved or remained constant between fiscal years 1999 and 2004.
The Air Force's stated goal depends on the variant, and ranges from 79
percent to 82 percent. As shown in figure 47, mission capable rates for
the F-15 C/D and F-15 E variants, which are expected to remain in the
fleet after retirement of the older F-15 aircraft, have increased to about
79 percent. Officials stated that cracks and issues related to the age of
the aircraft are the most common problems affecting the aircraft, but
noted that the Air Force is addressing these issues through programmed
depot maintenance. Officials also stated that the F-15 is a viable and
capable system, noting that the F-15E models were used during Operation
Iraqi Freedom.

Figure 47: Average Mission Capable Rates for Air Force F-15 Eagle and
Strike Eagle

Aircraft, Fiscal Years 1999 -2004

Percent

100

95

90

85

80

75

70

0 1999 2000 2001 2002 2003

Fiscal year

                                 F15 C/D Actual

                                  F15 E Actual

                                  F15 C/D Goal

                                   F15 E Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy for the F-15 and F-15E as green
because the Air Force has developed and funded a strategy to address known
problems, to include retirement of the older F-15 C/D variants. For
capability and reliability upgrades, the Air Force has funded and is
currently implementing replacements and upgrades for a variety of
different systems on 179 F-15C/D variants, to include engines, radars, and
various structural improvements. For the F-15E, the Air Force has funded
modernization of different systems-computer processors, avionics, and
software-which is collectively known as a Suite 5E upgrade. This upgrade,
which is fully funded for the F-15E fleet, is scheduled to occur from
fiscal year 2006 through fiscal year 2011, and is expected to increase the
survivability and weapons delivery capability of the aircraft. Officials
also stated that technological obsolescence and diminishing manufacturing

sources are a concern for the entire F-15 fleet; however, they also stated
that it is manageable, and were confident that the Air Force had the
correct procedures to address the issue.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy for the F-15 fleet as green
because the Air Force near-term upgrades are fully funded and designed to
keep the aircraft that will remain in the fleet viable and functioning
through at least 2025. The F/A-22 Raptor is the F-15 Eagle's designated
replacement, and officials stated that delays to its fielding schedule
will not impact the retirement schedule of the F-15 fleet. Retirements for
the F-15A/B aircraft are scheduled to begin in fiscal year 2005 with a
total of 84 retirements expected to occur through fiscal year 2009, and
retirement of 26 F-15 C/D aircraft is scheduled to begin in fiscal year
2009. The F/A-22 is expected to achieve operational capability in December
2005, and the entire fleet of 179 aircraft is currently scheduled to be
procured through fiscal year 2008. Officials stated that the effect of
changes in the F/A-22 fleet composition on further F-15 C/D aircraft
retirements beyond fiscal year 2009 remains to be seen, as the total
structure of the combat air fleet will be reviewed during the 2005
Quadrennial Defense Review.

F-16 Fighting Falcon	The F-16 is a compact, multirole fighter with
air-to-air combat and air-tosurface attack capabilities. There are four
F-16 variants - the A and C models are designed for one pilot, while the B
and D models are two-seat tandem cockpit aircraft, which are used for
training and can also be flown individually. Of the four variants, the
F-16 C and D models incorporate the latest technology and have the
capability to suppress or destroy enemy air defenses. The Air Force
currently has 1,353 F-16 aircraft in its inventory, and the average age is
about 15 years. The Air Force plans to retire the A and B variants because
they are not expected to be structurally viable past 2008, although the
specific schedule has yet to be published. The Air Force also plans to
replace the F-16 with the F-35 Joint Strike Fighter beginning in 2013.

Source: Defense Visual Information Center.

Condition

Consistent with the findings of our December 2003 report,24 we assessed
the condition of the F-16 as green because mission capable rates have been
near the Air Force's stated goal and have remained relatively constant.
For the A/B variants, mission capable rates were about 72 percent with an
Air Force stated goal of 75 percent in fiscal year 2004 and, as shown in
figure 49, mission capable rates for the C/D variants were about 76
percent compared to a goal of 81 percent. Officials stated that the most
significant factor affecting the F-16 is cracks, which occur mostly on
older aircraft and because of the stress caused by repeatedly landing
without dropping its two 2,000 pound bombs. Despite these concerns, the
Air Force has plans to address cracking. Further, although the rates for
all variants are below the goals, officials stated the F-16 was able to
meet operational requirements.

24GAO-04-112.

Figure 49: Average Mission Capable Rates for Air Force F-16 Fighting
Falcon

Aircraft, Fiscal Years 1999 - 2004

Percent

100

95

90

85

80

75

70

0 1999 2000 2001 2002 2003

Fiscal year

                                     Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy for the F-16 as green because
the Air Force has developed and funded a strategy to address known
problems. As we noted in our December 2003 report, structural issues
related to age and use are affecting the F-16. To address these concerns,
the Air Force began a structural augmentation program that strengthens the
airframe in areas prone to cracking, namely the wings and fuselage. The
structural augmentation program is expected to affect over 1200 of the
aircraft and be completed by 2013. Other near-term initiatives that are
being implemented to improve combat capabilities include the common
configuration implementation program, which incorporates improvements to
targeting, communications, and computer systems, and improvements to
radar, avionics, and targeting systems. Officials stated that these
programs are currently funded and being implemented, although not for the
entire F16 fleet.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy for the F-16 as green because
current and projected funding for aircraft modernizations identified in
the near-term program strategy are designed to ensure longer-term
viability for the next 15 years. Although the Air Force has yet to publish
an F-16 retirement schedule, officials indicate that the older variants
will be retired, as will be reflected in future budget documents. The F-35
Joint Strike Fighter is the designated replacement for the F-16 but,
according to officials, the retirement of the older F-16 variants will not
be affected by the F-35 fielding schedule, since operational capability of
the Air Force F-35 aircraft is not expected to occur until fiscal year
2013 and the exact quantity remains to be determined.

B-1 Lancer Bomber	The B-1 Lancer Bomber is a long-range, high-speed, large
payload global attack aircraft that was originally designed for nuclear
missions but was transitioned to a conventional role. In 2002, the Air
Force began consolidating the fleet, reducing the B-1 inventory from 93 to
67 aircraft and transferring all remaining B-1 bombers to the active
component. Beginning operations in 1986, the average age of the B-1 is
about 17 years. The Air Force plans to keep the B-1 in use through at
least 2040,25 so there are no immediate plans to replace the aircraft.

25Officials state that the calculated service life for a B-1 is 18,000
hours, and they estimate that the fleet would reach that point in 2040.

                   Source: Defense Visual Information Center.

Condition

We assessed the condition of the B-1 as yellow because mission capable
rates were below the Air Force stated goal most of the time between fiscal
years 1999 and 2004. As shown in figure 51, mission capable rates have
increased between 1999 and 2004. Parts shortages were identified as a
reason keeping rates below goals, and officials identified generators,
automatic pilot controllers, and various pump and hydraulic systems as the
items that were most often in short supply. After consolidation of the B-1
fleet in fiscal year 2002, the numbers of parts in the supply system
increased as parts were taken from retired B-1 aircraft. To compensate for
the smaller fleet size, the Air Force increased the mission capable goals
from 67 percent in fiscal year 2002 to 76 percent in fiscal year 2003. The
increase in the goal occurred as B-1 usage to support operations in Iraq
and Afghanistan increased. Although the aircraft's mission capable rate
was about 69 percent in fiscal year 2004, the rate for deployed aircraft
was 80 percent. Additionally, officials noted that the B-1 is capable of
accomplishing the Air Force's current needs.

Figure 51: Average Mission Capable Rates for Air Force B-1 Lancer Bombers,
Fiscal

Years 1999 - 2004

Percent

100

90

80

70

60

50

0 1999 2000 2001 2002 2003

Fiscal year

                                     Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy for the B-1 as green because
the Air Force has planned and funded programs to address the near-term
sustainment issues affecting the aircraft. According to officials, the
forecasted number of flight hours serves as the basis for funding planned
maintenance activity and expected number of parts required for the
aircraft. The fluctuations in the fleet size, coupled with the increase in
usage for operations overseas, caused instability in the supply chain and
increased the difficulty in efficient planning of maintenance cycles. For
the near term, the Air Force has addressed this concern by increasing the
number of forecasted flight hours for fiscal year 2005, which increases
the funding for supply and maintenance activities and is expected to
correct the disparity. In addition to addressing near-term sustainment
issues, the Air Force has already funded and will complete plans to
increase the sustainability and wartime capabilities of the B-1, to
include the planned

fielding of increased munitions capabilities, and upgrades to the central
computer systems and radar.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy for the B-1 as green because
the Air Force has a proactive strategy to address anticipated shortages
and deficiencies in the aircraft, and has funded modernization efforts to
meet requirements. Although a newer system in the Air Force's fleet,
officials stated that technology has advanced significantly since the B-1
was fielded in the 1980s, resulting in a reduction in the number of
manufacturers that make the original B-1 component parts. For example, the
original computer technology in the B-1 used processors that, while
cutting edge at the time, are slower than home computer processors. To
address these issues, the Air Force has funded efforts to modernize and
upgrade B-1 components, to include cockpit flight instrument displays and
navigation systems. In addition to resolving potential supply chain
concerns, these upgrades are also expected to enhance the aircraft's
combat capability.

B-2 Spirit Bomber	The B-2 is a multirole heavy bomber with stealth
characteristics, capable of employing nuclear and conventional weapons.
The aircraft was produced in limited numbers to provide a low observable
(i.e., stealth) capability to complement the B-1 and B-52 bombers. Its
unique stealth capability enables the aircraft to penetrate air defenses.
The Air Force has 21 B-2 aircraft in its inventory, and the average age is
about 10 years. The B-2 was deployed to support both Operation Enduring
Freedom in Afghanistan and Operation Iraqi Freedom. The B-2 is expected to
remain in the Air Force's inventory until 2058, so there are no immediate
plans to replace the aircraft.

Source: Defense Visual Information Center.

Condition

For the reasons associated with maintenance of stealth characteristics
that we identified in our December 2003 report,26 we continue to assess
the condition of the B-2 as yellow. As shown in figure 53, the B-2 did not
consistently meet the Air Force mission capable goal of 50 to 51 percent
between fiscal years 1999 and 2004.27 Officials stated that the small B-2
fleet size increases the difficulty in achieving goals, noting that a
change in the mission capable status of one aircraft results in about a 7
percent change in the overall mission capable rate; however, when viewing
other metrics, the B-2 condition is comparable with other bombers.
Maintenance of stealth characteristics continues to be the primary driver
of lower mission capable rates, and the Air Force is continuing to
implement solutions. Despite difficulties associated with stealth
maintenance, the B-2 is capable of accomplishing its wartime missions,
achieving mission capable rates of 64 percent for Operation Enduring
Freedom and 73 percent during the initial months of Operation Iraqi
Freedom.

26GAO-04-112.
27The Air Force did not have a mission capable goal for the B-2 in fiscal
year 1999.

Figure 53: Average Mission Capable Rates for Air Force B-2 Spirit Bombers,
Fiscal

Years 1999 - 2004

Percent

100

90

80

70

60

50

40

30

0 1999 2000 2001 2002 2003

Fiscal year

                                     Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy for the B-2 as green because
the Air Force has developed and funded the strategy for sustaining the B-2
inventory. The Air Force funded and continues to implement its Alternate
High Frequency Material modification, which reduces the number of steps
and the overall length of time required to conduct stealth maintenance.
Thus far, three aircraft have received the modification, and the entire
fleet has been funded and scheduled to receive the upgrade by the end of
the decade. Other areas of concern include cracking on the aft deck and
cracking in the windshield. For the aft deck cracks, officials stated that
the extremely high temperatures from the engine cause the cracking, and
have fielded kits to stiffen the aft decks, making them less affected by
the extreme heat. For windshield cracks, officials stated that redesigning
the spacing of drill holes will address the problem; delivery of the new
windshields is scheduled to begin in late 2005. Additionally, the Air
Force

has funded and is implementing improvements in B-2 connectivity and
interoperability, to include integrating advanced weapons.

Long-Term Program Strategy and Funding

We assessed the long-term program strategy for the B-2 as green because
the Air Force is addressing immediate issues for the aircraft while
concurrently developing and funding longer-term solutions. In addition to
continuing efforts to address stealth maintenance and aft deck cracks, the
Air Force is also addressing the issue of diminishing manufacturing
sources. Officials stated that technological advancements and the small
size of the B-2 fleet are a disincentive for manufacturers to continue
making B-2 unique parts. To compensate, the Air Force is modernizing
components and systems within the B-2, developing internal processes to
contract out management of B-2 unique parts, and closely monitoring all
parts to ensure that the supply chain has ample time to adjust.

C-5 Galaxy Transport	The C-5 Galaxy is the largest Air Force transport
aircraft, and can carry large cargo items over intercontinental ranges at
jet speeds and can take off and land in relatively short distances. The
C-5 is one of only two aircraft that can carry very large military
equipment. With aerial refueling, the aircraft's range is limited only by
crew endurance. The first C-5 was delivered in 1970. There are 112 C-5
aircraft in the Air Force's inventory, and their average age is 26 years.
Although the C-5 is expected to remain in service through 2040, the exact
length of service and composition of the C5 fleet is dependent upon the
Mobility Capabilities Study28 and the Quadrennial Defense Review, which
were not completed at the time of our review.

28The Mobility Capabilities Study is a DOD effort to address the size of
the required number of mobility airframes and aircrews necessary to
support implementation of the National Defense Strategy.

Source: Defense Visual Information Center.

Condition

For the reasons identified in our December 2003 report,29 we continue to
assess the condition of the C-5 as yellow. As shown in figure 55, mission
capable rates for the C-5 consistently remained below Air Force goals
between fiscal years 1999 and 2004. Officials stated that the size and age
of the aircraft make the C-5 maintenance intensive, and provided the
example of fatigued metal and adhesives, which take time to replace. They
further stated that the age of the C-5 makes it difficult to find
manufacturing sources for some parts, particularly avionics and engine
components. Additionally, the avionics systems and engines are
noncompliant with upcoming global airspace and air traffic requirements,
potentially limiting where and how the aircraft can be used. Despite these
challenges, officials stated that the C-5 can currently perform its
missions, including providing transport for tsunami relief efforts and
moving supplies for operations in Iraq and Afghanistan.

29GAO-04-112.

Figure 55: Average Mission Capable Rates for Air Force C-5 Galaxy
Transport
Aircraft, Fiscal Years 1999 -2004
Percent

                                     100 90

                                       80

70

60

50

0 1999 2000 2001 2002 2003

Fiscal year

                                     Actual

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the near-term program strategy for the C-5 as yellow because
of delays and funding shortages in key modernization efforts. The two
modernizations for the C-5 are to improve avionics and engines; avionics
upgrades must occur before engine modernization can begin. When complete,
the programs are expected to address many manufacturing source issues,
ensure compliance with global air traffic standards, and increase the
aircraft's capability. However, officials stated that the avionics
upgrades are experiencing software integration problems, resulting in a
delay of at least 3 months and cost increases of $20 million. Since engine
modernization is predicated on avionics upgrades, the costs for engine
modernization have also increased by $30 million. Additionally, after a
projectile attack damaged a C-5 during Operation Iraqi Freedom, officials
stated that defensive systems became a top priority, and the Air Force
requested and received funding through fiscal year 2005 supplemental

appropriations to upgrade defenses against infrared guided surface-to-air
missiles for 51 C-5 aircraft.

Long-Term Program Strategy and Funding

We assessed the Air Force's long-term strategy for the C-5 as yellow
because requested funding is inconsistent with long-term requirements to
sustain and modernize the inventory. With upgrades to avionics and
engines, officials stated that the C-5 could last through 2040. The Air
Force has requested funding for engine upgrades for the entire fleet of
112 C-5 aircraft; however, the Air Force has only funded the procurement
and installation of avionics upgrades for 59 aircraft, resulting in 53
aircraft not receiving the necessary avionics upgrades to support the new
engines. Officials stated that the Air Force remains uncertain about the
size of the final C-5 fleet and whether to fund the remaining C-5
upgrades, but will have a better idea following the completion of the
Mobility Capabilities Study.

KC-135 Stratotanker	The KC-135 is among the oldest aircraft in the Air
Force's inventory and represents 90 percent of the aircraft in the tanker
fleet. Its primary mission is air refueling fixed-wing aircraft and it
supports Air Force, Navy, Marine Corps, and allied aircraft. There are
three KC-135 variants currently in the fleet: the E, R, and T models. Each
model is a reengined version of the original KC-135A. Of these three
variants, the E model belongs to the Air Force Reserve and Air National
Guard. The first KC-135 was delivered in June 1957. There are 531 KC-135
aircraft in the Air Force's inventory and the average age is about 44
years. Currently, there is no replacement

Condition

Source: Defense Visual Information Center.

Consistent with our December 2003 report,30 we assessed the condition of
the KC-135 aircraft as yellow because, as shown in figure 57, it has not
met its mission capable goals and issues associated with age and corrosion
continue to be a concern. Officials stated that age is the primary driver
of KC-135 maintenance issues, and that maintainers discover new problems
with the aircraft every time it undergoes scheduled depot maintenance.
Age-related issues with the aircraft include fuel bladder leaks, parts
obsolescence, and problems with the landing gear's steel brakes. Corrosion
has regularly been discovered in new areas on the aircraft, requiring
increased amounts of depot maintenance time. The Air Force has yet to
determine the extent of problems caused by newly discovered corrosion. The
older variants also have a higher incidence of problems; for example, the
Air Force removed 29 KC-135E aircraft from flight status due to engine
strut problems and corrosion.

30GAO-04-112

Figure 57: Average Mission Capable Rates for Air Force KC-135 Stratotanker

Aircraft, Fiscal Years 1999 -2004

Percent

100

95

90

85

80

75

70

0

                                      Goal

                 Source: GAO analysis of military service data.

Near-Term Program Strategy and Funding

We assessed the Air Force's near-term strategy for the KC-135 as yellow
because age-related maintenance issues are expected to increase and the
severity of potential age-related issues remains unknown. Although
officials stated that maintenance problems with the aircraft are currently
manageable during programmed depot maintenance, they expect the number of
maintenance man-hours to increase by 2.5 percent each year. Officials also
stated that the severity of potential problems from newly discovered
corrosion remains unknown, so the potential for additional maintenance
requirements is likely to occur. Officials further stated that the effects
of KC-135 operations to support Iraq and Afghanistan are still unknown,
but the Air Force has instituted additional inspections and procedures to
address potential effects associated with higher usage. The only major
modification for the KC-135, Global Air Traffic Management

avionics system upgrades, remains on schedule and is fully funded.

Long-Term Program Strategy and Funding

We assessed the Air Force's long-term strategy for the KC-135 as red
because the future of the KC-135 fleet and the Air Force's tanker strategy
are unknown. Before acquiring new tankers, the Air Force must complete a
Recapitalization Analysis of Alternatives, which is a study to narrow the
field of possible future tanker options. Originally scheduled for
completion in December 2004, the analysis has been delayed until at least
August 2005. Regardless of the option, officials stated that all
recapitalization efforts will require use of the KC-135 in the near term
and delays in fielding a replacement exacerbate problems in maintaining
the existing fleet over the long term, as well as delaying modernization
efforts that are predicated on the replacement time line. In fiscal year
2005, $100 million was appropriated for a tanker replacement transfer
fund, and $9.7 billion has been requested for the tanker replacement
program in DOD's 2006 Future Years Defense Program.For the six Air Force
aircraft in this appendix, fiscal year 2004 data are through July 2004.

Appendix III

Agency Comments from the Department of Defense

Appendix III
Agency Comments from the Department of
Defense

Appendix III
Agency Comments from the Department of
Defense

Appendix III
Agency Comments from the Department of
Defense

Appendix III
Agency Comments from the Department of
Defense

Appendix III
Agency Comments from the Department of
Defense

Appendix III
Agency Comments from the Department of
Defense

Appendix III
Agency Comments from the Department of
Defense

Appendix III
Agency Comments from the Department of
Defense

Appendix III
Agency Comments from the Department of
Defense

Appendix III
Agency Comments from the Department of
Defense

Appendix IV

                     GAO Contact and Staff Acknowledgments

GAO Contact William M. Solis, (202) 512-8365 or [email protected]

Acknowledgments 	In addition to the contact named above, the following
individuals also made major contributions to the report: David Schmitt,
Assistant Director; Patricia Lentini; Vipin Arora; Janine Cantin; Alissa
Czyz; Barbara Hills; Barbara Gannon; Stanley Kostyla; Josh Margraf; Brian
Mateja; Kimberly Mayo; Jim Melton; Kenneth Patton; Malvern Saavedra; and
John Trubey.

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