Army Equipment: Management of Weapon System and Equipment Modification
Program Needs Improvement (Letter Report, 10/10/97, GAO/NSIAD-98-14).

Pursuant to a congressional request, GAO provided information on the
Army's management of its modification work order (MWO) program, focusing
on: (1) the availability of information needed by Army headquarters and
field personnel to effectively oversee and manage the MWO program; (2)
the availability of spare parts needed by personnel in the field to
maintain modified equipment; and (3) field personnel's experiences in
implementing the MWO program.

GAO noted that: (1) Army headquarters officials and Army Materiel
Command officials no longer have the information they need to
effectively oversee and manage the MWO program; (2) this occurred
because the centralized database to track installation and funding was
discontinued; control over modification installation funding was
transferred from the headquarters level to individual program sponsors;
and the authority over configuration control boards, which ensured the
completeness and compliance of MWOs with policy, was transferred to
individual program sponsors; (3) as a result, Army officials do not have
an adequate overview of the status of equipment modifications across the
force, funding requirements, logistical support requirements, and
information needed for deployment decisions; (4) the lack of information
is also a problem at field units; (5) maintenance personnel have not
always known which modifications should have been made to equipment or
which modifications have actually been made; (6) in addition,
maintainers of equipment have not always received the technical
information they need in a timely manner to properly maintain modified
equipment; (7) maintenance personnel in the field have had difficulty
obtaining spare parts to maintain modified equipment because program
sponsors frequently had not ordered initial spare parts when they
acquired modification kits; (8) Army officials believe these problems
occurred because they lost oversight and control of the program and
policies and procedures were not being consistently applied by the
individual program sponsors; (9) because spare parts have often not been
available, maintenance personnel have made additional efforts to
maintain modified equipment; (10) supply system personnel have not
always followed policies and procedures to ensure that supply system
records were updated to show the addition of new spare parts and the
deletion of replaced spare parts; (11) as a result, the Army's budget
for spare parts may not reflect accurate requirements for new components
to repair and maintain modified weapon systems and equipment; (12)
maintenance personnel in the field have also experienced a variety of
problems in implementing MWOs; (13) maintainers have not always received
adequate notice of pending modifications, and training schedules and
equipment maintenance have been adversely affected; (14) GAO was told
that various items of equipment did not always work together once some
modifications were made; and (15) according to Army officials, these
problems also occurred because of their loss of oversight and control.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-98-14
     TITLE:  Army Equipment: Management of Weapon System and Equipment 
             Modification Program Needs Improvement
      DATE:  10/10/97
   SUBJECT:  Management information systems
             Logistics
             Military inventories
             Spare parts
             Weapons systems
             Army supplies
             Military budgets
             Inventory control systems
             Equipment maintenance
IDENTIFIER:  Army Modification Work Order Program
             
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Cover
================================================================ COVER


Report to Congressional Committees

October 1997

ARMY EQUIPMENT - MANAGEMENT OF
WEAPON SYSTEM AND EQUIPMENT
MODIFICATION PROGRAM NEEDS
IMPROVEMENT

GAO/NSIAD-98-14

Army Equipment

(703182)


Abbreviations
=============================================================== ABBREV

  DOD - Department of Defense
  MWO - Modification Work Order
  NSIAD -

Letter
=============================================================== LETTER


B-277792

October 10, 1997

Congressional Committees

The Army is continually modifying its fielded equipment to add new
capabilities or overcome safety and operational deficiencies.  This
report discusses the Army's management of its multibillion-dollar
modification work order (MWO) program, under which it upgrades
fielded weapon systems and other equipment.\1 Specifically, we
determined (1) the availability of information needed by Army
headquarters and field personnel to effectively oversee and manage
the MWO program, (2) the availability of spare parts needed by
personnel in the field to maintain modified equipment, and (3) field
personnel's experiences in implementing the MWO program.  Due to data
limitations, we relied extensively on interviews with Army personnel
at all levels and on our observations at field locations to obtain
this information.  We are addressing this report to you due to your
oversight responsibilities for government management and/or
readiness. 


--------------------
\1 The Army manages modifications through MWOs, engineering changes,
and product improvements.  The Army's modification of equipment in
the field, in a depot, in conjunction with an overhaul, or at a
contractor facility, are commonly referred to as MWO programs. 


   BACKGROUND
------------------------------------------------------------ Letter :1

The Army established the MWO program to enhance the capabilities of
its fielded weapon systems and other equipment and correct any
identified operational and safety problems.  Modifications vary in
size and complexity.  For example, for a modification to the Bradley
Fighting Vehicle, the Army is adding the driver's thermal viewer to
improve visibility during night-time and all-weather conditions, the
battlefield combat identification system to reduce the potential for
friendly fire casualties, and the global positioning receiver and
digital compass system to improve navigation.  In contrast to this
major modification, the Army is adding updated seat belts to its
fleet of High Mobility Multipurpose Wheeled Vehicles to improve
safety. 

The Army is making a sizable investment to modify its fielded
equipment.  For fiscal years 1995-97, the Army received $5.1 billion
for all of its modification programs, and the President has requested
$6.7 billion for 208 modifications to the Army's equipment for fiscal
years 1998-2003.  About 80 percent of that amount is for
modifications to helicopters and other aviation items and to weapons
and tracked combat vehicles.  According to Army headquarters
officials, as the Army's budget has declined, less funding has been
available for new systems.  As a result, the Army will have to rely
more heavily on the modification of its assets to correct
deficiencies and enhance equipment capabilities.  For example, to
correct identified problems and add technological advances, the Army
has approved 95 MWOs for its Apache helicopter since fielding this
system in 1986. 

Management of the MWO program is shared by several Army headquarters
organizations.  Each organization has a wide range of decision-making
responsibilities in developing and supporting weapon systems, which
includes modifying weapon systems and equipment through the MWO
program.  The Army defined the roles and responsibilities of its
headquarters organizations and MWO sponsors in its September 6, 1990,
Interim Operating Instructions for Materiel Change Management, which
superseded Army Regulation 750-10.  One of the objectives cited in
the instruction was to decentralize the management of each MWO and
yet retain overall responsibility and oversight at the headquarters
level.  The instructions list numerous responsibilities for Army
organizations; however, Army headquarters officials emphasized the
following key duties for the organizations with primary
responsibilities: 

  -- The Deputy Chief of Staff for Operations has responsibility for
     prioritizing the required modifications for technical and safety
     issues, justifying and monitoring the overall budget, and
     allocating the approved funding. 

  -- The Deputy Chief of Staff for Logistics has responsibility for
     overall supply and maintenance support and for knowing the
     status of MWOs. 

  -- The Acquisition Executive has responsibility over modifications
     to correct or enhance the operations of weapon systems still
     being acquired. 

  -- The Army Materiel Command has responsibility over modifications
     to correct or enhance the operations of weapon systems that are
     no longer being acquired and for other equipment items.  In
     addition, the Army Materiel Command is executive agent for the
     headquarters and, as such, is responsible for knowing the status
     of MWOs and for ensuring that each MWO is complete and conforms
     with Army policy and procedures before the modification is done. 

  -- Program sponsors\2 for individual weapon systems and other
     equipment items are responsible for executing each
     MWO--acquiring the various components needed to modify the
     weapon systems and equipment, putting together the applicable
     MWO kit,\3 ensuring logistical support items are addressed, and
     managing the modification process on a day-to-day basis.  The
     MWO program sponsors for systems still being acquired are
     managed under the Program Executive Office of the Army
     Acquisition Executive, and the program sponsors for systems no
     longer being acquired are managed under the commodity commands
     of the Army Materiel Command. 

In January 1997, the Army formed a process action team, including
representatives from the organizations with program management
responsibility, to study how the program could be improved.  The Army
also hired a contractor to assist in evaluating how automated
information might be used to support program management.  We
coordinated with the process action team and have provided the team
with information as our evaluation progressed.  The process action
team expects to provide its recommendations to the Army by October
1997. 


--------------------
\2 We use the term program sponsor to include project managers of
major weapon systems, such as the Abrams tank or Blackhawk utility
helicopter; weapon system managers of sustained weapon systems, such
as the Iroquois (Huey) utility helicopter; and product centers for
equipment, such as the Squad Automatic Weapon.  There are numerous
program sponsors, and each is responsible for managing multiple MWOs. 

\3 An MWO kit includes the major upgraded or enhanced components;
installation hardware, such as nuts and bolts; special tools; and
technical instructions on the installation of new parts and disposal
of old parts. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

Army headquarters officials and Army Materiel Command officials no
longer have the information they need to effectively oversee and
manage the Army's MWO program.  This occurred because the centralized
database to track installation and funding was discontinued; control
over modification installation funding was transferred from the
headquarters level to individual program sponsors; and the authority
over configuration control boards, which ensured the completeness and
compliance of MWOs with policy, was transferred to individual program
sponsors.  As a result, Army headquarters and Army Materiel Command
officials do not have an adequate overview of the status of equipment
modifications across the force, funding requirements, logistical
support requirements, and information needed for deployment
decisions.  The lack of information is also a problem at field units. 
Maintenance personnel have not always known which modifications
should have been made to equipment or which modifications have
actually been made.  In addition, maintainers of equipment have not
always received the technical information they need in a timely
manner to properly maintain modified equipment. 

Maintenance personnel in the field have had difficulty obtaining
spare parts to maintain modified equipment because program sponsors
frequently had not ordered initial spare parts when they acquired
modification kits.  Army headquarters and Army Materiel Command
officials believe these problems occurred because they lost oversight
and control of the program and policies and procedures were not being
consistently applied by the individual program sponsors.  Because
spare parts have often not been available, maintenance personnel have
made additional efforts to maintain modified equipment.  Also, supply
system personnel have not always followed policies and procedures to
ensure that supply system records were updated to show the addition
of new spare parts and the deletion of replaced spare parts.  As a
result, the Army's budget for spare parts may not reflect accurate
requirements for new components to repair and maintain modified
weapon systems and equipment. 

Maintenance personnel in the field have also experienced a variety of
problems in implementing MWOs.  For example, because multiple MWOs
for the same piece of equipment were not always coordinated, the
costs of modifications have increased, and reportable mission time
could be adversely affected at some units.  Furthermore, maintainers
have not always received adequate notice of pending modifications,
and as a result, training schedules and the maintenance of equipment
have been adversely affected.  Finally, we were told that various
items of equipment did not always work together once some
modifications were made; hence, improved operational capability was
lost.  According to Army headquarters and Army Materiel Command
officials, these problems also occurred because of their loss of
oversight and control. 


   ARMY OFFICIALS AND FIELD
   PERSONNEL DO NOT HAVE READY
   ACCESS TO NEEDED MWO
   INFORMATION
------------------------------------------------------------ Letter :3

The Army does not currently maintain centralized information to track
the status of equipment modifications.  Instead, it relies on the
individual program sponsors to capture the information they need to
track the separate modifications for which they are responsible.  As
a result, Army headquarters and Army Materiel Command officials do
not have the information they need to effectively oversee this highly
decentralized modification program.  Moreover, the information that
Army headquarters officials and maintenance personnel have for
tracking modifications may not be entirely accurate.  Finally, field
and depot maintenance personnel do not have ready access to the
information they need to determine current equipment configurations,
nor do they have ready access to the technical information they need
to maintain the equipment once it is modified. 


      LACK OF CENTRALIZED
      INFORMATION HAMPERS PROGRAM
      MANAGEMENT
---------------------------------------------------------- Letter :3.1

Individual program sponsors decide how they will track the
modifications for which they are responsible.  Our review showed a
variety of ways that system modifications are tracked.  As a general
rule, for high-cost systems such as M1 tanks, Bradley Fighting
Vehicles, and helicopters, the command or program sponsors
established databases showing systems that were modified and systems
that were not.  However, for high-density, widely dispersed systems
such as M113 armored personnel carriers, trucks, and radios, program
sponsors make very little or no attempt to track which systems were
modified.\4

To carry out its management functions, the Army Materiel Command had
previously developed an integrated database to track the status of
MWO installation and funding.  However, the Command quit using the
system because the Army (1) discontinued funding to maintain the
portion of the system used to track MWO installation and (2) canceled
the remaining portion of the system because it was not chosen as a
Department of Defense (DOD) standard system to track funding.  As
noted, a contractor is currently studying the automated data needs of
the MWO program. 

The potential problems created by the lack of centralized information
readily available to Army officials to track modifications were
highlighted in a 1994 Army Audit Agency report.\5 The report pointed
out that the Army Materiel Command needed up-to-date equipment
configuration information to satisfy requirements that pertain to
readiness, safety, and compliance with laws.  The report also noted
that without a centralized information system, the Command's current
and future ability to plan for the sustainment of weapon systems was
weakened.  Furthermore, this could affect the Army's current and
future readiness position and adversely affect troop survivability. 


--------------------
\4 The program sponsors for the M1 Abrams tank and the Bradley
Fighting Vehicle maintain separate databases that show the status of
the MWOs installed on equipment.  For aviation systems, the MWO
program sponsors share a common database, maintained by a contractor,
which shows the status of all installed and uninstalled MWOs for each
helicopter.  Many other program sponsors maintain no automated
database on the status of their MWOs. 

\5 Modification Program, U.S.  Army Audit Agency (CR 95-200, Nov. 
15, 1994). 


      ARMY HEADQUARTERS OFFICIALS
      DO NOT HAVE INFORMATION THEY
      NEED TO PROPERLY OVERSEE THE
      PROGRAM
---------------------------------------------------------- Letter :3.2

Army headquarters and Army Materiel Command officials responsible for
formulating the MWO program budget and for ensuring that upgraded and
enhanced equipment is available to satisfy the Army's force structure
have limited information about what MWO funds have been spent, what
equipment has been modified, and what equipment still needs to be
modified.  Due to the decentralized nature of the program, the Army
budgets for MWOs through each program sponsor, who has discretion in
spending and transferring funds.  While the data available from
program sponsors provide some information, Army headquarters
officials told us they do not have ready access to this information
and that it is insufficient to enable them to track budget
expenditures. 

As previously stated, not all program sponsors track the status of
their MWOs.  While the information for tracked systems provides some
degree of control over the configuration, such information is not
available for all weapon systems and equipment.  Moreover,
headquarters officials maintain that these individual tracking
systems do not have all the information they need to make informed
decisions and are not readily accessible.  The lack of timely
information on equipment configuration could have potential adverse
effects.  For example, if the Army deployed a mechanized infantry
division, it would need to know the latest configuration of the
division's tanks, Bradley Fighting Vehicles, helicopters, and trucks
for mission considerations as well as to ensure that the appropriate
parts needed for maintenance were on hand.  To determine the latest
configuration of this equipment, Army officials would have to contact
the respective systems' program sponsors to determine how many tanks,
Bradleys, and helicopters of each configuration there were in the
division--a time-consuming process. 

In addition, civilian aviation and Army ground maintenance personnel
at Fort Hood, Texas, and Fort Carson, Colorado, told us that the
accuracy of the databases may be suspect.  For example, they said
that in some instances modified parts had been removed from aircraft
such as the Huey utility helicopter and nonmodified parts had been
reinstalled.  This occurred because either the unit did so
intentionally or no modified parts were in stock when the new parts
broke.  As a result, the configuration of these aircraft and ground
equipment are not always accurately portrayed in the database used by
the maintenance personnel, and Army headquarters officials would not
know the current configuration for these aircraft or ground
equipment.  Without the latest and most accurate configuration
information, it is difficult to ensure that deploying units have the
latest, most enhanced, and most survivable equipment.  Logistics
support is also complicated because planners do not know which type
of and how many spare parts are needed to support the unit. 


      DEPOT MAINTENANCE PERSONNEL
      LACK INFORMATION NEEDED FOR
      OVERHAUL OF EQUIPMENT
---------------------------------------------------------- Letter :3.3

Depot maintenance personnel at the Anniston Army Depot, Alabama, told
us they need current and accurate configuration data to overhaul
equipment but that they do not have such data.  To overhaul
equipment, they need to know whether any modifications or components
are missing.  Lack of good configuration data makes it difficult to
accurately estimate the costs of overhauls and to have the proper
kits and repair parts on hand.  Officials said that, as a result,
they expend additional labor for physical inspections and make
allowances in their cost estimates to cover unanticipated problems. 
For example, depot personnel had to visually inspect 32 National
Guard trucks in the depot for overhaul because they had no way of
knowing whether two authorized modifications had been made when the
vehicles arrived.  When this happens, the overhaul program is delayed
while depot personnel order the parts or kits.  However, if MWO kits
are not installed at the time the modification is made to the fleet,
the kits are often no longer available. 


      FIELD MAINTENANCE AND
      SUPPORT PERSONNEL DO NOT
      HAVE TIMELY EQUIPMENT
      CONFIGURATION AND OTHER
      TECHNICAL INFORMATION
---------------------------------------------------------- Letter :3.4

Field and support organization personnel also told us they have
trouble identifying what the configuration of weapon systems and
equipment should be and whether modifications have been made.  They
told us they need to know whether the configuration of weapon systems
and equipment is up-to-date and what is required on the item in order
to maintain it.  They said that this problem is especially acute for
items that are transferred from other units.  These officials said
they had sometimes spent many hours inspecting equipment to determine
its current configuration because determining whether modifications
had been done was not easy.  For example, during our visit to Fort
Carson, Colorado, a maintenance chief said that all authorized
modifications on two helicopters he had received from another
geographic area were supposed to have been made, but in preparing
them for deployment, a visual inspection showed some modifications
had not been made.  According to the chief, a contractor team had to
make the necessary modifications before the aircraft could be
deployed. 

No tracking information and no central list of modification changes
that should have been made are available for equipment with lower
dollar values, like trucks.  According to field personnel, the only
way to determine the configuration of weapon systems or equipment is
to do a physical inventory and compare the results to similar items
that are already assigned to the unit. 

Maintenance personnel at several locations said that an information
system that tracks both the completion of MWOs and any removal or
transfer of major components would be useful.  However, they would
rather have this capability added to their existing maintenance
information system than have an entirely new information system to
maintain and use.  We were told this tracking information will become
especially critical in the future as more modifications involve
software revisions.  Without tracking all of the MWO changes, removal
or transfer of major components, and software revisions, the
configuration data recorded in the information system will be
inaccurate. 

Field and support organization personnel told us that they also need
up-to-date technical information to maintain equipment.  The Army's
interim guidance requires technical publications to be updated and
distributed to field locations before modifications are made. 
However, maintenance personnel from Fort Hood, Texas, and Fort
Campbell, Kentucky, told us that technical manual updates are
published only on a yearly basis and that they do not receive updated
technical publications in a timely manner.  If the modification and
resulting configuration change occur between updates, the unit may
have to wait months before receiving the updated technical
information.  This delay not only prevents maintenance personnel from
using the latest techniques to troubleshoot equipment but it may also
result in wasted effort and impede supply personnel from ordering the
correct repair parts. 

A division aviation maintenance officer at Fort Campbell cited
several instances in which the lack of up-to-date technical manuals
caused wasted effort or delayed the installation of the modification. 
For example, in July 1996, when division maintenance personnel
modified the fuel subsystem on the Apache attack helicopter, they did
not receive revisions to the supply parts manual.  Subsequently, the
aircraft was grounded and the maintenance team wasted many hours
troubleshooting because the old manual did not identify the new fuel
transfer valve.  This new part would have been identified in the
revised manual.  In another instance, they had to delay the
installation of the embedded global positioning system on the Apache
by 2 weeks because the Apache program office did not provide changes
to the maintenance test flight and operator manuals. 


   ARMY UNITS DO NOT ALWAYS HAVE
   READY ACCESS TO SPARE PARTS
------------------------------------------------------------ Letter :4

The Army sometimes loses portions of its enhanced equipment
capabilities achieved through equipment modifications because Army
units cannot always obtain spare parts for its modified weapon
systems and equipment.  This occurs because program sponsors do not
always order initial spare parts for the supply system when they
procure MWO kits.  Furthermore, they do not always modify the spare
parts that are at the depot and unit level to the configuration of
the new component.  Army officials reviewing the MWO program believe
that these problems occurred because Army regulations are not clear
about whether program sponsors are supposed to provide initial spare
parts when they acquire the MWO kits.  As a result, Army units
increase their efforts to keep equipment operational and ready.  In
addition, program sponsors and supply system personnel do not always
follow policies and procedures to ensure that supply system records
are updated to show the addition of new items and the deletion of
replaced items.  When the supply system records are inaccurate, the
Army's budget may not reflect accurate requirements for new spare
parts to repair and maintain modified weapon systems and equipment. 


      SPARE PARTS FOR MODIFIED
      EQUIPMENT ARE DIFFICULT TO
      OBTAIN
---------------------------------------------------------- Letter :4.1

Some program sponsors have not used their limited funds to order
initial spare parts for the supply system, according to Army
officials responsible for the management of the MWO program. 
Ideally, initial spare parts would be provided to bridge the gap
between the modification of equipment and the entrance of the
replenishment spare parts into the Army's supply system.  Providing
initial spare parts at the time of modification is needed because the
supply system can take 18 to 24 months or more to provide
replenishment spare parts, according to aviation supply
representatives. 

According to Army civilian aviation maintenance personnel at Fort
Hood and Army aviation and ground maintenance personnel at Fort
Carson and Fort Campbell, program sponsors did not always modify
spare parts at unit and depot locations when equipment was modified. 
For example, we were told that the Apache attack helicopters were
being modified with an improved fuel subsystem, but at least four
major components were not available in the depot supply system.  As a
result, aviation maintenance personnel had to take parts from five
MWO kits intended for other aircraft.  This MWO had been ongoing for
15 months.  Aviation personnel said this occurred because at least
some portion of the components stored at the depot had not been
modified to the new configuration. 

One program sponsor told us his office was not required to buy
initial spare parts or modify parts located at depots when they
modified equipment in the field.  However, the Army's interim
operating instructions require program sponsors to ensure all
necessary integrated logistical support parts items are addressed. 
Furthermore, according to Army Regulation 700-18, ordering initial
spare parts is part of the total integrated logistical support
package for systems and end items.  This regulation, which does not
specifically refer to modifications, requires program sponsors to
coordinate logistical support requirements with all agencies and
activities concerned with initial materiel support for weapon systems
and equipment.  According to Army headquarters officials, both the
interim guidance and the regulation require program sponsors to
provide initial spare parts and to modify spare parts, but neither
may be clear enough to ensure that all program sponsors do it for
modifications.  In addition, Army headquarters officials told us that
when the Army Materiel Command used configuration control boards,
comprised of technical and administrative representatives, to ensure
the MWOs were complete and conformed with Army policies and
procedures, the need to buy spare parts was part of the approval
process.  The Army Materiel Command lost this quality control when
the reviews were decentralized to the program sponsors. 

Army personnel at the four locations we visited told us that they had
to take additional measures to support their equipment because they
had experienced problems obtaining spare parts.  They stated that if
spare parts were not available, they took components from MWO kits. 
For example, the only way to obtain spare parts for the new fuel
control panels--part of the Apache attack helicopter fuel crossover
modification--was to take them from kits that were needed to modify
other Apache helicopters.  In addition, they had obtained parts
outside the normal supply system by fabricating parts locally and by
buying parts directly from contractors with local funds.  These
activities have led to higher costs and reduced efficiencies at units
we visited. 


      MANAGEMENT OF MWO PROGRAM
      CONTRIBUTES TO INVENTORY AND
      BUDGET ERRORS
---------------------------------------------------------- Letter :4.2

In reviewing 73 MWO cases, we attempted to determine whether the Army
had properly phased out old spare parts and added new items to its
supply system to support newly modified equipment.  Because the Army
does not have an automated list of major components in MWOs, we
encountered difficulties in trying to make this analysis and could
not identify a significantly large number of the major components. 
We compared information on those major components that we could
identify with the Army's budget justification report and inventory
records and found many irregularities.  For example,

  -- national stock numbers had not been assigned for some
     components;

  -- some items with national stock numbers could not be tracked into
     the supply system; and

  -- relationship codes, which show whether old items are to be
     phased out of the supply system, were not always assigned. 

We were unable to measure the impact of these irregularities from our
relatively small sample of MWOs; however, we believe that they
indicate long-standing weaknesses in the Army's management of spare
parts.  For example, using a larger universe, we reported on similar
errors in the Army's budget justification report in December 1995.\6
In that report, we noted that the Army's budget justification report
for spare parts contained numerous errors, including errors in the
relationship codes and inaccurate records for items being repaired at
maintenance facilities.  We reported that as a result of the errors,
the Army lacks assurance that its budget requests represent its
actual funding needs for spare parts. 


--------------------
\6 Army Inventory:  Budget Requests for Spare and Repair Parts Are
Not Reliable (GAO/NSIAD-96-3, Dec.  29, 1995). 


   FIELD MAINTENANCE PERSONNEL
   EXPERIENCE PROBLEMS IN
   IMPLEMENTING THE MWO PROGRAM
------------------------------------------------------------ Letter :5

Field maintenance personnel cited numerous problems in modifying
their weapon systems and equipment.  For example, they stated that
(1) the completion of multiple MWOs on the same piece of equipment is
not always coordinated, or not all equipment is modified at the same
time; (2) they do not always receive adequate notice of MWOs; and (3)
modified equipment does not always work together with other equipment
once the modification takes place.  As a result, they believe some
units are losing equipment capability or experiencing reduced
reportable mission time, the cost to install MWOs is increasing, and
the training of unit personnel may be adversely affected.  Army
headquarters and Army Materiel Command officials believe these
problems are also occurring because of their loss of oversight and
control over the program and the inconsistent implementation of
policies and procedures by program sponsors, especially in
negotiating fielding plans with the affected organizations. 


      DIFFICULTIES ENCOUNTERED BY
      UNIT MAINTENANCE PERSONNEL
---------------------------------------------------------- Letter :5.1

Maintenance personnel told us that the completion of multiple MWOs on
the same equipment is not always coordinated.  For example, the
National Guard is testing a program to place some of its equipment in
long-term preservation storage.  Equipment in long-term storage
testing at the Camp Shelby, Mississippi, mobilization and equipment
training site has been taken out of storage several times so
modifications can be made.  As a result, the program was disrupted,
and additional labor hours were expended, according to a National
Guard official.  The lack of coordination in the future could have
even greater cost implications because the Guard is planning to place
25 percent of its equipment in preserved storage and if it implements
recommendations we are making in another report,\7 the Guard would
put an even larger percentage in storage. 

In another example, an aviation maintenance chief told us that two
labor-intensive modifications were planned for consecutive years on
each of 33 Blackhawk utility aircraft belonging to two units at Fort
Carson.  He said that making both modifications concurrently made
more sense.  Since a modification causes an aircraft to be grounded,
the additional downtime to install each modification consecutively
would adversely affect the reportable mission time for each unit. 

Maintenance personnel also noted that inefficiencies had resulted
when not all modifications were done at the same time.  For example,
when the Army upgraded the armament fire control system on the M1
tank at the Camp Shelby mobilization and training site, a contractor
team installed new software cards in the fire control system and 2
months later, a team from the Anniston Army Depot made needed
mechanical adjustments to the same tanks.  According to Army
officials, both functions could have been done at the same time,
thereby reducing the time the unit was without its equipment. 

The direct support maintenance chiefs and general support maintenance
personnel at Fort Hood and Fort Carson told us they did not always
receive adequate notice of modifications.  This situation disrupted
their ability to meet training schedules that were set up 12 months
in advance and interfered with their ability to maintain their
equipment. 

After some modifications are done, some equipment does not always
work together properly, according to aviation maintenance personnel
at Fort Hood.  For example, although civilian aviation personnel at
Fort Hood modified the Blackhawk utility helicopters to work with
night vision goggles, they could not get replacement radios from a
different program sponsor that were compatible with the night vision
goggle system, and night operational capability was lost. 

Army headquarters and Army Materiel Command officials believed these
problems had occurred because of their loss of oversight and control
over the program and the inconsistent implementation of policies and
procedures by program sponsors.  The Army's Interim Operating
Instructions for Materiel Change Management requires individual
program sponsors to prepare a fielding plan for each modification. 
The fielding plan calls for coordination and adequate notice when a
modification is to be done. 


--------------------
\7 Army National Guard:  Sharing Unit Training Equipment Would Help
Avoid Maintenance Costs (GAO/NSIAD-97-206, Sept.  29, 1997). 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

The highly decentralized nature of the MWO program underscores the
need for Army headquarters officials to have ready access to program
data and information and adequate management controls to ensure that
program implementation complies with policies and procedures.  Even
though the database they used was discontinued in part because it was
not accepted as a standard DOD system, Army headquarters officials
told us that the unavailability of information on the status of MWOs,
the status of funding, and the configuration of weapon systems and
equipment has made it difficult for managers at all levels to
effectively carry out their respective responsibilities and make
informed decisions on such things as funding, deployment, and
logistical support of weapon systems and equipment. 

The program sponsors have been inconsistent in providing initial
spare parts, ensuring that spare parts are added to the supply
system, and keeping technical information updated for the field
maintainers.  Furthermore, program sponsors have not always
adequately coordinated the completion of MWOs with other sponsors and
with the field maintainers.  The Army guidance on these processes is
not clear, and the headquarters' ability to ensure that existing
policies and procedures were complied with was diminished when the
responsibilities of configuration control boards were transferred to
program sponsors.  As a result, field maintainers have experienced
difficulty in obtaining spare parts and current technical information
and have experienced inefficiencies in getting their weapon systems
and equipment modified. 

Program sponsors have varying amounts of information on their MWOs,
ranging from none to fairly complete, and do not have ready access to
information needed to coordinate with other program sponsors.  Those
program sponsors without a database are limited in managing their own
programs.  Field maintainers do not have easy access to information
on MWOs that should have been installed or scheduled for future
installation.  At the unit level, the lack of information has
manifested itself in various inefficiencies related to the
coordination and scheduling of the installation of MWOs and has
sometimes prevented units from knowing the configuration of their
equipment.  It is important that these modifications be done as
efficiently as possible to minimize the reportable mission time the
equipment is unavailable to units. 

The Army's creation of a process action team to develop revised
policies and procedures and its hiring of a contractor to examine
automated information needs are steps toward correcting the
weaknesses noted in this report.  Improved management of this program
would provide more assurance that improved capabilities are
effectively and efficiently integrated into the Army's equipment in
the most expeditious manner. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :7

In considering the upcoming results of the MWO process action team,
we recommend that the Secretary of the Army

  -- direct actions necessary to provide managers at all levels ready
     access to the information they need to oversee, manage, and
     implement the MWO program and to ensure compliance with Army
     policies and procedures;

  -- clarify regulations to ensure that program sponsors and supply
     system personnel provide proper logistical support for modified
     equipment, including (1) ordering appropriate initial spare
     parts when MWO kits are ordered, (2) updating technical
     information and providing it to units when MWO kits are
     installed, and (3) properly phasing out old spare parts and
     adding new items to its supply system; and

  -- establish an effective mechanism for program sponsors to
     coordinate and schedule their MWOs, among themselves and their
     customers, to reduce the amount of manpower and to minimize the
     reportable mission time required to complete the MWOs. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :8

In written comments on a draft of this report, DOD concurred with our
findings and our recommendations (see app.  I), acknowledging that
improvements to the weapon system and equipment modification program
were needed.  Regarding our first recommendation, DOD agreed that
managers at all levels need ready access to information to oversee,
manage, and ensure compliance with Army policies and procedures.  It
noted that the process action team is developing a recommendation for
an MWO integrated management information system that would obtain
information from already established databases.  DOD believes that
such a system would provide a cost-efficient, nonlabor-intensive
management tool to assist managers in tracking all facets of MWOs. 
Approval of a proposal for a new study effort to design and develop
this system is pending. 

DOD also agreed with our recommendation that the Secretary of the
Army clarify regulations to ensure that program sponsors and supply
system personnel provide proper logistical support for modified
equipment.  DOD stated that Army Regulation 750-10 is being totally
revised to clearly define roles and responsibilities, thereby making
it a joint acquisition and logistics regulation that can be used by
both communities.  The revised regulation will adopt a modified
materiel release process that would address the logistical support
issues raised in our recommendation as well as other areas of concern
identified by the process action team. 

Finally, DOD agreed with our recommendation that the Secretary of the
Army establish an effective mechanism for program sponsors to
coordinate and schedule their MWOs, among themselves and their
customers.  DOD stated that the revised Army Regulation 750-10 will
address the issue of coordination between program sponsors and ensure
that MWOs are completed at all units at one location at the same time
where possible. 

We believe that these actions, if properly implemented, will help to
further improve the effectiveness and efficiency of this program. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :9

We interviewed officials and reviewed program records at the Army
Materiel Command, Alexandria, Virginia; the Army Aviation and Troop
Command, St.  Louis, Missouri; and the Army Tank-Automotive and
Armament Command, Warren, Michigan, to identify how the MWO program
works and to identify any problems.  We also interviewed officials
and reviewed records at the U.S Army Materiel Command; the Assistant
Secretary of the Army for Research, Development and Acquisition; the
Deputy Chief of Staff for Logistics; and the Deputy Chief of Staff
for Operations at Army headquarters to determine their role in the
modification program and what information they need to manage
funding, resource allocations, deployment decisions, and
supportability. 

We also interviewed Directorate of Logistics personnel and general
and direct support personnel, reviewed records, and made on-site
observations at Fort Hood, Texas; Fort Campbell, Kentucky; and Fort
Carson, Colorado, to determine whether they were having any
difficulties with the completion, scheduling, or supply support
obtained for MWOs.  In addition, we interviewed civilian and
contractor personnel that provided regional aviation maintenance
support at Fort Hood and Fort Campbell and reviewed records to
determine whether they were experiencing similar problems. 
Furthermore, we interviewed officials at Anniston Army Depot,
Alabama, and Camp Shelby, Mississippi, to determine how the MWO
programs affect maintenance and overhaul programs. 

To evaluate how well the Army integrates its MWO program with the
supply support system, we judgmentally selected 73 recent MWOs for
aviation systems; weapons and tracked combat vehicle systems; and
small arms.  The Army does not have a complete list of MWOs, MWO
kits, or the major components in the kits.  It has automated data
only on MWOs for high-dollar weapon systems.  For the MWOs selected,
we attempted to manually identify the major components in the kits,
enter them into a database, and compare them to the Army's automated
inventory (April-June 1997 master data record) and budget
justification (Sept.  1996 budget stratification report) records. 

We were not able to quantify the problems with the supply system
identified in this report because (1) we could not identify a
significantly large universe of new replacement items and match them
with the related item being phased out of the system and (2) for the
items identified, we could not consistently trace them into the
automated inventory and budget justification records.  Furthermore,
we could not determine the extent of some of the problems identified
through our field visits because some of the newer MWOs in our sample
have not been operational long enough for their parts to fail. 

We have used the automated budget justification records and automated
inventory databases in prior evaluations and reported that they
contain significant errors regarding the relationship codes between
secondary inventory items being added to the system and the replaced
items.\8 These databases are, however, the only available information
on inventory and budget justifications for Army secondary items. 

We performed our review between January 1996 and August 1997 in
accordance with generally accepted government auditing standards. 


--------------------
\8 Defense Inventory:  Shortages Are Recurring, but Not a Problem
(GAO/NSIAD-95-137, Aug.  7, 1995) and Army Inventory (GAO/NSIAD-96-3
Dec.  29, 1995). 


---------------------------------------------------------- Letter :9.1

We are sending copies of this report to the Secretaries of Defense
and the Army; the Director, Office of Management and Budget; and
other interested parties. 

Please contact me on (202) 512-5140 if you have any questions
concerning this report.  Major contributors to this report are listed
in appendix II. 

Mark E.  Gebicke
Director, Military Operations
 and Capabilities Issues


List of Congressional Committees

The Honorable Fred Thompson
Chairman
The Honorable John Glenn
Ranking Minority Member
Committee on Governmental Affairs
United States Senate

The Honorable James M.  Inhofe
Chairman
The Honorable Charles Robb
Ranking Minority Member
Subcommittee on Readiness
Committee on Armed Services
United States Senate

The Honorable Steve Horn
Chairman
The Honorable Carolyn B.  Maloney
Ranking Minority Member
Subcommittee on Government Management,
 Information, and Technology
Committee on Government Reform
 and Oversight
House of Representatives

The Honorable Herbert H.  Bateman
Chairman
The Honorable Norman Sisisky
Ranking Minority Member
Subcommittee on Readiness
Committee on National Security
House of Representatives




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================== Letter 



(See figure in printed edition.)



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II


   NATIONAL SECURITY AND
   INTERNATIONAL AFFAIRS DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix II:1

Carol Schuster
Nancy Ragsdale


   KANSAS CITY FIELD OFFICE
-------------------------------------------------------- Appendix II:2

Gary Billen
Mark Amo
Leonard Hill
Robert Sommer
Robert Spence

*** End of document. ***