Defense Logistics: Improved Oversight and Increased Coordination
Needed to Ensure Viability of the Army's Prepositioning Strategy
(15-FEB-07, GAO-07-144).
Prepositioned military equipment and supplies on ships and
overseas on land have become an integral part of the U.S. defense
strategy. However, the Army's program has faced long-standing
management challenges, including equipment excesses and
shortfalls, invalid or poorly defined requirements, and
maintenance problems. In Public Law 109-163, Congress required
the Army to conduct an assessment of its prepositioning programs
and required GAO to assess (1) whether the Army's report
addressed the areas required by Congress, and (2) the major
challenges the Army continues to face in its prepositioning
program. GAO analyzed the Army's report and other information it
obtained from the Joint Staff, the Army, and its subordinate
commands to identify the issues affecting the Army's
prepositioning program. GAO also visited prepositioned equipment
sites in South Carolina, Europe, South Korea, and Kuwait.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-144
ACCNO: A65965
TITLE: Defense Logistics: Improved Oversight and Increased
Coordination Needed to Ensure Viability of the Army's
Prepositioning Strategy
DATE: 02/15/2007
SUBJECT: Army facilities
Combat readiness
Defense capabilities
Equipment maintenance
Equipment management
Facility management
Intergovernmental relations
Program evaluation
Program management
Reporting requirements
Requirements definition
Strategic planning
Army supplies
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-07-144
* [1]DEFENSE LOGISTICS
* [2]Improved Oversight and Increased Coordination Needed to Ensu
* [3]Contents
* [4]Results in Brief
* [5]Background
* [6]The Army's April 2006 Report to Congress Addressed the
Areas
* [7]Army Report Addresses Areas Required by Congress
* [8]Army Prepositioning Stocks Strategy 2012 Is No
Longer Viable
* [9]The Army Faces Major Strategic and Management Challenges
As
* [10]Alignment between Army's Prepositioning Strategy
and Anticip
* [11]Despite Recent Efforts to Improve Requirements
Setting for S
* [12]Army Lacks a Comprehensive Prepositioning Storage
and Mainte
* [13]Outdoor Storage of Equipment Results in
Millions of Dollars
* [14]Future Facility Requirements for the Army
Prepositioning Pro
* [15]Maintenance Oversight of Prepositioned Stocks Has
Improved i
* [16]Conclusions
* [17]Recommendations for Executive Action
* [18]Agency Comments and Our Evaluation
* [19]Appendix I: Scope and Methodology
* [20]Appendix II: Past Products Identifying Challenges Facing the
* [21]Appendix III: Comments from the Department of Defense
* [22]GAO's Responses to DOD's Technical Comments:
* [23]Appendix IV: GAO Contact and Staff Acknowledgments
* [24]GAO Contact
* [25]Acknowledgments
* [26]Order by Mail or Phone
Report to Congressional Committees
United States Government Accountability Office
GAO
February 2007
DEFENSE LOGISTICS
Improved Oversight and Increased Coordination Needed to Ensure Viability
of the Army's Prepositioning Strategy
GAO-07-144
Contents
Letter 1
Results in Brief 3
Background 7
The Army's April 2006 Report to Congress Addressed the Areas Required, but
the Army's Strategy Is Evolving 9
The Army Faces Major Strategic and Management Challenges As It Revises and
Implements Its Prepositioning Program 11
Conclusions 21
Recommendations for Executive Action 22
Agency Comments and Our Evaluation 23
Appendix I Scope and Methodology 26
Appendix II Past Products Identifying Challenges Facing the Army and DOD
Regarding Prepositioning Programs 28
Appendix III Comments from the Department of Defense 34
Appendix IV GAO Contact and Staff Acknowledgments 44
Tables
Table 1: Status of Facilities at Selected Army Prepositioned Stock
Locations 20
Table 2: GAO Products 28
Table 3: Other Products 32
Figures
Figure 1: Existing Outdoor Storage in Kuwait 16
Figure 2: Overview of Military Construction Project at Camp Livorno, Italy
19
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
United States Government Accountability Office
Washington, DC 20548
February 15, 2007
The Honorable Carl Levin
Chairman
The Honorable John McCain
Ranking Minority Member
Committee on Armed Services
United States Senate
The Honorable Ike Skelton
Chairman
The Honorable Duncan L. Hunter
Ranking Minority Member
Committee on Armed Services
House of Representatives
With fewer troops permanently stationed overseas, the prepositioning of
stocks of equipment and supplies has become integral to the ability of the
Department of Defense (DOD) to project forces into conflict areas faster.
DOD has acknowledged the need to reorient its capabilities to respond to a
wider range of challenges. In the 2005 National Defense Strategy, the
department indicated that prepositioning will continue to be an important
aspect of DOD's force posture in the future.^1 Additionally, a DOD
analysis undertaken to support the achievement of operational timelines
during major combat operations reaffirmed the relevance of prepositioned
stocks.^2 As a result of this mobility analysis as well as recommendations
arising from a September 2005 GAO report on prepositioning, DOD determined
that it would reassess its existing prepositioning program to identify the
optimal mix of capabilities needed to support the defense strategy in the
future.^3123With fewer troops permanently stationed overseas, the
prepositioning of stocks of equipment and supplies has become integral to
the ability of the Department of Defense (DOD) to project forces into
conflict areas faster. DOD has acknowledged the need to reorient its
capabilities to respond to a wider range of challenges. In the 2005
National Defense Strategy, the department indicated that prepositioning
will continue to be an important aspect of DOD's force posture in the
future. Additionally, a DOD analysis undertaken to support the achievement
of operational timelines during major combat operations reaffirmed the
relevance of prepositioned stocks. As a result of this mobility analysis
as well as recommendations arising from a September 2005 GAO report on
prepositioning, DOD determined that it would reassess its existing
prepositioning program to identify the optimal mix of capabilities needed
to support the defense strategy in the future.
^1 DOD, The National Defense Strategy of the United States of America
(March 2005).
^2 This analysis was performed in the Mobility Capabilities Study,
released in December 2005.
^3 GAO, Defense Logistics: Better Management and Oversight of
Prepositioning Programs Needed to Reduce Risk and Improve Future Programs,
[27]GAO-05-427 (Washington, D.C.: Sept. 6, 2005).
The Army, the Marine Corps, and the Air Force have drawn heavily from
their prepositioned stocks to support Operations Iraqi Freedom and
Enduring Freedom. As we testified in March 2006, these sustained military
operations are taking a toll on the condition and readiness of military
equipment, and the Army and Marine Corps face a number of ongoing and
long-term challenges that will affect the timing and cost of equipment
repair and replacement.^4 A number of reports in recent years by GAO and
other audit agencies (see app. II) have highlighted numerous long-standing
problems facing DOD's prepositioning programs, including a lack of
centralized operational direction; unreliable reporting of the readiness
of prepositioned equipment sets; inaccurate reporting of the maintenance
condition of equipment; equipment excesses at some prepositioned
locations; systemic problems with the requirements determination and
inventory management; and some Army prepositioned stocks having a
maintenance condition that was considerably below the goal of 90 percent
mission capability. In our September 2005 report, we recommended that DOD
develop a DOD-wide strategy and that the Army repair equipment in poor
maintenance condition.^5
The National Defense Authorization Act for Fiscal Year 2006 directed the
Army to conduct an assessment of its prepositioning programs, and the Army
did so. The Army's report, submitted in April 2006, focused on specific
items required by the law including how such programs were configured to
support the evolving goals of the Army, including key operational
capabilities; whether there were any shortfalls, and if so, how the Army
planned to mitigate them; the maintenance condition of prepositioned
equipment and supplies, including the procedures used to ensure that
maintenance was performed; the adequacy of storage and maintenance
facilities; and the adequacy of oversight mechanisms and internal
management reports. The Army's report was based on the Army Prepositioned
Stocks Strategy 2012, the Army's underlying strategy at that time, which
laid out a strategic roadmap for the Army's prepositioning program through
2012. Strategy 2012 called for the prepositioning of five heavy brigade
combat team sets, multiple support units, and associated sustainment
stocks to provide the strategic responsiveness required to attain the DOD
joint swiftness objectives. These stocks are prepositioned around the
world, primarily at land sites in Europe, Northeast Asia, and Southwest
Asia, and aboard prepositioning ships afloat near Guam and Diego Garcia.
During the course of our review and subsequent to the Army's issuance of
its April 2006 report to Congress, however, the Army began revising its
prepositioning program and drafting a revised strategy, the Army
Prepositioned Stocks Strategy 2013. These changes were still under way as
we completed our work.
^4 GAO, Defense Logistics: Preliminary Observations on Equipment Reset
Challenges and Issues for the Army and Marine Corps, [28]GAO-06-604T
(Washington, D.C.: Mar. 30, 2006).
^5 [29]GAO-05-427 .
The 2006 Authorization Act also required GAO to assess the Army's report
and identify any issues facing the program for the future.^6 We provided a
briefing to your staff on our preliminary assessment of the Army's report
and issues facing the program. The present report expands and updates that
information by assessing (1) whether the Army's report addressed the areas
required by Congress, and (2) major challenges the Army continues to face
in its prepositioning program.
Our work is based on our analysis of the Army's report and other key
documents identifying equipment shortfalls and maintenance condition,
facility shortfalls, and contractor oversight; discussions with senior
Army officials and commanders; and site visits to Army prepositioning
sites in Charleston, South Carolina; Europe; South Korea; and Kuwait. We
determined that the data we used were sufficiently reliable for the
purpose of this report. We performed our work from February 2006 through
October 2006 in accordance with generally accepted government auditing
standards. A more detailed discussion of our scope and methodology is
contained in appendix I.
Results in Brief
While the Army's April 2006 report to Congress on the status of its
prepositioned program addressed the areas required by Congress, the report
is now outdated because the Army has shifted its prepositioning strategy.
As required by the National Defense Authorization Act for Fiscal Year
2006, the April 2006 report included descriptions of operational
capabilities as outlined in the Army Prepositioned Stocks Strategy 2012,
as well as inventory shortfalls expressed in terms of procurement costs.
The report estimated that the Army would need well over $4 billion to
procure new equipment and replenish spare parts and other items, as well
as provide new facilities in Kuwait, South Korea, and Charleston, South
Carolina. The report also addressed the maintenance condition of
prepositioned equipment, which had been a concern based on GAO's past
work. The Army reported that stocks in South Korea had been repaired since
GAO's previous review was performed. The Army's report also noted recent
efforts to improve management and maintenance oversight of the program,
including forming an independent team to inspect equipment and maintenance
operations. However, since the report was submitted to Congress, the Army
has been reexamining its overall prepositioning strategy. Based on recent
reprogramming decisions as part of a DOD program review, its
identification of servicewide equipment shortfalls, and insights gained
from the 2006 Quadrennial Defense Review, the Army concluded in the summer
of 2006 that its Prepositioned Stocks Strategy 2012 was no longer viable.
It began work on a revised strategy in late August 2006.^7 According to
Army officials, the proposed strategy includes significant changes to the
program, including less reliance on heavy combat equipment afloat, and the
expansion of heavy combat equipment in Kuwait and Italy, along with
continued reliance on stocks in South Korea. The Army is seeking to have
an implementation plan for its new strategy in place by the end of 2006.
^6 The Act (Pub.L. No. 109-163, S 351 (2006)) specifically required the
Comptroller General to (1) determine whether the Army's report
comprehensively addressed the required reporting items, and (2) determine
the extent to which any shortfall or other issues reported by the
Secretary of the Army or identified by the Comptroller General had been
addressed including an assessment of any related plans to address
shortfalls in the future.
The Army faces major strategic and management challenges as it revises and
implements its prepositioning program, including:
o Inability to gauge its alignment with DOD-wide prepositioning
strategy: The Army's plan to implement its prepositioning strategy
by the end of 2006 could result in investments for the
prepositioning program that do not align with the anticipated
DOD-wide prepositioning strategy because it will be several months
ahead of overarching DOD-wide efforts. Strategy should be shaped
from the top down. One of the key recommendations from our
September 2005 report was that the department needed joint
doctrine and an overarching strategy to lay a foundation for the
programs of the services to ensure jointness and avoid duplication
across the services. Consistent with our recommendation, DOD began
a study with a broad charter in mid-2006 to evaluate a range of
future prepositioning options, but that study was still underway
when we completed our work. The John Warner National Defense
Authorization Act for fiscal year 2007 required DOD to establish
the strategic policy on the programs of DOD for the prepositioning
of materiel and equipment mid-April 2007.^8 At the time we
finished our work the Army was planning to implement its strategy
by the end of 2006--months ahead of the DOD-wide effort. The most
significant problem resulting from this timing is that the Army
cannot be assured that its efforts will be aligned with DOD-wide
efforts still ongoing. Even though DOD and Army officials told us
they have coordinated their prepositioning plans, the timing of
the two strategies is not synchronized. As a result, DOD could be
restricted in developing an optimal DOD-wide strategy because the
Army strategy already exists or the Army could be at risk of
filling requirements that will be superseded when the DOD-wide
strategy is issued. Moreover, prepositioning is interconnected
with airlift, sealift, and basing, so the Army's decisions will
have an as-yet undetermined effect on lift requirements and
basing. Such potential problems are avoidable if the strategies
are synchronized.
^7 The new strategy will be the Army Prepositioned Stock Strategy 2013.
o Need to determine sound secondary item and operational project
stock requirements and systematically measure and report
readiness: Despite recent efforts to improve requirement setting,
the Army has not yet determined reliable secondary item and
operational project stock requirements. In its efforts to reassess
secondary item requirements, the Army ran its
requirements-determination model, called the Army War Reserve
Automated Process, in 2005. It had not previously run the model
since 1999, even though Army guidance at that time called for
requirements to be updated every 2 years. Further, operational
project stock requirements must be revalidated every 5 years, but
the most recent revalidation for many of the projects was last
conducted in 1998. However, in response to our recommendation in
2005 that this long-standing problem be addressed, the Army
initiated a revalidation of its Operational Project Stocks in
April 2006. The revalidation was still ongoing when we completed
our work in October 2006. Also, while the Army measures readiness
of prepositioned equipment programs by assessing inventory levels
against requirements and the maintenance condition of on-hand
equipment, the Army does not systematically measure or report
readiness for the secondary item and operational project programs.
This situation is largely unchanged since 1998, when we
recommended that the Army develop readiness-reporting mechanisms
for these programs.^9 Without sound requirements or reporting
mechanisms, the Army cannot reliably assess the impact of any
shortfalls, the readiness of its programs, or make informed
investment decisions about them.
^8 Pub. L. No. 109-364, S 351 (2006).
^9 GAO, Military Prepositioning: Army and Air Force Programs Need To Be
Reassessed, [31]GAO/NSIAD-99-6 (Washington, D.C.: Nov. 16, 1998).
o Need to identify maintenance and storage facility requirements:
The Army currently lacks a comprehensive prepositioning storage
and maintenance facilities plan. The maintenance and storage
facility shortages it reported to Congress were based on the now
obsolete Army Prepositioning Strategy 2012. Army policy calls for
the long-term storage of prepositioned equipment in
controlled-humidity facilities, because outdoor storage results in
substantially increased maintenance costs.^10 Yet currently in
Kuwait, storage facilities are being used to house command staff
personnel while equipment is being stored outside, in harsh
environmental conditions. The Army estimates that maintenance
costs an extra $24 million per year for the heavy brigade set in
Kuwait because equipment is stored outside. In South Korea,
despite an intensive effort to repair prepositioned assets and
correct long-standing problems, almost one-third of the equipment
continues to be stored outside, resulting in increased maintenance
and costly corrosion. In contrast, part of the Army's new strategy
includes a plan to store heavy equipment at a newly constructed
site in Italy, to make use of a facility that had previously been
left without a mission. Before these existing facilities problems
can be addressed, however, the Army must determine how
prepositioned equipment will be utilized and where it needs to be
located. Army officials are considering using prepositioned
equipment in Kuwait, South Korea, and Italy to support a
rotational presence and training in these regions even as they
continue to develop a prepositioning implementation plan based on
existing space and storage. According to Army officials, utilizing
prepositioned equipment to support a rotational presence or for
training increases the maintenance requirement and, therefore, the
maintenance facilities needed. Depending on how the rotation is
scheduled, however, it may concurrently reduce the requirement for
humidity-controlled storage space. Furthermore, since an alternate
South Korean prepositioning site is being considered, the Army may
be constructing facilities at its existing prepositioning site at
Camp Carroll that it does not need. Without a comprehensive
facilities plan, the Army will not know the types and quantities
of facilities it will need to store and maintain equipment at each
location.
o Lack of maintenance oversight: The Army reported to Congress
that oversight of the program is provided by the Army Materiel
Command and external agencies tasked with evaluating the program,
and that readiness is accurately reported. In our 2005 report, we
found that a lack of oversight in South Korea resulted in a
deterioration of the maintenance condition of prepositioned
equipment. In response to our report, the Army established
oversight of the maintenance process in South Korea and repaired
the equipment. However, in Kuwait, our review of recent
inspections by Army inspectors of contractor-maintained equipment
raised significant concerns about its true maintenance condition.
These concerns are the result of inadequate management of
contractor performance. Specifically, over one-quarter of the
prepositioned equipment presented by the contractor failed the
government quality assurance inspection between June 2005 and June
2006.
^10 Army Regulation 740-1, Storage and Supply Activity Operations (Sept.
9, 2002).
We are recommending that the Army take steps to synchronize its
prepositioning strategy with the DOD-wide strategy in order to
ensure that future investments made for the Army's prepositioning
program align with the DOD prepositioning strategy. Once the
Army's strategic direction is aligned, we are recommending that
the Army develop an implementation plan that maintains ongoing
reevaluation of the secondary item and operational project stock
requirements; establishes systematic readiness measurement and
reporting of these requirements; identifies the optimal mix of
storage and maintenance facilities at each location; and
prescribes oversight requirements for the maintenance of
prepositioned equipment.
In written comments on a draft of this report, DOD generally
concurred with our recommendations but stated that it had already
taken steps to address the recommendations and that further
actions are not needed. We acknowledge that the Army and the
department have taken some initial steps; however, we continue to
believe that our recommendations have merit and that additional
actions and sustained management attention will be needed to
ensure the viability of the Army's prepositioning program as part
of the overall departmentwide effort to meet mobility needs.
Background
Prepositioning is an important part of DOD's overall strategic
mobility framework. It allows DOD to field combat-ready forces in
days rather than the weeks it would take if the forces and all
necessary equipment and supplies had to be brought from the United
States to the location of the conflict. The U.S. military can
deliver equipment and supplies in three ways: by air, by sea, or
by prepositioning. While airlift is fast, it is expensive to use
and impractical for moving all of the material needed for a
large-scale deployment. Although ships can carry large loads, they
are slower than airlift. Prepositioning lessens the strain of
using expensive airlift and reduces the reliance on slower sealift
deliveries. The value of prepositioned stocks was demonstrated
during operations in Iraq. The military used equipment and
supplies stored at land sites in the region and offloaded much of
the stocks from its prepositioning ships. Having the equipment
prepositioned allowed troops to fly in, deploy rapidly, and train
with prepositioned equipment before beginning combat operations in
Iraq. As the ongoing war has depleted those items, the Army is in
the process of reconstituting its prepositioned equipment and
supplies.
The Department of the Army provides strategic-level guidance for
the Army's prepositioned stock program and allocates funding for
prepositioned stock requirements. The Army Materiel Command
provides the overall management of the Army's prepositioned stocks
program. Within Army Materiel Command, the Army Sustainment
Command manages the operations and maintenance of the program, and
issues the stocks in theater in support of contingency operations
or exercises. At each prepositioned stock location, the Army
Sustainment Command also provides an Army Field Support brigade
and battalion for day-to-day maintenance and operational
management of the program.
The Army's prepositioning program involves three primary
categories of stocks stored at land sites and aboard
prepositioning ships: combat brigade sets, war reserve sustainment
stocks, and operational projects as described below.
o Army Combat brigade sets
o Are designed to support 3,000 to 5,000 soldiers.
o Include heavy weaponry such as tanks and Bradley
fighting vehicles.
o Include support equipment such as trucks and High
Mobility Multi-purpose Wheeled Vehicles.
o Include spare parts and other sustainment stocks to
support the early stages of a conflict.
o War reserve sustainment stocks include
o Items to sustain the battle unit until resupply can
be ramped up to wartime levels and arrive in theater.
o War Reserve Secondary Items include rations,
clothing and textiles, construction and barrier
materiel, medical supplies, repair parts, and major
assemblies (reparables and consumables).
o Operational project stocks include
o Authorized material above unit authorizations designed
to support Army operations or contingencies.
o Equipment and supplies for special operations forces,
bare base sets, petroleum and water distribution,
mortuary operations, and prisoner-of-war operations,
among others.
The Army�s April 2006 Report to Congress Addressed the Areas
Required, But the Army�s Strategy is Evolving
The Army's April 2006 report to Congress on the status of its
prepositioned program addressed the areas required by Congress,
but the Army has significantly shifted its prepositioning strategy
since then. The Army's report included descriptions of operational
capabilities as outlined in the Army Prepositioned Stocks Strategy
2012; addressed the maintenance condition of prepositioned
equipment; and noted recent efforts to improve management and
maintenance oversight of the program, including forming an
independent inspection team. However, since the report's
publication, the Army has begun a reexamination of its overall
prepositioning strategy. According to the Army, this shift was
based on insights gained from the 2006 Quadrennial Defense Review,
but Army officials told us that recent budget reprogramming
decisions and worsening Army-wide equipment shortfalls also
influenced the reexamination. The Army concluded that its
Prepositioned Stocks Strategy 2012 was no longer viable and began
work on a revised strategy that was approved by Army leaders in
late August 2006 and is expected to be completed by the end of
2006.
Army Report Addresses Areas Required by Congress
The Army's report to Congress addressed the required areas
included in the National Defense Authorization Act for Fiscal Year
2006. The Army determined that over $4 billion would be needed to
fill equipment, secondary item, and facility shortfalls. The Army
reported that additional covered storage and maintenance space was
needed at prepositioning sites in Southeast and Northeast Asia as
well as at the Charleston, South Carolina, facilities used to
maintain afloat stocks envisioned under the 2012 strategy.
Further, it indicated that the facilities in Europe would be
sufficient to meet the prepositioned requirements once the
construction project in Italy was completed. The equipment sets at
each location were at a high percentage of mission capability, it
reported, with the exception of Kuwait. The equipment sets in
Kuwait had been issued in support of Operation Iraqi Freedom and
Operation Enduring Freedom, and by 2006 had a low
mission-capability rate. It did stipulate, however, that the
equipment set was undergoing repair, recapitalization, and
replacement.
Regarding the program's management and maintenance oversight, the
report acknowledged that weaknesses in the quality control program
had been revealed by both internal and external audits, including
GAO's September 2005 report. The Army Sustainment Command created
the Logistics Support and Evaluation Team to address identified
quality control problems. According to the Army report, the team
provides an additional layer of review to ensure that the Army
Prepositioned Stock readiness levels reported are accurate and
that sufficient quality assurance measures are in place.
Army Prepositioning Stocks Strategy 2012 Is No Longer Viable
Since the release of its report to Congress in April 2006, several
decisions led the Army to conclude that its existing strategy was
no longer viable. In particular, an internal DOD reprogramming
action required the Army to offload a Heavy Brigade Combat Team
equipment set stored on a prepositioned ship and redistribute it
to meet existing equipment shortfalls and reduce costs. The Army
had two equipment sets already aboard prepositioned ships and
planned to upload a third set in 2013. The reprogramming action
directed the Army to offload the third equipment set. However,
because the third equipment set had not yet been created, the Army
decided to offload one of the existing equipment sets instead to
meet the reprogramming guidance. This decision effectively reduced
the Army's program in the near term from two to one heavy brigade
combat team afloat, with implications for the operational plans of
the regional combatant commanders.
Several factors combined to create a ripple effect that impacted
the viability of the Army Prepositioned Stocks 2012 Strategy.
First, the department told us the Army changed its strategy based
on insights gained from the 2006 Quadrennial Defense Review. Also,
Army officials told us that equipment shortfalls made it difficult
for the Army to meet the requirements in the strategy at least
partly because Army prepositioned stock equipment was continuing
to be drawn to support ongoing operations. Also, the Army
transformation to modularity exacerbated shortfalls in certain
types of equipment and created excesses in others. In addition,
the Army eliminated most of the remaining facilities and
prepositioned stocks from Western Europe but was completing a new
maintenance and storage facility in Italy which needed a mission.
As a result, the Army's 2006 report was outdated soon after its
publication and should not be used by Congress or DOD for funding
decisions.
The Army Faces Major Strategic and Management Challenges As It
Revises and Implements Its Prepositioning Program
The future success of the Army's prepositioning program depends
not only on how well the Army aligns its efforts with those of the
department as a whole, but also on how well long-standing
management issues are addressed as the new strategic plan is
implemented. The Army expects to finalize its implementation plan
for the revised Prepositioned Stocks Strategy 2013 by December 31,
2006, but DOD will not complete its departmentwide strategy before
mid-April 2007. Further, problems persist with the Army's
management of its secondary item and operational project stocks
programs, including lingering questions about the overall
requirements and the lack of reliable readiness measures for these
programs. In addition, the lack of a comprehensive prepositioning
storage and maintenance facilities plan contributes to increased
maintenance costs and uncertain future facility requirements.
Finally, the Army has not demonstrated adequate oversight to
ensure the proper maintenance condition of prepositioned stocks.
The Army is developing a new prepositioning strategy to address
recent decisions that have affected the viability of its existing
plan. According to Army officials, the new strategy is intended to
promote greater flexibility in the use of prepositioned stocks
while concurrently increasing the Army's access to unstable areas.
While continuing to rely on stocks in South Korea, the proposed
strategy includes significant changes to the program--among them,
less reliance on heavy combat equipment afloat and expanded
reliance on heavy equipment in Kuwait, Qatar, and Italy. The
Army's draft revisions to its prepositioning strategy were
approved by the Army Vice-Chief of Staff in late August 2006. The
Army established an Integrated Process Team to develop a
comprehensive implementation plan for the new strategy and to
provide direction to working groups that would assess the areas of
strategy, capabilities, equipping, facilities, and funding. The
Army plans to have this task completed by late December 2006.
However, since the Army's Integrated Process Teams were still
performing their work, we could not evaluate progress at the time
we completed our review.
DOD has efforts underway that will address gaps identified in
GAO's September 2005 report but have implications for the Army's
efforts. First, to address gaps in departmentwide oversight, DOD
convened a working group that includes representatives from the
Office of the Secretary of Defense, Joint Staff, Defense Logistics
Agency, the Army, Joint Forces Command, and the other services to
develop joint doctrine for the prepositioning programs. This group
was also working to update the departmental-level directive that
describes responsibilities and provides broad guidance to the
services during our review. While the efforts begun by this group
represent progress, DOD had not yet developed joint doctrine for
the program at the time we completed our work. Second, DOD also
initiated a study in the spring of 2006 to address the need for a
departmentwide prepositioning strategy to guide the department's
future prepositioning efforts. This study was a follow-on to the
2005 Mobility Capabilities Study that, while identifying the
importance of prepositioning in meeting mobility objectives, along
with interrelated airlift, sealift, and basing decisions,
recognized the need for further analysis of prepositioning. Thus,
the DOD-wide prepositioning study will determine how and what
prepositioned equipment should be used and whether the
prepositioned assets are in the best locations to support the
department's priorities and posture plans. According to DOD
officials, this DOD-wide prepositioning study was not scheduled to
be finished until the spring of 2007 at the earliest. However, on
October 17, 2006, Public Law 109-369 was enacted directing the
Secretary of Defense to complete its DOD-wide prepositioning
strategy by mid-April 2007.
DOD and Army officials told us during the course of our review
that they discuss such strategy issues during their joint working
group meetings and felt that they have coordinated their
prepositioning plans. However, if the two strategies are not
synchronized, DOD could be limited in developing an optimal
DOD-wide strategy because the Army strategy already exists.
Alternatively, the Army could be at risk of filling requirements
that will be superseded when the DOD-wide strategy is ultimately
issued. In fact, DOD anticipates that when the DOD-wide strategy
is issued the Army will have to modify its service-specific
prepositioning strategy to align with the new requirements.
Finally, since prepositioning is interconnected with airlift,
sealift, and overseas basing, the Army's decisions will have an
as-yet undetermined effect on lift requirements and basing.
Despite Recent Efforts to Improve Requirements Setting for
Secondary Item and Operational Project Programs, the Army Does
Not Have Reliable Requirements or Readiness Information
Despite recent efforts to improve requirements setting, the Army
has not yet determined reliable secondary item and operational
project requirements. In its efforts to reassess secondary item
requirements, the Army ran its requirements-determination model,
called the Army War Reserve Automated Process, in 2005. It had not
previously run the model since 1999, even though Army guidance at
that time called for requirements to be updated every 2 years.
Because the model yielded questionable outputs, Army officials
told us they were conducting a management review to scrub the
requirements and help to determine investment priorities. Army
officials said they expect requirements to be significantly
adjusted as a result of their reviews. For example, the Army has
already lowered the U.S. Army Europe meals-ready-to-eat stockage
levels to match the smaller force structure there. This action
resulted in over 1 million meals being made available to fill
other high-priority requirements. In addition, the Army War
Reserve Automated Process that is used for computing secondary
item requirements will now be updated annually instead of
biennially.
Addressing these problems is critical for ensuring Army readiness
in future conflicts. Experiences in Iraq showed that prepositioned
secondary item stocks did not adequately support the troops in
combat operations. Secondary items encompass a wide range of
inventory, including critical readiness-enabling spare parts. In
2005, we reported that inaccurate requirements and insufficient
funding led to shortages in critical items during Operation Iraqi
Freedom.^11 For example, demand for nonrechargeable lithium
batteries and track shoes for armored vehicles were more than
three times greater than the stated requirements for those items.
We concluded that these shortfalls were directly traceable to
problems in requirements computation.
In addition to critical shortfalls, lessons learned also show
considerable mismatches between what was available in
prepositioned stocks and what units actually needed. In
retrospect, the Army did a poor job in forecasting what it would
need. As a result, it had to use scarce and expensive airlift to
get needed stocks to the troops in the field, essentially
defeating the purpose of prepositioning such items in the first
place. Subsequent analyses have detailed the extent of the
mismatches between stock levels, requirements, and actual usage.
For example, most of the 16,000 different spare parts that were
actually positioned in Kuwait were ultimately shipped back from
the theater because they were not needed by the forces there,
according to a RAND study commissioned by the Army.^12 Most spare
parts had to be airlifted to the theater, according to RAND. In
addition, RAND compared the Army's requirements for prepositioned
spare parts to the actual demands during 2003 in Kuwait and found
considerable mismatches. Only about half of the spare parts the
Army thought would be required for prepositioned stocks were
actually demanded in theater by Army units during 2003.
^11 [32]GAO-05-275 .
^12 The RAND Corporation, Sustainment of Army Forces in Operation Iraqi
Freedom: Major Findings and Recommendations (Santa Monica, Calif.: 2005).
According to Army officials, secondary items have historically not
been fully funded at least partially because of concerns over the
accuracy of the requirements. As shown in Operation Iraqi Freedom,
inaccurate requirements resulted in limited demand for some items
and excessive demand for others, greatly surpassing the on-hand
inventory. The Army had to employ high-cost air transportation to
bring needed items to the warfighter.
As with secondary item requirements, long-standing issues exist
within the operational project program--which includes important
items like chemical defense equipment, pipeline systems, mortuary
units, and bare base sets for housing soldiers in austere
environments, among other items not typically part of unit
equipment. These sets are typically kept to meet the specific
needs of regional combatant commanders, and Army regulations
require that they be revalidated every 5 years to ensure that the
sets are still needed for an operational plan. Despite this
requirement, the most recent revalidation for many of the projects
was conducted in 1998. However, in response to our recommendation
in 2005 that this long-standing problem be addressed, the Army
initiated a revalidation of its Operational Project Stocks in
April 2006.
By October 2006, when we completed our work, the Army had queried
Army commands worldwide to revalidate the needs for the various
sets and had obtained validations for most of the sets. However,
Army officials told us that they have already taken actions to
eliminate projects that are no longer needed and are planning to
conduct a management review of this program to further refine the
requirements. To date, the Army has consolidated some projects and
has cancelled other projects that were no longer needed. For
example, three projects to support aerial delivery operations were
cancelled because they were no longer required to support current
operational plans. In addition, United States Army, Europe has
cancelled two projects for bridging and aircraft matting because
they no longer meet current operational requirements.
One of the most significant consequences of having questionable
requirements underpinning the programs is that it makes it
difficult to assess their overall readiness, and the risk
associated with shortfalls. Typically, the Army measures readiness
of prepositioned equipment programs by assessing the inventory
levels against requirements as well as the maintenance condition
of on-hand equipment. However, the Army does not routinely measure
or report readiness for the secondary item and operational project
programs. According to Army and DOD officials, shortfalls in
secondary items and some operational projects are identified in
combatant command priority lists and through joint quarterly
readiness reports to the Joint Staff, but not as part of the
Army's readiness reporting system. This situation is largely
unchanged since 1998, when we recommended that the Army fix
requirements problems and develop readiness-reporting mechanisms
for these programs.^13
Despite their lower priority relative to combat equipment
programs, secondary item and operational project programs can be
critical during a war. They contain items such as spare parts that
are essential to keep the combat equipment operational, as well as
chemical defense equipment and other items likely to be needed
during the early stages of a conflict. The budgetary stakes are
high: according to the April 2006 report to Congress, the Army
estimated that it had a shortfall of about $1.7 billion in
secondary items alone. Without sound requirements, the Army cannot
reliably assess the readiness of its programs. Once sound
requirements are set, the Army will need reporting mechanisms to
assess their readiness and the impact of any shortfalls. In the
absence of such mechanisms, the Army cannot make sound risk-based
decisions about what investments it should make in the programs in
the future.
Army Lacks a Comprehensive Prepositioning Storage and Maintenance
Facilities Plan
Although the Army reported maintenance and storage facility
shortages to Congress, it lacks a comprehensive plan for
maintenance and storage facilities for prepositioned stocks.
According to Army officials, facility shortfalls are a concern in
Kuwait and Korea, while facility excesses were an issue in Italy.
Army policy recommends storing prepositioned equipment in
controlled-humidity storage facilities, since outdoor storage
results in increased maintenance costs. However, requirements for
these facilities are currently uncertain. Until the Army develops
a comprehensive plan that identifies how prepositioned equipment
will be utilized and where it will be located for the long term,
the existing facilities problems can not be addressed.
Outdoor Storage of Equipment Results in Millions of Dollars of
ncreased Maintenance Costs
The Army's lack of adequate storage facilities for prepositioned
equipment has led to equipment being stored outdoors, leaving it
relatively unprotected from moisture, sand, and other elements and
thus contributing to a number of maintenance problems, including
corrosion.^14 Army Regulation 740-1 stipulates that prepositioned
equipment should be stored in controlled-humidity storage
facilities. If controlled-humidity storage is not available, then
covered storage space is preferred. More frequent inspections are
required for equipment stored outside.
^13 GAO, Military Prepositioning: Army and Air Force Programs Need To Be
Reassessed, [33]GAO/NSIAD-99-6 (Washington, D.C.: Nov.16, 1998).
^14 Corrosion is defined under 10 U.S.C. S 2228 as the deterioration of a
material or its properties caused by a reaction of that material with its
chemical environment.
Inadequate storage facilities in both South Korea and Kuwait have
resulted in outdoor storage of prepositioned equipment. Figure 1
shows the storage situation in Kuwait, with prepositioned
equipment stored at outside locations.
Figure 1: Existing Outdoor Storage in Kuwait
Outdoor storage accelerates equipment deterioration and increases
costs due to additional maintenance requirements. For example, if
tanks are stored outside, preventive maintenance inspections must
be performed every 30 days. If they are stored in
controlled-humidity warehouses, inspections are only performed
every 6 months. According to Army officials, maintenance
inspections and repairs for equipment stored outdoors cost about
four times that of equipment being stored in controlled-humidity
warehouses. Army officials estimate that it costs an additional
$24 million per year per heavy brigade combat team to maintain the
equipment in outdoor storage.
Future Facility Requirements for the Army Prepositioning Program
Remain Uncertain
Facility requirements for the Army's prepositioning program depend
on equipment requirements, and as was discussed above, these have
not yet been established. Consequently, facility requirements are
uncertain. Prepositioned equipment can be used as rotational--that
is, equipment provided to units arriving in theater for
deployment; training--that is, equipment provided to units for
training exercises but then returned to the storage location; or
simply as stored prepositioned--equipment that is stored for
undetermined future use. According to Army officials, there will
be increased maintenance and maintenance facilities requirements
if prepositioned equipment is to be used for training or to
support a rotational presence in the region. Concurrently, there
may be a decreased requirement for humidity-controlled storage
space, depending on how the rotation is scheduled. Rotational unit
equipment will have more repair requirements than stored units,
due to damage and wear. If the prepositioned equipment is
maintained solely for future use, more storage facilities and less
maintenance capability will be needed. In Kuwait, the Army has not
determined whether the prepositioned equipment will be used for
units rotating in and out of theater, used as a combat brigade
team training set, or stored.
Storage facilities in Kuwait will likely be needed, but until Army
officials decide how the equipment in Kuwait will be used, they
will not be able to determine the type and amount of facilities
needed. Storage facilities intended for prepositioned equipment at
Camp Arifjan are currently being used as headquarters buildings
for Army Central Command, and it is not clear when these buildings
will revert to their storage function. While the Army is exploring
numerous options for providing covered storage of the equipment in
Kuwait, ranging in cost from $20 million to $37 million, none are
currently funded.
Additional maintenance and storage facilities are needed in South
Korea to support the prepositioned equipment at Camp Carroll. The
Army has already broken ground on a new maintenance facility that
is expected to be operational in November 2007. The Army has plans
to build an additional 200,000 square feet of storage space at a
cost of $18.6 million. This project is currently unfunded, yet it
has a target completion date of 2012. However, while the Army is
addressing the prepositioning facility shortfalls at Camp Carroll,
it is considering relocation of the set to another site near a
port further south. Army officials believe it would provide for
more flexible use of the prepositioned assets. If the Army decides
to move the equipment set, the additional covered storage at Camp
Carroll may be unnecessary.
The Army's new strategy also includes a plan to store heavy
equipment at a newly constructed Italian site, to make use of a
facility that previously had no mission. When initially approved,
the construction project was intended to support the storage of a
prepositioned combat brigade team equipment set, but this plan was
eliminated in the 2012 strategy. However, since the contract for
this project had already been awarded and construction was
underway, the Army decided to complete the construction. Army
officials stated that it would be more costly to cancel the
project than to finish it. The cost for the initial phases of the
construction project is approximately $48 million. A $5 million
ammunition maintenance and storage facility is also planned as
part of this construction project.
Figure 2 shows the new facility, including seven
controlled-humidity warehouses, a maintenance facility, an
administration building, and a brake test facility and wash rack.
Figure 2: Overview of Military Construction Project at Camp
Livorno, Italy
The new Army strategy includes a prepositioned combat brigade team
equipment set at Livorno with the intention of using the port to
upload the prepositioned equipment onto ships as needed. The Army
has also been discussing using the equipment in Livorno for
rotational training exercises in Eastern Europe in locations like
Bulgaria and Romania. However, specific plans for this had not
been developed.
Afloat stocks are reduced in the Army's new 2013 prepositioning
strategy, but the Army plans to continue to utilize the
Charleston, South Carolina, prepositioning facility to unload,
repair, and reload prepositioned equipment from afloat
prepositioning ships. The facility was originally used to maintain
Polaris missiles and was converted by the Army to provide
maintenance support of the prepositioned afloat fleet. According
to Army officials, upgraded maintenance and storage facilities
will be required to support the facility's prepositioning mission
but the implications of the new strategy on facilities have not
yet been determined.
Table 1 shows the current status of maintenance and storage
facilities at selected Army prepositioning locations.
Table 1: Status of Facilities at Selected Army Prepositioned Stock
Locations
Location Status
Europe o Military closed three prepositioned sites in Europe
at Bettemborg, Luxembourg; Eygelshoven, Netherlands;
and Hythe, United Kingdom
o First two phases of a three-phase maintenance and
storage facility project are nearing completion in
Livorno, Italy at a cost of $48 million
Charleston, S.C. o The Army is proposing several projects for
additional storage and improved maintenance capability
for the facility
South Korea o Construction of a new maintenance facility is
currently underway at Camp Carroll with completion due
in November 2007
o Planning for additional 200,000 sq. ft. storage
capability
o Exploring potential relocation of set to Kwang Yang
Kuwait o Existing storage facility is currently being used to
house Army Central Command administrative offices,
which leaves prepositioned assets stored outside
o Army Materiel Command is considering permanent and
temporary maintenance and storage capability
alternatives to protect prepositioned equipment from
the harsh desert climate
Qatar o Seventeen of 26 existing storage facilities have
been diverted to Army priority missions; some diverted
warehouses may be returned to Army Prepositioning
Stocks use at some future date
Source: GAO analysis, developed from Army data.
Maintenance Oversight of Prepositioned Stocks Has Improved in
South Korea, but Needs Improvement in Kuwait
Management oversight of the maintenance of equipment in Korea has
improved since we published our report in 2005. Previously,
significant issues and problems were found with the mission
capability of stocks in South Korea. We stated that despite
reports of high mission capability, the majority of the stocks in
South Korea were not mission capable. During our May 2006 visit to
South Korea, we observed that the Army had hired additional
personnel to bring the equipment up to full mission capability and
ensure that the equipment was properly maintained. A new
organizational structure was established that created clear lines
of responsibility and standard operational procedures for each
aspect of the cyclic maintenance program. A training program for
production control was established for both U.S. and South Korean
employees, and there was a continued emphasis on the need for
oversight.
While the problems we identified in 2005 in South Korea have been
corrected, recent inspections of contractor-maintained equipment
in Kuwait revealed a high percentage of equipment failure,
indicating that maintenance oversight is a continuing problem.
Analyzing data available at the site, we found that 28 percent of
the prepositioned equipment in Kuwait submitted for government
acceptance had failed quality assurance testing between June 2005
and June 2006. However, the maintenance battalion had not
routinely tracked this information or monitored this important
performance measure.
Additionally, much of the equipment recently certified by the
contractor during preventative maintenance inspections failed
random governmental checks. Beginning in May 2006, the quality
assurance^15 team began performing random preventative maintenance
checks on equipment items inspected and certified by the
contractor within the previous 10 to 14 days. Nearly half of the
49 pieces of equipment sampled during May and June 2006 by the
quality assurance inspectors had nonmission-capable faults needing
repair. We accompanied inspectors on three random inspections. The
nonmission-capable faults we observed included inoperable lights,
fluid leaks, lack of battery power, and an inoperable rear door on
a Bradley Fighting Vehicle. Army officials told us this failure
rate was not acceptable and that they had informed the contractor
it needed to improve performance. Yet Army officials recently
reported successful issuance in August 2006 of some of the
prepositioned equipment for units heading to Iraq. This inspection
failure rate raises questions about the true mission capability of
the prepositioned equipment, and it demonstrates the need for
rigorous management oversight of the maintenance contractor in
Kuwait. Without improved oversight of maintenance, prepositioned
equipment and supplies could be less than mission capable when
needed.
Conclusions
While prepositioning is considered critical to DOD's ability to
meet its mobility needs, the department does not yet have a clear
strategy laid out that identifies the role that prepositioning
will play in the 21st century. The Army took steps to revise its
prepositioning strategy in the latter part of 2006; however, its
efforts are not fully synchronized with the evolving DOD-wide
strategy. The Army's decisions today have profound future
implications for the entire department and potentially affect our
ability to respond to conflict. The primary risk of having the
Army develop its strategy in advance of a DOD-wide strategy is
that the Army could develop plans without an understanding of how
the Army and other services' programs will fit together or,
alternatively, limit the options of the department because it must
incorporate the Army's plans into the overall strategy. The
importance that prepositioned stocks are envisioned to have in the
future underscores the need for DOD-wide consensus on the
direction and priority for the programs, and the necessity of
strong leadership and direction from the top levels of DOD. The
choices may well be difficult. Unlike the period following the end
of the Cold War, the Army no longer has an excess of relatively
modern combat and support equipment. Depending on the strategy
that is eventually chosen, billions of investment dollars could be
required to recapitalize prepositioning programs and build an
infrastructure to support them. Alternatively, should the Army and
DOD decide to focus less on prepositioned stocks, this decision
will likely have a ripple effect on airlift and sealift needs. A
DOD-wide strategy would become the foundation for an investment
plan that balances costs and risks and would guide the department
as it chooses where it will invest in an environment that is
increasingly becoming resource constrained.
^15 Quality assurance inspectors perform a variety of tasks, including
initial acceptance of repaired equipment from the maintenance contractor
and monitoring of contractor-performed preventative maintenance checks.
Setting and aligning broad strategies, however, will not be enough
to ensure success in the Army's program over the longer term. Once
the DOD-wide strategy is set and the Army's efforts are aligned
with it, the Army must turn its attention to the fundamentals of
program management. Dozens of reports from GAO and other
organizations point to pervasive management problems in
determining requirements and ensuring program readiness, as well
as in providing adequate storage and maintenance for prepositioned
equipment. To its credit, the Army recognizes this and has taken
critical first steps toward redefining its prepositioning program
and building a plan for its implementation. However, focused and
sustained attention will be required to overcome these
long-standing issues.
Recommendations for Executive Action
We recommend that the Secretary of Defense direct the Secretary of
the Army to take steps to synchronize the Army's prepositioning
strategy with the DOD-wide strategy to ensure that future
investments made for the Army's prepositioning program align with
the anticipated DOD-wide prepositioning strategy.
Once the strategic direction is aligned with the DOD strategy, we
recommend that the Secretary of the Army develop an implementation
plan that
o completes ongoing reevaluation of the secondary item and
operational project stock requirements as well as establishes
systematic readiness measurement and reporting of secondary items
and operational project stock programs,
o identifies the optimal mix of storage and maintenance facilities
at each location to support the emerging strategy, and
o prescribes oversight requirements for the maintenance of
prepositioned equipment to ensure that equipment is ready for
combat.
Agency Comments and Our Evaluation
In written comments on a draft of this report, DOD generally
concurred with our recommendations but stated that it had already
taken steps to address the recommendations and that further
actions are not needed. We acknowledge that the Army and the
department have taken some initial steps; however, we continue to
believe that our recommendations have merit and that additional
actions and sustained management attention will be needed to
ensure the viability of the Army's prepositioning program as part
of the overall departmentwide effort to meet mobility needs. DOD
also commented that our report contained misleading information
and provided technical comments to improve the accuracy and
clarity of the report. We disagree that the facts in our report
are misleading and have addressed each of the department's
technical comments in appendix III.
DOD partially concurred with our first recommendation that the
Secretary of Defense take steps to synchronize the Army's
prepositioning strategy with the emerging DOD-wide strategy, and
stated that the Army had developed a service-specific strategy
that is being incorporated into ongoing mobility studies and the
emerging DOD-wide effort. The department stated that, since the
Army is participating in ongoing studies, further direction is not
required. Some of the technical comments DOD provided also
addressed the strategy-setting issue, but seemed to contradict the
overall response. For example, DOD stated that the timing of the
two strategies could cause "disconnects" and that the Army will
have to modify its strategy when the DOD-wide strategy is issued.
Since DOD's comments lack internal consistency, it is not clear to
us what the department intends to do to address the
recommendation. As our report points out, successful management
practices dictate that strategy setting should begin at the top,
and that strong leadership will be needed from the department to
ensure that the programs of the Army--as well as other military
services--are aligned with the overall departmentwide strategy,
not the reverse. Moreover, taking a service-centric approach to
prepositioning may preclude opportunities for innovation, or lead
to duplication across the department. Prepositioning should be
viewed in a joint context, as part of broader mobility objectives.
The ultimate departmentwide strategy should not just cobble
together the plans of the individual services into a
departmentwide strategy. In our view, as it develops the DOD-wide
strategy, the department should take advantage of the opportunity
to reexamine its approach to prepositioning as part of broader
mobility considerations including its interrelationship with
airlift and sealift.
In the technical comments, the department also stated that the
Army should not be criticized for its timing and lack of
synchronization with a DOD strategy that had not yet been issued.
The Army did expedite its strategy revision during the course of
our review, completing it from start to finish in the latter half
of 2006. The Army completed this revision while a broader strategy
effort--specifically, a follow-on to the Mobility Capabilities
Study focused on the future of prepositioning--was ongoing but had
an unclear completion date. In a September 2005 report, we
recommended that DOD develop a departmentwide strategy to set
direction for and underpin the prepositioning programs of the
services but this has still not been completed. Underscoring its
interest in prepositioning--and consistent with our previous
recommendation--the John Warner National Defense Authorization Act
for Fiscal Year 2007 required the department to finalize a
departmentwide prepositioning strategy by April 2007. Had the
department implemented our recommendation in a more timely
fashion, this synchronization concern would be moot and DOD may
not have been called upon to establish a strategy for the
department's prepositioning programs.
The department concurred with our second recommendation that, once
the Army's strategy is aligned with the DOD-wide strategy, the
Secretary of the Army should develop an implementation plan to
address the requirements, readiness reporting, facilities, and
maintenance oversight issues that we identified in our report. The
department stated that the Army had included an implementation
plan in its revised prepositioning strategy that addressed these
issues and that the implementation plan had been aligned with a
joint staff instruction published in November 2006 that provides
logistics planning guidance for prepositioning and a department
directive dated December 2003 that provides war reserve materiel
policy. As a result, the department stated that no additional
direction is required. We disagree. The Army's implementation plan
was to have been completed in December 2006, but was still
unavailable as of the end of January 2007. As a result, GAO could
not determine whether the elements of our recommendation have been
addressed. However, we reviewed the recent logistics planning
guidance and while the instruction provides general logistics
planning guidance for prepositioned stocks, there are few
specifics about requirements setting and readiness reporting for
secondary items and operational project stocks, facilities, or
maintenance oversight. We also reviewed the identified department
guidance. While it does require the determination of war reserve
materiel requirements, and annual reports of the existing levels
of these items, we do not believe this is a systematic reporting
of readiness. In fact, our 2005 report found that the department
was not enforcing the readiness-reporting provision, and planned
to rescind it. Neither Instruction addresses the optimum mix of
storage and maintenance facilities or prescribes oversight
requirements for the maintenance of prepositioned equipment to
ensure that it is combat ready. Moreover, since these issues have
been long-standing, recognized both in prior GAO reports and
assessments made by the Army's own audit organizations, we
continue to believe that additional direction is needed.
We will send copies of this report to the Secretary of Defense and
the Secretary of the Army. We will also make copies available to
others upon request. In addition, this report will be available at
no charge on the GAO Web site at http://www.gao.gov . Contact
points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report.
If you or your staff has any questions, please contact me at (202)
512-8365. Key contributors to this report are listed in appendix
IV.
William M. Solis, Director
Defense Capabilities and Management
Appendix I: Scope and Methodology
To assess whether the Army's report comprehensively addressed the
required reporting areas in Public Law 109-163, we reviewed the
Army's prepositioned stocks program. We obtained the Army's report
and reviewed and compared it to the legislative mandate as well as
other documents including Department of Defense (DOD) regulations,
Army regulations that govern storage and maintenance of
prepositioned stocks, and the Army Prepositioned Stocks Strategy
2012. We also reviewed Inspector General and Army Audit Agency
reports on prepositioning issues as well as any relevant GAO
reports. We interviewed officials in the Department of Defense
Joint Staff, Department of the Army, Army Materiel Command, and
the Army Sustainment Command and its subordinate units at each
prepositioning location. We also collected and analyzed internal
Army reports on inventory and readiness to verify the reported
inventory levels and readiness rates of prepositioned stocks.
To assess the major challenges facing the Army as it revises and
implements its prepositioning program, we reviewed the Army
Prepositioned Stocks Strategy 2012 and DOD regulations and
documents pertaining to a joint prepositioning strategy, along
with relevant past GAO, Inspector General, and Army Audit Agency
reports. We interviewed officials from the Department of the Army,
the Office of the Secretary of Defense for Policy, the Department
of Defense Joint Staff, the Army Materiel Command, and the Army
Sustainment Command and its subordinate units at prepositioning
locations in Europe, South Korea, South Carolina, and Kuwait. We
conducted site visits to Army prepositioned stock facilities at
each location to observe firsthand the current status of their
storage and maintenance facilities and also reviewed existing
maintenance and storage procedures and oversight processes. We
also examined the Army's planned revisions to its existing Army
Prepositioned Stocks Strategy 2012 and the efforts on behalf of
DOD to develop an overarching prepositioning strategy. We examined
the level of coordination between the Army and DOD with regard to
the new prepositioning strategies currently under development. We
could not fully assess these strategies, as they are still in the
process of being developed. We also documented current inventory
levels, funding for the program, and equipment readiness rates by
collecting and analyzing internal Army reports on inventory,
funding, and readiness. We reviewed past reports prepared by GAO,
the Army Audit Agency, the Army Materiel Command Inspector
General, and the Army Logistics Support and Evaluation Team that
identified problems with the prepositioning program.
We conducted our review from February 2006 through October 2006 in
accordance with generally accepted government auditing standards.
We reviewed available data for inconsistencies and also verified
with the Army information technology contractor in Kuwait that
they review and validate the input data we used in the report. We
determined that the data we used were sufficiently reliable for
the purpose of this report.
We interviewed officials, and obtained documentation when
applicable, at the following locations:
o U.S. Army Headquarters, Washington, D.C.
o U.S. Army Material Command, Ft. Belvoir, Virginia.
o U.S. Army Forces Command, Ft. McPherson, Georgia.
o U.S. Army Central Command, Ft. McPherson, Georgia.
o U.S. Army Sustainment Command, Rock Island, Illinois.
o U.S. Army Europe, Campbell Barracks, Germany.
o 8th U.S. Army, Yongsan Garrison, South Korea.
o U.S. Army Field Support Brigade, Seckenheim, Germany.
o Material Support Center - Korea, Camp Carroll, South Korea.
o U.S. Army Field Support Battalion - Livorno, Camp Livorno,
Italy.
o U.S. Army Field Support Battalion - Northeast Asia, Camp
Carroll, Korea.
o U.S. Army Field Support Battalion - Southwest Asia, Camp
Arifjan, Kuwait.
o U.S. Army Field Support Battalion- Afloat - Charleston, South
Carolina.
Unified Commands
o U.S. Forces Europe, Patch Barracks, Germany.
o U.S. Forces Korea, Yongsan Garrison, South Korea.
o Joint Chiefs of Staff, J-4, Washington, D.C.
Appendix II: Past Products Identifying Challenges Facing the
Army and DOD Regarding Prepositioning Programs
The Army's prepositioning program has faced a number of
long-standing challenges including inadequate oversight and
management; equipment and facility excesses and shortfalls; and
invalid, inaccurate, poorly defined, and otherwise questionable
requirements. In addition to problems with the prepositioning
program, the Army has also had difficulty associated with the
successful implementation of strategic plans and programs. GAO,
the Army Audit Agency, Army's and the Department of Defense's
(DOD) Inspector Generals along with others have called attention
to these problems in products issued over the years.
Table 2 provides summaries of the challenges to the Army and DOD's
prepositioning programs along with program implementation concerns
identified in past GAO reports and testimonies issued between
January 1996 and September 2006. Table 3 provides summaries of
similar issues identified in select products released by other
organizations during the same time period.
Table 2: GAO Products
Title Key challenges identified
Force Structure: Army Needs to In September 2006, we reported that the
Provide DOD and Congress More Army had not completed key details of the
Visibility Regarding Modular equipping strategy for its modular force
Force Capabilities and and, as a result, it is unclear what level
Implementation Plans, of equipment units will have, how this
[34]GAO-06-745 (September strategy may affect the Army's equipment
2006) funding plans, and how well units with low
priority for equipment will be able to
respond to unforeseen crises. We also
reported that the Army lacks a
comprehensive and transparent approach to
measure progress against its modularity
objectives, assess the need for further
changes to modular designs, and monitor
implementation plans. We noted that without
performance metrics and a comprehensive
testing plan, decision makers will not have
full visibility into how the modular force
is currently organized, staffed, and
equipped and, as a result, will not have
sufficient information to assess the
capabilities, cost, and risks of the Army's
modular force implementation plans.
DOD's High-Risk Areas: In July 2006, we testified that DOD has
Challenges Remain to Achieving continued to make progress implementing the
and Demonstrating Progress in 10 initiatives in its supply chain
Supply Chain Management, management improvement plan, but it will
[35]GAO-06-983T (July 2006) take several years to fully implement these
initiatives. We noted that although DOD has
incorporated several broad performance
measures in its supply chain management
improvement plan, it continues to lack
outcome-focused performance measures for
many of the initiatives, making it
difficult to track and demonstrate progress
toward improving the three focus areas of
requirements forecasting, asset visibility,
and materiel distribution. We additionally
reported that although DOD's plan includes
four high-level performance measures that
are being tracked across the department,
these measures do not necessarily reflect
the performance of the initiatives and do
not relate explicitly to the three focus
areas. Further, DOD's plan does not include
cost metrics that might show efficiencies
gained through supply chain improvement
efforts.
Force Structure: Capabilities In April 2006, we testified that although
and Cost of Army Modular Force the Army is making progress creating
Remain Uncertain, modular units, it faces significant
[36]GAO-06-548T (April 2006) challenges in managing costs and meeting
equipment and personnel requirements
associated with modular restructuring in
the active component and National Guard. We
noted that the Army does not have a
comprehensive and transparent approach to
measure progress against stated modularity
objectives and assess the need for further
changes to modular designs. We additionally
testified that the Army has not established
outcome-related metrics linked to many of
its modularity objectives and although it
is analyzing lessons learned from Iraq and
training events, the Army does not have a
long-term, comprehensive plan for further
analysis and testing of the designs and
fielded capabilities. Finally, we testified
that without performance metrics and a
comprehensive testing plan, neither the
Secretary of Defense nor congressional
leaders will have full visibility into the
capabilities of the modular force as it is
currently organized, staffed, and equipped.
Defense Logistics: Preliminary In March 2006, we testified that both the
Observations on Equipment Army and Marine Corps will face a number of
Reset Challenges and Issues ongoing and long-term challenges that will
for the Army and Marine Corps, affect the timing and cost of equipment
[37]GAO-06-604T (March 2006) reset, such as Army and Marine Corps
transformation initiatives, reset of
prepositioned equipment, efforts to replace
equipment left overseas from the active,
National Guard, and Reserve units, as well
as the potential transfer of U.S. military
equipment and the potential for continuing
logistical support to Iraqi Security
Forces. We also testified that the Marine
Corps and Army will have to better align
their funding requests with the related
program strategies to sustain, modernize,
or replace existing legacy equipment
systems. We testified that both services
will have to make difficult choices and
trade-offs when it comes to their many
competing equipment programs. Finally, we
noted that while the services are working
to refine overall requirements, the total
requirements and costs are unclear and
raise a number of questions as to how the
services will afford them.
DOD's High-Risk Areas: In October 2005, we testified that DOD's
High-Level Commitment and plan to improve supply chain management
Oversight Needed for DOD provides a good start and framework for
Supply Chain Plan to Succeed, addressing long-term systemic weaknesses
[38]GAO-06-113T (October 2005) and in focusing the multiyear effort to
improve supply support to the warfighter.
We noted that successful resolution of
DOD's supply chain management problems will
require continued efforts to complete and
successfully implement the plan. Based on
GAO's criteria for removing programs from
the high-risk designation, we reported that
it is important for DOD to sustain top
leadership commitment and long-term
institutional support for the plan; obtain
necessary resource commitments from the
military services, the Defense Logistics
Agency, and other organizations; implement
proposed improvement initiatives across the
department to address root causes; identify
performance metrics and valid data to use
in monitoring the initiatives; and
demonstrate progress toward meeting
performance targets.
Defense Logistics: Better In September 2005, we reported that DOD
Management and Oversight of faced near-term operational risks should
Prepositioning Programs Needed another large-scale conflict emerge because
to Reduce Risk and Improve existing prepositioned stocks had been
Future Programs, heavily drawn to support operations in
[39]GAO-05-427 (September Iraq. We noted that some residual
2005) capability exists but many of the programs
face significant inventory shortfalls and,
in some cases, maintenance problems. We
additionally reported that the department
and the military services have provided
insufficient oversight over DOD
prepositioning programs resulting in
long-standing problems with requirements
determination and inventory management.
Defense Inventory: Actions In March 2005, we reported on DOD's
Needed to Improve the supply-chain management during Operation
Availability of Critical Items Iraqi Freedom. We developed detailed case
during Future Military studies of nine supply items that were
Operations, [40]GAO-05-275 reported to be in short supply and could
(March 2005) have had operational impacts, and found
that U.S. troops experienced shortages of
seven of the nine items that led, in some
cases, to a decline in the operational
capability of equipment and increased risk
to troops. We identified five systemic
deficiencies that contributed to shortages
of the selected items, including (1)
inaccurate and inadequately funded Army war
reserve requirements, (2) inaccurate supply
forecasts, (3) insufficient and delayed
funding, (4) delayed acquisition, and (5)
ineffective distribution.
High-Risk Series: An Update, In January 2005, we reported that DOD's
[41]GAO-05-207 (January 2005) supply-chain management had experienced
significant weaknesses in its ability to
provide efficient and effective supply
support to war fighters. While DOD reports
showed the department owning about $67
billion of inventory, shortages of certain
critical spare parts were adversely
affecting equipment readiness and
contributing to maintenance delays. DOD
also lacked visibility and control over the
supplies and spare parts it owned and did
not have the ability to provide timely or
accurate information on the location,
movement, status, or identity of its
supplies.
Military Prepositioning: In March 2004, we testified that during
Observations on Army and Operation Iraqi Freedom, the Army's
Marine Corps Programs During prepositioning program had some equipment
Iraqi Freedom and Beyond, that was outdated or did not match unit
[42]GAO-04-562T (March 2004) needs. The program also faced shortfalls,
such as trucks, spare parts, and other
items. We noted that shortages in Army
prepositioned and war reserve spare parts
had been a long-standing systemic problem.
We likewise reported that the theater
supply-and-distribution system became
overwhelmed and was worsened by the
inability to track assets available in
theater, which meant that warfighters did
not know what was available.
Defense Logistics: Preliminary In December 2003, we reported that during
Observations on the Operation Iraqi Freedom poor asset
Effectiveness of Logistics visibility and insufficient and ineffective
Activities During Operation theater distribution capabilities
Iraqi Freedom, [43]GAO-04-305R contributed to substantial logistics
(December 2003) support problems. DOD and military service
officials raised a number of issues that
may have contributed to the logistics
problems, including (1) shortages of some
spares or repair parts needed by deployed
forces, (2) a reported mismatch between
Army prepositioned equipment and unit
needs, (3) DOD contractors used for
logistics support during Operation Iraqi
Freedom were not always effective, and (4)
physical security at ports and other
distribution points in the theater was not
always adequate to protect assets.
Military Readiness: New In March 2003, we reported that DOD used
Reporting System Is Intended readiness measures that varied 10
to Address Long-Standing percentage points or more to determine
Problems, but Better Planning readiness ratings and often did not report
Is Needed, [44]GAO-03-456 the precise measurements outside DOD. We
(March 2003) additionally reported that DOD had complied
with most, but not all, of the legislative
readiness-reporting requirements and, as a
result, Congress was not receiving all the
information mandated by law. DOD issued a
directive in June 2002 to establish a new
comprehensive readiness-reporting system.
However, as of January 2003, DOD had not
developed an implementation plan containing
measurable performance goals,
identification of resources, performance
indicators, and an evaluation plan to
assess progress in developing the new
reporting system.
Major Management Challenges In January 2003, we reported that
and Program Risks: Department inefficient inventory management practices
of Defense, [45]GAO-03-98 represented one of the most serious
(January 2003) weaknesses in DOD's logistics operations.
While DOD's inventory value had been
declining for the previous 10 years, GAO's
past and current work in the area indicated
that DOD (1) continued to store
unnecessarily large amounts of material,
with about half of its secondary inventory
exceeding then- war reserve or current
operating requirements; (2) purchased
material for which there was no valid
requirement; (3) experienced equipment
readiness problems because of a lack of key
spare parts; and (4) maintained inadequate
visibility over material being shipped to
and from military activities.
Defense Inventory: Improved In July 2002, we reported that the Army's
Industrial Base Assessments approach to industrial-base capability
for Army War Reserve Spares assessments lacked key attributes that
Could Save Money, included the collection of current industry
[46]GAO-02-650 (July 2002) data, the analysis of that data, and the
creation of management strategies for
improving wartime spare parts availability.
We noted that out-of-date data could result
in reduced readiness and inflated or
understated war reserve spare parts funding
requests within budget submissions to
Congress, and the Army's ability to
identify long lead times and create
management strategies to reduce lead times
and thus the amount of inventory needed.
Defense Inventory: Army War In May 2001, we reported that
Reserve Spare Parts notwithstanding the apparent shortfall in
Requirements Are Uncertain, funding for war reserve spare parts, our
[47]GAO-01-425 (May 2001) review showed uncertainties about the
accuracy of the Army's requirements and
funding needs in that area. Specifically,
we found that (1) the best available data
regarding the rate at which spare parts
would be consumed during wartime had
generally not been used in determining war
reserve requirements for spare parts, (2) a
potential mismatch existed between the
Army's methodology for determining spare
parts requirements and the Army's planned
battlefield maintenance practices, (3) the
capacity of the industrial base to support
the parts requirements of the two major
theaters of war scenario was not well
defined or based on industry data, and (4)
emerging issues, such as force
restructuring actions, could significantly
affect future war reserve requirements.
Military Prepositioning: Army In November 1998, we reported that the Army
and Air Force Programs Need To and Air Force had poorly defined, outdated,
Be Reassessed, or otherwise questionable requirements in
[48]GAO/NSIAD-99-6 (November the major programs that GAO reviewed. The
1998) Army and the Air Force had reported
significant shortages and poor maintenance
conditions in their prepositioning
programs. In some cases, however, reliable
data to assess inventory fill and
maintenance condition were unavailable.
Thus, the precise readiness of the
prepositioned stocks--and the impact of any
shortfalls--was difficult to determine
because of the questionable requirements
that underpinned the programs and the poor
information that the services used to
manage the programs.
Afloat Prepositioning: Not All In July 1997, we reported that of the
Equipment Meets the Army's Army's unit sets considered when reporting
Readiness Goal, the readiness of the brigade set of war
[49]GAO/NSIAD-97-169 (July reserve equipment; about 25 percent did not
1997) meet the Army's readiness goal for
full-mission capability. According to Army
maintenance records, some equipment aboard
prepositioning ships had been reported as
nonmission capable since September 1995.
These records also erroneously identified
some nonmission-capable equipment as
repairable aboard ship, although Army
officials said that many repairs could not
be made until the equipment was downloaded.
One factor that contributed to lower
readiness rates was that some equipment was
not fully mission capable when it was
originally loaded on prepositioning ships.
Other factors include the deterioration of
the equipment while in storage aboard ships
and the limited ability to conduct
maintenance on the equipment while in
storage.
Army War Reserves: DOD Could In July 1997, we reported that DOD could
Save Millions by Aligning have saved about $54 million per year in
Resources With the Reduced personnel costs once the Army removed
European Mission, unneeded war reserve equipment from central
[50]GAO/NSIAD-97-158 (July Europe and aligned its resources with the
1997) reduced mission. Army data showed that of
128,000 items in central Europe identified
as available for redistribution outside of
Europe, the Army had firm plans for about
54,000 items, had proposed--but had not
funded or implemented--the plans for about
27,000 items, and had no plans for about
46,000 items because it found no known
requirement for them in the war reserve
program.
Defense Inventory Management: In March 1997, we testified that inventory
Problems, Progress, and management problems had plagued DOD for
Additional Actions Needed, decades. We had recently reported that
[51]GAO/T-NSIAD-97-109 (March about half of DOD's secondary inventory was
1997) not needed to support war reserve or
current operating requirements. Most of the
problems that contributed to the
accumulation of this unneeded inventory
still existed, such as outdated and
inefficient inventory management practices
that frequently did not meet customer
demands, inadequate inventory oversight,
weak financial accountability, and
overstated requirements. We noted that
while we continued to see pockets of
improvement, DOD had made little overall
progress in correcting systemic problems
that had traditionally resulted in large
unneeded inventories.
Source: GAO.
Table 3: Other Products
Title Key challenges identified
Management of Army Prepositioned In August 2006, the Army Audit Agency
Stocks. Headquarters, Department reported that U.S. Army Material Command
of the Army, U.S. Army Audit management practices for overseeing the
Agency, A2006-0200-ALL (August Army prepositioned stocks program and
2006) ensuring it remained responsive to
warfighters needs appeared to be on
automatic pilot with little management
intervention. They reported that this
inattention has resulted in supply
problems including problems associated
with requirements determination and
inventory management.
Army Prepositioned Stocks in In August 2006, the Army Audit Agency
Europe. Headquarters, Department reported that the requirements identified
of the Army, U.S. Army Audit in the Army's APS Strategy 2012 would not
Agency, A2006-0197-ALE (August effectively support responsibilities in
2006) the European theater or Army
transformation goals. The Army Audit
Agency indicated that while the APS
strategy included requirements for six
operational projects, only two were valid
- special operations forces and aerial
delivery. According to the Army Audit
Agency, the remaining operational
projects were either invalid or
questionable for the U.S. European
Command Area of Responsibility and
proponents of these projects did not do
required reviews and revalidations of the
requirements.
Military Construction Projects In June 2006, the Army Audit Agency
Supporting Army Prepositioned reported that the Army was continuing
Stocks in Europe. Headquarters, with its construction projects at
Department of the Army, U.S. Livorno, Italy, despite elimination of
Army Audit Agency, the original requirements for the
A2006-0149-ALE (June 2006) projects and uncertainty about the
facility's future mission. They
additionally reported that the
continuation of construction without a
permanent requirement did not justify
expenditure of Military Construction,
Army funds appropriated for the project
and violated the spirit in which Congress
appropriated funds for the project.
Operation Iraqi Freedom (OIF) In June 2004, the Center for Naval
Maritime Prepositioning Force Analyses reported that although Marine
(MPF) Reconstitution, Corps Maritime Prepositioning Force
Regeneration, and Reembarkation operations in Iraq could be characterized
(R3)Operations: Summary as a success, the execution of
Findings, Center for Naval reconstitution, regeneration, and
Analyses, CAB D0009974.A2/Final reembarkation was neither simple nor
(June 2004) easy. Challenges and issues included (1)
a lack of detailed published policies and
guidance, and servicewide knowledge and
experience, in planning and executing
operations; (2) simultaneous conduct of
combat and operations; and (3) a lack of
effective systems, organizations, and
procedures for tracking and accounting
for prepositioned equipment after it was
downloaded.
Operational Project Stocks - In February 2004, the Army Audit Agency
Phase II, Headquarters, reported that some operational
Department of the Army, U. S. projects--one of four categories of Army
Army Audit Agency, prepositioned stocks--had (1) invalid
A-2004-0108-AML (February 2004) intended purposes; (2) inaccurate,
overstated, outdated, or questionable
requirements; (3) insufficient quantities
of equipment on hand; or (4) a lack of
requirements for essential equipment.
Consequently, about $472 million of the
roughly $1.5 billion in requirements
reviewed were invalid and $280 million
were questionable.
U.S. Army Materiel Command In September 2003, the U.S. Army Materiel
(USAMC) Operation Iraqi Freedom Command sponsored an Operation Iraqi
(OIF) Lessons Learned Freedom lessons learned conference during
Conference, 10-11 September which 27 major issues were identified in
2003, Redstone Arsenal, Alabama such areas as personnel, supply,
maintenance, and distribution. For
example (1) supply-related lessons
learned included the need to relook at
requirements determinations, asset
management and visibility, prepositioned
stocks, and ammunition warfighter
support; (2) maintenance-related lessons
learned included the need to improve
prepositioning maintenance, readiness and
other reporting, accountability, and
forward repair activity; and (3)
distribution-related lessons learned
included the need to modify force
structure and doctrine to support the
distribution system, appoint a single DOD
distribution manager, and develop and
implement a business system.
Systematic Inspection of the In August 2001, the Army Materiel Command
Material Condition of Army War Inspector General reported the following
Reserve Stocks, U.S. Army problems with Army war reserve
Materiel Command Inspector sustainment stocks related to the Army
General (August 2001) Prepositioned Stock program: (1) a lack
of centralized strategic operational
direction; (2) insufficient funding for
program requirements; (3) a lack of data
integrity in automated systems; (4)
adverse mission impact caused by
readiness reporting procedures and
overall operational practices; (5)
mismatches between recorded condition
codes of materiel and true conditions;
(6) no established procedures for test,
measurement, and diagnostic equipment
support; (7) an inability of the command
to effectively support the Army's wartime
mortuary affairs mission; (8) materiel
excess to requirements stored at
prepositioned sites; (9) ineffective
government oversight of a contractor
allowing decreased readiness and
increased costs; and (10) bulk fuel,
potable water, and other assets to
support forces during deployment were not
part of the package.
Army Prepositioned Stock In March 1998, the Army Audit Agency
Program, Combat Equipment Group reported that while the Army Combat
- Europe, U.S. Army Audit Equipment Group properly accounted for
Agency, AA 98-138 (March 1998) its war reserve stocks stored in Europe,
improved accounting procedures were
needed for its war reserve stocks loaned
in support of Operation Joint Endeavor in
Bosnia. The audit agency additionally
reported that repair parts had been
identified during the audit that were not
needed to support the deployable unit
sets authorized for the war reserve
program. Moreover, while war reserve
equipment was generally maintained and
stored properly, some of the combat
equipment companies retained too many
line items, maintained excess stockage
levels, and didn't establish an effective
method to monitor maintenance operations.
Sustainment Requirements for the In February 1998, the Army Audit Agency
Army Prepositioned Stock reported that a substantial number of
Program, U.S. Army Audit Agency, undesignated war reserve assets were
AA 98-99 (February 1998) stored in Europe that could have been
used to satisfy new sustainment stock
requirements.
Total Asset In November 1997, the Army Audit Agency
Visibility-Operational Projects, reported problems in the Total Asset
U.S. Army Audit Agency, AA 98-31 Visibility capability for Army
(November 1997) operational projects, including (1)
incomplete or unreliable on-hand asset
balances, (2) a lack of visibility over
loaned assets, (3) inadequate
identification of key management controls
in Army policy regulations, (4)
weaknesses in data integrity, and (5)
failure of Army managers at both the
wholesale and retail levels to
redistribute assets to improve readiness
and reduce requirements.
Equipment Pre-positioned Afloat, In December 1996, the DOD Inspector
Department of Defense Inspector General reported that the Army had
General, 97-054 (December 1996) rapidly expanded its afloat
prepositioning program without first
publishing criteria, policy, plans, and
doctrine resulting in a possible
inability to ensure effective equipment
management in support of the combatant
commanders.
Source: GAO.
Appendix III: Comments from the Department of Defense
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
See comment 2.
See comment 1.
See comment 4.
See comment 3.
See comment 7.
See comment 5.
See comment 6.
See comment 10.
See comment 9.
See comment 8.
See comment 11.
See comment 14.
See comment 13.
See comment 12.
GAO's Responses to DOD's Technical Comments:
1. DOD comments indicate that the reason the Army shifted its
prepositioning strategy in 2006 was not due to budget
reprogramming decisions; instead it was due to the 2006
Quadrennial Defense Review. We interviewed Army officials during
the summer of 2006 who told us that the budget reprogramming
decision and equipment shortfalls throughout the Army were the
main impetus of the strategy review. We have added the Army's
assertion that the quadrennial review influenced the decision to
the text.
2. DOD indicates that the DOD policy under development "will
result in the Army creating/modifying its strategy in accordance
with the guidance in the DOD policy" when issued. We have added
the department's assertion to the text. We agree that having an
Army implementation plan in place before the DOD policy is issued
will result in the need to modify the Army's strategy. However
this is an apparent inconsistency with the main text of the
department's comments stipulating that the Army's completed
strategy will be incorporated into the DOD-wide strategy. As a
result, we continue to believe that additional department-level
direction is needed to ensure that future investments made by the
Army are aligned with DOD policy.
3. We believe that strategy is a better description as it provides
linkage to the recommendation in our 2005 report calling for a
DOD-wide prepositioning strategy.
4. The department stated that the Army should not be criticized
for creating an implementation strategy before the DOD policy is
issued. Our intent was not to criticize but to demonstrate the
potential risks associated with individual service strategies
being implemented before the department's strategy is issued. In a
September 2005 report GAO recommended that DOD develop a
departmentwide strategy to set direction for and underpin the
prepositioning programs of the services but this has still not
been completed. The Army can ill afford to invest scarce resources
to meet requirements that will not be aligned with the DOD policy
when issued.
5. The department disagreed with several aspects of our
description of the operational project and secondary item
programs. We have included additional information to the report
that, in response to a past GAO recommendation, the Army has
conducted revalidations of most operational project stocks.
Further, the Army asserted that it tracks the funding of the
prepositioned secondary items and operational project stocks as
part of the Army's Strategic Management System and that this
constitutes readiness reporting. We disagree. The requirements
underpinning these programs are questionable, and funding
information is inadequate for determining readiness.
6. We have changed the text to reflect the department's definition
of war reserve sustainment stocks.
7. Since the Army strategy evolved during our review, we continue
to believe our caption better reflects the substance.
8. See comment 1.
9. We have changed the text to delete "reset".
10. We have changed the text to insert "DOD".
11. We have made changes to the text to reflect the role of
Combatant Commanders in operational planning.
12. The department's suggested language indicated that the shift
in strategy was the result of the 2006 Quadrennial Review. We have
reflected this throughout the report. The department also
suggested deleting language in the draft report concerning the
lack of mission in Italy in the previous Army strategy but offered
no reason why this information should be deleted. When initially
approved, the $55 million construction project in Italy was
intended to support the storage of a prepositioned combat brigade
team equipment set there, but this requirement had been eliminated
in the 2012 strategy leaving the facility with no mission. The
Army decided to complete the construction as it was more costly to
cancel than complete, and the Army's 2013 strategy indicates
placing a combat brigade team equipment set at that location even
though existing operational and contingency plans for the area do
not require this type of equipment. We have retained this
information in the report because we believe this information
illustrates the need for better facilities planning by the Army.
13. We have made changes to the text to include the Joint Forces
Command in DOD's working group.
14. We added information to reflect the facilities in Qatar.
Appendix IV: GAO Contact and Staff Acknowledgments
GAO Contact
William M. Solis, (202) 512-8365
Acknowledgments
In addition to the contact named above, John Pendleton, Assistant
Director, Jeff Kans, Travis Thomson, Jennifer Jebo, Erika Prochaska, and
Cheryl Weissman also made key contributions to this report.
(350921)
GAO's Mission
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony
The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO's Web site ( www.gao.gov ). Each weekday, GAO posts
newly released reports, testimony, and correspondence on its Web site. To
have GAO e-mail you a list of newly posted products every afternoon, go to
www.gao.gov and select "Subscribe to Updates."
Order by Mail or Phone
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to:
U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548
To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061
To Report Fraud, Waste, and Abuse in Federal Programs
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail:
[email protected] Automated answering system: (800) 424-5454 or (202)
512-7470
Congressional Relations
Gloria Jarmon, Managing Director, [email protected] (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125 Washington,
D.C. 20548
Public Affairs
Paul Anderson, Managing Director, [email protected] (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548
www.gao.gov/cgi-bin/getrpt?GAO-07-144 .
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact William M. Solis at (202) 512-8365 or
[email protected].
Highlights of [59]GAO-07-144 , a report to congressional committees
February 2007
DEFENSE LOGISTICS
Improved Oversight and Increased Coordination Needed to Ensure Viability
of the Army's Prepositioning Strategy
Prepositioned military equipment and supplies on ships and overseas on
land have become an integral part of the U.S. defense strategy. However,
the Army's program has faced long-standing management challenges,
including equipment excesses and shortfalls, invalid or poorly defined
requirements, and maintenance problems. In Public Law 109-163, Congress
required the Army to conduct an assessment of its prepositioning programs
and required GAO to assess (1) whether the Army's report addressed the
areas required by Congress, and (2) the major challenges the Army
continues to face in its prepositioning program. GAO analyzed the Army's
report and other information it obtained from the Joint Staff, the Army,
and its subordinate commands to identify the issues affecting the Army's
prepositioning program. GAO also visited prepositioned equipment sites in
South Carolina, Europe, South Korea, and Kuwait.
[60]What GAO Recommends
GAO is making recommendations to synchronize the Army's prepositioning
strategy with overall department efforts and address issues including
requirements determination, readiness reporting, need for a comprehensive
facilities plan, and maintenance oversight. The Department of Defense
(DOD) generally concurred with our recommendations but felt that further
actions are unneeded. GAO disagrees and continues to believe that its
recommended actions are warranted.
The Army's April 2006 report on the status of its prepositioning program
addressed the areas required by Congress; for example, it included
descriptions of operational capabilities, as well as inventory shortfalls
expressed in terms of procurement costs. However, the Army significantly
shifted its prepositioning strategy in the latter part of 2006, since that
report was issued. According to the Army, this shift was based on insights
gained from the 2006 Quadrennial Defense Review, but Army officials told
us that budget reprogramming decisions and worsening Army-wide equipment
shortfalls also influenced the expedited strategy revision. The Army's
revised strategy proposes less reliance on heavy combat equipment afloat
and the expansion of heavy equipment in Kuwait and Italy. As a result, the
Army's April 2006 report to Congress is outdated, and neither Congress nor
DOD should base funding decisions on it.
The Army faces several major strategic and management challenges as it
revises and implements its prepositioning program. From a strategic
perspective, the Army cannot gauge how well its emerging strategy will
align with DOD plans currently under development. The Army plans to begin
implementing its revised strategy by the end of 2006. DOD has a
departmentwide prepositioning study underway intended to set strategy and
joint doctrine, but this will not be completed for several months and it
anticipates that the Army will have to modify its prepositioning strategy
when the DOD-wide strategy is issued. As a result, the Army is at risk of
resourcing requirements that may be superseded by the DOD strategy.
Moreover, because prepositioning is linked to airlift, sealift, and
basing, the Army's decisions will have an as-yet undetermined effect on
these areas. In addition to these strategic concerns, the Army faces three
key management challenges. First, the Army has yet to determine sound
secondary item and operational project stock requirements, and to
systematically measure and report readiness. While the Army has been
taking steps to address long-standing requirements-determination problems
in certain parts of its program, the effort was not finished when GAO
completed its work. Without accurate requirements and systematic readiness
reporting, Army managers are not able to determine the extent to which the
existing inventory reflects what the Army needs. Second, the Army lacks a
comprehensive plan for maintenance and storage facilities for
prepositioned stocks, resulting in uncertain future facility requirements.
In the interim, prepositioned stocks are being stored outside, resulting
in higher maintenance costs. Finally, inadequate maintenance oversight of
the Army's prepositioning program has raised concerns about the true
condition of the equipment at some locations. Until these strategic and
management challenges are addressed, the Army will face uncertain risks
should new conflicts occur.
References
Visible links
27. http://www.gao.gov/cgi-bin/getrpt?GAO-05-427
28. http://www.gao.gov/cgi-bin/getrpt?GAO-06-604T
29. http://www.gao.gov/cgi-bin/getrpt?GAO-05-427
31. http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-99-6
32. http://www.gao.gov/cgi-bin/getrpt?GAO-05-275
33. http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-99-6
34. http://www.gao.gov/cgi-bin/getrpt?GAO-06-745
35. http://www.gao.gov/cgi-bin/getrpt?GAO-06-983T
36. http://www.gao.gov/cgi-bin/getrpt?GAO-06-548T
37. http://www.gao.gov/cgi-bin/getrpt?GAO-06-604T
38. http://www.gao.gov/cgi-bin/getrpt?GAO-06-113T
39. http://www.gao.gov/cgi-bin/getrpt?GAO-05-427
40. http://www.gao.gov/cgi-bin/getrpt?GAO-05-275
41. http://www.gao.gov/cgi-bin/getrpt?GAO-05-207
42. http://www.gao.gov/cgi-bin/getrpt?GAO-04-562T
43. http://www.gao.gov/cgi-bin/getrpt?GAO-04-305R
44. http://www.gao.gov/cgi-bin/getrpt?GAO-03-456
45. http://www.gao.gov/cgi-bin/getrpt?GAO-03-98
46. http://www.gao.gov/cgi-bin/getrpt?GAO-02-650
47. http://www.gao.gov/cgi-bin/getrpt?GAO-01-425
48. http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-99-6
49. http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-97-169
50. http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-97-158
51. http://www.gao.gov/cgi-bin/getrpt?GAO/T-NSIAD-97-109
59. http://www.gao.gov/cgi-bin/getrpt?GAO-07-144
*** End of document. ***